This article was originally published on the Guardian Social Enterprise Network. To see the original post, go to socialenterprise.guardian.co.uk.
A year ago, when the spending cuts started to bite, it became clear that two projects at the Forum were facing with two options: do or die.
For civil society working with migrants, Big Society is more of a Big Crunch with funding squeezed or drying up. We had to think beyond traditional charity projects to social enterprise and online communities. The Forum has responded to the cuts by transforming two of our projects into social enterprises. Last autumn, the Overseas Healthcare Professionals project became the Dentist StudyBuddy – an online forum for qualified dentists who come to the UK but need support to verify their qualifications. Members can study together online and offline, share resources and use our library.
On Tuesday, we launched our second social enterprise, Integrated Media UK, which provides support on digital media and one-day courses for a flat rate of £100 with discounted rates for migrants and refugees. We also offer work placements for young migrants who wish to enter the digital media or communication sector.
While the cuts have been a challenge, they have forced us to innovate, streamline and become sustainable. As a small charity, we can offer a few lessons we have learned from social enterprise in the past year.
[h4]Look internally to find your expertise[/h4]
Many charities think social enterprise means setting up a cafe to make money on the side. We found social enterprise was a better fit within our experience and our expertise. We ran a project for migrant dentists for over 10 years and were the only one supporting over 3000 people. Social enterprise helped us find a different way of monetising that work.
After several failed attempts at repackaging our digital project, we realised that we have an expertise – not only in the migrant sector but in a wider market. Because we were ahead of the pack, we now have two years experience providing simple and clear trainings on social media, blogging, and other digital tools. What we needed to do was transform this knowledge and expertise into a business model.
[h4]Pilot your idea quickly[/h4]
The best way to know your idea works is to try it and try it quickly. Charities are notoriously conservative about new projects, so find ways of experimenting with social enterprise for free. For us, it didn’t cost anything to pilot our idea. We knew our social media trainings were unique but we didn’t know if people would pay for them. We used our community centre and content from previous courses to pull together our first training. Although we launched publicly this week, we have piloted four different formats in the last year and they are still evolving.
[h4]Use a mixture of income streams[/h4]
Finding the right income stream was difficult with the dentist project because our members had rejected membership fees and donation drives in the past. But in October 2011, we re-introduced an annual £50 membership fee at the same time as complete rebranding of the service. Because the product was fresh, the transition to an annual membership fee was smoother and within three months made a profit of over £7,000.
We were also surprised by the success of alternative income streams, such as advertising on the site. In the past month alone, we have made more profit from businesses who advertise to our members than membership fees. This showed us that people were willing to pay for access to the niche community we have cultivated. Don’t let opportunities for a mixture of income streams slip away; they may surprise you by being the most profitable.
[h4]’Customers’ are different than ‘users'[/h4]
Probably the biggest challenge for charities looking to become social enterprises is the difference between charity and business cultures. Our culture clash happened in two ways: first was that our staff wanted to continue the same services even if they were not profitable. Should we continue a lecture series that incurred a £200 loss each week? Maybe if the social benefit is worth it but in this instance the business case won out.
The second clash happened in the way we support ‘users’ of our centre and ‘customers’ of our service. As a social enterprise, we need to balance the amount of time and emotional support for our communities with the need to make a profit. It is easy to get sucked into doing too much for customers/users when charity culture says our job is to holistically support them.
Invest time and energy in your customer service strategy. This will help both your staff and customers learn the boundaries of your new service.