Three Essential Practices for Building a Stronger Social Enterprise
A passionate dream of many social entrepreneurs is growing their enterprise to serve new communities, including communities in other countries. At Stage Six, we work as advisors and partners to these entrepreneurs to turn these dreams into reality.
A viable, sustainable business model is the essential foundation needed to make these dreams come true. Nothing makes this clearer than the experience and inspiring stories of successful social entrepreneurs who have taken this step and “nailed” their business model.
Recently, the Stage Six team attended the Global Social Business Summit (GSBS) hosted by Yunus Social Business. We heard powerful stories from social entrepreneurs from around the world that echoed the experience of many of our clients. Notably, the fifth session of the summit highlighted challenges and approaches to scaling nutrition-oriented social businesses. The experience recounted by these business people illustrated the importance of several practices that Stage Six has found essential in our work.
Here are three practices to build a solid foundation.
Practice #1: Establish a Clear Target Population. To develop viable products or services that will achieve a social entrepreneur’s desired impact, it’s crucial to identify a clearly defined segment of people and a specific community that the enterprise seeks to serve
Example from GSBS: Caesar Ogunremi highlighted the importance of focusing on a clear target population, which he did when he helped create a social business selling nutrient-fortified yogurt to Nigerian women in their peak reproductive years.
Practice #2: Build a Market. There are many cases where social entrepreneurs can address a compelling social need, but the market for their product or service does not yet exist. This is often the case with nutrition interventions because food is highly cultural, and people can be hesitant to make changes to their diet. The key in this case is to create a product that can be easily integrated into people’s lives and then build a market for this product.
Example from GSBS: Leah Tronel’s business is a partner with local mills in Tanzania to help them produce and sell fortified flour. Prior to entering the market, there was no obvious demand for enriched flour even though there were unmet nutritional needs. Leah created demand for the flour by making it easy for mills to produce, accessible to consumers, and more desirable than competing products.
Practice #3: Prioritize Sustainability. Once social enterprises select a clear target population and have established a market for their solution, the next challenge is to make choices that support the ongoing sustainability of the enterprise. Leaders must balance revenue goals with their social impact goals. Many enterprises achieve this balance by serving a blend of middle-income and lower middle-income customers. One approach that our clients use is ensuring that their products and services appeal to people across income levels and then adapting the features and pricing to keep them affordable to lower middle-income households.
Learn more about these practices and the specific experience of the social entrepreneurs who built strong business models for their enterprises. Watching the full session from GSBS 2021.
Global Social Business Summit -Session 5: Scaling up purpose-driven business models.
Once social enterprise leaders have tackled the challenge of building a viable, sustainable business model, Stage Six works with entrepreneurs to scale their enterprises and their impact. Learn more about the Six Stages of Social Franchising and how we work with entrepreneurs to scale impact and expand their social businesses internationally.
