Social enterprises, like private businesses, may sell products and services in a variety of markets.
Many economic development income-generating models, such as microfinance and business development programs, are designed so that the paying customer is also the client. In this model the clients are poor people, which limits income potential of the enterprise.
In many civil society programs, such as arts and environmental organizations, the clients are not defined by their economic status and may have considerable purchasing power, thus clients do not limit the revenue potential per se.
In short, social enterprises may serve any type of customer, depending on how financial and social objectives are welded into a business model.
In social enterprises intended to create maximum economic value, then the market sought is that with the greatest ability to pay and where margins will be the highest. A social enterprise where social and economic value generation are intertwined may elect to serve clients, forsaking profit in favor of social impact.
The following chart provides a list of potential social enterprise customers and corresponding examples.
|The "client" of the social enterprise and "customer" (user) of the service or product are the same.
|Clients of microfinance institutions purchase financial services from the MFI. Small producers who are also clients buy product development and marketing training from a BDS provider.
|Third Party Payer
|The "payer" of the product or service is not the same as the "user," who is the client. Social enterprise third party payers are donors (voucher programs), insurance companies, or government (Medicaid).
|Social welfare program pays for health services rendered to indigent people by a community clinic. A local donor provides low income working mothers vouchers to pay for childcare services from a nonprofit childcare organization.
|Customers in the open marketplace who buy social enterprise goods and services. In some cases their purchases may be socially motivated.
|The public pays admission fees to see a cultural exhibition by an arts organization. Consumers buy used clothing from a thrift store run by a disabilities organization.
|Businesses and Nonprofits
|"Business-to-business" nonprofits or businesses buy products and services from the social enterprise.
|A national ice cream manufacturer buys brownies from a bakery staffed by recovering drug addicts, which it uses in some ice cream flavors. Socially conscious businesses purchase renewable energy sources from an environmental organization.
|Government buys services and products from the social enterprise.
|Area circuit courts purchase a referral service database from a nonprofit for substance abuse organizations. A local government agency purchases janitorial and grounds maintenance services from a disabilities organization.