As far as broad definitions go, impact businesses can address a whole range of the world’s problems, including social inclusion, financial inclusion and environmental benefit.
From revenue growth to job creation: The economic impactThe world’s largest study of social enterprises, the SEFORIS project, reveals that organisations delivering inclusive growth are also seeing rapid revenue growth and are creating more jobs now than ever before.
According to the study, the 135 UK social enterprises surveyed generated £450m in revenue, 46.5% reporting revenues exceeding £1m. They collectively employ 13,705 people.This rise in job opportunities challenges the common assumption that impact businesses rely on charity and volunteers. The report found that only 1,149 people out of 13,705 were volunteers, while 10,482 are full-time employees. The survey found UK social enterprises served 1.3m beneficiaries – including individuals, groups, communities and other social organisations. The 1,030 social enterprises in the wider SEFORIS survey, the EU flagship research project that included nine countries in Europe, as well as Russia and China, generated €6.6bn in revenues, employed half a million people, and served 871m beneficiaries. And these businesses aren’t just based in one or two sectors. 68% are in various service industries including financial and real-estate, business-related, health, social and community services and education. Aston University’s Professor Ute Stephan led the UK branch of the study. As the director of the Aston Centre of Research into International Entrepreneurship and Business, his interest in the project is primarily in that it highlights the important economic contributions that these businesses make to the UK economy – which often go unnoticed.
“These organisations are strictly focussed on their social missions and work towards socially inclusive, healthy and environmentally sustainable societies in an entrepreneurial manner.”
A unique business modelImpact businesses have a unique business model and operational strategy that focuses on making money while doing good. Business performance is a key marker for success for these enterprises rather than profit alone. In the UK, 91% of the social enterprises use a fee-for-service model for at least one of their products or services. For 63% of UK impact businesses, fees for services and sales of products or services are the main source of financing. Like most businesses, impact enterprises can use multiple operational models alongside each other. Another popular model is the employment model, which is used by 14% of impact businesses. With the employment model, these businesses generate social impact by offering employment and training opportunities to their beneficiaries.
Innovation as a key definerThe survey also found that UK social enterprises are important innovators. 82% said they introduced a significantly new or improved service, product or process in their organisation in the last year, and 69% introduced a product, service or process that was new to the marketplace. As these businesses continue to grow in terms of revenue and number of employees, so does their potential in serving their social mission of helping hundreds of thousands of people in the UK.
Who are the people behind the UK’s fast-growing impact businesses?Businesses with social and environmental aims at the core range are one of the fastest growing sectors in the UK.
In this series, we’ll highlight some of the biggest names in impact enterprise based on the problems they are trying to solve, their challenges, and growth ambitions.
This is in the lead-up to a mainstay event in the UK’s entrepreneurial calendar, the Amazon Growing Business Awards, which recognises the talent, potential and ambition of the nation’s growth businesses. A brand-new category has been added to the awards line-up for 2018: the Bridges Positive Impact Award. Proudly sponsored by Bridges Fund Management, a specialist sustainable and impact investor, this award is tailored to celebrate growth businesses that are driving positive change for people and planet through their business model.
To nominate your business, visit gba.realbusiness.co.uk.
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