Social Firms UK

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How to use the new Social Firms UK website

1. What’s new for all visitors to the site
2. What Social Firms UK members can do in addition to the above
3. What Board members can do in addition to the above
4. Notes for staff

1. What’s new for all visitors to the Social Firms UK site.

You can just view the new website as it is and enjoy new features such as the:

• Trade Directory and the Resource Centre Library which are now based on the site itself advanced search engine system throughout the site.
• Photo library.

2. For Social Firms UK members only

Members of Social Firms UK are automatically set up as a member of this website. Just sign in by clicking on ‘login’ in the top right hand corner of the home page and then entering your username and password (please contact Social Firms UK if you lose your username/password by calling 01737 231360 or emailing us).

Unique to you as a Social Firms UK member is the ability to then:

• download resources free only to members.  To access them visit the Resource Centre Library and search under the ‘availability’ category for the ‘free to members’ resources;
• add events or news items To do this click on 'my account' in the top right hand corner, select 'create content', choose 'news item' or 'event'. Fill in the form and press 'save';
• have a listing and profile on the member directory.  As a default, this is currently set up to publish your details on the site. Please visit the members directory and check your details are correct. If you would like to amend or add any details (e.g. add your website but remove your email address etc) on your members directory listing, click on 'my account' in the top right hand corner, select 'create content', choose 'member profile', add/delete/amend details on the form, and then press 'save'.  If you don't want any details at all published to the website, including your name, just remove the tick next to ‘list profile publicly on the website' (which is right at the bottom of the page), and then save;
• add comments to news or events and thus take part in various conversations. To do this, select a news item or event, scroll down to the bottom and click on add comment;
• change your password. To do this click on 'my account' in the top right hand corner, select 'edit', write in your new password twice and press 'save';
• request to be notified when new material appears on the site according to selected tag word or content type. Click on 'my account' in the top right hand corner. Select 'edit' and in the email address section select the email address to which any notifications should be sent, and press save.  Then go to 'Notifications' and choose 'content type' or 'tags'.  Tick your selections e.g. the content type 'news items' or the tag word 'Japan', and how frequently you'd like to be notified and press save.

3.  Additional notes for staff & board members

Staff and board members are able to use the site in the same way as members, but are not able to create a 'member profile.' 

Where to find…

• Annual reports – old one in research section, new one in resource centre.

On this topic in the winter of 2005, Third Sector Magazine wrote:

"There are obvious benefits to organisations in having a trustee or trustees on their board who have learning difficulties, particularly if the focus of their objectives is providing for people with learning difficulties. Such trustees will be best placed to give the perspective of beneficiaries of the organisation and suggest ways to improve services as well as providing them individually with empowerment and self-esteem opportunities.

There are, however, some issues which require caution. The obvious area is in terms of legal capacity. There is a general assumption that individuals have legal capacity, for example to enter into contracts, unless a Court determines otherwise. This is an issue for both companies and for unincorporated organisations, for example unincorporated associations, clubs or trusts. A company may have its own legal personality and can enter contracts in its own company name, but there is still a requirement for individuals who may sign on behalf of a company to have legal capacity in order to enter into a binding contractual commitment. With unincorporated organisations, trustees may have to enter into contracts or hold land in their own names. However, all charity trustees have to act in the best interest of their charity and are collectively responsible for the strategic decisions of the organisation as a whole.

Both the Charity Commission and the Home Office are keen to promote diversity on trustee boards. The question of legal capacity and the extent of any individual person's learning difficulties should rarely be a bar to becoming a trustee as there are measures that can be put in place by an organisation to ensure equality of opportunity and access to such an individual's valuable contribution."  

The Visit Programme

The Visit Programme has been set up to provide opportunities to visit Social Firms and Work Integration Social Enterprises (WISEs). The programme’s main aim is to enable Social Firms and WISES to learn from each other, but it is also a response to a wider demand to understand how social enterprises can compete in their chosen markets and employ and support people at severe disadvantage in the labour market. What better way to learn than to visit an enterprise with a successful business model for achieving this?

