Eight months ago, Mr Mohammad Shahri was all set to unleash his PauWer.
The social enterprise which trains former offenders and single parents to make bao with unusual fillings, such as durian and chocolate, had received a $50,000 grant through the Ministry of Social and Family Development’s Youth Social Entrepreneurship Programme for Start-Ups.
The 24-year-old ITE College East graduate had come up with 20 bao flavours. He had a mentor from school, the manpower and also support from the National University of Singapore Entrepreneurship Centre. His enterprise began operations in October last year.
Just three months later, however, the social enterprise was floundering. PauWer was making a profit of only $100 a month. “I was stupid,” says Mr Shahri. “I should have planned more. I just wanted to start, fast. I bought everything brand new when I could have used second-hand equipment.”
He blew $25,000 – the first tranche of the grant – in 15 days, on equipment, rent for a kitchen space and warehouse, renovation and wages.
The ministry says there is no national database to track the performance of social enterprises in Singapore but Mr Shahri’s experience would be familiar to many social entrepreneurs who run into financial roadblocks.
A social enterprise is a business set up primarily to fulfil social purposes such as helping the disadvantaged and advancing environmental issues.
The social enterprise sector is a relatively new sector in Singapore. There are between 200 and 300 social enterprises here, of which 170 are registered with the Social Enterprise Association. The association was set up in 2009 to promote social entrepreneurship, after about a third of the 73 social enterprises in a funding scheme failed.
Some common reasons for a social enterprise failing are rental costs, manpower costs and the lack of demand for the product or service, says the ministry spokesman.
Interviews with people in the social enterprise sector suggest that the key challenge for many social entrepreneurs is striking a balance between financial sustainability and achieving their social mission.
National Volunteer and Philanthropy Centre chief executive Laurence Lien says he has seen many social enterprise start-ups struggle to sustain themselves.
“Entrepreneurship is hard. Social entrepreneurship is doubly hard,” says Mr Lien, who is also a Nominated MP. He adds that non-profit organisations starting social enterprises may lack the business know-how to operate a social business. Young social entrepreneurs, too, may not comprehend the realities of the market and society to helm their start-ups.
Youth-oriented brand 77th Street founder Elim Chew says that in order for a social enterprise to be sustainable, its owner has to know and understand the business environment and the real cost of business.
“Like any business, they must have a good business plan coupled with business strategies in order for them to do well,” says Ms Chew, who sits on the ministry’s panel that evaluates social enterprises’ proposals for funding.
Since 2003, the ComCare Enterprise Fund, administered by the ministry, has helped more than 80 social enterprise start-ups by disbursing about $10 million in grants.
A ministry spokesman says: “Based on the performance of the social enterprises funded thus far, about half are able to sustain beyond three years in operations.”
The spokesman says to obtain funding, the social enterprise has to submit detailed business plans and go through rigorous evaluation and approval processes.
These social enterprises are to submit progress reports to keep the ministry updated and ministry staff also make site visits when necessary.
Earlier this year, the ministry launched a Social Enterprise Mentoring Programme, which sees corporate professionals and entrepreneurs such as Mr Andrew Khoo, director at ABR Holdings, which manages companies such as Swensen’s; and Mr Jamie Endaya, associate director at consumer goods giant Procter & Gamble, taking various social enterprises under their wing. The programme is expected to run until August.
Among the five social enterprise outfits in the programme is Laksania, which works with organisations such as the Movement for the Intellectually Disabled, or Minds, to hire people with disabilities to make laksa pastes in its central kitchen.
Laksania has fallen on hard times. From four cafes at its height early last year, it has had to shut two which it blames on poor sales and increased rent. Its two remaining outlets are at Bugis+ and Jem mall in Jurong.
“Things are looking bleak,” says Laksania’s director, Ms Tay Su Yin, 26. Her mother, Madam Sim Sin Sin, 52, founded the company.
Ms Tay says: “We are fighting to keep Laksania alive.” She explains that she and Madam Sim have been appealing to corporate bodies to purchase meal vouchers, which they hope can buy Laksania some time. Madam Sim says she has met Laksania’s mentor, Mr Lim Soon Hock, managing director of corporate advisory firm Plan-B ICAG, and sounded him out on some new business ideas. These include focusing on the social enterprise’s catering arm, Social Food Inc.
