A Practica Guide of Setting up a Socia Enterprise What is a socia enterprise? A socia enterprise, generay speaking, is a business that targets at a specific socia mission such as creating jobs and providing training to underprivieged groups, giving support to ethnic communities, promoting fair trade and buiding a community of harmony. It attempts to sove socia probems by commercia means. Its profit wi be principay re-invested in the business to create wider socia impact. Maximising profit for the sharehoders is not its primary target. In Hong Kong, there is no forma definition of socia enterprise. Neither is there any forma registration system for socia enterprises, nor is there any ega form as socia enterprise in Hong Kong. Usuay we use Doube Bottom Line to describe the unique of socia enterprise which embodies a reationship between socia objective and financia goa as a sef-sustaining cyce of interaction. Unike ordinary socia service agency, socia enterprise has a cear business target to reach in order to maintain and sustain its operation. Yet, unike an ordinary business enterprise, socia enterprise is primariy driven by its socia objective. In other words, both the socia objective and the business target are indispensabe components of socia enterprise. How does a socia enterprise differ from an ordinary enterprise? In practice, socia enterprises in Hong Kong may take different ega forms. Thus, a socia enterprise is not defined by its ega form but by its nature and utimate objectives. Generay speaking, socia enterprises in Hong Kong share some common features despite their diverse ega forms. Ordinary enterprise Socia enterprise Main objective - Profit maximisation for business owners - Operate as an sef-sustainabe mode for achievement of socia objectives
Operation mode - Profit maximisation - Achievement of socia objectives and sef-sustainabe Socia Objectives - Not the mission of the enterprise - Core vaue of socia enterprises Job creation for underprivieged groups - Not necessary - Can be regarded as one of the socia objectives, particuary for the Work- Integrated Socia Enterprise (WISE) Profit distribution to owners - Aowed - Aowed, except for those socia enterprises aready granted tax exemption - In any case, profit distribution is not main aim of sharehoders Main objective and nature of business expressy stated in constitutiona document - Not compusory - Ony appicabe to socia enterprise not granted tax exemption, but recommended pease refer to SE Good Start Book Book 2 Choosing a Lega Form and Recommended Practices Maximum cap of profit sharing - Not compusory - Same as above Asset Lock - Not compusory - Same as above For detaied information and practice, pease refer to SE Good Start Book 2 Choosing a Lega Form and Recommended Practices
Information Have you thought about what the genera pubic thinks of socia enterprises (SEs)? Woud your customers agree to the vaue of the your socia enterprise? This question is of great importance to any founder of socia enterprise. Commissioned by the Home Affairs Bureau in 2013, the HKCSS-HSBC Socia Enterprise Business Centre and the Chinese University of Hong Kong conducted a research named "The Research Study on the Socia Enterprise Sector in Hong Kong - to Capture the Existing Landscape of the Socia Enterprises in Hong Kong". A teephone survey of over 1000 citizens was conducted to attempt to understand what they think of socia enterprises and their consumption patterns. The findings are interesting: The genera pubic speak highy of SEs. 78.5% of the peope interviewed have heard of this term. Broadcasting media are effective channes of promotion as 73.3% of them have come to know SEs through them. 68.8% of them recognise that SEs shoud be abe to make profit as we as to meet their socia objectives. 72.4% of them beieve that the mode of achieving both profit and socia objectives is feasibe. Despite high eve of pubic awareness, 54.3% of them have never bought any products from SEs within the six months before the survey. 69.5% of them, however, say they wi definitey or probaby buy SE products within the next 6 months. The respondents who have bought these products say that a hope that their consumption wi benefit the whoe society (58.2%) and their identification with the SEs socia objectives (48.7%) are the two major reasons supporting them to buy SE products. 60% of them are even wiing to pay more for the products of SEs. 77.9% of them are wiing to pay as much as 10% extra amount of money for SE products. 61.5% of them think it woud be most convenient for them to buy SE products in supermarkets and convenience stores whie 53.2% say housing estate stores. The above resuts may hep you understand the characteristics of your potentia customers. For detaied information, pease visit the website: http://www.socia-enterprises.gov.hk/en/research/research.htm
