Whether you are launching an enterprise that requires social finance immediately, or your pre-existing operation has moved along the continuum from grants to repayable investment, entering the social finance marketplace is an important event. Are you ready?

Taking the leap to social finance

For those enterprises and community-based organizations that are ready to access the world of outside investment, a plan for repayment is essential. In cases of social enterprise, this means either a track record showing history of profit, or a solid business plan showing how you intend to do so. For community-based organizations, it could mean the demonstration of securable assets (i.e. collateral), or a track record of organizational sustainability.

Through the lens of enterprising non-profits, success in benefitting from the tools of social finance generally means that:

• The venture is selling a good or a service that contains a healthy margin.
• The good or service is of high quality, and is desired in the marketplace at the price level presented by the venture.
• The venture has the capacity to effectively market its offerings.
• The host organization trusts its venture concept enough to take the risk involved in making a promise to repay.
• The host organization intends to run a business that is financially sustainable.
• The host organization’s Board and staff have a strong comfort level with the idea of repaying debt, and/or paying interest to investors. The Board understands its obligations to repay.

Fail to plan… and plan to fail

The tendency for some organizations is to farm the hard work of feasibility research and business planning to a consultant, entirely. Stacey Corriveau’s blog on SocialFinance.ca, called Are You Ready to Access Social Finance? warns against this practice, arguing that the actual experience of engaging with the research cannot be transferred to the organization through a consultant’s report.

You’re not alone -- accessing support

Like most every nascent industry (think high tech and clean energy), skills development is an early requirement for sector success. It is no different for social enterprises, which in essence, are driven to address the most important issues of our time. At this point in the development of social entrepreneurship as a movement, an opportunity exists for folks to bolster their passion with relevant skills and acumen.

There now exists a range of organizations that assist social purpose businesses, co-ops, non-profits, and charities to develop investment-ready business plans and financing proposals.

• Information and tools : Several organizations, including ENP, MaRS, The Social Enterprise Council of Canada, The Atlantic Council for Community and Social Enterprise,and the BC Centre for Social Enterprise provide online information and tools to support financial literacy and help organizations develop social enterprises.
• Advisory services: Capacity Waterloo Region, Collaboration for Innovation and Social Enterprise Development (CISED), MaRS, the Ontario Ministry of Economic Development and Trade, and others provide one-on-one advisory services, with most ranging from one to ten hours of support.
• Planning grants: The Enterprising Non-Profits program in Toronto and BC offer matching grants to charities of up to $10,000 to build organizational capacity for business development.