Undoubtedly entrepreneurship is risk taking endeavor. Every entrepreneur faces risks of his money, time, effort and life those are inherent uncertainty of an entrepreneurial mission. Entrepreneurs run after some goals-which can be economic goal or social or can be both. Although each and every entrepreneur walks in the unparallel streets-missions but all sorts of entrepreneurs aren’t considered parallel according to their missions. Actually, some types of entrepreneurs are only economic goal oriented who are considered as Business Entrepreneur, and some are inclined to social goals who are considered as social entrepreneur. Broadly, the entrepreneurs who run after solving social problems are social entrepreneurs. But a dilemma lies here that whether a social entrepreneur’s initiative (social enterprise) can be profit able? Usual philanthropy/charity based social enterprises are not profit oriented, but it doesn’t mean a social enterprise can’t be profit able (here the professional help from Labyrinth Inc is available). A social enterprise ‘can make profit solving social problems’ and its mission will be only ‘solving social problems and the service/product will be absolutely for the bottom line people. In Europe social enterprises are recognized as Non government Organizations (NGOs) and in USA it is called as non-profits (that means the enterprise can earn money which will be used for the enterprise not for any personal purpose).
Business Entrepreneur Vs Social Entrepreneur!
Just as business entrepreneurs change the face of business, social entrepreneurs act as the change agents for society, seizing opportunities others miss and improving systems, inventing new approaches and creating solutions to change society for the better. While a business entrepreneur might create entirely new industries, a social entrepreneur comes up with new solutions to social problems and then implements them on a large scale. It can be said to some extent ‘a social entrepreneur can be a business entrepreneur, but a business entrepreneur can’t be social entrepreneur’.
Ashoka: Innovators for the Public, a nonprofit organization, identifies and support leading social entrepreneurs through a Social Venture Capital approach, expounded social entrepreneurs as “Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change. Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution and persuading entire societies to take new leaps”. Thus social entrepreneurs change the social problems and systems.
Social entrepreneur presents ideas that are user-friendly, understandable, and ethical and they engage widespread support in order to maximize the number of local people that will stand up, seize their idea and implement with it. In other words, every leading social entrepreneur is a mass recruiter of local change makers- a role model proving that citizens who direct their passion into action can do almost anything.
According to Ashoka: Innovators for the Public, “Social entrepreneurs often seem to be possessed by their ideas, committing their lives to changing the direction of their field. They are both visionaries and ultimate realists, concerned with the practical implementation of their vision above all else.”
Dilemma: Profitable or non-profit?
We usual social enterprises are non-profit or for charity. So it creates impediment in making a social enterprise as profitable. A social enterprise may not be founded for making profit but indeed it needs to be self sustained. But it creates dilemma while choosing its revenue model. So, before launching a social mission-based startup should be sure to ask these three questions to themselves:
1. Is it absolutely imperative that a social enterprise be a non-profit?
An industry can be a non-profit leading and history may exemplify so, like as schools or health center or sanitation service. But it doesn’t mean a new social enterprise should be charity/nonprofit, it can be profit able rendering core services. There is no actual imperative regarding social enterprises revenue model!
2. Does customer care whether it is non-profit or for-profit?
In most cases consumers choose products/services according to their quality level. They don’t care whether it is profitable or nonprofit enterprise. But, in some cases the services/products are inherently charity base (in case of natural disaster), so then the entrepreneur should care about consumers concern.
- Also learn: What Is A 501c3?
3. How far can it be profitable?
If a social enterprise can be a significant and realistic revenue generator over a sustained period of time, then it can be continued. Another group of social enterprise will be appeared through this!
Eventually, a social entrepreneur should keep in mind that the mission should be targeted to the bottom line people- serving them creating profit is globally acceptable.
Sources: www.ashoka.org and www.huffingtonpost.com