Five Stages of Setting up a Socia Enterprise: Inspire, Incubate, Innovate, Invest, Impact You may now be at different stages in the process of preparing to set up a socia enterprise. Some of you may sti be identifying a socia probem to focus on whie some coudn t wait to register it as a company and to raise capita. Wherever you are, we suggest you to sow down a bit and examine your pan against the five-stage framework beow to see if there is anything you can make further improvement. First Stage: Inspire Athough responding to socia issue is the core of socia enterprise, what is often ignored by most socia entrepreneurs is precisey this core function. Many founders of newy estabished socia enterprises start with business mode and pan rather than understanding the socia probem. They usuay spend much time on market researches, whie sedom pay attention to understanding what the community or the peope reay need. A socia enterprise woud be no different from an ordinary enterprise if it is not buit on a thorough understanding of the concerned socia issue and need. A perfect business pan wi be meaningess if it acks a sou - the socia vaue itsef. Therefore, the first, and indeed the most important step is to understand the needs / probems as we as the potentias of the community. Census and Statistics Department www.censtatd.gov.hk/home.htm Commission on Poverty Archives www.povertyreief.gov.hk/eng/archives.htm The Hong Kong Counci of Socia Service Poverty Information www.poverty.org.hk Second Stage: Incubate There are many incubation patforms in Hong Kong that provide advisory services for newy estabished socia enterprises. But don t forget that you are the founder of your socia enterprise and you shoud be its most informed incubator. Nothing can be achieved if you do not even have an initia idea to base your socia enterprise on. At this stage, you are supposed to devise your
business mode, understand the market needs, buid your team, as we as the organisationa structure of your socia enterprise. To be abe to accompish a these, you shoud equip yoursef by taking part in training programmes, workshops and business cinics. Hong Kong Counci of Socia Service HSBC Socia Enterprise Business Centre http://www.sociainnovation.org.hk PoyU Technoogy and Consutancy Company Limited Good Seed goodseed.hk SOW (Asia) Foundation Limited - Fast Forward www.cn-sowasia.org/appicationform The Yeh Famiy Phianthropy Limited- Nurturing Socia Minds www.nsm.hk Third Stage: Innovate Everyone is taking about innovation, but what is innovation? Is having something origina and new a must to make a good socia enterprise? In fact, many are mistaking innovation for invention. Socia enterprises do not have to create brand new groundbreaking products, services or pans. Innovation is about approaching od issues with new modes and soutions. It wi be great if a socia enterprise does invent something, but innovation is more a means than an end itsef. Pease bear this in mind. Practica Toos to trigger and support socia innovation diytookit.org McKinsey s Anaysis and Case Sharing on Socia Innovation mckinseyonsociety.com/topics/socia-innovation Fourth Stage: Invest Litte can be done without capita even if we have got a terrific pan. You are suggested to consider appying for grant from the seed money programme aunched by the Government in recent years. Some funding programmes were once for non-profit organisations ony, but they are now open to other entities
incuding private companies. Apart from this, there are some venture capita funds targeting at the highy competitive socia enterprises with big socia impact. They either directy invest in them or provide oans to them. As in an od Chinese saying: a rea genius does not worry about whether there wi be a scout. Home Affairs Department: Enhancing Sef-Reiance Through District Partnership Programme www.had.gov.hk/tc/pubic_services/en_sef_rei/index.htm Socia Wefare Department: Enhancing Empoyment of Peope with Disabiities through Sma Enterprises Project www.swd.gov.hk/tc/index/site_pubsvc/page_rehab/sub_istofserv/id_enhancinge Socia Innovation and Entrepreneurship Deveopment Fund (SIE Fund) www.sie.gov.hk Deveopment Bureau: Revitaising Historic Buidings Through Partnership Scheme www.heritage.gov.hk Fifth Stage: Impact How shoud the socia