By Andrew Cook
Before Inspire2Enterprise, I spent around thirty years in the recruitment industry – most of which were invested in setting up and running my own business.
Having spent all that time in one sector, I realised I was becoming stale; I was no longer enjoying it and made the decision to do something about it. Times had changed significantly, too – particularly with the advent of the internet and new employment regulations; candidates stopped wanting to come into the office due to the increasing length of red tape and the fact they could just as easily find employment online.
This prompted me to sell my office, pay off the mortgage and reconsider my future. Then, one weekend, I spotted an advert for a job at Business Link which resulted in an interview that featured psychometric tests and all sorts of stuff I hadn’t done for years. I was convinced I wouldn’t make it through, but I did!
I joined Business Link in September 2010, but during Christmas that year, we were informed there would be redundancies due to a lack of government support for the organisation. Oddly enough, I knew this might be on the cards when I joined – having regularly advised people to research companies they’re thinking of joining. Perhaps I should have listened to my own advice, but I took the risk thinking it would lead onto something else in the future!
Inspire2Enterprise is born
During the redundancy period, there were talks underway between the University of Northampton and Business Link. The uni wanted to create a business support and advisory service specifically for the social enterprise sector, and following an interview, I managed to get myself a job at what would become Inspire2Enterprise!
I loved the idea of giving something back to other businesses and being able to actually help people who were struggling during the start-up phase – particularly if their business had a strong social purpose. It was also a big challenge, because I’d never worked with social enterprises before.
The government tends to look for high growth companies when providing business support and training. This is a shame, because those companies are probably the most capable of actually supporting themselves and are unlikely to even feel they need external help. In contrast, lifestyle businesses and social enterprises are started because the owners want to make a reasonable living from doing something they love and from which society profits. I identify far more with those kinds of businesses, as does the entire team at Inspire2Enterprise.
Freedom to help
Malcolm Williamson who was instrumental in setting up Inspire2Enterprise gave us complete freedom, and that was a revelation for me; I didn’t have to follow any processes – I could simply do whatever I wanted in order to offer the best business advice to social enterprises.
I have absolutely loved my time here. Social enterprises address problems in society by using business models to resolve issues that are often overlooked by Government and local authorities. Sometimes, they’re people who have been made redundant and who don’t necessarily have a business background – they just know their sector very well and want to make a difference.
We help with what is often thought of as the ‘boring business bits’, and taking them through these vital elements to achieve their dreams gives me an immense amount of satisfaction.
In social enterprise, it’s easy to get wrapped up in the idea, but my role is to say, “great idea, but you’re not making money yet; how are you going to continue without turning a profit?” Social enterprises are still businesses – they trade like any other firm. There are restrictions on their profits and dividend payments, but the idea is that, after the wages have been paid, the profits go back into the business to generate social impact.
The importance of legal status and business planning
Often, when people contact us and say they want to set up a social enterprise, they’re surprised to find out that ‘social enterprise’ is not a legal entity or status; it’s a generic term for six or seven types of legal status. This is why we start by discussing their idea and then deciding which status might be the most appropriate.
This can only be done if a business plan has been put together. Social entrepreneurs should start by putting all of their ideas onto paper, producing a cash flow forecast and trying to ascertain whether or not it’s likely to be a sustainable business. Some of the people we speak to have gone as far as setting up their enterprise and choosing its legal status without undertaking the planning phase. Often, this results in the wrong status being chosen, and sometimes you have to close the organisation down and start again if you need to change it.
Getting help from Inspire2Enterprise early is vital, because the old adage of “fail to plan, plan to fail” is so true. I always remember the old Business Link statistic that suggested 89% of start-ups survive for three years if they get business advice and support. Although it’s an old statistic, it’s still relevant today.
Business plans don’t guarantee success – they reduce the chances of failure. What you write during that planning phase isn’t set in stone, either; you should adapt and change it as the enterprise grows and you gain experience. Facts and figures are vital if you’re to back up your assumptions.
Why it’s a great time to start a social enterprise
Social enterprises are outperforming SMEs. In 2017, a report by Santander revealed that 47% of social enterprises grew their turnover in a twelve month period, compared to just 34% of SMEs.
Profitability, turnover, diversity, inclusion and operating within some of the most deprived areas in the UK are just some examples of how social enterprises are beating SMEs at their own game. The irony is the amount of social investment available keeps rising – it now stands at about £3bn.
There’s never been a better time to start a social enterprise, but it isn’t always the most obvious route to take. There are lots of charities out there which are struggling because they’re not getting involved in trading activities and making their own money – they’re relying on grant funding and it’s getting much more competitive. The route you take depends on that business plan again; if you find you can’t make a profit, a charity is probably the best idea, but if you can run it as a profitable organisation, a social enterprise is absolutely the one to go for.
However, if you’re considering starting a social enterprise with grant funding, a word of warning! You’ll have to find the grant and apply for it and that’s all really time consuming. Then, even if you get the funding, you’ll probably receive it for around three years before the funder decides to cease and give someone else a chance. Also, if you’re not careful, they can start to dictate what you should do within your social enterprise, and it could be against your instincts.
This is why Inspire2Enterprise exists; we’re here to help you start your social enterprise and make it a success by applying sound, experience-led business advice. We’re a friendly bunch, too, so why not get in touch today to tell us about your big idea?