When it come to social entrepreneurship, successful startups Warby Parker, TOMS and Casper have proven that you can build good into your business model.
It is possible to save the world, one business at a time.
Successful startups like Warby Parker, TOMS and Casper have proven that businesses can create and stick with a socially responsible mindset from day one. Older companies like Danone, which last year became a B Corporation, have shown us that it’s never too late to put a socially conscious mission front and center.
[Related: Check out these womed-led socially responsible companies]
How does one go about starting a for-profit business rooted in social responsibility? Many social ventures go through “foundation” motions similar to typical startups. The company incorporates or forms an LLC, drafts a business plan, registers trademarks, files for business licenses and goes about winning customers.
The primary difference between starting a typical startup versus a socially responsible business is that the seeds for social responsibility are planted early. If you feel ready to take your business to the next level and embrace social responsibility, start by adding some thought into the process. Here are a few ways:
1. Add good into your business model.
Your business wants to make an impact. The goal is to leave behind a lasting mark and make a difference on the world. It’s perfectly fine for entrepreneurs to state this as their intention, too.
However, there’s a difference between all talk and no action. Determine what causes and issues you are passionate about and how that passion can be integrated in your social mission and values. In this post about social entrepreneurship, one entrepreneur advises to “write your values on your walls.” I love that phrase, which can be taken literally and figuratively. Hang a sign or use a dry-erase board to communicate your values to your customers and your employees. And make sure to include your values in your business plan and in your mission statement.
When you add good to your business model, the business becomes sustainable.
Can you still earn a profit? Sure! The profit is simply not the end game. A socially responsible business is on a mission to solve problems and address human needs. It will prove how positive contributions can be made and how you are ready to be held accountable for this change.
2. Incorporate as a B Corporation.
Over the last few years, I have interviewed founders of B Corporations on my business blog. These B Corps cover a wide range of industries and all have unique stories to tell about how they got in business.
What fascinates me, however, is the number of entrepreneurs that switched their entities. Several entrepreneurs I interviewed didn’t start out as a B Corporation. They initially formed limited liability companies (LLCs), and then made the B Corp shift.
Why is that? What makes B Corporations so popular? B Corporations are for-profit companies. Their mission is not to be the best in the world, but the best for the world.
Incorporating as a B Corporation is a bit different from filing as other entities. Whether you do it from the start or shift later to the formation, there are three steps involved in the certification process.
- Entrepreneurs must complete the B Impact Assessment test as their performance requirement. This test accesses how your business is better for its workers, community, customers, and the environment. A passing score means earning 80 out of 200 total points. Once you’ve (hopefully) passed, you’ll receive a snapshot score of your grade. This highlights where your business excels and where it can use improvement. Entrepreneurs who take the B Impact Assessment test also receive an impact score. This, essentially, gives you an idea of where your score stands against 40,000 other B Corporations.
- You’ve taken and passed the B Impact Assessment test. Now, entrepreneurs must figure out their legal requirements before becoming fully certified. Will you need to elect B Corp status with your business or amend governing documents? If so, these changes will need to communicated with any board members and legal counsel.
- If you have passed your performance requirement and addressed the legal requirement, you are able to complete the certification process. Sign the B Corp Declaration of Interdependence (not a typo) and Term Sheet. Your business is officially a B Corporation.
3. Hire like-minded talent.
Let’s cover this section from the perspectives of a startup that just decided to become a socially responsible business and an established company embracing socially responsible practices.
A socially responsible business just starting out will likely be on the hunt to find like-minded talent to join the business. Potential hires, particularly millennials and members of Gen Z, will be interested in the openings because they share the same values. Draw applicants in by creating engaging job postings. These postings should cover more than the day-to-day workload. Focus on sharing your mission, the company atmosphere, and how hires can make a difference.
If your business already has employees, communicate with the team about the changes. Meet together to discuss why socially responsible practices are being implemented within the company. Keep everyone updated about what is changing, what isn’t, and how they can be a part of the conversation.
4. Develop relationships with great partners.
You have defined your values, incorporated under a socially responsible entity, and hired talent that care about causes as much as you do. What comes next? It’s time to develop partnerships with other great organizations.
Take the time to connect if you find you’re on the same page as another company in your industry. By joining forces, you can further increase your impact with customers and the community.
The end result of social responsibility inclusion for a business is a win-win-win for everyone. Consumers are faithful to companies that share their values; talent wants to be employed by businesses making a difference; and businesses are respected for standing beside their beliefs.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.
Posted: January 22, 2019