vaue of a socia enterprise be gauged? It is a probem that worries many socia entrepreneurs. For a socia enterprise at an embryonic stage, it is not easy to assess its socia impact due to ack of data. Don t be overwhemed by this probem. It is aready commendabe that you have seriousy thought about this at this start up stage. There are many toos avaiabe to assess socia impacts. There are aso workshops providing you with training on knowedge and skis in socia impact assessment. What you need to do at this stage is to go check them out. SROI Network thesroinetwork.tumbr.com Socia Vaue UK sociavaueuk.org/what-is-sroi/the-sroi-guide Creating Your Theory of Change NPC s Practica Guide www.thinknpc.org/pubications/creating-your-theory-of-change/
Supporting Patforms and Schemes for Start-up Government Funding and Support Deveopment Bureau: Revitaising Historic Buidings Through Partnership Scheme www.heritage.gov.hk Home Affairs Department: Enhancing Sef-Reiance Through District Partnership Programme www.had.gov.hk/en/pubic_services/en_sef_rei/index.htm Socia Innovation and Entrepreneurship Deveopment Fund www.sie.gov.hk Socia Wefare Department: Enhancing Empoyment of Peope with Disabiities through Sma Enterprises Project www.swd.gov.hk/en/index/site_pubsvc/page_rehab/sub_istofserv/id_enhancinge Socia Innovation and Entrepreneurship Deveopment Fund intermediaries The Hong Kong Counci of Socia Service Impact Incubtaor www.sociainnovation.org.hk PoyU Technoogy and Consutancy Company Limited Good Seed www.goodseed.hk SOW Asia Foundation Fast Forward www.cn-sowasia.org/appicationform The Yeh Famiy Phianthropy - Nurturing Socia Minds www.nsm.hk SE Funding Schemes and Socia Venture Patforms British Counci Hong Kong - Socia Investment Patform www.britishcounci.hk/programmes/society/skis-socia-entrepreneurs Hong Kong Poytechnic University - Micro Fund www.poyu.edu.hk/ife/poyumfund
Socia Ventures Hong Kong www.sv-hk.org Socia Impact Partners socimpactpartners.org The Hong Kong Counci of Socia Service - DBS Socia Enterprise Advancement Grant and DBS Socia Innovators /www.dbs-sociainnovators.hk UnLtd Hong Kong www.untdhongkong.org SE Supporting Schemes and Patforms Chinese University of Hong Kong - Hong Kong Socia Enterprise Chaenge hksec.hk City University of Hong Kong Project Fame www.projectfame.hk Education for Good education-for-good.com Funess Socia Enterprises Society www.fses.hk Hong Kong Genera Chamber of Socia Enterprises www.sechamber.hk Hong Kong Productivity Counci SME One www.smeone.org Hong Kong Socia Entrepreneurship Forum www.hksef.org
MaD SCHOOL Accumuator Scheme www.mad.asia/posts/759/mad-schoo Socia Enterprise Summit ses.org.hk SOW Asia Foundation www.cn-sowasia.org The Good Lab goodab.hk The Hong Kong Counci of Socia Service -HSBC Socia Enterprise Business Centre www.sociaenterprise.org.hk The Hong Kong Counci of Socia Service Impact Incubator www.sociainnovation.org.hk The Hong Kong Federation of Youth Groups Jockey Cub Socia Innovation Centre m21.hk/sic/tc/atest.php The Hong Kong Poytechnic University Jockey Cub Design Institute for Socia Innovation www.sd.poyu.edu.hk/en/j.c.-innovation-tower/jockey-cub-design-institute-for-sociainnovation The Hong Kong Socia Enterprise Incubation Centre Limited www.seic.hk The Yeh Famiy Phianthropy www.yehfp.com
SE Directory Socia Impact Assessment and SSE Mark Centre for Socia Impact (HKCSS) sia.hkcss.org.hk Funess Socia Enterprises Society www.fses.hk Hong Kong Institute of Socia Impact Anaysts www.hkisia.org Hong Kong Genera Chamber of Socia Enterprises - Socia Enterprise Endorsement (SEE) Mark www.seemark.hk The Hong Kong Counci of Socia Service - HSBC Socia Enterprise Business Centre Socia Enterprise Directory www.sociaenterprise.org.hk/en/sedirectory SE Saes and Trading Patform Tithe Ethica Consumption https://www.ethicaconsumption.hk The Hong Kong Counci of Socia Service - HSBC Socia Enterprise Business Centre Good Goods Socia Enterprise Saes Patform http://www.goodgoods.hk Exampes in the above tabe are for reference ony. About SEBC HKCSS-HSBC Socia Enterprise Business Centre (SEBC) is a coaborative patform under the Hong Kong Counci of Socia Service (HKCSS) with a mission to support over 570 socia enterprises and their beneficiaries. We initiate partnership among business sector, professiona groups and socia enterprises through a variety of
coaborative projects; provide start up and scae up funding support to encourage socia enterprise set up. We aso advocate responsibe consumption and socia innovation by means of capacity buiding programs and pubic education campaigns.