What is a Social Enterprise and How Businesses & Society Benefit from the SE Business Model?
What is a Social Enterprise?
A Social Enterprise is a business or organisation driven by a public or community cause; be it social, environmental, cultural or economic. Businesses tackle social problems, improve communities, provide people with access to employment and training, or help the environment.
So, a social enterprise can be identified where:
1. Our organisation’s purpose is to create a sustainable environment for future generations through the implementation of sustainable business practices and the work that our Foundation is doing.
2. Our income is derived from applying our own commercial strategies in industrial, marine & commercial demolition, decommissioning & deconstruction.
3. We dedicate fifty percent or more of our distributable profits to work towards our social and environmental mission.
How does it work?
Almost any business or organisation can choose to be a social enterprise. It simply requires a different operational structure with a beneficiary cause.
Social enterprises are incorporated associations, companies limited by guarantee and proprietary limited (PTY LTD) companies.
As mentioned above, instead of working solely to increase the wealth of owners and shareholders, these businesses provide a billable service or item and reinvest profits back into the business or the local community. So, when a social enterprise profits, society profits.
Using the example of Major Projects Group, we provide various industrial, commercial and marine demolition services, and deconstruction consulting.
The client benefits by receiving professional, safe, cost-effective and environmentally sustainable demolition services; and society benefits, as the distributable profits support activities in marine conservation, research, education and action throughout Australian’s coastal waters and the Pacific region.
Further to a social and environmental mission, Major Projects Group maintains:
Profits are reinvested into our purpose as a means to leverage positive impact on society. It implies many things such as limiting the gap between top and bottom salaries.
Like “traditional” businesses, w have to focus on our economic activities: wealth and job creation and balancing income & expenses in order to be self-sufficient. Our business model is a means to reach social impact.
Stakeholders are naturally involved in the social enterprise due to strong local partners. Thus, the decision process is not based on capital ownership.
FASES estimated that there are approximately 20,000 social enterprises operating across all industry sectors in Australia. Of these, 73% are small businesses largely clustered around major metropolitan areas with the highest density being in Victoria.
Benefits from alignment with a Social Enterprise
Today, best business practices show management considering the social and environmental impact of their organisation rather than just seeing the rich getting richer. Social enterprises can be found in almost any industry; from toilet paper, to technical expertise and yes, even demolition and deconstruction services.
By choosing to procure services from a social enterprise, individuals and businesses alike can:
- Demonstrate their commitment to CSR;
- Enjoy the benefits of enhancing their reputation through working with an innovative business, and
- Know they are contributing to truly making a difference in the world.
Some key benefits clients will find with Major Projects Group:
- Social values: Our business puts people and the environment before shareholders;
- Transparency in business practices;
- Employees who are motivated by our mission to create a sustainable future.
Social Traders is Australia’s leading organisation connecting social enterprises with social procurement opportunities and supporting social enterprise businesses to successfully deliver on the contracts they win.
Business and government membership with ST provides tailored support and expertise to enable members to incorporate social enterprise into supply chains, and create real social change².
Challenges for a Social Enterprise
Social Enterprises come with their own set of unique challenges. The greatest of which, is funding. Acquiring sufficient funds to pursue their business goals is often a slower process and requires patience and realistic targets from management and investors.
Other challenges can be:
- Government support: Local, State and Federal Government policies still lack cohesiveness, and inhibit the growth processes by not offering better incentives, or promoting investment in social enterprise businesses.
- Low level of public awareness: many people are still unaware of the difference and benefits of social enterprise. Potential clients may not consider the options they have available to contribute to social impact.
- For smaller and start-up social enterprises – difficulties in obtaining and maintaining suitably skilled staff and most notably, adapting workforce profiles to rising operational complexity³.
- Lack of peer and networking support: charities and traditional businesses have clearer defined sectors to network. Businesses such as Major Projects Group are unique as social enterprises in the field of industrial and commercial demolition. While this model of business continues to grow, it still lacks some visibility and opportunities for connection and support.
Although there are challenges, Managing Director of Social Traders, David Brookes notes that social enterprise in Australia is on the rise and already contributes between 2% and 3% of GDP and employs over 300,000 Australians.
“We are on the way to seeing social enterprise as part of the mainstream, recognised for its contribution to providing innovative solutions for employment and access to service for disadvantaged Australians.” ⁴
Why Major Projects Group chose to become a Social Enterprise
Major Projects is not just another Australian demolition company. We are a social enterprise with an environmental purpose and a commitment to innovation and excellence in demolition.
We know that we are great at what we do, and when our founder, Paul Adams, became aware of potential oil leaks from WWII tankers, and the possible catastrophic environmental consequences in the Pacific, we decided to put our experience and expertise in demolition and deconstruction to use for the greater social and environmental good.
We structured our successful business as a social enterprise with the benefactor being Major Projects Foundation; responding to emerging maritime issues being faced by Pacific Islands nations and Australian coastal waters, including the threat of oil spills from World War II shipwrecks, ghost nets, unexploded ordnance, plastic pollution and the effects of climate change.
Our purpose is to create a sustainable environment for future generations. We invite you to join us and contract Major Projects Group for your demolition, engineering and consulting needs.