What is Social Enterprise?

Social enterprise is about running a business, making a profit, and using that money to create a positive impact.

You may or may not have heard the term ‘social enterprise’ before, but if you want to use business to do good, then you could be one.

Social enterprises are businesses that are synonymous with doing good. Like other businesses, social enterprises make a profit, but they use it to have a positive impact. They do this by reinvesting profits back into their communities and those they serve with their business. This is known as an asset lock.

There is no single legal definition or legal structure for social enterprises. Many are registered charities or Scottish Charitable Incorporated Organisations (SCIOs). Other structures of social enterprises include: Social Firms, Community Interest Companies (CICs), Co-operatives and Mutuals, Development Trusts, Credit Unions, and Housing Associations. You can find out more about these on Social Enterprise Scotland’s website.

In general, at the start social entrepreneurs focus more on their positive impact than making money, but embracing the idea of being a business is an important step on the road to becoming a successful social enterprise .

The chances are you have already bought from a social enterprise or used their services. From supermarkets and zero-waste shops, to gardening services and childcare providers, almost any type of business can be a social enterprise. Check out the social enterprises we have supported.

What is a typical social entrepreneur?

There’s no such thing as a typical social entrepreneur. They come in all shapes and sizes, from all places and backgrounds. Social entrepreneurs combine their skills with their passions to make a positive impact, create worthwhile jobs, and earn a living. Some people even become social entrepreneurs because of their own lived experience, wanting to make a difference in an area that has affected them personally. All you need is an idea that can benefit the community or environment you want to support.

Social enterprises in Scotland

Social enterprises are exciting, eclectic and in Scotland there are lots of them (6,047 to be precise) This has continued to grow, in 2019 there were 6025 and in 2017 there were 5600.

Social enterprises boost the Scottish economy by £2.6billion, and unsurprisingly as ethical businesses, 85% pay their staff at least the Living Wage.

You can read more about the social enterprise sector in the most recent Social Enterprise in Scotland Census.

Intrigued by social enterprises and their impact on Scotland?

This animation by Social Enterprise Scotland dives into what they are, the various types that exist, and their contribution to the Scottish economy.

Are you still unsure about what a social enterprise is and if it is for you?

Get in touch with us via email or call us on 0131 564 0331. We are always here to answer questions.

You can also use Impact Compass, a tool we designed to guide you towards the type of business that best fits your ideals. Impact Compass works as an interactive quiz. By asking you what is important to you when it comes to purpose, accountability, ownership, and profit distribution, the quiz will guide you towards the most suitable business type(s) based on your answers.

Whether that be as a co-operative, charity, social enterprise, or purpose-led business, the results offer carefully curated resources to help you navigate the Scottish start-up support ecosystem.

Visit the Social Enterprise Scotland website for more in-depth and technical information about social enterprises in Scotland.