The challenges faced by social enterprises mean the sector needs to be “bolder” and “more ambitious”, the chair of Social Enterprise UK has said.
Social Enterprise UK has today published The future of business: State of social enterprise survey 2017, which offers a snapshot of the size and scope of social enterprise and highlights barriers to growth.
It is ten years since SEUK began assessing the state of the social enterprise sector, and it says that the landscape is markedly different from 2007, when there was a more stable political and economic environment, which means there are more challenges and increased demand.
In the foreword to the report, Lord Adebowale, chair of Social Enterprise UK, said: “We have made great progress in the last ten years, but the challenges we face require us all to be bolder, more ambitious and grow this movement to new heights in the next decade.”
Last week the Department for Digital, Culture, Media and Sport published a report which estimated that there are 471,000 social enterprises, although only 99,000 have any employees.
SEUK surveyed 1,581 organisations, both over the phone and online.
The report said that there are more pressures on cashflows and that there has been a slowdown in recruitment.
This year 12 per cent of social enterprises increased their workforce, compared to 30 per cent the previous year. Some 30 per cent reduced the size of their workforce.
SEUK also found that a quarter of social enterprises are under three years old, with just over a third operating at a neighbourhood or local level. Almost three-quarters earn 75 per cent or more of their income from trading.
Access to appropriate finance remains the biggest barrier, with 51 per cent of social enterprises looking for finance under £100,000.
SEUK said it found that social enterprises are more resilient than traditional small and medium-sized enterprises.
The report said: “Social enterprise is continuing to do business differently, and showing considerable commercial resilience: it continues to outperform mainstream SMEs against a range of business metrics: turnover growth, innovation, business optimism, start-up rates, diversity in leadership and more. Over 70 per cent made a profit or broke even in the last year.”
Some 47 per cent of social enterprises grew their turnover in the last year, compared to 34 per cent of SMEs, SEUK said.
SEUK said that social enterprises are more diverse than other sectors, with 89 per cent of leadership teams including a female director.
Some 41 per cent of social enterprises are led by a woman and just over half have a majority female workforce.
One-third also had some form a black, Asian or minority ethnic background, and 36 per cent had a director with a disability.