Is social business the stuff of fairy tales?

What is a social enterprise? Let the three little pigs tell you all about it in this back to basics blog.

See this page in: Cymraeg

What is a social enterprise?

To be honest, up until a few months ago, I had very little understanding of social enterprise, and could not have told you how a social business differs from other business models. In fact just the term ‘business model’ would have sent tumbleweeds rolling through my mind.

But then I moved to Cardiff and started working at the Wales Co-operative Centre; a company that supports social businesses and runs projects to strengthen communities, tackle poverty, get people online and give them access to fair financial services.

Whilst I’m definitely still no expert, I think I’ve absorbed enough knowledge over the past few months to give a layperson’s explanation of what a social business is and why more people should know about it.

In essence, a social enterprise is a business like any other, it has to provide a service or product and run efficiently to make a profit and grow. The key difference is that a social business has a worthy cause, and rather than using its profits to give to private shareholders, those profits go back into the business and towards helping the cause. This means that when a social business profits, society profits as well.

There are many different types of social enterprise, and in all honesty the terminology and legal structures are still a bit much for me. So I’m taking it back to a level that my simple mind can understand…

Once upon a time…

…Once upon a time there were three little pigs and, due to a nasty incident with a wolf, two of them were homeless and crashing at the third pig’s house. This was far from ideal, but it turned out that the pigs were not the only ones in dire straights; many of the fairy tale creatures in the community were struggling to repair their homes after the nasty wolf had blown his wicked way through town.

The third pig wanted to do something to help his neighbours and restore his town to its pre-wolf glory. He had his worthy cause, now he just needed a business plan.

As it happened, the third pig was an expert builder, specialising in wolf-proof buildings. So he teamed up with the friendly Welsh dragon from the next valley who made dragon breath-baked bricks, and together they started a building and repair firm. The third pig provided a friendly service and was able to charge affordable prices by using locally sourced, sustainable products.

Hog Roast Building and Repair Ltd. started to make a decent income and bring home the bacon, but the restoration of the town was slow and, as ever, winter was coming. So the third pig decided to use his profits to train his unemployed fellow pigs in the art of building. As the first and second pigs became competent, more building could get done and more profit came in.

The pigs decided to build a town hall for the community which was used to host all sorts of events to benefit the locals. The first pig started to hold building and maintenance lessons, teaching everybody that straw lacks the structural integrity necessary to build a decent home. The second pig hired Red Riding Hood and the Woodcutter to teach wolf-defense classes and Cinderella was employed to do the cleaning.

The community thrived; the little old lady was moved out of her shoe and into more suitable accommodation, Hansel and Gretel got counselling for their gingerbread addiction problems and Wi-Fi was installed in Rapunzel’s tower so that she was no longer isolated from the rest of the world.

Because the three little pigs (and the dragon) ran their business fairly, with a social conscience, they were able to provide services that their community needed and improved the lives and prospects of the whole town. They may not have been millionaires, but everybody was richer because of them.

And it’s not a fairy tale, businesses with these kind of ethics at their heart exist all over the real world.

There are social enterprises making a positive impact around the globe; from cafés giving people with learning difficulties the skills to get into employment, to community owned leisure centres creating jobs and improving the health of the local population; from companies selling affordable, renewable energy, to centres providing friendship and counselling to those who need help. In short, social businesses are working to tackle social problems, in a sustainable way, and that can only be a good thing.

As I said, I’m definitely no expert. But it seems to me that by applying some basic co-operative principals, a company can make money AND benefit the wider community. Surely that’s a better way to do business and something we can all get behind to support.

If you want to find out about social enterprise in more detail, there are great, easy to understand, in depth resources at the Social Business Wales website.