missing the mark? what the latest research about social enterprises suggests about those who support them.

At the end of each year, most people get excited about what's behind the next door of their advent calendar, or the prospect of up to 4 weeks to indulge in unlimited mince pies.

Not me.

I look forward to the bi-annual state of the (social enterprise) sector research, that's published by Social Enterprise UK which is also released at this time of year.

(But I do also love mince pies...)

And that's because I'm always interested in what data tells us about what's really being experienced within the sector by those doing it, rather than the rhetoric of policy makers, infrastructure bodies, and people who speak about the sector - and yes, being led by the data and research does frequently see me being put in the naughty corner for the upset it can cause to other bodies because it can sometimes contradict their narratives and positions...

But to be clear: I never intentionally try to embarrass anyone publicly, but have an idea that if someone is going to be making decisions that affect their enterprise and personal future (and that of their family and wider community by association) then surely we should be offering the best-informed insights and options, because it's they who'll have to live with the consequences of those choices, not us?

So - to this latest research and what I'm reading from it (although other interpretations may be, and are, available: please check out the report yourself and draw your own conclusions): Backbone of Britain - State of Social Enterprise 2025;

and as with all research, remember to approach with caution: large data sets like these only reflect the 'main middle' - there will always be exceptional stuff happening around the edges...

the sector is very unequal

Roughly half of all social enterprises are below the VAT threshold by turnover (currently £90,000), yet their average number of employees is reported as being 6. Assuming that people aren't being employed on a 1-day week basis (the only way you could get these 2 numbers to line up), this suggest a sector that is made up of a lot of small social enterprises, with a disproportionate influence of a few very large ones on the overall picture we're being presented with.

legal structure choices and experiences continue to throw up surprises

The number of CICs in the sector appears to be starting to 'flat-line' over time (which is in keeping with longer-term trends about the numbers of CICs from the CIC Regulator), in contrast with Companies Limited by Guarantee (the most commonly used, and favourite choice for social enterprises for over half a century, before the CIC was proposed by government).

This contrast between CIC and CLG isn't constrained to their seeming popularity - CLGs are also reported as typically generating higher incomes than CICs.

But the historical OG of all legal forms continues to outpace all other choices when it comes to how large their turnovers typically are - co-op societies aren't going anywhere soon (which is also reflected in their having a far lower wind-up rate than both CICs and CLGs).

an increasingly weak financial position and outlook 

fewer social enterprises are reporting being able to generate profit, with nearly half now only able to achieve a financial break-even. But this seems to be galvanising social enterprises to focus more on making sure they're getting the most of what cash they are generating:

-  1 in 3 of all social enterprises seeking support say it's in relation to strengthening their financial management;

- there's a reducing trend of how far social enterprises are able to invest in training and development for their teams;

- there's a significant increase in social enterprises seeking support around the topic of redundancy, suggesting a sector that's starting to recognise the need to make hard choices about its future.

most social enterprise trading models remain in avoidance of delivering  public services

In keeping with historical trends, the main customer type of all social enterprises isn't the public sector to deliver contracts on behalf of, but us, the general public - only 1 in 5 social enterprises base their business model on delivering public sector contracts, and 2/3 have never engaged in this type of activity. 

But for those that do, 1/3 report struggling to engage with procurement processes and systems - suggesting still more needs to be done to level the playing field, despite 20 years of national campaigns, programmes, initiatives, and lobbying by different sector bodies.

social investment offers are increasingly out of touch with the sector?

There's a growing trend of social enterprises saying that social investment offers are too expensive and/or not designed to offer them what they need, with a growth in high street banks being turned to for finance instead.

