Others want to work for themselves. Some people want to be their boss. Some people see an opportunity they cannot resist.
Entrepreneurial spirit can be ignited by the desire to create positive change through business.
It’s called “social enterprise,” and is a business approach that’s becoming more popular as globalization takes sustainability and international development on a global stage. This is also leading people to ask, “What can i do for the planet today?”
Social entrepreneurship is the creation of mission-based businesses that devote some or all their profits to furthering a particular cause, giving their customers a reason behind each purchase.
What is social enterprise?
It is social entrepreneurship when you create a company to support a charitable cause. It’s also known as “altruistic entrepreneurial,” and it can include nonprofits like Doctors Without Borders, which rely almost entirely on grants and donations, and for-profit companies like Tesla, which turn a profit through their clean energy products.
Social entrepreneurship includes brick-and-mortar businesses and ideas for online businesses. TOMS is one example of a company that does both.
Social entrepreneurs are innovators who start businesses and organizations with a commitment to giving back.
What is a social enterprise (SME)?
Social enterprises are businesses where profits and bottom lines are not the only metrics that determine success. Social enterprises measure their success using a Triple Bottom Line.
- People. Your ability to improve lives and create a sustainable community.
- The Planet. How you can contribute to a sustainable world or reduce your carbon footprint (CO2 emissions).
- Profit Social enterprises, like traditional businesses, need to earn money to survive, pay their workers, and grow.
What types of social enterprises are there?
Social entrepreneurship can take many forms.
- Nonprofit: An entity exempt from taxation that is not a business and invests surplus funds into the mission.
- Cooperative. Cooperative: A business that is run by and for the members. Co-ops include credit unions and local grocery stores. REI is another example of a cooperative.
- Social purpose business. These businesses are built on a foundation of social purpose.
- Social firm. Social firms hire those who are unemployed in the community. FareStart provides healthy meals and employs youth at risk.
- Business that is socially responsible Companies who support social missions in their daily business operations.
- For profit. This is the most vague category. These businesses make money first but also donate to charities, raise awareness, or support other causes. Warby Park is an example of a program that encourages people to Buy a pair and give a couple.
Do social entrepreneurs make money?
- It depends. In many cases, social entrepreneurs do make money. These social entrepreneurs are living proof that it is possible to be a successful business owner while also doing good. In some cases, entrepreneurs choose not to keep a profit.
- It takes work to measure profits in social entrepreneurship. (Did you make any money or none at all? It’s easy to calculate profit (did you make money or not? ), but it is harder to communicate your impact to others.
- Social entrepreneurs use a business model where their mission is at the heart of their company. They are then held accountable by their customers and stakeholders for their impact.
Benefits of establishing a social enterprise
- Social responsibility is becoming a priority for consumers and businesses today, as climate change, global development, and supply chain ethics are more and more prominent topics of discussion on the international stage.
- In a CSR study by Cone Communication, 87% of respondents said that they would purchase a product if the company supported a cause they are passionate about. This shows a change in the consumer’s awareness of the impact their purchases have on them. Consumers are also holding themselves to higher standards.
- Social enterprises are able to succeed despite the fact that they must, by definition, dedicate a part of their profits towards the impact they wish to have.
- Branding with a mission. An organization story that has a purpose at its heart makes customers feel good about their purchases.
- Partnership Opportunities Because of their mission-based motivations, a social enterprise can partner with nonprofits and for-profits to leverage audiences and reputations in order to create a market presence. Social enterprises often receive discounts and “in kind” resources.
- Coverage in the press. Publications and blogs are always interested in social innovation, changemakers, and the impact they have. This helps social enterprises to evangelize and share their efforts.
- Social enterprises are eligible for grants and “impact investment” opportunities, which focus on job creation, sustainability, and other factors. They can also receive special certifications, such as the Benefit Corporation status, that help them establish credibility and commitment to transparency and attract customers and employees.