Social entrepreneurs

Social entrepreneurs are highly innovative, and many of them make good use of our services.

Your choice of legal structure affects your liability, risk, tax, rights and obligations, as well as your freedom to manage the business's assets. It also affects your funding opportunities and how the market and potential business partners perceive you.

Some countries have a specific legal structure for social enterprises. Norway does not. On Altinn, you can find detailed information about legal structures such as EPF (sole proprietorship), AS (limited company), FLI (association, club or organisation), STI (foundation), SA (cooperative), ANS (general partnership) and DA (partnership with shared liability).

You can also watch a useful video on the topic here.

To succeed in the market, you need to sell your product or service. Customers are your most important source of income. To build a lasting solution that creates value for society, you need to develop a financially sustainable model. However, many entrepreneurs need external funding both to start and scale their business. How you can secure funding depends on your stage of development, the problem you are solving, your ambitions and the legal structure you choose.

Social entrepreneurs may also have access to other funding opportunities, particularly at an early stage. These may include private funds, foundations, trusts, philanthropists, banks and other private-sector organisations.

Many foundations and trusts provide support through donations to associations or non-profit limited companies working to address societal challenges. These donors often set requirements for your legal structure and how you can use the money. For example, many do not fund operations or administration, but will contribute towards purchasing physical items or carrying out specific activities.

You may also have access to more funding opportunities if you are developing a solution where the public sector owns the problem or is the customer. Relevant public-sector organisations may include ministries, directorates, county authorities, municipalities and public funding agencies.

Most social entrepreneurs have links to the public sector, as it is often your customer and/or owns the problem you are addressing. To succeed in the market, you need to understand how the public sector is organised and how it works.

Most people agree that public-private innovation partnerships offer significant untapped potential. However, there are many good examples of innovation partnerships between the public and private sectors, particularly in healthcare.

While the public sector needs to strengthen its innovation expertise, non-profit organisations, commercial businesses and social entrepreneurs must also learn how the public-sector market works. They need a clear understanding of public-sector needs so they can develop effective solutions that meet them. The Norwegian Government's document Pathways to collaboration gives public-sector organisations confidence to invite social entrepreneurs to collaborate.

Many social entrepreneurs base their business model on a distinction between the user and the customer. Only in exceptional cases does the social enterprise's target group pay the full cost. Social entrepreneurs must navigate a complex landscape and understand public-sector organisation, administration and procurement. However, this duality is also becoming increasingly common in traditional business models.

Most public-sector organisations have funds tied up in operations, leaving little for developing or testing new and better solutions. If there is limited scope, ask when planning for the next budget period will begin. Good public-sector leaders want to hear from innovators who can demonstrate the impact of new solutions. If you can become part of their plans within the rules for innovative public procurement, you have a realistic way forward.

Public procurement is governed by regulations that set out a range of requirements. You can find more information at anskaffelser.no. Start-ups often find it challenging to take part in tender competitions, partly because they need to provide historical financial statements. Partnering with established companies can therefore be a useful strategy.

We have helped develop a legal guide for public-sector contracting authorities working with social entrepreneurs. Read the guide to purchasing services from social entrepreneurs.

We offer a dedicated funding scheme for Innovation Contracts.

Measuring social outcomes is just as important as tracking financial performance. For social entrepreneurs, the UN Sustainable Development Goals provide a strong framework. They add value to your dialogue with customers and business partners. They can also be an important management tool, helping you run your business in line with both financial and social goals.

You report financial results through your accounts, but there is no standard for reporting social results. In Pathways to collaboration you can read more about some of the methods currently in use and see examples of how other social entrepreneurs measure social results.