What are some risks of social entrepreneurship

A social entrepreneur is an entrepreneur who creates a business to bring about social change and potentially solve specific social issues and problems. The examples of social entrepreneurs are wide and varied. It could be someone who develops mobile apps to report crimes or starts a company that aims to provide resources to disadvantaged communities. Ultimately, social entrepreneurs are known for following their hearts.

Being a social entrepreneur can be a really fulfilling career. You can follow your dreams, change people’s lives and at the same time (hopefully) gain financial freedom. But there are definitely many risks and challenges that come with becoming a full fledged social entrepreneur and you should be fully aware of them before embarking on this journey.

get funding

Most entrepreneurs need some form of funding when they start their entrepreneurial ventures. Regardless of whether they want to get their financing from a private lender or a bank, the fact is that starting a business involves overcoming many costs. The problem with social entrepreneurship is that the business models often do not generate large profits. This, coupled with the fact that social entrepreneurship is widely misunderstood, discourages lenders from lending large amounts to social entrepreneurs.

Constantly being rejected by lenders can be extremely discouraging. That’s why it’s so important to have a solid business plan and a reliable way to turn your profits into reality.


In many cases, when you fight for a particular cause, there are people who fight against it. The more controversial your cause, the more backlash you can expect. Although social entrepreneurs are known for being selfless and aiming to help people and communities in need, they often face some pretty harsh backlash and criticism. In the age of social media, backlash can never stop and can affect your sanity.

It’s important to be aware of existing social justice groups and whether you would offend anyone with your proposed projects.

No focus on profit

Many social entrepreneurs are so wrapped up in their business that they don’t focus on making a profit. However, making profits is very important when it comes to keeping your investors happy, maintaining a successful business, and putting food on your table. If this is really your top priority, remember that the more profit you make, the more you can give back to your business and the more financial freedom you have.

More profit also means you can hire people and know what they’re saying; many hands make light work.

Burn out

Burnout is a real risk for social justice entrepreneurs. Because they often put their heart and soul into their work, social entrepreneurs work their to the bone and work long hours. As with all types of entrepreneurs, there are no set working hours, so entrepreneurs find their personal and work lives merging. It is very important to ensure that you maintain a healthy work-life balance to avoid burnout, which can affect both your physical and mental health.

lack of public knowledge

Although social entrepreneurship is growing and spreading, the majority of the public does not have a clear understanding of what social entrepreneurship is. This can make it difficult for your cause to gain support, and the support of the general public and local communities is often essential to your success as a social entrepreneur. The lack of information both online and offline can lead to misunderstandings.

Only through education and dissemination of information will the public be informed about social entrepreneurs and their work.

Not many success cases

Unfortunately, when looking for social entrepreneurship role models and success stories, there aren’t many to choose from, so you can use minimal business models as templates. It also affects your likelihood of getting a loan, as lenders like to see examples of similar, successful businesses. This is why business models like franchises find it so easy to get credit as there are many examples of successful cases.

Have no significant support structure

Having a support structure and facilities to turn to for advice is very important to the success of any business. As social entrepreneurship is relatively new, there are not many support structures or even regulations for companies that fall within the scope of social entrepreneurship. Tax incentives in the UK are not yet regulated, which can be confusing for social entrepreneurs.


Marketing a social business definitely comes with its challenges. Unfortunately, many social entrepreneurs do not place enough emphasis on effective marketing and may not have the resources, time, or funds to invest in marketing, which could present an enormous risk and challenge.

How to eliminate risks as a social entrepreneur

When you look at the risks involved in becoming a social entrepreneur it can be daunting, but there are ways to minimize those risks including:

  • Talk to successful social entrepreneurs you know. Their advice and guidance is very valuable to you and can guide you on the best path for your business.
  • Create a detailed business plan that covers everything you intend to do with your project.
  • Focus on effective marketing that engages the public and educates them about your social business. The more public knowledge that is out there, the better!
  • Prioritize making profits.

The more consciously you are aware of the risks associated with social entrepreneurship, the more likely you are to avoid those risks. So make sure you do your research and stay grounded as you embark on your social entrepreneurship journey. Social enterprise plays a key role in the UK and resilient social entrepreneurship should be encouraged.

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