By Shristi Banka
Social entrepreneurship is, at its most basic level, doing business for a social cause. It might also be referred to as altruistic entrepreneurship.
Social entrepreneurs combine commerce and social issues in a way that improves the lives of people connected to the cause. They don’t measure their success in terms of profit alone – success to social entrepreneurs means that they have improved the world.
Social entrepreneurship is an approach by start-up companies and entrepreneurs, in which they develop, fund and implement solutions to social, cultural, or environmental issues.
People from different walks of life are creating and implementing effective, innovative, and sustainable solutions to battle social and environmental challenges. These solutions include services and products for profit or as a non-profit initiative.
In the 2010s, social entrepreneurship is facilitated by the use of the Internet, particularly social networking and social media websites.
These websites enable social entrepreneurs to reach numerous people who are not geographically close yet who share the same goals and encourage them to collaborate online, learn about the issues, disseminate information about the group’s events and activities, and raise funds through crowdfunding.
The social entrepreneurs’ business structures fall mainly under three different models, applicable in different situations and economic climates. These are three main categories of social businesses –
a) Leveraged non-profit: This business model leverages financial and other resources in an innovative way to respond to social needs
b) Hybrid non-profit: This organizational structure can take a variety of forms, but is distinctive because the hybrid non-profit is willing to use profit from some activities to sustain its other operations which have a social or community purpose.
c) Social business venture: These models are set up as businesses that are designed to create change through social means. Social business ventures evolved through a lack of funding. Social entrepreneurs in this situation were forced to become for-profit ventures, because loans and equity financing are hard to get for social businesses.
To find the impact of a social enterprise on the society, we must first understand what a social enterprise is. The most common way to explain it would be – “a business that can succeed while pursuing to help others”.
Basically, when a business is making a profit and at the same time, is doing something good for the community, we are talking about a social enterprise.
Social startups in India haven’t been able to get the spotlight of investors to attract billions of dollars much like regular technology start-ups.
Moreover, the number of social start-ups pales in comparison to the number of technology start-ups. when social entrepreneurship was still at a nascent stage in India, let alone incubation for it, the ecosystem has evolved with many stakeholders realising the need for social entrepreneurship.
They are looking to support sustainable business models to solve India’s pressing social problems. Corporate and governmental interest is also increased in this space.
To be successful in sustainable business practices, one often requires social entrepreneurship and innovation.
The importance of social entrepreneurship and innovation also applies to companies that change how they produce products and services.
The latter companies can use innovative practices and entrepreneurship to establish their brand name and to be market leaders in doing things that create shared value for society and their companies and also, over time, contribute to changes in practices in their industry.
Social enterprises play a key role for the development of our country. They help alleviate poverty, bring about hope, and provide people access to a brighter future.
However, like all organisations, social enterprises face challenges while scaling up. Most of them are related to funding, people, process, and technology.
In order to grow, the founders need to acknowledge the issues and work towards addressing the same.
Moreover, such enterprises don’t need to hire long-term resources to solve specific problems.
They can easily tap into a large base of experts who are willing to share their skills and knowledge for a good cause.
But at the end of the day, it all depends on the founders and their vision. If the vision is strong enough and the founders are resourceful, the enterprise will succeed and thrive.
(Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any Government department)
About Author
Founded by 24-year old Chartered Accountant and NMIMS graduate – Shrishti Banka, BankaCFO.com – is a Financial Services consulting form for Startups and SMEs in areas related to accounting, SME finance, legal, taxation and compliance. An avid traveller, Shristi also operates a popular pop culture page on Instagram that had crossed 200,000 followers
