Difference between Social Business and Social Entrepreneurship

Among the numerous pressing issues confronting the world today are hunger, adverse climatic circumstances, inadequate educational facilities, and criminality. Despite these obstacles, there is no greater sense of accomplishment than doing something that will ultimately improve people's lives. Strong leadership is essential, but philanthropic efforts, donations, and volunteering can also help.

There are other businesses and activities that exist just to benefit the local community. Two methods that have emerged as a direct reaction to this difficulty are social businesses and social entrepreneurship. Although they have many similarities, there are also many areas in which they differ.

What is Social Business?

Muhammad Yunus created this company to solve a societal problem, not to make a profit. In addition to covering operational expenses, profits are re-invested to repay investors for their initial capital contributions. Social corporations are common in many sectors, including education, housing, nutrition, healthcare, and finance, with the success of these businesses measured not by financial gain but by the good they provide for society.

Due to the fact that these groups exist to do good in the world, money is certain to come up in conversation at some point. Social companies are prohibited from requesting or accepting government funding, grants, or charitable contributions.

The following enterprises fit the definition of a social enterprise −

  • Nonprofit organizations whose major goal is to help those in need

  • Community-owned enterprises (CBEs) are businesses whose primary mission is to fund local nonprofits.

Social enterprises are subject to the same regulations as any other kind of business, which are outlined below.

  • Instead of focusing on profit maximization, the company's primary goal is to reduce unnecessary human suffering.

  • The firm is not permitted to receive any form of government funding, grant money, or private contributions.

  • After that point, investors will only be able to recoup their initial investment, and any further funds will go toward the company's core objective.

  • If the firm is able to make a profit bigger than the initial investment, it may expand and use those funds into solving other problems.

  • Company employees should be paid a fair wage that reflects the value of the goods and services they provide.

  • Companies shouldn't engage in activities that might harm the environment, but should instead focus on improving society.

What is Social Entrepreneurship?

"Social entrepreneurship," as used here, denotes corporate initiatives that aim to improve society as a whole by adapting established management practices to address pressing issues of social, cultural, or environmental concern. The desired societal reform may consist of the reduction or elimination of societal problems. This system does not need financial returns, but any profits are reinvested into operating the business. Social entrepreneurs often work in areas such as healthcare, child rights, women's empowerment, waste management, the fight against poverty and unemployment, and education.

By allowing people to follow their passions while also contributing to society, social entrepreneurship encourages creativity and innovation. Unlike for-profit businesses, the goals of social entrepreneurs are not primarily monetary. That's why these businesses might seek funding from sources including private investors, the government, and charity foundations.

Differences − Social Business and Social Entrepreneurship

The following table highlights how Social Business is different from Social Entrepreneurship −

Characteristics Social Business Social Entrepreneurship


A social enterprise is a business that operates to address a social problem rather than generate financial gain.

When people talk about "social entrepreneurship," they are usually referring to commercial activities that are undertaken with the goal of improving the society.

Problems in culture, the environment, and society as a whole might be the focus of such endeavors.

Measure of profitability

Money made for the common benefit is the standard by which social enterprises are judged profitable.

Effective problem-solving is the yardstick by which social entrepreneurs evaluate their success.


Any form of grant funding, donation, or sponsorship from the government or private citizens is illegal for social businesses.

Individual donations, government funding, and charitable grants are all possible funding sources for a social entrepreneur's endeavors.


A social enterprise is a business that operates to address a social problem rather than generate financial gain. Although monetary returns are used to calculate profits, the fundamental goal of these partnerships is to advance societal goals. However, it is against the law for them to solicit or receive private donations, grants, or government funding of any kind.

Social Entrepreneurship, on the other hand, describes commercial activities that are undertaken with the goal of improving society. The solving of cultural, environmental, or social issues can be facilitated by employing a wide range of approaches.

Non-profits measure their performance by how much of a problem they are able to tackle, and they do things like ask for and accept donations from members of the public, lobby for government funding, and apply for grants. However, the end result of any approach is to address social issues and create positive change.