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The Next Business Shift

Social entrepreneurship as a way for rural prosperity

Thursday, May 13, 2021

 

Steps to take to start a social enterprise

We’ve all driven along highways and passed through villages and clusters of homes that were struggling. Maybe there’s a shuttered paper mill, a closed gas station, only a small corner store in a place that one had a strip mall, or abandoned lots that once sold industrial equipment to the now-closed mine.

We’ve all been through these places, remembering better times when the local school was open, there was a post office, and people in the community worked jobs that provided decent pay. No one ever got rich work a shift at the mill, but there was a roof, food, benefits, paid time off at the cottage, and enough left over to save something for retirement.

These towns have become places parents only see their adult children once a year when they come up from the city. If you’re lucky, you’ll see them every two or three years once there are grandchildren. Too long to travel more frequently, with diaper change stops, work schedules, and winter roads.

Let’s take a look at some cold, hard facts on the state of the rural Ontarian economy. According to the 2020 Ontario Economic Outlook report (1), rural Ontario faces weaker (older) infrastructure, loss of workforce due to urbanisation, and finding workers with the right skillsets. The Canadian economy ground to a halt in December 2019. COVID only exacerbated economic conditions. (2) For decades, there has been a slow bleed of people out of villages and towns that have lost industry towards cities.

How do we address systemic economic challenges that have plagued regions for decades? I propose that we shift our mindset away from a standard business model to one of social entrepreneurship. Business is about making money by delivering value. Social entrepreneurship is about making money by generating value that transforms a series of relationships in the community.

It’s the transformative aspect of social entrepreneurship that will give a new lease in many communities. Social entrepreneurs look at the social, environmental, and economic ecosystem in which they operate. They identify a relationship that can be improved and design products and services to meet that niche.

Let’s look at a few examples of social enterprises. Abbey Garden’s transformed a 300-acre gravel pit into a farm that sells local produce and provides educational and recreational activities. The business has immediate beneficial environmental benefits and, through their programming, social benefits.

Ottawa Renewable Energy Cooperative creates projects for local, sustainable energy production. Such projects change the way energy is produced and strive towards local energy independence.

Social enterprises combine community, different ways of financing, and innovation. For every problem you can think of, there is a multitude of social innovations that can be applied. If your community has problems attracting and maintaining younger workers, a business incubator can be created to launch businesses that excite and engage younger workers. If your community is facing environmental issues, a social enterprise can be launched to create a solution. Problem with plastics? Start a Plastic Bank and modify it to meet the needs of your community better.

A lot of rural communities have problems attracting venture capital and financing. The mill or mine closed years ago, and to an outside investor, there’s too much risk without a large economic driver in the community.

Good news. Social enterprises are here in support. There are different ways of launching a project, including working for equity, community bonds, partnerships with patient capital, and other forms of social finance.

Some communities face employment issues. The primary industries might be seasonal or subject to boom-and-bust cycles. Social enterprises can be created to pick up the slack in employment. Job sharing initiatives can be created to ensure meaningful and long-term employment, the acquisition of new skills, and the opportunity to earn income while developing a start-up. There are also ways of combining benefits and other incentives to ensure a stable and prosperous employment base.

What’s appealing about social enterprises is that they empower individuals and communities to address local concerns. Social enterprises bring people together to see how they can collaborate, share resources, and create new resources together.

 

Starting a social enterprise

 

Let’s look at the steps to take to start as a social enterprise. The first step is to identify which relationship you want to transform. Social entrepreneurship is about creating positive changes in a relationship or a series of relationships to enhance value. This step requires a lot of deep thinking because you want to target the right relationship with the right service or product. Social enterprises also have a goal of generating revenue to support themselves. In my personal view, it is better to start a social enterprise to make it self-sustaining through sales. If a social enterprise relies on grants from the government or foundations, it risks closing its doors when there is a shift in spending priorities.

The second step is to gather research. Engage with the people in the target relationship to understand the dynamics and impacts of that relationship. Probe how the relationship can be improved and listen. Listen some more and listen yet again.

The third step is to reach out to others working in the space. Reach out to social enterprises that target the same relationship and learn from them. Reach out to small business and social enterprise incubators to learn, develop a network, and co-create solutions.

The fourth step is closely related to the third. Once you’ve identified resources and networks, you’ll be able to develop your resources and networks. You’ll find partners and supporters.

By the fifth step, brainstorming, you should have a cluster of individuals and organisations interested in your social enterprise idea. A social enterprise is a business, and businesses go through several product and service iterations before finding the right fit. Use the fifth step to brainstorm, get creative, come up with as many ideas as possible.

In the sixth step, you’ll develop metrics to determine how to select the best idea. Metrics may include impact, cost, preference of target audience, and feasibility. You can further refine the metrics to meet your specific needs. Be honest. Sometimes the most innovative idea isn’t feasible with your current resources. Sometimes the simplest solution doesn’t generate the intended impact. The more critical you are at this stage, the more likely you’ll develop a stellar product or service.

In the seventh step, you’ll test the idea with your target audience. As part of beta testing, you can develop several iterations of the product or service. You can also design metrics to determine the relative impact of your social enterprise.

In the eighth step, you’ll tinker, tweak, redesign, and redevelop your service or product. The eighth step is critical to ensuring a viable product or service that transforms the targeted relationship.

The ninth step is the official launch of your social enterprise. It’s time to celebrate all of your planning and effort and open the doors of your social enterprise. A different type of work begins. You’ll concentrate on your social enterprise’s day-to-day operations, monitoring impact and ripple effects, and where appropriate, grow your social enterprise to ensure viability.

Now is the time to be bold and build and to reach out to neighbours and new friends. How can you flex your leadership muscles to rethink the economic relationships in your community to add more value, use all of the talents of your employees, and drive social entrepreneurialism?

 

I welcome all opportunities to continue this conversation. Please feel free to reach out to me to see how we can harness the love of small towns, the desire to innovate and live better, and the return to broad prosperity for all.

Renée Gendron

@vitaedynamics

renee@vitaedynamics.com

 

1 https://occ.ca/wp-content/uploads/2020-Ontario-Economic-Report.pdf

2 https://www.conferenceboard.ca/insights/blogs/disappointing-economic-growth-in-fourth-quarter

3 https://fcm.ca/sites/default/files/documents/resources/report/rural-challenges-national-opportunities.pdf

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