One social entrepreneur who has cut his losses is Mr Christopher Lim, 57. He opened social enterprise Barista Express in 2006, a coffee joint in Clifford Centre that hired people with mental conditions to make coffee. But he soon found himself sweating over rental and flagging sales. Barista Express closed in 2010.
“If I talk about it in terms of dollars and cents, it was a failure,” says Mr Lim, who does leasing of commercial vehicles now. “But in terms of de-stigmatisation, it was a success. We raised a lot of awareness about mental health, which to me is one of the purposes of a social enterprise.”
Despite the challenges, social enterprises continue to pop up. These range from a circus that helps at-risk youth to groups that teach people how to grow their own food.
Last year saw the launch of the Youth Social Entrepreneurship Programme for Start-Ups . It aims to help people aged 18 to 35 who want to develop businesses that promote social causes.
Republic Polytechnic and Ngee Ann Polytechnic run diploma courses in social enterprise.
And for every story of broken social enterprise dreams, there is a happy one of success.
In 2006, Mr Alvin Lim took over as chief executive officer of Bizlink, a non-profit organisation that provides employment services and job assessments for the disabled. Since then, he has constantly “evolved” the seven social enterprises under Bizlink.
In 2012, having built up a client pool for the company’s cards and gifts business, he launched a floral and hamper service. Last year, he set up a Bizlink Cafe at the Institute of Mental Health that hires and trains recovering mental patients.
Many people told him then that the cafe would fail because he had no prior experience in the food and beverage industry.
Undeterred, he hunted down an experienced hotel chef. The cafe serves pies, sandwiches and “really good gourmet coffee for $2.50”. It broke even within six months of operation.
Mr Lim has set his sights set on a second outlet.
He says: “I’m very focused. There must be work creation, but the business must also be financially sustainable.”
His advice to social entrepreneurs? Always find an exit path and be willing to embrace change.
“Some people think they can survive if they have more time, when they need to think of how to phase things out. The drought may never end, and the good times may never come again,” he says.
Meanwhile, PauWer’s Mr Shahri is not giving up.
He says the ministry gave him another $20,000 from the grant earlier this month. He used the money to pay off investors who had injected $12,000 to support the business and is using the rest of the funds to keep the outfit running.
The bachelor also started a new social enterprise earlier this year, Shogun Fight Gym, in Woodlands, which he operates with a friend. They conduct classes in silat, judo and mixed martial arts, with the aim of inculcating discipline, resilience and pride in individuals, especially at-risk youth.
He says: “PauWer is now my sideline. The product is good, but people don’t want to eat my pau every day. The gym, surprisingly, is doing well,” he says.
“I can put only $100 in my pocket monthly selling pau. But the gym gives me $2,500 a month and I get parents of troubled youth thanking me for training their children.”
Ms Helen Lim is the sprightly and cheerful 67-year-old chief executive of Silver Spring, a social enterprise that she set up in 2009.
It began as an organisation to provide career coaching to those aged 40 and above, after she noticed that many people lost their sense of identity and selfesteem after retiring or getting retrenched.
But she soon felt she wanted to do more for them.
She says: “Besides helping these people to help themselves, I wanted to see them being given new opportunities and roles.”
Ms Lim, who worked as a human resource professional for almost 40 years before retiring in 2005, opened Chatters Cafe in Parkview Square near Bugis in December 2009. It was staffed by employees aged 50 and above.
Ms Lim, who is married with a 35-year-old son, also obtained an employment licence. By 2010, the company had the added service of finding jobs for seniors.
However, the going was difficult despite her sinking $100,000 of her savings into the business. The company incurred losses for the first two years, and for the first year, it placed just eight people in jobs.
The firm’s main source of revenue comes from the placement fee – roughly a month of the employee’s salary – employers pay after a candidate has been placed.
“Those were tough times for our economy,” explains Ms Lim. “That period was following the Lehman Brothers financial crash in 2008. Many companies were downsizing and not hiring, and there was a general age bias against those aged 40 and above.”
She persevered. “I prayed, I told myself to have faith and I also gave myself three years to see if I could make sufficient meaningful social impact,” she says.
