As the economy crumbles around our ears, there is one kind of business which is thriving and its main driver is not profit and growth but social wellbeing and environmental health. Sarah Lewis talks to some of Brighton and Hove’s most successful social enterprises.

It may seem counterintuitive to set up a business with the express purpose of giving away the profits, but increasingly people are doing just that – and Brighton and Hove is a hotbed of such social entrepreneurship.

Generally, social enterprises are driven by the triple bottom line: people, planet, profits. Business Link defines the concept as “a business with primarily social objectives whose surpluses are principally reinvested... in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners”.

The legal structure of a social enterprise can take many forms, from limited liability companies to trusts to Community Interest Companies (CIC), but the key determiner is what the business does with its profits.

Kim Stoddart is the founder of the Green Rocket Group, a Hove-based PR company focussing solely on green or ethical businesses.

She says: “We give back 75% of the profits we make to help educate people and businesses about the environment – so the more profit we make, the more we can give back.”

Of the 110 social enterprises in Brighton and Hove, perhaps the most well known one is the Wood Recycling Project on Circus Street.

The project rescues waste wood from ending up in landfill and sells it off as timber or hand-made furniture.

Profit is reinvested into the project and it specialises in helping disadvantaged and unemployed people get back to work by offering training, skills and support.

Managing director Richard Simpson says: “All of it has been so rewarding for me, from pioneering the ethos of wood recycling in the Brighton area, to saving more than 6,000 tones of wood from landfill to creating jobs and employment opportunities along the way.

“However, one of the greatest challenges is trying to keep the right balance between staying true to our environmental concerns, helping the community stay involved and running a viable business.”

The current economic model favours growth and increasing profit over everything, so can this model of enterprise really ever work?

Business experts on the BBC’s Dragon’s Den have described social enterprise’s unique mix of business and charity as a “dangerous mix”.

Richard says: “We provide employment, are financially self-sufficient, and assist marginalised individuals to become employable. I see no reason why an economy could not thrive on this model.”

Kim agrees, pointing out a recent Mori poll showed 85% of British adults want to buy from organisations which have a strong ethical and sustainable stance, suggesting purchasing power may soon become more of a force than shareholder power when considering the focus of a business.

She says: “For us, the more profit we make, the more we give back through our work. We like to call it a more-than-profit approach.

“The success of an increasing number of social enterprises such as Café Direct and Divine Chocolate, combined with the increasing funding and interest in the sector, shows that this really is a sector to learn from. I think people will increasingly question just how much profit a business really needs to make to be a success.”

Alan Lugton is the CEO of Nourish, an organisation which provides vocational training in catering, hospitality and horticulture at Stanmer Park. He believes social enterprises provide a more balanced and dispersed growth, moving away from the boom-and-bust pattern that has so recently thrown the UK towards recession.

He says: “Everyone would prosper at a pace with everyone else, often with the benefits being seen directly in the communities, through the activities of social enterprise. It is not true business and charity cannot mix – just ask Oxfam.”

Philanthropy is nothing new, but it is interesting to note the definite increase in people setting up businesses with the express purpose of benefiting both environment and society. The Government’s Office of the Third Sector says that in 2006, the total turnover of social enterprises was an estimated £27 billion – 1.3% of the total turnover of all businesses with employees – and contributed £8.4 billion to GDP.

In 2005, the first new legal form of company in more than 100 years was created, the Community Interest Company, a limited company with an “asset lock” ensuring its assets and profits are secured for community purposes.

This year, social enterprise became a core part of the business studies GCSE syllabus.

Kim says: “It’s important to me to make a difference through my work, which is why I wanted to set up a social enterprise. People want to do something meaningful with their work. There is no reason why you can’t combine your ethics with your work and it’s so much more enjoyable when you do.

“It also just makes good business sense because if you really believe in what you do, so will others.

People are starting to realise the social enterprise sector could teach the more traditional business world a thing or two about corporate social responsibility.”

Richard says people are eager to find meaning and job satisfaction in their day-to-day working lives, which is something not catered for by multinational corporations.

He says: “I think as there is more and more evidence a useful livelihood can be forged through the social enterprise model, so more and more people will rise to the challenge.”

  • Social Enterprise Day is on Thursday and the city’s Business Community Partnership will be celebrating the launch of the Brighton and Hove Social Enterprise Strategy with two events:
    Driving Success – a tour of social enterprise in Brighton and Hove Embracing Opportunity – celebrating the launch of the Brighton and Hove Social Enterprise Strategy For more details, visit www.bhbco.org.uk or call Emma Mongan on 01273 770075.