PHASE 3. EXPANDING BUSINESS OPPORTUNITIES

PHASE 3. EXPANDING BUSINESS OPPORTUNITIES

Insights from the case study Suggested actions

MAIN ACTORS Self-assessment questions

In the implementation phase, which coincided with a substantial production growth, Quid social cooperative saw a rapid human capital growth: the number of employees rapidly grew to around 60. Moreover, at this stage, Quid managed to begin fulfilling its social mission by employing more and more people with fragilities, not only people belonging to those socially disadvantaged categories recognized by the national law, but also to a wide range of difficult backgrounds (victims of domestic violence and abuse, psychological abuse, etc.). In this phase, the Italian important multi-brand clothing company continued to be a crucial partner which opened to further strategic collaborations and partnerships. Also, the two philanthropic foundations remain important, one of which eventually became member of the social enterprise. Other big economic players (i.e., big international companies belonging to various market sector) became Quid’s business partners. Quid also managed to engage local public administrators (both municipal and provincial level) making them aware of its impact on the local territory and obtaining their endorsement. Quid engaged with the territorial third sector networks and social service providers in order to reach people with fragilities and to become a partner in job re-insertion training programs. Quid continued to manage the tailoring laboratory program within the local district prison. Quid also began its dialogue with the European Union which provides larger-scale project opportunities. Quid also received support from an impact investment fund willing to invest in its strategy.  If the business is at a growth stage, this is a good time to invest in human resources and employ more people also belonging to fragile and vulnerable social categories, hence starting to increase your social impact.  Continue to build on the relationship with initial supporters/sponsors/ investors.  Enlarge your business opportunities by opening up to partnerships with other local, national or international companies not necessarily belonging to the same market sector.

 Make local public administrations and institution aware of your social/environmental territorial impact and pursue their endorsement.

 When employing people belonging to disadvantaged social categories, search and reach out to third sector networks and service providers which can provide their deeper knowledge, expertise and network access regarding the same social issues you are addressing.  Expand your business opportunities also looking for larger-scale international organizations (i.e., EU, UN, World Bank).  Expand your funding opportunities also towards more innovative instruments such as impact investment funds (i.e., social impact bonds, green bonds, development bonds, …).  Can the business growth allow for the employment of more people other than the initial group of founders? Can the business begin to provide job opportunities also to people belonging to fragile and vulnerable social categories?  Can the business count on the support of its initial supporters/sponsors/ investors?  Can the business manage to engage and partner with other relevant and well known national and international companies not necessarily belonging to the same market sector?

 Are local public administrators aware of the social mission and impact which the business idea is achieving? Can the business count on their endorsement?

 Can the business idea connect with territorial third sector networks and service providers in order to access their territorial knowledge of social/environmental issues and fragility and, hence, scale its social impact?  Can the business idea benefit from larger international opportunities (i.e., social economy competitions, projects, networks, …)?  Are there impact investment funds available for new social enterprises willing to generate an impact on the territory?

MAIN RESOURCES

Substantial financial investments, that brought Quid to its full productive capacity, in particular:

- Purchase of a bigger production plant. - Rapid human capital growth: the number of employees rapidly grew from 60 to 120. - B2B: strong increase of collaborations and business partnerships with other large and well-known companies which placed important productions orders. This sparked the demand for Quid’s collections, allowing the standardization of production, and, consequently, to enormously boost its production. In fact, it allowed Quid’s collection to reach from an estimated 35 000 to 400 000 clients. Strong connection and identification with the local territory. Access to the strong knowledge of the local third sector network in regard to the social issues and fragilities of the local territories. In turn, this allowed Quid to reach people with fragilities and to provide them with job opportunities. Tax benefits due to Quid’s recognized legal form of social cooperative/social enterprise employing people belonging to vulnerable categories. Provincial and municipal public administration’s endorsement and institutional support allowing Quid to partner in job re-insertion welfare programs. The European Union’s initiatives and development vision provide Quid with larger-scale project opportunities compared to those available on a national scale. The impact investment fund provided additional funding to carry out Quid’s activities and scale its impact.  Reach out to investors, funders or other sources of funding (i.e., bank loans) necessary to make substantial investments in order to allow for business growth (i.e., increase the number of employees, purchase new means of production and production plants).  Expand your business opportunities and search for new client segments (i.e., B2B).  Maintain your local roots and a strong connection to your local territory.  Make sure you are maximizing your social impact through accessing resources coming from the third sector actors and networks.  Comply with your local/national regulation in order to apply for tax benefits related to your social/environmental impact, if available.  Engage with public sector institutions/entities in order to benefit from their endorsement and institutional support facilitating access to further opportunities (i.e., allowing for the social enterprise to partner in job re-insertion welfare programs).  Search for larger scale opportunities to maximize your social impact (i.e., social economy international projects, competitions, awards).  Search for available impact investment funds.  Is the social enterprise able to make substantial investments in order to allow for business growth (i.e., increase the number of employees, purchase new means of production and production plants, etc.)?  Is there a possibility to engage market competitor as partners, hence, to enlarge the business model also to a B2B model in order to reach more clients?

