Is Social Entrepreneurism Right For Your Business?
Social entrepreneurism is used by for profit entrepreneurs and also not for profit startups. It’s popular and a considerable number of ‘for profit’ companies are also incorporating social entrepreneurship into their business strategies as a way of giving back to society.
However, social entrepreneurship isn’t clearly defined and thus it’s meaning mis-interpreted, and misused particularly in marketing initiatives.
Let’s look at it in more detail and examine the advantages or disadvantages of launching a social enterprise.
What Is A Social Enterprise?
A basic definition of social entrepreneurship is an organization which operates in order to identify, create and implement solutions to social problems. Of course, the wide-ranging nature of social problems means that social enterprises can be focused on hundreds of areas.
Whether it focuses on poverty, homelessness, health or the environment, a social enterprise typically aims to promote a cause, alleviate suffering and/or resolve serious problems which are affecting communities, countries or the population as a whole.
Why It’s Popular
Social entrepreneurship has really taken off in recent years and companies which align themselves with positive values appeal to customers. Those among us who are more discerning about where we chose to shop and what we buy, will chose the ‘feel good’ that comes with knowing our purchase can indirectly improve the conditions of those less fortunate.
If you’re a purchaser who often feels guilty for buying for yourself, then knowing your purchase is not solely about you is all you need for guilt free pleasure. Plus the feel good experience, motivates you to share it with friends, family and followers in social media. It’s a reason to buy from the same company, time and time again, and every business wants a repeat customer.
Should It Be Where I Focus My Business?
Labelling yourself a social entrepreneur can be a savvy business decision. However it’s also a responsibility that you must fully commit to, as it requires a bonafide desire to make a difference.
Commit To It
Dedicating resources and some of your business profit to social causes is not for everyone. A halfhearted approach may backfire too if your business fails to follow through in any way.
We know how fast a business can be destroyed through carelessness. Who doesn’t remember Ratner’s fall from grace and it’s reputation irreparable.
Consumers are becoming accustomed to a whole host of organizations identifying as social enterprises and the media spotlight means self-proclaimed social enterprises do need to back-up their claims with clear goals, actions, and results.
Positives Of A Social Enterprise
Becoming a social entrepreneur can have many benefits and it can be extremely rewarding.
By identifying a worthy cause which needs exposure so it receives the support to make a difference to people’s lives, your business can help to alleviate a genuine social, culture or environmental problem.
Regardless of the size of your organization, knowing you’re helping to resolve a harmful issue can be rewarding on a personal and professional level.
Free PR, Discounted Marketing & Advertising
Perhaps more cynically, incorporate a social enterprise objective into your organization can garner positive PR.
Aligning yourself with a worthwhile cause can lead to free or reduced-cost advertising, and it can certainly help to gain support from similarly-minded individuals.
In some cases, social enterprises can benefit from tax breaks too so there could be a financial incentive to take a professional interest in social issues.
If your organization operates as a non-profit or eco-friendly enterprise, there may be certain grants you’re entitled too as well, not to mention PR-friendly awards you could be eligible for.
With so many benefits surrounding social entrepreneurship, declaring your organization a social enterprise may seem like a no-brainer. However, there are some disadvantages which can arise from social entrepreneurship.
As well as meeting your legal obligations as a company director or owner, you may need to fulfil additional requirements if you’re operating as a social enterprise. There are often strict guidelines which must be adhered to if you claim to operate for the benefit of cause and you’ll be expected to back up your claims with evidence.
Are There Conflicts Of Interest Between A Social Enterprise Versus A For Profit Business?
Not necessarily. A non-profit organization may run as a social enterprise but this doesn’t prevent for-profit businesses from incorporating social entrepreneurship into their for-profit business strategy.
Inevitably, a percentage of your revenue will need to go towards a particular cause if you claim to be supporting it but this doesn’t prevent your company from continuing to make a profit as well.
As the number of social entrepreneurs continues to grow, the definition of social entrepreneurism continues to evolve. Whilst there are a number of considerations to take into account before declaring yourself a social entrepreneur, adding a social enterprise element to your business or launching or non-profit organization can be beneficial for you, your business and your chosen cause.