How to Test Your Non-profit Social Enterprise Idea

Four Board Members doing research to complete a feasibility study.

By now you’re well on your way to developing your social enterprise for your non-profit. You’ve narrowed down your top three social enterprise ideas, and the next step is to dive deeper to see if they’re realistic. That’s where a feasibility study comes in.

Think of it as your reality check. A feasibility study doesn’t give you a polished business plan, but it does give you enough data and evidence to make smart, informed decisions about which idea is worth pursuing.

In this article, we’ll share how to test your social enterprise idea to determine if it’s worth moving forward into planning and development.

What to Explore in a Feasibility Study

A solid feasibility study addresses several key areas that could make or break your social enterprise. This is not a hard-and-fast list, so feel free to add other items you feel are appropriate to your organization.

Mission and strategic fit

For each chosen idea, add notes to answer the following questions:

• Does the idea align with your mission, vision, and values?

• What positive community or social outcomes will it create?

Market opportunity (and need)

Each idea should be investigated to see if there is a need in your community for this product or service. Ask yourself:

• Who will buy your product or service?

• How much will they pay, and how often?

• Who are your competitors, and what makes you different?

Operational feasibility

Even if the need exists, if you don’t have the resources to fulfill it, your project may be doomed before it begins. To understand your resources, ask yourself:

• Do you have the people, systems, facilities, and technology to launch?

• Can it grow if it proves successful?

Legal and regulatory considerations

Talk with internal or external legal and regulatory experts to understand what rules and laws may apply to opening your social enterprise. Ask if:

• Do we need a separate legal entity or partnership?

• What permits, licenses, or CRA rules apply?

• Are there liability issues or intellectual property concerns?

Financial Feasibility

Starting a social enterprise will require funding. Now is the time to do a basic budget and financial investigation to understand your needs. Does your research determine:

• What are the start-up costs?

• What revenue can you realistically expect?

• What’s your break-even point?

• Where might funding come from — grants, loans, sponsors, or investors?

Human Resources

Your social enterprise needs people. Learn more about your human resources needs, including:

• Do you have the skills in-house to research, do a feasibility study/business plan, and manage it?

• What external consultants or team members may be needed?

• Is your board and leadership team committed to the time and energy required to make this idea real?

• What training or succession planning is needed?

Risk Assessment

Take a full, honest look at potential risks of each social enterprise venture. Ask:

• What are the financial, reputational, and operational risks?

• How will you mitigate them?

• What’s your exit strategy if it doesn’t work out?

Impact Measurement

What impact can your social enterprise expect? Look at what impact measurement tools you’ll use including:

• How will you track both financial results and social, cultural or environmental outcomes?

• What KPIs - or metrics - matter most for your board, management, and stakeholders?

Recommendations & next steps

Once you’ve done your feasibility studies, compare your results across your proposed projects. Work with your feasibility study team and interest holders to determine:

• Which offers the best opportunity for initial launch & profitability, growth and scaling, and long-term sustainability for the organization?

• Which ideas suggest piloting, partnering, or phasing in?

• What’s the timeline for moving forward?

Where to find research data

During your feasibility study, you don’t need to go deep into the numbers quite yet. Just go deep enough to outline what’s possible. Focus on the information that gives you clarity on your audience, market, and risks.

Great starting points to find market data and support for feasibility studies include:

• Statistics Canada – census, trade, and industry data

• Innovation, Science and Economic Development Canada (ISED) – business intelligence and industry stats

• Bank of Canada – economic outlook surveys and reports

• BC Stats – provincial economic and demographic data

• BDC – practical guides to market research

• Universities and libraries – entrepreneurship and industry resources

• Province of BC – Resources for Small Business and Entrepreneurs:

• University of Toronto – The Gerstein Science Information Centre: Entrepreneurship

• National Industry Associations

• Fraser Institute

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And don’t forget to hyper-focus on your niche — whether that’s youth employment, mental health, housing, or environmental sustainability. A non-profit consultant like Angie at HIP Strategic can also help you with your social enterprise feasibility studies and provide additional resources based on your niche.

The importance of feasibility studies

A feasibility study won’t answer everything, but it will highlight opportunities, risks, and gaps so your non-profit can make evidence-based decisions on the next steps. When this step is done well, it helps you avoid costly mistakes and ensures the social enterprise ideas are mission-aligned and financially sustainable.

✨ Ready to test your social enterprise ideas? Book a Get Curious! Discovery Session with HIP Strategic — let’s explore the potential together.