Entrepreneurship is about more than just making money, according to social entrepreneurs. With their company, they contribute to solving a social problem. Do you want to start a social enterprise? Read how to determine your mission and which legal form best suits your company. And find out how you show what your company is doing to make the world a little better. You are a social entrepreneur if the main goal of your company is to help solve a social, social, or environmental problem. Your company does not exist to make as much profit as possible but to do something good for the world. Making money is not your main goal, but your company is financially independent.
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This is social entrepreneurship.
Social entrepreneurship is not the same as sustainable entrepreneurship or corporate social responsibility. These terms are often used interchangeably. Jorgen van Looker Campagna, policy officer at Social Enterprise NL, explains the difference: “With social entrepreneurship, the social goal that you want to achieve with your company is paramount. The other terms are about companies where making a profit is paramount. Secondly, they also have social objectives.”
Social entrepreneurship can be done in many different ways. Think of a restaurant where people with an occupational disability work in the service. Or a furniture maker who makes new furniture from old materials. Companies that pay a fair price to the farmer in Ethiopia for the coffee they import are also social enterprises. Van Looker Campagna sums it up: “Social entrepreneurs are committed to social welfare, a better environment and a sustainable world.”
This is how you start with social entrepreneurship.
Does social entrepreneurship sound like something that suits you? Start your social enterprise or turn your existing business into one with a social purpose. Determine your mission, choose the right legal form, and arrange to finance and measure the results of your company.
Determine your mission and approach
You already know well what problem your company will be tackling. Dive even deeper into it. How big is the problem, where does it come from, and what does the target group need? Once you have mapped out all aspects of the problem, you can look for solutions. Read books and articles, talk to experts and find out which solutions are already available. Van Looker Campagna adds: “And look at entrepreneurs who are already focusing on this problem to determine how you add value.” Based on this, determine which approach you choose for your company.
Sea Ranger Service protects vulnerable sea areas and helps young people with a distance to the labor market to find a job. “We started in the port cities of Rotterdam and Den Halder. Unemployment is highest there,” says Wiest van der Warf, the driving force behind the Sea Ranger Service. Maritime veterans train the unemployed young people to become ‘foresters at sea.’ They go out with a circular sailing ship, manage protected marine areas, conduct research, and preserve historic shipwrecks.
Choose the right legal form.
Choose a BV or foundation as the legal form of your social enterprise. In a private limited company, the highest power lies with shareholders. The profit does not have to go entirely to your social goal. In a foundation, the board has control, and the profit goes entirely to the social goal. You can also make a combination between being and foundation. Do you want help choosing the legal form? Check the overview of legal forms on Ondernemersplein.
The government wants to stimulate social enterprises and is developing a social limited liability company (BVM). “With a BVM you make it clear to your customers and business relations that the social mission is paramount within your company,” says Van Looker Campagna. “For example, when you participate in a tender at a municipality, it is immediately clear to that party what your company stands for.”
A BVM is not a new legal form but a variant of the BV. It has yet to be discovered when you can set up a BVM. Sea Ranger Service consists of a foundation that owns three private limited companies. “That is a conscious choice,” explains Van der Warf. “The foundation is important for the social mission and doing business with the government. The BV’s really run like a company. That is important for financiers. The two legal forms complement each other well.”
Arrange to finance
You can choose from various options if you are looking for financiers for your social enterprise, from donations or grants to crowdfunding and loans. Use a funding tool that helps you find funders that align with your social cause. Do you hire people at a distance from the labor market? Then the government makes subsidies and schemes available. You will receive help in finding the right people, and you can opt for a trial placement. Your employee then works for two months in your company while retaining benefits.
This way, you have time to discover whether you are a good match. A job coach guides your employee on the work floor during the trial placement and afterward. Van der Warf explains why the partners of Sea Ranger Service have invested in this in particular: “Our partners consider it important to participate in entrepreneurial processes that aim to achieve sustainability. And if you create jobs and revenue models by protecting nature, a connection is created.”
Measure the result
You have determined your mission, chosen the right legal form, and arranged to finance. While you are getting started, it is time to measure the concrete result of your social enterprise. Do people with an occupational disability work in your restaurant? Then you track how many people you employ and how many hours they work. Do you make new furniture from old materials? Then you register how many products you have sold and how much recycled material you have incorporated. Do you buy coffee for a fair price? Then write down how much extra you pay the farmer in Ethiopia compared to current prices. You keep track of these concrete results in your administration and process them in your annual report. You also share them with clients and investors. Use tools to measure your results more easily.