Doing good while doing business
Social enterprise is a fast-growing sector around the world. More and more people want to do business while doing good, but setting up a social enterprise can be a daunting and challenging experience. Being a “social” entrepreneur adds more complexity to the job of launching and running a business, because it means having to fulfil both social and financial objectives. To successfully use business as a powerful force for change, here are some best practices to consider:
1. Choose a social cause that you are passionate about. Make sure the issue you want to solve means something to you, because having your beliefs shaken or your credibility questioned is not what you are looking for. Be clear on the cause you want to support, who you are seeking to help and what is distinctive about your approach.
2. Focus on the commercial side of social enterprises. Provide a service or product that is good and commercially viable. Ensure the quality of your product or service if you want to ensure sustainability. The better the quality, the more the sales, thus the more chances to accomplish your social mission. The secret is to align the social cause with the financial performance.
3. Test your ideas and product viability before choosing a legal framework for your company. Your business models might be adjusted based on early customer feedback (only customers know exactly what they want and what they are willing to pay for), so you don’t want to find yourself stuck with a licence that doesn’t serve your objectives.
4. Develop a (short draft) business plan early on: it is hard work and might not be required yet, but it will help you reflect on what’s needed to make your company sustainable and impactful. Your business plan should answer all the big questions facing your new venture such as vision, mission, potential revenues, likely costs, competitors and partners, go-to-market strategies, social impact measurement plan and more.
5. Ask a lawyer. Registering your business, writing contracts and shareholder agreements can be a real hurdle, time-consuming and very painful, especially if you are not completely aware of all the rules. There are some law firms offering pro bono legal support.
6. Don’t do it all on your own. Get support from experts in areas you don’t master, solicit input from your team members, cultivate relationships within your community, ask for help. You will be surprised to find lots of people who are willing to help: don’t hesitate to ask.
7. Rely on personal funding as much as possible and only seek funding when necessary. Investing your own money and bootstrapping force your organisation to be more innovative and efficient from the very beginning. In case you need external resources, make sure you know your investor and their expectations and if they buy into the social enterprise model: making money and doing good.
8. Be prepared for all sort of feedback. Don’t let negative opinions get you down but value people that take the time to give you constructive feedback: more importantly, take it on board.
9. Don’t stop learning. Invest time on finding out new information, develop new skills and look at things in new ways. Visit other organisations, speak to people who have built businesses and you will find that most of them will be open to share their experiences. Attend lectures and training that offer help to kick off or boost your business.
10. Don’t be afraid of challenge or failure. Many successful entrepreneurs have launched products that failed, learnt from it, changed their products and launched them again and again before finding the right formula and succeeding: make sure you fail fast and often.
Medea Nocentini is the founder and chief executive of social enterprise C3 – Consult and Coach for a Cause, and vice-president of corporate development at OSN
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Published: October 5, 2014 04:00 AM