No matter what’s going on with political division in our country, companies always seek profitability. For instance, we realize that some segments of our population care very much about climate change. Others don’t consider it a top priority. Still, business leaders should lean into what makes sense for their companies and profitability. One approach that more and more companies care about is social entrepreneurship because it appeals to a large part of the population that cares about social impact.
Understanding Social Entrepreneurship
Social entrepreneurship, or impact entrepreneurship, is a way to make a profit but also considers the impact on society. My team and I have grown several social enterprise brands, including Funds2Orgs, which is for shoe drive fundraising, and Sneakers4Good. That brand helps running retailers, gyms, and sports clubs recycle sneakers since those groups tend to prioritize the environment. Both brands are for-profit companies, but we also pay attention to social impact. In short, social entrepreneurs seek to make positive social change.
Why Make the Transition?
So, why should business leaders explore impact entrepreneurship? There are a variety of reasons that social enterprises can improve sales and profitability, among other things. Some of the top reasons are as follows:
- Purpose with Profit: Entrepreneurs, like any business leader, want to make a profit. A social enterprise allows leaders to combine their desire to make a profit with a social purpose, which offers entrepreneurs a sense of fulfillment.
- Team Morale: Despite what it may look like, people care about the well-being of others. Becoming a social enterprise company improves morale because teams realize they’re doing something that positively impacts society.
- Creating Impact: Social entrepreneurship allows business owners and their companies to address social challenges. For example, our brands focus on the environment and also giving a hand-up to global micro-entrepreneurs.
Steps to Transition from Corporate to Social Entrepreneurship
1. Identify Your Social Passion
If impact entrepreneurship is something you’d like to explore, a place to start is one that fits your interests. If someone asked you what your social interest is, what would be your reply? Education, the environment, healthcare, etc.” Focus on your social purpose.
2. Conduct Thorough Research
Next is to research the social issues you want to address. What are the problems? What are the current solutions and where are the gaps? What could you do to fill that gap and innovate new solutions. Make it a point to also network with other social entrepreneurs.
3. Develop a Sustainable Social Enterprise Business Model
After the research, and provided you’re still committed, it’s time to build. A successful social enterprise requires a sustainable business model. Those elements include the value proposition, target customers, revenue, and impact metrics.
4. Leverage Your Business Network
Like any other business, it’s vital to leverage and expand your network. It’s also critical to keep connecting. One great association to consider is the Global Impact Investing Network (GIIN). They’re dedicated to impact, scale, and effectiveness.
5. Start Small and Scale Gradually
As with any business, it’s essential to pilot a project. Test your approach on a smaller scale and then refine the strategy based on the results. When you’ve tested and found that you have a model to take to the market, strike while the iron’s hot.
6. Measure and Communicate Impact and Business Metrics
Finally, once you move with the social enterprise, it’s essential that you show effectiveness. You can do it regarding profitability. However, it’s also important to measure social impact. The School for Social Entrepreneurs has excellent resources for business and social impact leaders.
Social Enterprise Challenges
Any start-up or business has its challenges. For instance, investment capital is always an issue, as is finding the right business model, products or services, and talent. Still, to overcome these challenges, it’s imperative for entrepreneurs to do the homework to create a successful business. Social entrepreneurship has several positives that make its challenges more rewarding than profitability.
In my experience, other business leaders get curious when you mention that you own a social enterprise. Inevitably, there are questions about what that means. However, the best thing, in my view, of being a social entrepreneur comes in the knowledge of the impact we’re making in society. Moreover, our team cares about our work, as do the 4,000 + micro-entrepreneurs we have as our partners worldwide. In sum, the journey has been rewarding.
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