Five steps towards social enterprise success
By Clint Coo | Starting any new business is tough, but social enterprise startups face a unique set of challenges compared to their traditional counterparts. It can be a delicate balancing act, but keeping these five tips in mind can help any new social entrepreneur get their startup heading in the right direction.
If it’s not measurable, then it’s not workable
In the same way that traditional businesses review their earnings statements to see how profitable they are, social enterprises should regularly measure their social impact to understand how well they meet their mission statements. For example, an enterprise that provides job training to disadvantaged communities may look at the number of people they train each month along with the average percentage increase in their incomes after one year.
It is understandable for early-stage startups to lack the resources to spend on measuring social impact, but at a minimum, they should have a broad view of the scale of impact that’s created and set goals alongside traditional earnings targets. It’s useful to have this data available when talking to a variety of stakeholders, such as customers, staff, and potential investors.
If the startup has trouble quantifying or describing the social impact they want to manifest, then they should reevaluate or even redesign their social business model.
A sustainable business model requires revenue and profit
If the means for social impact are effectively integrated into the business model, then ‘revenue’ and ‘profit’ are not dirty words but what enables the startup to achieve its ultimate objective of generating impact now and in the future.
Grants can provide a helpful boost, but they are not sustainable sources of revenue in the long run, and can even subsidize lousy product ideas and inefficient business models.
You need to be innovative to be competitive
Social enterprises often operate with higher costs compared to their profit-driven competitors. Higher costs translate to higher retail prices for customers or lower quality products at the same price point relative to competitors. If the social enterprise can provide products and services that are better and more innovative than the competition, then the value proposition is a no-brainer for the customer.
It’s not one story that rules them all
The best selling smartphone, coffee, or sneaker is not necessarily the cheapest, the highest quality, or even the most environmentally or socially sustainable. However, customers choose to purchase products because of the company’s ability to create an emotional connection with a consumer.
Like any other startup, social enterprises need a strong brand identity to stand out in a crowded marketplace. While it may be tempting to build a brand entirely around the social story, the social benefit of a product is rarely the most important factor a potential customer considers when making a purchase. Customers typically prioritize price, quality, innovation, style, and value, so it’s essential for social enterprises to perfect these elements, too.
Find people who are as passionate as you are
While technology startups can lure talent with high salaries from investors and the promise of working on exciting and cutting-edge products, social enterprises generally can’t take the same approach. Instead, they must find individuals who share the passion for the mission, since it’s this dedication that will keep them motivated during challenging times.
While social enterprises differ from traditional companies because of their social missions, in many ways, the keys to success are the same as any other startup. Social entrepreneurs need to balance the business and social needs of their enterprises to further their visions for a better world.
About the Author
Clint Coo is the Business Development Manager of Jasberry, a Thai social enterprise that partners with over 2,500 Thai rice farmers to grow organic Jasberry® rice, a nutritious variety of non-GMO purple rice. By providing training and services to reduce planting costs, increase yields, and paying farmers up to 200% more than commodity rates, Jasberry enables farmers to escape poverty by earning 14 times more than average farmers. Jasberry sells its organic food products internationally, including in the USA and several markets in Asia.