«You need a star to aspire to». What can beginners learn from successful social enterprises?

A number of master classes have been organized in Minsk for participants of the Biz4all social entrepreneurship programme within the framework of "Social Entrepreneurship Incubator". On April 22, participants heard from Viktar Velesnitsky, whose company collects used greenhouse film from residents of the Stolin region, and from Dmitry Klimkovich, who has organized courses for the elderly. Lawyer Vitaly Paulagradsky described some of the legal aspects you need to be aware of when you create your own company, while a business game allowed participants to tackles the urgent needs of their social enterprises.

"Without funds and expert support, you will be overtaken"

“If you have a problem, you can respond with a business idea and make money off it”, says Viktar Velesnitsky, director of a non-profit company within the “Stolin District Rural Development and Entrepreneurship Support Centre” fund, founder of “Selskaya Stolinschina” (“Rustic Stolin Area”).

“Selskaya Stolinschina” improves ecology in the region by collecting used greenhouse film from local residents. We covered this profitable business in the past.

At the moment, the company does not just collect used film: it also works in wholesale and retail trade of means of production for vegetable farmers (greenhouse film, seeds, fertilizers) and in agricultural production (rented land and purchased blueberry seedlings). Thus, the company addressed the issue of seasonal fluctuations in earnings.

“We have a non-profit organization which helps us get a start if we write a project and attract resources (the enterprise was founded by the local fund “Stolin District Rural Development and Entrepreneurship Support Centre” – Editor’s note)”, says Viktar. "Without funds and expert support you may be overtaken, so you lose the competitive edge".

In fact, "Selskaya Stolinschina” has a number of competitors. The company takes a sensible approach, however.

"Our original goal was not to make money but to solve the environmental problem. The fact that we now have competitors only helps to solve it”, says Viktar Velesnitsky. At the same time, he maintains, you should know what your competitors are doing, be proactive and promote yourself and your success instead of criticising others.

Viktar gave an example of a creative solution the company employed in the very beginning. When “Selskaya Stolinschina” organized a market research to make an estimate on the market size, the local executive body was unable to provide complete data on the number of greenhouses in the district. However, Viktar Velesnitsky’s team used Google Maps to obtain the data they needed.

ODB: Viktar, what advice would you give to new social businesses to become successful?

“When you are building a social company, you need to have a team of like-minded people, so that you all looked in the same direction. You need to have an inspirational figure and a star to aspire to. However, when you only see a big star, it is a challenge. You need to set intermediate goals: when you have achieved something, you become more motivated”.

Courses for the elderly: want to learn Chinese? No problem!

Dmitry Klimkovich organizes courses for the elderly, where one can learn anything, even the Chinese language. Dmitry used to work in a non-profit organization doing projects to train older people. Therefore, when he registered this company with his colleagues, they already had a client base of people willing to pay for education.

The charitable institution “Social Services Centre for Various Categories of Population” opened in 2015, achieving financial stability in its very first month of operation. The enterprise has a director, a chief accountant and 2 contracting specialists. Teachers are employed as contractors. It should also be mentioned that the Centre employs disabled people.

When the Centre just opened, it offered computer literacy courses, but today they can teach anything: if they don't have a teacher already working there, they will find one. The average bill for retirees and the disabled comes up to 50 Belarusian roubles per course (this includes a 50% discount not offered to other categories of people, since the courses are available to everyone). It is cheaper than in territorial citizen service centres, underscores Klimkovich. 

"A huge plus of the institution is that we earn money from the training center and get funding from foreign donors”, says Dmitry Klimkovich about their type of legal entity. The team receives foreign grants to implement two projects: “Accessible medical assistance and care” and “Development of local communities through social activities and responsibility of citizens”.

“How did you promote your organization?” we ask Dmitry Klimkovich.

"The first thing we did was set up a website, which was a mistake, because older people do not look for information online. Then we changed our strategy, placing ads in newspapers: "Pensioner's Friend", "I Am Retired". Then we began to look for customers at discos for the elderly.

In one and a half years the Centre trained over 500 people. Currently, they spend no money on advertising: students learn about the courses through word of mouth.

“Our business approach allows us to stay sustainable but not get profits. If we had no other projects, we would just have enough to cover rent and salaries”, notes Dmitry Klimkovich.

Go to a qualified lawyer and never risk large amounts of money

What kind of legal entity to choose when you register your social business? What taxation scheme? Why is it more difficult to close an enterprise than to open one? These were among questions answered by lawyer Vitaly Paulagradsky during his master class.

Vitaly has his own social business: “Healing Magic” programme and a fee-based “Magic Trick School”, which sponsors the social enterprise. “Healing Magic” trainers teach magic tricks to rehabilitation specialists who work with children with disabilities and serious medical conditions. The tricks help children develop motor and cognitive skills, making rehabilitation easier.

