Despite many socially responsible businesses using their company profits to further social and environmental goals, the fact remains that almost all of these entrepreneurs repeatedly favor a low-risk approach that breeds less than desirable results. Examining closely the things that do make national enterprises successful in their efforts to make a positive impact, here is a list of roadblocks that often get in the way of accomplishing those goals.
Lack of Resources
Oftentimes the resources available to assist a desired capacity of people just don’t add up. Whether it’s medical aid or housing those in need, it can be difficult to accommodate for the numbers needing assistance. Even after partnering with nonprofits and other organizations, companies rooted in helping address social needs often come up short, and are unable to fully meet their goals by addressing the targeted need or offering a comprehensive program.
The Structural Setup is Complex
Funding such enterprises adds substantial complexity. Some for-profit organizations are large enough to finance their social and environmental projects and retain healthy profits. Other organizations are labeled as a charity or non-profit and are able to receive funding from private companies, foundations, or government programs. Still, there are enterprises that use a hybrid-like approach to cover their bases financially. In this structure one would organize the entity as a for-profit business, so it would generate a return for its investors, and work alongside a growing non-profit foundation that would be able to meet the requirements held for private companies and government sectors.
Unclear Roadmap for the Future of the Enterprise
One of the biggest challenges (especially for a newer organization just getting started) is to clearly plan out the answers to important business questions. How will the legal and financial structure be created? What sort of capital will be required for the investment of the beginning stages? And how will success be measured?
For entrepreneurs in enterprises just starting out and investing in their social and environmental circles, focusing on how to successfully generate funding or profit is a must. It’s wise to start small and safely grow in size and in outreach capabilities. Any money invested by the entrepreneur themselves should strictly go towards areas of business that will help generate a ROI. Look for donors to supply money for the social change in the beginning. Lastly, it’s important to have a graceful exit strategy. While it is never the intention for the business to fail, you never know when the chips will start to collapse.
Starting a business, especially one that works to better its social and environmental surroundings, takes delicate strategy. Luckily the number of entrepreneurs taking on this unique challenge continues to grow with every year.