Social enterprises are companies with heart. They're the businesses that don't just work to make a profit but focus on creating value for society, and the world as a whole. These are the companies that think more carefully about the solutions they need to bring to the marketplace, with innovative strategies to support people, the environment, and more.
From coffee bean companies that source ethical work, to green businesses who build environmentally-friendly offices, social enterprises often face many complex challenges. After all, you'll need to find a way to stick to your values no matter what, while keeping costs as low as possible. Of course, as the demand for socially-conscious organizations grows higher, businesses as a whole are beginning to implement more programs that allow them to give back to their community, donate to people in need, and more.
So, what's fueling the move towards a more conscious business environment? The simple answer is that the time is ripe for companies to start showing their social side. Let's look at some of the reasons why now is a great time to launch your social business.
1. Greater Governance Flexibility
In the past, it was difficult to run a company focused heavily on giving, as the stipulations for launching a business placed significant importance on delivering value for stakeholders. Now, there are new regulations in place that support the concept of a "triple bottom line". In simple terms, benefit corporations agree to generate profits for themselves and their shareholders, but they also assist with solving social and environmental problems.
A greater degree of flexibility is crucial to running a successful social enterprise because it means that today's entrepreneurs have the freedom to do what's right for the world, as well as what's right for their companies. In an environment where the profits of the stakeholders come first, it's difficult to maintain a good balance between serving the environment and serving the company. Today's conscious enterprises are finally free to officially stand for what they believe in.
2. The Rise of a Socially-Conscious Workforce
Any company - whether it's socially conscious or not, knows that it needs amazing people to drive success. The right people, from your those responsible for sales, to those who help you market your organization, can quickly help your business rise through the ranks. Today, many teams are packed full of Millennials, with Generation Z just around the corner.
While many people talk about the digital-savvy nature of the younger generations, they often forget to mention the point that's so important for socially-conscious companies. Millennials prefer to support companies that give something back. Not only are they more likely to buy products and services from socially conscious organizations, but these younger generations will also actively seek out careers with employers who share their values.
There are few things in business more important than loyal and dedicated employees. Now that Millennials have social good so high on their list when it comes to employment and purchasing, it's safe to say that socially-conscious businesses will have a wider pool of talent to choose from. Not only can your social nature help to attract skilled individuals, but it can also keep them around for longer too.
Remember, your employees want to feel as though they're making a difference and contributing to something greater than themselves. Putting social consciousness at the heart of your business gives you a deeper sense of purpose and belonging at work.
3. Appeal to More Investors
Not only will your socially conscious nature help to attract employees and keep them happy, but it could also appeal to your investors too. As consumers continue to hone their focus on social consciousness, investors know that the businesses with purpose are the ones most likely to deliver the best results. As such, they're willing to support the growth of socially-conscious companies.
Businesses who find a way to give something back to their community show investors that they stand for something more important than just making money. As millennials become the more monied generation in the world today, they'll be looking for companies that they can get behind on an ethical basis, as well as organizations that deliver a regular profit.
From an investment standpoint, socially-conscious companies aren't just effective because it feels good to give something back - they're a powerful way to boost profits. As studies continue to show that consumers are willing to spend more money with those who donate to a charitable cause, companies with a focus on the world around them could potentially make more money and stay in business for a lot longer than their counterparts.
4. Differentiate Yourself from the Competition
The business landscape has changed dramatically in recent years. The rise of new technology has meant that there are now more ways than ever before to get involved in launching your own company. Of course, while that's a great thing for the savvy entrepreneur who wants to explore a life in business, it also means that there's a serious amount of competition in the marketplace.
In a world where it's difficult to set yourself apart from companies who claim to do what you do, but bigger and better, socially conscious values can be a powerful way to drive differentiation. A commitment to the environment or social good shows your customers, investors, and shareholders that there's something unique about you that should maintain their interest.
Consider the Toms shoe brand for instance. The company generates a huge amount of interest from day one because it donates a pair of shoes to children in need whenever a pair of shoes are purchased by a customer. While there are plenty of footwear brands out there, few go that extra step to support the world around them, which is why Toms stands out.
5. Healthier Entrepreneurship
Finally, as tempting as the thought of running your own company, choosing your own hours, and selling products you care about can be, it's important to remember that entrepreneurship isn't always a walk in the park. For most business owners, it means long hours and a lot of stress. Running a company is hectic, with ups and downs that may leave you worrying about whether you can afford to pay the bills - never mind change the world.
From consuming extra unhealthy junk food to skipping your workouts and getting less sleep, there are a lot of bad habits that can form when you're running a company. The good news is that running a socially-conscious brand could actually have a positive impact on your health. A study published in the Journal of Science and Medicine found that there's a higher rate of health and happiness among volunteers.
In simple terms, we feel better when we're doing something good for the world. Generosity has a positive impact on your emotional health, which can also change your physical health too. After all, it's much easier to sleep comfortably at night when you know you're doing your part to make the world a better place.
Today, the rise of social consciousness has ensured that every company has the chance to do something important in their industry. It proves that you can make a profit, while also making a difference. If you've been considering creating a company with purpose, now might be the perfect time to explore the avenues of socially conscious entrepreneurship.
Author: Raj Jana is the entrepreneur and socially-conscious mind behind JavaPresse, a coffee company dedicated to delivering exceptional flavor, without compromising on ethics. Raj believes in the importance of businesses with purpose, and when he's not running his organization, he's happy to share tips and advice with budding business owners.
Anna Sun Choi