Can your business be both capitalist-based and have a social purpose?
Updated: May 17, 2019
What if a local company was discharging toxic waste into the river? What if they underpaid staff and gave little regards to the material used in the fabrication of their products? Would you support them? Naturally, you wouldn’t!
For years, it has been the norm to purchase from such business, given that they operate far enough from our home. It used to be socially acceptable not to question companies that offered products that we became convinced were indispensable to our way life.
As slow as it may seem, it is all changing. Consumers are increasingly looking for meaning and value. Recent research from Nielsen shows that fifty percent of global consumers (in 58 different countries) are willing to pay more for goods and services from companies that make a difference. We can deduct that within a few years, businesses without a core impact will be at a competitive disadvantage! (Source: Evolved Enterprise by Yanik Silver)
The beauty of capitalism is that it allows consumers to dictate the direction of the market. When a social purpose is deemed important enough for the masses, business opportunities ensue.
Three questions to determine if your business has the potential to be a profitable socially driven company.
1 - What is your social purpose?
When I co-founded a sign shop over nine years ago, we found out that the print industry was as dirty as it can be. Signs, decals, and car wraps are everywhere you look. We took a significant risk and invested in brand new technology to provide our customers with low VOC ink, with minimal waste. We doubled our revenue every year until we sold our business three years later.
In this case, our social purpose was to reduce our environmental footprint while setting a new standard in the industry. Social entrepreneurs are risk-takers and innovators. They establish either for-profit or not-for-profit companies that address social or environmental needs using sound business practices.
2 - How does your social purpose affect your client's life?
Is your social purpose deemed important enough for the masses to buy-in as an alternative to more traditional products? Where is it talked about, by who, and how often?
By answering these three simple questions, we knew Portia Ella was going to gain good market traction. In addition to the substantial Canadian cosmetic market, multiple surveys, article, fashion magazines regularly talk about the ethical trend in the cosmetic industry.
Our research confirmed our thoughts, and we started to focus on sourcing the best and cleanest brands in the Canadian market.
If there are no current trends that relate to your idea, don’t be discouraged. The work to create a movement is much more intensive, but it may play in your favour as there are much less competition and noise to temper your effort.
3 - Do you have what it takes to start a movement?
Within five years, Portia Ella gained National recognition and the traction needed to be recognized in the mainstream world and establish itself in malls. Early on, other companies replicated our model; we have set the trend in our market.
We built our reputation through different campaigns, videos, content and strategic associations with players in the industry paired with an awful load of stamina.
There is no secret to starting a movement. It begins by pushing your goals and vision ahead of your ego, teaming with the right people, and the courage to persevere through adversities.
Purposeful capitalism is the way of the future. I would love to hear how your business contributes to increasing sustainability in your community! Comment below to start a conversation, and to let me know of other businesses worthy of attention!
Julie Michaud Angelatos