Report: Field Visit to Social Enterprise

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Date added: 17-06-26

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Contents http://static.wixstatic.com/media/41cef1_4a21dc2188c044739988cf5af562247c.jpg_srz_500_500_85_22_0.50_1.20_0.00_jpg_srz Contents Background and History Mission and Social Needs to address Mission Social needs to address Theory of Change Business Model and Operation Customers Services/Products/Key Activities Key Resources Key Partnership Revenue Cost Structure Challenges and Solutions Output and Outcome Output Outcome Social Impact Sustainability and Future Development Sustainability Future Development Comments and Recommendation Comments Recommendations Bibliography Books Periodicals Web documents, web pages or report

Background and History

Fullness Christian Vocational Training Centre (FCVTC), the precursor of Fullness Christian Social Enterprise (FCSE), was set up in 1987.(Avantage Ventures, 2009)[1] Set up in 2007, FCSE was derived from FCVTC. It currently owns an auto service centre and two hair salons.(Avantage Ventures, 2009)[2] One of the salons is Fullness Salon. Opened in 2001 in Mongkok, it moved to beside Sai Wan Ho Youth Outreach Centre in 2004.

Mission and Social Needs to address

Mission

For social missions, it aims at helping deviant youth reintegrate into society by Christian faith, vocational training, mentoring, counselling, and rehabilitation. (Social Ventures Hong Kong, 2010, p.13)[3] For business missions, it aims at providing customers with high-quality services, retaining sustainability in business and developing a potential for further development.

Social needs to address: deviant youth problem

In 2005, there are 3258 youths being led astray. Most of them are sentenced to prison and 293 of them are sent to vocational center.[4] (Social Sciences Research Centre, the University of Hong Kong, 2005) Although some of them find employment, many employers have reservations on hiring these people. Long term employment or professional careers are often out of reach for them.(Avantage Ventures, 2009)[5]

Theory of Change

Fullness Salon employs deviant youths as hair-stylists in order to allow them to learn a practical skill, thus increasing their chances of employment and reducing their chances of repeating offence. (紀治興、鄭敏華, 2008, p.24)[6]

Business Model and Operation

Customers

Fullness Salon has a very stable customer source. The customer base started from Christians in churches. Around 70% to 80% of the customers are Christians, who are willing to help deviant youth. By spreading through words of mouth, friends and relatives of the Christians gradually join the customer base.

Services/Products/Key Activities

Hair-stylists provide hair-cutting and other hair treatment services. They also teach and train apprentices, helping deviant youths to adapt to normal working environment. Volunteers from Christian organizations organize Christian fellowship activities for deviant youths. Board of directors focus on promotion and plan long-term business strategies for sustaining the operation.

Key Resources

  1. Money in the form of donation is important because Fullness Salon is independent from the government.
  2. Experienced stylists and technicians train apprentices to maintain staff continuity.
  3. Support from Christian organizations helps promote the salon among Christians.
  4. Board of directors with business background can make up successful marketing and promotion plans.

Key Partnership

  1. "SVHK takes part in the board of the social enterprise and provide equity investment, offering professional support in human resources, operation of the enterprise and marketing. They are also responsible for strategic planning and launch of innovative communication programmes." (Social Ventures Hong Kong, 2010, p.13)[7]
  2. Youth Outreach centre next to Fullness Salon, so they provide deviant youths as trainees to the salon. The volunteers there offer mental guidance to trainees. The centre is also used for Fullness Salon to organize activities for trainees, such as Christian gathering.

Revenue

As in first quarter of 2009, FCVTC gained over HKD 2 million revenue, of which around 86% comes from operation of salons and car centre and less than 1% comes from donation. (Fullness Christian Vocational Training Centre, 2009, p.8)[8]

Cost Structure

As in first quarter of 2009, FCVTC expense is around HKD 1.8 million, of which around 42% is for salary and 58% for operation and other expenses. (Fullness Christian Vocational Training Centre, 2009, p.8)[9]

Challenges and Solutions

  1. Pastors and ministers of the Church first started FCVTC, but could not make profit to sustain the business. To overcome this challenge, they seek help from Christian businessmen, one of whom is Mr. Ngai, to develop a more cost-effective model.
  2. The salon chooses not to receive governmental aid to maintain autonomy, thus sacrificing the opportunities to be promoted through the government. To overcome this challenge, they invite the media for visits, such as TVB programmes on Fullness Salon and promotion during Tithe Ethical Consumption Movement[10].
  3. Training some deviant youths are difficult, and some even commit theft in the salon. The staff is willing to provide them more opportunities to make up for their mistakes.