We asked Vitaly Paulagradsky several questions.

ODB: How can someone with an idea for a social business deal with all legal specifics if they have no legal education?

“First of all, I would advise you to read the Civil Code: this will help you get a general idea. Go online to learn about the necessary conditions and functional limitations of every type of legal entity. It is necessary to evaluate the business model: your target audience, your profit-making scheme, etc. If we are talking about doing something small, something that only requires up to three people, we advise the person to be an individual entrepreneur. For a team of five people, choose a unitary enterprise. The logic is simple.

For those who have trouble relating their business models to a certain type of legal entity, Vitaly recommends to seek legal advice: either go to a non-profit or choose a paid legal consultation which can be found in every locality.

If a social enterprise intends to receive grants, including foreign ones, then it is worth opening two organizations: a commercial one and a non-profit one (a public association, a foundation or an institution). Or you can set up a company, but there are some limitations here. Instead of opening your own business, you can also become a partner of an existing public organization and submit a grant application on their behalf.

I would also recommend people to take part in such programmes (Biz4all – Editor's note.), to get immersed into the environment, communicate with colleagues and get first-hand knowledge that will be clear and useful. 

ODB: How can social enterprises reduce the risk of losing money or getting a tax fine?

It is advisable to have a clear understanding of your mission from the very beginning and ensure that all the actions are legally justified and insured. It is preferable to engage qualified lawyers and accountants, to pay them if necessary. From the beginning, you need to structure your business processes well, so that later you do not waste time on adjustments but instead work with a stable model.  

Any business, including a social one, is a risk. That is why you need to strive to invest less and receive more, to not risk large sums in the beginning, to first test the demand. If you do not have the money to organize a large marketing study, then start with your friends, from your region or your city. A major risk is not to start something that requires a lot of resources right off the bat.

Projects from participants: water flasks and a CO2 offset app

One of Biz4all teams is developing a project that aims to offset CO2 car emissions. Andrei Fedotau, CarbonFreeTravel.com coordinator, spoke about the project.

The team developed an application, which currently works in a demo version. Carbon Free Travel allows the user to input values (departure and arrival airports, or the distance behind the wheel coupled with the car engine volume), and the application will calculate the volume of CO2 emissions. It will also suggest the amount needed to offset these emissions: donate money to build solar panels, wind generators or small hydroelectric power plants. From a list of countries, you can select one where the renewable energy project is located. The application has no Belarusian projects at the moment, but they will be added soon. 

"For Belarus, instead of helping solar or wind energy projects we will offer people a chance to donate money to plant trees or install energy-efficient lamps in kindergartens, hospitals or other social institutions", says Andrei Fedotau. There will also be a payment system.

For example, driving a car for 1000 kilometres leads about 350 kg of CO2 emissions, which corresponds to approximately 3 Belarusian roubles. The user can contribute this amount to the project, thus offsetting the emissions.

Yekaterina Syraezhkina, creator of S’way brand, invented a reasonable alternative to plastic disposable water bottles. Together with the team, Katya developed prototypes of steel flasks for water and a tumbler for tea or coffee.

"This is a project with a zero budget", says Yekaterina. “In our months of learning we reached an important conclusion: we would like to start working with wholesale customers, companies who could purchase flasks for marathons or for corporate gifts. So, we are currently looking for partners and not for investment. This would allow our project to pay off and develop faster. After all, for our team this project is a hobby that benefits people.

Creators of flasks and tumblers also plan to advocate for increasing the number of places in the city where people can get drinking water.

“The passive ones lose”

An interactive game "Beehive" helped the participants to go one step further and solve one of the needs of their social enterprise. The participants had to define one of the needs of their social enterprise and try to get the maximum number of contacts to satisfy it. Each table was a “beehive” with four bees around it. Participants had a chance to become both a “queen bee”, which “flew” to other tables to solve their problems and get contacts, and a “working bee”, which could suggest a solution to other people. Participants looked for grannies who can knit socks, website administrators and experts in all kinds of other areas. Nobody left without useful contacts.

“On the one hand, this game helps participants to know each other better, learn each other’s needs, unite people. On the other hand, it helps them quickly find both people and resources for their projects. In one hour of the game, participants made the most of everybody’s potential. It’s a dynamic and fun game, and passive people are the ones who lose”, says Maksim Padbiarozkin, ODB Brussels programme coordinator for Minsk. 

Find more photos here.

Text by: Tatsiana Tukhai   

The material was prepared within the framework of the "Social Entrepreneurship Incubator", implemented by ODB Brussels in partnership with TNU Network University (Netherlands), Belarusian Youth Public Union "New Faces" and International Civil Association "Union of Belarusian of the world “Motherland", with support from the European Union.