FAQ: What is a Social Firm?

A 'Social Firm' is a market-led enterprise set up specifically to create good quality jobs for people disadvantaged in the labour market.  An 'emerging Social Firm' is an enterprise that is working towards becoming a Social Firm, usually in the early stages of trading and not yet in a position to employ numbers of people, but working to a business plan which illustrates how they're going to achieve their goal. The 'Social Firm sector' is the collective term used for emerging Social Firms and Social Firms.

Criteria - the Values-Based Checklist

The criteria used to assess whether a business is a Social Firm can be found in the Values-Based Checklist. These criteria are based around three core values that Social Firms will subscribe to within their businesses: enterprise, employment and empowerment.  See the checklist (available in mind-map and list versions) for full details, but key are the following criteria:

  • Enterprise - Social Firms are businesses that combine a market orientation and a social mission (‘businesses that support’ rather than ‘projects that trade’). The business activities of Social Firms vary widely as shown by these case studies.  At least 50% of the firm’s turnover will be earned through sales of goods and/or services, (the lowest for Social Firms in April 2005 was 66%).  The firm will have an appropriate legal status. It must not be governed or driven by individual profit (except for worker co-operatives). Remote shareholders will not extract unreasonable profit.
  • Employment - more than 25% of employees will be disadvantaged people. Reasonable adjustments will be made for employees relevant to their needs.
  • Empowerment - Social Firms are committed to the social and economic integration of disadvantaged people through employment. A key means to this end is economic empowerment through all employees having a contract of employment and a market wage at or above national minimum wage.

Extra elements: a Social Firm Trainer

There is already a wealth of advice and information about general business development in the social enterprise sector. So 'The Extra Elements: A Social Firm Trainer' has been has been designed purely to fill the gaps specific to setting up and running a Social Firm that they don't cover. It is therefore a tool that is complimentary to, and should be used alongside, what is already available. It is split into six parts: A: What is a Social Firm? B: How does starting and growing a Social Firm differ from other business development? C: Developing the right organisational structure for a Social Firm D: Raising appropriate start-up funding for a Social Firm E: Developing supplimentary income streams F: Developing a supportive workplace.


View this three minute video ("Social Firms, successful businesses, empowering employment") explaining what Social Firms are:


Star Social Firm logo.jpgThe Star Social Firm quality standard Social Firms UK has developed a quality standard for Social Firms called 'Star Social Firm'. See www.starsocialfirms.co.uk