The basic idea behind social enterprise is quite simple:

A social enterprise is a business, which often focuses on community benefit as well as the bottom line.

The important factor is that profits are reinvested into the business or for the benefit of the community. Social enterprises can help to improve local communities.

How Big?

Social enterprises are first and foremost businesses but with a strong social purpose. They range in size from small organisations with turnovers of a few hundred pounds to international sized corporations. They operate in a wide range of industries and sectors ranging from village halls, farmers markets and recycling companies to transport providers and childcare. They all aim at both generating profits AND delivering social and environmental change.

The Sector

The social enterprise sector is as diverse as the private sector, encompassing a variety of structures. These include co-operatives, industrial & provident societies, development trusts, community enterprises, housing associations, mutual associations, community land trusts and leisure trusts and companies Limited by Guarantee. Recognising that none of these entirely matched social enterprise a new legal structure was launched and since 2005 social enterprises have also been able to register as a Community Interest Company.

Who are they?

Some well known companies are social enterprises. These include high profile names such as The Co-operative, Welsh Water , the Eden Project, The Big Issue, and Jamie Oliver's Fifteen, but there are many other social enterprises operating in almost every sector and industry from village halls , farmers markets, recycling , and construction, to IT, childcare and transport. Ealing Community Transport formed in 1979 as part of Ealing Voluntary Service Council, ECT started life with just four vehicles, providing a transport service to Ealing residents. 27 years later, ECT has grown into a leading not-for-profit organisation with an £50 million turnover, providing a range of high quality services for the community. Local examples of social enterprise in East Sussex include Ore Valley RSO, Decoda, Hastings Furniture Services, The Bridge (Hastings), Laughton Village Shop, Community Transport for the Lewes Area, PaperChase Business Support Services.

Why are they there?

Nearly all social enterprises are there because they spotted some kind of gap in the market. Often these gaps are not served by either the private or public service, or where there has been a market failure in the past. Community Transport schemes are a good example – providing services where for example bus companies are not interested. In the case of development trusts, co-operative societies, after-hours activities at primary schools, the people and communities who felt they had been let down or needed something that they just weren’t going to get from the public or private sectors decided to do something about it themselves. Such ‘community enterprises’ can be viewed as a subset of social enterprise –where trading for social purpose has a community base which takes in both community of place and community of interest.

Service Delivery

Successful social entrepreneurs have mixed money with a clear community purpose and possessing a clear business ethic, applied good management to create successful businesses.

Social enterprises tackle a wide range of social and environmental issues and operate in all parts of the economy. By using business solutions to achieve public good, the Government believes that social enterprises have a distinct and valuable role to play in a helping create a strong, sustainable and socially inclusive economy

Formal Definition

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 maximise profit for shareholders and owners.

Social Enterprise - a strategy for success DTI, 2004