Source 9: ABC's of Social Enterprises
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Source 9: ABC's of Social Enterprises


We conducted a survey to explore how nonprofit providers are creating new income streams by targeting the private-pay market, launching business ventures, and forging strategic corporate partnerships. The research was funded by The Robert Wood Johnson Foundation. Here’s what we learned.

Starting Up

  • Stick to your C’s.
    The closer you stick to your core competencies, capabilities, and constituencies, the more likely you’ll reduce planning time, start-up costs, and risks.

  • Examine your assets.
    Look creatively at your tangible assets like equipment, space, and vans—plus your intangible assets like your reputation, intellectual property, and unique expertise. Which assets are potential customers willing to buy—and are they profitable?

  • Identify your weaknesses.
    Partner with organizations whose strengths correspond to your weaknesses.

  • Stabilize your base.
    Line up your internal financial commitment and staff resources before you start researching and planning.

  • Educate.
    In the nonprofit world, some staff, volunteers, and board members oppose charging fees and making profits. Show them how your idea will help you better achieve your mission.

Going to Market

  • Leverage your reputation.
    Your expertise, trustworthiness, service quality, respected staff, and specialized skills make you a good buy in the marketplace. Value pricing, dependability, and cause-related issues also can give you a competitive edge.

  • Target your marketing.
    This is crucial if you have limited staff and financial resources. Also make sure to allocate initial seed money for marketing to drive demand.

  • Identify secondary referral sources.
    Elder law attorneys, financial planners, discharge planners, private case managers, and human resource professionals are critical. Cultivate these relationships. Make presentations at professional and religious organizations and clubs.

  • Know your customer.
    Understand their wants and needs and learn how to deliver them. Build a relationship with customers before they need your service.

  • Be flexible.
    Get a competitive edge by offering features like short hours for home-delivered services, extended hours for a health club, or the ability to have one worker complete multiple tasks.

  • Offer one-stop shopping.
    Make it easy for people to get a variety of services from you.

Operating Your Venture

  • Be clear.
    Once you decide to pursue a business venture, be precise about what services and products you will and will not provide.

  • Focus on staff.
    If necessary, hire new staff to implement your venture. Culturally diverse staff increases consumer satisfaction and referrals.

  • Pay to earn.
    Remember that the costs of delivering services and products are critical to turning a profit.

  • Seek consumer feedback.
    Hold informal, face-to-face meetings with older consumers and their families. Use surveys to identify trends and needs. Being proactive, so you won’t be thrown a curve.

  • Update your thinking.
    Market conditions constantly change—and you have to change with them.

  • Stay current: Make sure you have good internal controls and current technology so you can be as efficient as possible.

  • Line up working capital.
    You need enough cash to do what you need when you need it. That includes paying managers and direct staff a competitive wage.

  • Learn from your mistakes.
    Don’t be afraid to tinker with, revise, or replace failing ideas with better ones. Social enterprises are not a quick fix. It will likely take years to come up with the most profitable venture and realize its full potential. 

  • Have an exit strategy.
    Make sure you can bow out if you’re not meeting business or mission goals.

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