Updated: Jan 29, 2020
Some people start businesses to improve the quality of their life; to work for themselves; or to explore an opportunity they can't resist. But today, the many creatives and visionaries have felt the entrepreneurial spark to use business as a vehicle to create positive change.
Shared value is created when we solve social problems using business models. This is called "social entreprenuership", and it's an approach to business that's gaining popularity as globalization sparks conversations about sustainability, development, and impact. It's also leading more people to ask themselves, "What can I do for the world today?"
What is Social Entrepreneurship?
Social Entrepreneurship blends the brains of a business with the heart of a non-profit, providing a sustainable model to create positive social change. Social entrepreneurship involves starting a purpose-centered enterprise dedicated to solving a problem or furthering a cause - giving their patrons a purpose behind every purchase. Social entrepreneurs are innovators, creatives, and visionaries who start companies that are committed to giving back.
How is Success Measured?
A social enterprise measures success in metrics beyond dollars and cents. They typically measure success based on a double bottom line: :
Purpose: Your business's ability to create social change, improve lives, and support the causes or communities you care about, in sustainable ways.
Profit: Your business's ability to serve your customers, make money in order to sustain themselves, pay workers, and grow as an enterprise.
Types of "Social Entrepreneurship":
Social entrepreneurship is still an emerging field, and there have been many organizational structures that are recognized as social enterprises:
Non-Profit: a tax-exempt, non-business entity that invests excess funds back into the mission.
Co-Operative: a business organized by and for its members. i.e.credit unions and grocery stores, REI.
Social Purpose Business: businesses that start on the foundation of addressing a social mission (i.e. TOMS Shoes was created to prevent fatal diseases in children caused by bare feet.)
Social Firm: employs those in the community who need jobs. (i.e. FareStart employs at risk youth and serves healthful meals)
Socially Responsible Business: businesses that support social missions as a part of their day-to-day business operations.
For-Profit: profit-first, but donate funds, raise awareness, and support causes. (i.e. Sevenly)
Our Favorite Social Enterprise Model:
Uncommonly Positive focuses on creating sustainable Social Purpose Businesses. We believe this is most powerful model, because it keeps the mission at the center of everything they do, rather than making it an afterthought.
"It's not just saying, "Hey, we have a social mission s an organization, and X percent of our sales go to nonprofit X,Y, and Z.' I think it needs to be deeper and more authentic than that." -Stephan Jacob, co-founder of Cotopaxi
Social enterprises are intended to make money. They're living proof that you can be successful as a business owner and do good at the same time. The businesses that start on the foundation of addressing a social mission.
Social entrepreneurs adopt a business model that puts their mission at the center of their business, and are held accountable to their customers and stakeholders based on the intended impact.
Social Enterprepreneurship Gives You A Competitive Advantage
In a CSR survey by Cone Communications, 87% of consumers said they will purchase a product because a company supports an issue they care about. This reflects a shift in consumer awareness about the impact of their buying decisions. Not only are businesses held to a higher standard, but customers are holding themselves to a higher standard also.
While a portion of their profits are diverted to the impact the enterprise wants to make, they do enjoy several benefits that provide a competitive advantage:
Mission-Based Branding: A company story with a cause at its core makes consumers feel good about every purchase they make from you.
Powerful Partnership: A social enterprise, because of its mission-based motivations, can partner with other non-profit organizations and for-profit companies to leverage existing audiences and established reputations to give you a presence in their market.
Media Coverage: Publications and blogs love to cover social innovation and change makers and their impact, helping social enterprises evangelize their mission and share their impact.
Certifications and Support: Social enterprises can be eligible for grants, 'impact investing' that focus on job creation and sustainability, and special certifications, such as B-Corp, that make it easier to establish credibility, commit to transparency, and attract customers, employees, volunteers, and investors.