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The Social Enterprise Business Model

Social enterprises are businesses that aim to solve social or environmental problems rather than maximize profit. They prioritize social responsibility over profits. Two examples are Rags2Riches, which empowers artisans in the Philippines by upcycling fabrics into fashion, and Hapinoy, which supports women running small stores through training, capital access, and new products. The key principles of social enterprises are being motivated by a social cause, achieving long-term financial sustainability, investing profits back into the business, and prioritizing social and environmental responsibility.

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119 views3 pages

The Social Enterprise Business Model

Social enterprises are businesses that aim to solve social or environmental problems rather than maximize profit. They prioritize social responsibility over profits. Two examples are Rags2Riches, which empowers artisans in the Philippines by upcycling fabrics into fashion, and Hapinoy, which supports women running small stores through training, capital access, and new products. The key principles of social enterprises are being motivated by a social cause, achieving long-term financial sustainability, investing profits back into the business, and prioritizing social and environmental responsibility.

Uploaded by

DENNROSE DECLARO
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Group #6

THE SOCIAL ENTERPRISE BUSINESS MODEL


WHAT IS SOCIAL ENTERPRISE?
• defined as a business model with the objective of solving social issues
and problems while providing goods and services.
• A social enterprise is driven by a cause purpose as well as the need to
address as issue or problem. One common thing about social
enterprise is that profit is not their first priority.
Social responsibility is the duty of business to do no harm to society. In
other words, in their daily operations, businesses should be concerned
about the welfare of society and mindful of how its actions could affect
society as a whole. We know that social responsibility doesn’t always
happen, despite the seemingly best efforts of a company.
EXAMPLES OF SOCIAL ENTERPRISE
RAGS2RICH
Co-founded by Reese Fernandez-Ruiz, a Forbes Magazine Top 30 Under
30 Social Entrepreneur, Rags2Riches works with local artisans across the
Philippines to create eco-ethical fashion and home accessories. Every piece
is joyfully woven from upcycled, overstock cloth and indigenous fabrics.
Every R2R piece is handwoven by artisans using overstock, upcycled
cloths and indigenous fabrics that would otherwise end up in the landfill, so
every purchase empowers the person who made it while creating positive
environmental impact.
HAPINOY
Hapinoy is a social enterprise founded by Senator Bam Aquino along
with Mark Ruiz, who is married to Reese Fernandez Ruiz, the founder of Rags
2 Riches.
Hapinoy aims to level up the sari-sari store as we know it. “Hapinoy
empowers women microentrepreneurs who own sari-sari stores; we partner
with them by providing training, access to capital, and new business
opportunities,” Ruiz said.
They focus specifically on supporting new initiatives that can create
social change. Ruiz shared, “These new business opportunities are ideally
goods and services that can positively impact the communities that these
sari-sari stores serve, a concrete example of which is our current focus –
mobile financial services.”
The Hapinoy Sari-Sari Store Program continue to effectively empower Nanays
by providing them with three main resources that they need to successfully run and
grow their businesses.

EDUCATION. Hapinoy’s Business Management and Personal


Development training modules emphasizes on education, culture-building,
and imparting overall best practices, giving Nanay the tools and skills she
needs to introduces systems in her store. These systems aid in developing a
more sustainable business model for her sari-sari store.
ACCESS TO CAPITAL. If Nanay’s business plan involves securing additional
capital, Hapinoy can link her up with different sources available in her area which
she can then choose from. These can be Microfinancing Institutions, Cooperatives,
or groups with a lending facility.

NEW BUSINESSES. To weave the program together, Hapinoy focuses on


assisting Nanay in expanding her business while introducing higher value
products and services to the community, through her sari-sari store. Not only
does this bring added revenue for Nanay, it also brings a whole new level of
access and impact to the community.

7 PRINCIPLE OF SOCIAL ENTERPRISE

 MOTIVATED BY A CAUSE
A social enterprise does not aim to maximize profit but rather
solve or overcome certain issues on health, education, technology
access, environment or poverty.

 FINANCIAL AND ECONOMIC SUSTAINABILITY IN A LONG TERM


Since the purpose is to solve the certain problem, the enterprise
has to ensure that it can attain financial stability in the long term. It
should be financially stable to sustain its worthwhile projects.

 NO DIVIDEND FOR INVESTORS


Since a social enterprise does not seek to maximize profit,
investors expect a return only on the actual amount they have put in.
 PROFITS GENERATED REMAIN
When investments are returned to the investors, whatever profits
generated remain in the company for expansion or improvement of
operations.

 SENSITIVE TO GENDER AND ENVIRONMETAL ISSUES


The social enterprise operates ethically by ensuring no gender
discrimination and providing eco-friendly products and services.

 EMPLOYEES ARE TREATED FAIRLY


The workforce is well-taken care of through fair wages and
benefits and better working conditions.
 JOY IN EVERY TASK
A social enterprise that strives to work for a cause does it with
pleasure.

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