Social entrepreneurship is no different than any other form of entrepreneurship. Any business start-up needs to fill a demand – this can range from helping solve people’s problems, fears or fueling their passions. With social entrepreneurship the focus is on solving society’s needs and problems such as: poverty, health care, or education for example. Most social enterprises work on a for-profit business model, where the profits are fed back into the company. So can social entrepreneurship succeed? Yes. But just like any start-up venture, social or not, there will be a number of unsuccessful businesses. This will be due to inexperience leadership, an unsustainable business model, or lack of financing.
The issues that social entrepreneurs choose to tackle are large and pressing challenges, that won’t be solved overnight. What social entrepreneurship looks to do is to create sustainable long term solutions. This can be through creating a new business with a focus around a cause, leading a nonprofit organization or by instilling a social responsible mindset in existing companies.
Some great examples of social entrepreneurship succeeding can be seen through the Grameen Bank, Give Water or through TOMS Shoes. From the start, TOMS Shoes had a business model that allowed the company to donate a pair of shoes to a child in need every time people bought a pair of TOMS shoes (One for One). The success of social responsible businesses comes from having a bottom line that is focused on other people’s well being, instead on just profit.
This focus on other people’s well being also creates a well focused and effective marketing strategy. The marketing messages are focused around the cause, and there is a lot of word of mouth value in this. This saves on advertising and marketing campaigns. The money that is usually spent on small business marketing ideas can be used instead on facilitating the cause, such as producing shoes for those in need.
Here is a video of Muhammad Yunus talking about social business models. Muhammad started the Grameen Bank in Bangladesh. It is an institution that gives out micro loans. A $10 loan to people living in poverty can radically change their lives. With $10 they are able to buy materials and start a trade to support their families.
Social entrepreneurship and enterprises can succeed. They are sustainable businesses that focus on people’s well being. It takes experience, knowhow and financing to start a successful business venture, social or not. For more information have a look at these related articles:
image credit: Amio Ascension