What if non-profits could leapfrog over early start-up pains and acquire businesses instead? What pathways and conditions for success are needed for this to work? Scale Collaborative, in partnership with four BC communities is exploring new non-profit acquisition and business ownership possibilities.
Small businesses are significant drivers of local economies through their contribution to job creation, innovation, and spending. Recent research estimates that 700,000 small businesses across Canada are at risk of closure due to a lack of a succession plan (WISIR, 2018).
At the same time, the non-profit sector in Canada is facing an increasingly challenging funding environment and complex needs in communities. In response, social enterprises are a way for non-profits to both generate revenue and also add another approach to achieving impact.
Currently, most non-profits start up their social enterprises with all the risks that a start-up brings. But many social enterprises are Main Street businesses, such as construction, landscaping, cafes, catering, etc. What if non-profits could leapfrog over the early start-up pains and acquire a business instead? What are the pathways and conditions for success for this to work?
Scale Collaborative, in partnership with four BC communities is exploring how non-profit acquisition and ownership of businesses could achieve the following:
- Address succession planning challenges, particularly for businesses in small and rural communities
- Maintain key businesses within communities
- Shift ownership to non-profits, with business profits going back into programs and services
- Build a model that is replicable, viable and scalable
Scale Collaborative, in partnership with Royal Roads University, and advised by the communities of Cariboo Chilcoltin, Cowichan, Central Island and Alberni Clayquot, has been funded by the BC Rural Dividend Fund to explore this model and approach. Over the next few months, we will be conducting secondary and primary research to better understand the opportunities and challenges, explore ownership and governance structures, develop tools and resources, and identify pilots.
We are also excited to be a part of the Leadership Legacies Lab (L3) hosted by Waterloo Institute for Social Innovation and Resilience, which is exploring all different types of business conversions. What could our social economy look like if more businesses become owned by and generate profits back into communities? Let’s find out.
Learn more about the Business Legacies Initiative here.
