The concept of building a substantial enterprise seems uncomplicated at the outset. As a result of identifying an issue, a solution can be developed which provides relief to a group, individual, community, etc.
As a result of India’s vast geographical area and lack of infrastructure, it faces several social challenges, ranging from basic needs like clothing, shelter, and food to lifestyle solutions, such as quality education, healthcare, and employment, just to name a few of the national challenges we must collectively address.
A. Creation of enterprises that are ethical and have a meaningful impact on our lives
- Not non-profits because they focus on profits
- Not traditional entrepreneurship: impact entrepreneurs focus on the triple bottom line: profit, social & environmental impact
- Often synonymous with the term “social entrepreneurship” but can sometimes involve other areas such as environmental impact
B. Typical areas include healthcare, sanitation, education, and energy.
Also Read: Types of Enterprises
How does entrepreneurship for social impact work?
Impact entrepreneurs are actively contributing to the UN Sustainable Development Goals (SDGs). Using digital tools and capacity-building services, they help these life-changing businesses scale up and have a greater impact.
In social entrepreneurship, business ideas are used to promote a wide range of social and environmental benefits. An image of business-like discipline, innovation, and determination is combined with the passion for a social mission in social entrepreneurship.
An impactful social change solves or addresses social injustices or challenges in a significant way. In their operations and administrations, businesses or organizations achieve these goals through conscious and deliberate efforts.
An interesting aspect of social entrepreneurship is that it focuses on business practices and tries to solve environmental, social, and cultural problems. Essentially, they are subcategories of businesses.
Considering COVID-19 and the government’s support for people from underserved communities, this is the perfect time to be an impact entrepreneur in India.
The following steps will help you become an impact entrepreneur and create a positive change:
- Realize you always have an impact. Shape it.
- Get your frame: What do you care about?
- Educate yourself and broaden your networks.
- Learn from leading Social Entrepreneurs.
- Rethink the business model as you know it.
- Think aspiration!
- Get started.
Entrepreneurs not only create employment opportunities for themselves but also for others. By bringing new products, methods, and production processes to the market and by boosting productivity and competition, entrepreneurial activities may enhance a country’s economic performance.
From its freedom and flexibility to the job satisfaction it can provide, there are many reasons to consider entrepreneurship.
- Be your boss.
- Potentially unlimited income.
- Choose when and where you work.
- Make a living doing what you love.
- Constant growth and development.
- Choose who you work with.
- Create a positive impact.
Examples of Social Entrepreneurs
- Muhammad Yunus, GrameenBank
- Microfinance org provides loans to rural poor in Bangladesh
- Provided loans to over 8M borrowers with repayment rates over 95%
- Iqbal Quadir, GrameenPhone
- The belief that providing connectivity to the poor will help increase income and job prospects
- The largest operator in Bangladesh with over 50M subscribers
- Manish Sabharwal, Teamlease
- Focused on skills development and job placement for people with limited access to education and employment opportunities
- Helped over 1M people in India find jobs
Social Enterprise Challenges: Scaling
- Hard to scale because the social goal has real costs associated with it – e.g. cost of reaching remote or underserved populations
- How do you scale? – Scaling out through partners: increase geographical reach through franchises; partner with someone who has last-mile reach at scale (YMCA, Red Cross) – Influence policy change: E.g. for Teamlease, an important growth barrier is lack of clarity on labour laws in India.
Social Enterprise Challenges: Financing
- Traditional VCs are often not an option: social ventures often need patient capital.
- Philanthropic Foundations like Gates, and Ford Foundations – Focus on specific areas. Issue grants
- Government grants
- Impact-oriented venture funds like Omidyar, Khosla Impact, Acumen
Traditional Enterprises Adopt Impact Entrepreneurship/Social Missions
- Warby Parker’s buy-one-give-one model
- Donated over a million pairs to date
- Toms uses a similar “buy one, donate one” model in shoe retailing
- Does social mission contribute to profits?
- Neil Blumenthal (CEO, Warby Parker): “Customers put fashion & design first,” cost is next, and quality is third. Social mission is probably fourth.
- Not the primary driver of consumer behaviour but creates a brand personality that affects consumer behaviour
- Valuable recruiting tool
If your idea has double or triple bottom-line impact, ask:
- Should I run it like any other enterprise, or should I approach fundraising and scaling differently?
- If I have a traditional enterprise, should a social mission be a core mission of the organization?
- How do you marry a social mission to a for-profit model: (i) lead with product first, (ii) mission should be authentic, (iii) implement in a simple format such as Warby Parker’s “buy one, give one” program?