Using the 360 degree social enterprise tool
Running any business is difficult, but when that business also has to act ethically and transparently in everything it does, while delivering positive social and environmental impact, it can be difficult to strike that fine balance.
Fear not! It is possible, as we have seen with numerous examples of social enterprise in the UK and beyond. The likes of Grameen Bank, Patagonia and Who Gives a Crap have shown us the way, and no doubt if you reflect on your social enterprise network, you can find further examples.
Here we reflect on getting that balance right.
People, planet, profit
When we define social enterprise, we always use the triple bottom line, and in this case it acts as your starting point for every decision you make. It’s the basic check, in which you can go into a lot more detail depending on what you are deciding.
For example, if you are looking to source a raw material, and you find two suppliers, one locally and one from a country halfway across the world, you will need to go through each other the three P’s.
What effect will this have on people, my staff, the producers, the community and my customers?
What effect will this have on the environment?
What effect will this have on my profit or the price of my product?
Answer these three questions for both suppliers and see whether you get a clear answer.
It has to make financial sense
It doesn’t matter what type of social enterprise you have, you still need to make enough money to stay in business!
This means you can’t make decisions that are going to lose you money, unless you’re able to cover that loss from somewhere else. As with the questions above, if the raw material sourced locally changed the price so much, that your would no longer be competitive, then you’d have to think again.
This doesn’t necessary mean think about using the other supplier, but about your model and pricing strategy.
Is there a reason the local material is priced in such a way? Could the quality and reputation actually mean you can charge a premium and therefore still run a successful social enterprise?
It shouldn’t have a negative effect
Another bare minimum of balancing good and profit, is by making sure that your actions don’t have a negative effect. Even though this sounds pretty obvious, when you look at the conventional workings of business, then it’s not so crazy.
Communities left without water, staff working in dangerous conditions, products breaking after a week.
These are some of the worst examples, but for each decision you make, you should take into consideration knock-on effects and how to minimise any damage. This could be in the form of greener transportation, better quality material, or could result in you looking to offset parts of your business with doing good elsewhere.
Take into opinions of stakeholders
If you, as the decision-maker, find yourself in a bit of pickle when making a decision, don’t be afraid of reaching out to stakeholders. Make sure it meets customers’ expectations, that your staff are on the same page as you and you have the board’s backing. Share the costs and make a decision together, after all this way of working is key for any social enterprise.
If you need help with starting a social enterprise, then get in touch with us for some social enterprise consulting.