But there's also a weaking of the wider sectors' ability to raise investment in general: the typical amounts being sought to be raised, and the likelihood of success in doing so, both continue to fall...

a determined sector, nonetheless

But in the face of the above, the social enterprise sector appears to be doggedly resilient and sheer bloody minded about finding ways to keep going:

- where investment is being sought, it's for stuff like buildings and equipment, showing a long-term strategic planning focus, rather than looking for 'quick fixes';

- similarly, the topics that make up the top 1/3 of all requests for support relate to strengthening systems for the long-term, rather than 'quick wins': governance, leadership, impact, and accessing training opportunities;

- and while the development of new offers and services continues to be the main way in which most social enterprises are seeking growth, that they're doing it with less investment shows 'frugal innovation' at work (pointing to a high degree of resilience and adaptability; although 1 in 5 also say that their ability to grow and adapt in these ways in being hampered by a lack of suitable, accessible, or appropriate support for them).

So overall, it initially looks concerning (although with some signs for hope) - but we should never read research in isolation: looking at comparable trends for both traditional charities, and private businesses, shows these themes are being similarly felt there (and usually to a more painful extent!).

And if this reflection seems overly critical, then maybe it is - but as a sector, social enterprise has huge potential if it can only plug into the right things. And from this latest mapping, it might seem that some of the things which were created to do just this for the sector may be starting to struggle to keep up with what's needed from them?

now I'm no longer twenty

You may have noticed that my blog posts this year have been a little different.

That's because 2025 has been the 20th anniversary of my business, and as part of 'celebrating' this milestone (over 90% of all start-ups don't make it this far), I wanted to commit to doing a few things:

1. 
   get more people to talk about toilets;
   
2. write and publish a 20-year retrospective of perspectives on how this journey to date has been so far;
3. and being more open and honest about things that we might usually shy away from, or consider 'too unprofessional' to share openly.

What happened this year

As this is the last scheduled of post of the year, it's usually the one were people look back over what they've done this year that they think has been most important - and this one is no exception to that custom, except I'm focussing more on what I think I've learnt and experienced by my attempts to mark 2025 as my porcelain anniversary:

- admitting to, and drawing the curtain back (a little more than I have done in the past) on the crises I've endured doesn't seem to have lost me any work (and actually made people more interested in me). It's also meant that others who are navigating their way in self-employment / small business ownership have been more encouraged by hearing that it's not just them that 'certain types of stuff' happens to.

- a year goes by more quickly than you think it does. I started in January by twinning my office toilet, but then it was the start of summer and the book I'd originally intended to have out in the world for the spring was still having pages added to it... but I managed to get it out in the end, and was rewarded by Amazon declaring it one of their top100 bestsellers of the year!

- in trying to make sure I also did the other things I meant to (like completely refresh my website), I messaged and tagged others as part of trying to ensure some accountability for myself in making sure everything I wanted to achieve actually happened. But none of them were able to help me keep in track with those things - and I don't think it was because they were rude or insensitive, they're just caught up in life and all the unexpected things that the universe throws at us each day that we have to prioritise and juggle. (And there's always next year to try and catch up with this 'still to do' list?).

What didn't happen this year

Which brings me to a key reflection about life overtaking me more times during the year than I hoped it would (usually for dramatic reasons connected to my being a sole unpaid sandwich carer) - and that's ok, as the other things I'd hoped to do to tie-in with this milestone anniversary year (refreshing my website, getting the 2nd edition of my first book done), can still be done next year (or maybe the year after that...)

How well did I celebrate 20 years compared to how others do it?

I also paused during the year to reflect on how others celebrate milestones in their own respective organisations. Most involved cake (which is always a good thing), but these also seemed to be fleeting moments - surely if we're serious about creating impact through what we do, then the way we celebrate our achievements should similarly leave some form of legacy or lasting benefit?

The moral of this festive story?

And maybe that's the key message of this end of (calendar) year reminisce - enjoy your anniversaries, because life is hard, and we need all the encouragement we can get. 

But don't blow it all on a single cake (maybe take out a monthly cake subscription?) - try and find ways that you can create artefacts and reminders of how you've managed to keep these plates spinning that you never thought you'd be handed. They'll then act as future encouragements not just to you, but to others too...

What makes your business 'good'?

In a recent group conversation with fellow freelancers, who are all part of the Freelancing For Good community, someone asked me:

"Are there any types of clients or work you would turn down on ethical grounds?"

