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For a successful business, you need a viable business idea, the skills to make it work and the funding. Discover whether your idea has what it takes.
Forming your business correctly is essential to ensure you are protected and you comply with the rules. Learn how to set up your business.
Advice on protecting your wellbeing, self-confidence and mental health from the pressures of starting and running a business.
Learn why business planning is an essential exercise if your business is to start and grow successfully, attract funding or target new markets.
It is likely you will need funding to start your business unless you have your own money. Discover some of the main sources of start up funding.
Businesses and individuals must account for and pay various taxes. Understand your tax obligations and how to file, account and pay any taxes you owe.
Businesses are required to comply with a wide range of business laws. We introduce the main rules and regulations you must comply with.
Marketing matters. It drives sales and helps promote your brand and products. Discover how to market your business and reach your target customers.
Some businesses need a high street location whilst others can be run from home. Understand the key factors from cost to location, size to security.
Your employees can your biggest asset. They can also be your biggest challenge. We explain how to recruitment and manage staff successfully.
It is likely your business could not function without some form of IT. Learn how to specify, buy, maintain and secure your business IT.
Few businesses manage the leap from start up to high-growth business. Learn what it takes to scale up and take your business to the next level.
There are about 80,000 social enterprises in the UK contributing £24bn towards the national economy and employing almost a million people (source: Social Enterprise UK). Yet arguably, the contribution they make is beyond being summed up in mere financial terms.
A social enterprise is a business operated to benefit society or the environment, not purely to generate profits for the business owner or dividend payments for shareholders. Well-known examples of social enterprises include The Big Issue, Cafédirect and the Eden Project.
UK social enterprises include community interest companies, credit unions, trading arms of charities, employee-owned businesses, co-operatives, development trusts, housing associations, social firms (ie businesses created to employ people who are disadvantaged in the labour market) and leisure trusts.
Ethical businesses are committed to 'morally responsible' trading and minimising their negative impact on people and the environment, but not necessarily run primarily to benefit society. And just because a business gives some of its profits to worthy causes, that doesn't make it a social enterprise.
Fair trade businesses pay farmers and other workers in producing countries enough to earn a fair living, but not all of them are social enterprises (visit the Fairtrade Foundation website for more information).
Crucially, social enterprises are businesses that must generate enough revenue to survive. Most of their income must come from trade, with profits reinvested to achieve their social or environmental objective.
A social enterprise can be set up as a limited company (which must be registered at Companies House), sole trader business (registered with HMRC), business partnership, charity or charitable incorporated organisation (CIO), mutual (eg industrial and provident society and co-operatives - owned by members and run for their benefit) or community interest company (CIC).
A CIC is a type of limited company created specifically for social enterprises. CICs have a social objective and are regulated, ensuring that they cannot deviate from their social mission and their assets are protected from being sold privately.
You need to apply to Companies House to set a CIC up (it costs £35), following approval from the CIC regulator. You can convert an existing company into a CIC (£25). Each year a CIC must submit an annual community interest company report along with detailed accounts and a confirmation statement (Annual Return). The CIC regulator pages of the GOV.UK website contain a wealth of helpful information about CICs, as well as downloadable forms and handy guides.
The Charities Act 2011 describes a charity as "an institution established for charitable purposes only", which is "subject to the control of the High Court's charity law jurisdiction."
According to the Charity Commission (the independent government department that registers and regulates charities in England and Wales): "Charities exist to benefit the public, not specific individuals. Because of this, charities pay reduced business rates and receive tax breaks but are restricted in what they can do and how they work." Charities must observe charity law, which includes being transparent about their activities and only do things that are charitable according to law. They are normally run by trustees who do not benefit from the charity.
A CIO is a legal form of charity launched in 2013, as the Charity Commission explains: "Created in response to requests from charities for a new structure which could provide some of the benefits of being a company, without some of the burdens." CIO's must only register with the Charity Commission. Visit the organisation's pages on the GOV.UK website to find out about setting up and running a charity. The GOV.UK website also features information about tax rules for charities.
You might not want to get rich and your business idea might be very worthy, but that doesn't mean you have what it takes to run a successful social enterprise. You must be able to sell and manage a wide range of other tasks - running a social enterprise requires no less hard work or commitment than any other business.
You might be able to access funding to help start or run your social enterprise (although don't take that as a given). Your business model must be economically viable. There must be sufficient market demand for your products and you must make sales if your cash flow is to remain healthy.
Before launch, you should test your idea and research your market. Creating a basic business plan might prove useful too. Consider how you will fund your business and find out whether any grants or loans are available. Different types of social enterprise are subject to different tax rules, so seek tailored professional advice will help you to fully understand your obligations.
Seek out free sources of reliable advice and support. The website of Social Enterprise UK (the national body for social enterprise) features a wealth of advice and information, including a downloadable guide to setting up and running a social enterprise [PDF]. Also find out about Inspire 2 Enterprise ("a unique, free-to-access service for the social enterprise sector providing information, specialist advice and support from start-up to initial growth and beyond").
If you are only thinking about setting up a social enterprise and wonder what the reality would be, speak to someone who already runs a social enterprise. Ask about their experiences and seek their advice. It could help you to get your new social enterprise off to a flying start.