Business Operations

Venture Criteria


Before starting a new social enterprise venture – whether a new start-up social enterprise or a new business line in an existing social enterprise – it is essential to articulate your goals. In the broadest terms, what does “success” look like for your social enterprise?

Unlike traditional businesses, social enterprises have two sets of goals: the social outcomes expected from the enterprise and the financial targets set for the business. These goals can co-exist, but enterprises need to prioritize among them. The process of setting these goals is what REDF refers to as “venture criteria”.


Why is it important to set goals?

Establishing clear goals as a first-step in launching a new enterprise is essential for several reasons.

First, it ensures agreement between stakeholders in your social enterprise – staff with different roles, the board and any other stakeholders on the objectives of the enterprise. This is particularly important for social enterprises with a parent nonprofit organization. Second, it helps you in selecting a business idea and guiding the business planning process. Proposed business ideas can be evaluated objectively using the enterprise’s stated criteria. Third, it will help guide business operations after launch. Clear social and financial goals help the Enterprise Manager make operational decisions. And finally, it will help you evaluate whether or not the enterprise is successful. Tracking financial and social metrics against initial goals shows whether the enterprise is fulfilling stakeholders’ expectations.

You should involve multiple stakeholders when setting goals. For existing organizations or social enterprises, this could include the executive director, social enterprise director, operational/business lead (if different from the social enterprise director, program lead or employee supports personnel, or crew supervisor. For start-up organizations there may be few, if any, of these positions on staff. Use your judgement on who is a key stakeholder and make sure they are involved.


Venture Criteria

To help social enterprises articulate their goals, REDF developed the “venture criteria” framework. This framework sets out to answer the questions:

  • What are your goals for the social enterprise?
  • How will the enterprise advance your mission?
  • How will the jobs benefit the target population?
  • What specific aspects of the jobs enable their effectiveness?
  • What are the financial goals of the enterprise?
  • What specific job/enterprise characteristics will determine the enterprise’s success?

However, it is essential that your objectives are as clear as possible. For each of the high-level goals listed above are a series of detailed questions you must answer to properly set the goals for your social enterprise. We have compiled those questions, grouped by category, below. We have also developed a venture criteria tool that is designed to help you quickly identify what is required of your social enterprise. Once complete, the tool will provide you with a report of your venture criteria.

To establish venture criteria on your own, you should examine your goals for the following areas:

Social Mission Requirements

  • How will this business further your mission?
  • Why are you operating this business?
  • Who should the business employ?
  • What barriers to employment do your clients face?

Job Characteristics

  • What are the objectives of the jobs for your clients?
  • Should the employment be permanent or transitional (or a mix)?
  • How long should the clients be employed for?
  • Should the employment be full or part time?
    • What is the minimum number of hours clients should work?
    • What is the maximum number of hours clients should work?
    • What is the maximum shift length?
  • Should the hours be flexible or fixed?
  • Are there any times when employees are unable to work? (e.g. weekends, evenings,..)
  • What skill level should the entry jobs require? (give examples)
  • What skills should clients learn on the job? (give examples)
  • What sort of tasks should clients do on the job? (and what shouldn’t they do)
  • Could clients do a job that requires physical strength?
  • Could clients do a job involving alcohol?
  • Could clients do a job that involved working with the public? (what sort of work could they do: greeting, taking orders, dealing with customer complaints)
  • Is there equipment that clients couldn’t use?
  • What stress level would clients be able to cope with?
  • What promotion options should there be if any?
  • What pay rate should clients earn? (hourly wage, pay increases, benefits)
  • How much supervision will clients need? (how many clients per supervisor, how many hours could they work without supervision, which tasks would need supervision)
  • Other job requirements

Staffing Requirements and Limitations

  • What skills do the social enterprise staff need to work in the enterprise?
  • How many staff need to work in the enterprise?
  • What level should they be at within the organization?
  • What salary should staff earn?


  • What is the long term financial goal of the enterprise?
  • Would your answers to the above questions change if these costs were supported by an external funder?
  • For those enterprises starting in conjunction with a parent nonprofit organization?
    • How many years can the parent organization support the enterprise for until the goal is achieved?
    • How much money could the parent organization afford to spend to start up a new enterprise?
    • How much money could the parent organization spend to subsidize losses in the first few years?
    • Which of the parent organization assets could be used to support a new business?


  • Where should the business be located to serve clients best? (support services, proximity to where they live, transportation)
  • Where should the business be located for staff convenience?
  • What is the maximum distance that clients should have to travel to get to work?

Community Reputation

  • How should the business reflect the values of the social enterprise?
  • How should the business be viewed by the local community?


Quantifying Key Goals

The ultimate objective of the venture criteria is to ask yourself: what do you need to see across your key goals in order to make the new venture worthwhile? Again, clarity is key, so set boundaries to definitively determine whether the idea “does” or “does not” meet your pre-defined conditions. For example, “less than $150,000 in startup funds”, “breakeven on direct business costs within 18 months”, or “20+ people employed per year”. Setting clear boundaries will help you get to “no” quicker on a proposed idea.


Next Steps

Establishing clear venture criteria before starting any new social enterprise is essential. We encourage you to use our venture criteria tool to help guide you through this process. Once you have your venture criteria established, you can begin evaluating different business ideas and develop a business plan to meet your social enterprise’s objectives. In the long run, these venture criteria will help guide the operations after launch and allow you to track the proper financial and social metrics to determine whether or not you are successful.

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