How to set up a social enterprise

It's no wonder that social enterprise is proving popular with the sector, as housing providers look to deliver services in new and sustainable ways while negotiating funding cuts, localism and the big society. As a model, it fits our corporate objectives perfectly – to grow commercially and enhance our social, ethical or environmental offer in the regions we serve. For us the decision came when the grounds maintenance contract for one of our local landlords came up for renewal. We wanted to take on the work ourselves, saving the cost of re-tendering. Establishing an independent company would make the best use of our experience in grounds maintenance and enable us to train staff in house. However, the end of contract and setting up alone meant we were tight for time, and didn't have the support of an experienced social enterprise or entrepreneur. Overcoming the governance, ownership and employment terms required a shift in mindset for board directors and senior managers, intensive research into suitable models, and strong leadership from the executive team. Setting up One of the main issues we encountered was establishing how the governance and ownership of the new business would fit within our existing structures and processes, without burdening the enterprise with the housing sector's regulatory framework. Limited company status was our strongest option, although as a private company we have had to introduce a new set of employment terms and conditions which lack the additional benefits enjoyed by staff in the housing sector. Financial viability was a key concern. We aim for our company, Futures Greenscape, to generate 100% of its income, breaking even by the end of year one and achieving small profits for reinvestment in year two onwards. But we also know that most new businesses lose money in the first couple of years of trading, so building in that protection to the rest of the business is essential. Planning ahead A detailed and accurate business plan is a must. It gave us the building blocks for decision making, funding, recruitment and a basis for planning to meet our deadline. Likewise to ensure financial demands and social aims are evenly weighted, we built those aims into the business model, ensuring that financial success depends on their delivery. Our short term goals of offering job and training opportunities to the unemployed are in full swing, while long term we hope to tap into shared service routes with local community partners. It's important to understand that there are significant cultural and operational differences between operating a social enterprise and a social housing provider. So my advice would be get the business plan right, be prudent, expect some losses, be very clear on why you want to develop a social enterprise - and expect a lot of hard work. Martin Sherman is chief operations officer at Futures Housing Group . This content is brought to you by Guardian Professional. Join the housing network for more like this direct to your inbox.