Toms Shoes. Grameen Bank. Ashoka.
Social enterprises are exploding all over the world and are changing the way we do business.
Don’t make the mistake of thinking that social entrepreneurship is a fad that will just fizzle out. It’s how companies should operate and it should and will become a norm. The world is moving away from the traditional ‘for-profit’ companies in favour of the ‘for-purpose’ model.
Here are three reasons why you should look at incorporating social entrepreneurship principles in your business.
Reason 1: Social entrepreneurship keeps your business competitive
Business is a cut-throat world. If your company isn’t innovating, then it is dying.
With so many options to choose from, customers are now a lot more discerning about who they do business with. It’s not enough to just have a great product or service anymore. You need to connect with your customers at a deeper level if you want to become the top dog in your field.
And while that all begins with creating the best product or service in your market, one of the best ways you can connect with your customers is by integrating a social mission into your core business. If your brand doesn’t have a clear social mission that your target market can get behind, they might consider doing business with someone else who does.
Find ways for your company to make a positive impact on local communities whilst remaining aligned with your brand’s core product or service.
Take note: Your social mission needs to be authentic to be truly effective. Your market can smell half-hearted efforts a mile away.
Understand what your customers are most passionate about. If your social mission aligns and supports what they believe in, not only will you have increased sales through better brand perception, but you will have transformed them into highly dedicated advocates for your business.
We highly recommend you watch Simon Sinek’s “How Great Leaders Inspire Action” to gain more insight into this.
Reason 2: Social entrepreneurship combines the best of charities and for-profits
A social enterprise allows you to combine the impacts of a charity while keeping the income of for-profit enterprises, with distinct advantages from each end of the spectrum.
The edge that social enterprises have over charities is that they are much more sustainable over the long term. They don’t have to depend on the generosity of their donor networks to stay afloat, which can fluctuate wildly depending on several factors outside their control.
On the other hand, social enterprises need to create a competitive product or service to compete on the market, just like any other business.
Here’s where things get interesting: a social mission is an excellent way to stand out from your for-profit competitors. You can even charge a premium for your offering if you can market this aspect well. People are willing to pay more to support brands with purpose.
This middle-ground between sustainability and marketability is what gives social enterprises their leg-up over other business models.
Reason 3: Social entrepreneurship creates a better economic environment
More than just impactful social change, for-purpose enterprises also provide value to stimulating local economies, helping your business in the long run.
When a social enterprise is responsive to the biggest needs of local communities, this empowers beneficiaries to work on more productive and profitable uses of their time and effort.
A microfinancing institution, for instance, will make funding available for borrowers who are, for one reason or another, unable to secure said funding from large banks or hedge funds. If done well, this will create a healthier local business community, make a more vibrant job market, and likely increase property values of any given area–this is good news for everyone in that community.
When you can do this effectively, the goodwill you generate allows you to build relationships and networks in these communities that your company can benefit from. When the local community thrives, so does your enterprise.
Quite simply, it’s good business to be a business for good.
Bonus: Social entrepreneurship creates a sense of fulfilment
When you incorporate a social mission into your business, it becomes more than just a vehicle for generating wealth. More than just being driven by the margins, you are now motivated to actually make a difference in the world.
And this doesn’t just apply to you, but for your employees as well. If they can see the value that they create in the lives of others, they’ll be much more inspired to work than when they were motivated by just a paycheck.