Despite how it may sound, being a social entrepreneur isn’t about starting a business that makes you into a social butterfly in your field; it’s about starting a business that helps you give back to society. This can be a risky path to take, with many unknown twists and turns to keep you on your toes, but being a social entrepreneur also offers reward in a non-monetary form that no other industry can provide. It requires not only a keen business sense and advanced organizational skills, but also a fully functioning moral compass, and a social conscience to guide you in your decision making.
The world of social entrepreneurship also requires the basic skills and strategy that most business entrepreneurs need to possess in order to flourish. This means having an understanding of the marketplace that you’re entering into, knowing your target audience, and having a firm grasp on the product or service that you’re offering to the public. In return for doing your due diligence and researching the foundation of your company, the world of entrepreneurship can give you back freedom and independence that no other career can offer. This comes in the form of being your own boss, making the big decisions in your business, and choosing how to handle the finances that come in.
Defining Social Entrepreneurship
Although social entrepreneurship has been around for a little while, it’s still much newer than the concept of entrepreneurship as a whole, which may explain why people have such a difficult time defining it. When you look up the definition for this industry, you’re likely to get mixed signals about what exactly it is that a social entrepreneur does, and unlike other business related fields, it has had a hard time gaining recognition in the world of academia. Out of the many definitions that can be found, the simplest way to explain the difference between these two forms of business is that while an entrepreneur is driven by profit and seek to optimize on unique ventures and innovative products to make money, while finding a better way to do something than the majority. A social entrepreneur is driven by their primary mission, which in this case is not money, but usually a cause. The overall objective involved in most of these socially conscious businesses is to stay profitable independently, with those profits aiding in the intended social cause.
Getting To Work For Your Cause
In order to build a functioning business that operates at a level of social relevance it’s important to set boundaries for yourself, and to create your business plan based on one of two foundations. One strategy that you can use is a non-profit organization with income, which creates a hybrid of social and business concepts spun together to help you achieve financial independence as a company, while still funneling resources into your selected social calling. This would mean that although your business is both commercial and related to your cause, the finances that you gain are all put toward the improvement of those values, with no personal gain. A secondary option to base your business strategy on is a mission-driven option that is for-profit. The difference here is that although the business is based on the same purpose of your social focus, the commercial side of the business is being operated separately to capture profits, which can be used for personal gain, while still aiding in your social cause.
Getting Started
Deciding that you want to be part of a business that helps society is the first step in finding your entrepreneurial spirit, but once your mind is made up you’ve still got a lot of work to do and many decisions to make before you’ll find success in your endeavors. It’s important to know that this is really what you want before you dive in head first, because once you’re in the deep end you’ve got to stay afloat, and that isn’t easy if you’re in over your head. Think about whether or not you prefer a leadership role, or to have tasks delegated to you. Are you happy working on just one project at a time, or do you like to stay busy by multitasking? It’s also crucial to realize how much time and energy it can take to get started and to know whether or not you’ve got a lifestyle to allow for this flexibility. Many start-up companies fail in their first year simply because the creator doesn’t have enough time to focus on the growing business.
Financial Responsibilities
One of the ways that social entrepreneurship can differ from a basic entrepreneurship is that your startup capital might be easier to come by, because rather than finding investors who are confident in your product, you can seek out philanthropists who want to give back to your social cause, and invest in your product or service as a means of helping to benefit that cause. With that in mind, it’s still a good idea to have most of the start-up capital available from your own funds, and this should be money that’s been saved and set aside rather than skimmed from an account that should have been used for something else. Drawing cash out of your retirement fund or your children’s college accounts is a risk that most smart entrepreneurs won’t take.
Learn From The Mistakes Of Others
You’re going to make mistakes as you go along; this is a given, but you can minimize the impact that these mistakes will have on your business if you stay informed on the errors of other entrepreneurs in your industry, and in other industries around the world. Take note of what people have done wrong to cause failure, as well as what their successes have stemmed from. You may want to consider the possibility of a mentor for this. An example of one area where you should follow the success of your predecessors is by testing the market on your service or product before you create stock you won’t be able to sell. Research demographics and price points to find the best cost of production as well as the highest amount that you can sell at comfortably without negative feedback to learn who your product is helping, whether or not there’s a need for it on the market, and how much money you’ll make or lose in the first year.
