social delta

Consulting and support for social enterprise in Canada

Tag: business planning

Strategies for social enterprises to survive social distancing

Every business is struggling now under the recommendations (and requirements) for people to stay home and not be in public gathering places, retail locations or restaurants and bars.

Here are 7 suggested activities for your social enterprise, to make good use of this time in order to strengthen your business in the future.

To be clear, it is clear that this is not business as usual. Money is tight. Priorities may be changing. Families are in varying degrees of crisis and need. Clients are scared. Entrepreneurs are doubting their futures. Beneficiaries are in greater need than ever. These following recommendations are not a magic solution—if only there was one—but try to take from this list some ideas that fit within your context.

Build customer relationships. Now is a good time to build relationships with your customers and stakeholders. We should do this at all times, of course, but when we can’t meet face to face, there is an unusual opportunity to reach out to get to know your customers better. Here are a few approaches to consider:

  • Ask them how they are doing, and what your business can do to help them?
  • Provide incentives for online shopping, pre-ordering, or referring a friend.
  • Re-confirm the information you have about them (their preferred email, a new phone number, product preferences, etc)
  • Invite them to answer a survey (or attend a video chat) to share what they value most about your products or services.
  • Share with them a good news story about how their past support has provided something of value to a beneficiary of your social enterprise.

Be careful with the content of your outreach, however. Many of us have received emails from every company for which we have a loyalty card or an account telling us their policy on COVID. Frankly, everyone’s policy is the same (give or take) and these efforts at communication are very one-sided. Do I really care what my preferred car rental company’s policy is? Or how the opening hours of the local pharmacy are changing? If we wanted to know this (because we needed to rent a car or pick up a prescription)…we would simply visit their website, or ask them by phone.

Re-visit your business plan. Don’t revise it based upon the pandemic, simply take this time to go back to your original assumptions, do some analysis of how your targets have been met or not met in the last year(s), review the past effectiveness of your strategic marketing channels, etc. Of course, it might also be prudent to look at your risk management strategy (of course you had one in your business plan, right?) and maybe consider what you might include going forward now that you are in the middle of a risky business environment. (What are you learning that would inform your future resilience?). Write down you hypothesis based upon what you know. You can check back in a few months to confirm your assumptions as the market re-calibrates.

Offer your services. You are a social enterprise. You are therefore creating social value at a time when social value is most needed. If your service helps people, make it available. If your revenue helps to provide benefits to those in need, ask people to buy your product/service so that you can help more people (ie double down on communicating your social value proposition to clients). If you can afford to, give away your product/service/time to help others manage through the crisis. This is not about marketing, but about increasing your social impact (and that is what you are in business to do, right?). Oh, as a happy by-product, people will know more about your business, which may help future marketing, but for now, focus on creating social value.

Do (free) online promotions: This is the time to offer a webinar, or create valuable downloadable content, or host a zoom call of your key clients.  It may seem counter intuitive if you are losing money to offer free online content, but remember that by offering up something that is at no cost, but can be of benefit to your audience can help with future sales, or at the least can demonstrate your social commitment while showcasing your expertise or product.

Create (or improve) that online storefront:  Your “to do” list probably has included some reference to creating or strengthening your online sales capacity for some time. It is part of your business plan that you might not have got to yet.  Well, today is the day. Start investing in the infrastructure to sell your products or services online. Create a virtual storefront. Set up a Paypal account. Ensure that you are able to fulfill online orders promptly and accurately. Link your online ordering system with your customer relationship management software (or your Excel spreadsheet, or your paper files…depending on the maturity of your office record keeping systems).  This may cost you money to set up (at a time when money might be tight) but it is a necessary investment in future growth…and very likely will help you recover losses is this pandemic scare lasts for any length of time.

