Sophi Tranchell, managing director of Divine Chocolate, shares her tips for starting a social enterprise that will not only survive, but also prosper in a global market.
When we originally pitched our concept of a delicious fair trade chocolate owned in part by Ghanaian cocoa producers, many people told us it was a wonderful idea but unlikely to 'have commercial legs'.
Luckily we persevered and set about challenging the commonly held misconceptions about social enterprises – that they are socially responsible, but not commercially viable. Years later, I'm enormously proud to say that we've not only achieved our original goals, but have moved many steps further.
Successful business model
Starting a social enterprise is now favoured by about 15% of the UK's small firms and as a nation we're leading the way in supporting better prices, decent working conditions, local sustainability and fair terms of trade for producers in the developing world.
These principles formed the bedrock of Divine's original mission, in partnership with 80,000 cocoa farmers in Ghana, who have benefitted not only from the fair trade premium on sale of their beans, but also their 45% share of Divine's distributed profits and 2% of its annual turnover.
With the right plan and confidence that things can change, many businesses can fly as a social enterprise. It's important to articulate and reinforce your mission statement in everything you do. The central purpose of your organisation needs to be at the core of all your business materials, internal and external conversations and any media or advertising work you do. By doing this, your staff, suppliers and customers will better understand and appreciate the ethos of the company, which will provide a sound platform for growth.
Sources of support
Getting the right financial support is another key factor in creating a successful social enterprise. You must bring in people and organisations that share your mission and values. We attracted investment from Body Shop, Christian Aid and Comic Relief. We also secured a £400,000 loan guarantee from the Department for International Development. Do as much research as possible into all potential avenues for funding and take opportunities that come your way – but make sure they complement your business philosophy.
Also take advantage of the range of support that is available from both the public and private sector. Currently I'm involved in the 'Business is GREAT Britain' campaign, which aims to build confidence among small businesses and encourage them to plan, hire and export.
One element of support my business got involved with was the Knowledge Transfer Partnerships scheme, which gives businesses access to expertise within UK universities. Liverpool John Moores University helped us with our new product development. We were also able to access export markets through attending UK Trade & Investment food trade fairs. This has been incredibly valuable for us and has helped us to enhance the skills and reach of our business.
Product and people
If, like us, you have plans for global expansion, you must do your homework on your product(s) and territories in which you plan to sell. Make sure your product is a 'good fit' for all of the markets you're looking to enter.
We were conscious that tastes vary from country to country, so we needed to consider if our product would sell well in places where dairy is not commonly eaten, for example. You've also got to think about whether your product is named appropriately. On a practical level, we had to consider whether our product was suitable for hotter climates – and how this impacted on countries we would export to.
Finally, people are what really makes social enterprises successful. You need employees with knowledge, energy and – above all – passion. Passion and vision are two things you'll need as leader of your social enterprise, however, you can't just rely on these alone. You'll also need the right mix of business skills, and with planning, advice from third parties and a strong team around you, you'll be better placed to succeed. A social enterprise may exist to benefit the world around it, but it is still a business that needs a sound strategy if it is to succeed.
- For more information about setting up a social enterprise visit www.socialenterprise.org.uk.