FD Blog - Formations Direct Blog
FD Blog - Formations Direct Blog
Blog Home
Back To Main Site
Blog Categories
    Accounting and Finance
    Address Services
    Banking
    Business News
    Business Advice
    Company Addresses
    Tax and VAT
About FD
Contact Us
  • Blog Home
  • Back To Main Site
  • Blog Categories
    • Accounting and Finance
    • Address Services
    • Banking
    • Business News
    • Business Advice
    • Company Addresses
    • Tax and VAT
  • About FD
  • Contact Us
Business Advice, Featured, Start-Ups

How to Balance Profit and ‘Do Good’ in a Social Enterprise

Social Enterprise: TOMS

Some people are of the opinion that social entrepreneurship has something to do with how you market your business over social media, but this is far from the truth. True social entrepreneurship has to do with the underlying objectives and human elements behind the running of a company. It stems from the personal philosophies and ideals of those in charge and filters through to the main workings of the establishment. In this lies the continuous challenge to balance the goal of any business – which is turning a profit, and making the business serve a higher purpose.

Shout It Loud and Proud – Share Your Good Works

Many companies do actively support charity drives and worthy initiatives, and they are not shy to make this known to the public. The benefit to be gained by this approach is that the company will invariably always draw unto itself like-minded individuals who would be proud to serve under their employ. At the same time, the company has no trouble keeping existing staff members happy who view their participation in the business as something noble and fulfilling. More companies are realising the tremendous benefits attached to the social enterprise business model.

Employees are a social enterprise’s biggest resource

There is no denying that companies who operate for a higher goal are still sometimes faced with a scenario where the ‘chase for profits’ remains the number one priority. It’s important to note how employees react in this situation, particularly those who were initially attracted to the company on the basis of its so-called mission. Some may feel disenchanted with the firm once they realise that the company was merely projecting a façade, and others may even feel betrayed now that they have seen the ‘higher mission’ fall through the cracks.

Being a true social entrepreneur means going above and beyond appearances, and herein lies the biggest challenge. When you look at a firm that claims to contribute to preserving the environment, you want to hear about the actual endeavours they have undertaken to make a difference. You are not so easily convinced even if the company takes a can of spray paint and decorates its brand image up and down in appropriate green. People relate to real life stories and the truth always comes out in the end.

Finding the right quality people to share in your vision is another task altogether. Sometimes it’s not easy trying to determine people’s motives and having to separate the wheat from the chaff is not a straightforward affair. From upper management teams to office staff, to labourers on the workshop floor, you wished everyone was possessed by the same level of dedication to the ”cause” as you are. Finding investors though who may well share your specific dream shouldn’t be as difficult as the Huffington Post would suggest.

Assess every aspect of your business model

When your business is in motion, you have yet to arrest yourself from the balancing act that lies between achieving profits and promoting social initiatives. You have to drill down to the most minute of elements in your business and see if they are inline with the larger objective. For example, if you’re an environmentalist this could mean making sure all writing material comes from recycled sources, and when disposed is recycled again.

But it doesn’t stop there – there are bigger fish to fry. The daunting question is whether the company is prepared to take a slight knock to its profits in order to better serve the bigger goal. If it means that a few pennies lost here and there will somehow translate to a profound impact on the company’s contribution to its cause then by all means. But it is never as simple as that. There are a lot of grey areas but certainly objectivity helps a great deal to complete this balancing act.

Believe in the ideal – and remind yourself regularly

You need to truly believe in and stand for the bigger mission you serve. This goes without saying, and is the foundation of a true social enterprise. As the business owner, you have to demonstrate this purpose driven philosophy in both word and action. This not only cements the company’s deeper goal in the minds of your staff but also plays a huge role in fostering powerful relationships with your customers.

Remember – you are in control, and it is only you who can decide when you will happily reap the profits, and when you should relax your business mind so that the social initiative can take precedence. The constant back and forth guidance between profit and cause is completely at the behest of the entrepreneur, but the rewards of playing to this balance go to the company as a whole.

Another core responsibility of the social entrepreneur involves learning how to use creativity and open-mindedness in this balancing act. This is critical for any business so that it never has to feel like the social project is a lead weight around your waist. Instead, the company’s mission should be a source of inspiration and strength to all parties concerned.

The secret to success

Those social enterprises that have made the biggest impacts haven’t learnt any mysterious secret. In fact, they have succeeded in part because of their intelligent use of data gathered from the process of balancing the mission and the money. They have learnt how investing more revenue into the mission meant the wider success of the social initiative; how in turn, the greater success of the mission resulted in more money coming to the company. If you need help deciding the structure of your socially oriented business here is a wonderful resource detailing the models of social enterprises.

Greater than profits is when you realise that your customers and clients have a definitive role to play in the bigger scheme of things.  For the social enterprise, this means figuring out how you can create a direct bonding between your company’s social mission to the values of every customer. The first step will be to look at ways in which your business can join forces with customers in order to further the social goal. And secondly, since you wouldn’t be in business otherwise, is to see how this process can be made profitable.

The last stage to linking your customers to your mission happens when you learn to take active involvement with your customers. This happens through the very support your customer gives to your company when they buy your products and services. It actually plays a role by serving or enhancing the mission and is contributive in some way. Remember though that this does not take place directly, this can only be achieved over a period of learning to bring customers closer to the higher goals of your business.

June 23, 2016by Anna Lemos
FacebookTwitterPinterestGoogle +Stumbleupon

Recent Posts

  • Service Update – COVID-19
  • Paying Dividends to Shareholders
  • ProCircle – The Matching Network for Accounting Professionals
  • The PSC Register – Offshore Companies and Indirect Interest
  • What is a Community Interest Company, and how is it Different from a Charity?
Start Your Company Formation

Categories

  • Accounting and Finance
  • Address Services
  • Banking
  • Business Advice
  • Business News
  • Company Addresses
  • Company Documents and Record Keeping
  • Company Secretarial Services
  • Domains and Websites
  • Featured
  • General Interest
  • HR Employment
  • Our Services
  • Running Your Business
  • Sales & Marketing
  • Shares and Shareholders
  • Start-Ups
  • Tax and VAT

Popular Posts

Reducing your Carbon Footprint

Reducing your Carbon Footprint

Top 10 Best Places to Sell your Products Offline

Top 10 Best Places to Sell your Products

Service Update – COVID-19

Service Update – COVID-19

Economic confidence – where next?

Is the water cooler an economic baromete

Archives

  • March 2020
  • November 2018
  • October 2018
  • July 2018
  • May 2018
  • February 2018
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • September 2015
  • June 2015
  • May 2015
  • March 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • May 2014
  • April 2014
  • March 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • February 2013
  • January 2013
  • October 2012
  • September 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • May 2010
  • August 2009
  • July 2009
  • May 2009

“Formations Direct was created in 1994 to provide a reasonably priced Company Formation Service to the accountancy and legal profession that is backed up by high quality advice and technical support. From humble beginnings the company is proud to be servicing the needs of thousands of firms throughout the UK and beyond. ”

© 2016 copyright Formations Direct Limited // All rights reserved
Formations Direct