How To Start A Social Enterprise In 5 Steps

I'm a big believer in social innovation and purpose-driven organisations. Over the last few months, I had the privilege of sharing our journey at The Cookie Project to share some seeds of hope and encourage young Kiwis to chase after their passion that is aligned with a meaningful purpose.

2 years ago, 99% of people thought The Cookie Project was a crazy idea that will not be sustainable. I also decided to not tell the remaining 1% to save myself from further ridicule.

Fast forward to today, we have survived the toughest challenges, generate sustainable impact and continue to count our cookie blessings.

We also experienced karma and kindness working in tandem to bring out the best of everyone.

Most of the time we win, and some other times we learn.

As we look to the next chapter of our social enterprise that requires a different mindset to adapt our business strategy, I wanted to share five important steps that took place over a period of eight months before launching The Cookie Project in June 2018.

Most importantly, I want to dedicate this article to all our supporters as one of our ways to give back and show our appreciation. In particular special thanks to these kind-hearted Kiwis who helped us get through COVID-19:

• Nick, Ben and the team from Eden Park;
• Jenni, Michelle, Helen, Sonya and the team from Dentons Kensington Swan;
• Last but definitely not least, Andy, Monty, Pat and the team from Manaaki.

To all our Cookie Angels

- THANK YOU!

Step 1: Start with why

"Why do I want to start a social enterprise?"

Homework: The big question that requires a thoughtful, honest, and authentic answer. This becomes the DNA of your social enterprise that becomes a powerful brand story and connects with customers at a much deeper level.

Do this: The two concepts that are interwoven are ikigai and UN's Sustainable Development Goals (SDG). Think of ikigai as the fuel or energy and the SDG's as the destination on your GPS.

Pro tip: Learn from the mistakes and best practices of successful and failed social enterprise. My top five resources: ākina, Seeds Podcast, Cause Artist, Pioneers Post, Change Creator.

Step 2: SMART Impact Model

"How do I measure the impact that contributes towards the bigger picture?"

Homework: Size up the problem. Is it impacting at local level? Regional level? Country level? Or even global level?

The size of the problem will also determine the solution (impact model), the potential pool of customers, and ultimately your probability of survival in the long term.

A well-considered impact model helps to report your progress, keeps you focussed, and garner more support. All impact measurement must be traceable (accurate record keeping) and verifiable (can be validated independently by a reputable organisation)

Do this: Apply SMART to impact targets - Specific, Measurable, Achievable, Relevant, Time-bound

Pro tip: Go through Theory Of Change to understand how your social enterprise generates impact and creates the desired change. Highly recommended: Innovation For Social Change and The Center for Theory of Change

Step 3: Commercial Acumen and KYC (Know Your Cost)

"What is the unfair advantage of my product or services?"

Homework: Social Lean Canvas is the gold standard when it comes to articulating your social enterprise concept on one single page.

Do this: Proof of Concept. This is to test and pilot your product to refine it before launch. Our long term strategy is always to win by quality, not by sympathy. We were launching into a very crowded space (cookies, or snacks, or confectionary) competing with big brands with deep pockets. However, we strategically targeted a niche market position and build the credibility of our new brand with some help from our brand partners to establish our brand consideration and trial intention.

We also invested six months to test our product likeability and price elasticity with target customer groups. We listened intently to understand their decision making process and their choice of keywords that describe our product and our purpose. Rigorous testing with improved versions will help you develop a profitable product that is customer-centric and carries a higher chance of success during launch. Really understand your CVP, the total cost to deliver them, and use this interactive model by Bain & Co to nail your customer strategy.

Pro tip: MVP mindset. If you receive rave reviews and useful constructive feedback of the prototype during the proof of concept, then you should be confident to start building the next Minimum Viable Product (MVP) that can be produced commercially from your home garage. Small seed capital will be required ranging from $5k up to $50k depending on your risk appetite and impact model. Funding is most likely to come from family, close friends or crowdfunding platform like PledgeMe.

Step 4: Long term commitment and clarity

"What are my personal plans and company goals in the next 2, 5, or 10 years?"

Homework: Train for a marathon and be ready anytime for a sprint when there's a market opportunity that aligns with your impact and business strategy. Must read: What Makes Your Social Enterprise Valuable.

Legal structure - New Zealand does not have a legal structure (yet) that identifies social enterprise. It is one of the most important decision because it will decide largely where your funding will come from, how you plan to grow the social enterprise, or scale your impact if that's part of the plan. Highly recommend you read Structuring For Impact to learn more about the most suitable legal structure. We at The Cookie Project adopted a for-profit legal structure for three key reasons:

• Agility - fail fast, learn fast, adapt fast.
• Sustainability - growth is 100% within your control and not dependant on donations or public budget.
• Scalability - access to investors to raise capital and funding to scale up.

Funding - Every social enterprise is different in terms of the cost and revenue model. Many require an initial capital that may seem daunting but there are plenty of organisations to partner up with to give new social entrepreneurs a hand-up, just like Lisa King who donated her Eat My Lunch kitchen for us to use during our first year of operation. There are many grants and funding throughout the year for a range of impact and type of organisation. It pays to seek advice and consultation early on from your lawyer, your accountant, and your banker on the various funding stage and stress-test your financial plans every 3 months or even more frequently depending on the pace of the industry, your business model and your impact model.

Pro tip: Join the local version of Social Shifters to access world-class online platform with tools and resources created for social enterprises. The framework is super easy to understand, focussing on the 5M's: Mission, Money, Market, Measure, Manage.

Step 5: Supercharge your journey with Social Enterprise World Forum Digital (SEWF Digital)

Is there a digital Coachella for social enterprise that I can join?

My experience: Every year, SEWF is held somewhere around the world and New Zealand hosted the global event in 2017 centered in Christchurch over one impactful week. It opened my eyes to the purpose-driven world of social entrepreneurship and was deeply inspired by the stories, the trials and tribulations, and develop meaningful connections with like-minded individuals across the world.

Discover your purpose: This year, it's going to be digitally delivered by top social entrepreneurs and thought leaders, hence making it more affordable and accessible for everyone. If you've been thinking about starting a social enterprise, then consider the ticket price of ￡49 (NZ$95) as self-investment to learn, to connect, and to discover your why.

All tickets have unlimited access for 12 months of recorded content until September 2021. Check out the full program and book your tickets today!

Final Thoughts

They say dreamers are the ones who are crazy enough to change the world.

I think there's a little dreamer in each one of us that yearns to make the world a better place.

COVID-19 is forcing an opportunity for all of us to pause, to reflect, and to reconnect with what's truly important and priority for the short time that we have on the planet.

All of our bakers at The Cookie Project never dream of having a meaningful job, let alone a job that pays them a decent wage of NZ$18.90 an hour and feeling extremely proud of making delicious cookies that our fans just can't get enough! #NomNomNom

So to the dreamers out there - please don't stop dreaming because dreams can come true when you have purpose and passion!

Eric Chuah is the co-founder and the Chief of Everything at The Cookie Project - a certified social enterprise that employs Kiwis with disabilities to make award-winning delicious cookies.

The team invested tonnes of TLC into the company to receive 12 awards and recognitions in the first 17 months, including being the recipient of 2019 Attitude ACC Employer Award.

We survived COVID-19 because of the kindness from everyone. After more than five months of no access to a production site, we reached out for help on LinkedIn and connected with new friends and we’re now baking our cookies from the heart of New Zealand’s national stadium – Eden Park!

Follow The Cookie Project on LinkedIn, Facebook, Instagram, YouTube, Twitter and the newly reopened online store.