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Business models beyond profit

What makes the social enterprise business model different?

Your business model is an integrated view of your entire organisation, bringing together your social model, strategy and operational plans. These components form the ‘engine’ of your organisation, with your vision and mission providing the context of what you do.

A business model describes how an organisation creates, delivers, and captures value. However, there are several reasons why business models of social enterprise are distinct from those of for-profit enterprises:

  • Social entrepreneurs pursue different objectives: While commercial entrepreneurs focus on value appropriation, social entrepreneurs focus on value creation. For social entrepreneurs, profits are a facilitator but not the primary purpose of the organisation.

  • Social entrepreneurs pursue different entrepreneurial opportunities: Social entrepreneurs often discover and create opportunities related to the social, the so-called ‘third sector’, characterized by the idiosyncratic personal relationships.

  • Social entrepreneurs take different approaches to enact opportunities: Social entrepreneurs are not interested in building up a sustainable competitive advantage; instead they want to provide sustainable solutions. They are not interested in protecting their ideas, as they want their idea to be spread to other geographical regions or target groups.

Are there any other differences between the business models of social enterprise and those of for-profit enterprises that you can think of? Please share them in the comments.

In the coming steps, you’ll have the opportunity to start developing a business model for your own social venture. Before moving ahead, check out the business model resources in the Downloads section below.

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This article is from the free online course:

Social Enterprise: Turning Ideas into Action

Middlesex University Business School

Course highlights Get a taste of this course before you join: