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The Social Business Model Canvas (part 1)

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If you are thinking of creating a social enterprise your main challenge will be to find a balance between your social mission and economic sustainability. This is why some social enterprise business models are quite complex. In this two-part article, we share with you a very simple and visual tool that will help you model your business model concisely.

"Business model": what does it mean concretely?

First of all, let's clarify the term "business model". It is the way in which your company will create, deliver and exploit value, i.e. how it will make money. The Social Business Model Canvas allows you to:

  • define your product or service offering, particularly in relation to your different targets, whether they are customers or beneficiaries,
  • describe how you will deliver this offering,
  • define your needs (technical, financial, etc.) and
  • sketch out the framework of your future business.

Unlike the "standard" Business Model Canvas, we will in particular think about the social and environmental dimensions of the project that will need to be put forward: the mission, the social need and the targeted impact.

Let’s unpack the different elements of this tool:

Your mission or purpose

What is the guiding star, or the purpose of your project? How is it linked to your personal mission in life? The social mission will be at the heart of your project, so it is crucial to write it down clearly, in two or three lines. In fact, the choice of your business model has to be in line with this mission: it will be your compass and your guide.

This step may seem laborious if you are not used to this kind of exercise, but it’s important to get it done. It will allow you to reflect on yourself as an entrepreneur: why do you want to develop this particular project? Do you feel aligned with your project and your social mission as a project owner? The 17 Sustainable Development Goals can help you to identify the main objectives you want to address and thus define your social mission.

The social problem or need

What is the social need being addressed and specifically the problems faced by your target clients or beneficiaries? This should definitely be in relation to the previous box. Be as specific as possible.

For example, listing the problem as "fighting food waste" is not specific enough. On the other hand, "facilitate connections between people who are willing to buy unsold or expired products" or "facilitate connections between traders and suppliers who can sell unsold or expired products" are concrete examples, linked to specific targets. This is what you should aim for.

Another issue to address could be the lack of information, the fact that people are not sufficiently aware of food waste issues. As you can imagine, the solution will not be the same for these two examples.

Here you can list in sub-categories the existing alternative solutions that have been developed to solve the problem. It would be surprising if there weren't already some! Name some of the companies that are the most direct competitors that your customers could use today. Of course, this part should be supplemented by a competitive analysis.

Client segments and beneficiaries

First of all, it is important to distinguish between clients and beneficiaries. Who are the people who will benefit from the social impact and who will pay for your solution?

For example, someone opening a solidarity restaurant can have as beneficiaries people who are removed from the labour market, if they intend to hire this target. This is an inclusive business model where the beneficiaries are an integral part of the business. The target group of beneficiaries often needs to be extended to those who will benefit from the created impact (citizens, consumers, users, public authorities, suppliers, etc.).

As for the clients, you should think about the different client segments (young people, elderly people, people with a passion for a particular hobby, etc.) that you are targeting.

Start by listing all the potential customers for the product or service you are planning to sell. Next, select the ones you think are the most promising (most easily reached, etc.). Choose a maximum of 2-3 personas, representing your ideal customers. The empathy map will help you identify their needs, strengths, fears and aspirations.

The product offering and value proposition

What is your solution to the need that you have identified? This part concerns the value proposition for the problem(s) that you have identified, both for the clients and the beneficiaries. Avoid formulating advertising slogans and instead think about the differentiating argument compared to your competitors. What are the promises you make to your future clients and beneficiaries? What really makes your project unique, what is at the heart of your project? A value proposition should be simple, unique, precise and formulated in one or two succinct sentences.

Make sure that you understand these various elements. As soon as you have filled in these first boxes, you can move on to the second part of this article and finalise your SBMC (Social Business Model Canvas).

If you need help with this process, don't hesitate to contact the nyuko team! nyuko's advisors are specialised in entrepreneurship and will be more than happy to assist you from the idea to the realisation of your entrepreneurial project in Luxembourg.

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