Are you thinking of setting up a social enterprise? Here are the basics of what you need to know to get started.Â
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. Â
What is a social enterprise? Â
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. Â
Social enterprises in Scotland can be set up as a:Â Â
- limited companyÂ
- charity or a Scottish Charitable Incorporated OrganisationÂ
- co-operativeÂ
- registered societies (previously known as ‘industrial and provident societies’)Â
- community interest company (CIC)Â
- sole trader or business partnershipÂ
There are 3 main models of social enterprises:Â Â
- 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 employmentÂ
- 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 projectsÂ
- 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 ScotlandÂ
To be a social enterprise a business must adhere to the following:Â Â
- have a clear social or environmental mission set out in its governing documents and be controlled in the interest of that missionÂ
- be independent of state or government control, and earn more than half of its income through tradingÂ
- re-invest or donate at least half of its profits or surpluses towards their missionÂ
- be transparent in the way they operate and the impact they haveÂ
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.  Â
Here are some helpful links to resources and support to kickstart your social enterprise journey:Â Â
Start-up Checklist – Women’s Business CentreÂ
Setting up a social enterprise – GOV.UK (www.gov.uk)Â
Funding help Â
Firstport – Business support and funding to help you start a social enterprise in ScotlandÂ
Home | Social Investment ScotlandÂ
Your Community Shares Journey (communitysharesscotland.org.uk)Â
Advice and training Â
Just Enterprise – National Support, Delivered LocallyÂ
Support for Social Enterprises | Highlands and Islands Enterprise | HIEÂ
Support social enterprises Â
Find an ethical gift from a Scottish social enterprise – Buy Social ScotlandÂ
Find a Social Enterprise – Social Enterprise ScotlandÂ
Social Enterprise Directory | The Good Stuff Network – Edinburgh (goodstuffedinburgh.co.uk)Â