“The other four social enterprises – Bettr Barista Coffee Academy; Bliss Restaurant and Catering; Eighteen Chefs; and events agency Adrenalin Group – said they got useful tips from the mentoring programme” (Painful Advice the Recipe to Save Failing Business, Priscilla Goy).
The well-intentioned, pilot mentoring programme for social enterprises – by the Ministry of Social and Family Development (MSF) – may have been a “get out of jail free” card for struggling food business Laksania, yet its sustainability and effectiveness are less clear. Aspiring social entrepreneurs should not have mistaken perceptions that they will be bailed out by the government when their financial situations go south, or that wide-eyed consumers will necessarily pay a premium on goods and services if provided by a social enterprise.
In other words when these businesses are concerned, perhaps the government should get out of the way (ST, Feb. 21). Already government agencies such as the MSF disburse funds, and mentorship schemes – especially for the newer social enterprises – have been in place.
Asking for more with these support systems in place would appear unreasonable, even if the company was incorporated for a good cause. And it takes more than just business nous to run a successful social enterprise. Founder Sim Sin Sin has a background in accountancy and was also the former CEO of lifestyle café chain Secret Recipe, but since the inception of Laksania in 2008 it has been plagued by financial troubles. The occasional features on the newspapers and television programmes might have led to concept revamps or temporary boosts for its marketing campaigns, though rising costs and falling revenue have persisted.
The reality is that keeping a business in the black is tough, and it is even tougher for a social enterprise. Four of the five social enterprises under the recent MSF mentoring programme are in the food and beverage industry, and it is well-documented that such establishments in Singapore – with greater competition, a tight labour market, and the exhaustion of selling propositions – suffer from high closure rates. In the absence of proper definitions and regulation of social enterprises, and the corresponding inability to carve a marketable niche, these companies cannot rely on goodwill or charity to keep afloat.
So leaving them to fend for themselves, after that initial boost of funds or advice through the government, seems to be the best recourse. This community will expand not with additional handholding, but with more instances of failures, and thereby more opportunities for frank assessment and consequent rejuvenation.
A version of this article was published in The Straits Times.