It’s hard enough to create and deliver value into the marketplace. But it’s extraordinarily difficult when you have a mission to help people, the planet, AND generate profits while doing it.

In my experience funding impactful projects and starting my own enterprises, I’ve discovered five questions you should ask (and keep asking) as you start your journey.

#1 Who will pay for it? 

I’ve found that economically distressed communities, which is where many social enterprises reside, have been neglected by the marketplace and policymakers.

Your social enterprise will have to be a bridge between the broken policies and markets.

You’ll need to attract different types of customers to help pay for your product/service and the have the social outcomes that are your mission. You might try different tactics such as: 

• Sliding scale fees
• Scholarships
• Internal cross-subsidies from other programs

#2 What’s your bottom line? 

Operating a social enterprise requires you to have your eyes on both mission and margin.

If you are structured as a non-profit, you’ll need to educate your stakeholders about why you are starting an earned revenue program (another term for social enterprise).

If you are a traditional business, you’ll need to understand how to measure and tell your impact story to those interested in your cause.

Measuring success in your mission and margin is a constant balance, but you have the unique opportunity to leverage both for the common good.

#3 What’s your risk tolerance? 

Being a risk-taker is counterculture in some agencies or places. So first you have to do an honest assessment of yourself and your stakeholders.

Social entrepreneurs see opportunities, make connections, and create value for others. These will need to be communicated through a business plan or social business model canvas.

#4 How much is enough? 

You’ll need to have a financial model that allows you to project and adjust unit cost and capital inputs.

If your financial projections are not realistic, it does not bode well for impact investors. You’ll want to show your break-even units and know how much capital you’ll need in the startup phase.

#5 Who will operate it? 

As with any organization, people and teams are the most valuable asset and often the biggest expense.

You’ll need to assess your organization’s capacity and know the gaps and areas for improvement.

If you start solo, you’ll be wearing a lot of hats at first and will need to have a plan for which team members to add first.

Finally…

If any of these things are confusing or you’re just not sure of the steps to do them well, you might check out the Innovation Lab, designed for those who are exploring the idea of forming a social enterprise. We cover these questions, as well as other topics, in more detail.

*Photo by Simone Secci on Unsplash