Balancing passion, purpose and profit in small business
Want to know how to start your own social enterprise? Are you determined to ‘make a difference’ in the world?
What is the right balance of purpose and profit in a small (or large) business?
Social Cycles founder, Brett Seychell, shares some insight.
Why you should (or shouldn’t) start your own social enterprise.
Drive and Motivation. It’s different for everybody. Some people are motivated by money. Some people are motivated by passion. The very first thing you need to do is to learn what motivates you, and to what proportion (90% money, 10% purpose or vice versa). Then be comfortable with that fact. Accept it regardless of what is socially popular. There is no shame in being motivated by money. Money does not have to mean your goal in life is to own a sports car. It could just mean that providing financial security for you and your family is your priority. And there’s certainly no shame in that.
The risk of recreating the wheel. Let’s assume that, for the sake of this post, your purpose is at least 40%-50% of your drive and you’re looking to start your own business with a social impact based element. You have an idea in mind that you believe in. The next course of action is to complete a competitor check. It sounds quite obvious, but you shouldn’t be looking to see what separates you from your competitor, but what makes you similar. If there is an established organisation or business that has a strong social purpose in your field and location, then consider joining forces and working for that organisation. They have probably already made the mistakes you are bound to make over the next few years and might benefit from having new found passion and ideas within their team. If your closest competitor is still different in it’s outlook, and would not consider taking on your business model, then consider why they wouldn’t. If nobody is doing anything close to your vision, then you have potentially found a gap in the market.
How much money do you need (or want) to earn?
This is such a difficult question, and again, there is no right or wrong answer. Whatever the answer is, it needs to be clear from the outset and form the backbone of your business plan. Do you want to create a company that employs over 100 people, or are you looking to create a role that sustains your own employment and salary? Making money is essential and should be considered your primary responsibility. If you cannot make enough money to sustain your life, then you cannot build a business that generates social good in a sustainable manner. To set up your business plan, work out how much money you want to earn, or would need to cover your costs, then set your goals and targets accordingly.
As ironic as it may sound, if you really want to help people, you have to put yourself first.
Staying true to your purpose
The best way to stay true to your purpose is to have a clearly defined vision. A mission statement if you will. You will no doubt find times when the opportunity to increase your revenue comes at the expense of compromising your vision and purpose. It’s so important to stay true because at times, you may question if all the stress and effort is worth it. Your mission statement is a quick glance and reminder about what, and more importantly, why, you’re doing what you’re doing. You may want to set up some measures of performance and impact your social enterprise has influence in. It could be the amount of money that has been raised, or the amount of people who now have jobs through the vocational training programs you’ve set up. Whatever it is, measure it. It is the best way to explain your purpose to the general public, and generate support for our business.
A Case Study | Social Cycles
The balance of our drive and motivation: At Social Cycles, we’re proud to say our balance between social purpose and profit sits comfortably at 50:50. If our goal was to make money, then this is not the business we would be in. However, we have a model that should provide enough income for everybody involved.
Carving our niche in the market: There’s many ‘responsible travel’ operators in the world but not many that look to connect travellers directly with local NGOs for the purpose of creating awareness and education. We appreciate that we have a niche audience. Not everybody wants to spend a couple of hours of their cycling holiday learning about social impact from the perspective of local grassroot charities. However, we’re not aiming to host thousands of travellers. We would like to host about 300 each year, from all corners of the globe. A feat that is quite feasible.
Defining our purpose: Our model is to encourage riders to donate to local NGOs they have met personally and had the chance to ask questions and learn from. Each rider commits to A$200 minimum donation. The money is given directly to the NGOs that are chosen by the rider. All of it. No bank fees, no commissions. The group from every tour engage in a ‘Donation Debate’ on our last night together. We’ll discuss what impressed us, confused us and inspired us. As a group, we’ll make a decision as to how we’ll divide the total money. It’s their money and their experience. It can, and will, go to whatever NGO touched them the most.
The Author: This article was written by Social Cycles Founder, Brett Seychell.
Brett started Social Cycles on the back of an epic two and a half year cycling adventure from London to Melbourne. A complete change of industry from hospitality management to travel entrepreneurship.