If you’ve ever tried to map a social enterprise onto a standard Business Model Canvas, you know the problem. The Osterwalder canvas is designed for commercial businesses that create value for customers and capture value as revenue. Social enterprises do that too, but they’re also creating social value for beneficiaries who may not be their customers.

That double bottom line doesn’t fit neatly into nine boxes. So here’s a modified approach that I’ve seen work well with Australian social enterprises, based on conversations with founders, accelerator programs, and consultants working in the space.

Start with the mission, not the market

In a standard canvas, you typically start with customer segments and value propositions. For a social enterprise, I’d argue you should start somewhere else entirely: your intended social outcome.

Before you think about customers, channels, or revenue, be ruthlessly clear about what social change you’re trying to create. Not your activities. Not your programs. The actual change in people’s lives or in the system you’re trying to shift.

Write it in one sentence. If you can’t, you’re not clear enough yet.

Example: “Young people leaving out-of-home care in Victoria sustain stable housing and employment for at least 12 months.”

That’s specific. It’s measurable. And it gives you a North Star for every other decision on the canvas.

Two value propositions, not one

Your social enterprise has two value propositions, and they might be aimed at completely different groups.

Customer value proposition: What are you offering to the people or organisations that pay you? This needs to be compelling on its own commercial terms. If your product or service isn’t genuinely valuable to your customers, you don’t have a business. You have a cause.

Beneficiary value proposition: What are you offering to the people or communities you’re trying to help? This might be employment, training, services, or something else entirely. It might overlap with your customer value proposition, or it might be completely separate.

A cafe that employs people with disability has customers who want good coffee (customer value proposition) and employees who gain work experience and income (beneficiary value proposition). These are related but distinct.

Map both clearly. Understand the relationship between them. And make sure you’re not sacrificing one for the other.

The impact model

This is the piece that’s missing from the standard canvas. Between your activities and your intended social outcome, there’s a theory of change — the logic of how what you do leads to the impact you’re trying to create.

You don’t need a 50-page theory of change document. You need a clear, honest chain of logic:

We do [activity] → which produces [output] → which leads to [short-term outcome] → which contributes to [long-term impact].

If any link in that chain is weak or unproven, flag it. That’s where your risk sits, and that’s where you need to invest in learning.

Revenue streams need special attention

Social enterprise revenue models are often more complex than commercial ones. You might be generating revenue from:

• Direct sales of products or services
• Government contracts
• Fee-for-service arrangements with other organisations
• Grants (which aren’t technically revenue, but fund your operations)
• Cross-subsidies from commercial activities to mission activities

Map all of these. Understand which are sustainable and which are precarious. Be honest about the percentage of your revenue that comes from grants, and have a plan for what happens if that funding disappears.

The healthiest social enterprises I’ve seen have diversified revenue with a strong base of earned income. The most fragile are the ones where 80% of revenue comes from one or two grants.

Key resources include your community

Commercial businesses think about key resources in terms of assets, intellectual property, and technology. Social enterprises have all of those, plus something else: community relationships and trust.

Your relationships with the communities you serve, the trust you’ve built, and the local knowledge you’ve accumulated are key resources. They’re also incredibly hard to replicate, which gives you a competitive advantage that no amount of venture capital can buy.

Map these alongside your conventional resources. And invest in maintaining them, because they’re more valuable than most founders realise.

Cost structure and the cross-subsidy question

Most social enterprises cross-subsidise to some degree. Commercial activities generate a margin that funds social programs, or social programs receive grant funding that covers overhead costs. This is normal and fine, but you need to understand it clearly.

Map your costs by category: commercial delivery costs, social program costs, and overhead. Understand which parts of your operation are self-funding and which require subsidy. This clarity is essential for financial sustainability and for honest communication with funders.

Put it on one page

The whole point of a canvas is that it fits on one page. You should be able to look at your social enterprise business model and understand, in five minutes, what you do, who you serve, how you make money, and how you create social impact.

If you can’t, it’s too complicated. Simplify until it’s clear.

Test it with stakeholders

Once you’ve drafted your canvas, show it to three groups: your customers, your beneficiaries, and a potential funder. Their reactions will tell you whether your model is credible, compelling, and complete.

The customers will tell you if your value proposition is real. The beneficiaries will tell you if your impact model makes sense. The funder will tell you if your financial model is viable.

Listen to all three. Iterate. And remember that a business model canvas is a living document, not a finished product. It should change as you learn.