Why Social Enterprise is Becoming the More Popular Choice

Discussions Include:

• Learning the social enterprise business.
• How a passion for social enterprise led to a business start up
• What is social enterprise?
• How values of the world help shape social enterprises.
• How to get started in building a social enterprise business model.

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The Conversation:

ZEF: The social enterprise business model is quickly becoming a favorite among many entrepreneurs. Since this business model is new and trending, there haven't been many successful ones that we can model or learn from. Today, Lirone and I are very excited to speak to our guest, Steven Boughton. Steve and I met a few years ago at a networking event called the Green Drinks in New Jersey. Let me tell you, Steve has a passion for social enterprises, and, in fact, when I met him, he was planning to start a farm school. I visited the planned site and was very intrigued with his passion. So since we are discussing the trending social enterprise model, I couldn't think of anyone else, but just had to call him up and have him on this show. So Steve, before we even begin, can you please share with our audience a little bit about your first exposure to this social enterprise model and your passion for it?

STEVE: I've always had a passion for helping people. I really see my time in this life as being dedicated to guiding people to be good caretakers of the Earth and each other. I first got involved with social enterprises before college through various non-profit charities. During college, I studied social movements, intentional communities, and sustainability. After college, I started a non-profit on the farm in New Jersey that Zef mentioned, where I had school teachers offering summer educational programs for children in science and environmental education. After going back to business school, I founded Great Turning Advisors to help achieve a more balanced and sustainable economy by helping small businesses and non-profits with their toughest business challenges.

LIRONE: What is a social enterprise? Can you tell me more about this business model?

STEVE: Social enterprises are really any business that is organized around a mission for the benefit of the world, not just private value. They often exhibit strict accountability to society for their outcomes. The bottom line is that profits are not the bottom line for these businesses.

ZEF: Are all social enterprises not-for-profit?

STEVE: No way! As more business and legal professionals get involved with social change, we see more for-profit or hybrid businesses emerging to address social issues. Charity is no longer the only way to change the world for the better! Many states are adopting the L3C (low-profit, limited liability company) business entity which distinguishes mission-driven businesses. Under this organization, a for-profit business can accept investment from private foundations and regular investors. The social value can be subsidized by the lower return required by foundations while still allowing regular investors to have a proper risk-adjusted return.

LIRONE: Steve, with the growth of social enterprises, do you think that the "non-profit business model" will become obsolete?

STEVE: I think the values of the world are shifting and more people value or want to consumer charitable causes, either because they want to help or they are personally connected to whatever the cause is. I wouldn't say that the non-profit model is obsolete, but for-profit social ventures are likely to attract more successful business models and minds because a for-profit company must be self-sustaining. Furthermore, if you are providing value to the consumer, you will likely get them to pay more in the for-profit model than when they donate to a non-profit simply for the "feel-good" value, which is usually a lot less than people want to believe it is.

ZEF: Lirone, how do you think social enterprises need to market their business differently from other types of businesses?

LIRONE: Businesses always seek to differentiate themselves and highlight their own special added-value to their customers. Some can do it through declaration for amazing service (Avis) or health revolution, like what McDonald's has been trying to do in the past few years. Social enterprises have the advantage of differentiating themselves by letting their customers know that by buying from them, they contribute to a greater cause. Social enterprises provide people with sense of influence, which is also emotionally related and it makes all the difference. I would rather buy from Toms Shoes than another show company online because I know that an African kid will also get shoes if I will buy from Toms.

Tips & Solutions:

Your Hosts:

Meet Zef Here!

LIRONE GLIKMAN
www.LironeGlikman.com

"Lirone Glikman is an energetic business networking coach, blogger and international speaker. She shares her networking knowledge and philosophy in order to help others take control of their lives, reach their goals, succeed, and most importantly, enjoy doing it! She is based in Tel Aviv, Israel and works with audience worldwide."

STEVEN BOUGHTON
www.GreatTurningAdvisors.com

"Steve is passionate about creating sustainable business models that benefit social and environmental needs. He has founded two social enterprises (one for-proft and one non-profit). He holds his MBA in Entrepreneurship from Washington University in St. Louis and a BS in Environmental Studies from the University of New England. Steve has worked in private equity, nonprofit education, and consulting, and is an avid equestrian."

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LIRONE'S TIPS ON HOW SOCIAL ENTERPRISES CAN CREATE AWARENESS FOR THEIR MESSAGE FROM NETWORKING

• By networking with the right people for them, social enterprises can gain brand/company awareness, collaborations, more clients, and people who can relate to the cause and spread the word - offline, same as online
• The point is to know who to network with and what you would like to gain for your company
• Social enterprises can generate awareness by networking and collaborating with influencers, celebrities, and the like
• Social enterprises can also gain investors by networking and collaborating with companies, big corporates, and wealthy people who believe in the cause and the like

STEVE'S TIPS ON HOW TO GET STARTED WITH THE IDEA OF "CREATING A SOCIAL ENTERPRISE"

1. Understand the difference between non-profit, for-proft, and L3C hybrid businesses.

2. Reach out to some social entrepreneurs. They are very busy, but always passionate to talk about social enterprises and social change. They are great mentors and collaborators.

3. Develop your business model: be sure to define the broad vision first (what problem are you addressing?), then set boundaries by drafting a specific mission (including what you do and do not do and how you will accomplish your mission). Finally, think about what resources you need and where they   will come from (what are you offering? Is there a market for what you're offering? If not, is there a special interest group?). This will help you determine if you will be for-profit, non-profit, or hybrid.

4. Never lose your passion and energy for the cause. Always do what's best for the mission (even if you have to step aside to do so).

5. Network, network, network... and ASK FOR HELP!

Inspiration:

Better World Books

TOMS

Better World Books is a successful social enterprise that is driven by the goal of increasing education worldwide. They regularly collect textbooks to be donated to African schools and have a presence throughout the world.

TOMS is a company that started its social enterprise model in the shoe industry by donating a pair of shoes to someone in need in relation to every purchase made. TOMS has since expanded into many other sectors, offering eye wear and coffee, among others.