3 Things I’ve Learned About Social Entrepreneurship
1. You Can Combine a Social Cause with a Business Model
This point might spark an answer of “um yeah, duh!” for some, but many may not have ever been presented with the concept of social entrepreneurship. When I first saw the word social in front of the word entrepreneurship, I was confused. To be honest, I have never associated starting a business with valuable work that could benefit a community or the world at large.
Social entrepreneurship is a great way to start a business while addressing a social issue that you care about. For example, if you see an issue of barriers facing youth entering the labour market, you may come up with a business model that sells a product with a company mandate to provide experience and jobs to unemployed youth. You can even create a product in response to a particular problem. A great example is Final Straw, a company that seeks to mitigate plastic pollution by offering consumers an alternative to single use straws.
2. You Can Turn a Profit While Addressing a Social Issue
While there are many charities that work tirelessly to advocate for their respective causes, a charity is not the only way to get involved in an issue you care about. A business provides a unique opportunity to address a problem in society while making money at the same time. Depending on your goal, your business may be one that is non-profit or for-profit. However there is no doubt that you can achieve financial goals while pursuing social goals. A product or service that is paired with doing social good can be structured in a way where it achieves profit just like a regular business would.
A great example that I have recently discovered is Thawrih which is a local Ottawa enterprise in the business of making modest activewear. While making a product intended to reach a specific target audience, Thawrih also employs newcomers to Canada to make the garments. The business sells a product while also addressing the challenges of integration that newcomers to Canada face when they attempt to enter the workforce.
3. Social Enterprises Face Unique Barriers and Often Struggle to Access Capital
Investors often seek out startups that have the potential for rapid and large growth. This can be a challenging thing to deliver for a company with more stringent ethical mandates. Practices such as ethical sourcing, fair wages, and training unskilled workers just to name a few make operating costs higher and therefore present smaller margins. In addition, because social enterprises are not charities, they are barred from receiving some grants. Because of these barriers, social entrepreneurs must be creative when coming up with funding for their business. Crowdsourcing can be a great idea, however many alternate channels of funding are required and you may even need to tap into your own personal assets.
There is also a general wariness from the business community that equates social enterprises with a charity. This mindset can create a presumption of lower quality and less capacity to deliver. Social entrepreneurs often have to work against this image to prove that they are just as worthy of business and investment as other startups.
Overall, social entrepreneurs will face different barriers when starting a business. Nevertheless, social enterprises can generate an abundance of good for the world. If you are like me and had a narrow view of how entrepreneurs can benefit society, then I challenge you to expand your mind! If you have always wanted to change the world while being an entrepreneur, then get creative!
If YOU want to be in the #business of doing good, consider applying for the Entrepreneurship Hub’s Become A Change Maker Bootcamp!
