Why a Social Enterprise Is Much More Than a 'For-Profit' Venture
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Great enterprises begin with a simple idea. These are ideas born out of a need identified in our environment, a problem whose solution will bring relief to individuals or groups or communities at large. Considering the challenges facing India on food, clothing or shelter, with over 1.3 billion people, it is clear that India needs ideas that can alleviate large groups of its masses in a sustainable manner. And better still, if the solutions can also address other basic issues such as education, healthcare, and employment, it would be an incredible opportunity for the country.
In the last decade or so, India has produced some great examples of start-ups that have transcended boundaries and defined the marketplace across multiple sectors. Be in retail, healthcare, finance or commuter transport, Indian start-ups have demonstrated the ‘jugaad’ mindset that is now an official lexicon in the dictionary. Hence it is heartening to see, a lot of young entrepreneurs taking up social entrepreneurship in India to resolve issues faced by millions of their fellow countrymen. Through the concept of social entrepreneurship, individuals across fields have focused on alleviating suffering, and uplifting society, while building a sustainable business model at the same time. As responsible citizens, social entrepreneurs have been instrumental in taking initiatives to bring about change, rather than waiting on the government or corporate sector for the same.
While the concept of social entrepreneurship continues to evolve and become mainstream, it is also a good stage to clarify what it is not. A common misnomer is that social entrepreneurship is the same as starting a charitable foundation or starting an NGO. This could not be further away from the truth. The aim of a social entrepreneur is beyond just profit. It is about bringing a large-scale transformation of the society or community at large. It is to bring change and solve problems faced by people and attracting talent and funding to solve these issues in a sustainable manner.
As an entrepreneur, it is important to start a venture with an open mind, one that can disrupt the current ecosystem and drive innovation. It is critical that the social entrepreneur operate just as any other ‘for-profit’ entrepreneur would, but with the cause as one of their key end goals.
Build a Sustainable Growth Plan
Any business, be it philanthropic or otherwise, needs to be planned with a clear understanding of the ground realities and underlying reasons to why the opportunity exists. A thorough business plan needs to be chalked out before venturing into the world of entrepreneurship. It is important to evaluate all variables involved, as well as undertake in-depth studies of the issue at hand. A lot of entrepreneurs stumble into the idea through a personal experience or incidents that gives insights into the challenges faced by many. Those with an entrepreneurial bent of mind would delve into the root cause of the issue, its far-reaching effects, and the feasibility of a business solution aimed at solving the problem.
While the concept of social entrepreneurship is not a path taken with the motive of earning huge profits, at the same time, it does not mean that one should ignore budgetary constraints and financial restrictions. In order to operate in an efficient and effective manner, it is important to have a plan to raise funds, find investors and turn profitable in a defined period or face the ignominy of being forced to shut shop.
Identify the Right Team to Work With
As social entrepreneurs it is not uncommon to employ immediate family and friends, especially during the initial days, to run the venture. While it works in the short term, for the long term, in order to create a profitable business, it is important to identify trained and qualified professionals who will be able to streamline operations, and scale the business to generate results.
A social enterprise is no doubt set up with the initial idea of solving the problems pertaining to a particular society, community or region. A good idea though will find takers beyond the immediate circle and would apply to a wider group, audience or nations. Social entrepreneurship can go a long way in addressing a multitude of issues, and has the potential to be life changing. With a sustainable business model, a venture can go a long way to benefit other regions, and make a difference in the lives of a large number of people.
Monitor Business Progress
Just in the case of any entrepreneurial venture, it is important to closely monitor its progress, track and measure the success or failure rate encountered. Benchmarks are created to understand what works or does not work for the venture, and how things can be improved. This helps to resolve issues in real time and also enable future growth plans in terms of newer opportunities and expansion plans.
It is clear that social entrepreneurship is complex, challenging, but equally rewarding. In a country like India, which has a highly diverse and complex socio-cultural environment, there is a definite need for social entrepreneurship to address challenges such as the economic inequality and bridging the gaps between the ‘haves’ and ‘have-nots’. It is not an easy task or for the faint-hearted but spirit of the youth has always triumphed in India and this is a revolution that is already underway.