Step One: Building your social enterprise: where does your idea fit in the market?
April 1, 2014
am forever telling people that they need to walk before they run! I draw no distinction between starting a general business over a social enterprise. As i recently said in my Pocket eBook for Start-Ups you need to undertake a scan of the market before you move to the next phase which is developing the business plan proper.
One of the most important things you must do as a first step in building your social enterprise is to categorise your idea into what is commonly called a thematic area. A thematic area is a subject of defined interest in social terms that people and whole industries can have a pre-existing and defined affinity with such as health or education.
This is important because as you move through the process you will begin to understand, with much more clarity than may exist at the outset, who the main investors, individuals or organisations are that you want to target for financial and material support or partnerships to get your idea up and running.
Categorising your idea will also help you map the resources in the sector where you are most likely to operate as well as identifying the key stakeholders and the social enterprises who may already be operating.
Keep in mind that many ideas are simply innovations on a pre-existing service or product and very rarely are they new inventions. Importantly, when it comes to the later subject of evaluation you will be able to more clearly understand the key social or financial impacts and outcomes that will need to be achieved.
First of all ask yourself these questions:
Is my idea a product or a service?
What specifically will my product or service be?
What sector is it most relevant to?
Where will the product (if it is a product) be manufactured and sold?
Where will the service (if it is a service) be headquartered and delivered?
Most of these questions become more relevant later on but it’s also important to shape them in your mind very early.Because this will be a social enterprise we think you need to keep things as clear as possible when it comes to categorisation. We suggest that you identify both a main category and then a sub-category. This will enable you to drill down on the specific sector within a sector that will ultimately be most relevant to you.
The main categories we recommend are:
Water and Nutrition
Banking and Finance
More often than not people may argue that there could be many more, but in the main the above are the top ten. Now, let’s break some of them down into sub-categories:
Reduction of child materiality
Provision of drugs or medication
Combat HIV AIDS
Improve maternal health and wellbeing
By taking two examples, Health and Education, we can easily see that they are further broken down into categories and subcategories. In the case of Health we have “6. Mental Health” to show that when you unpack that thematic sub category further you fast arrive at the conclusion that your social enterprise may in fact sit within the secondary sub-category area.
By categorising the thematic area you may actually find that your social enterprise could cut across two or even three areas and then multiple sub-categories. This is mostly the case when it comes Infrastructure being connected with Water and Nutrition or Banking and Finance.
By way of a further example of sub-categorisation, Micro-finance could be a sub-category of either Banking and Finance, Infrastructure, Employment or Women’s Empowerment.
Again, the purpose of this first step is to try and clarify in your own mind or on a piece of paper what the thematic connection is with your social enterprise idea as well as framing some of you thinking as we step through the business planning and implementation phase.
Come back tomorrow when we dive deeper into the business planning elements of developing a Social Enterprise when we take a look at:
The mission statement
Your proposed product or solution
The team you need to build around
Author: Matthew Tukaki is the Chief Entrepreneur of the EntreHub and its Chair.
For context: This week we are taking a look at social enterprises and social entrepreneurship.
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