What It Means To Be A Social Entrepreneur
Necessity is the mother of invention. That’s what we learnt when we were younger and it, quite aptly, describes and defines social entrepreneurship. Social entrepreneurship is driven not so much by profit as by societal needs that the entrepreneur has identified and is passionate about. So here is my take on what it means to be a social entrepreneur.
A community need
Every business enterprise addresses specific needs for profit, otherwise why have a business in the first place? But a social enterprise needs to fulfill a much more basic community need, or even a subliminal one, and it may be set up for-profit or not-for-profit.
Examples abound around the world– education for employability, improving water quality, improving crop yield, microfinance to support women’s employment among others.
Passion over profit
Like any other business, social entrepreneurs should leverage business techniques to ensure operational efficiency and ensure that financial needs are met, i.e. expenses such as salaries, etc. But the overriding driving force has to be passion with a societal focus.
There are a lot of aspects that require thinking like a typical businessperson. As entrepreneurs understand and work with the problems and their vision for solving them, they will discover new avenues, new challenges and it is important to evolve the business to ensure that they stay with their vision to make it work and achieve the goals set out.
For example, when I set up GRAS Academy as a for-profit organization, it was to help underprivileged youth in India get vocational education that would lead to a job. Lack of employable youth was the societal issue that we wanted to address, with employment being the end result. However, we discovered quite early that while we could fund and run our courses and find companies to offer jobs, not all the youth we trained were motivated to do more for themselves, take advantage of this opportunity, and enter the job market. To succeed, we had to rethink our premise, creating filters to ensure that we were training the right candidates, i.e. those that sought employment.
Don’t ignore funding or profits
The business may be driven by a social need, but as a social entrepreneur, it is important to ensure that there is a clear vision, plan, and enough funding in place to deliver on that vision. After all, there will be expenses. Many of the world’s best-known social enterprises are for-profit, including the well-known Grameen Bank.
Social entrepreneurs need to work harder to get funding since normal sources such as bank funding are not typically available. Other sources have to be looked at, such as CSR funds from corporates, funds from family and friends. There are PE firms that could fund social enterprises, but that’s after they have proof of concept, and, often, the entrepreneur needs funds to reach that stage. The biggest support can come from government agencies, if there is a match between what they have been set up to do and what they entrepreneur has set out to achieve.
At the end of the day, it’s still a business. The difference is it’s not solely for wealth creation, but to primarily serve a societal need. It means that the entrepreneur has to find ways to ensure he or she delivers on the needs of the community without compromising on delivering a return to its investors and shareholders.