5 Questions Every Social Enterprise Should Ask Itself
It’s no secret that social enterprises face some unique challenges that make their paths tough to chart. When you’re building something imaginative and new, there isn’t a standard playbook that guarantees success.
But there are some key questions that — when answered thoughtfully — lead to viability, growth, and long-term success. Many social enterprises encounter these important questions either when an investor asks directly or when their venture hits a difficult inflection point and an issue has to be confronted. While you can’t anticipate everything, it usually helps to have a point of view on those key questions before any of them becomes an emergency.
If you are part of a social enterprise — whether it’s as a social entrepreneur, part of leadership, or an individual contributor — these questions can help you refine your strategy and sharpen your execution.
1) How big is your potential impact?
Traditional corporations and venture-funded startups can get tunnel vision in their search for the giant pie. Anything that isn’t a fully mass market often goes ignored because there might not be as huge of a payoff (we’re talking Billions with a capital “B” here).
Social enterprises can err too far in the other direction by not even asking the question of scale at all. A single good deed does indeed make the world a better place — but by how much? And how much did the world drift the other way in the meantime?
This isn’t to say that to change the world you need to serve every person in the world — far from it (as you’ll see in our next question). These are simply useful tentpoles for your strategy. Sometimes just knowing the total pool you’re working with can inform or even drive your strategy.
In traditional marketing, we call this a market size. How many customers could you serve? At what price point? Is there market segmentation to consider for pricing, level of service, etc.? Some useful starting points are models for Total Addressable Market (TAM) and its supporting subsets.
What if I provide something for free? What if my beneficiaries aren’t humans at all?
Measuring impact is a complex question. Even so, having a clearer picture of your potential impact on people or the planet can help you set goals, gain new funding, and develop your growth curve. This quantitative approach may miss out on some of the intangible nuances of your mission, but it’s the language of management and investment that prevails today. You’re going to want tangible proof points to convince people of your mission and vision — even if you have the best story in the world.
Interested in learning how to do a market sizing for your social enterprise?
We happily provide free consultations and action plans to get you started.
2) If you could talk to 100 potential customers, clients, or beneficiaries tomorrow, who would they be?
No product or service is for everyone. When you try to appeal to everyone, you don't make a meaningful impression on anyone. Don’t focus too much on the number 100 here — this is just an overall barometer for how well you’ve developed your target personas.
A clear answer to this question means you’ve found some important market signals and may be ready to scale your impact significantly, if you aren’t doing so already.
We used to ask this question as “Who is your ideal customer?” but have since adjusted because we find that this new framing presses our clients to consider tradeoffs more thoughtfully. You’re trying to build an ideal world, but right now we all have to live in the real world and face its constraints.
3) Imagine that a few of your stakeholders are having a dinner party (remember those?). What would they talk about?
The key here is that the answer to this question shouldn’t be you or your social enterprise specifically. There has to be more to it than that. Go deeper and look for what they have in common. What do they care about? What keeps them up at night? What are their shared dreams and vision for the future?
The question is aimed at another key element for growth: scalability and repeatability. Shared traits such as demographics, motivations, needs, roles, firmographics, and others are crucial for growth.
What do your stakeholders have in common? Why? These commonalities can help you find more of those stakeholders, communicate with them more effectively, and serve their needs better. These are all key to a social enterprise’s success.
4) How repeatable is your revenue model?
Am I starting to sound like a broken record about repeatability? I bet! Here’s the thing: repetition works. Not just in communications, but in organizational development as well. When we repeat things, we get better at them. It also removes a lot of decision fatigue that can feel like you’re constantly reinventing the wheel. Find what works and repeat it.
The name of the game for any startup these days is recurring revenue. It makes your life so much easier if you manage to achieve it. Of course, it’s easier said than done, but asking yourself this question can reveal new paths forward. Not sure you can have a truly “recurring” revenue model? Repeat business is similar and also very valuable.
It also doesn’t hurt to check out examples of successful recurring models, whether they’re close comparables to you or not. While it may feel a little icky, I’d even look at some purely profit-driven companies in the tech world for inspiration. They may not always have great values, but they sure do know how to build revenue machines.
5) If you landed $1 million in funding tomorrow, what would you do with it? Why?
Yes, investors are definitely going to ask you this. Donors might too, depending on your organization. But that’s just a fraction of the value in asking this question. It’s mostly useful as a test case for how well you understand the levers within your social enterprise.
How do the pieces work together? What is the next growth step for your social enterprise and what do you really need to get there? Have you figured out how to maximize your impact with money I’m willing to give you? Why is your venture the best use of resources for solving this problem?
These are tough questions. And there probably isn’t a perfect answer. But they’re a great way to prepare for success. Addressing these questions will build your confidence in everything from day-to-day decision-making to funding conversations to actually using the funding when you get it.
Depending on your phase of development, $1M could be too low or too high. Early social enterprises might be able to do a lot with $250K from angel investors or grants, while more established ones could need tens of millions. Not sure what number is meaningful for you? Try a range of figures and gut check what your answer would be.
Take a Breath
The questions here are tough. They’re meant to challenge you and get you thinking more deeply about the mission you’re pursuing each day. It’s easy to look at the list and feel a little overwhelmed.
Consider this: sometimes the most valuable answer (at least for the time being) is “I don’t know.” Being honest with yourself about what you know and what you need to find out will open doors. We often say this to clients on discovery calls for that very reason. It can highlight the areas where you need to focus your energies in order to build a sustainable organization, and motivate other questions that are crucial to your success path.
Remember, social enterprises are a process of discovery. You are charting a bold new path. Taking a moment every now and then to get your bearings is an important part of the process!
