Social entrepreneurship: working on a mission

Does your business solve a social, societal or environmental problem? And is that the main purpose of your business? Then you may call yourself a social entrepreneur. Making money is not your main goal, but your business is financially independent.

What makes a social entrepreneur?

Social entrepreneurship is not the same as sustainable business or responsible business conduct. But these terms are often interchanged. Jorien van Lookeren Campagne, policy officer at Social Enterprise NL, explains the difference: "In entrepreneurship, the social goal you want to achieve with your business is paramount. In sustainable or socially responsible businesses, making a profit is paramount. Secondly, they also have social objectives.

Social enterprise can be done in many different ways. Think of a restaurant that employs people with disabilities in its service. Or a furniture maker who turns old materials into new furniture. Van Lookeren Campagne sums it up: "Social entrepreneurs work hard for social welfare, a better environment and a sustainable world."

How to set up a social enterprise

Does social enterprise sound like something that suits you? Start your own social enterprise or give your existing business a social purpose. Define your mission, choose the right legal form, arrange funding and measure the results of your business.

1. Define your mission and approach

You probably already have a good idea of the problem your company is working on. How big is the problem, where does it come from and what does the target group need? Once you have identified all sides of the problem, you can start looking for solutions. Read books and articles, talk to experts and find out what solutions already exist. Van Lookeren Campagne adds: "And look at entrepreneurs who are already focusing on this problem. That way, determine how you can add value." Based on this, decide which approach to take for your business.

Sea Ranger Service protects vulnerable marine areas and helps young people distanced from the labour market find jobs. "We started in the port cities of Rotterdam and Den Helder. That is where unemployment is highest," says Wietse van der Werf, driving force behind the Sea Ranger Service. Maritime veterans train unemployed young people to become 'foresters at sea'. They set out on a circular sailing ship and manage marine protected areas, conduct research and preserve historical shipwrecks.

2. Choose the right legal structure

The legal structure of a foundation is well suited to a social enterprise. A foundation can run a business (in Dutch) and make a profit. The board makes the decisions and allocates the profits entirely to the social objective. You can also choose other legal structures, such as a BV or a cooperative. In a BV, the highest authority lies with the shareholders. In a cooperative, it lies with the members. In a BV or cooperative, part of the profit can go towards a social objective and part to the shareholders or members. Want help choosing a legal structure? Find out which legal structure suits you on Business.gov.nl.

Starting a BVm

The government wants to encourage social enterprises. To this end, it is developing the social limited company (BVm). "With a BVm you make it clear to your customers and business relations that within your company the social mission comes first," says Van Lookeren Campagne. "For example, if you participate in a tender with a municipality, it is immediately clear to that party what your company stands for." A BVm is a variant of the BV, and therefore not a new legal form. It is not yet clear from when you can set up a BVm.

Sea Ranger Service consists of a foundation that owns three BVs. "That is a conscious choice," Van der Werf explains. "The foundation is important for the social mission and doing business with the government. The bv's really run like a company. That is important for financiers. The two legal forms complement each other well."

3. Arrange financing

If you are looking for funders for your social enterprise, you have several options to choose from. From social credit (in Dutch) or grants to crowdfunding and loans. Make use of a financing tool. This will help you find funders that match your social purpose.

Are you hiring work-disabled people? The government offers several subsidies and schemes. You get help in finding the right people and can opt for a trial placement. The employee then works in your company for two months on full benefits. This gives you time to discover whether you are a good match. A job coach guides your employee on the shop floor during the trial placement and afterwards.

4. Measure the results

You have defined your mission, chosen the right legal structure and arranged financing. As you get started, it is time to measure the concrete results of your social enterprise.

Does your restaurant employ people with disabilities in service? If so, make a note of how many hours they work. Do you make new furniture from old materials? Keep track of how many products you have sold and how much recycled material you have incorporated in them. Do you buy coffee at a fair price? Make a note of how much extra you pay the farmer in Ethiopia compared to current prices. You keep these concrete results in your records and include them in your annual report. You also share them with customers and investors. With tools (in Dutch) to measure your results more easily.