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Frequently Asked Questions

1. What are social enterprises?

Social enterprises are businesses trading for social and environmental purposes. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social and/or environmental purpose is absolutely central to what they do - their profits are reinvested to sustain and further their mission for positive change. 

2. Why is it important for social enterprises to make a profit?

Social enterprises are businesses. They need to make a profit to compete in the market, to ensure their continued survival and to invest in their social or environmental aims.

For many social enterprises, being sustainable - in every sense of the word - enables them to become more independent and to reduce any dependency on public grants. It also ensures they can continue to help provide a solution for a social or environmental problem.

3. What are the pros and cons of setting up a social enterprise

Running a social enterprise can be a real challenge. Dealing with day-to-day problems is time consuming, and it can be frustrating when your work fails to have an immediate impact on the community. It's just a case of asking yourself whether social enterprise is the right form for what you want to achieve.

  • Since social enterprises are businesses, they can fail if the market changes or an idea doesn't work out.
  • It can be difficult to see a social enterprise as both a business and a community organisations.
  • As social enterprises grow and new people come on board the original momentum can be diluted or lost altogether.
  • Despite your hard work the social benefits of a social enterprise may take years to appear.
  • A social enterprise can be a way to avoid dependence on funding and volunteering, allowing your carbon saving work to be self supporting by using the income it generates.
  • Because social enterprises are more flexible than charities they can support innovative ways to achieve a social purpose.
  • Social enterprises attract passionate people, so they can be genuinely inspiring places to work or volunteer.
  • Social enterprises offer a way for finance-savvy people to use their skills and make a difference to the community or the environment.
  • It's satisfying to take part in a project that genuinely makes a difference to society.

4. What is a social entrepreneur?

A social entrepreneur identifies and solves social problems on a large scale. Just as business entrepreneurs create and transform whole industries, social entrepreneurs act as the change agents for society, seizing opportunities others miss in order to improve systems, invent and disseminate new approaches and advance sustainable solutions that create social value.

Unlike traditional business entrepreneurs, social entrepreneurs primarily seek to generate "social value" rather than profits. And unlike the majority of non-profit organizations, their work is targeted not only towards immediate, small-scale effects, but sweeping, long-term change.
5. What are the different legal structures I can choose from?
Please click here to learn more about a Company Limited by Guarantee without Share Capital
Please click here to learn more about an Unincorporated Association
Please click here to learn more about a Voluntary Organisation or Community Group
6. What is a charity and what are its benefits?
Please click here to learn more about charities


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