Innovation: The Social Purpose Business

According to LateralAction.com, “To create means to come up with something new [unique] which also has the capacity to positively affect lives [useful].” This idea is perfectly encapsulated in a new trend sweeping the nation and the world: the social purpose business.

Ever heard of TOMS? They’re a shoe company that has a simple, charitable premise: every pair of shoes sold is matched by the company giving one pair of new shoes to a child in need who otherwise wouldn’t have any. The company has become a wild success, and if you walk around the nearest university campus you’re likely to see that a large percentage of the shoes worn are TOMS.

TOMS has helped head the wave of “social purpose” business that is built on the idea of enacting social change through profitable business. It is an innovation born of a time where, according to the Huffington Post that did an analysis of their annual Edelman goodpurpose consumer study, “People . . .  are more passionately supportive than ever.”  In their words, “social purpose can be a key driver of brand building” since they found the majority of consumers will switch brands if presented with a company that supports a good cause. It’s a simple premise: by approaching your business from a different perspective creatively you can help others through a social purpose while also knowing that you’re helping yourself by making a company that is more attractive to consumers. It’s a win-win situation that allows you to keep up with the changing tides of time and consumer opinion.

Like what you’re hearing? Well here’s some good news: starting a new business isn’t as hard as it used to be. Both funding and business solutions are more common than they’ve ever been before because of the rise in success of small businesses: the U.S. Small Business Administration (SBA) reports that small businesses have generated 64% of net new jobs over the past 15 years. Online MBA programs are also a great option for people who also have a passion for innovation and social purpose and who want to take their knowledge to the next level. They are a great way to learn the information you need to compete in today’s business world.

If you think you have a good idea but aren’t sure about the particulars, try looking for an incubator attached to the local university like the Texas Venture Labs at the University of Texas at Austin. These incubators will help you do two things: connect to local angel investors and clearly outline your ideas so you can develop your pitch for those investors.

Think you might need a little more money than just one person could provide? Looking for help in the actual running of the business? Try looking into a business accelerator. These companies will become a partner in your business, investing around $25,000 for a 6 percent ownership stake. As a part of this partnership, the company will help teach you how to start and run your business in order to ensure that you do well so that they can get a good payoff for their investment.

Finally, you can actually go to the SBA to get funding. On their website (sba.gov), you can find a variety of different grant and loan programs, all of which are through SBA-certified lenders. The SBA will also streamline the application process for you, so you’ll be able to get your funding both faster and easier. As a bonus, you can enter the prequalification pilot loan programs if you’re a female or minority business owner, possibly getting an even better rate on your funding.

So change with the times. Business is never just “business:” it’s innovation and making sure that you’re using the best approach you can for the situation and market at hand. By creating a social purpose business you can not only feel good about yourself but also create a truly attractive company that will draw in customers.

—

James Kim is a writer for Choosewhat.com. ChooseWhat is a company that provides product reviews and test data for business services and products.  Their goal is to help small companies make informed buying decisions on business solutions that help their business.