As all successful social entrepreneurs will tell you, balancing commercial and social strategies is essential
“If you’re not making money, that’s a nice hobby you’ve got there!” Blunt commercial advice from a blunt commercial adviser. But it was exactly the advice social entrepreneur Jude Ower, founder of online gaming company PlayMob, wanted. For Jude, a ‘highly commercial’ approach is the best way to help the charities PlayMob supports.
However, for many, fully embracing the dualism required of a social entrepreneur — do good and make money — is not easy. This is especially true of social enterprises that have been forced into existence as traditional funding has dried up. Making money is a subservient, if not uncomfortable objective.
It’s something every social entrepreneur knows they need to do, but it’s not what gets them out of bed in the morning. And for many whose background is primarily social, the whole process of building a commercial operation can be bewildering.
Our company, OneLeap, a global community that introduces entrepreneurs and social entrepreneurs to business-leaders, investors and influencers, has just published ‘How to build a social enterprise that makes money.’ The free book brings together personal tips and stories from 14 of our successful social entrepreneur members.
The tips are as varied as the enterprises, but if there’s one thread running through, it’s the need to confront and embrace the dual nature of your objectives: making money and doing good – even if the former is a means to the latter.
Here’s what that dualism might mean.
Horses for courses
You’re not going to ask your accountant for advice on how to get ex-offenders into employment. Similarly, don’t rely on a board full of social work experts to tell you how to improve your marketing. Baillie Aaron of Spark Inside, which provides life-coaching to ex-offenders, counsels developing a diverse network of advisers that includes for-profit professionals who will help you “develop practical funding models and make you ‘investable’.” Particularly in an established organization that is transitioning to social enterprise, there can be resistance among the ‘believers’ to make space for the pragmatist ‘suits.’ The point is a social enterprise needs both.
Stick to your mission, but don’t get stuck in your business plan
Having a clear mission is essential if you’re to persuade people to back you. But as Jan Matern of Emerge Venture Labs warns: “don’t be precious about your business model.” Social entrepreneurs can be reluctant to pivot, as changing what you’re doing to make money sounds an awful lot like ‘selling out.’ But changing the trading activity that supports that mission is not the same as changing the mission. Many startups need to perform some sort of pivot on the road to success. Social enterprise startups are not immune from this logic in achieving their missions.
Share value, but know how to sell value
There’s a culture among people social enterprise and startups of helping each other out, and you should make the most of this. Selene Biffi, founder of Plain Ink, which publishes books tackling social exclusion, created a value partnership under which her company gets free stationery in return for providing the stationer with illustrations from Plain Ink’s workshops. Be aware though that some large organisations may cheekily suggest ‘partnerships’ when they can and should pay. Sometimes this means explaining politely, but firmly that you can’t do something for free.
It’s also important you don’t forget the commercial value you’re creating along the way. For example, the lessons Lily Lapenna’s MyBnk learnt in establishing its highly successful financial literacy programmes has enabled it to consult to organisations wanting to set up similar initiatives.
Learning to see double
For many, the duality of being a social enterprise means having to focus on two customers. There’s your social customer, who it’s your mission to serve, and there’s also your economic customer, who pays for your mission. Your economic customer may care about your mission – or they may not. If they do, that’s a loyalty bonus, but don’t expect them to let you off for sloppy service because you’re a ‘socent.’ If they don’t, embrace it. That’s the beauty of a social enterprise: unlike asking for donations, you don’t necessarily need to convince your economic customer of your cause in order to get their money. So sell the oversize 4WD-owner a great product, happy in the knowledge that even he is helping to fund a lower emissions world. And in meeting you, or in using your product, you might win him over to your cause as well.
Hamish Forsyth is founder of OneLeap, a global community that introduces entrepreneurs and social entrepreneurs to business-leaders, investors and influencers. The free book ‘How to build a social enterprise that makes money’ can be downloaded here (subscription needed)
This content is brought to you by Guardian Professional. To join the social enterprise network, click here.
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