For some people who are looking to leave the traditional corporate business world, the emerging market of the social entrepreneur is quite alluring. Establish a business with a social mission that you believe in, and the profits will follow, right? Well, it is not always quite so easy as that.
While social entrepreneurship seems like a no-brainer, it can also be just as difficult to be successful in the world of market-driven business as the world of for profit companies. You still have to follow proper business management, and you still have to have good business practices.
Good Business Management Practices for Social Entrepreneurs
• Make a good product. Just because your product is “fair-trade” or ethically produced or local doesn’t mean people want to buy it. It still has to be a good example of whatever it is that you are sell, and it has to be price-competitive. Don’t sell people poorly made goods, or products that aren’t as good as their mass market or foreign made goods. Yes, people want to support your mission, but they don’t want to waste their money. With economic realities being relatively tight, people are thinking hard about where to spend their money before they do. They will factor in your mission, but they also factor in price and quality into the equation.
• Look at your bottom line. Don’t just think your business is successful because you are still supporting your mission. If it is not financially successful, look hard at how you can make it more financially viable. Remember that the more profits your company generates, the better you can serve your mission. This means that it behooves you to treat your company and its failures and successes just as harshly as a traditional corporation might. This isn’t in reference to treating employees poorly, just be realistic about which parts of your business are viable and which are not. Don’t be afraid to cut your losses if one part of the business isn’t doing as well as you had planned.
• Raise more capital than you think you need. Running a business takes money, and you will probably underestimate how much you actually need. Even the best business plan can’t anticipate the unexpected, so put in a healthy reserve in your search for supporting capital. When you have a cash crunch or crisis, you need to be able to not panic and pull from your reserve.
Following these practical and traditional business management practices can help make sure that even your non-traditional social entrepreneurial business remains a successful and open business that you can return to every morning. You don’t want your poor business practices mean that you actually end up going out of business.