Attracting social enterprise funding is often best done as a collaboration. Image: Unsplash
Growing your social enterprise is a rewarding but challenging process – and in many cases you’ll need social enterprise funding to make that happen.
And yet, if you’ve set up a business to make change in your community, the world of investment and grants may be alien. To become a truly successful social enterprise, it’s more than likely you’ll need some financial help to get going.
So here are some tips on how to attract funding that will set you up for success
Refine your business plan and vision
Application forms are, on the face of it, a boring form of admin. But at the funding stage they also present an opportunity.
It’s a chance to articulate your mission, and what makes you worth investing in. While you’re working on a pitch, you’re also refining your vision.
It almost goes without saying – but we’ll say it anyway – the clearer and more focused your pitch, the more attractive it’ll be to investors.
Get help and an outside perspective
It’s easy to become so familiar with your business that you almost forget what makes it remarkable. After spending endless hours making your enterprise viable, you can be forgiven for not being able to see the wood for the trees, from time to time.
So when putting together your grant and loan applications, get other people to read them. They might spot the thing you should be highlighting more – the thing that makes your business unique and worth investing in, but that seems ordinary to you after countless late nights.
If it’s someone close to you, they might also spot the thing you talk about all the time but haven’t put in the application – the so-called “pub test”.
Draw a parallel between yourself and beleaguered climate scientists trying to explain the reality of climate change – you’re both so well-acquainted with the details that communicating them to others can be a challenge. If it helps, imagine yourself being played by Leonardo Di Caprio or Jennifer Lawrence.
Put yourself in the shop window
As a small company, things are likely to change – and when they do, you’ll be the thing keeping them on course. While it’s important to make sure your business’s pitch is sparkling, don’t neglect your personal pitch. If investors think you’re a rank amateur, they’re going to be put off. On the other hand, making yourself an attractive investment may be the thing to take a deal over the line.
And equally, let people know you’re seeking investment – a bit of word of mouth may just pull the right people towards you.
“You never know who in your network might want to get involved. And failing that they may be able to introduce you to someone else who does. In my experience, people want to help out, particularly if there is a social cause involved,” says Alice Lacey, CEO and co-founder of Now Press Play, a social enterprise which helps engage children in their curriculum through sound.
Apply for all the social enterprise funding you can find, but be selective with what you accept
This is, really, a simple piece of advice – you never know which will be the successful application.
But only accept funding from places you feel will support you. It can be a folly to take money that comes with prohibitive strings attached. A higher investment offer can come with growth conditions that you might think are unsustainable and will leave your business underdeveloped but over-large, for example. Some investors may value different things to you, which might harm you down the line.
Remember that social enterprise funding comes in all shapes and sizes
As a social entrepreneur, you’re lucky to have a range of ways to get investment.
A range of grants are on offer to social enterprises, and there are a host of loans on offer.
Big Issue Invest, the investment arm of The Big Issue, offers social enterprises and charities a host of repayable finance options – ranging from £20,000 to £3 million.
You can also raise equity investment from angel investors, just like any start up.
Each of these have their pros and cons. Think about which source is right for you – but also under which circumstances a particular funding source would work for you.
If you can't visit your local vendor on a regular basis, then the next best way to support them is with a subscription to the Big Issue. As a social enterprise, we invest every penny we make back into the organisation. That means that with every subscription, we are supporting people in poverty to get back on their own two feet.