When the rental cost of the cafe increased, she decided to close it, but not before opening another outlet in Ren Ci Community Hospital in Novena in March 2012.
That cafe has been doing well and the company has been on the upswing, thanks in part to a successful jobhub partnership with the North East Community Development Council last year, which helped to place 170 people in jobs in six months.
Ms Lim says employers have also become more receptive towards hiring older workers in recent times.
To date, Silver Spring has placed more than 200 people.
It made a modest profit of $20,000 last year, after breaking even in 2012, and does not get external funding.
The company has 14 employees, up from seven at first. They are employed in the cafe, at the job hub and in the organisation’s office.
“An entrepreneur must keep looking at his business model to see if he can afford the various components required in the business,” Ms Lim says.
Instead of resting on her laurels, she says: “I knew I had to prepare to let go, to let the company grow. I cannot cling to it or it will die with me. If you want to leave a legacy, what do you do?”
She thought of a succession plan and shared her company’s vision with Mr David Wee, 55, a former managing director of an outplacement company.
He says: “I found the work of Silver Spring very meaningful. It has to do with helping people, especially those at the lowest point of their careers. I decided that this was something I wanted to do.”
He came onboard as Silver Spring’s managing director earlier this month. He is married to a housewife and they have two children aged 19 and 15.
Says Ms Lim: “I believe in doing good and in doing well. With David around, I hope we can continue to do well and do even more good.”
Together, their aim is to make Silver Spring “the agency of choice” for jobseekers aged 40 and above and champion the employment needs of that age group.
Says Ms Lim: “I want age bias to go. I want to help people age gracefully. I want to stay energetic and build more success stories, so that in time, these people who we help will be our advocates.”
PROJECT OVERTURNED CLOSET
All teenager Tricia Young wanted to do was to clear out her wardrobe – but that led to her becoming a social entrepreneur.
The 19-year-old student wanted to sell her old clothes in May last year.
As she mulled over the idea, however, her grandfather’s first death anniversary and the death of American teenager Zach Sobiech, both due to cancer, came to mind and she was inspired to give back.
Sobiech, who was 18 when he died, had written a farewell song, Clouds, before he died of osteosarcoma, a bone tumour.
When he posted the clip on YouTube in December 2012, it became an online sensation and has had more than four million views since.
The proceeds from the song and Sobiech’s other music are reportedly going to the Zach Sobiech Osteosarcoma Fund to support research treatment for this form of childhood cancer.
“I decided that the proceeds from the sale of my preloved clothes ought not to be for myself, but for charity,” she says.
She started an Instagram account as well as a Tumblr account and publicised that all proceeds from the sale of her preloved clothing would go to the Children’s Cancer Foundation.
Her 40 pieces of clothing fetched $450, which she donated via online donation portal SGGives (www. sggives.org).
“It felt good giving back to society. But the question then was, ‘What now?’ I did not want the giving to stop,” she says.
She started thinking of other ways in which she could use fabric to further her cause, in line with her online shop name, Project Overturned Closet (over turneddcloset.tumblr.com).
In November, as she was rummaging through her closet for ideas, she chanced upon a tie-dye tank top that a friend had given to her.
“I asked my friend where she had bought it. When she told me she had tie-dyed the top herself, I asked her to teach me how to do it,” she says.
Within three weeks, Ms Young started sourcing for basic tops and dyed them herself.
She launched her first tie-dye collection of about 10 designs, with the sale proceeds going to the Children’s Cancer Foundation. The tops were priced between $18 and $25.
She expected about 20 orders, but was surprised to receive 40. She personally delivered the goods to the buyers.
“I try to meet up with buyers rather than just post the parcels, as I believe in my cause and I want to spread the word about what I do,” she says.
“It’s not just about selling a shirt. It also allows us to exchange stories about people in our lives who have battled cancer.” Her grandfather had died of stomach cancer.
She donated about $700 to the charity with the first round of sales and covered her cost of $250 with her salary from a part-time job.
Last month, she did a second launch. She received 50 orders and gave the proceeds of close to $1,000 to the children’s cancer charity again. This time, she used $250 in savings to cover her cost of materials.
