Social Enterprises: The Conditions for a Sustainable Business Model

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A speaker delivering a presentation at the Insight Lecture.(Photo by Milly) 



The grand festival of social economy enterprises in Incheon, the Incheon Social Economy Expo, was held from September 26 to 28 at the Incheon Imagination Platform.

 

Related post: Highlights from the 2nd Incheon Social Economy Fair


On the first day of the event, right after the opening ceremony on the 26th, a special insight lecture was held. Seongjun Lim, Director of mysc (Merry Year Social Company), a consulting and impact investment firm specializing in social innovation, presented practical strategies for how social enterprises can survive and grow. Many social enterprises and intermediary support organizations listened attentively with great interest.

 

In this article, I’d like to summarize the key points from Director Lim’s presentation on how social enterprises can build a sustainable business model.

 

The Meaning of Social Value and Impact

 

Social enterprises must create social value while also pursuing economic profit. At times, the terms social value and impact are used interchangeably. In his lecture, Lim explained the difference.

 

Social value refers to the social issues we need to solve, such as respect for humanity, environmental protection, and educational support.

 

Impact refers to the specific activities or the scale of influence that contribute to achieving those social values.

 

What kind of business model is required for sustainability?

 

👉Marketability: Verify whether customers are truly willing to pay. Simply being “a good cause” is not enough to survive in the market.

 

👉Profitability: Build a structure that generates revenue independently, without relying solely on government subsidies or grants.

 

👉Social Value: Ensure that the business genuinely contributes to solving social problems.

 

👉Team Capability: Work with a team that has diverse expertise, develop products quickly, and enter the market efficiently.

 

👉Innovation: Offer innovations that differentiate from existing services, making the enterprise attractive to both customers and investors.


Balancing Impact and Profitability

 

A common dilemma for social enterprises is balancing impact and profitability.

 

Focusing only on impact makes it difficult to attract investment, since investors prioritize the potential for profit generation.

 

In addition, due to recent changes in the investment environment, social enterprises now need to emphasize strengthening their internal foundation and survival strategies over external growth. Lim stressed that instead of scaling up (expanding size), enterprises should focus on scaling deep (strengthening depth). This requires improving customer experience, enhancing internal capacity, and building a profitable business model.

 

Conclusion

 

For social enterprises, social value and profitability must form the foundation of a sustainable business model. With marketability, innovation, team capacity, and sound management in place, social enterprises can go beyond mere survival to achieve long-term growth and social impact.

 

It is crucial to understand that securing sustainability through such realistic survival strategies is the key for impact enterprises to grow in the long run.

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