If your business is fueled by the drive to improve the lives of others, you're not just a business owner—you’re a social entrepreneur.
According to the Guardian, there are 40 million people employed in social enterprise models worldwide. Rebecca Tekula, executive director of the Helene and Grant Wilson Center for Social Entrepreneurship of Pace University in New York, says there may be even more. "Many...do not position themselves as 'social enterprises' simply because the entrepreneurs do not even consider the alternative of being purely for-profit and ignoring the impact their business makes on society," she said.
Cara Aley is president and COO of Moms and Jobs, or MoJo. She and her twin brothers, Darr and Tom, are concerned about the 1.5 million homeless children in the U.S. Most of the children's mothers are single and never receive child support. Many wait up to three years to receive childcare subsidies from the government, leaving no one to care for their children while they work.
Instead of establishing a charity or nonprofit shelter, the Aleys decided to invest $1 million in a special business model to help single mothers get back on track. MoJo employs single mothers to stitch made-to-order clothing and apparel while providing free childcare and GED, employment and literacy training.
MoJo partnered with the city of Lowell, Massachusetts, to open a plant that employs 200 people and provides childcare for nearly 500 children. Their largest clients include Zazzle, Jockey, Starbucks and Lands’ End. MoJo has grown 450 percent each year since opening in 2010; the Lowell plant expects to turn a profit on its $5.5 million projected revenue this year.
MoJo has some special characteristics that make it both a social endeavor and a business.
- MoJo employees receive $11.50 an hour, a wage 15 percent higher than the U.S. average minimum wage, because the Aleys are just as concerned with providing their employees a livable wage as they are with their profit margin.
- MoJo's management chooses to expand slowly and only in the locations of greatest need, when the intended city signs on as a partner, and when an anchor customer is willing to support the company with sustainable orders. Their next plant will open later this year in Oakland, California.
If your business shares these characteristics, you need to make sure the rewarding work of helping others doesn't distract you from the fact that it’s a business. Too many social entrepreneurship ventures dry up because of a lack of balance between doing good for the community and being profitable. Remember that if you want to continue to make a difference, you need to be on top of your cash flow.
Another major problem is lack of scalability. Many social entrepreneurs remain very small because they're not scalable enough to allow growth. Revisit your business plan often and revise it to be sure that your model is flexible and sustainable, so you can expand when the time is right. Ask yourself which elements of your business you want to see replicated on a larger scale. "Allow your business model to evolve as you see opportunities that are relevant, but that you didn’t previously consider,” advises Aley. “Your company on day one may very well look quite different a year or two later as you incorporate learnings into your approach and refine your model.”
Entrepreneurs must understand that skilled management is also key to ensuring their business remains viable. “If they don't focus on excellence, they can't compete. If they don't compete, they can't create the social change that’s the reason for their existence in the first place," says Kevin Lynch, president of Minnesota-based nonprofit Social Enterprise Alliance and author of Mission, Inc., The Practitioner's Guide to Social Enterprise. Don't let your management practices become stale or allow your business to outgrow them. If your policies and procedures limit your growth, they limit your future.
Are you a social entrepreneur? Tell us about your social venture.
Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9 p.m. ET for emerging entrepreneurs. She also publishes a resource blog and is the bestselling author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works.
Note: The opinions expressed in this article are those of the author and do not necessarily reflect the views of FedEx.
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