The Visit Programme offers you a simple way to identify an appropriate enterprise according to your interests, and for setting up the visit. This website tells you where you can visit, how to book, and what to expect from the experience:  www.visitsocialenterprise.co.uk

To find out about the international Social Firm scene, visit our international page.

An entrepreneur is an individual who owns and operates their own business, assuming the responsibility, risks and rewards therein. A social entrepreneur meanwhile is someone who works in an entrepreneurial manner, but for public or social benefit, rather than to make money. Social entrepreneurs may work in ethical businesses, governmental or public bodies, quangos, or the voluntary and community sector.

While entrepreneurs in the business sector identify untapped commercial markets, and gather together the resources to break into those markets for profit, social entrepreneurs use the same skills to different effect. For social entrepreneurs, untapped markets are people or communities in need, who haven't been reached by other initiatives.

But while they may read from a different bottom line, social and business entrepreneurs have a lot in common. They build something out of nothing. They are ambitious to achieve. They marshal resources - sometimes from the unlikeliest places - to meet their needs. They are constantly creative. And they are not afraid to make mistakes.

Social entrepreneurs are particularly skilled at finding new uses for derelict spaces, second-hand materials, and under-used people; as well as squeezing money out of the commercial and public sectors. The most successful embody a curious mixture of idealism and pragmatism - high-mindedness wedded to hard-headedness.

Social entrepreneurs never say "it can't be done."

These enquiries are currently not very common as:

• most social enterprises have growth rates that are not attractive to private investors as they compare badly with private sector for-profit businesses;
• most social enterprises can access start-up grants from government and Trusts as long as they are non-profit distributing organisations. This gives social enterprises a competitive advantage as they do not have to repay this investment;
• some grant funds are better than others, and many have drawbacks related to admin or outputs that mean the business is compromising on its business focus. In some cases a social enterprise would be better rejecting the grant route and getting a private investor on board to create a well supported, very focused and dynamic business;
• we don’t yet have a network of high net worth individuals interested in investing in Social Firms, but this is something Social Firm UK is working on. We believe that there is a potential pool of investors that will be content with low or modest return on investment as long as the business is producing worthwhile social outputs. This is supported by the experience of our colleagues in Social Ventures Australia;
• a combination of grants and private investment is probably the best way to go for Social Firms. The new Community Interest Company legal model which was introduced in 2005 now makes this possible. A CIC Social Firm structure allows a certain level of private investment and a capped rate of return, but is also an acceptable company structure for most grant giving bodies. Social Firms UK is monitoring its level of take up in the Social Firm sector with interest.  

Community Interest Companies (CICS) are limited companies, with special additional features, created for the use of people who want to conduct a business or other activity for community benefit, and not purely for private advantage. This is achieved by a "community interest test" and "asset lock", which ensure that the CIC is established for community purposes and the assets and profits are dedicated to these purposes. The CIC is a suitable business structure for a Social Firm. For more information see www.cicregulator.gov.uk where there is a frequently asked questions page.

There are several options for disabled people wanting to return to work from unemployment. The MIND website, has a comprehensive description of various work options. Visit the information system, entering ‘work options’ into the search box.

What are social enterprises?

The UK government defines and describes social enterprise as follows: "A social enterprise is a business with primarily social objectives whose surpluses are reinvested for that purpose in the business or in the community, rather than being driven by the need to deliver profit to shareholders and owners." A more simple definition is that a social enterprise is an organisation that trades for a social purpose. Sometimes social enterprises are described as 'not for profit' as any profit or surplus generated is used to further the social objectives of the business.

Types of social enterprise

There are seven main types of social enterprise:

1. Social Firms

Businesses set up to create employment for those most severely disadvantaged in the labour market.

2. Co-operatives

Co-operatives, and associations of people united to meet common economic and social needs through jointly owned enterprises. Co-operatives are organised by and for their members, who come together to provide a shared service from which they all benefit.

