Social Entrepreneurship: The Future of Business

Close-up of a diverse group of young people stacking hands in an office DisobeyArt /

Mahatma Gandhi is credited for saying: ‘Be the change you want to see’.

Many of us are good at talking the talk, but we never back up our daily moans and wails with action. It’s easy to complain – and fun, too – but it doesn’t achieve anything. We tend to want others to act first, and then we follow suit. But is that enough to change the world? Hardly.

There is a group out there that is being the change they want to see, using a concoction of the free-enterprise system, innovation and social activism.

These young entrepreneurs are showing the rest of the world that profit isn’t the only driving force behind a business. It can be about so much more.

This is known as social entrepreneurship.

What Is Social Entrepreneurship?

Have you ever heard of activist investing? This consists of an individual or group of shareholders who acquire a large number of shares to exact change within the company that will then lead to other improvements – sometimes for helping your fellow man, sometimes for the planet.

That said, what is the definition of social entrepreneurship?

Social entrepreneurship is somewhat similar to activist investing. This is when you launch a startup or use other business owners to establish, fund and institute remedies to a diverse array of issues, ranging from the cultural to the environmental. Ultimately, the idea of social entrepreneurship can extend to private enterprise with varying sizes, objectives and values.

It is true that this concept dates back 150 years, but it has been popularised by younger generations.

Social Versus ‘Normal’ Entrepreneurship

Becoming a so-called ‘normal’ entrepreneur is hard enough, but what about when you want to be socially aware of your business practices?

While the ideas of social and normal entrepreneurship still utilise the means of the market, their endgames are different. It is correct that both concepts need to churn out a profit to remain viable, but social entrepreneurship looks beyond more than just generating a profit.

Social entrepreneurship measures its success and performance on the positive impact the company makes on society. This is an interesting alternative to merely examining the bottom line. Moreover, experts present the case for concentrating on the positive elements of social returns.

They purport that concentrating on the positive elements of social returns tend to make an enterprise in this realm a crucial and successful alternative to the notion of ‘corporate social responsibility’. This model operates on the premise that once profits are achieved, then the business can begin to focus on what’s best for society. But, then again, an economist will purport that profits do suggest that corporations are doing what society demands.

Ultimately, a social entrepreneur aims to accomplish largescale social change, home in on these goals while generating revenues, innovate to locate a solution to a problem at hand and depend on consumer feedback to adapt – or die.

Types of Social Enterprises

Think you need to establish a utopia to erect social enterprises? Think again! Even in today’s ultra-competitive global economy, social enterprises are thriving better than ever before.

But what exactly constitutes a social corporation? Here are some that you likely wouldn’t think twice about:

  • credit union
  • nongovernmental organisations
  • fair trade entities
  • microfinance outlets
  • community-based outfits.

You have seen at least one of these in your town (credit union), in your nightly surfing of the internet (microfinance) or local coffee shop (coffee shop).

Business Ideas

How do companies do it? How do they remain successful after all these years? While your idea for ready-made peanut butter and jelly sandwiches sits in the basement, you’re noticing aspiring entrepreneurs seeing their dreams of selling attachable sticky note boards for laptops come to reality. It’s frustrating.

But perhaps you need to take a different approach to starting your own business. Sure, your college buddies may love the PB&J, but will it solve hunger in remote parts of Africa? Nope. So, maybe you need to extend your culinary idea to something broader.

Ultimately, if you’re stumped and have no idea how to tap into your entrepreneurial spirit and benevolence, then maybe you need to assess the marketplace now and try to balance it out with your philanthropic desires. Whether it is energy-efficient appliances or green footwear, there is a long list of business ideas to take advantage of.

Remember: it is also important to have the entrepreneurial mindset to attain prosperity.

Tips for Becoming a Social Entrepreneur

Want to become a social entrepreneur? Here’s how.

  • Identify your mission. Every business needs to have a core mission; otherwise, you’re operating a company blind and without a stick. A social enterprise is no different, so begin your journey by determining who you want to serve, where you want to operate and how you want to serve these consumers. At the same time, you need to fully understand what problem you want to solve.
  • Research the market. There’s nothing with a little bit of competition, even in the social entrepreneurial arena. That said, it is important to perform a search and find out what your industry is like, who the power players are and how you can get your foot in the door.
  • Decide on a business model. A business model is essentially your blueprint to operate and maintain your corporate affairs. It acts as a roadmap that keeps you on course, ensuring that you do not veer off track.
  • Get funding. Where is the money coming from? That is the $64,000 question. You have good intentions, but good intentions don’t pay the bills – they never do. So, when you’re first getting started, you need to find out where your capital is coming from. Are you self-financing your startup? Are you seeking out grants? Are you turning to 21st Century methods of raising cash, like crowdfunding or peer-to-peer lending? It’s these things that get neglected in the middle of your vision of changing the world.
  • Use the AIDA model. No, we’re not talking about the Giuseppe Verdi opera here. If you have seen Glengarry Glen Ross, then you know what we’re talking about. If not, here is what AIDA stands for: Attention, Interest, Decision, Action. The last word is the most important of the acronym because it is your to-do list, schedule, calendar, planner and everything else to attain your weekly, monthly and annual goals.

We will refrain from quoting the rest of Alec Baldwin’s monologue in the motion picture.

Successful Social Entrepreneurs

They say that Florence Nightingale was one of the most famous social entrepreneurs because she was the mother of modern nursing. Since nobody is reading this from that era, we think some newer successful people and companies should be on the list.

So, what are some examples of famous social entrepreneurs? Well, Toms Shoes founder Blake Mycoskie is probably one of the most well-known because his business model entailed one for one. This consisted of for every pair of shoes you purchased, another pair was donated to those in need.

Here are just a handful of companies and their founders:

  • Grameen Bank: Muhammad Yunus is the father of microfinance and microlending, and this business lent money to villages that tried to lift themselves out of poverty.
  • Better World Books: Xavier Helgesen, Christopher ‘Kreece’ Fuchs and Jeff Kurtzman started this company – selling unwanted books on the internet – with the goal of improving literacy rates.
  • Ashoka: Bill Drayton established this nonprofit organisation in the 1980s to help guide, support and fund social enterprises.
  • Malala Fund: Everyone is aware of Malala Yousafzai – the youngest Nobel recipient – but the business aspect of her fund is managed by Shiza Shahid, who has partnered with Yousafzai since the early 2000s when she wanted to launch a camp for girls.
  • Seventh Generation: Jeffrey Hollender had a plan to bring natural and eco-friendly household products to homes everywhere. It’s worked immensely because we don’t realise how unhealthy the more traditional cleaning solutions are to our bodies.

There are a whole lot more of these companies and their founders, but this is a glimpse to show you that you don’t need to find a cure to cancer or a perpetual motion machine to make a dent in the world.

What does protesting achieve? It has its place, but it often fails to accomplish much in the long run. So, how exactly do you bring about the change you want to see? If you have the mind, the know-how and the spirit, then entrepreneurship.

There are two interesting trends developing in the marketplace: younger consumers are becoming more socially conscious of their purchasing decisions and startups – hoping to become corporate giants in the process – are trying to update the free market capitalist model. Is it working? The world has never been better off than it is today since the Industrial Revolution. From technology to green energy, the rest of the world is better off because social enterprises are making sure that innovation is at the forefront of better lives.

Do you have anything you’d like to add? Join the conversation down below and let us know.