In lots of ways our world has never been more connected than it is now and yet it also feels as though we are on the edge of massive change.
Whether you are surfing the net or on social media you would have to have been living under a rock to have not been aware of the growing tide of social and environmental issues, more and more we are all looking for ways to make a positive impact in our everyday lives and in our businesses.
Our drive to commit to social good influences everything from our careers to what we put in our shopping trolley and the growing number of ethical brands has given us a real opportunity to make a difference.
These brands and companies, or social businesses, give us the opportunity to support our favourite causes by using our purchasing power.
So what is a social business? The Social Business Alliance defines it as: “Organizations that address a basic unmet need or solve a social problem through a market-driven approach.” A business that works for
social good often strives to find a balance between profit, sustainability and social impact. But while starting a small business to create social change is an awesome and powerful thing to do, it does take hard work to do the good you’ve set out to do.
Here’s a few basics to consider when starting a social entrepreneurship, including finding your focus, researching it, implementing it and how to keep it going—and growing.
Find Your Focus
What is your company mission, it’s values, it’s why? Your cause should resonate with others for sure, but most importantly, it should resonate with you. To keep focused on your goals and stay motivated, it’s important to find a cause that you’re passionate about. You don’t have to look far to find inspiration—often the best business ideas come from looking at an everyday experience and thinking, “How can I make this better?”
Pinpoint the Problem
Instead of inventing some magical product or service that you feel is going to revolutionise the world, study the experience you want to improve. Really think about every detail—pinpoint what about it you can fix/make better, then brainstorm the idea even further. How can you make it better for yourself and people like you? How can you take it a step farther and help other communities around you?
Having a clear purpose is the building block of all successful social enterprises and will give your passion a direction.
Start Small, But Think Big
Your social business doesn’t need to be all things to all people to make a positive impact. Just tackling one thing, like sustainability, is significant. But being focused doesn’t mean you can’t think of the bigger picture. A person who wants to help the environment by reducing waste and believes in empowering others is a guaranteed loyal customer. People will feel good when supporting social enterprises that allow them to do all the above.
Being clear on what motivates you will help you structure your business and better help your community in the long run.
Research
Study the concept you’re tackling and learn the ins and outs of the industry you’re diving into. Whatever your social or environmental issue is, and however you want to solve it, research as much as you can to come up with the most effective solutions. If you’re looking to reduce plastic waste in the oceans by manufacturing reusable water bottles, look into how much waste you’d be reducing by putting your product out there. Get the numbers, understand the process and calculate your impact.
Brainstorming and Problem-Solving
During the brainstorming process, be prepared to troubleshoot and troubleshoot often. Always consider all possible angles about your product or service and how it can be
Basically, think about what consumers are looking for in a better solution and what else, apart from positive social impact, would concern them? Is it sustainability, aesthetics, convenience, affordability or all of the above? Market research is key. It’s important for social entrepreneurs to understand the problem they’re facing and the solutions already in place. It’s equally important that they understand their target audience.
Non-Profit or For-Profit?
Is your organization non-profit or for-profit? There are pros and cons to each but it’s important to decide which better suits your business and its goals. This determines the structure of your team, legal business, marketing strategy and more.
- Non-profit allows social businesses to accept grants, offer tax deductions to donors and receive tax-exempt status.
- For-profit social businesses, on the other hand, can accept equity investments and have no limits on revenue generation. However, they do have a limited ability to receive grants and can’t offer tax deductions to donors.
Put more simply: Both make money, but for-profits retain profit and non-profits put all profit back into maintaining the business. Traditionally, most social entrepreneurs opt for non-profit status.
Funding
Many grassroots organizations have humble beginnings and that’s OK! Chances are there are local businesses and events (like #GivingTuesday) you can get involved with to begin building professional relationships. A strong social media marketing campaign is your best friend from the start, especially when it works hand in hand with crowdfunding.
Crowdfunding
is a popular and well-known method of funding a social entrepreneurship. There are several websites and approaches to crowdfunding, but the gist remains the same: Individuals or organizations invest or donate to projects, often in return for a potential profit or reward. Crowdfunding is a great option for supporting a social business since social media is the main platform for sharing information about social causes.
Balancing the Books
Starting a social enterprise means finding a balance between philanthropy and business management. When you’re a small business relying heavily on outside funding and donations with a focus on giving back to the community, it’s especially important to stay on top of your finances.
Using a cloud based accounting software such as Xero will give you real time financial information and that means you spend less time “doing the books” and more time growing your social business.