3. Development trusts

Development Trusts are businesses created to provide integrated employment to people with disabilities and disadvantages. They are umbrella organisations under which different regeneration activities can take place.

4. Intermediate labour market companies

These provide training and work experience for the long term unemployed and other disadvantaged groups. The aim is to assist these groups to re-enter the labour market through the provision of paid work together with high quality training, personal development and active job-seeking.

5. Community business

These are social enterprises that have a strong geographical definition and focus on local markets and services. They are trading organisations which are set up, owned and controlled by the local community and which aim to be a focus for local development and ultimately create self supporting jobs for local people.

6. Credit unions

Credit unions are finance co-operatives that help people save and borrow money. They also provide access to community finance initiatives.

7. Charities trading arms

These enable charities to meet their objectives in innovated ways such as restaurants, shops and fair trade companies.

What are the six main ways to become a social enterprise?

There are six main starting points for social enterprises:

1. Community regeneration

Members of a local community come together to meet a specific need.

2. Employee buyout

Employees of a business that is already operating come together to buy out the existing owner. Employee owned businesses are expected to grow rapidly in the next few years following the introduction of tax credits in the All Employee Share Ownership Plan.

3. Local authority externalisation of services

A local authority transfers one of its services to an independent operation.

4. Individual social entrepreneur

An individual with a particular vision will create a business to meet an identified need, often in an innovative way.

5. Voluntary organisation transformations

A voluntary organisation that has been funded by donations and grants decides to turn to trading. This may be driven by a desire to ensure its long-term viability, or from a belief that its beneficiaries are better served by the transformation, or perhaps both.

6. Voluntary organisation spin-offs

A project housed by a voluntary organisation may then be transferred to a separate legal entity.

The Social Firms UK Resource Centre Library has a wide range of material about benefits, which can be rented or bought. Alternatively visit Job Centre Plus and enter ‘benefits’ into the site search for information regarding various benefit allowances.

Several leaflets have been produced to help explain various the links between benefits and work. All have been written by benefits and work expert, Judy Scott and are available to download from the Resource Centre of the Social Firms UK website as follows:

• 1.1 Permitted work for people who receive the Employment & Support Allowance (from Oct 08; updated Nov 08)
• 1.2 Permitted work for people who receive Incapacity Benefit or Severe Disablement Allowance &/or Income Support for Incapacity  (2008)
• 1.3 Using Working Tax Credit as an alternative income to Incapacity Benefits when starting up in self-employment  (2009)
• 1.5 The 104 Week Benefit Linking Rule for people receiving Incapacity Benefit, Severe Disablement Allowance &/or Income Support  (2008).

Social Firms UK seeks to advise and support people setting up Social Firm businesses, not to find jobs for individuals. We would obviously like, one day, to be able to signpost individual enquiries to a Social Firm in every town of the country, but until we achieve that kind of critical mass we are unable to assist individuals seeking work in Social Firms through us. You can get information, support and advice from a Disability Employment Advisor (DEA) and Access to Work through Job Centre Plus. Job Centre Plus are undergoing a major re-vamp with disability as the focus. Also try Connexions or try the CanDo index, which is an index for employers and employees focused on disabilities. Another good place for information is the Disabled Workers co-operative website which is another website for employers and job seekers focused on disabilities. Direct Gov has comprehensive information regarding organisations providing advice and support for disabled people looking for employment.  Finally, Scope has set up an exciting graduate development programme to provide career opportunities for disabled people.

The spectrum of employment provision for disabled people can be confusing. Social Firms UK has put together a simple table to explain the difference between sheltered workshops, supported businesses, open supported employment and Social Firms. (NB. Social Firms are set up to provide employment for people severely disadvantaged in the labour market. This includes for example the homeless and ex-substance mis-users etc, not only disabled people. However, this table only refers to disabled people because there is not the same kind of spectrum of sheltered workshops/supported businesses for these other types of severe disadvantage in the labour market.).

