One major challenge I have seen in nonprofit running social enterprises is vocabulary!

When a for-profit "regular" business finds a way to create value for a customer, it has generally found its source of revenue; when a nonprofit finds a way to create value for a beneficiary, it has not identified its economic engine. That is very often a separate step.

Nonprofit that are running social enterprises struggle more with the words to use than understanding the concept in itself. Words have power over mindsets, and your mindset impacts your actions. When the right words are used, the right decisions are made.

The term funding model is different from business model to describe a framework. A business model incorporates choices about the cost structure and value proposition to the beneficiary. A funding model, however, focuses only on the funding, not on the programs and services offered to the beneficiary.

A business model identifies the products or services the business plans to sell, its identified target market, and any anticipated expenses. A business model describes the methods the company will use to generate customers and revenue.

Investing in the right people is also crucial! Many nonprofit have the feeling that they can't afford the right people. Hiring the right people is an essential part of scaling up for every enterprise. The social sector is no different as the skills required to sell, brand, and manage financials are specialized. Talking about business model, revenue and customer, will tremendously help in hiring the right people.