Guest blog: How to start a business that solves a social problem

Geldof's rant – spot on, I think.

Sir Bob Geldof was his plain-speaking self at the recent National Business Awards. One thing was certain - he has a clear idea of the role business plays in society. In his straight-talking style, Sir Bob told the audience of top businesses, thought leaders and the Prime Minister, that the leadership of the business community was not enough, and stressed the significant social responsibility that it had too.

We all know that the success of a business is due, in part, to how much people need it. In my view, a business that solves a social “need” is a great one to be involved with. I fundamentally believe that in the same way that we saw “green” become the norm will begin to see the same seismic shift from businesses being called “Social” to “Social” being a key requirement of any respected business.

The banking crisis that we have witnessed over the past few years and the very recent press coverage of The Co-op Bank, RBS and Pay Day loans all highlight how our society no longer tolerates the pursuit of profit as an excuse for business that does not deliver on the social bottom line. 

I have a very simple message, a ‘Social Business’ allows you to use your entrepreneurial principles to organise, mobilise and manage a for-profit business that supports and encourages social change. I believe that’s a great reason to go to work.  

To get started you need to think hard about what you are passionate about. Are you drawn to a social issue through your own experience?  WARNING! Always remember that to be a business, the cause you choose also needs to be important to others. 

With your cause identified there are some tasks that have to be completed to turn your dream into a reality. Each step is a vital part of the process. Having a social purpose does not replace the required business planning. So let’s get started.

Define your business vision

As mentioned this will come from personal experience. Initially test this on friends and family to refine the proposition.

Research your idea 

Just because you are passionate it does not make you an expert. You need to validate your assumptions and test the potential of the concept. Who is your competition and how will you stand out from it? What is the potential scale of your idea?

Grasp legal structures 

The legal structure of your business will impact its structure, governance, taxation, regulations and ability to attract investments and partners - all of which are critical for growth. 

Research and define a business plan you need to submerge yourself and clearly articulate

  • What is your product or service?
  • What is your social objective?
  • How do you blend the social and business goals?
  • What does success look like for both goals?
  • Who is your customer?
  • How do you reach your customer?
  • How will you develop your product or service?
  • What does your operational plan look like?
  • What skills have you got and what skills do you need?
  • What’s the financial plan costs, income and cash flow?

Investigate funding options

One of the greatest challenges is finding the resources and capital to start a venture. Research the funders, and once you start meeting funders listen carefully, refine your proposition and don’t take no for an answer. You will find a way.

Find a mentor that will offer ongoing support

Starting any business is tough and lonely.  A mentor with the right experience will provide sound business advice, support and encouragement. In a perfect world seek one who understands the unique challenges that relate to your vision but above all select someone with a sound business and moral background. 

Hire the right people 

Any business is the sum of its parts and the culture of that team. This applies to the entire team as it grows from the directors you select to the most junior new recruits. Working for a business with a social mission may require more commitment; your team needs to understand just what’s expected – whether that is flexibility, longer working hours or lifestyle changes. Aim to hire people that share the same concerns about the social issue you’re striving to change and experience with the community you’re planning to serve. You need to communicate to everyone involved – employees, board members, stakeholders and customers, the blended social and business values that you are creating.  

Never lose sight that you will be competing with other purely commercial enterprises that are concerned only with financial returns. Your business needs to engage and convince stakeholders, investors and funders. What’s more you need to know your business inside out and know your story. Tell it regularly on every channel possible. 

Good Luck, enjoy the journey and remember anything is possible.

 

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