A Conceptual Paper on Early-Stage Business Model Development in Social Enterprises

Abstract

Social enterprises, which seek to achieve social impact through business activities, have increased in number in various parts of the world during the last few decades. However, creating business models that combine financial sustainability and social mission achievement is a challenge. Responding to recent calls for more research on social enterprise business models, this conceptual paper aims to shed some light in the area of business model development in early-stage social enterprises. Using theories of entrepreneurship and social entrepreneurship as its theoretical foundation, this paper suggests a conceptual framework for business model development in early-stage social enterprises which incorporates insights collected from relevant scholarly sources. The proposed conceptual framework describes early-stage business model development in social enterprises as a continuous process which starts before a social enterprise has been founded and continues for a period after the founding. This process is typically influenced by personal factors of the social entrepreneurs, by the needs of beneficiaries, by market conditions, by external factors, and by organizations that support social enterprises. The proposed conceptual framework could be used as the basis for an empirical study, following which a theory of business model development in early-stage social enterprises could be developed. Such a theory could potentially provide useful insights for social entrepreneurs who establish social enterprises.