If you are thinking about a new business start up, this may be a good time to also think about a social business start up. A social business is one that does make a profit and pay salaries. It also helps to further some socially responsible goal. Are you interested in this idea?
Of course, this idea is not entirely new. There are, actually, some very ethical business models from the past. We tend to pay attention to the bad guys, and sometimes the good guys do not get a lot of notice. But this new term, social business, tends to refer to enterprises that really focus on helping some worthy cause as a big part of their business model.
Is this the same as a not-for-profit corporation? As we understand it, a social business is not exactly the same thing as a non-profit business. A non-profit, as the name implies, does not make a profit for the owners. It may, however, pay salaries to employees. Social businesses do try to make profit. They use a portion of this profit to fund their social aims though.
One good example is peer to peer lending. Investors do want to make a profit. However, borrowers may also hope to get loans with more friendly terms than they could get from major financial companies.
How do these businesses work? Actually, there are several types of social business models. Some may do business with the aim of giving a share of profits to worthy causes. Some may offer a service, at a lower cost, than traditional companies offer that service at. Some companies may just strive to do business in a very socially responsible way. Still others may concentrate on employing a certain group of people. And finally, some of these companies manufacture goods. For each purchase, the manufacturer may donate another product.
You can see that there are several ways to make a business socially responsible. By now, you have probably figured out that a lot of different kinds of businesses could apopt this business idea. They could still make a profit, but could do it while benefiting people locally, nationwide, or all around the world.
Social business may also be very good business. A lot of consumers would not mind spending their money at a company that promotes some of the same ideas that they have. Some people might even be willing to spend a bit more for their soup.
For example, let us say that a small company makes a line of tasty and healthy organic soup. As part of its social business, this soup maker will donate a can of soup for every 12 cans of soup purchased. Would you be willing to purchase 5 cans of soup, instead of your normal brand, if the soup was also healthy and tasted good? If so, you are not alone.
Social business may be good business. Maybe it is time for you to incorporate some socially responsible business ideas into your next business start up idea!