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Advantages of being a social enterprise

Social enterprises combine business with a ‘do good’ ethos, and they’re not limited to small start-ups either.

While social enterprises opens in new window have business goals opens in new window, such as turning a profit opens in new window, what sets them apart from other businesses is that they have aligned social goals where surpluses can be invested into rather than needing to maximise profit for shareholders or owners.

These aligned goals can fall into many sectors, including:

  • community – such as funding local recreational centres, providing education, and supporting local charities.
  • finance – such as providing financial education and support, building societies, and providing grants and loans.
  • environmental wellbeing – such as introducing green initiatives, providing green energy options, and energy-saving advice opens in new window .

The primary focus of a social enterprise is to help others, but there doesn’t have to be a trade-off between making a difference and making a profit.

Social Enterprise UK opens in new window (SEUK) reported that 44% of social enterprises grew their turnover between 2019 and 2021.


Making business finance work for you

Starting a business doesn’t come with a set of instructions.

We know that understanding the many different types of financial product in the marketplace can be difficult.

Our Making business finance work for you guide is designed to help you make an informed choice about accessing the right type of finance for you and your business.

Download your free copy


Social enterprises in the UK

According to Barclay’s and SEUK,  over 100,00 registered social enterprises opens in new window were operating in the UK in 2021.

These businesses contribute £60 billion to the UK economy and employ two million people.

Just over one-fifth of social enterprises operate in the most deprived areas of the UK, supporting local and inclusive employment.

Social enterprises offer women and Black, Asian, and Minority Ethnic individuals increased employment opportunities, with SEUK reporting that 47% of them opens in new window were female-led and 33% having directors from Black, Asian, and Other Ethnic Minority backgrounds.

The number of social enterprises in the UK has steadily risen, increasing from 25% to 34% opens in new window since 2017.

A record-breaking 12,000 were started in 2020 alone.

SEUK attributes this increase to the resilient nature of social enterprises, their consistent innovation when it comes to what products and services they offer, and how quickly and intentionally they can scale up.

Unlike charities, which do not aim to make a profit and do not work on a fixed income, social enterprises aim to make a profit to reinvest into progress towards their goals.

According to SEUK, 74% of social enterprises either made a profit or broke even opens in new window.

Besides providing entrepreneurs with a sustainable and impactful business model, there are other advantages to running a social enterprise.


Business advantages of running a social enterprise


Higher employee satisfaction

Businesses that actively include employees in ‘mission-based’ activities may benefit from greater employee satisfaction.

When employees feel more involved in their work and the business’ goals, they may look for opportunities to be more collaborative and motivated to make change happen.


Increased productivity

A potential benefit of a higher rate of employee satisfaction and motivation is increased productivity opens in new window.

When employees find satisfaction in their work, they tend to do more opens in new window.

According to, 30% of employees opens in new window work more efficiently when the organisation they work for has ethics and morals that match their own.


More innovation and creativity

Social enterprises can be more innovative and adept at problem-solving, having been set up to address a social or environmental issue.

By actively demonstrating a commitment to social goals opens in new window, your team can feel encouraged to develop new ways of working.

Teams may have to think outside the box and get creative to meet the business’ goals, coming up with ideas for new or improved products and services, or internal processes, that they wouldn’t have considered before.


Better customer relationships

With a strong social mission, social enterprises can appear transparent, responsive, and compassionate to customers.

The positive results of business activities can be tangible and visible to local markets, such as helping fund community or environmental projects, and enhancing trust in the brand.


Improved business insight

The open nature of a social enterprise and its shared goals means it can access more customer insights than others, such as their preferences, actions, and behaviours.

Customers may be more open to sharing their opinions with those they believe share them and will listen.

Because of this deeper insight, social businesses can create more impactful strategies and develop more targeted products and services for their customers.


Learn with Start Up Loans and help your social enterprise get off the ground.

Thinking of starting a business? Check out our free online courses in partnership with The Open University on sustainability in the workplace.

Our free Learn with Start Up Loans courses opens in new window include:

Plus free courses on climate and sustainability, teamwork, entrepreneurship, mental health and wellbeing.


Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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