Jul 14, 2023 | None
9 Hacks to Succeed as a Social Business Entrepreneur
Since 2009, our programs at The Grameen Creative Lab have undergone a significant transformation, but especially in the latest couple of years with a rapidly changing world, coupled with the added challenges of various crises, our incubation and acceleration methodologies have gone through continuous adaptations to better support social businesses on their journey to success.
Partners and mentees in our programs often expect a precise formula for success in accelerating and incubating social businesses. The truth is that no set recipe or checklist guarantees success for social entrepreneurs. Solving socio-environmental problems through business is complex and requires a dynamic and innovative approach.
If the journey of a start-up is a complex and nuanced one with high failure rates (CBInsights 2022), the journey of social business entrepreneurs is even harder and the initial phase even more crucial: more difficulties in finding investors because of their non-dividend structure, finding a market fit while addressing socio-environmental issues requires a unique approach, one that not only addresses the needs of the market but also incorporates a sustainable business model to reinvest profits and create greater impact. It is this comprehensive approach that sets social business entrepreneurs apart.
So why should you enter the social business world?
Now more than ever we need a new kind of entrepreneurship: one that has the power and effectiveness of traditional businesses to solve socio-environmental problems.
Social business entrepreneurship is not a path to financial wealth, but rather a journey toward creating a more equitable and sustainable society. As we are creating a new civilization where people and the planet are at the center of our economic and business system. This journey is challenging, but it is also rewarding as it allows us to make a meaningful impact on the world. We need more individuals who are willing to embrace this journey, not only for their benefit but for the benefit of us all.
Strategies for social business entrepreneurs
While there is no guaranteed recipe for success in social business entrepreneurship, there are strategies and techniques that can guide you in your journey.
In this article, we gather some valuable tips from the experience of our chairman Prof. Muhammad Yunus and from the most successful cases we encountered in these 14 years.
9 Hacks to Succeed in Social Business Entrepreneurship
1. Fall in love with the problem you are solving
You need to fully immerse yourself in the socio-environmental problem you are trying to solve with your social business. Only by deeply understanding the issue at hand will you be better equipped to create a solution that truly addresses the needs of the community.
The Grameen Bank, founded by Prof. Muhammad Yunus, is a prime example of this principle in action. The bank was created to address the lack of access to credit for poor, rural women in Bangladesh. Yunus observed that these women were often overlooked by traditional banks and had no way to improve their economic situation. Rather than simply trying to provide loans, Prof. Yunus and his team spent time in the field, talking to these women and utterly understanding their needs. They found that the women were often able to generate income through small businesses but had no way to access the capital they needed to start or expand their ventures.
By fully immersing themselves in the problem and falling in love with the issue, they were able to create a solution that truly met the needs of the community. The Grameen Bank provides small loans to women without the need for collateral and offers training and support to help the women start and grow their businesses. This has led to a significant reduction in poverty in the areas served by the bank and has been replicated in many countries.
2. Discover your full motivation and purpose
Before embarking on your journey as a social business entrepreneur, it is essential to take the time to understand your true motivation and purpose. Why are you dedicated to solving a specific socio-environmental problem in your community? How strong is your passion for this issue? It is important to be honest with yourself and set realistic expectations. Being an entrepreneur is not easy, and the early days can be filled with limited resources and challenges. But, if you are driven by a deep passion and motivation to make a positive impact, it will be easier to overcome these obstacles.
In our programs, we observed that those entrepreneurs that were truly touched by the problem that they were aiming to solve, found an inner strength higher than those who were entering incubation programs with an outer passion for a specific problem merry coming from observation.
However, you can find inner motivation also through observation, and practicing deeply the 1st hack, mentioned previously.
3. Set your mindset for change, but keep your focus on your vision
Test continuously and adapt to things continuously changing. Marnus Broodryk in his book '90 Rules for Entrepreneurs' gave a good suggestion: "Make a dynamic one-page business plan: what will you achieve in 1 year? Break it down per month and set monthly objectives that you then review monthly. In this way, you will be able to plan but at the same time reach to improve yourself and your social business at every stage!"
To do so it is important to adopt a mindset that continuously questions and challenges the status quo with tests and data at hand.
However, at some point, you might feel lost running after your goals and changing so frequently, our suggestion is to always remain focused on your vision and impact. Why did you create this social business in the first place? Make sure you never lose sight of your original mission and keep track of your progress with systems in place. By doing so, you can ensure that your social business model is sustainable and will continue making a positive difference.
