2. Defining Your Business Model /

2.5. Balancing business and social goals

STANDARD:

We achieve a good balance between our social and business goals.

To meet the standard in full, your team and stakeholders have open and regular conversations about the trade-offs between your desire to make a social impact and the need to make enough money to remain in business. You have identified any tensions between your business goals and social goals and found ways to reduce them.

Building a successful business is no easy task. It means generating positive change in the world while maintaining healthy profits.

All social enterprises must focus on the twin goals of profit and purpose, and face everyday decisions that pit one against the other.

Often the business decisions that social entrepreneurs make don’t make sense in conventional terms. For example, you make a difference by creating jobs for people in problem situations so choose to accept higher training and support costs than other businesses. You can still have a viable business, but one that accepts lower profits or requires different ways of funding (subsidising) the higher costs of doing good.

While there are plenty of social enterprises that find the right balance, there can be ongoing trade-offs and tensions. Particularly when facing losses you might face hard decisions about whether to compromise on your social impact to balance the books.

It is a continuing balancing act. If the social enterprise does not work financially, then there is no business. If it cannot make an impact then there is no social enterprise, just a business.

You can check out the really useful guide to using a Business Model Canvas for Social Enterprise Design to explore ways to find a sustainable balance for your social enterprise.