For many people, social entrepreneurship seems to be kind of revolutionary, combining social intentions with daily business. It is often considered as the ideal business, where you reinvest at least 50% of the profit into social activities. In fact, here are two main motivations to do so:
- To create a better future for the new generations to come
- To build long relationships with customers based on ethical values and trust
Social business often is managed and run from two categories of social entrepreneurs: the ones who consider themselves as a charity rather than a business with social purpose, and the ones who consider themselves as pure business entrepreneurs.
The main difference is the contrasting emphasis on their function.
In the foreground of the business entrepreneurs is the financial side, focused on generating profit and wealth and satisfying their customer’s needs. This often ends up in detaching them from the social purpose and mission of the company.
Any social entrepreneur should have a slightly different attitude.
A social entrepreneur’s main goals should always be:
- To promote and support social impact in their chosen community.
- To run a sustainable business through trading activities to finance their social mission.
This is not an easy task with proven difficulties in handling the balance of both the social aspects and the profitability.So…
Is running a social enterprise as easy as many people believe?
Particularly in the early stages, social entrepreneurs have to face several difficulties. In order for the project to gain success, a well-established and long-lasting organisation is required, but people often underestimate the effort put into these projects.
First of all, despite the availability of funds, there are requirements to be fulfilled and having to start without a fair amount of capital could set you back for a while. The competition is fierce and while investors are willing to take well assessed risk to acquire their reward in return, grants are scarce, comparing to the demand for them.
Besides, organisations are usually required to be investment ready before approaching investors.
Accomplishing social obligations is vital, although quantifying the social value created is difficult, communicating that value could be even more challenging. Not only the task of creating a system that social entrepreneurs face but the challenge of acquiring technologies and skilled employees too.
In general, the work of a social entrepreneur is very time-consuming and accordingly does not correspond to the view many people have on this work. It is hard work to convey the ideas and main aims and to convince potential stakeholders and donors in order to get funded. Moreover, requirements change with the evolution of the social enterprise. The products or services are expected to be innovative, their quality must be maintained and promoting awareness is a continuing duty. Also cash flow (donation, investment), setting standards and raising equity need to be all organised.
All in all, it is not easy to set up and run a social enterprise because it merges two important business areas. The dream to change society in a positive way and improve living conditions in an effective and professional manner requires a sound organisation. The establishment of that sort of organisation is where entrepreneurs face challenges: the organisation must survive and flourish within the business environment too. This is the reality.
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Looking forward to share more information with you, please share and tweet this blog post.Maurizio Gioli