Asia

Breaking the myth: The reality of social entrepreneurs and their business approach



My job as a business coach means I talk with a lot of people, including entrepreneurs and social entrepreneurs. They want to solve issues and solve market gaps, and it’s exciting, stimulating and all that, but… wait a minute.

Read that first sentence again. Why would I distinguish social entrepreneurs from entrepreneurs in the first place? Is there a difference justifying this language split?

It depends.

A lot of social entrepreneurs seem to think that, yes, there is a difference worth emphasizing, which is why I wrote my first line this way. But do I believe the distinction makes sense? Absolutely not.

Worse, that’s a real problem from a credibility standpoint and a fundraising standpoint.

In many discussions, I’ve had, “social” entrepreneurs insisted on being treated differently.

They demanded discounts on what they wanted to purchase because, well, their enterprise was a social one, so it was fair to ask for an effort. They wanted to raise more funds at a discounted rate because the purpose was social and deserved to be supported even more.

They refused to talk in terms of profit because, somehow, the word seemed incompatible with the social principles behind their enterprise.

The problem is that this type of discourse sends the wrong message to entrepreneurs and funders who know what the reality of entrepreneurship and business is like. And it isn’t something you want to inflict on your business.

Entrepreneurs are entrepreneurs

Feel free to spend some time wondering about the definition of social entrepreneurship if that floats your boat. As far as I am concerned, social or not, entrepreneurs are entrepreneurs.

Also Read: Rise of the social entrepreneur: can doing good be good for business?

From a language standpoint, first, social entrepreneurs would call themselves charity people, world changers, magicians or change makers if they weren’t entrepreneurs. But since they do use the term, then that means something pretty clear to me.

From a pragmatic and operational standpoint, then, social entrepreneurs are entrepreneurs because, like it or not, what they do is based on entrepreneurship principles.

Yes, they want to fill a market gap, make an impact and change the world. But to get there, they have no choice but to act as responsible business leaders who know what it takes to run an organisation with teeth.

Value proposition, USP and offering

First, any social entrepreneur who refuses to think in terms of value proposition, unique selling point and offerings are driving blind.

If there is to be a beneficiary (see how I didn’t talk about ‘client here?) in the end, there must be a real issue to solve on their side and a real value proposition on your side.

Because there is always competition, you must also have a unique selling point that makes you… you! For instance, imagine how many charities seek money to help people in need and put yourself in a banker’s shoes. Why would he fund you more than another?

Hence, your social enterprise must also be able to put a clear offering in front of that banker. They get this if they pay this. But they get more if they pay more. The question is, “What’s in it for them”. And the only way to answer it is to think about market value and business opportunity.

Also Read: Bridging the gender gap and boosting women entrepreneurship with embedded finance

Business modelling and profits for all

If social entrepreneurship is not a value proposition, social leaders must also think in terms of business models: whatever comes out has to come in the first place, including profit.

Basic costs must be met, but profit is crucial if you want to go beyond just basic: it is your investment capacity-building powerhouse!

The primary focus should not be to express disdain towards profits due to their perceived negative connotations, as such an attitude can quickly lead to dismissal by others.

It is to make a profit on whatever you invest, so you can re-invest it in your cause to make a bigger impact. The issue isn’t profit, and it’s what you do with it!

Please don’t roll your eyes. I’m not being judgmental here; explaining this to social workers does really take a lot of time because when the cash historically comes from donations, this logic is not always that logic.

Keep boosting your entrepreneurial skills

In short? Invest all your energy and talent in making the difference you want to make, and don’t look back. What you are doing is fundamental, and I’m deeply grateful.

Still, keep some bandwidth to focus on the business management aspects (offering, modelling, financial planning) of what you do. This is key.

Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic

Join our e27 Telegram groupFB community, or like the e27 Facebook page

Image credit: Canva Pro

This article was first published on July 4, 2023

The post Breaking the myth: The reality of social entrepreneurs and their business approach appeared first on e27.



Source link

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *