How to Build a Business Based on Social Entrepreneurship: These Companies Are Nailing It
There are many more ways to measure success beyond money, and dollar signs aren’t always enough to get people out of bed every day.
PHOTO CREDIT: Getty Images
In business, we're always talking about the bottom line. We measure success by asking about metrics like net profit and annual growth. However, more and more, companies are setting up their businesses for reasons beyond money.
Their companies are born out of a desire to do good, to give back -- to let someone else reap the fruits of their labor.
Of course, profit margins are still important. But it's what a company does with its success that can go farther with consumers. In fact, Unilever just reported that a third of consumers opt to buy products from brands they believe are doing social and environmental good.
Lee Rhodes, the founder of glassybaby, a handblown glass company based in Seattle, talks about starting a business based on philanthropy: "I decided to start glassybaby because I wanted to make votives and drinking glasses that bring light to people in a dark place. That endeavor slowly turned into a company."
She now donates 10% of her annual revenue to the white light fund she started to help veterans, abuse victims, animals, and the environment.
The whole idea started when she was facing lung cancer for the third time. "One night...I lit a candle and placed it in a handblown glass piece. The comfort that glow brought me was immeasurable, and I just knew then that I wanted to bring that same warm feeling to others in my position."
Business for the Greater Good
It's people like Rhodes who prove that, while the bottom line is important, it isn't everything. Trends like social entrepreneurship can also take the lead and compete with the best of them. Companies acting as forces for change are going far in today's market, making consumers want to buy into more than just the average brand.
Want to do the same? Here are a few strategies for mapping out your own social entrepreneurship business model:
1. Source locally
Made was founded in Kenya in 2005 on a premise that's simple but powerful. In Kibera, one of the world's largest slums, artisans use locally sourced raw materials, like reclaimed brass, to make jewelry by hand.
It provides a safe working environment, as well as job security, to people in the area; it also teaches them new skills. Meanwhile, by sourcing local materials, they're putting money back into their community to boost their local economy.
2. Spread your wealth
Much like glassybaby's social entrepreneurship model, T-shirt and apparel company Ivory Ella donates 10% of its net profit to save the elephants. The company has also donated to a host of other causes like Feeding America, Toys for Tots, and Homes For Our Troops, which helps build homes for severely injured post-9/11 vets.
It goes to show that setting out in hopes of making a difference in one area doesn't mean your mission can't expand and evolve to help a whole host of causes.
3. Use the "buy one, give one" model
A method made famous by TOMS and perfected by countless other companies, the 'buy one, give one' structure is a classic model prevalent throughout several industries. Take SoapBox, for example. It gives one bar of soap to a person in need for every bar sold around the world.
Further, each bar of soap has a 'Hope Code' -- consumers can enter it on the company's website to see where their purchase went. This simple detail helps others become more invested in the cause by allowing them to see its impact in a tangible way.
4. Outsource with a cause
Clothing company Della may be based in Los Angeles, but it works directly with a village in Hohoe, Ghana, to employ the men and women who create its textiles. Don't worry; it's no fast-fashion model providing poor wages.
Far from it, in fact, the company's mission is to empower its employees with a fair income, as well as provide them with entrepreneurship classes and an education.
There are many more ways to measure success beyond money, and dollar signs aren't always enough to get people out of bed every day. This often comes from social responsibility, a term becoming a more and more prevalent metric in the business world.
After all, if a business model with a good cause can draw more consumers, it puts more money toward companies that are willing to give back -- leading to more positive benefits for everyone involved.