Income from Impact - Social Enterprise Business Models
By Nikki Wilson
In any business your “business model” will be built around deciding who you’re selling to and the product or service you’re selling. But when trading to support social and environmental impact, whether as a social enterprise or as a charity* looking to build trading activities into the funding mix, there’s more to consider.
Understanding how what you’re selling connects to the impact you want to create is key. There are numerous ways this can be done but I’ve outlined some of the most common below.
I always find illustrations helpful so I’ve used an “e.g” of an organisation supporting people with long term health conditions to live well, but why not brainstorm some ideas of how this could apply to your “impact focus” (the people or issues directly impacted by your work)?
The first five cases make an impact directly from what is being sold, so the main objective is to cover the costs of delivery.
The last is different, focusing on generating income that not only covers costs, but provides sufficient surplus to subsidise other activities.
Selling professional services based on your knowledge and expertise to enable other professionals or organisations to improve and increase impact. This might include consultancy or training to professionals working with your “impact focus”.
e.g. this could include training health professionals on how to spot signs and diagnose a particular condition, or to treat the symptoms well.
Selling products or services to a commissioner or contract provider to enable them to address a particular need or target group.
e.g. this could include being contracted by the NHS to deliver targeted therapeutic services to people with a particular condition.
Selling services directly to your “impact focus” or their carers. This could include charging all users of your services or considering whether some could contribute whilst being mindful of creating a cost barrier.
e.g., this could include selling therapeutic services or support groups to enable people to alleviate symptoms or to enable people to learn how to manage their condition better.
Selling products directly to your “impact focus” or their carers. This could include physical or digital products that provide practical or therapeutic benefits.
e.g. this could include specialist therapeutic aids which are not available through public funding (or not in sufficient volume/ quality) or a selection of other products that could help symptom management.
Selling the outputs of service delivery activities to the general consumers to cover the costs.
e.g. this could be running a growing or crafting group for those with long term health conditions to allow social and therapeutic benefits and selling the produce or products to consumers.
Selling products or services to subsidise impactful activities. A common example is charity shops which sell goods to raise a surplus that contributes to the charity’s work.
e.g. if not a charity shop, this could also include selling a product or service that builds on the organisation’s expertise such as holistic therapies, but selling to general consumers.
You might start out doing only one of these but over time, generate income through a mix of approaches.
* Before moving into trading or developing into a new area, it’s vital to ensure you check your governing document for any restrictions and for charities in particular, to focus on the potential tax implications of trading,