Defining Social Entrepreneurship
“So, What is a Social Enterprise?” That is the number one question I get!
The quick answer is a social enterprise is a non-profit or for-profit organization that, through their business model, solves a problem & creates change that positively impacts people, profit and planet.
What does that really mean? Let’s walk through a real example:
A photo printing business operated in such a way that each time someone sent their pictures for print & delivery, 10% of the proceeds were given to diabetes research. The owner was passionate about giving back and chose diabetes as the cause his business could get behind. The problem? Supporting diabetes didn’t really help with customer engagement or retention—there wasn’t a personal connection for clients between printing their photos and supporting diabetes.
The owner decided to bring in a social innovation consultant who explained that although it was great that he was giving a portion of his profit to diabetes research, he didn’t have a social enterprise, instead, he had a socially responsible business. While a socially responsible business model is admirable, in this case, the owner wanted more.
Soul Searching Your Business Model
He began exploring how he could integrate people, profit and planet in a more thoughtful manner in his organization. Through market research, he discovered that 10% of his customers print booklets of pictures for family members with Alzheimer’s disease, in order to jog their memories. The owner was inspired! His product was bringing joy, laughter, and helping families preserve memories of their loved ones. During the same research, he found out that his customers also cared about the environment.
In the end, the owner applied the “one for one” model (made famous by TOMS Shoes) to his photo business and shifted his cause of choice. When customers purchased a special photo album, they would also provide a custom album to someone with Alzheimer’s, so they could remember the good times too. He also swapped out his materials for ethically sourced and recycled paper. These changes resonated with his customers so much that within the first month his sales grew by 30%!
The difference? The owner got to know his customers, took a cause that was meaningful for them and that also made sense for his photo printing business.
Your Business Can Create a Better World
While social enterprise may not be for every entrepreneur, it is a flexible model that can work for most on different scales. By investigating a social enterprise model that takes people, profit, and planet into consideration, entrepreneurs can potentially magnify the benefits to society and their bottom line.
If you’d like advice on planning or growing your social enterprise connect with ATB now!