5 Keys to Success for Social Entrepreneurs
Building Your Business Plan
Once the basics are out of the way you can focus on building an impressive business plan. Your business plan isn’t just for your benefit, this is what you’ll show banks, investors, and social outlets involved in your cause to get the funding and recognition needed to get started. A good business plan begins with an executive summary; this is the outline of your plan, which will give a little bit of history about what your business is and why you’re so supportive of the social issue that your business revolves around. It also gives the main objectives of the company, and focuses on what you’re looking to achieve. Once this is out of the way you can address a summary of the company, including the owners, investors, and staff, as well as the flow of cash in and out. You might want to consider creating a graph or chart to get the financial information recognized appropriately. If your company focuses on products, then the next feature of your business plan should revolve around what these products do and how they’re created. This means talking about everything from the materials used, to the price of production, as well as its purpose. Following talk of your product, or service if that’s what your company does, you’ll require information regarding the market, and the tests that you’ve done to analyze what the response will be upon launching your business. Explain who your target audience is, how this product will benefit them, and how to reach them through marketing or word of mouth sales. The business plan should be wrapped up with your forecast for the company, including what kind of a future you see economically as far as an optimistic and conservative outlook goes.
Exploring The World Of Internet Marketing
Before you get into any commercial advertising ventures to promote not only the business that you’ve created, but the cause that you’re working so hard to support or change, you should establish yourself online. The internet has fast become a driving force in the business world, and utilizing the social media presence to your advantage can work wonders for the reputation that you’re building for your brand or company. Things like blogs, e-zine articles, and social accounts can all make a huge difference in the way that your audience views you, as well as how quickly you’ll grow a client or customer base during your launch period.
How To Get Capital
Venture capital is an important part of getting your company off the ground, but it also plays a big role in the continuing success of your business. For this reason, finding suitable investment firms that are interested in working with your social project can be helpful. It’s especially important during this phase of your business that you make good choices and choose investors who share the same view as you on the social cause that you’re supporting. You can also turn to the popular financing source of crowdfunding, which allows entrepreneurs to gain sponsorship and donations to their startup, as well as online investors who just want to see your company succeed. For a small startup supporting a real social cause, this is a great way to bring notice to your social focus, as well as gain the funding needed to succeed. Crowdfunding websites have managed to raise hundreds of millions of dollars for entrepreneurs all over the world.
Of course, you can always consider more traditional methods of funding such as a bank loan. The United States Small Business Administration offers a microloan program, which can help get you the finances you need with a reasonable rate of interest. This kind of funding may mean keeping more equity in your company, but it may also produce disappointing results, as the approval rate has been dropping with each passing year that the economy falls. You could also consider a government grant, which is a high possibility for social entrepreneurs, with something that could provide your city, state, or country with income that supports a cause.
Following Procedures
Now that you’ve got your funding, your business plan is strong, and you’re fully committed to the social obligations that your company will bring, you need to get all of the paperwork and business related paperwork out of the way. This means sorting out any patents that you might require, filing for the right business license, getting your tax information sorted, and having a lawyer there for all documentation that requires legal approval. You’ll need an employer identification number, as well as any permits that your business requires for signage, construction, or providing certain products like alcohol.
Getting Educated
One of the most important things that you can do for your company and for the social responsibility that you’ve committed to is getting educated, not just on how social entrepreneurship works, but also on everything that you need to complete in order to launch a successful business. There are plenty of online tutorials, free educational seminars, and full tuition college courses and MBA programs that cover the ins and outs of the business world in the field of social entrepreneurs. It can give you a better understanding of what to expect in the field, as well as what kind of problems you can run into while you’re just getting started. If there’s more than one person responsible for the operation of the business then it might be critical to have all members of the company take the same courses or informational sessions so that everything runs smoothly and is streamlined to a high standard.
Your success lies in your own hands; this is the basic mantra of an entrepreneur, and there’s no better time to make it a reality.
