Pathways to social enterprise

By Kylie Flament, CEO of SECNA. Published 18 June 2026.

In the 10 years I have spent in the social enterprise sector, I have met thousands of incredible people making the world a better place through business. I was asked recently how an organisation can become a verified social enterprise and what the steps are to getting there. I’m capturing it here in case it helps other social entrepreneurs on their journey.

Step 1: Decide whether this is the path for you

Are you creating or running a social enterprise, or something else?

There is now a common definition of social enterprise across Australia. It is:

A social enterprise is a business that puts people and planet first. They trade like any other business, but exist specifically to make the world a better place.

To prove that you’re a social enterprise, you need to meet these five global standards:

1. Purpose: Exists to solve a social and/or environmental problem

2. Operations: Prioritises purpose, people, and planet over profit in operational decisions

3. Revenue: Has a self-sustaining revenue model

4. Use of Surplus: Reinvests the majority of any surplus towards its purpose

5. Structure: Chooses legal structures and financing that protect and lock-in purpose long term.

Here are some common ways that organisations are not social enterprises:

• Profit over purpose

  If you want to do something good but also make as much profit as possible - perhaps you’re a business in an industry that is helping people and the planet, but you’re not a social enterprise.

  • E.g. a psychologist

• Helping one way, harming another

  If you’re solving one social or environmental problem but you’re creating another - you might have been called a social enterprise in the past, but the Operations standard means that this is no longer OK

  • E.g. a business that sells plastic straws and donates all the profits to charity

• Funded by donations

  If most of your income is from donations - it sounds like you’re a charity, and we love charities, but you’re not a social enterprise

  • E.g. a repair cafe that has optional donations at the door 

• No income

  If you don’t have any income - again, it’s a great charity or charitable initiative and you should absolutely keep going but you’re not a social enterprise without income from trade

  • E.g. a community group that does beach cleans

• Doing good on the side

  If your main goal is to run a successful business but you do good things on the side - good on you! Anything any business does to make the world a better place is welcome. You might be an ethical business or even a B Corp but you’re not a social enterprise

  • E.g. a grocery store that employs local young people

• Doing good but keeping the profits

  If you meet all the other criteria but you’re not actually reinvesting the majority of your surplus (profits). 

  • E.g. a disability provider that provides support for people with disabilities but only at full market rate and doesn’t give back in a way that any other disability provider wouldn’t

The good news is that you can still join SECNA be part of the ecosystem - and may be eligible to be on our services directory too.

Step 2: Call yourself a social enterprise

Let your customers, employees and the general public know that you exist to make the world a better place. Give some information on your website about how you do that.

It might be as simple as a webpage that says:

1. Why you exist 

2. What you sell

3. How you benefit the community and/or the environment (the above-and-beyond business-as-usual benefits, so not just that the goods or services you sell are of benefit)

You can join SECNA even at this stage in your journey. Become an emerging social enterprise member.

Step 3: Join your peak body

Networks are important! Every state and territory peak body in Australia was set up by social entrepreneurs for social entrepreneurs and we all exist to connect, champion and advocate for you.

If you are based in, operating in or selling goods and services in NSW or ACT, join SECNA. If you’re in another state, join Impact North, QSEC, SASEC, SECTAS, SENVIC or WASEC (and you can join as many as you like). Apply as a social enterprise or ‘industry’ member to see if they agree that you’re a social enterprise too.

What we look for as a minimum to know that you’re a social enterprise:

1. Your social or environmental purpose (why you exist)

2. Whether most of your revenue comes from trade (what you sell)

3. How you reinvest your surplus (how you give back to and benefit the community and/or the environment)

You can join SECNA as a social enterprise member.

Step 4: Get verified

There are two verification bodies in Australia and both are affordable and will only take about two hours to apply for (if you have all your evidence available).

We recommend applying for both Social Traders (national) and People and Planet First (global) verification. They serve different networks and purposes, and the more organisations that recognise you as a social enterprise, the better.

These are more robust checks, so you’ll need to show:

1. Purpose: Exists to solve a social and/or environmental problem
   Show what your purpose is, where it says this publicly and where it says this in your governing documents

2. Operations: Prioritises purpose, people, and planet over profit in operational decisions
   A good way to check this is to register on Good Market (this is free). Their checklist will help you to know that you’re doing the right thing. Note that you do not have to say ‘yes’ to everything on the list - if you’re not sure or it is not applicable, select ‘no’.

3. Revenue: Has a self-sustaining revenue model
   Show where your revenue comes from. If you are selling goods and services, this is trade. For People and Planet First (PPF), this includes reciprocal grant agreements (i.e. grants where you have to deliver goods and services). One quick way to check if a grant counts as trade is to see if there is GST on it - if there is, it is considered to be trade by the ATO so it is considered to be trade by PPF.

4. Use of Surplus: Reinvests the majority of any surplus towards its purpose
   Show how much surplus you make (also called profit) and how that amount is less than or equal to the amount of reinvestment or ‘give back’ you make. This might be in the form of cash donations to charity, low bono or pro bono services, giving goods away, or incurring costs as a social enterprise that you wouldn’t if you were a business (such as employing a support worker to help your refugee staff to thrive - if you didn’t choose to employ people who would otherwise be locked out of work, you wouldn’t incur this cost, so it is reinvestment in your purpose, if your purpose is to employ and empower refugees, for example).

5. Structure: Chooses legal structures and financing that protect and lock-in purpose long term.
   If you have a not-for-profit legal structure, you have already done this. If you have a for-profit business, you’ll need to show a governing document such as a Shareholder Agreement or Constitution that locks in your purpose and reinvestment even if the business is sold. If you are a sole trader or partnership, you won’t have governing documents like this but you can make a public commitment to your purpose, reinvestment and to including this in future governing documents if you decide to change to a company structure later, for example.

Note: these are only brief notes as guidance only. For full details on what is required of you to become a verified social enterprise, please see Social Traders or People and Planet First.

If you’re not already a SECNA member, become one today. Any social enterprises with People and Planet First or Social Traders verification are automatically approved as social enterprise members.

Final note

We know that doing good and proving that you are doing good are two different things, and that in the early stages of your social enterprise journey, you may be too busy doing the good to measure or report on it. That’s absolutely fine, until or unless you want to access benefits that are only available to verified social enterprises - such as social procurement opportunities. 

It may take some time to build up to that verified status. It’s a journey. 

Have a look at the next steps based on where you are on this journey, put processes in place to make it easier to show the good that you do and to meet the criteria, and reach out to us and/or to others when you need help.

From one social entrepreneur to another, thank you for using business for good. Once upon a time, I thought you could either make money or make a difference. Social enterprise proves that you can do both.

Additional links

• Social enterprise verification

• How to account for good