 Are the connections and relations with the local territory cultivated and maintained?  Are the resources coming from the third sector actors and networks properly exploited in order to maximize the social impact?  Can the legal form of the entrepreneurial activity benefit from national/local tax benefits?  Are local public administrators aware of the social mission and territorial impact of the social enterprise? Can they provide their endorsement and institutional support allowing for the social enterprise to partner in job re-insertion welfare programs?  Are there international institutions that offer the opportunity to access wider and largerscale projects maximizing the social impact?  Are there impact investment funds available for new social enterprises willing to generate an impact on the local territory?

MAIN ACTIVITIES

Quid opened its first retail shops in the local territory which quickly led to:

- A burst of the local market demand, - A consequently rapid production growth which, in turn, required, - The purchase of a bigger production plant, and - The workforce growth: the number of employees, including people with fragilities, rapidly grew from 60 to 120 in this stage. Quid’s strong business growth is also explained by another strategic activity which was carried out in this phase. In parallel with its B2C business model through retail selling, Quid also developed its B2B channel, hence, increasing its networking activity and actively seeking for collaboration opportunities with strong market players, i.e., other large and well-known companies which could place important productions orders. In particular, Quid intentionally reaches large and famous companies, not necessarily with a sustainable productive chain, aiming, on the one hand, to reach more clients, and, on the other, to instil elements of environmental sustainability and corporate social responsibility in their business model. Quid’s collaboration with these companies, therefore, goes beyond the mechanisms of order placements, but also consists of product co-design and co-branding. Indeed, Quid B2B channel allowed to enormously expand its reach of targeted clients, specifically starting from an estimated 35 000, before its B2B activity, to 400 000 clients. Quid’s strong and rapid business growth required an internal reorganization of the social enterprise business management, starting from the business departments and work teams:

- In particular, an administrative office and a communication office were structured. The latter, in particular, proved to be strategic in order to boost Quid’s capacity to create and communicate its identity and, therefore, to build their market credibility both towards its clients and its business partners. - Also, Quid defined important and structured work divisions such as a product development division, a production division and an institutional relations division. The latter is in charge of managing external institutional relations with local public administrators and  Once market demand and profits start increasing, substantial investments are needed in order to allow the enterprise to reach a full production capacity able to keep up with the market demand. If initial investments should be contained to start-up and test the market, at this stage, seize the appropriate moment to take the risk and invest for business growth (i.e., purchase of means of production and production plants, increase the number of employees, …).  Seize the strategic opportunities to target new and different client segments (i.e., expanding also to a B2B model).  Once the business starts growing, promptly adapt the enterprise internal organization and management structure which best suits and responds to the business growth and allows for the most efficient business management. In particular, competent human resources should be fully dedicated at least to: - administration and accounting. - communication, marketing and branding.

Also, internal business operations should be well divided, distributed and structured in work divisions/teams.

 Keep building your credibility and connection to the territorial third sector network and actors aiming at becoming a territorial reference points when it comes to job opportunities for people with fragilities.  Expand your distribution channels in order to reach your client segments (i.e., e-commerce platform).  Experiment new sources of funding (i.e., social  Which is the best solution to place the product in the local market and to reach the client segments? For example, is there a possibility to open retail shops?  In case of an increase of market demand, does the enterprise have the capacity to respond with an adequate production increase?

 Is there a possibility to engage market competitor as partners, hence, to enlarge the business model also to a B2B model?

 Which is the enterprise internal organization and management structure which best suits and responds to the business growth and allows for the most efficient business management?

As the business expands: - are there competent human resources which can focus on leading the enterprise administration and accounting? - is the social enterprise able to define its own identity in order to build its market credibility both towards its clients and its business partners? Are there competent human resources which can focus on the enterprise communication and branding? - are internal business operations well divided, distributed and structured in work divisions/teams? - are there competent human resources which can focus on managing the enterprise external relations with nationals/international institutions/public administration in order to seize wider and strategic opportunities and synergies?  Is the enterprise able to maintain and

public welfare providers, as well as Quid’s participation in international and national call for proposals/tenders concerning job placement/training for people with fragilities. - Moreover, Quid has chosen to keep its entire production chain in

Italy, although usually, its Italian fashion industry market colleagues have externalized their production abroad. However economically less efficient, this choice has the purpose to maximize Quid’s impact on the territory and to keep the highest quality standards. During this stage, Quid kept strengthening its credibility and connection to the territorial third sector network and actors in order to reach people with fragilities and to provide them with job opportunities. Quid continues to manage the tailoring laboratory program within the local district prison and also opened another laboratory in the male section of the prison. As of end 2020, Quid employs around 10 people through these tailoring laboratories, and 4 are currently interns. Quid eventually also opened its own e-commerce platform. Finally, Quid also experimented new sources of funding and piloted its first social impact investment instrument by a territorial impact investment fund. impact investment).

reinforce its connection with the local third sector networks and actors aiming at becoming a territorial reference points when it comes to job opportunities for people with fragilities?  Can the social enterprise expand its distribution channels also through ecommerce platforms?  Can the social enterprise benefit from innovative sources of funding such as impact investing?