In the prior two modules, we discussed how your venture creates social impact. We call this your ‘Social Change’ or ‘Impact’ Model. However, a social venture needs more than just an Impact Model; it also needs a viable Business Model. In other words, it needs a way to generate income to pay for its activities by selling goods or services. In this module, we now turn to how to set up an effective revenue model.
A traditional charity generally only has one business model: it raises donations and grants, which pay for it to deliver its services to its beneficiaries. A social enterprise has more options – it can sell products or services to many different kinds of customers. It can also combine charitable and commercial activities.
This module is set out as follows:
We begin by discussing which stage your venture is in. Whether your business model is in its experimental early stages, or already advanced and growing, will determine how social investors will view your social business and what you should be focusing on.
We then look at the critical elements of your revenue model. This can be set out in four basic questions:
- Who is your customer?
- What is the product or service that you are selling to them?
- How will you produce & deliver your service?
- What price do you charge?
Every social venture needs more than just an Impact Model, it needs a viable Business Model, a way to generate an income to pay for its activities by selling goods or services.