This blog post originally featured in the Foundation Center's Literature Review blog.
How can your nonprofit use social enterprise methods to tackle society's intractable problems? Two recently published titles available at Foundation Center libraries will help you get started: The Nonprofit Guide to Social Enterprise: Show Me the (Unrestricted) Money! (CharityChannel Press, 2014) and The Social Entrepreneur's Playbook: Pressure Test, Launch and Scale Your Enterprise (Wharton, 2013).
Let's start with The Nonprofit Guide. This "In The Trenches" handbook starts with a general overview of social enterprise, but its real focus is helping you figure out how to launch an earned income venture. Authors Jean Block and Niki Nicastro McCuistion offer detailed instructions, worksheets, and other tips that you can use as a blueprint for such a venture. In particular, Chapters 7, 8, and 9 can help you develop your sales plan, figure out pricing and costs, and write your business plan.
A sales plan identifies a target market (say, single mothers) establishes a market position (this can vary, from a high end program, to a low cost-low budget program that needs high sales volume), and the price of the venture. One warning: you can't assume that customer will pay for your services just because you are a nonprofit. The service or product you offer MUST but as good or better than what is offered by a for-profit.
The business plan, on the other hand, is the final step to the social enterprise process that will keep you on track, and give you benchmarks to achieve. The Nonprofit Guide provides a blank template as well as a sample plan, but you can also use the resources listed in the GrantSpace Knowledge Base article "How do I write a business plan for a nonprofit organization?"
Ian MacMillan and James D. Thompson's Social Entrepreneur's Playbook takes a similar approach, covering all phases of creating a social enterprise (both for- and nonprofit) from start-up to launching. I should note that the advice offered is largely the result of crowdsourced feedback to a free ebook the authors published on the first phase of testing a social enterprise start-up idea.
One section that goes beyond what is offered in The Nonprofit Guide is a discussion on how to scale up your operations once successful. There are two options: the first is the "cookie-cutter approach," where you replicate your operation in another geographic region. The second option is expanding your core operations to support the growing demand for your services.
The discussion on scaling also examines the challenges of success and hazards of visibility, such as aggressive competition or increased attention from authorities. Some responses to these threats are illuminated through the work of Zambia Feeds, a social enterprise working to combat malnutrition in Africa. When the founder of Zambia Feeds discovered she had attracted the attention of larger competitors, she immediately engaged with partners and consultants to identify cost-reduction possibilities should a pricing war develop. Her fast action was successful, and ended up creating a lower cost structure so her venture could continue to operate and thrive.
So, if your plan is to expand the revenue base for your existing nonprofit organization or start a new social enterprise, it's well worth your while to check out this two titles. Even more resources can be found in the GrantSpace Knowledge Base article "What is social enterprise?"