How social enterprises can succeed as businesses – Patients Know Best, MyChoicePad and Patient Choice in the Guardian

Ten years ago this month I listened to the chief executive of a US non-profit recount the first lesson his boss had taught him: “We are not-for-profit, and that means we are not for loss.” In other words, you cannot deliver the social good you want if you do not manage the financial health of your organisation. Over the years I have learned from numerous social enterprises that their success depends on their ability to operate with the discipline of a business.

A great business begins with a great product. MyChoicePad built an iPad app that helps people with learning or communication disabilities to communicate better. In its early days the company was funded from the sheer number of prizes it won, including its selection as an UnLtd Big Venture Challenge winner. Co-founders Zoe Peden and Andrew Jackman were able to recruit top developers from their City of London jobs because of Peden’s ability to explain the importance of the app. MyChoicePad has been downloaded more than 100,000 times by parents, schools and health institutions and has succeeded in making a real, sustainable difference to many lives.

Without sales, there is no business. Communicating the social good that a social enterprise delivers is a key part of the sales strategy. Patient Choice Foundation is a new type of healthcare company. It is completely impartial and unique in the stoma care market as the only prescription home delivery service dedicated to funding charitable activities. As a not-for-profit business, Patient Choice doesn’t have shareholders, but instead supports charities and associations through the money it makes. The company is the brainchild of Neil Basil, a patient himself, who through his years of experience in receiving products from home-delivery companies, decided that more could be done to improve the quality of service for customers.

What is so impressive about Patient Choice is how professionally it markets itself to new customers. They know that they’ll only get patients switching to them if they provide a high quality, trusted, independent service first ??? with the charitable message coming second. However, those two messages together make a simple yet compelling sell to any potential customer. Great quality, great service ??? plus you’re helping fellow stoma care patients, too.

To reach scale at speed, you need investment, and the vast majority of investors need some cash return on their investment. Even social investors need the cash to invest in the next generation of social enterprises. Which is why community interest companies find it so much more difficult to raise the sums they need. The first workshop I attended as an Ashoka fellow I picked up some great advice about how to structure a social enterprise to recruit investors while safeguarding the mission. For example, you can create a non-profit that carries out the social mission, and is funded by the royalties or revenues from a for-profit company that can receive investment. It is important to get good legal advice on how to structure correctly early on.

One of the great opportunities available to social enterprises is that lots of people want to help you succeed. Employees want to work for social enterprises because they believe in the mission. So make sure you mention it in every interaction your team has with the public because you are always recruiting. Experienced executives want to donate their knowledge and network to give back to society, so make sure you network across all sectors to spread the word about your work. You need help from every expert for every aspect of your business.

Finally, be greedy in your learning. Find the best in every field and interview them about their techniques; they want to teach you and you need to learn.

Dr Mohammad Al-Ubaydli is founder and chief executive of the healthcare social enterprise Patients Know Best. He is Ashoka’s fellow of the month for January 2013. Ashoka is a global network of social entrepreneurs, with more than 3,000 fellows spanning 72 countries. For more details click here.

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