Building a Value Driven Non Profit Business
With so much talk these days about corporate social responsibility, many companies are feeling compelled to jump on the values bandwagon. Because of their agility, small businesses in particular are at the forefront of what is becoming a responsibility revolution.
But, what does it really mean to be a Value Driven Non Profit Business? Simply selling ideas does not classify a company as values-led.
As Founder and President of the Financial Policy Council for the last three years now, a New York not-for-profit corporation tax-exempt under Internal Revenue Code Section 501(c)(3), here are some tips for succeeding as a social entrepreneur.
Think About What You Can Provide. Being passionate about empowering people with revolutionary social ideas is all well and good, but in order to be a social enterprise you also need to have a product or service that provides value to others. In that respect, every entrepreneur should start by trying to answer the following question: What does the world most need that we as a company are uniquely able to provide?
The key point for any social entrepreneur to understand is: Your core values and passion have to align with some demand in the marketplace. In other words, a values-driven business isn’t going to succeed if it relies on the owner’s passion alone. There’s more than one meaning to “value” when it comes to running a social enterprise – there’s your market value and also your defining values (or beliefs). Hence, it’s important when building your company to “lead with your value, and follow with your values.
Hone Your Mission Statement. Having a visible and known mission statement is crucial to building a values-driven business. It’s not uncommon for businesses in general to form without a mission statement, but if you haven’t spent a significant amount of time thinking about the goals of your social enterprise, make sure you work on that core building block before going any further. It’s always a good idea to go online and read the mission statements of the 10 companies that you most admire. You’ll find that it helps to see the operating principles and values-oriented statements put out by established companies, and then use those as model for your own.
You’ll want your mission statement to embody both what you’re passionate about and how your business will help you fulfill it. Your mission statement should be strong enough that it continually drives you to keep focused on your values, and gives insight into your value proposition as a business. Once you’ve spent some time refining your mission statement, don’t just ignore it. Use it as your compass for making decisions, and put it out there whenever you’re presenting your company to others.
Focus Your Efforts. Focus can be a big challenge for social entrepreneurs. Most do-gooders have started a social enterprise because they are very passionate about a particular social issue or problem. However, it’s common to get distracted by the broader social problems while building a company, and feel compelled to want to “fix it all.” After all, entrepreneurs who become most successful are those who stay focused on their founding mission and don’t try to do too much at once.
Hence, I recommend you start small. For example, if your mission is to stop hunger, it’s better to refine that by being specific about what you can do on a local or more concentrated scale to achieve that mission. You will always be able to expand on that vision later, once you’ve established yourself as a business. Another danger of trying to do it all is that it often creates confusion for employees, and then they don’t know what aspect of your vision they are expected to deliver on. If your employees or people connected to your company can’t tell you how the given mission of your company would affect a decision they have to make, then you are probably not staying focused enough.
Practice Transparency. Along with the task of staying focused comes the importance of being transparent in the way that you run your business. The easiest way to build trust with consumers and employees is to be clear about what you are and aren’t doing. A good way to create that transparency is by putting together a corporate responsibility report. The report doesn’t have to be long but it should discuss how exactly you are being socially responsible in your process and methods.
It’s important to point out the areas where you are striving to do this as well, but may not have the capacity to do so at the time. It’s helpful to post the report on your Website for your customers to see, as well as share it with your staff. The more open you are about your process, the easier it will be for your employees to deliver on your mission, and the more invested they will feel in the success of the organization.
Build Your Team. One of the most important aspects of running a social enterprise is the people you hire to work at your company. While smart hiring is crucial to the success of any small business, there are certain things to look for when hiring for a social enterprise.
It can often be more challenging for social entrepreneurs to attract high-quality people, because you aren’t just looking for someone who can do their job well. You also want to bring the people on board who really understand the mission of your company and believe in it. Those who are eager to build upon your vision are the kind of employees that won’t just help your company grow, but the ones who will grow with you. Your challenge as their boss is to make sure they remain motivated and excited about the mission.
Educate & Market Yourself. The more involved you are with a community of like-minded social enterprises, the more knowledge you will gain about decisions crucial to your own company.
In that respect, I recommend finding a group of trusted advisors who can take part in your company in a mentoring capacity. Finding advisors that you admire often comes from joining community networks, especially ones that are geared towards social responsibility in business. Most importantly, you can’t rely on social mission to sell your product. You can have a great product and great business practices, but if you don’t promote it, you won’t sell anything.
Remember Your Cash Flow. Just as marketing should be integral to your business, turning a profit even for a no profit is just as essential for the sustainability of your organization.
In order to make a difference through social enterprise, your business has to be financially healthy. According to Nelson, there’s a saying in the social entrepreneurship community: “No margin, no mission”. Hence, keeping your expenses lean and bootstrapping as much as possible at the beginning will help you achieve that crucial balance. You can’t afford to be naïve about your numbers, either.
Now that you know the basics….go use these tools to build the value driven organization of your dreams and never turn back.