Steps to a social enterprise start-up

July 4, 2013 - Tags: Social enterprise Planning Startup

As a would-be social entrepreneur, you may want to get going, but simply don't know how. The good news is that anyone starting a small business faces similar issues, so rest assured that there are resources already out there to help you and your social enterprise.

Before starting, ask yourself a few questions as a social entrepreneur. Your answers could guide decisions you make along the way.

  • What is your mission? Are you trying to fill a niche in the community, fulfill a social mission or help a non-profit organization be more financially sustainable?
  • How does your mission relate to the business you'd like to implement?
  • Do you have a viable business idea?
  • Is the financial return on investment more important than the social ROI?

When planning your business, be prepared to define social enterprise. Explain your goal of starting an organization whose purpose is to create social, environmental or cultural value while generating income by selling your product or service in the marketplace, such as:

  • a catering service that hires community members with barriers to traditional employment
  • a landscaping business that trains homeless or at-risk youth
  • a low-cost laundromat that serves a low-income neighbourhood

With your goals and mission established, make sure your organization is ready and has identified a solid idea for your social enterprise. Then focus on steps involved in launching a start-up:

Do your market research — Gathering pertinent information and statistics helps determine how to lay the foundation for business success.

Create a business plan — This sales tool can convince others of your business' potential to succeed and is essential when seeking financing.

Determine your legal business structure (for-profit, not-for-profit, charity, co-operative) — The Canada Revenue Agency can help you understand not-for-profit and charity structures and how they generate income.

Find out what permits and licences you need — Which municipal, provincial or territorial and federal regulations govern your social enterprise?

Seek financing — A solid business plan will help you approach sources such as credit unions and banks, foundations, philanthropists and social impact investors. There may also be government sources of funding for your social enterprise.

Find a location — Your social enterprise may need a specific type of setting. Having both local customers and local social enterprise clients who could work in the business may be crucial to its success.

Hire employees — If you need employees, look into recruiting and employment standards, and payroll and taxation obligations.

Our business start-up checklist can help you navigate the start-up phase. Enterprising non-profits may be another useful resource, as well as this eBook, Social Enterprise, an Introduction. Please contact us for information on starting a social enterprise in your region.


Comments

Posted by Canada.ca on July 22, 2013
Hi Georgina,

Thank you for your interest and feedback, we appreciate hearing from you.

To answer your first question, the Government of Canada provides financial support to social enterprise through a number of programs. In many cases, both for-profit businesses and social enterprises may be eligible.

Use our search tool to find financing programs here. Under 'Type of business' instead of searching 'social enterprise', use the name of your industry. If unsure, see the list of categories here.

As for your second question, legislation governing incorporation at the provincial level varies across the country as you noted; at this point we are not aware of any plans for changes in the federal legislation.

All the best.
Posted by Georgina on July 19, 2013
Great introduction to social enterprise! The references are really useful, especially the e-book, we hadn't come across it before.

I'm interested to know what the Government of Canada is doing to support social enterprises specifically in terms of financing options? Also are there plans to develop federal legislation similar to what the BC and NS governments have passed?

Thanks!

Georgina

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