What planning issues should be considered
when establishing a social enterprise?
When a social entrepreneur considers beginning a new social enterprise or when the directors of a charity or NPO consider introducing a new social enterprise program, a range of issues must be addressed. Having a well-considered business plan is vital to success.
Andrew Valentine, LL.B. • Partner, Miller Thomson LLP in brilliant fashion, outlines the various factors to be taken under serious consideration, in detail. This blog-post will provide his description of the operational priorities which should be questioned and clearly addressed in the business plan; for directors to consider when planning to introduce a new social enterprise.
Determining the operating goals and priorities of the social enterprise is crucial. What is the enterprise’s fundamental purpose? Is it to further a social purpose directly, for example, by providing employment to marginalized individuals? Or is it primarily to generate a financial
return that can be used to support the operations of a charity or NPO.
These questions affect both the initial structure of the enterprise and ongoing operational decisions, so thinking them through carefully is crucial. As the organization operates, it will likely encounter tension between the competing priorities of revenue and social mission.
For example, if revenue from the enterprise disappoints, how flexible should the enterprise be with its business model or its willingness to seek new revenue opportunities? Should such changes be made even if they might diminish the social mission? Or should the social mission
remain paramount, even if this means lower revenue and greater need to supplement revenue through grants or public donations?
These questions can be answered more coherently and consistently if the founders of the social enterprise have established a clear purpose and set priorities for the social enterprise at the outset.
Source: 20 Questions Directors of Not-for-Profi tOrganizations Should Ask About Social Enterprise, Andrew Valentine, LL.B. • Partner, Miller Thomson LLP, Charted Professional Accountants Canada: https://www.cpacanada.ca/en/business-and-accounting-resources/strategy-risk-and-governance/not-for-profit-governance/publications/social-enterprise-questions-for-nfp-directors
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