This website has a directory of:

• Social Firms UK members searchable according to region and membership type
• Social Firms as part of the UK Social Firm Trade directory so that you can find Social Firms to buy from.

Why not also visit our 'What's going on near you?' page to be able to search regions for local events, news stories and features.

• Social Firms UK offers consultancy services to organisations from the social enterprise and Social Firm sectors.
• SETAS - A register of consultants for the social enterprise sector can be found at: the Social Enterprise Training website. If we are working actively with members to help them develop their Social Firms, we often call on the services of experts that we know of in the sector that are specialists in their field also.

For reasonable insurance quotes, try CIS (Co-operative Insurance Services). Alternatively MIND have a factsheet with information regarding personal insurance. Unfortunately they do not hold specific information on companies that provide insurance to a company employing people with mental health issues. However they recommend it may be worth contacting the organisations listed in the referral section of the factsheet. Our other suggestion would be to contact our insurance broker, Helen Skinner, at MCIS.

In terms of externalising work projects or Social Firms from public authority backgrounds, there aren’t many examples yet of this happening.  The following reports may be of interest:

• "Bringing Social Firms Out Of Public Authoritiy Control" (£60 to non-members of Social Firms UK and £30 to members)
• "A Guide To Charities Starting Social Firms" (£40 to non-members of Social Firms UK and £20 to members)
• Perceived advantages/disadvantages of externalising Social Firms from public authorities (August 2007)
• Reports from the Invest to Save project run by Social Firms UK:
  • Employment creation in social enterprises, a public authority perspective: ISB final evaluation & guide to good practice;
  • Employment creation In social enterprises, a public authority perspective: ISB financial net cost     analysis & disabled worker perspective;
  • Employment creation In social enterprises, a public authority perspective: ISB evaluation report, full version. 

Consultancy from Social Firms UK

Social Firms UK is able to provide consultancy on externalising Social Firms from public authority control. Examples of where this has worked is Travel Matters, which came out of an NHS Trust in Surrey in June 2006 (www.travelmattersuk.com), Netherne Printing Services, which came out of the same NHS Trust in October 2006 (www.netherneprint.co.uk) and Sally Reynolds is currently assisting Devon Partnership NHS Trust to externalise Hillcrest Branch Social Firm in Exeter.  

Visit these sections of this website for advice on how to find:

• business support (including training and financial support)
• consultancy support
• links to useful external websites concerned with training and education
• resources on the Resource Centre Library.

The Star Social Firm quality standard

The Star Social Firm is a new quality standard for Social Firms that was launched in early 2008. It is awarded to Social Firms that have proved the quality of their business and the employment they provide for severley disadvantaged people. Star Social Firms are companies that have proved to be thriving, sustainable businesses, where staff say, 'this is a good place to work!'

The Star Social Firm quality standard - the first in the social enterprise sector - has been developed by Social Firms UK and, externally validated by SFEDI (Small Firms Enterprise Development Initiative). Whilst the process for achieving the Star Social Firm quality standard is rigorous, it is one that any well run Social Firm can achieve without difficulty.

Go to the Star Social Firm website at www.starsocialfirms.co.uk to find out more about:

• why Social Firms UK developed the Star Social Firm quality standard ;
• the criteria for becoming a Star Social Firm;
• how to apply to become a Star Social Firm;
• Social Firms that have achieved Star Social Firm status;
• Star Social Firm Assessors.

Social Firms UK has developed a tool called The Social Firm DIY Feasibility Toolkit which has been specifically designed to help groups and individuals to work through the feasibility process for their business ideas. Although designed to assist with Social Firm business idea feasibility, it is appropriate for usage by any type of social enterprise or group wanting to carry out a feasibility study on a particular idea. By providing the tools for you to do this yourself, often in a group setting, it reduces costs that would otherwise have been spent in drawing in external expertise to help with feasibility, it increases group ownership of the process and the idea itself, and it develops the skills of those involved in the process to better understand the business perspective. The tool is available as a PDF which can be ordered from us via the online Resource Centre Library: it is free to members of Social Firms UK, £50 to members of the Social Enterprise Coalition, and £90 to non-members.

