Growing a social business

Growing a social business can be seen as a route to improved sustainability and social impact. However, it must not be taken lightly or in an organic, unplanned way.

Points to consider:

  • Growth, as such, may not necessarily contribute to the achievement of the social mission. Growth for growth's sake is sometimes an indication of mission drift.
  • Growth may improve business performance but this is also not a necessary truth. It is worth looking at Business Planning for a Social Business.
  • Growth may improve the strength of the business, especially if it generates profits and build reserves and enables the recruitment of a stronger and more capable team, but it may also generate a high-risk situation where relatively small fluctuations in profitability or cash flow on the larger turnover can overwhelm a small capital base or low cash reserves - a situation known as 'over-trading'.

Assuming that these considerations have been taken into account, a social business can consider the routes to growth shown below either individually or in a mix.

In this section:

Image of Expansion

Expansion

Doing more of the same, probably in a wider market place

Diversification

Widening the range of goods or services offered

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Consortia Working

Creating teams of organisations

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Spin-outs

Spinning out enterprises from within the existing business

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Mergers and Acquisition

Creating a larger enterprise through aggregating existing organisations

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Social Franchising

Providing a package to enable others to replicate your success

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Employee Ownership

This section deals with businesses that are owned by their employees.

Social Business Wales case studies

Case Studies

Examples of social businesses we have worked with across Wales to help grow, expand, diversify, collaborate and transform.