Starting a social enterprise

[Cromulent]

I've been thinking of starting a social enterprise recently. I have previously run two limited companies in the past but for various reasons they didn't work out (one was a music business but I got foiled by having to talk to record labels individually to get them to grant me use of their music even though I was offering to pay a fair price) and one was a cloud service provider which was way to ambitious and frankly when I started I didn't foresee the difficulties inherent in the idea. I did learn a lot in the process though which was good.

This time I've decided that what I really want to do is help people. Since I have suffered from mental health issues in the past and have a good understanding of what severe mental health problems can do to a person that seemed like the obvious way to help people.

I now have a good idea for something that would have helped me if I had access to it when I was really ill. Furthermore I also think the idea could be expanded to people with physical disabilities as well as people who are perfectly healthy (although of course this would be done in stages).

I am currently writing a business plan and researching the competition and what it would cost to run a service but I'm a little confused as to what I really need to do. If I am understanding things correctly I simply set up as a sole trader and when forming write a document with a mission statement stating how I am going to help society and then I just need to reinvest or give away 51% or my profits (or more). Is this roughly correct?

I'd rather not go through the whole limited company thing again but if there was a compelling reason (other than the limited liability which I am aware of) I might change my mind.

I've also been thinking about joining Social Enterprise UK since it only costs £75 a year and they offer free legal advice and certain other services which could be useful.

Is there anything important I have missed in my plans at all? Any help is appreciated .

 

[Mr D]

May be worth speaking to other social enterprises in your area to find out what problems and issues they had and what to avoid. Also speak to those in that 'field'.
Check what you need to provide / do in order to do what you intend.

 

[Scalloway]

Community enterprises are not normally run as sole traders. They are usually formed by groups of people. There is more information on setting up a social enterprise here.

https://www.socialenterprise.org.uk/Handlers/Download.ashx?IDMF=b5514bc0-5a3b-4c4e-afe1-d8aaec3ebb19

 

[Cromulent]

May be worth speaking to other social enterprises in your area to find out what problems and issues they had and what to avoid. Also speak to those in that 'field'.
Check what you need to provide / do in order to do what you intend.

That is a good idea. I'm also in contact with the NHS mental health services so I guess I could ask them as well if there are any other social enterprises helping in that area. Thanks for the reply.

Community enterprises are not normally run as sole traders. They are usually formed by groups of people. There is more information on setting up a social enterprise here.

https://www.socialenterprise.org.uk/Handlers/Download.ashx?IDMF=b5514bc0-5a3b-4c4e-afe1-d8aaec3ebb19

Awesome. Thank you. That is really helpful.

Alas this would be just me on my own (unless I can get enough funding to employ someone part time or on a limited duration contract). I don't mind setting up as a limited company it is just something else to worry about which I am trying to avoid at the moment.

 

[Mr D]

Alas this would be just me on my own (unless I can get enough funding to employ someone part time or on a limited duration contract). I don't mind setting up as a limited company it is just something else to worry about which I am trying to avoid at the moment.

Or you could find volunteers to help.

 

[Scalloway]

If you set up on your own then you are just a sole trader who happens to donate a lot of his income after tax to charity.

 

[billmccallum1957]

Get others to help, as co-founders or volunteers, you cant possibly develop a mental health service alone.

The usual format for social enterprises are Community Interest Company (CIC) or Company Limited by Guarantee (has no share capital and surpluses are re-invested in the company).

Where you are in the country can have a major impact on what's available, Wales, Scotland and NI have different funding programmes.

I have a long history of social enterprise/community/charity projects, let me know where you are and I might be able to help.

 

[Cromulent]

If you set up on your own then you are just a sole trader who happens to donate a lot of his income after tax to charity.

Who said I'd be donating to charity? I want to set up as a social enterprise. You don't need to donate to charity to be one you just have to reinvest more than 50% of your profits into ensuring the business meets its social obligations set out in its mission statement. You can certainly be considered a social enterprise as a sole trader as long as you have a mission statement that you stick to.

I'm just not sure if I want to be a sole trader or a limited company yet. Being a limited company would have the benefit of keeping the companies finances completely separate from my own with the downside of increased paper work.

Get others to help, as co-founders or volunteers, you cant possibly develop a mental health service alone.

The usual format for social enterprises are Community Interest Company (CIC) or Company Limited by Guarantee (has no share capital and surpluses are re-invested in the company).

Where you are in the country can have a major impact on what's available, Wales, Scotland and NI have different funding programmes.

I have a long history of social enterprise/community/charity projects, let me know where you are and I might be able to help.

I'm pretty sure I can develop the website I want to develop on my own. I've done a lot of research on it and it seems that Microsoft Azure (along with other cloud hosting providers) provide all the services I need to get a basic working copy off the ground to show to people to get them interested in the project. I've been programming for 6 or 7 years so I'm quite confident in my technical skills. It is the business stuff I need a major refresh on. Hence this thread.

Anyway as for volunteers it is basically impossible to find programmers who are willing to work for free unless you are working on an open source project and I'd quite like to keep this website closed source.

As for a Community Interest Company. I'll look into that. I hadn't considered that. From looking on the gov.uk website it sounds interesting although I'll have to make sure I'll be allowed to pay myself a reasonable wage if it does take off.

On the other hand being a CIC might make it easier to work with other social organisations since they will know you are legally obliged to help the community.

Thanks for the information.

 

[Mr D]

Volunteers - why do you need programmers?
Most social enterprises I have worked with have had a group with varying skills and experience running it - the most important being sharing a vision for what they want to achieve.
One had a dentist on the board - the issue being addressed was nothing to do with teeth but he was a valued (and useful) member to work with.

 

[billmccallum1957]

It is the business stuff I need a major refresh on..

This.

 

[Cromulent]

Volunteers - why do you need programmers?
Most social enterprises I have worked with have had a group with varying skills and experience running it - the most important being sharing a vision for what they want to achieve.
One had a dentist on the board - the issue being addressed was nothing to do with teeth but he was a valued (and useful) member to work with.

I guess I can do without the programmers. It'll just take longer for me to do it myself.

I could certainly put some feelers out to people who might be interested in the idea and who would be willing to spend some time on it for free or at least point me to useful resources. I know a few people in the NHS who work with people suffering from mental health issues from my own experiences. I might try and speak to them and see what they think but I'm reluctant to take up too much of their time because they have a very stressful and busy job themselves.

I'm still writing the business plan so until that is done I don't think I can really approach anyone until I've put all my ideas down on paper. At this stage I'm just doing some research.

This.

Do you have anything useful to add? I don't think I've said anything incorrect in this thread based on my research.

 

[Cromulent]

Community enterprises are not normally run as sole traders. They are usually formed by groups of people. There is more information on setting up a social enterprise here.

https://www.socialenterprise.org.uk/Handlers/Download.ashx?IDMF=b5514bc0-5a3b-4c4e-afe1-d8aaec3ebb19

Having said that the official gov.uk page on social enterprises does list being a sole trader as a valid way to start a social enterprise.

https://www.gov.uk/set-up-a-social-enterprise