How are social enterprises trading internationally – generally?

There are five main categories of how social enterprises are trading internationally. The first is via direct export, such as business to business sales or internet sales via e-commerce. Others are importing goods, these tend to be fair trade or fair chain organisations. The third method is by replication and this includes licensing and franchising. Another popular method of trading goods and services internationally is by some type of partnership, collaboration or joint venture. This involves one or more organisations. Finally, a relatively low risk method of entering a foreign market, which will not be covered in detail, is by consultancy.

How are social enterprises trading internationally – Export

Direct exporting can take a number of forms, these include business to business sales, via contracts and e-commerce. A popular choice for social enterprises can be through a distributor or an intermediary. This means that a social enterprise can know exactly how many goods you need to produce for each order. Two niches of direct exporting were found in the sample. One focussed on cross border communities, such as the trade between Ireland and the UK across the border in Northern Ireland and the other targeting expat or tourist markets.

How are social enterprises trading internationally – Import

Importing goods from countries under the fair trade or fair chain principles is a further mode of trading internationally. The goods imported are usually food or craft products and usually the founder of these organisations has strong ties to communities based in the country which is producing the goods. Social enterprises which operate fair chain or fair trade models usually need the correct certification from a relevant trade organisation, to use these titles and associated logos. We tend to know more about fair trade companies, but, the FairChain Foundation (https://fairchain.org) has the following key principles:

1. Creating shared value
2. Trade over Aid
3. Compete on Quality not Poverty.

How are social enterprises trading internationally – Replication

Exporting via replication can involve trading goods and services through franchising or licensing. The laws around franchising can be complicated, if you are the franchiser and this system can be restrictive if you are the franchisee. Many organisations used this approach as a first method of replication, however, many moved on to use the licensing approach as they expanded to other countries, as they felt that this system was easier to implement and manage.

How are social enterprises trading internationally – Partnerships

Partnerships and Collaborations as a method of trading internationally was the most popular method of international trading in this ERASMUS+ project. It was usually considered to be inexpensive and low risk and was often over a relatively short period of time. Using partnerships and collaborations gave social enterprises a taste of working on an international basis that they could build on in the future.

How can Social Enterprises ensure financial sustainability and sustained social impact?

How can Social Enterprises ensure sustainability? For many organizations that were involved in this project they had used a combination of reasons and strategies to increase or sustain their international trading activities. E.g. one social Enterprise from England described their strategy for internationalisation as focused on two different categories. One refers to the countries that are facing social problems and the second one to countries that have developed a good market economy system and expertise like England, Germany, Greece.

The first option for many Social Enterprise that operate in Europe is obviously to start to internationalise and trade their goods and services in the European countries and in particular in the neighbouring countries. However, many social enterprises had taken advantage of a variety of routes, including e-commerce, which have allowed them to sail their goods across the globe.

For one organization, the choice of countries in which to operate was a response to demand from their services.

A number of social enterprises were directly targeting the tourism market to sell their services.

Some organization focused on cross border countries as their choices for international trading operations.

Expat communities living abroad had influenced their trading locations of some social enterprises.

Even language skills and language similarities had also influenced trading choices.

For the social enterprises working in the aid and cooperation sector their choices of operational location was obviously driven by social needs, and the same was for the social enterprises that work in the environmental sector.

Another choice of the countries where to internationalise a social enterprise was the result of a previous volunteering experience.

Interestingly the interview data relating to the sustainability of social enterprises trading internationally showed that in a small organisations the idea for and the planning of the international arm of the enterprise relates to a single person. Having such a responsibility, pressure and working long hours can really take its toll – as one said: “Self-care, looking after yourself, whoever, is leading the internationalisation because you are going to be pushing yourself. Working across multiple time zones and multiple customer bases. Make sure you have a well-rounded team, that back each other up so that at difficult moments you have somebody to talk to. Have your coaching and learning and development plans in place.”