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Social enterprises: From Concept to Practice

In Bosnia and Herzegovina, Serbia, Montenegro, Macedonia and Turkey people are still not adequately familiar with social enterprises. Thus, they represent a new concept in economical and social activities.

The development of social entrepreneurship is a subject of increasing public interest. Social enterprises have been operating for dozens of years in Europe, making up almost 10% of small and medium-sized enterprises.

What is a social enterprise and what are its goals?

Social enterprise is a way of doing business in which the main goal is not maximization of profits, but contribution to society through realized gains. These companies strive to make positive changes in society through business operations or various other socially useful activities, and are the only way of hiring vulnerable and marginalized groups.

Imagine starting a business that helps others!

Focusing on labor integration and inclusion of socially vulnerable groups, social enterprises combine business approach with social problems that the state does not know how or cannot solve systematically. Regardless of their organization and structure, all social enterprises have a common feature, which is a double bottom-line (DBL) concept. This concept represents an increase in financial returns with the simultaneous contribution to the social mission that the company is committed to.

Good economy = Social entrepreneurship

Although in most of these countries there is still no legal regulation for social enterprises and they are treated like any other commercial entity, the differences between them are more than evident. Some of the basic differences are shown in Table 1.

 

 

Social enterprises

Commercial enterprises

Purpose of establishing the enterprise

Solving social problems

Profit

Management

Democratic management

Owner management

Allocation of profit

Reinvesting in the community

Transfer to the owner of the enterprise

Table 1- The difference between social and commercial enterprises

Resource: Smart Start

Social enterprises open up opportunities for solving social problems, such as poverty and unemployment, especially for people with disabilities, members of national minorities, people from socially vulnerable groups, and other people who have difficulties finding a job. Such enterprises also represent a chance for direct employment of young people and help in creating the skills that the labor market requires. Additionally, they contribute to the growth and development of social capital, as well as the economy of a community or a region.

Furthermore, many social enterprises are faced towards promoting socially responsible business, ecology and recycling, contributing to the sustainable development process.

It is out of great importance that in the future much more attention is paid to analyzing the opportunities for the development of social enterprises and creating a more favorable business environment for the aforementioned. CPCD through the Smart Start project seeks to raise public awareness of social enterprises by mapping social enterprises and promoting a good economy.

Although many social enterprises are unfortunately often closed due to the inability “to survive” on the market, many of them are strongly resisting the circumstances. You can read some of their successful stories on Smart Start.