Social entrepreneurship combines a social orientation of activity and an entrepreneurial approach. It is a business solution to a social problem, a balance of social goals and a commercial component, where money is not a goal but a means to achieve these social goals, allowing the entrepreneur to remain sustainable and independent. Enterprises operating in this area receive additional support at the federal and regional levels. For the successful implementation of any business project, both commercial and social, the enterprise’s financial stability in social entrepreneurship is necessary; this criterion is fundamental. However, social entrepreneurship success comes down to people, timing, and resources (Sneed et al., 2016). Under these conditions, socially-oriented business differs from traditional philanthropy (Walske et al., 2021). Subjects of social entrepreneurship – enterprises that specialize in producing products or providing services in the interests of socially vulnerable and low-income groups of citizens or create jobs for them.
World experience shows that entrepreneurship is increasingly shifting the emphasis on earning money and solving social problems. Moreover, more investors nowadays are interested in socially oriented companies. In this regard, many enterprises should have a long-term development plan to maintain a high-level reputation. The economic plan for profit is not so important in this situation, naturally, growth is expected from any such undertaking. The growth of a social enterprise can also be due to scaling – increasing the scale of the activities of a social enterprise within a single legal entity. As a type of scaling, replication is applying a proven social business model by other organizations in other geographical, economic, or social conditions. However, not all social enterprises consider it necessary and proper to grow. Social innovations found and well-established locally may be so specific to a given community that it may simply be pointless to replicate them in another region (Walske et al., 2021). Such enterprises successfully operate in their native region until the chosen social problem is completely solved. Then it is necessary choose another area of activity for themselves or, for constantly needed social services or products, stabilize at the optimal level of production and continue to work. Before moving on to the growth stage, social entrepreneurs must ensure that several conditions are met. To begin with, a social enterprise must have a clearly defined mission and core values, as well as a developed and self-sustaining business model. The model must show and prove its success and sustainability. Not every business model can perform well in other geographic, social, and economic environments. It is necessary to evaluate the degree of its universality.
The sustainability of social enterprises depends on the diversified demand for the services provided and the specifics of the problem being solved. As the growth of a social enterprise relies heavily on scale and replicability more than conventional business financial success, it needs to remain attractive to investors and deliver on missions effectively. Therefore, scaling is directly related to enterprise performance (Walske et al., 2021). Achieving impact and system transformation are the determinants of a startup’s success. If financial performance may not show a clear profit, reaching such an impact on a particular issue will be a more important indicator in social activities. The goals achievements even in specific problems contribute to extrapolating experience to broader tasks or other regional issues. A track record will be a great resume to attract new investors interested in solving a problem and increasing a startup’s profitability. Although profit is not an end in itself in social entrepreneurship, it can be an indicator of effective operational performance for the quality of both investors and higher levels of government are willing to pay. Only those projects can be scaled up based on a high-quality solution that gives society a tangible, significant result.
References
Sneed, M., Sohn, E. K., & Threlfall, V. (2016). Scaling the Social Startup: A Survey of the Growth Path of Top-Performing Social Entrepreneurs. Threlfall Consulting & Kathleen Kelly Janus.
Walske, J. M., Foster, E., & Tyson, L. D. (2021). Scaling the Social Enterprise: Lessons Learned from Founders of Social Startups. Edward Elgar Publishing.