Innovative solutions to social challenges can come from anywhere, and no longer from just traditional actors, such as governments, nongovernmental organizations or development agencies. As technology becomes more readily available and funding becomes more democratized, social enterprises are figuring more and more prominently in the global development landscape.
Often born from an urgent need to solve real social problems in the same communities where they are founded, social enterprises are still businesses that strive for financial sustainability. Whether this means bringing in profits or simply breaking even depends on the enterprise’s unique business model, but one thing all of them have in common is a commitment to maximize social impact.
Social entrepreneurs are disrupters — often engaging with communities and stakeholders to find and create solutions from the ground up. They can tackle a range of issues, including youth unemployment, environmental degradation, education, poverty, health, energy and the empowerment of women and girls.
Like all businesses, however, social enterprises still face a number of challenges and risks along the way. While scaling up operations might seem like a natural next step, when — and how — this is done can mean the difference between success and failure.
Scaling up with a business accelerator
This is where business accelerators like Impact Investment Exchange Asia’s Impact Accelerator program come in. IIX’s first program in Manila ran for six months and provided mentorship, capital and continuing investment support to four Philippine social enterprises that were selected from a pool of 55. The program ended with the finalists pitching their businesses to potential impact investors and ecosystem partners.
“More than the financial [resources], we needed mentorship and guidance,” Anya Lim, co-founder and managing director of one of the winning social enterprises, told Devex. “We felt that being in an accelerator program will increase our accountability to implement changes for growth more efficiently and effectively.”
Lim’s company, ANTHILL Fabric Gallery, was launched five years ago. It transforms traditional Philippine weaves into contemporary clothes, while providing poor indigenous, rural and urban communities with stable jobs and income.
Innovative housing and infrastructure company Sidlakpinoy, another finalist, has been running for 20 years, manufacturing environment-friendly, low-cost fire bricks made from alluvial silt, a freely available raw material found in water bodies.
Both social enterprises, already quite established, joined the Impact Accelerator to take their businesses to the next level — in terms of both operations and social impact. Their founders share some tips with other social entrepreneurs also looking to scale up.
1. Do it at the right time.
Sometimes, timing is everything. Scaling up too early can mean the collapse of a company while doing it too late can mean lots of missed opportunities. Ideally, a social enterprise that pursues growth more aggressively should already have proven that its business model works.
Both social entrepreneurs agree one sign that it’s time to scale up is if there is an increased market demand for their product or service. Scaling up will allow the enterprise to fill the gaps in its operations, increasing its potential for positive social impact.
2. Have a clear company ethos and a solid team.
Growing businesses face all sorts of challenges, but those with a clear sense of purpose — as well as a passionate team backing it up — have a better chance of not only surviving, but thriving.
“You need to know how you want to do business, what are the core values that guide you and how you want to bring the business forward,” Lim said. “You have to have a strong core or management team that will act as a steering committee to ensure that the rest of the team will be able to adapt [to] the changes.”
3. Know your numbers.
Raw passion is important, but this alone isn’t enough to take your social enterprise to the next level. You need capacity, and you need to have done your research. Knowing your market and the ins and outs of the social issue you’re trying to address will put you in a position to succeed, and having a good marketing plan and strategy will help you focus and prioritize.
“Know how much — capitalization, production level, people involved — [you] need to achieve maximum social impact,” Manny Alkuino, CEO and chairman of Sidlakpinoy, told Devex. “Have your goals set and everything must be measurable so that you can see [and] track your growth accurately.”
4. Engage your team and stakeholders in the process.
The process of scaling up a social enterprise can involve many changes — some gradual, but a few are drastic. It is important to give your team ownership of the process and the changes, and ensure they do not lose sight of the vision and bigger picture.
“Not all stakeholders will scale with you,” Lim said. “It is important to let them participate in the process, get their buy-in and make them realize how the changes will benefit them and their business in the long run.”
To learn more about social entrepreneurship, check out our series the #SocEnt Revolution: How entrepreneurship is changing global development, which explores the entrepreneurship ecosystem, from the roles of different actors to donor support, financing and incubators, in an effort to examine what needs to be done to maximize the impact of entrepreneurship in the post-2015 era of development.