Good intentions alone not enough for social enterprises

Good intentions alone not enough for social enterprises
Koh Seng Choon (front, centre), founder of Dignity Kitchen, a hawker training school at Kaki Bukit View for the disabled and disadvantaged.

SINGAPORE - He took his savings, money from a re-mortgaged property and his late mother's inheritance.

And he risked losing it all running his non-profit business.

Dignity Kitchen founder Koh Seng Choon pumped in $1 million to run his hawker training school for the disabled and disadvantaged. It posted just over $3,000 profit last year.

Mr Koh knows Mr Lionel Lye, whom The New Paper profiled on June 23. Mr Lye's team lost $1 million dollars running the social enterprise Kampung@Simpang Bedok.

Touted as Singapore's first private-run hawker centre, it folded last October, after opening in 2012.

Both men said they learned expensive lessons - like how doing good meant making bad mistakes.

Mr Koh, 55, said he made zero sales when trainees wore badges stating disabilities like "I am deaf" or "I am blind".

He had thought it would help customers understand why service would be slower, but people ended up avoiding the staff instead. Business picked up after they stopped wearing the badges.

Mr Koh, an engineer by training, said: "That's why many social enterprises wind up. I don't encourage everyone to do this. Don't go in blindly."

In 2009, about a third of the 73 social enterprises in a funding scheme failed.

Mr Koh hit on the concept after a polio victim, who wanted to be a chef, approached him.

Dignity Kitchen, which was conceived in 2006 and opened in 2010, initially lost about $1,000 a day.

He said: "People asked if I ever wanted to give up. My answer was yes, every single day - but I couldn't."

Too many people were depending on him.

Western food chain Eighteen Chefs' founder Benny Se Teo said: "It's normal to lose $15,000 a month. Not everybody can handle it." Mr Se Teo, a former drug addict, was broke, but he now offers franchises for $50,000. His is a rare success story.

There are about 400 social enterprises here, including 180 members under the Social Enterprise Association, estimated its executive director Alfie Othman.

He said: "The bulk of social enterprises here tend to hire a percentage of their manpower from the marginalised sector or offer products and services that address a market gap.

"Their success depends much on market forces, quality of products and services, and a good team."

Good intentions alone do not make for good business.

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