Output and Outcome

Output

Firstly, youths with good attitudes and professional skills are trained. Secondly, an annual revenue of HKD 90,000 is earned. (紀治興、鄭敏華, 2008, p.24)[11]

Outcome

The success rate of transforming the youth is 50%.[12] In the 50%, 25% of them have completed the 18-month training and become hair-stylists whereas the remaining 25% have completed the 6-month basic training. (紀治興、鄭敏華, 2008, p.24)[13]

Social Impact

Firstly, 17% of deviant youths do not repeat their offences. Secondly, the youths that have successfully become hair-stylists can bring economic contribution to GDP of Hong Kong. (紀治興、鄭敏華, 2008, p.24)[14] The Social Return on Investment (SROI) is calculated as 376%. (紀治興、鄭敏華, 2008, p.25)[15]

Sustainability and Future Development

Sustainability

The prices of the service is highly competitive and the staff’s professionalism is ensured. Its "cheap but good quality" service help retain the number of customers. According to data provided by Fullness Salon, 90% of customers returned for service the second time because of satisfaction with the good service provided. (Social Ventures Hong Kong, 2010, p.13)[16]

Future Development

  1. For expansion, "FCSE aims to provide 50 training slots for these youth by expanding from two to ten salons."(Avantage Ventures, 2009)[17]
  2. For promotion, the salon will take part more in the Tithe Ethical Consumption Campaign, so more consumers can have deeper understanding of the salon and influence other consumers in the market.
  3. For services, FCSE is considering to provide a range of other services to maximize profit, e.g. they are already planning to set up restaurants in Sham Shui Po.

Comments and Recommendation

Comments

FCSE has been very successful[18], being profitable and sustainable for over 10 years. They have created a role model which operates business-like, unlike common NGOs that highly depend on government funding. Therefore, other social enterprises can take reference of their model. Also, they have successfully implemented their theory of change[19], producing many productive and good-attitude youths. Fullness Salon also has good business strategies to maintain its customers. Since they own the premise at Sai Wan Ho, they need not bear a high rental cost. This enables the salon to afford high-quality hair-care chemicals and equipment. By offering service that has similar standards to other normal salons, Fullness Salon can accumulate and increase customers through recommendation of friends or family members. Although the salon uses expensive hair-care products, the price of its services is relatively lower than other high-class salons. Therefore, its cheap service but high quality service can also attract customers. The salon also treated apprentices in a good approach by not labeling the salon with rehabilitated staff. This on one hand reduces discrimination to the youths and on the other hand helps the salon to retain a positive image in the general public. However, it is not a good idea for Fullness Salon to be selective on which deviate youth to train as an apprentice. Every deviated youth deserves a chance of receiving help, regardless of their initial abilities or misbehaviors. Concerning the output and outcomes, it is believed that those provided by FCSE[20] is insufficient. For output, I believe that it should include number of youth trained, number of customers served, number of transactions per year, number of training programmes and number of public education activities; apart from the annual income of HKD 90,000. However, there are no such information up till now, hence it is suggested that FCSE can make these information known to public. For outcome, I believe that the rewards of youths should not be neglected. These include finding their life goal of serving the customers while reintegrating into society is achieved, gaining a sense of achievement by being able to serve a wide range of customers, acquiring the ability to overcome challenges as they have personally been through the process of changing their behaviors and values, increasing their self-confidence in dealing with people in society, meeting a lot of good friends such as staff and customers in salon, and learning practical vocational skills. The figure (Social Ventures Hong Kong, 2010, p.13)[21] shows the improvement of employed youths in a few aspects after 6 years of training. Therefore, such improvements in youths should also be considered as part of the outcomes, on the targets (deviant youths). Concerning the social impact, I think it is acceptable. It cuts social cost by approximately HK$250,000 per annum per youth. However, the total number of youths it helps is relatively low as of 6 apprentices, thus making the total social cost reduction not very significant. The figure above is a Social Impact Chain for Fullness Salon that is constructed with the necessary information. Fullness Salon has profoundness due to high sustainability, but its coverage is rather limited (only help 6 apprentices annually). Overall, fullness Salon is an effective solution to address the social problem of deviant youths .

Recommendations

Firstly, more marketing or advertising should be done, in order to increase public’s awareness of their company. I believe that simply promoting through media and inside the salon is insufficient to attract more investors and volunteers for cooperation. Therefore, FCSE can seek partnership with some firms that specializes in public relations[22], such as Weber Shandwick Worldwide, Hill & Knowlton Asia and Ketchum Newscan Public Relations. These companies not only help promote in the local community, but even offer globalized promotion, hence drawing the attentions of foreign visitors to further expand the customer base of Fullness Salon and gain an international image. Secondly, they should minimize the selectivity of trainees. Since the enterprise has reached break even and made profits since few years ago, it should have sufficient capital and manpower to help more deviant youth. Therefore, FCSE should consider to employ more deviant youths in Fullness Salon, or seek partnership with other salons to help hiring the youths that have finished apprenticeship at Fullness Salon. Thirdly, FCSE can consider expanding into other areas. Among the deviant youths, they have different interests and characters that make them more suitable for a particular type of occupation that others. In order to cater to the different youths, new businesses should be developed, such as opening groceries and boutiques. As a result, new partnership with companies that provide the corresponding employment should be established. Fourthly, FCSE can take more part in educating the public, including bringing the concept of social enterprise into secondary and tertiary education to educate our future generations about the importance of such enterprises. Therefore, FCSE can start by looking for schools around Fullness Salon (ie. in the east Hong Kong Island district), to organize talks or workshops at school and conduct field trips to Fullness Salon.

