Welcome to the first in an ongoing series of entrepreneur interviews for The Small Business Blog. These short Q and A sessions are conducted by myself and will feature some of the most exciting figures in the business world.
Our first interviewee is Andy Peers, founder of Love Enterprise, a social enterprise venture working with individuals and organisations that want to bring about positive social change. Andy has a long history of success in the social and private sector and he is determined to improve the ethics of enterprise in UK.
Here’s my interview with Andy:
Q: Social enterprise is one of the buzzwords at the moment. What is social enterprise exactly?
A: I’ve read that the phrase ‘social enterprise’ was first used sometime around the mid to late 1990’s and still, to this day and after millions of pounds and thousands of hours, the debate about what is and what isn’t a social enterprise still rumbles on.
In some ways it’s hardly surprising that confusion is abound. Consider this… The first government Social Enterprise Unit was housed under the remit of the Department for Trade and Industry (DTI) – a pretty clear message that social enterprise was about, guess what, enterprise, trade, industry… oh, and those two dirty little words ‘business’ and ‘profits’. Then, four years later, in 2006 the Cabinet Office for the Third Sector was created (headed up by none other than Ed Miliband) and social enterprise was now moved from the DTI and housed alongside charities and voluntary groups. This lurch in the placement of social enterprise demonstrates that even the same government had difficulties in its definition.
But, therein lies just one of the problems… social enterprise got complicated when the government started to get stuck in. Truth is, social enterprises have existed for hundreds of years, just always under different banners and names. And, they’ll continue to exist in the future too – whether government supports it or not. They’re just another part of the fabric of our economic and social makeup and well-being.
To try and simplify things a bit I have to profess, right from the beginning, that I’m a bit of a purist when it comes to what is and isn’t a social enterprise. And, it’s this purist position that means that, to me, the definition of a social enterprise is this: a market solution to a social problem.
If there isn’t a social issue driving (and, I do mean ‘driving’!) the organisation, then please don’t call yourself a social enterprise. And, if there’s not a market-based solution to addressing that social issue, again, please don’t call yourself a social enterprise.
So, lets take the Social Enterprise Mark, declaring themselves as ‘the only international certification for social enterprise’… how very bold! One of their criteria for gaining the mark is that 50% or more of the organisation’s income has to come from trading. I’m not sure that this does any favours for social enterprise being viewed as a credible enterprise model. I mean, how sustainable, really, is an enterprise that only has 50% of its income from its trading activities. My view is that the trading % should be closer to 85% of income.
I guess that this does raise the question ‘why only 85%…?’ Well, that’s because due to the social, public, environmental or cultural benefit that social enterprises should have, along with the pursuit of profit for reinvestment rather than distribution purposes, there will probably always be forms of public or charitable money available. And, if this granted/funded money can serve as a) a kick-starter b) an enhancer to the benefit/impact being delivered or c) a mechanism for new innovations or growth, then I find this a totally acceptable addition to the core, trading income of the enterprise.
I have no doubt that in future pieces there’ll be a revisiting (either directly or indirectly) of the issue of definition… there’s plenty more to be said about this!
But for now let me leave you with this: for me, there is absolutely no doubt, that social enterprise is not just something you are; it is, most definitely, something you DO!
Big thanks to Andy and Love Enterprise for participating in our first interview.