Within the Social Firms UK Resource Centre there are several materials and tools, either already produced and available, or being produced, which aim to assist those setting up or running a Social Firm.

The Extra Elements: A Social Firm Trainer

This is your best starting point.  In acknowledgement of the wealth of advice and information about general business development in the social enterprise sector already available, the Extra Elements has been designed purely to fill the gaps specific to setting up and running a Social Firm that these do not cover. It is therefore a tool which is complimentary to, and should be used alongside, what is already available. The report can either be downloaded free of charge from the Social Firms UK Resource Centre Library or hard copies can be bought for £10 by emailing us.

The DIY Feasibility Toolkit

This toolkit is designed to help social enterprises examine for themselves the feasibility of their business idea and assess whether or not it has the potential to work. Although it was originally designed with Social Firms in mind, it is an ideal resource for any type of organisation considering the development of a social enterprise. The DIY approach to business feasibility not only saves money on hiring in external expertise but also empowers staff in increasing their sense of ownership of the business and trains them in business feasibility. The toolkit costs £90 to non-members of Social Firms UK but is free to members and costs £50 to members of the Social Enterprise Coalition. Order by emailing us.

The Template Social Firm Guarantee Company

This template company Mem & Arts pdf (£10 to members, £20 to non-members) provides guidance to the process of selecting a legal structure for Social Firms, as well as a Word document template for non-profit companies limited by guarantee – this is just the first of what will be a series of templates for each likely legal form for Social Firm. Order by emailing us. 

Values-Based Checklist

The Values-Based Checklist outlines the basic criteria defining Social Firms to help businesses gauge their own progress within this sector.  It is available to download free of charge in both mind-map and list version.

Unlocking The Potential: A Guide To Finance For Social Enterprises

This guide focuses on the different forms of non-grant finance available for social enterprises. It explains which are the most suitable for your organisation and how they can be used most effectively; it leads you through the application process and suggests where to go for further information. If you are...

• an established social enterprise thinking about raising finance;
• a new social enterprise in need of start-up funding;
• a voluntary sector organisation looking to generate income through trading;
• interested in the types of finance available to social enterprises,
• or thinking of buying an established business and converting it into a social enterprise...

...then this guide is for you.  £10 full price, £6 for Coalition members (plus p&p).  To order email publications@socialenterprise.org.uk, or call 020 7793 2323.

Community Foundation Network (CFN)

CFN is the national network linking, promoting and supporting over 60 Community Foundations (CFs) throughout England, N. Ireland, Scotland and Wales. CFs are charitable trusts that

• promote and support local voluntary and community activity;
• raise funds from all sources to give local communities improved quality of life by supporting a wide range of projects for the benefit of local people;
• respond to donors (individual, corporate or legacy) who want their giving concentrated locally, secured over time and focused on specific aims;
• use locally chosen trustees to ensure value-for-money in grants made to applicant community groups;
• build capital endowment funds, where donors permit, so that help to communities can be long-lasting;
• handle funding on behalf of Government, National Lottery and other countrywide organisations.

There are 56 community foundations across the UK and would be worth approaching to explore options for start-up funding. However, success is not guaranteed and the aims of each CF may vary from region to region as each one might have different aims!  Visit: www.communityfoundations.org.uk , find and make direct contact with a CF near you to see what the local opportunities are.

Access To Work (AtW)

AtW is a scheme set up by the Department of Work & Pensions (DWP) that is run by Jobcentre Plus. It provides financial assistance towards the extra costs of employing a disabled person when additional costs are incurred because of that disability, and can apply to any job, full-time or part-time, permanent or temporary. More information can be found from an information sheet produced by Social Firms UK entitled "How the government's "Access To Work" scheme can support organisations to employ disabled people."

