What happens when a social enterprise fails for a non-profit?

3 replies [Last post]
Anonymous's picture
Joined: 2012-08-20

Is there some repercussion to them, or should they be concern in reference to funding opportunities?

Joined: 2012-11-08
We have to be resourceful

We have to be resourceful enough.You may need a pay day loan while attempting to determine your finances; this loan can help you afford to pay for things when something happens to financially hurt you. One really common thing that takes place is that people get conned out of cash by a fraudulent person. It is occasionally unavoidable as the fraudsters are really wise. Get more information at: https://personalmoneynetwork.com/payday-loans/

Cathy Lang (not verified)
Failing at Social Enterprise

Always have an exit strategy at each stage of your social enterprise development journey. Investment in social enterprise means assigning time, resources, money, staff and building up the expectations of your stakeholders. If you set out your expectations at each stage and clearly communicate with those involved you can exit without considering it a failure.

Failure may mean different things to different stakeholders. Make a note of all of the stakeholder groups and how you will communicate with them about the enterprise at different stages.

If your business simply doesn't take off or sales and grants cannot cover costs, you need to know when to let go. Your board will need to approve protocol for winding down. This may require letting go of staff, selling assets, etc. Part of developing your exit strategy will be to make sure you have the policies and protocol in place to manage this.

Businesses fail all of the time. What is different in social enterprise is that we almost always have external funders who participate in and fund our work. If your enterprise has to wind down, remember to communicate with your funders. Document what you have learned and achieved in the process and share those successes as well as your challenges.


Cathy Lang (not verified)
Pitfalls in Early Stages of Social Enterprise

I've been thinking about some of the pitfalls in early stage social enterprise development that I can share. A few come to mind. We can consider more over the next Community of Practice Q and A. 1. Some organizations might jump into selling services or products with great enthusiasm but not a lot of planning - on rare occasions these might evolve into successful initiatives, but more often than not, without sufficient planning and thinking ahead of time, these jump starts can easily fizzle. Remember to take the time to get ready and plan your enterprise development path. 2. I've encountered organizations that are overly enthusiastic about a product or service they would like to sell. Yet they have not fully researched the market for the service or the potential competition - enthusiasm will not translate into sales without a market. Checking your assumptions along the way and backing up any claims with research is important so that you don't launch with a product or service that has no market. 3. I've known of agencies that created employment related social enterprises without consulting their clients on the kind of employment and career paths they aspire to. This can lead to a serious mismatch between your existing clients and the work you create through your enterprise. Focus groups with clients is an important part of research when you are planning an employment or human development enterprise. More to come next time.... 

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