“I’m so encouraged to see people buying my products, knowing clearly the cause they are supporting in doing so,” she says.
Her social enterprise has been highlighted by ad.vo.ca.se, a social enterprise awareness campaign led by a group of Nanyang Technological University communications students.
Taiwanese-American singer Nate Tao, 25, an American Idol finalist, has been spotted wearing one of her designs.
Her retiree dad and private banker mum are “okay” about her business, she says. She has a twin sister and two older siblings, aged 30 and 26.
She is preparing for her third launch later this month and hopes to recover her costs from the sale.
While she will leave for Australia in July to study human resource in Brisbane, she says she will continue with her social enterprise.
“I think I’ve only just begun,” she says.
“I wasn’t looking to be a social entrepreneur. For me, this was just about giving back to society.”
Breakthrough Missions was running 10 social enterprises even before the term gained traction here.
Set up in 1983 by former addicts, the Christian drug-rehabilitation halfway house at Yew Siang Road in Pasir Panjang started with removal, garden and landscaping, as well as copper tooling and wood crafting services.
Says its deputy director Freddy Wee, 60: “A halfway house needs to offer work to the recovering addicts. We started these services as a form of employment. Whether you call it a social enterprise or not, there needs to be work.”
As the years went by, the centre expanded its services to include carwash and polishing; oil painting and banners; book binding and embossing; framing; foot reflexology; and selling handmade honey baked ham. It now runs 12 social enterprises.
All the income goes to the halfway house.
Mr Wee considers its first “official” social enterprise to be a bookshop it set up in 2005 in People’s Park Centre. This was started after the then Ministry of Community Development, Youth and Sports encouraged Breakthrough Missions to develop a social enterprise.
It started the bookshop, called Breakthrough Art Craft, Gifts, Bookroom, with a grant of $70,000. The store sold Bibles, Christian reading materials and gifts.
“We thought the location was ideal. The shop faced the then Subordinate Courts, a visual reminder to our recovering addicts of their past,” says Mr Wee.
However, the bookshop did not do well. In 2011, Breakthrough Missions decided to close it and move some of the items to Breakthrough Cafe, located a few units away. The eatery, which has been in business since 2007, is another of its social ventures.
Mr Wee says the halfway house decided to open a cafe as it supplied “people’s daily needs”.
He adds: “People do not buy gifts daily, but people need to eat. With that in mind, we hoped the cafe would be sustainable.”
Breakthrough Missions consulted its committee members, some of whom are in the food and beverage industry. They helped to put the halfway house in touch with food suppliers, although many of the items sold at the cafe, including local fare such as curry chicken, pig’s trotters, fish head curry and desserts, are made by the recovering addicts.
The cafe, which makes “some profit”, did well and expanded to occupy an adjacent unit in People’s Park Centre in 2010.
Says Mr Wee, a former drug abuser who has been drug-free since 1979: “We are not entrepreneurs. We are in the mission field trying to minister to lives.”
The latest social enterprise that the halfway house started is a teak and art business in 2011.
Its contacts hooked it up with a teak wood supplier in Indonesia and it converted a part of its halfway house into a furniture showroom. The items are priced from $200 for a chair to $1,500 for a dining table. The showroom also sells decorative items.
The business is “moving at a slow pace”, says Mr Wee, who is married to a part-time kindergarten teacher and has two children aged 29 and 18.
“We are not like big furniture companies that can advertise weekly. We can’t depend on walk-in customers either,” says Mr Wee. “We need someone with a marketing plan to move the furniture. We need a team to help us generate sales.”
In general, most of its social enterprises move “quite slowly”, he says.
The cafe and the removal and garden and landscaping services are the best performers.
Mr Wee is comforted by the fact that Breakthrough Missions is not paying rental for most of its services, which are housed within its premises.
The takings from the 12 social enterprises make up 45 per cent of its annual income, while the rest comes from donations.
At any one time, the centre has between 60 and 80 recovering drug addicts on its programmes and the halfway house has helped thousands since it was set up.
There are no plans to take on new social ventures and existing ones will be monitored closely, says Mr Wee.
“As long as people ask for a certain service, we will provide it. The people at our home are trained and certified and we are providing quality. We will serve with pride and to the best of our abilities.”
Source: The Straits Times