Wow, November already. How did that happen? Am I allowed to use the ‘C’ word yet … or should I wait until December!? Over the next few weeks, in the run up to the Christmas (yes I said it) month of December, we will be taking a look at the concept of social business. Or should I say social enterprise? Or social venture? Or social entrepreneurship? In whichever of its guises, we want to know whether a business can have a social purpose and profit making as core aims.
bíku and bíku’s business model has been inspired by social business (13 September blog post). It is an area that interests me greatly and a topic that I see becoming increasingly important in all sectors and all businesses.
The customer is always right
Businesses have seen an increase in their customers wanting more information. More information about the quality of products, where products are coming from, how the products have been made, and whether what they are buying is eco-friendly. And this isn’t just happening at the higher end of the market, it’s even an issue for the budget supermarkets. Just look Lidl’s #LidlSurprises marketing campaign as one example! It’s affecting businesses across the board.
Businesses are increasingly having to adapt their business models to meet this demand. But how many businesses give pursuing a social purpose the same weight as pursuing profits? And can you prioritise both aims and still be successful?
But what about the investor?
An episode of Dragons’ Den sparked the idea to write this November series of blogs. I watched in amazement as Lara Sengupta from Cork Yogis pitched her high-end cork yoga mats with a social purpose (the business, not the mats!). Although in agreement that Lara’s business was doing a great thing, there were doubts from the Dragons about the investment opportunity. Each Dragon insisted that the focus should be on developing a strong business (read: profits) before giving a significant amount of the revenue to the social cause. In this case – helping to create ‘futures for vulnerable communities.’ CorkYogis works with Destiny Foundation, an NGO working to end human slavery and trafficking. For every CorkYogi mat purchased, the company contributes towards a training course for one girl. Destiny Foundation provides the training courses in sewing and literacy, giving the girls employable skills.
I have to say that I was surprised by the response from the Dragons to this social enterprise model. No one could disagree that the business would give back to the community. However, this appeared to be a peripheral concern to the business moguls, who continued to focus on numbers and the financial return on investment. The Dragons even asked Lara – on a few occasions – if what she was doing was even a real business.
Social impact investing is moving into the mainstream. Hopefully this is a sign that investors are beginning to see the social purpose in and of itself as part of the return on investment; just as big a part as the financial return.
A long way to go
I feel that business is heading in the right direction. This has been driven principally by customer demand. There’s still a way to go.
Mahatma Gandhi probably said it best, ‘Earth provides enough to satisfy every man’s needs, but not every man’s greed.’
Until next time #liveslow, #livesustainably
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