Some of the main issues facing the Social Firm sector at the moment include:

• access to start-up funding;
• identifying businesses which have a decent enough profit margin to fulfil the social aim of employment for people disadvantaged in the labour market; 
• dealing with the often risk-averse nature of trustee or director boards; 
• conflict in culture between ‘care’ and ‘business’; 
• becoming sustainable; enabling the transition from benefits to paid employment.

A useful indicator of the current issues facing the sector can be found in the 2006 Social Firm sector mapping reports.

Social Firms UK is dedicated to lobbying government on policy and funding issues relating to the Social Firm sector. Examples of reports submitted to government as part of this lobbying work can be found on the Policy Work page of this website and reflect well some of the issues being tackled at the moment.  

The following text explains why Social Firms UK expanded the definition of Social Firms in December 2006 from ‘creating employment for disabled people’ to ‘people severely disadvantaged in the labour market’.

The Historical Context

In fact, when Social Firms UK was set up as an organisation in 1999, the original definition did encompass people disadvantaged in the labour market as well as people with disabilities (ref. CEFEC definition that ours was originally based upon at www.socialfirmseurope.org). However, when Social Firms UK set up we were also not aware of the other types of social enterprise that existed in the UK e.g. development trusts, community businesses, credit unions etc. Pretty soon, as interest in the social enterprise sector started to grow, we became conscious of potentially overlapping with other types of social enterprise when the target group for Social Firm employment creation was expressed so broadly, for example we felt that community businesses were set up potentially to create jobs for people in long term unemployment. At the same time, services for people with mental health problems and learning disabilities were going through significant changes in the UK and Social Firms were being considered as a serious option by many service providers as a result. In acknowledgement that people with mental health problems and learning disabilities were furthest away from the labour market, therefore, and combined with a desire not to tread on others’ toes within the broader social enterprise sector, Social Firms UK restricted its definition for Social Firms to just creation of jobs for ‘disabled people’ from the end of the 1990’s.

Modern Day Changing Needs

Towards the middle of 2006, however, as our mapping of the sector became more sophisticated and we were able to identify the organisations developing Social Firms, Social Firms UK began to recognise that businesses were being set up to create jobs for people far away from the labour market, but who were not being categorised by their service providers as disabled people. And, furthermore, there was no particular type of social enterprise that these businesses were able to identify with; certainly the initial anxieties that Social Firms UK had had about stepping on others toes would probably not have become an issue after all because there was no other umbrella body stepping in to help these businesses to develop. The common denominator amongst most groups furthest away from the labour market is actually mental health. Just because a service provider developing a business categorised its target group as ‘homeless’ for example did not mean that those individuals do not have a disability; it is simply that ‘disability’ is not their primary disadvantage. In fact, it’s been estimated that 80% of ex-offenders have mental health problems, and the other disadvantages also often go hand in hand e.g. homelessness and drug or alcohol addition. So, rather than be pedantic about terminology and choose not to include or support these enterprises as Social Firms, Social Firms UK took advice from its board, its membership, its funders and follow agencies within the social enterprise sector as to whether it made sense to broaden the definition of Social Firms to be ‘employment for people severely disadvantaged in the open labour market’. The outcome of this consultation was that people favoured the wider definition, and hence we changed the definition of Social Firms in December 2006.

Why ‘severely’ disadvantaged?

We opted to include the word ‘severely’ before ‘disadvantaged’ because Social Firms remain a model that is set up to create employment for those furthest away from the labour market and we needed a way to reflect this still in the definition. When we researched the European Social Fund (ESF) definition of ‘disadvantage’ for example, we found that it includes a whole range that we wouldn’t consider relevant for Social Firms, e.g. women in an area where there are more jobs for men than women. Without wanting to list examples of what we mean by ‘severely disadvantaged’, we needed to convey the fact that Social Firms wouldn’t be started unless there was a real need to create jobs for people who otherwise wouldn’t get them because of their particular disadvantage, and that is why we use the word ‘severely’. We are also not prescriptive about what is viewed as a ‘severe disadvantage’, but the more common disadvantages where individuals face one or more barriers to the labour market are, for instance, homelessness, being an ex-offender, being a drug or alcohol addict, having a mental health problem and having another kind of disability. The focus of the disadvantage is the individual, rather than the geographic area in which they live, i.e. it does not matter where they live they would still face the same barriers to employment. We believe that listing the types of severe disadvantage we mean within, or as a footnote to, the definition, would be too over-prescriptive and potentially limiting to how the employment model can be used in the future to tackle worklessness.