Limit your costs. This sounds obvious—and somewhat counterintuitive after some of the recommendations above—but wherever possible, reduce your variable costs and try to negotiate lower fixed costs (or defer them). Don’t keep your staff hired just to make a point if it is going to harm the long term sustainability of your business. (There are—so far—more cash benefits from government for individuals than there are for small businesses) Don’t place that huge supply order unless you absolutely need it to meet market demand. Negotiate better terms with your financial partners on outstanding loans. Ask for longer payment terms on outstanding invoices. (your clients may be asking you for the same if you are selling business to business)

Apply for relief. There are several programs and promotions being offered to support small businesses. These are changing each day, but research grants, low interest loans, tax breaks and other policies that may apply to your business.

Key Gov’t supports are summarized and linked here: (bookmark this link and check back frequently, as the programs keep changing as we learn more)

https://www.canada.ca/en/department-finance/economic-response-plan.html

Check with your financial institution about Accessing interest free loans (up to $40K until Dec 2022) through the Canada Emergency Business Account (CEBA). Up to 25% of this loan is forgivable in certain conditions.

And a bonus one: (thank you for reading to the end!)

Look after yourself. Of course you are social distancing, or placing yourself in isolation if you are not feeling well. But remember to eat well, get moderate exercise, sleep, listen to your favorite music with your eyes closed, limit your intake of frenetic news updates…whatever you need to stay physically and emotionally healthy.

The restrictions on our lives and businesses, and the inevitable new landscape in the economy in the coming months will need us to remain positive, balanced, mindful and patient.

Don’t let the worry lead to a feeling of despair. Stay connected with friends, clients, beneficiaries, and family in whatever way you can to bolster your spirits and your resolve to remain in business for social improvement. 

The effectiveness of your social enterprise will rely on your ability to remain committed, focused, and diligent in the months ahead.

Market share equals what to social enterprise?

One key measurement of success in a for-profit business is market share. Does this also apply to a non-profit housing cooperative?  An employment-based catering company?  An up-cycling storefront?

The goal of a social enterprise is to maximize the positive impact on those who benefit from their business: affordable housing to all, new job opportunities for the disenfranchised, tons of diverted waste from landfills.  In many cases, mission maximization can only be achieved by increasing the scale of their business; therefore,  unless the market expands, scaling up means someone else must scale down or be joined.

However, it is almost “un-social enterprise” to be creating a vision in which market share is a goal, or evemarket-share-graphicn plausible. Most social enterprises operate locally, and all work with a social mission that drives them. The thought of putting a for-profit out of business—or even acquiring that company—is likely not in their initial thinking, nor explicitly in their business plan.

But why not? Why shouldn’t a social enterprise seek to minimize competition and/or take customers from another local business? Why wouldn’t they attempt to buy that local business in order to increase their inventory, maximize their social mission, minimize competition, and benefit from economies of scale? There is no imperative to leave your competitors alone when you are a social enterprise.

Of course, it is possible that putting competitors out of business, or challenging their cost structure by using grants to get a competitive advantage, or taking them over in order to employ a disadvantaged segment rather than their existing employees, may have unintended social costs. No social enterprise ought to decrease the employment of others in favor of their “target” population, or diminish the value of for-profit colleagues in the marketplace. Healthy competition is good, arguably even necessary for innovation and improved social outcomes, and seeking market share without recognizing the social costs could potentially jeopardize the net social impact on the community.

Social enterprises are modest by nature, in my experience, and aggressive business practices are seen as unsavoury at best and downright nauseating at worst. However, if increased market share means increased (net) social benefit, then by all means a social enterprise ought to be unabashedly bold in their business aspirations to increase market share.

Free downloadable resources now available

Social Delta has just made several resources available to be downloaded for free.

Do you know your entrepreneurial strengths and weaknesses? What sort of incorporation is right for your social business? What information might be included in a social enterprise business plan?

Visit our Downloadable Resources page to answer these questions and more.

The Value of Ideation

“What business should we operate?”