Bibliography

Books

  1. 紀治興、鄭敏華. (2008). 營商能耐可以改變社會. 香港¼šæ€ç¶²çµ¡

Periodicals

  1. Fullness Christian Vocational Training Centre. (2009). 豐盛通訊. 二零零九年1月至3月收支表. Retrieved from http://www.fullness.org.hk/test/fullness/image/news/ 200906.pdf

Web documents, web pages or report

  1. Avantage Ventures. (2009). Fullness Christian Vocational Training Centre. Retrieved from http://www.avantageventures.com/avcatalogue/sv-fullness-christian-vocational-training-centre
  2. Social Ventures Hong Kong. (2010). Impact Report 2007-2010. Retrieved from http://www.sv-hk.org/files/SVhk-Impact-Report-2010.pdf
  3. Social Science Research Centre, the University of Hong Kong. (2006). Youth In Hong Kong Statistical Profile 2005. Retrieved from http://www.coy.gov.hk/filemanager/
template/common/images/research/2005_statistical/YouthStatisticalProfile2005.pdf
  1. Tithe Ethical Consumption. (2014, September 5). Mission of Tithe Ethical Consumption Movement. Retrieved from https://www.ethicalconsumption.hk/cgi-bin/ ourdb/ bdetail?template=7132320190004&session_id=start&[email protected] tion.hk&dbname=ecm_Post&key=1
  2. HKU Space. (2014). 社會企業管理講庼šç¤¾ä¼çš„三倍壽命七倍回å Â±. Retrieved from http://hkuspace.hku.hk/programme/sharing/share-73137
  3. Wikipedia. (2014). Public Relations. Retrieved from http://en.wikipedia.org/wiki/Public _ relations
1
[1] http://www.avantageventures.com/avcatalogue/sv-fullness-christian-vocational-training-centre [2] http://www.avantageventures.com/avcatalogue/sv-fullness-christian-vocational-training-centre [3] http://www.sv-hk.org/files/SVhk-Impact-Report-2010.pdf [4] http://www.coy.gov.hk/filemanager/template/common/images/research/2005_statistical/ YouthStatisticalProfile2005.pdf [5] http://www.avantageventures.com/avcatalogue/sv-fullness-christian-vocational-training-centre [6]紀治興、鄭敏華, 2008, 營商能耐可以改變社會, p.24 [7] http://www.sv-hk.org/files/SVhk-Impact-Report-2010.pdf [8] http://www.fullness.org.hk/test/fullness/image/news/200906.pdf [9] http://www.fullness.org.hk/test/fullness/image/news/200906.pdf [10] Tithe Ethical Consumption Movement (TECM) started three years ago. It is an annual event in November that promotes spirit of Tithe (十行一å-„), encourages consumers to choose social enterprises, hoping to bring a change in society. (Retrieved from Mission of TECM: https://www.ethicalconsumption.hk/cgi- bin/ourdb/bdetail?template=7132320190004&session_id=start&share=[email protected]&dbname=ecm_Post&key=1) [11]紀治興、鄭敏華, 2008, 營商能耐可以改變社會, p.24 [12] Success rate is defined as they work at the salon for at least 6 months. [13]紀治興、鄭敏華, 2008, 營商能耐可以改變社會, p.24 [14]紀治興、鄭敏華, 2008, 營商能耐可以改變社會, p.24 [15]紀治興、鄭敏華, 2008, 營商能耐可以改變社會, p.25 SROI = (Revenue + Financially social impact) / Investment = (90,000 + 2,860,000 reduced social costs x 6 apprentices x 17% success rate) / 800,000 =376% Reduced social costs include legal fees, detention expenses and rehabilitation fees. [16] http://www.sv-hk.org/files/SVhk-Impact-Report-2010.pdf [17] http://www.avantageventures.com/avcatalogue/sv-fullness-christian-vocational-training-centre [18] Extent of success is determined by the total length of years that the enterprise operates, when compared to the average lifespan of social enterprises (9.3 years) according to (HKU Space, 2014, 社會企業管理講庼šç¤¾ä¼çš„三倍壽命七倍回å Â±) [19] Fullness Salon employs deviant youths as hair-stylists in order to allow them to learn a practical skill, thus increasing their chances of employment and reducing their chances of repeating offence. (p.3) [20]紀治興、鄭敏華, 2008, 營商能耐可以改變社會, p.24 [21] http://www.sv-hk.org/files/SVhk-Impact-Report-2010.pdf [22] Public relations is the practice of managing the spread ofinformationbetween an individual or anorganizationand thepublic. (Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Public_ relations)
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