The world demands every present-day innovation to be sustainable and futuristic with a long-term positive impact. This word is not new, nor is it a rocket science. It came right out of our school textbooks. Profits, on the other hand, are means to make money, with the least possible cost burden.
Social Entrepreneurs have been facing the dilemma of how best can they build profits while creating an impact. In this process, conflicts over the business model and its operations are not uncommon.The new breed of social entrepreneurs is building effective solutions through business models that directly impact the underprivileged population, what is better known as, For-Profit Social Entrepreneurship.
What is Sustainability?
The very first obvious definition would be “to be sustainable.” The concept of being Sustainable or Sustainability originated from a branch of science called ecology. There have been many definitions, postulates, and explanations of what sustainability means ‘out of the environmental scope.’
According to the Bruntland Report for the World Commission on Environment and Development (1992), Sustainability essentially means, “Development that meets the needs of the present without compromising the ability of future generations to meet their needs.”
Simply put, to be sustainable is to put the available resources to use in a constructive way, such that the benefits so obtained, positively impact the people and the environment even in the future.
What are Profits?
Commercial businesses since the crux of Globalization, have chased pure profits by reducing their input costs. Cheap labour, low cost raw materials have made procuring profits easy.
Building a sustainable business while creating profits is not easy. Social entrepreneurs are testing the waters with creative business models that deliver a long term impact, albiet, with some roadblocks. In fact, if you wish to be sustainable, one has to bear the brunt of lesser monetary gains. The same holds true, vice versa. There are three key areas in which the conflict between sustainability and profits will exist and can’t be controlled.
The primary goal of a social good brand is to create sustainable livelihood for the BOP as against a commercial brand that lays focus on producing large volumes at least cost.
For-profit social good brands like, Okhai.org cater to a niche audience and hence, employ artisans from below the poverty line to source a native craft or art into their products, thereby promoting fair trade through their social good business.
Commercial brands like Hidesign, have a huge market and hence a huge demand. They select their raw material and labor sources that are low cost, which in turn will pave the way for higher profits for the brand.
For social good brands, impacting a community or promoting a lost art is of a higher importance that reaping profits which is clearly not applicable to a commercial brand.
For instance, apparels like block prints, batik prints at Jimani Collections are hand crafted with finesse and with a keen eye to detail by the women from African BOP community. That way the women are empowered to lead a dignified life with a sustained influx of money. ‘Handcrafted’ is the USP of social good brands, which add a personal touch to their products through the artisans that they employ.
On the contrary, commercial brands like Aditya Birla Fashion and Retail have large textile factories that churn out products in significant volumes by automating their processes through assembly lines.
- Business Models
Brands that are focused on sustainability have a distinct business model with the BOP community at the center of its goal matrix.
Hasiru Dala and Social Plastic give entrepreneurial opportunities to ragpickers and waste recyclers through their business model thereby delivering a dual impact of environmental and livelihood sustainability.
On the other hand, conventional industrial waste recyclers, to reduce cost and improve production volume, pay ragpickers and recyclers meager wages and in turn earn in millions, through their industrial clients.
Blending sustainability with profits is the need of the hour, but conflicts between sustainability and profits will exist. Social entrepreneurs have to take tough decisions by compromising on the profits, and device a golden mean to build an impactful solution.
Cover Image Source: rohanpotdar.com