The business world is experiencing a sea change in its commitment to social and environmental impact. With the success of social impact-oriented companies such as Toms, Etsy, and FEED, a growing number of businesses are seeing the value of striking a balance between profit and positive impact. The burgeoning community of certified B Corps (for-profit companies that meet certain standards of performance, accountability, and transparency in their practices) is a testament to this movement towards businesses that can make a pretty penny while fostering lasting social change.
We are witnessing the rise of “social businesses.”
What is a “social business,” you might ask? Social business is a term defined and developed in a 2010 book by Nobel Peace Prize laureate Professor Muhammad Yunus. According to Yunus, social businesses are established with the intent of addressing a social problem. Though unlike nonprofits, which dedicate the entirety of their funds to fieldwork, social businesses are profitable and use their financial gains to amplify their social impact.
In this sense, they draw two fundamental human instincts — selfishness (the desire to make money) and selflessness (the desire to help people) — to advance both personal and global interests.
So how do you go about growing your own social business? Whether you are just starting out your social entrepreneurship journey, or working to transition your business into one that is more socially oriented, here are three strategies by which you can do good while doing good business.
1. Create a Tangible Product
Social businesses benefit from the ability to create products that people can feel, touch, and see. Whereas donating to a charity or nonprofit may leave you feeling unclear as to the impact your dollar is having, the tangibility of a product is a concrete show of your contribution. By reacting physical products, you empower consumers not only to engage with your social issue at a direct level, but to also proudly wear the product as a token of their support. In the age of selfie sticks and social media, people like to make a show of their social justice warrior status.
This is the model that companies like FEED or Toms were founded on. The original “FEED 1 bag,” for instance, came with the promise of providing one child with a year’s worth of school meals. This straightforward promise enabled consumers to engage with the immense issue of world hunger on a definitive, individual level. The attractive aesthetic of the FEED bag also elevated the company’s visibility on city streets and sidewalks, further amplifying people’s awareness of the fight against world hunger and making the company a model for successful social businesses around the world.
2. Build Trust as the Foundation of Your Company
Social businesses that succeed are able to earn and maintain their customers’ trust. If you are able to cultivate your consumers’ confidence in your product or services — and then prove it based on high-quality performance — you’ll be on the fast track to striking the balance between robust impact and long-term growth.
Enter Aspiration.com, a rapidly growing online financial firm committed to helping its customers “make money and make a difference at the same time.” Unlike traditional financial firms, Aspiration empowers its consumers to choose their fee for banking and investing services (while you’re treated the same even if you pay zero, almost everyone chooses to pay because they’re so satisfied). Aspiration also donates 10% of all earnings to bring economic opportunity to struggling Americans across the nation, pushing back against the “greed is good” mantra often ascribed to the financial industry.
No matter what your industry, building trust takes hard work and time. But if you are able to do so by demonstrating your commitment to your consumers and cause, as does Aspiration, you will succeed in turning first-time buyers into repeat consumers and scaling your impact.
3. Commit to Radical Transparency
Transparency is the trend in business operations these days. With the rise of 24/7 social media channels that allow us to get peek into the personal lives of celebrities, politicians, and industry leaders, consumers demand to know what is happening behind the scenes — in business and in life.
Take the example of The Honest Company. The Honest Company was infused with a clear purpose from the very beginning: namely, to provide families access to products that create healthy, safe environments for children. The Honest Company gained the trust of families by making a commitment to rigorous transparency; it actively shares the contents of its products, its supply chain, and the fact that it avoids chemicals with possible links to harmful human impact. By demystifying the chemical elements that go into its brand of consumer goods, The Honest Company not only garnered trust, but also succeeded in raising environmental health awareness.
Social businesses are uniquely positioned to help make the world a healthier, safer, and more equitable place for all. By following these practices, we enable ourselves and those around us to have the biggest impact possible.