4. Planning is essential, but NOT at the expense of starting
Many times, we spend a lot of time planning, and reviewing the business model, the target, and the product. Our suggestion is to have a proposition that is 80% validated and then take the jump and start testing!
As a social business entrepreneur, it is important to have a clear plan and strategy in place. However, in a continuously changing world, it is also important to not get caught up in planning and analysis paralysis. Sometimes starting with one person or a slight problem to solve can lead to a bigger impact as you adapt your model putting fewer resources at risk.
5. Start with what you have and hustle your way to the top
It is common for entrepreneurs to have grand ideas and plans, but it is important to remember that another reason for starting small and testing the waters is that it avoids committing to big investments in money and time to make the best product. Instead of looking for big investors and focusing on creating the perfect product, start with what you have.
Also here, the Grameen Bank serves as a notable example. It started with 27 $ given as a small loan to a woman in a village and gradually expanded to become a global leader in microfinance. By starting small and testing its business model before scaling, the Grameen Bank was able to make a significant impact on the lives of millions of people. This approach can also be applied to other social businesses, and it serves as a reminder that you do not always need a lot of resources to get started, but you do need to be resourceful.
6. Find your first paying customer
Nowadays creating a successful business requires more than just market surveys and empty promises. You need to make sure that customers are willing to pay for your offer and that you are meeting their expectations. To do this, you need to put yourself in their shoes and evolve your offer in line with their needs.
Staying on top of cash flow is essential for any business but for entrepreneurs, it's even more fundamental. Set up a good system to track payments and make sure to ask for deposits in advance if possible.
7. Don't focus on outbuilding your competition, focus on partnerships to grow
Despite the social nature of your business, there are still aspects of traditional enterprise at play, and competition is a small part of it.
You should keep an eye on your competitors to cherish them! Do not get obsessed about competition, but rather observe them to improve your business model in terms of service and delivery; rather focus on building partnerships to grow, and (why not) partner with competitors as well.
You are here to solve a socio-environmental problem as a human-centered business, partnerships are a fundamental aspect to scale up impact!
8. Optimize your own and your team's human power
Another big initial question at the beginning concerns resources and in particular people and time. In the beginning, it is fundamental to surround yourself with few but very committed and motivated people as well as optimize your time at maximum. Here are some hacks we gathered for you here:
- Hire based on attitude and passion, invest in skills development, and reward your people. Good people will help you make a difference from day 1 and will help you build the business.
- At the outset, you may not have the resources to employ the finest personnel. However, you can still maximize your effectiveness by utilizing systems and tools which can help to streamline processes. Tools such as Xero for accounting, Zoho for customer relationship management, Hubspot for sales, and Woo Commerce for e-commerce are invaluable for this purpose.
- At the right moment find a good accountant that will help you structure your growth, but you need to understand your basic numbers.
- Optimize your time focusing on growth, be patient, and become skilled, so that when it is time to scale up, you are prepared...and learn to say NO. There is always a temptation to expand and to source more business. However, it is important to understand when it is the moment to scale up. The 80/20 rule is applicable here; 80% of your sales will come from only 20 percent of your customers, while 80% of the problems encountered will originate also from only 20 percent. As such, prioritize the parts of your business that bring in the most profit and drop the rest.
9. Good things happen when people come together
Building a sense of community within your business and engaging your employees is important for any business. By fostering a sense of community, both within the team and among customers and stakeholders, a social business can create a sense of shared purpose and belonging, which can lead to greater engagement, motivation, results, and impact.
The sense of community starts with fostering a positive work environment where employees feel valued, supported, and heard. This can be done by encouraging open communication, creating opportunities for team building and collaboration, and recognizing and celebrating employee contributions. Engaging with customers and stakeholders through regular interaction and feedback is also important to build a sense of community. By doing so, businesses can create a sense of community that leads to success.
Our Bonus Hack
As a bonus hack, we want to emphasize the importance of "Do it with JoYY!”
It is the 7th principle of social business and crucial for social business entrepreneurs and all entrepreneurs to remember.
The journey of a social business entrepreneur is challenging but rewarding. There is no recipe for 100% success, but at The Grameen Creative Lab, we have the luck of having a great community willing to share and learn from each other.
Author: Maria Ida Palmieri, Md Israr Ehsan
Illustration: Story Set