Background Image

4 Ways to Decrease Your Social Enterprise’s Odds of Failing

Many startup businesses—tech or otherwise—fail. Today’s failure can bring experience for tomorrow’s success. 

Social Sector Network poses a good question: “What happens when social activists masquerade as business people?” It’s an important question because many of us do a poor job at this. 

So poor in fact, that the World Economic Forum reported social enterprise failure rates to the tune of 38.3% within one year. Only 45.2% of social enterprises lasted around three years, and just 8.7% made it to the four- to six- year mark. While this study was focused on Mexico, global trends are much the same. 

Social enterprises are faced with many of the same setbacks as traditional enterprises. However, the difference lies in the fact that their failure has a more significant, and far-reaching impact. Most importantly, it often affects the people or places the organisation was established to serve.  

In the world of impact, there are unfortunately many things outside of our control. While it will do no good to worry about everything (cough, cough, burnout can be a cause of failure, too), it is helpful to understand ways we can support ourselves and our organisations, and ultimately decrease our social enterprise’s chances of failure. So, here are 4 ways to decrease your social enterprise’s odds of failing…

Get (and Stay) Clear on Your Purpose

Whether burnout or a big crisis (much like the one we’re currently living through), being clear on the purpose of your organisation is essential in keeping it running. Even if you’ve already defined the purpose of your social enterprise, it’s helpful to continuously revisit it and make sure that everything else falls in line with what you hope to achieve. 

Your business plan, your offerings, your marketing strategies, your team, your engagement with your customers and community, and even your potential funding streams should all revolve around your purpose. It’s important to get as clear as possible on who you are and what you’re going to achieve so that everything else can work to further your purpose. 

Your social enterprise’s purpose will also require you to get clear about your role in it. 

Enhance your Skills as an Entrepreneur

Resources and funding are the biggest support systems a social enterprise can have, and unfortunately, they’re also common obstacles. While opportunities and resources are available—like those shared with Social Change Central members—you can make the most of them by enhancing your skills as an entrepreneur.

It’s one thing to have a vision for social or environmental change, and it’s totally another thing to be able to act on that vision through enterprise. 

Unless you’re well-versed in the business or management world, it’s helpful to take some time to improve your skills. You’ll want to eventually attract the right people, recruit, train, and retain talent, be able to manage your team well, work effectively with your board members, develop and recruit essential fundraising skill sets, and manage your resources and funding well.

All of this certainly doesn’t happen overnight. As one of the most important ways you can decrease your social enterprise’s chances of failing, it will require you to step outside of your comfort zone to improve upon your skills or find the right people to work with you.

Through mentorship, books, podcasts, or events, there are several ways to invest in your personal development in ways that will make you a better entrepreneur.

Understand Market Trends, and Work with Them

Another thing that comes with enhancing your entrepreneurial skills is understanding the market and environment in which your social enterprise operates. Between societal, cultural, and political influences, you might find that your social enterprise is either working within spheres that will drive its success—or against obstacles that will make its sustainability impossible. 

Take the time to get to know your competition and your regulatory environment. Assess opportunities for public or private support, as well as cross-sector collaboration. Understand market trends, the expectations of your customers, and any technologies that could support your organisation. 

The more holistically you’re able to evaluate the role of your social enterprise in the current environment and be able to draw upon possible opportunities for funding, collaboration, and partnerships, the better likelihood you have that all of these outside factors can support the survival of your social enterprise. 

Evaluate, and Improve

It’s all too easy to get caught up in the day-to-day operations and any obstacles that may get thrown your way, but it’s equally important to regularly evaluate your impact and take steps to improve. 

Try to get clear on what your social or environmental impact goals are, and what targets can be used to measure success. Use appropriate metrics, understand your risks in return, and use measuring and reporting to share your impact with stakeholders. 

One of the main causes of failure is a “Just Do It” mentality—where trial and error takes the place of a well-informed business plan. Instead, quality measuring and reporting can help you concretely determine what works and what doesn’t. 

Final Thoughts on Failing

At the end of the day, don’t be afraid to fail. For many of us, it will be an essential and educational part of the journey. Don’t get wrapped up in the idea that failure is inevitable, and if it does come, don’t be afraid to talk about it. The world is full of success stories, but we need to recognize that sometimes failure can be just as uplifting and inspirational (in the long run, aswell) as success. 


Social Change Central
Social Change Central

No Comments

Post a Comment

Join as a member to get unlimited access


Already a Member? Log in

Subscribe to Social Change Central

No spam. It's a promise.

Password reset link will be sent to your email