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• The Development & Diffusion of Social Firms
• How Social Firms Can Succeed
  
• Advantages of Social Firms

How Social Firms Can Succeed

Social firms may achieve success by finding the right market niche. Many gain a market edge by competing for contracts with public agencies, such as hospitals, which often have a special interest in the social inclusion of people with disabilities or a strategic need to be seen to serve the public interest. They may also have practical market advantages. A cleaning business in Pordenone, in northern Italy, successfully developed contracts with public facilities because the unionized workforce it replaced was relatively inefficient. The market niche may come from workers’ special qualities. People with disabilities, for example, may have unusual reserves of empathy and patience when employed as home health aides. The public orientation of social firms can help them earn contracts through a willingness to tackle community problems – like salvaging abandoned motor scooters to clean up a run-down section of the city.

Social firms often select labor-intensive business options to maximize employment
while minimizing capital investment. Common choices include cleaning services; handmade products, like wooden toys; organic food production that is not driven by investments in machinery and fertilizer; car washes; and bicycle repair. At times, however, a social firm consortium may choose to develop a business that is profitable but employs relatively few people with disabilities in order to use these earnings to offset other losses. A profitable venture of this type is the consumer-oriented pharmacy in Boulder, Colorado.