A social entrepreneur is one who launches an organisation dedicated to address a social issue. This occupation usually covers a vast range of concepts. This includes charities that raise funds to resolve community challenges. They create organisations that seek to raise awareness on sensitive issues. It offers scope to fill in societal gaps which have long been neglected. Consequently, the benefits of social entrepreneurship are plenty.
Social entrepreneurship is often undertaken with a noble cause in mind. Most of these entrepreneurs seek to make a positive impact through their services. Though the benefits of social entrepreneurship differ from regular entrepreneurship in significant ways.
7 Rewards of Social Entrepreneurship
Making a Positive Impact
Social entrepreneurship provides products or services that help a community overcome societal challenges. EWOR is an example of such entrepreneurship. It helps to provide budding entrepreneurs with the knowledge to launch their businesses.
Creating a Positive Community
The impact doesn’t stop after they provide the service. Social entrepreneurs have the potential to build strong partnerships with other businesses. It helps to achieve both of their goals. A socially conscious company might join forces with a manufacturer and distributor to make and sell its products. As a result, all parties are employed under the banner of a good cause.
This raises awareness on behalf of marginalised communities. These include racial/ethnic/religious minorities and the LGBTQIA+ community. This also includes the physically/mentally disabled community. Moreover, social entrepreneurs help them maintain visibility in the larger society.
Filling in Market Gaps
They manage to fill in demographic gaps. Thus, it includes charity shops. They sell second-hand goods at cheaper prices. Furthermore, they donate a part of their profits to other charitable organisations. Customers who cannot afford new, are able to buy similar second-hand products. Furthermore, charity beneficiaries gain donations from these purchases.
Less Direct Competitors
The majority of businesses invest in making profits. Thus, social responsibility isn’t practised. Thus, a social enterprise has more opportunities to stand out. They can attract customers based on their USP (Unique Selling Proposition). As they deliver good quality products or services, they can focus more on retaining loyal customers. It helps them to worry less about their competitors.
Access to More Capital Options
Society and government have interests in supporting businesses that benefit social causes. They are willing to fund social entrepreneurship ventures. They are also interested to provide the business owner with assets. This includes raw materials and machinery at discounted rates. The Global Alliance for Social Entrepreneurship alone supports 100,000 social entrepreneurs worldwide.
The entrepreneur will be able to witness first-hand the positive impact of their work. This motivates them to keep pursuing their goals. This personal satisfaction is a gift that keeps giving. Furthermore, the entrepreneur continues to work harder to support their cause.
These are considered the benefits of social entrepreneurship. Yet, with these unique advantages come unique drawbacks. Social entrepreneurs aren’t exempt from challenges. Anyone considering this path should be well aware of them.
7 Challenges of Social Entrepreneurship
With great social responsibility comes greater accountability. Most social enterprises need to adhere to government rules and regulations. This usually involves a lot of paperwork. It’s important for an entrepreneur to keep track of any changes. They must follow them to keep the business running.
Specialised Skills Needed
Social enterprises cater to specialised markets. Thus, they need a very specific skill set. This might make hiring employees and volunteers challenging. This leads to entrepreneurs not finding enough qualified people to run the business. Consequently, they might have to take on more work themselves.
Closer Monitoring of the Market
Social issues shift and evolve over time. They need to keep a close eye on the market to predict trends. Any small changes will trigger a greater shift within it. Hence, entrepreneurs have to act on the trends within their market niche.
Social enterprises have few direct competitors. Still, they have to contend with their larger mainstream counterparts. Big corporations have the advantage of brand visibility and longevity. In contrast, social entrepreneurs must work harder to attain. Entrepreneurs might have to learn to accept smaller market shares in the long run.
Possible Lack of Support
Not all communities are willing to patronise socially conscious businesses. Unfortunately, some societies do not consider minority rights. For those who support these rights, the ruling majority sometimes ostracise them.
Gaining Consumer Trust
Social enterprise has to focus most of their marketing material on the good they intend to do in their name. The business often has to emphasise achieving moral gains in supporting such a cause.
Inability to Scale Up
Social enterprises often find it challenging to expand. This is due to the government and societally imposed constraints. Though, some might think these are advantages to remaining small and localised. However, it can be frustrating for a business owner to lose out on opportunities.
Social entrepreneurship is a highly rewarding career path. It comes both with its benefits and challenges.
Entrepreneurs are prepared to put in an equal amount of hard work. Though, it’s important to bear its unique drawbacks in mind. Yet, this is a line of work that stands to benefit many communities. The sense of purpose alone is what drives most entrepreneurs. That in turn is what brings them the most satisfaction at the end of a long working day.