What is a social enterprise?
A social enterprise is a business with primarily social objectives, whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximize profit for shareholders and owners.
If you're considering setting up a social enterprise in Herefordshire, there are a number of different elements you need to consider, such as legal structures and business plans.
This may sound rather daunting, but don't worry, as there's also lots of help available to support you along the way.
To find out more, take a look at the following sections...
There's lots of fantastic support available, to help you get started as a social enterprise.
Community Interest Companies is the Government's official regulator of community interest companies and is responsible for deciding if an organisation is eligible to become, or continue to be, a community interest company (CIC). They also offer useful guidance, including the forms you need to submit and step by step guides.
Companies House provide a vast range of information, including starting and running a company, filing your company accounts and annual return, along with useful guidance and forms.
Co-operatives UK support co-ops to start up and thrive with expert advice, guidance, training and events.
The Government offer useful information to help you set up a social enterprise, including explanations on the different business structures you can choose from, such as a charity, co-operative or community interest company.
NCVO (National Council for Voluntary Organisations) represent over 16,000 voluntary organisations, charities, community groups and social enterprises across England. They offer step by step guides, templates, interactive tools, practical support, training and events on a wide range of areas, such as setting up an organisation, finding funding, managing volunteers and governance.
School for Social Entrepreneurs provide training, funding and mentoring to help people develop the skills, strengths and networks needed to set up and run a social enterprise in their local community.
Social Enterprise UK is the leading authority and membership body for social enterprises. They offer a range of advice, resources and practical guides to help you set up and run your organisation.
UnLtd offer tailored support around funding, investment and business skills to help social entrepreneurs achieve their goals.
It can be slightly confusing deciding which legal business structure is right for your organisation. There are a number of different ones to choose from, all of which have specific and often complex rules. Your legal structure also determines things like the amount of tax you pay and the type of funding or investment you may receive.
An example of the different social enterprise legal structures available, include:
- Unincorporated association
- Sole Trader
- Company Ltd by Shares (CLS)
- Company Ltd by Guarantee (CLG)
- Charitable Incorporated Organisation (CIO)
- Community Interest Company (CIC)
- Limited Liability Partnership
- Co-operative Society
- Community Benefit Society (CBS)
Anthony Collins Solicitors offer a useful legal structures for social enterprises at a glance document.
To help you find out more about legal structures, please take a look at the support organisations listed in the above what support is available section.
It's really important to create an effective business plan before you start your social enterprise, as in essence, it's a route map of how you will run your organisation. It can also help clarify your idea, identify any challenges, strengths and weaknesses and enable you to monitor your progress.
It's worth noting that your business plan will not be a static document, as it will continue to develop, as your organisation grows.
When creating your business plan, try to consider and include the following:
- What is your idea?
- Who will your customers be?
- Who will benefit from what you’re doing?
- How will you promote your organisation?
- Is there something similar already available?
- What steps do you need to take to achieve your goals?
- What resources do you need (such as funding, staff, building, materials)?
- How much money will you have coming in, going out and left over?
The following organisations offer information and advice on how to write a business plan, including templates and examples.
The Government: Write a business plan
School for Social Entrepreneurs: Writing your first business plan
The Prince's Trust (for young people up to 30 years old): Business plans
It is important to measure the social value and impact your organisation has on the local community. This will not only help you to continue developing and improving, as it can identify areas of strength and weakness, but it also demonstrates to stakeholders, including funders, that you are making a real difference.
The following organisations offer information on how to measure the social value and impact your social enterprise has in your community.
Data Orchard: Data maturity self assessment tool
Good Finance: Measuring social impact
Social Value UK: The social value self assessment tool