I’ve worked for social enterprises for 15 years and have now decided to set up my own. I’ve heard about the Social Enterprise Mark and agree there is a clear need to differentiate myself from the competition but how do I know if I’ll be eligible for the Mark?
Lucy Findlay writes:
As you know social enterprises are businesses doing really extraordinary things in new and innovative ways but until now they have been hard to recognise, partly because they work in practically every industry imaginable. The introduction of the only certification process for social enterprise, together with a visually powerful Mark to indicates the integrity of an organisation and helps businesses differentiate themselves from their competitors. By signifying a set of clear criteria the Mark proves that an organisation is a genuine social enterprise working for social and environmental aims. The Mark has the potential to will broaden and eventually revolutionise buyers’ choices to buy ethically and it is great that you want to be part of this.
Applying for the Social Enterprise Mark is straightforward with much of the documentation required based on your existing paperwork. The only legal requirement to be eligible for the Mark is that the business needs to have its own constitution (e.g. not be part of a local authority or a sole trader). The constitution needs to show clear social and/or environmental aims, and a principle proportion (50% or more) of any profit made by the business must be dedicated to social/environmental purposes, as are any remaining assets if your organisation was to close. There is no specific legal structure to be a Mark holder. Mark holders come in all shapes and sizes; there are community interest companies, industrial and provident societies, as well as companies limited by guarantee and others by shares. There is however a cap on the maximum share dividend per share cap which is 20% of the paid up value of a share, the same as the CIC maximum.
The Mark is now available to start-up businesses. A Anstart-up applicant must also show that it has started trading (eg a contract and management accounts showing earned income). In addition, a start-up must pledge that 50% of its total income comes will come from trading within 18 months (trading excludes grants and donations), but. there is no specific legal structure to be a Mark holder. Mark holders come in all shapes and sizes; there are community interest companies, industrial and provident societies, as well as companies limited by guarantee and others by shares. There is however a cap on the maximum share dividend per share cap which is 20% of the paid up value of a share, the same as the CIC maximum.
The vast majority of Mark holders have been trading for over a year because they use their annual accounts as evidence of sustained trading levels, but this is not a necessity. If you can provide significant evidence of trading (not planned trading but actual) over a significant time period (more than 6 months) then our assessors would be happy to look at your application. Enterprises that previously existed as part of another organisation should get in touch with us as we may be able to use documentation from this source to process an application.
A question often asked by potential applicants is “Can I get the Mark if I don’t make any profit?” The answer is yes. In fact many social enterprises provide ongoing financial support to social or environmental activities and so will never aim to make significant profits. Charities are also eligible for the Mark if they meet the trading criteria.
If your application is successful, the Mark will be yours to use in your marketing materials and your organisation will also be featured oin the online Social Enterprise Mark Directory, as well as other numerous marketing opportunities, eg featured Mark holders, case studies, advertising etc. Actively displaying the Mark on your stationary, vehicles and promotional materials will clearly communicate your identity as a social enterprise working for people and planet and as you say, differentiate your organisation from the competition.
Good Luck with your application!
Lucy Findlay is the managing director of the Social Enterprise Mark