The Basics of a Social Enterprise


Whether you are a business or a nonprofit organization, a social enterprise is a great way to create positive change. However, as with any company, there are some basic guidelines to ensure success. Among these are the three Bs of business – authenticity, competitive advantage, and a double bottom line.


Authenticity is one of the most critical components of any social enterprise’s marketing strategy. It can inspire trust and loyalty among your consumers and drive sales.

Authenticity can be achieved through several tactics. For example, a curated user-generated content (UGC) campaign can help a brand connect with its audience. Another technique is to solicit feedback from customers. For example, a contest to get users to post a review or comment about a product or service is a great way to start.

Another strategy is to use the power of social media to showcase your brand’s personality. This means you need to have a social media presence of your own. You can use your social media to share your personality and your business’s values while displaying a professional and fun side to your brand.

Double bottom-line

Using a double-bottom-line approach can benefit both the company and the community. Companies can increase profitability and improve public relations by prioritizing social impact.

Using a double bottom-line approach has been embraced by many corporations. However, defining what exactly a social impact is can be difficult. As a result, many investors and funders seek to funnel revenue into social causes.

The corporate world is increasingly aware of its social responsibilities. Some companies are focusing on environmental impacts. Some are also committing to paying living wages to their workers. Increasing the philanthropic presence of a company can improve retention rates and encourage employee engagement.

Many consumers are willing to pay more for products if they are produced sustainably. For example, a clothing manufacturer may minimize its environmental impact by hiring the least expensive labor and disposing of manufacturing waste sustainably.

NGOs and charities

NGOs and charities are social enterprises. These organizations work independently of the government. They provide expertise and support to people and governments. They work on a variety of issues and develop new approaches to problems. They can work with other organizations and companies and receive funding from private individuals and companies.

The revenue model is the main difference between an NGO and a social enterprise. NGOs typically earn income by selling goods or services on the external market. Social enterprises reinvest the profit into the organization, helping it achieve its social mission.

In addition to fundraising, NGOs may receive funding from private companies and governments. NGOs can also ask for fees from third parties for advisory work. In addition, they may charge disaster victims for relief services.

For-profit vs. nonprofit

Depending on your business model, you may be able to determine whether your social enterprise should be for-profit or nonprofit. However, the distinctions between the two are often more nuanced than you might think. So, you might wonder, “What is the difference between a for-profit and a nonprofit?”

The fundamental difference between a nonprofit and a for-profit is that a nonprofit is not profit-making. In addition, the nonprofit must be a public charity, meaning it has no private ownership.

Nonprofits also have a different governance structure. The nonprofit board is responsible for ensuring the nonprofit complies with applicable laws.

Nonprofits also have different tax implications. A nonprofit may offer tax deductions to donors. However, sales not related to the nonprofit’s exempt purposes are taxed. A nonprofit must also get the majority of its funding from public sources.

Competitive advantage

Using the social enterprise model, an organization has a social mission and participates in the commercial market to deliver its services. The profits are distributed to its stakeholders and are used to achieve social impact. There are several advantages of a social enterprise. It offers affordable solutions and addresses the needs of a specific group of people.

Social enterprises are nonprofit and cannot be classified as private or public. However, the government has created significant incentives for social enterprises. This makes it easier for social enterprises to raise capital.

The resource-based theory has identified two essential resources that social enterprises use: the motivation of employees and customers. In addition, reputation has been identified as a sustained competitive advantage for social enterprises. These resources are motivated by the organization’s social mission and brand.