THERE was a time when the idea of being able to make money and do good at the same time was seen as a utopian dream. That is not the case any more. Social enterprises now contribute more than £8.4 billion to Britain’s economy, showing that it is possible to combine profit with a passion for social responsibility.

Moreover, a recent survey by Business Link found that 8.6% of entrepreneurs were motivated to start a business out of a desire “to do something that helps or supports other people”.

This combination is not easy to achieve, however. Social enterprises have to compete in the commercial market and face the same challenges as purely profit-motivated operations. To succeed they need to be as good as – if not better than – traditional businesses.

Justin Francis is founder of Responsible Travel, a website that deals with travel companies that are of benefit to people and the environment. He believes there is no need to choose between being profitable and having good values.

“A business should be able to hold together more than one thought,” he said. “Profit and principles can go hand in hand.”

Francis founded the company with £30,000 from private investors in the belief that the travel industry could be changed if people chose holidays that treated communities and the environment with respect.

The company’s ethos has attracted highly committed staff – and clients – and last year Responsible Travel had a turnover of £920,000.

However, Francis realises that being ethical alone is not enough. He maintains the highest possible standards in all aspects of his business so he can compete in the travel market.

His profit-led approach helped him to secure a £150,000 loan from the South East Growth Fund, a venture-capital group, which has been vital to Responsible Travel’s expansion.

“We were not given funding because we were a social enterprise,” he said. “We were given the money because we were a business with growth potential. The business has got to be great; being a social enterprise is not an excuse.”

Another business that has managed to close the gap between doing good and making money is the Fairtrade chocolate company Divine. It has not only established itself in the highly competitive UK chocolate market, but 54% of its distributed profit goes straight to the Ghanaian farmers who grow the cocoa.

The creation of Divine came about when a group of cocoa growers in Ghana – who had set up farmers’ cooperative Kuapa Kokoo in order to trade their own cocoa – decided they wanted to create their own branded chocolate bar as well.

In 1998 The Body Shop, Christian Aid, Comic Relief and the Fairtrade organisation Twin Trading joined Kuapa Kokoo and recruited a commercial team to release the chocolate bar under the name Divine into the European market.

Divine’s managing director, Sophi Tranchell, said: “Without our mission being at the core of who we are, we would never have been able to make money in the chocolate sector.”

Such was the success of Divine’s marketing campaign that it was the potential consumers who, in 1999, played a big role in getting Divine chocolate onto the shelves of Sainsbury’s supermarkets.

“What I have realised is that consumers want to make a good choice,” said Tranchell. “People do care about the way the world works and like to think they can have a good influence. To succeed as a social enterprise, you’ve got to have your product in a place where it’s possible for people to be making that positive choice.”

Yet Tranchell also realises that however strong a story Divine may have, the product needs to be delicious and the business behind it must maintain the highest possible standards.

“No social enterprise can be successful without a fantastic product and services,” she said. “Customers have to keep coming back for more and you have to be able to get the product on the market. A good business is about levering your assets.”

Divine will have a turnover of £10m this year and the Kuapa Kokoo group, along with paying the cocoa farmers a fair price, has been able to invest a large percentage of its profit into community projects such as water wells and medical training.

Closer to home, the Glasgow firm Haven Products is also managing to combine making profits with pushing for social change. More than 80% of the staff employed by Haven, which provides services for companies that wish to outsource their production processes, are disabled.

Employees on the factory floor do a variety of jobs: packing boxes, print-finishing, repairing books and labelling products. As a significant number have learning disabilities, the repetitive tasks work well.

However, managing director David Whyte is determined that the company attracts clients because of the quality of its services, not because of the nature of its staff. He said: “Our focus is on offering clients high-quality, commercially driven services with a great staff team behind them – who happen to be disabled.”

Whyte believes Haven’s professional services are the secret to the company’s longevity. Its commercial success is also vital to its social responsibility. A large percentage of the profits go toward continuing to develop and improve employment opportunities for the disadvantaged.

As most of Haven’s staff have previously been reliant on incapacity benefits and are new to the world of work, the company places high priority on developing learning facilities.

Some 5% of each staff member’s contracted time with the company is spent learning social and business skills in an on-site learning centre. Haven has also introduced optional evening classes and hopes to launch a new programme teaching sign language, as many of its workers experience difficulties in communicating.

Whyte is proud of what Haven achieves – internally and externally. “We are offering quality services to customers while at the same time providing our staff with choices. Employees have financial independence, are developing personal skills and, in having a job, they are coming out of the house every day with a purpose,” he said.

Jonathan Bland, chief executive of the Social Enterprise Coalition, sees social enterprise as the business model of the 21st century. “People are increasingly more aware of the issues we face in society and the power of businesses to create solutions where other methods have failed,” he said.

Despite recognising the challenge that a social enterprise presents, Bland remains convinced that every entrepreneur should at least consider the opportunities on offer.

“Unlike other businesses, social enterprises have multiple bottom lines: financial, social and often environmental as well,” he said. “It’s an extremely challenging job but the rewards are enormous.”

socialenterprise.org.uk

businesslink.gov.uk

j4bcommunity.co.uk

triodos.co.uk

unltd.org.uk

cdfa.org.uk

acf.org.uk