This article emphasizes the need for a social enterprise to excel in the business aspect while maintaining their social mission. By not maintaining the business aspect or having a sustainable revenue, it is no different from a NPO.
"They know that they'll only get patients switching to them if they provide a high quality, trusted, independent service first – with the charitable message coming second. However, those two messages together make a simple yet compelling sell to any potential customer. Great quality, great service – plus you're helping fellow stoma care patients, too."
I feel that it is extremely important for social enterprises to be competitive against private businesses, your social mission should only add as a bonus to the business you are doing. Patient Choice has fully demonstrated this important point as they understand the needs of consumers and use it to their advantage to compete against other companies in their field. When comparing services and product, the consumer will do a simple cost-benefit analysis. With the benefit of patronizing your social enterprise as supporting your social mission while getting the product/services they need, it does not mean that they will be returning customers, especially if the benefits of patronizing a private businesses are better services and a better price. As such, it is important for all social enterprises to ensure that after taking the social mission aside, the organization can be seen as a equal competition against other similar businesses in order for it to excel.
Another point in the article that is important is how to attract investors and investment is "the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value" dictionary.com. It is necessary to get investors because it is a sign that people recognize the profitability of your business and with the extra funding, it is then possible to expand your business. The article mentions a method which I think can be considered by current social enterprises and NPOs to further expand their organization as one issue commonly faced by all is their financials . This method allows SEs and NPOs to maintain their social mission and ensure that they have financial backing
"create a non-profit that carries out the social mission, and is funded by the royalties or revenues from a for-profit company that can receive investment. It is important to get good legal advice on how to structure correctly early on."
Hi Ashlyn!
ReplyDeleteYes! All social enterprises ought to be sustainable and excel in the business aspect even though the social aspects is important.
The social aspect is the bonus factor but the business aspect is the crucial factor that allows the social aspect to runs well.
So taking Eighteen Chefs as an example, its social aspect of the social enterprise is helping the troubled youths and ex-convicts. However, if their products are not satisfactory or good, customers will only come back once and would not return. Would you return to a cafe with substandard food or services just because they help the less fortunates? I know I will not. They would visit once but return to other restaurants which offers the same product at a similar pricing, even though the other restaurants are not serving a social mission. So I think successful social entrepreneurs are very impressive, as they can juggle the two deciding factors well to sustain their business. :)