Daw Toe Toe Aung Coop-2104 Social Business Models in developing Countries

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Social Business Model

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Social enterprises primarily apply business solutions to social problems. In a nonprofit organization, there are no shareholders. Therefore, the profits of a social enterprise are reinvested in the work of the organization itself. Since non-profit social organizations started undertaking revenue-generating activities, they needed a new business model. 3

Social Business Model • A business model has two primary elements: • An operating strategy to create the intended impact. This includes the organization’s internal structure as well as external partnerships. • Since any organization needs resources to work (both human and financial), the business model must include a resource strategy defining where and on what terms can the organization acquire the resources.

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• Integrating a social enterprise with a non-profit organization • You can integrate a social enterprise with a non-profit organization in the following ways:

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• Embedded • The social enterprise and the social program is one and the same • The creation of the business has client service at its heart

• Integrated • The business activities overlap with the social programs • The business acts as a funding mechanism and helps in the expansion or enhancement of the mission of the organization

• External • The business and social activities are separate. Further, they are usually not related to the mission of the organization • The business is created to fund and support the social activities 6

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Types of Business Models Entrepreneur Support Market Intermediary Employment Free-for-Service Low-income Client Cooperative Market Linkage Service Subsidization Organizational Support 7

Entrepreneur Support

Business Model Name

Entrepreneur Support

How it works

Sells business support to its target population.

Examples

Microfinance organizations, consulting, or tech support

Key Success Factors

Appropriate training for the entrepreneur

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Market Intermediary

Business Model Name

Market Intermediary

How it works

Provide services to clients to help them access markets.

Examples

Supply cooperatives like a fair trade, agriculture, and also handicraft organizations

Key Success Factors

Low start-up costs, allows clients to stay and work in their community

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Employment

Business Model Name

Employment

How it works

Provide employment opportunity and job training to clients and then sells its products or services on the open market.

Examples

Disabilities or youth organizations providing work opportunities in landscape, cafes, printing, or other business

Key Success Factors

Job training appropriateness and commercial viability

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Free-for-Service

Business Model Name

Free-for-service

How it works

Selling social services directly to clients or a thirdparty payer

Examples

Membership organizations, museums, and also clinics

Key Success Factors

Establishing the appropriate fee structure vis a vis the benefits

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Low-income Client

Business Model Name

Low-income client

How it works

Similar to fee-for-service in terms of offering services to clients but focuses on providing access to those who couldn’t otherwise afford it

Examples

Healthcare (prescriptions, eyeglasses), utility programs

Key Success Factors

Creative distribution systems, lower production and also marketing costs, high operating efficiencies.

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Cooperative

Business Model Name

Cooperative

How it works

Provides members with benefits through collective services.

Examples

Bulk purchasing, collective bargaining (union), agricultural coops, credit unions

Key Success Factors

Members have common interests/needs. Further, they are key stakeholders and investors.

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Market Linkage

Business Model Name

Market Linkage

How it works

Facilitates trade relationships between clients and the external market.

Examples

Import-export, market research, and also broker services

Key Success Factors

Does not sell clients’ products but connects clients to markets

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Service Subsidization

Business Model Name

Service Subsidization

How it works

Sells products or services to an external market to help fund other social programs. This model is integrated with the non-profit organization. Further, the business activities and social programs overlap.

Examples

Consulting, counselling, employment training, leasing, printing services, and so forth

Key Success Factors

Can leverage tangible assets (buildings, land, employees) or intangible (expertise, methodologies, or relationships)

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Organizational Support

Business Model Name

Organizational Support

How it works

Similar to service subsidization, but applying the external model. Further, business activities are separate from social programs

Examples

Similar to service subsidization– implement any type of business that leverages its assets

Key Success Factors

Similar to service subsidization.

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Lets together for society. 26