Scaling-up the reach and impact of operations has frequently been an challenge for Social Enterprises (SEs). The various stumbling blocks include a lack of team management skills and a shortage of financial resources. Several sessions at the Impact Forum focused on overcoming these barriers and growing the reach of SEs. Combining the wisdom from the forum, we noted seven critical ways to enable SEs to scale:
- Consider scale from the outset. It’s far easier to grow a business if that objective is kept in mind from the start. Business plans and strategies should always leave room to achieve social and financial growth and look for opportunities to do so.
- Treat yourself as a traditional start-up. For a business to survive, it needs to generate revenue, but unfortunately, many SEs overlook this fact. Approach your business strategy and marketing like a traditional start-up, but with the goal of achieving a social and environmental mission. Bear in mind that consumers will usually select products and services based on their quality and availability, not just the attached social and/or environmental value.
- Understand the market. Like all regular companies, SEs must compete in the marketplace. This means that you need to know your competition and know how to differentiate yourself from your peers. You can do this by expanding your network, understanding the mindset and strategies of those in the same field, and being up to date with the space as a whole.
- Keep an eye for market access. New opportunities always arise and one – or more – of them might just be what your firm is looking for to scale-up. If you need capital to scale up, reach out to potential investors through platforms like IIX.
- Hire open-minded and talented people. Human capital is as important as financial capital. It is the people that you hire who will make or break your company. Hire people who have the potential to grow and are ready to take on dynamic work. Building talent and leadership will help secure the firm’s leadership pool.
- Consider commercial or rural bank lending. Depending on your business model, you may decide to approach commercial and rural banks for funds. Although these funding options will not value the social impact of the SE, they may disburse the capital on financial terms.
- Embrace replicability. Scaling-up operations is not desirable for every company. Sometimes, it is more desirable to scale-up successful business models rather than an individual business itself. Consider replicability not scalability – a franchise system for SEs.