In the moment, I said "no" - partly because my circumstances as the sole unpaid sandwich carer to several immediate family members means I have no recourse to support for myself, and so less capacity to take on work than my counterparts, so I need to try and take anything  I may be offered. But also because as I answered, I realised that I've never been in a position where I've been offered work that I'd had to seriously consider taking on ethical grounds.

This then prompted me to briefly widen the conversation as to what constitutes our respective businesses being 'good' or 'ethical', in order to work out just where the line was where I might start to say 'no' to types of work I'm asked to support:

- is it the type of work you do?

- is it the clients and customers you work with?

- is it your business model?

Your business model and form doesn't automatically make you 'good'

And this last prompt in particular may be more contentions than you think; for example, we generally hold co-ops and mutuals to be intrinsically 'good', but what if the product they offer may be seen as dubious to some (i.e. alcohol production, or support to sex workers)?

Perhaps we should look to 'badges' and accreditations? - but this too can throw up more complications. For example, Belu Water has won various public accolades from Social Enterprise UK, and yet it's market offer (botted water) is recognised as being one of the most environmentally damaging products in the marketplace.

What counts as being 'good'?

But I think there's also a wider challenge to setting the criteria for what counts as 'good'. Namely, to be 'ethical' means being socially acceptable, but what's socially acceptable changes over time (I'm of the generation which initially never knew or thought about the importance of recycling, or had any awareness that tuna was being fished in a way that killed dolphins - and yet within less than my lifetime I've seen significant changes on these, and other ethical/social issues).

And there's also the lesson that the brilliant TV show The Good Place highlighted: it suggested that in order to get into 'the good place' after you die, you needed to amass enough 'good points' during your time here on planet earth. But as our heroes came to learn, it had been centuries since anyone had been able to amass enough such points (and so 'the bad place' was creaking at the seams) - not because people were becoming more 'evil' but because of the curse of unintended consequences and the ever more complex supply chains that permeate our daily lives. For example, 200 years ago you could walk to visit your mother (plus points for family visit), and pick flowers as a gift on the way (more plus points). But today you'd drive (which involves mining of metals and fuels to create and power the car, often by people in precarious and dangerous working conditions = minus points), and buying flowers from a shop (again, grown and picked by people in other countries, necessitating CO2 production to fly them to said shop = even more negative points).

Even if it seems impossible, it's still important to try 

So if trying to live a good life is now so complex, and we can't help but compromise our ideals in trying to do good in how we run our businesses, should we even bother?

I think so, yes. Because for me it's the effort that's important - not what we do, but how we try and do it that defines us*; and this hopefully inspires and encourages others that although something may be hard, we should still try.

And we should also try and be kind to ourselves, on the occasions where we realise and have to accept that there is no 'ethical' choice to be had - we live in an imperfect world; but through our intentions and efforts we can try and shift this, even if only an infinitesimal amount. Because ultimately, it's when lots and lots of very small things get together to work in harmony, that the big things start to change and happen.

Does AI think my business is 'good'?

Finally, as this is my 20th year in business, you may have seen that I've been trying to look at things through this porcelain lens. Part of this has been writing 'Flushed!' as a retrospective of these first 2 decades from my own perspective, but I've also been asking AI what it thinks the main footprints of my business' activities to date have also been.

In keeping with the idea and questions of this post, I read what it thought through the question of "how good" has everything I've done so far actually been (after all, good intentions and commitments are important, but if you don't actually follow through on them...). What it returned was surprising and encouraging in equal measure - as I outline above, my core focus to 'doing good' has been about how I manage my business, not what I do, but AI highlighted:

"His portfolio includes socially challenging and “mission-driven” assignments — in-prison rehabilitation enterprise, incubation for homeless entrepreneurs, community-facing incubation or workspace models, etc. That shows not just business savvy, but a commitment to social justice and inclusion."

All of which leads me to conclude that your business is actually already doing more good that you might realise...!

* see my annual impact reports for examples of my efforts in this regard: 

https://drive.google.com/drive/folders/1o7M70ttK7My-ieTuBRi-gGeR9VOUfYxl?usp=sharing