Private enterprise, social enterprise and cooperatives, what they have in common and their differences

1. ALTERNATIVE
GOVERNANCE MODELS
Social Enterprises, Venture or Cooperative
13 August 2015

2. WHAT IS A BUSINESS MODEL
Business Model: different ways of
operating in a market to present value and
generate revenue
• Qantas Vis Ryan Air
• Taxis Vis Uber
• Motel Vis AirBnB
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Three different
business structures:
• Commercial Enterprise
• Social Enterprise
• Cooperative Enterprise

3. ENTERPRISE STRUCTURE
• An enterprise is an enterprise is an enterprise
• The difference is not only the business structure
but also
• Their purpose and what you do with the net profit :
» Private Enterprise: Wealth generation for the owners
» Social Enterprise: Mission based purpose
» Cooperative Enterprise: Shared profits within a collective
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4. PRIVATE ENTERPRISE
• People using market-based ventures to achieve private
ends
• The focus is on private profit rather than community
benefit
• Shareholders, where they exist, can inform the
objectives of the enterprise but ultimately a Board must
legally do what is best for the company
• Many private companies have a process for contributing
to community benefits:
» A fixed line on their budget for donations
» A percentage of net earnings allocated to social ends
» A Foundation or the like
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5. SOCIAL ENTERPRISE
• People using market-based ventures
to achieve agreed social ends
• The focus is on community benefit
rather than individual profit
• They are not alternative ways of
operating government funded
services e.g. welfare or labour
market programs
5© 2015 Enterprising Partnerships Pty Ltd
Cleanable - a social enterprise
developed by Westgate Community
Initiatives Group (WCIG
Inc.), committed to providing high
quality property maintenance
services providing a supportive
environment for people re-entering
the workforce and living with
disability.

6. COOPERATIVE ENTERPRISES
• People agreeing to a Co-operative structure
which belong to, is operated by, and benefits
the people who become members of co-
operatives.
• They can also enhance the communities they
operate in, provide wealth the participants
and/or only to the objects of the Cooperative.
• Co-operatives are democratic organisations
formed by people with mutual needs and
aspirations which can be fulfilled by pooling
resources and working together.
• In Australia, for every challenge, there is a co-
operative solution!
6© 2015 Enterprising Partnerships Pty Ltd
100% owned by members and do not
pay dividends to shareholders.

7. ALL ENTERPRISES
• All have three factors in common:
• Must be mainstream: Access and utilise market-based enterprise
• Must make money: Acknowledge the market to build sustainable wealth
• Must make measurable difference: Aspire to measurable change
» http://socialenterprise.com.au/
The purpose and what happens to the money are the discernibly
different business approaches; however
increasingly there is a great deal of similarity between the three.
7© 2015 Enterprising Partnerships Pty Ltd

8. WHICH TO CHOOSE?
• Ultimately it is your own decision based on what your
intent is:
» Do you want your net earnings (after costs) to go to
you for you to decide how to spend it? (Re-investment
for growth, dividends, etc)
» Do you want your net earnings to go towards a social
benefit - where your wages are just another input cost?
» Do you want your net earnings to be shared amongst
those who have agreed to cooperate to generate the
wealth (either for the participants or for the purposes of
the cooperative)?
8© 2015 Enterprising Partnerships Pty Ltd

9. REFERENCE
• http://socialenterprise.com.au/resources/
• http://accsr.com.au/
9© 2015 Enterprising Partnerships Pty Ltd

10. 0414 392 323
frank@enterprisingpartnerships.com.au
Enterprising Partnerships
PO Box 5127
South Melbourne 3205
@communityep
@Enter_EP
enterprising-partnerships
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CONTACTS
10© Enterprising Partnerships| Frank Wyatt