Inspiring a New Generation: The missions that set social enterprises apart
Written by Emily Ennis
This piece comes from an E-Lab Entrepreneurship Essay Competition winner from the 2024 competition. For more information about the Essay Competition, and to see the other winning entries, see this overview post.
The concept of social enterprises has been in existence in the United Kingdon since the late 1970’s, when the emergence of social entrepreneurships as an alternative to commercial or private businesses developed the belief that goods or services can exist not only to serve profit making establishments, but also as a part of companies which serve to improve the communities they exist in. Social entrepreneurship is the use of traditional business methods to overcome a social or an environmental issue. This focus is highly important to the respective areas in which different companies operate because it can help to alleviate challenges from poverty or inclusion, and it is built upon a commitment to take care of the development of a community. Social entrepreneurship, through social innovation, responds to needs that have not yet been met.
Today, there are more than 131,000 social enterprises in the United Kingdom with a collective turnover of £78 billion. They employ nearly 2.3 million people. Social entrepreneurship is widely regarded as a “better way” to do business because of the intention to contribute to economic and social equality and to environmental sustainability.
One good example of a successful social enterprise is Butterfly books. Butterfly Books has a long-term mission “to raise awareness among children of the career options available to them, with the aim of improving diversity and reducing national skill gaps” [source]. The core idea of Butterfly books is the production of carefully thought-out fiction book characters that seek to engage and inspire the next generation of children through the stories created in their collection of children’s books. The company has worked closely with key organisations in the United Kingdom, such as the Armed Forces and the NHS, to challenge gender stereotypes and job perceptions, and to foster open-mindedness in children with a belief that they do not need to fit into a particular box. In essence, the company endeavours to expand the horizons for what children believe they can achieve.
A typical example of this comes from their very first children’s book, entitled “My Mummy is an Engineer”. At present, more than 7,000 copies of these books have been sold, ensuring over 15,000 children have been able access these thought-provoking stories. Through the publication of this book, along with the other books from this collection, children are taught that people are not restricted to a certain job because of their gender or their ethnic background. A child does not have to be a doctor just because that is what their parents do. These books break the ‘social norms’ and aim to educate and inspire children as to how their future could look. Often, children are pressured and many assumptions continue to exist that there is only few career pathways that fit specific genders and ethnicities. These books help to challenge these assumptions and encourage children to feel that they can be whatever they might want to be.
This kind of social mission can have a number of benefits for a community. For example, children may become more excited about employment opportunities in their areas and communities could begin to see growth in employment of local citizens, rather than companies having to employee people from further afield. These books may also lead to an overall increase in national happiness, as many young individuals may no longer end up doing the jobs they feel obligated to do but may pursue the jobs that they feel impassioned about. This could, in turn, play a role in the increase of GDP. If people are passionate about what they are doing, then they tend to care more about the work that they produce and to invest more effort in doing it as well as they possibly can rather than just doing the basic required of them. This subsequently leads to a positive growth in the economy. Along with this, the government should see the macroeconomic objective of lower unemployment reached. More of the younger population will feel motivated and inspired to be in employment, doing a job they love.
For Butterfly Books, annual turnover has grown from £17,845 in 2022 to £22,194 in 2023. The company looks set to continue to make a healthy turnover for the directors but, more importantly, to make a positive contribution to society for a generation of children who may come to have a more positive view of their potential contribution to their community. Often, the directors of a social enterprise, unlike the directors of a limited company, are focused on reinvesting rather than hoarding profits, creating a positive social and environmental change.
In contrast to social enterprises, some companies strive for profit maximisation, driven by the idea of a higher salary at the end of the financial year rather than a prominent social mission to use profit to uplift the local environment. Even though we may love and use these businesses, we can clearly see they have limited impact on the world around us and that their core mission is not directed towards such impact. This can lead to cases whereby the companies do not care about their consumers but care only about their profits.
Tiny Owls is a children’s book publishing company founded around a similar time to Butterfly Books and it is a limited company. As a limited company, the emphasis is on profit making rather than social equality or environmental concerns. As a result of their contrasting business plan, they have seen a much stronger turnover and higher profits when compared to Butterfly Books. For example, by 2022, Tiny Owl Ltd had a total current asset of £188,516 in comparison to the £42,100 of Butterfly Books. The essence of the enterprises was the same, with the same timescale for growing the businesses, yet the social enterprise has generated significantly smaller assets.
Yet the social character of Butterfly Books cannot be a coincidence in the growth that it has seen. Factors, such as a prioritisation of social impact over profit as well as the niche nature of the books published by the company, should be considered when comparing the business accounts. There may be some trade-offs between social enterprise and profit maximisation, but the ethos and mission statements of each enterprise are also critical to measuring the success of a business.
Butterfly Books has succeeded in its core mission, produced a healthy turnover for its founders and supported generations of children in social mobility and development. Success without greed, established in an ethical way, should ultimately be viewed as a higher priority than bottom line profits alone.
Original Prompt:
Discuss the concept of social entrepreneurship and its role in addressing social and environmental issues. Analyse, in depth, a successful social enterprise and discuss how it balances the trade-off between profit-making with creating a positive impact.
Bibliography.
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Perera, S. (2022). All about Social Enterprise | Social Enterprise UK. [online] Available at: https://www.socialenterprise.org.uk/all-about-social-enterprise/#:~:text=Here%20a%20few%20examples%20of%20the%20diversity%20of [Accessed 2 Jun. 2024].
Rostron, K.I. (2015). Defining the Social Enterprise: A Tangled Web. International journal of management and applied research, [online] 2(2), pp.85–99. Available at: https://www.ijmar.org/v2n2/15-007.html#:~:text=The%20report%20defines%20an%20SE [Accessed 2 Jun. 2024].
Snowden, M., Oberoi, R. and Halsall, J.P. (2021). Reaffirming trust in social enterprise in the COVID-19 era: Ways forward. Corporate Governance and Sustainability Review, 5(1, Special Issue), pp.120–130. doi:https://doi.org/10.22495/cgsrv5i1sip3.