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Tips from Australia’s Most Awarded Serial Social Entrepreneur

Luke Terry is known as one of Australia’s most awarded ‘serial social entrepreneurs’. Over the last 15 years, he has founded several large-scale employment-focused social enterprise projects that create meaningful work pathways for individuals who would otherwise be excluded from the labour market. In 2017, Luke created Vanguard Laundry Services, an AU$8 million commercial laundry with an in-built mental health career and training centre employing more than 140 people since commencement.

Luke’s story of Vanguard Laundry is coupled with reflections on his learnings throughout. According to Luke, his early failures in his Toowoomba Clubhouse days were in people management. As a younger leader at 29, while full of energy and passion, Luke recognises that he may not always have listened enough, and sometimes made decisions that were not fully inclusive of the team. He also reflects on where he succeeded, stating that his successes were in his personal growth and in bringing opportunities to Toowoomba. Luke feels that he had opportunities that may have been particular to the regional location, such as having a community that was really accessible and really supported him as a leader.

Luke’s key reflections from his journey:

Have a small Board to enable rapid transitions. 

Value learning and development – we all need a support network and to put self-care on the agenda.

Take leaps of faith, such as the leap of faith St. Vincent’s Hospital took in giving Luke the anchor contract he needed despite having no experience with laundries. They took a leap of faith because the enterprise aligned with their mission.

Successes create successes and it is important to get high-profile people on board.

Persevere – it’s not as simple as a call from the Prime Minister. Things can take many months.

The story of Vanguard Laundry also highlights important messages for entrepreneurs, partner funders and government in the journey of setting up and supporting a social enterprise. Luke’s key messages are captured below.

Message for Entrepreneurs

Projects are too big for the sector at the moment. Make sure you have the networks you need, that your Board is agile and consists of people you trust and who you have fun with. Make time for self- care.

  • Recognise how long a large project like Vanguard Laundry will take and that Australian funding mechanisms aren’t currently there to support projects like it (just yet).
  • If you don’t have a source of funding, choose projects that don’t require a lot of capital. An anchor contract is a great place to start but finding those, like St Vincent’s Hospital, who have the courage to take that plunge is as scarce as hens’ teeth.
  • Ensure that you have supportive networks. Find mentors and peers in both business and community.
  • In fundraising find out why people want to give you money. People always have a reason for giving money to a good cause, but it is not always a good reason. Work out their reasons for supporting you and question whether their reason aligns with yours.
  • Fundraising rarely comes from the first meeting, it comes from relationships. When a Board says, ‘Go and find money,’ that will not happen in a day. It takes time and work.
  • Be aware that what organisations deem valuable, and what people deem valuable are different things – some partners take up time and some pro bono work is not valuable. Others are incredible.
  • Fill the narrative or someone else will. When there are gaps in the information, and you don’t fill that gap, people will make assumptions. Communication and stakeholder updates are really important. Otherwise, people fill in the gaps on their own.
  • Work out what success would look like for the people you are working with. As entrepreneurs, we have to identify what this is.
  • Memory traps us in the past. Don’t let negativity from the past influence your focus moving forward.
  • Climb the ladder on the right wall. To do that, you need people around you.
  • As social entrepreneurs we need to live in two worlds: social work and business. Keep your desk on the front line and your networks in the business community. Joining TEC was a gamechanger for me. It pivoted my thinking from a social worker to a social entrepreneur.
  • Don’t build employment focused social enterprises to support your auspice agency or to fund a cause. It took me four years and visits to 30 large scale employment focused social enterprises to work this out. Our employment focused social enterprises will have an enormous social impact on the communities we work with and do not require ongoing government funding. This in itself is a miracle.
  • Keep the most important thing the most important thing. That’s your health and your family, not your enterprise. Yes, you will have 70-hour weeks and work through holidays but it’s not sustainable. It was Vanguard and TEC that ultimately helped me centre myself in things like regular meditation, running and yoga. To do more you must focus on your own self-care first.

Message for Funders

Question what role you want to take and how you can invest more than five per cent of your funds in social enterprises.

  • There is a missing middle in funding for employment focused social enterprises. We need grants for early stages, but we don’t want grants to run the business. However, with our social business models we cannot afford impact investing at 7+%. We want to work with you, the sector, to borrow small amounts of your corpus to enable the scaling of employment focused social enterprises at one per cent.
  • Question how you can play a role and what else you can do besides funding – how can you invest in the person and not just the product?
  • Fund the employment focused start-ups that no one else can. We need venture philanthropy and an ability to place multiple bets. There are only 20 employment focused social enterprises in Australia that pay award wages and employ more than 50 people. We can do much better. Government will not fund our early stage, so this is an incredible opportunity for philanthropy to support employment focused social enterprise.
  • Fund the backend and learning and development at critical points in a social enterprise’s journey. Vanguard’s longitudinal employment research should not be the first of its kind in Australia; programs like TEC are also an integral part of business growth but would not have happened without philanthropy.

Message for Government

Social enterprises are highly effective community infrastructure projects that are significant early intervention cost savers to government. If we want to innovate, we need to support the early stage development of social enterprises.

  • Employment focused social enterprises are the key to changing some of our nation’s most complex social problems. Fund them once and they will support your community for many years to come.
  • The federal government currently pays a DES provider an average of $17,000 to support someone to employment and the success rate is 28% to 13 weeks. With a success rate of 80% to 52 weeks, social enterprises could scale overnight on a payment by outcome model. Employing people through social enterprises costs the government substantially less.
  • If you do choose to fund social enterprise pay us per job outcome, not with a grant for which we don’t have any accountability.
  • Traditional Impact Investment is not the answer for employment focused social enterprises. As non-profits, enterprises such as Vanguard Laundry cannot take equity and, if they could, any margins are taken up by additional training and efficiency costs. Therein lies the missing middle between grants and impact investing that requires work with all levels of government to overcome.
  • Employment focused social enterprises have a 3X efficiency on existing government funded employment initiatives. Helping our disadvantaged people engage in employment on a large scale will provide a landslide change to government spending across the board. Our sector wants to help! But we need a policy alignment.

Drawing on his learnings to scale up Vanguard Laundry, Luke has recently launched White Box Enterprises – a large scale jobs focused social enterprise builder and the first of its kind in Australia. Luke’s vision for White Box Enterprises to create more than 5,000 jobs through social enterprise by 2030.

jay@socialchangecentral.com
Jay Boolkin

jay@socialchangecentral.com

I'm passionate about positive social change and the power of social entrepreneurship to tackle some of the world’s biggest problems. I believe that for-purpose business models can become part of the mainstream and I am enthusiastic about advocating for business models that are genuinely built around a social or environmental mission.

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