Is your organization thinking about launching an enterprise?  Jonathan Wade explains the importance of ideation in pursuing that goal – and shares some of the challenges and benefits every enterprising non-profit can expect.

For non-profit organizations, there is a growing sense of urgency in seeking necessary resources to deliver on their social mission. Funding is diminishing, or is becoming increasingly focused on specific areas of funder interest. Donors seek lean organizations and relatively rapid results, yet social service provision is labour intensive, and change takes time.

It is not surprising that Ottawa’s Centre for Innovative Social Enterprise Development (www.cised.ca) receives regular calls from non-profit professionals asking for help starting a business to offset lost funding. The problem is that successful businesses rarely succeed because the entrepreneur needs money. In fact, as anyone who had started a business can tell you, launching a business typically requires more money (investment) than it initially makes…often generating one to three years of operational losses.

This reality is understandably disappointing for cash-strapped organizations.

Let the ideation begin

However, starting a social enterprise from within a non-profit is an excellent way to diversify revenue, provided that expectations are managed. In fact, the process of conceiving of a business idea—referred to asideation—is itself a very beneficial endeavor for most non-profits (and charities) as it allows them to look critically at what they do and how they do it while considering market demand for products and services they might create.

There are several ways to determine what sort of social enterprise your non-profit might consider:

1. What are you good at, and can it be commercialized?
2. What does the market need, and do you have (or can you assemble) the knowledge, skills, and inputs required to meet that demand?
3. Can you take over an existing business that is in keeping with your mission?
The second approach to ideation is pure entrepreneurship. If you understand the market, and you can fill a consumer need, that becomes your business. However, non-profits typically need to commission suitable market research and then divert limited resources to create the required product or service. This has a high opportunity cost, and many say that you can’t “learn” entrepreneurship.

Similarly, taking over an existing business requires a strong knowledge of business operations and business valuation, as well as access to financing to acquire an existing business.

Building a social enterprise on existing strengths within a non-profit corporation, in my experience, is the most effective ideation approach; it guarantees an alignment between the organization’s social mission and its business activities and it doesn’t require learning a whole new skill-set or investing in new resources.
For example, if your organization offers computer training to women in crisis, then you can offer fee-for-service computer training to a broader audience to generate revenues to underwrite your social mission. Similarly, if your social service programming generates artworks, then selling those artworks—indeed a by-product of the programming—is relatively easy and does not immediately raise concerns about mission drift.

The challenges of commercializing

Commercializing existing assets—intellectual, social, financial, or human capital—can be a challenge for non-profits. For one, the organization may lack the skill and resources to bring these assets to market. Second, there may be no buyer for the skill, product or services in which your non-profit excels. Third, an organization must ensure that selling of skills, networks, intellectual property, or programs doesn’t adversely affect the current programming goals. Fourth, the very concept that people, networks, programs and buildings are “assets” that can be “used” to generate revenue can rub non-profit professionals the wrong way.

Each of these challenges can be addressed, of course, and the process of addressing them is what brings new value to a non-profit board, staff, volunteer and beneficiary community. Acquiring new skill-sets is possible but one needs to be carefully budgeted and planned. A well-done feasibility study will identify not only if there is a buyer for your product/service, but also whether that business idea will enhance social outcomes.

A good business plan ensures that the launch of any revenue generating activity will support, not compete with, social value creation. Similarly, if the “assets” of the organization are understood as being investments in a better social outcome, then the language becomes less inflammatory.

Many believe that what makes an entrepreneur is the ability to see challenges as opportunities. Perhaps loss of funding offers the opportunity to rethink how best to maximize a social mission. The ideation process for non-profit staff and governors is a concrete way of categorizing challenges in the market and in the organization and building a sustainable, revenue generating, social value-creating solution to those challenges. Indeed, the process of ideation actually strengthens the capacity and resolve of an organization with a social mission.


This article originally appeared February 24, 2014 in See Change Magazine online.

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