If there’s one challenge many social enterprises have in common, it’s finding capital. Insufficient capitalization is a primary reason that small businesses fail or fail to grow, and that’s also the case for social enterprises. The good news: that seems to be changing. A new field is emerging, so young that it still goes by …

Many startup businesses set up incentive or commission-based compensation systems for their initial employees. This is often done because they can’t afford to pay staff what they’re worth. As an enticement they offer the opportunity to earn much more than a smallish base salary if these early staff achieve great success. This is common in …

As the term social enterprise gains traction in the marketplace, more and more organizations are using that term. There is a real risk that this expansion will dilute the meaning of social enterprise to the point that it means any organization that can claim social as well as financial goals, no matter how vague or …

This recent report summarizes a recent survey of 740 organizations on the current state of the SE field in the US. This work was prepared by the Social Enterprise Alliance, in partnership with Community Wealth Ventures and Duke University’s Center for the Advancement of Social Entrepreneurship. REDF funded the survey. Some interesting findings include: Top …

Earlier this year, the Social Enterprise Alliance published Succeeding at Social Enterprise: Hard-Won Lessons for Nonprofits and Social Entrepreneurs (Jossey-Bass). Anyone interested in starting or strengthening a social enterprise would benefit from reading this informative book. The book’s sixteen chapters are organized into three sections: Startup and Structure, Methods, and Leadership. Each section contains chapters …

As BP continues to be in the spotlight, with every business practice being scrutinized, we can learn some lessons on how ethical companies balance safety and costs. Ethical Culture There is nothing inherently “ethical” about balancing safety and costs. Few programs, even government projects, can reduce safety risks down to zero. The key factor is …

Maybe BMW should try selling ketchup or mayonnaise. It's not as ridiculous as it sounds: according to a study in the Journal of Consumer Psychology, recession-wracked shoppers are eager to embrace luxury brand names over a wide range of product categories, including those with little logical connection to the brand's core item.

Can a nonprofit purchase a for-profit company and operate it as a social enterprise? This question came up in a recent discussion on the npEnterprise Forum. Incidentally, npE is the official listserv partner of the Social Enterprise Alliance, and, with 7000+ global subscribers, has become the global commons for the social enterprise movement. Subscriptions are …

One of the nice things about writing a blog is getting comments. And now that the Free Management Library blogs are attracting more than 10,000 readers each week (wow!), we’re glad to hear what readers are thinking. Here are two particularly interesting recent comments: On whether the “social” in social enterprise is redundant, Andy Horsnell …

It used to be that there were essentially three choices: private, public, or nonprofit. Privately-held companies offer the most flexibility, without outside investors or the IRS constantly looking over your shoulders. A privately held social enterprise can choose to invest some of its profits into achieving social impact without anyone second-guessing those decisions. But if …