At the core of social enterprise is the notion that business models move beyond profitability solely, to incorporate a social mission. As noble and important as this work is, the reality of what this takes is generally more capital intensive to start and businesses experience slimmer margins on revenues due to their social mission.
By principle, the social entrepreneur has to be able to operate from a place of financial stability in order to bear the burden of the impact they want to create.
While I do believe there is a case to be made for the long-term benefits of such impacts, the business is still complicating its operations as they infuse additional (AKA missional) factors into their supply chains and overhead. This is especially evident in groups that are leveraging pre-purchase impact.
As a result, the products or services provided by these social enterprises tend to have a slightly (and sometimes massively) higher price tag, making it more out of reach for those lower on the socioeconomic ladder.
Combined, these consequences of an impacted-minded business model often help to cause a less diverse ecosystem of social entrepreneurs and stakeholders.
I am a white male and I am a social entrepreneur. As in many cases, I see how the odds are stacked in my favor.
Though I hope to use the privilege I experience to help uplift and empower others, I think there is more we can all be doing to increase inclusion within social enterprise.
Here are a couple of ways I think about it:
1) Offer your time.
I set aside time every other week to talk with aspiring and early stage social entrepreneurs. It’s amazing what can be accomplished in a 30 minute phone call. If you’d like to talk, shoot me an email at kohl [at] everythingisinspiration [.] com.
2) Price your products accessibly.
This may not be a reality at first, but as social entrepreneurs it’s important for us to think about ways we can make our products accessible to a wider diversity of people. I think Tesla’s model for electric cars is a good example of market adoption. Simply put, they made the really expensive car, that funded the more affordable car, that helped fund the even more affordable car. You can either take that same approach, or since social enterprise is more established, I believe you could jump in at the lower rungs of affordability right now. (Note: I’m not advocating for you to compete on low-price solely. Instead, I’m encouraging you to move toward inclusion where possible.)
3) Partner wisely.
Be sure you are including a wide range of voices in your work, and especially those that represent the communities or individuals you are serving. Non-profit partners, advisors, and team members are all important allies as you seek to deliver the best social impact possible.
4) Leverage core competencies to move your industry forward.
What is your social enterprise great at? Through strategic partnerships could you further your impact in positive ways and minimize redundancies? Early on at Krochet Kids intl. we built our business upon product collaborations, leveraging our transparency and social impact as a value add for big brands that wanted to showcase their humanitarian side. Now at KNOWN SUPPLY, we are helping all kinds of partners take part in our social mission by allowing them to utilize our ethically-made apparel for their purposes.
This post first appeared on Kohl Crecelius blog. Check it out here.