Social entrepreneurs are innovative entrepreneurs who strive to bring positive and impactful change. The world needs these compassionate and creative entrepreneurs with a vision to help people and the planet.
In this blog you will discover the difference between a social entrepreneur who will create and build a Social Enterprise and a business entrepreneur who will use the traditional shareholder value business model.
Profit, Purpose, Passions
Let us first start with the similarity between the social entrepreneur and business entrepreneur. The main common attribute is that they both create sound businesses with an aim to generate a sustainable profit.
Both types of entrepreneurs also aim to bring to market a product/service that people need or want, with the intention to deliver value to consumers.
But a business entrepreneur is primarily focussed on growing profit and wealth for shareholders – while a social entrepreneur’s focus on the other hand, is the positive impact their business (Social Enterprise) has on society, incorporating social, cultural, and environmental factors.
A Social Enterprise model would also ensure a percentage of the profit is reinvested to directly help their social mission. This could be through setting up a separate foundation arm or supporting an existing charity that directly supports the social purpose of the business.
Traditional business entrepreneur and responsibility
With a business entrepreneur’s main focus being profit and generating as much revenue as possible, this can sometimes – but not always – lead to a neglect of the ecological outcomes of their actions.
The primary example of this would be large multinational corporations who control a substantial amount of the world’s wealth and do so at whatever damage to the environment. This includes factories which cause air pollution and leak harmful damaging chemicals into our rives in order to manufacture their products.
Our video also shows the damage to the Aral Sea caused by the fashion industry producing cotton, despite the negative impact it was having to the environment and people living around the Aral Sea in Kazakhstan and Uzbekistan.
A business that aims to make profit exploiting people as employees or within their supply chain and causing damage to the environment along the way, is far from the ethics of a social entrepreneur.
Social entrepreneurs are solution orientated
A business with a social mission to help improve the planet for people and animals is the core function of a Social Enterprise and a key value for a social entrepreneur. A social entrepreneur is essentially a change maker, creating solutions to the world’s problems using their entrepreneurial skills and business mindset.
Funding for their Social Enterprise may be supported from fellow philanthropists who will work with them to invest in their social mission.
For many social entrepreneurs, creating and building their Social Enterprise can feel that they are fulfilling their life’s purpose and they are dedicated to using their business to create long-term, sustainable change.
A Business, Charity and Social Enterprise
There are many businesses which are not founded by social entrepreneurs, that do also make a significant positive contribution to society. This would be a form of Corporate Social Responsibility (CSR), rather than the model of a Social Enterprise and this to differs from the model of a Charity which relies on donations, rather than generating a profit in order to serve its purpose. Charities have trustees rather than shareholders and governed by regulators. This means operating a Charity is more rigid, technical, and complex than a Social Enterprise, which frustrates entrepreneur spirit.
The difference between the traditional business model, charity and Social Enterprise is explained in two modules within our How to Build a Social Enterprise online course. You can see the full course outline here by clicking on course curriculum and a special coupon code for our readers is ‘APRIL2020’. This gives you lifetime enrolment to the course for £13.99, valid until May 8 2020.
Social entrepreneurs put People and Planet at the heart of their business, with a desire to create long-term sustainability and an opportunity for real change.
Join the social entrepreneur movement and learn more about Social Enterprises. Examples of existing Social Enterprises can be found throughout our blogs and you can also watch our Top 5 Ted Talks on social entrepreneurship.
As we rebuild our world following the devastating impact of Coronavirus, we now have a chance to reset and create a new economic model that is fairer for our most vulnerable people in society, with a focus to also be environmentally friendly too, protecting our Eco structure.
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