How pure am I? Designing a social enterprise from the ground up

I do my best thinking when I’m on a little journey somewhere. When I was a teenager, it was those endless trips in my parents’ car or on the train; as an adult, it’s my habit of going for a good wander. Sometimes, the wander is in the car, sometimes, it’s on foot. (Occasionally, very occasionally, it’s on skis). Once upon a time, when I was younger, it was running.

Sometimes the goal is to come up with a solution to a specific problem, either of content (what do I want to write?) or of form (how should I design that project so it works?) In that case, I use a special rule: on the trip out, I can whinge and carry on all I like about the problem, but when I get to the point of turning around to come back, I must begin the journey of solving it, and when I arrive back, I must have solved it. The journey then has its own in-built deadline.

At other times, the job is too creative to be forced, and needs to be coaxed out. For this, window shopping often works, particularly in old-fashioned shopping strips. Sometimes in art galleries or museums.

Today, I took the dog for a walk in the town where we are planning to relocate, about twenty minutes away. (She was really excited and wanted to sniff everything; she was in such a happy mood she didn’t even really notice the small fluffy dogs walking past, which she would normally try to inhale).

The problem I was prodding at today was: so what kind of organisational (and financial) structure would work?

The point is, I have cracked upon a little bit of the problem of the business model. It needs to be able to serve the needs of the community in providing a safe haven at work for people who are vulnerable in the world of work. But at the same time, I’m not helping anyone if my family goes broke. So how to mix the two?

Key entrepreneurial question – who is the ultimate ‘natural owner’?

The first key strategic question about any entrepreneurial effort is, who is the natural owner of the business, once it is established and stable? The answer is, the community.

So the next question is, how can that be manifest? The old-fashioned way of doing something like this would be to simply give it away – put it in the hands of a responsible trustee of some kind and hope for the best. But how could the social enterprise be designed so that it has built-in longevity? (And… grudgingly, the possibility of being replicated?)

What if I used the idea used by the Bendigo Bank in its Community Bank franchises? (For readers unfamiliar with this, it’s a system of franchising bank branches to communities, who operate them and have a board and shareholders in that particular branch). What if the enterprise was designed so that individuals in the community, plus local institutions and service providers, could own shares in it in just the same way? If so, should this be a co-op or a company?

I am leaning towards a company, but one which has explicit values about re-investing any profits back into its operations, and pays dividends in the form of services rather than cash. Shareholders could come and go, trading their shares in if they moved out of the community, or buying some if they became a supporter/partner.

So where does that leave me and my family? How can I set it up so it provides this social good without creating an inherent conflict of interest built in to it?

What do I want out of it? Do I want to make a profit when I exit, so I can go and start something else? Do I explain to the initial board that, unlike the other shareholders, I need to take dividends in cash? How do we value the shares?

How pure am I?

Clearly, this blog has a way to go. Stay tuned.


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