Social Entrepreneurship: Creating a Business that Does Good

  • August 22, 2016
  • Posted by: Marion M. Chamberlain
  • Categories: Mission & Purpose, Social Entrepreneurship
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Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.
Margaret Mead

Book CoverWe’re seeing more and more of a new kind of entrepreneur these days. An entrepreneur who wants to make a difference through her business profits. This type of entrepreneur typically is consumed by a burning desire that has her asking these questions:

  • How am I going to have an impact in this lifetime?
    • I want to make a difference in this world.
    • I want to do something awesome with my life.
  • And most importantly: How do I go about it?

He then goes off to figure out how to make that dream happen and comes across a term coined social entrepreneur and realizes that this is the way to combine both the best of the corporate and philanthropic worlds.

What is a Social Entrepreneur?

  • An individual who has innovative solutions to society’s most pressing social problems.
  • Someone who is willing to tackle major social, environmental and economic issues and offer new ideas for wide-scale change.
  • A bit of a rebel and status quo challenger who doesn’t leave societal needs to the government or typical large business sectors.

You might then be asking – why does someone want to become a social entrepreneur?

  • You can create positive social change where you see a pressing need.
  • You can use your profits to help people.
  • You think that the traditional business world hasn’t stepped up properly, and you want to contribute to changing the human condition.
  • You feel you have solutions to address inequity issues.
  • You believe that there will be a new momentum and support for your endeavor.

All this is commendable, but the question that then needs to be answered is: “What’s your why for starting your social entrepreneurship venture?” This will be the driving force for you when trying to enlist others and keep you going even when there are obstacles. Without a clear “why”, you won’t inspire yourself or others. Let me be clear that saving the world isn’t the best why. Your commitment to bring about change through your venture needs to be positively focused and full of possibility-thinking that is relevant to you.  You’re not here to fix wrongs, make yourself feel better or to lift up others to appear as a hero/heroine. That will only cause burnout. You’ll only rally the troops with positive activism. (Read more on this blog post.)

Let’s look at some key steps for creating your social venture. I recommend that you:

  1. Design and develop your organization’s mission and vision
  2. Start up as a social enterprise
  3. Select your board and collaborators
  4. Pursue funding opportunities
  5. Implement your business plan and measure performance
  6. Garner media attention

Here are some more details on these steps:

Step 1: Develop Your Vision + Mission. They need to be:

  • Inspiring words to clearly and concisely convey the direction of the organization.
  • A mission statement defines the reason for existing.
  • A vision statement shows where the organization is heading.

Your Vision Statement

  • Defines the optimal desired future.
  • Provides guidance and is focused on goals in five, ten, or more years.
  • Helps team members understand how they contribute towards long-term goals.

Your Mission Statement

  • Answers three questions about why your organization exists:
    1. WHAT it does.
    2. WHO it does it for.
    3. HOW it does what it does.

Step 2: Start up as a social enterprise.

The in’s & out’s of creating your legal structure are a bit complex. I’m listing various options you have. I’d recommend that you research the individual terms and confer with both an accountant and lawyer on this area. I’m neither and don’t want to sway you in a certain direction since your individual mission needs to be addressed professionally.

Legal structure options are:

  • Social Enterprise Legal Form
    • Low-profit Limited Liability Company (L3C)
    • Benefit Corporation
    • Flexible Purpose Corporation
  • Standalone Not-for-Profit Organization
    • 501(c)(3) – Public Charity (or a Private Foundation)
    • 501(c)(4) – Social Welfare Organization
  • Multiple Entity Hybrid Social Enterprise
    • Not-for-profit entity with a for-profit subsidiary
    • Not-for-profit entity with a related (or sister) for-profit entity

Step 3: Select your key supporters:

    • Board of Directors. These should be individuals who have skills that your organization needs and who are actively committed to your organization’s cause and growth.
    • Collaborators . These are your employees, vendors and groups who share your vision and mission. They can help you advance your cause.

Step 4: Pursue funding opportunities.

Some of the options you might look at are:

  • Investors
  • Grants
  • Foundations

Again, this will be based upon your specific business needs and structure.

Step 5: Time to launch your venture.

And there’s no way getting around it, but you have to create and implement your business plan. The sections to include are:

  1. Executive Summary
  2. Market Opportunity
  3. Business Model
  4. Operations
  5. Management and
  6. Stakeholders
  7. Social Outcomes
  8. Financials

Step 6: Promote and champion your business and cause by:

  • Getting clear on your message and brand.
  • Developing a relationship with your stakeholders.
  • Pursuing media relationships.
  • Creating brand champions in your direct community and social media.

I’d also recommend that you take a look at these additional resources to get yourself educated on the trends and funding opportunities for social entrepreneurship ventures.

Becoming a social entrepreneur is a bit more complex than your traditional business entrepreneur. That’s why I firmly believe that you need to spend time doing your research and understanding the requirements to ensure your success. I see a lot of wonderful people starting a social venture without having done the upfront work, are struggling financially and don’t have the proper systems in place. A firm foundation through proper planning and action-taking will be all the difference for you wanting to make a difference in the world.

Here’s to you making a difference through your business dollars!

[box color=”red” title=””]Need a bit of business strategy guidance with your social enterprise? I work with organizations, both emerging and established, that want to or are making a difference in the world. Find out more here.[/box]

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