This is a bit of the background to why and how the definition got broadened to ‘severe disadvantage’ at the end of 2006. To date we have discovered organisations creating Social Firms for homeless people, addicts and ex-offenders as well as the majority who are focusing on disability and mental health. We welcome the opportunity to work across a broader range of interest with the ultimate common aim of creating employment for people who otherwise would have significant difficulties in getting and/or retaining a job in the open labour market. If you are such an organisation and haven’t yet made contact with us about the potential that Social Firms might hold for your target group, then please email us – we’d be delighted to hear from you.

The Social Firm movement in the UK is a relatively recent one. Inspiration was originally derived from developments in Germany and Italy where significant employment levels for disabled people had been achieved through the development and support of Social Firm businesses. Social Firms UK itself started as a European funded project, with partners in these two countries, and initially commenced raising awareness about the model in this country with the help of German and Italian partners in 1997.

From 1999 to 2006 Social Firms were defined as market-led enterprises set up specifically to create good quality jobs for disabled people. (From 2007 that definition was wided to include people suffering other disadvantages in the labour market.) Initially, when Social Firms UK began life as a project in 1997, there were five Social Firms and an unidentified number of emerging Social Firms. By the end of 1999 this number had increased to 22 Social Firms and a further 50 or so emerging Social Firms. In 2002 the number mapped in the sector had increased to 51 Social Firms and 128 emerging Social Firms, employing a total of nearly 1700 employees of whom approximately 45% had a disability. More recent mapping information is available.

The timing of creating a national support agency for Social Firm development has proved to be invaluable, as the environment surrounding employment provision for people disadvantaged in the labour market both in attitudes and funding climate has resulted in a steady increase in enquiries surrounding this model.

A Social Firm is one type of social enterprise. Other types of social enterprise include development trusts, co-operatives, credit unions and community businesses. A social enterprise is a business that trades for a social purpose. The specific social purpose of a Social Firm is to provide employment for people disadvantaged in the labour market. See "The Extra Elements: A Social Firm Trainer: Part A"  for an explanation and diagramme.  To find out more about social enterprise visit the Social Enterprise Coalition Website.

Additional recommended reading:

How Social Firms sit within the spectrum of employment provision

A 'Social Firm' is a market-led enterprise set up specifically to create good quality jobs for people disadvantaged in the labour market.  An 'emerging Social Firm' is an enterprise that is working towards becoming a Social Firm, usually in the early stages of trading and not yet in a position to employ numbers of people, but working to a business plan which illustrates how they're going to achieve their goal. The 'Social Firm sector' is the collective term used for emerging Social Firms and Social Firms.

Criteria - the Values-Based Checklist

The criteria used to assess whether a business is a Social Firm can be found in the Values-Based Checklist. These criteria are based around three core values that Social Firms will subscribe to within their businesses: enterprise, employment and empowerment.  See the checklist (available in mind-map and list versions) for full details, but key are the following criteria:

• Enterprise - Social Firms are businesses that combine a market orientation and a social mission (‘businesses that support’ rather than ‘projects that trade’). The business activities of Social Firms vary widely as shown by these case studies.  At least 50% of the firm’s turnover will be earned through sales of goods and/or services, (the lowest for Social Firms in April 2005 was 66%).  The firm will have an appropriate legal status. It must not be governed or driven by individual profit (except for worker co-operatives). Remote shareholders will not extract unreasonable profit.

