Social entrepreneurship is a relatively fluid concept that covers a broad variety of organizations. There’s no definitive mold that says, “A socially entrepreneurial business generates X amount of revenue within the confines of a Y organizational structure for a Z type of cause.”
For instance, both a mutual aid fund dedicated to assisting small businesses in marginalized communities and a corporation that uses its proceeds to support education for women in third-world countries could both be considered socially entrepreneurial outlets.
Some social enterprises might not follow any sort of typical organizational structure — they can be run entirely by volunteers who do not receive a paycheck or individual contributors that participate of their own accord.
What is a socialpreneur?
A socialpreneur is a person that sets out on an entrepreneurial venture with the intention of addressing social issues and contributing to the social good. These businesses can have a for-profit, non-profit, or hybrid model, but funds are typically used to support operational costs and develop programs to support target markets.
While socialpreneurs still abide by most core tenets as conventional entrepreneurs, there are key differences between the two groups.
Socialpreneur vs. Entrepreneur
The most significant difference between a socialpreneur and an entrepreneur is the end goal. The former is less interested in defining their successes through high profit margins. Instead, they’re guided by how their operations benefit their causes and communities of interest.
While social entrepreneurs typically engage in standalone ventures, entrepreneurs can start for-profit businesses that fund programs to support social issues.
Socialpreneurs can play a central role in finding solutions to the world’s toughest social problems. The failure rate for start-ups, however, is high. And new ventures in emerging economies face such challenges as uncertain prices and costs, nonexistent or unreliable infrastructure, and unpredictable competitive responses.
Many social entrepreneurs go into emerging markets with fixed plans and the best of intentions: Launch a business, solve a problem. But the dearth of information about customers, cultures, and competitors often stops them in their tracks.
The failure rates for new companies and markets, however, are high. That is true anywhere in the world, including emerging economies. The management challenges associated with producing and marketing goods and services at the base of the economic pyramid include imperfect markets, uncertain prices and costs, nonexistent or unreliable infrastructure, weak or totally absent formal governance, untested applications of technology, and unpredictable competitive responses. Given this daunting uncertainty, entrepreneurs need a framework for “unfolding” success from a perceived or an emergent opportunity.
Turning Uncertainty into Risk
How to Pick a Social Entrepreneurship Idea
Define your passions and areas of interest.
Do you firmly believe every child in America should have a pillow? Do you volunteer at a food pantry on the weekends? Are you an activist for certain local charities? Define what you’re passionate about and proceed to step two…
Identify existing market the gaps.
Once you know what you’re passionate about, it’s time to decide what the gaps are in existing products or services and determine how you can fill them.
If the food pantry you volunteer at can’t distribute fresh, donated fruits and vegetables before they spoil, think about how you could provide a service that makes it faster and easier to get fresh produce to the underserved communities in your area.
Identify your key strengths and skills.
Are you an excellent writer or a salesperson extraordinaire? List your strengths and skills, and define how they can serve your mission. This is also an excellent time to identify your weaknesses — so you know who to call upon for help.
Decide on a business model.
Being a social entrepreneur is not always the same as starting a nonprofit. Determine whether and how you’ll monetize your idea — and design a fitting business model.
Social Entrepreneurship Is Here To Stay
In the age of heightened competition, social responsibility is a differentiating factor that allows many companies to appeal to specific buyer demographics. The idea of “Conscious Capitalism” gained mainstream attention when Whole Foods founder John Mackey published a book by the same name.
In addition, consumers — now more than ever — put their trust in brands that they believe are committed to taking action. For example, consumers are 80% more likely to trust a business that they believe is committed to solving societal issues, especially when it comes to racial justice.
So, if you’re still interested in becoming a social entrepreneur — you couldn’t pick a better time. Formulate your plan today and make the world a better place.