Tricky part of management within Social Enterprises is in deciding how much of profit is right? Though there can not be a simple formula to suggest a fool-proof method here, some disciplines in operational aspects ensure that there is control over every bit of the functioning.
One such important aspect is the fact that most of the social enterprises, like many small businesses are pushed out of business due to “small leaks”. That’s because they have a tendency to pass unnoticed, whereas major expenses are carefully scrutinized and weighed up. They may come in the form of – small trips to meet people, expenses on office coffee, tea, milk, copier paper or even the printer toner! All these small leaks add up to a big dent for a program that is already on a shoe-string budget or a business that is set-up purely to keep the social interest on a self-reliant mode.
Unlike most of the for-profit enterprises, Social Enterprises should embrace Frugality as their business model. Spend only when necessary. Acquire only what is critical and keep the running cost as minimum as possible. Recording every small spend, breaking it down into variety of categories aligned to running programs in hand will help in finding and acting on the trend to stop small leaks killing the program and the business itself.