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Setting up a social enterprise

Are you thinking of setting up a social enterprise? Here are the basics of what you need to know to get started. 

According to the 2021 Social Enterprise in Scotland Census, there is a growing trend of female leadership within the social enterprise sector with 71% of social enterprises being women-led. So, if you are looking to set up your own social enterprise here are the basics of what you need to know.  

What is a social enterprise?  

A social enterprise is a business set up to help with a common good, either social or environmental. As a business, they seek to make profit and succeed commercially. However, to fulfil their mission they operate in a way which prioritises the benefit to social and environmental issues i.e. who they employ, how they use their profits and where they work.  

Social enterprises in Scotland can be set up as a:  

  • limited company 
  • charity or a Scottish Charitable Incorporated Organisation 
  • co-operative 
  • registered societies (previously known as ‘industrial and provident societies’) 
  • community interest company (CIC) 
  • sole trader or business partnership 

    There are 3 main models of social enterprises:  

    • opportunity employment: this model employs people who would otherwise have significant barriers to traditional employment. For example, Social Bite aim to employ 1 in 4 people who have struggled with homelessness or extreme barriers to employment 
    • donation: this model re-invests profits and donates back into the cause or community they seek to help. For example Isle Develop re-invest their profits in island entrepreneurs and community projects 
    • innovation: this model provides transformative products or services that serve and positively impact the community/cause in their mission. For example, Radiant and Brighter aims to bridge the gap between the needs of the growing BME refugee and migrant communities and existing support provision in Scotland 

    To be a social enterprise a business must adhere to the following:  

    • have a clear social or environmental mission set out in its governing documents and be controlled in the interest of that mission 
    • be independent of state or government control, and earn more than half of its income through trading 
    • re-invest or donate at least half of its profits or surpluses towards their mission 
    • be transparent in the way they operate and the impact they have 

    Social enterprises play a vital role in encouraging positive action and change to the challenges faced across communities and the world. They are found across all sectors of the economy both private and public.   

    Here are some helpful links to resources and support to kickstart your social enterprise journey:  

    Start-up Checklist – Women’s Business Centre 

    Setting up a social enterprise – GOV.UK (www.gov.uk) 

    Home | Social Enterprise UK 

    Funding help  

    Firstport – Business support and funding to help you start a social enterprise in Scotland 

    Home | Social Investment Scotland 

    Your Community Shares Journey (communitysharesscotland.org.uk) 

    Advice and training  

    Just Enterprise – National Support, Delivered Locally 

    Social Enterprise Scotland 

    Support for Social Enterprises | Highlands and Islands Enterprise | HIE 

    Support social enterprises  

    Find an ethical gift from a Scottish social enterprise – Buy Social Scotland 

    Find a Social Enterprise – Social Enterprise Scotland 

    Social Enterprise Directory | The Good Stuff Network – Edinburgh (goodstuffedinburgh.co.uk) 

     

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