Social enterprises are businesses that trade in order to pursue a social aim. They:
- produce goods or provide services to achieve their goals and financial self-sufficiency
- have social aims such as employment and training - or provision of services - particularly for disadvantaged groups
- often have a democratic management style with different stakeholders taking part in decision making, eg employees, users of the social enterprise or specially appointed trustees
- often report on their social, environmental and economic impact
- principally reinvest profits in the business or in the community to further their social aims
Social enterprises are diverse and operate at many levels. They include community enterprises, social firms and mutual organisations such as co-operatives and large-scale operations operating nationally or internationally. What they have in common is a commitment to meeting social and financial needs, with some also aiming to meet environmental needs.
Sources of finance for social enterprises includes
- trading income
- retained profits
- bank, Community Development Finance Institutions and other loans
Social enterprises may qualify for grants in the same way as other types of business. In addition, social enterprises in disadvantaged communities, or which address social exclusion, may qualify for start-up and capital grants.
