Who is a Social Entrepreneur
A social entrepreneur is someone who creates a non-profit organization for public good. They operate in an entrepreneurial fashion by balancing the need for financial returns with the desire to generate an important form of positive societal impact. Social entrepreneurs are passionate about their cause and use business tools such as market research, branding strategies, competitive analysis, supply chain management principles and more to achieve their goals. Their mission is to help change the world, and they do it by creating profitable businesses that do good.
What is Social Entrepreneurship?
Social entrepreneurship through its most common definition is the practice of creating a business that works toward social changes with an aim of generating profit. The definition can be stretched to include many other types of enterprises, such as those that provide community services or products. The term encompasses a wide variety of approaches and methods with differing degrees of involvement and business process management knowledge. Perhaps due to this diversity and the fact that there is no one approach best suited for all types of successes, there is no clear way to measure or track social entrepreneurship.
To be economically self-sustaining, the social enterprise must capture revenue through the sale of a product or a service. Any profit made may be re-invested in the organization or paid out to shareholders. While profit is important to a social enterprise, it is not the primary goal of a social entrepreneur because his/her main motivation is to address a social problem, not necessarily to make money. In fact, many businesses that could have been successful by traditional measures fail because they cannot achieve their core mission to impact society for the better. In other words, there are greater benefits from building a successful business that does good rather than just making money from one that only serves its owners’ needs.
The elements of a successful social enterprise are often found in the mix of the organizational structure, the products or services offered, and the people who work there. For example, an organization can use many business techniques to achieve its goals, including but not limited to: competitive analysis, branding strategies, market research, global distribution channels or supply chain management principles. By using these tools that are familiar to other businesses but apply them in new ways to serve social needs that otherwise could not be met economically through traditional means.
Social entrepreneurs come in all shapes and sizes with backgrounds ranging from education and experience in business or non-profit organizations to no prior experience at all. The average age is 28 with a male to female ratio of about 3:1. For the most part they are highly educated and possess a high level of scientific and technical knowledge.
What motivates a social entrepreneur?
The second question asked is what moves the person who might not consider themselves a “social entrepreneur”. This is different from those who have been motivated by profit as they are now seeing both profit and good as possible results from their decisions. There are three important areas that motivate or drive social entrepreneurs: academic, personal or career, and altruism. Academic motivation may come from school, an internship or an exciting study abroad experience. Personal motivation for a budding entrepreneur may stem from a feeling of purpose and the desire to create change in the world. Career motivation stems from a job that provides a platform for social entrepreneurship whereas personal motivation for social entrepreneurs is mostly centered on how they can help others.
The number of new nonprofit organizations created annually has increased by more than 40% since 2000, amounting to over 1 million organizations in 2012, according to the Small Nonprofits Center at the Harvard School of Public Health. Social entrepreneurship is becoming increasingly popular as an alternative to traditional nonprofits with their formal by-laws and high overhead costs. In fact, its numbers have been growing at a rate six times faster than all other new US nonprofits combined. The social enterprise model has become the fastest growing segment in the nonprofit industry and is expected to grow even faster in the next few years due to its success in providing services and products that people want and need while achieving social impact (i.e. “do well by doing good”).
Social entrepreneurship has been increasing rapidly since the year 2000. In fact, there was a 73% increase in growth between 2010 and 2011 alone; this growth continues to rise by approximately 20% per year. The definition of a “social entrepreneur” is open-ended (established people who operate for profit or non-profit organizations).
The past twenty years have seen a global expansion of social enterprises. Social entrepreneurs are seen as innovators in their field, making giant strides in addressing seemingly impossible problems; they also see themselves as “intrapreneurs”.
Why Do Social Entrepreneurship?
Social entrepreneurship is about harnessing entrepreneurial tools and approaches to help solve global challenges. Why is this important? There are many reasons why, but here are three:
It’s often more efficient than traditional charity work : One of the challenges traditional charities face is that, traditionally, they have relied on grants or donations to support their mission. When compared to traditional philanthropy, however, social entrepreneurs are often more efficient. For example, social entrepreneurship can be more targeted because of the speed at which they seek to address community needs. They are also more sustainable because their goal is not to hand out money but to use better business practices to improve communities.
One of the challenges traditional charities face is that, traditionally, they have relied on grants or donations to support their mission. When compared to traditional philanthropy, however, social entrepreneurs are often more efficient. For example, social entrepreneurship can be more targeted because of the speed at which they seek to address community needs. They are also more sustainable because their goal is not to hand out money but to use better business practices to improve communities. It’s a way of tackling the root causes of problems – not just dealing with symptoms : Traditional philanthropy can often deal with the symptoms of a problem – for example, providing medicine or food aid – but social entrepreneurship works to address the underlying causes as well.
Traditional philanthropy can often deal with the symptoms of a problem – for example, providing medicine or food aid – but social entrepreneurship works to address the underlying causes as well. It’s all about engaging communities: Social entrepreneurship relies on community involvement right from the start. Because they’re working to solve social and environmental problems, social entrepreneurs need to engage with people – and the best way to do this is through engaging online communities like Facebook, Twitter and Google Plus.
Social entrepreneurs use the same approach as for-profit businesses – but it’s clear that resources are tighter in developing countries where many social entrepreneurs work. However, these challenges can be met by using simple business tools such as social media platforms like Twitter and Facebook – where there is strong usage among connected users. This has led some social entrepreneurs to develop products such as mobile phone services that can be used by those without access to a credit card or bank account.
What Success Looks Like
Success can be defined differently by social entrepreneurs depending on their goals, but there are some common elements. Social entrepreneurs may be seeking to address problems at different levels – community, regional or national. Their aim is also to make a positive difference in people’s lives by building community capacity and enabling people to engage with each other more effectively. So, for example, social entrepreneurs may see success as helping their business to achieve its financial targets while also having a positive impact on communities. One of the biggest challenges they face is ensuring that profitability does not result in reduced investment in the social side of the enterprise.
Whatever your priorities are as a a Social Entrepreneur, Fintalent, the hiring and collaboration platform for tier-1 M&A and Strategy professionals can help you define your success determinants and help you create sustainable businesses that is able to continue without the need for additional funding.