Social business is a ‘for profit’, non-dividend business that is created and designed to address a specific social problem. The profit realized by the business is spent to increase and improve further operations. In this article, get to know about the aspects of social business and move up your business plan to successfully create an impact on society.
What are social businesses?
Any business that generates profit while contributing to environmental or social progress qualifies as a social business. This ground-breaking concept of social business is a brainchild of Professor Muhammad Yunus, Nobel Peace Prize Laureate and founder of Grameen Bank. Being introduced, this brilliant concept immediately gathered attention and had been adopted by different countries across the world. Being a self-sustaining model, social entrepreneurs address social concerns in the most efficient way possible. We often block the debates that question social concerns such a lack of pure drinking water just by counter questioning where will the money come from. The most lucrative feature of this concept is that it does not require companies to go about collecting charity or bring out money from their own pockets in order to make social change. In fact, nobody has to be concerned with raising money since the model is such that profit can be generated by addressing the issue itself. The profit generated is used to subsidize the area of concern. Therefore, all you need to have in order to keep the business running is will power and commitment. While addressing “The power of social Business”, Professor Muhammad Yunus sighted the perfect example where he said “We created an eye-care hospital at which we provide cataract operations, and we charge the market price, which is $30 per cataract operation. We make money and we cross-subsidize the cost for people who cannot pay.” Thus social businesses can potentially transform our world for the better.
How are they different from conventional business?
Everybody wants to make money. And that’s alright! But in the process, even business giants like energy companies are facing a huge backlash from the general public for endangering the ecological safety as studies openly suggest how different companies are the highest contributors to global warming. In a world of growing environmental concern where climate change is threatening human existence, it is not surprising that people started to associate ‘Business’ as an ‘Anti-environment agent’. Thus it has become increasingly hard for people to look at entrepreneurs as more than just ‘money making machines’. But, here is how social businesses are so different. As these businesses intelligently profit through addressing social or environmental concerns such as waste management or rural unemployment, they help people re-evaluate their impression on ‘Business’. It provides new dimensions to business such as a purpose that does not circulate around money adding human values. Thus, people start to believe that businesses can indeed be ambassadors of social and environmental change.
Why is it important? What are the impacts?
Here are a few reasons why social businesses are crucial in our age and circumstance.
It’s the best time to be social entrepreneurs
People these days opt for environment-friendly products over non-environment friendly products. After all, it’s a matter of them and their future generation’s survival. Customers tend to appreciate these initiatives and naturally opt for environmentally concerned companies to show their encouragement.
Pay damages without feeling damaged!
Since corporations have been most accused of environmental damage, such as carbon emission and river dumping, they were asked to pay ‘Green tax’ by the general public as compensation for their damages. If you as an industrialist feel burdened by green tax, opt for social business, since it helps to create an impact on society without having to incur a loss.
Creating certainty for social change
“Poverty is the absence of human rights. Over 3 billion of the world’s 6.5 billion human beings live below the poverty line”-Professor Muhammad Yunus.
How come we live in the era of technological advancement and yet have issues of social concerns like poverty left unresolved? Maybe because we have been looking up to the government to take action and capitalists to feel kind and charitable to address the concerns. Thanks to the concept of social entrepreneurship, we no longer have to be reliant on others to make the change. Anyone with ideas and determination combined can conquer social problems through social entrepreneurship.
Bettering peoples’ lives
Social entrepreneurship, while boosting local economies also helps boost the confidence of local people by helping them build identities by enabling them to see the potential and significance of their skill. This untapped crowd becomes a useful reach out for human resources but a very meaningful one too. As in the process, a lot of underprivileged people get an incentive to live a better life.
Creating a sustainable future
Public opinion had only gone against corporations as they explicitly contribute to global warming. And even though, for now, everything may look fine but current business models are least environmentally sustainable. The foreseeable future is in chaos due to a lack of responsible actions by corporates. But through social entrepreneurship, we potentially look at a world where social problems are recognized and addressed creating a sustainable future like responsible citizens that we should have been from scratch.
Seven Principles of Social Business
- Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization.
- Financial and economic sustainability.
- Investors get back their investment amount only. No dividend is given beyond investment money.
- When the investment amount is paid back, company profit stays with the company for expansion and improvement.
- Gender sensitive and environmentally conscious.
- Workforce gets market wage with better working conditions.
- Do it with joy.
Why YY Goshti exists
Endless possibility dies the moment when aspiring social entrepreneurs back off from their incredible ideas because of being clueless on how to materialize them. Due to the lack of guidance, innovation is barred. Our job is to create an avenue for these businesses who aim to make an affirmative change. We do it with training, mentorship, community, and resources that help build sustainable social businesses. With time and proper mentorship, they become independent business entities.