• Employment - more than 25% of employees will be disadvantaged people. Reasonable adjustments will be made for employees relevant to their needs.
• Empowerment - Social Firms are committed to the social and economic integration of disadvantaged people through employment. A key means to this end is economic empowerment through all employees having a contract of employment and a market wage at or above national minimum wage.

Extra elements: a Social Firm Trainer

There is already a wealth of advice and information about general business development in the social enterprise sector. So 'The Extra Elements: A Social Firm Trainer' has been has been designed purely to fill the gaps specific to setting up and running a Social Firm that they don't cover. It is therefore a tool that is complimentary to, and should be used alongside, what is already available. It is split into six parts: A: What is a Social Firm? B: How does starting and growing a Social Firm differ from other business development? C: Developing the right organisational structure for a Social Firm D: Raising appropriate start-up funding for a Social Firm E: Developing supplimentary income streams F: Developing a supportive workplace.

Video

View this three minute video ("Social Firms, successful businesses, empowering employment") explaining what Social Firms are:

The Star Social Firm quality standard Social Firms UK has developed a quality standard for Social Firms called 'Star Social Firm'. See www.starsocialfirms.co.uk  

We are the national support agency for the Social Firm sector. We are not a grant-giving organisation and therefore do not have funds to give directly. We are unable to help you with direct financial support and receive no applications for funding. Social Firms UK represents the interests of the Social Firm sector and plays a role in lobbying and dissemination activities. You can approach your local Council for Voluntary Services to seek guidance on where to approach for funding if you are in the voluntary sector.  There are also some useful external links 'funding & finance' listed on our website.

Our role falls into two main areas:

• to continue raising the profile and increase the level of understanding of Social Firms generally
• to actively grow the number of Social Firms in this country through the implementation of initiatives and programmes designed to support the start-up and operation of Social Firm businesses

We have five strategic priorities over the next 5 years:

1) Promote the values and increase the level of understanding around the Social Firm model

2) Facilitate the start up, development and growth of new Social Firm businesses and strengthen those already in existence

3) Serve and grow the membership effectively and efficiently, determining and meeting their needs

4) Lead on R&D initiatives to drive development, production and promotion of new and existing resources

5) Ensure that Social Firms UK has sufficient financial and personnel resources in order to be able to carry out its objectives

We worked on a franchising and licensing project in 2005 and 2006 called 'Flagship Firms'. At the beginning of 2008 we launched an accreditation scheme called the Star Social Firm quality standard (www.starsocialfirms.co.uk).  In 2009 we launched the national social enterprise visit programme (www.visitsocialenterprise.co.uk). On an ongoing basis we introduce new tools and resources to help emerging Social Firms and Social Firms manage their own performance better and prove their own value to internal and external stakeholders. See our Resource Centre Library and our Products and Tools page in 'About us'.

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The main benefit of membership is access to a range of tools and resources that are either discounted or free of charge to members – especially useful to those either considering, starting the development process, or already operating a Social Firm. Examples of this include the DIY Feasibility Tool, which costs £90 to non-members but which is completely free of charge to members. The same applies to the specially developed organisation performance management software, the Third Sector Performance Dashboard, which provides a license for eternity completely free of charge to members. There is a whole range of other membership benefits, including discounts on associated organisations’ products and services (e.g. Social Enterprise Coalition, and Social Enterprise magazine) and access to networking and sector lobbying opportunities to help shape the future of Social Firms.

Social Firms UK is the national support agency that encourages the development of Social Firms, which are companies set up specifically to create employment opportunities for people severely disadvantaged in the labour market.  It leads the development of the Social Firm sector by promoting and raising the profile of the sector and lobbying on issues that affect the growth of Social Firm businesses.  Social Firms UK continuously develops tools and resources that lead to more successful businesses. With the UK's largest Social Firms-related Resource Centre Library, it provides support and advice to those in the sector and others interested in Social Firms.