If you are a purpose-driven entrepreneur (or aspiring!) who want to have a positive impact in the world while making a good living & generating enough revenues to grow your impact in the long run, this article is for you!
Thanks to my masters in Sustainable Development, and running a consulting agency for social entrepreneurs since 2014, I have seen what models work and which one to avoid. I am a big fan of Inclusive Business Models (you’ll soon discover why) and want to share not just one but 3 ways to put an inclusive business model into action.
If you wonder, an INCLUSIVE business model “includes” your beneficiary in the value-creation and/or delivery part of your business model. But don’t worry, you don’t need to know what that means exactly, or be a sustainable business expert (this is why I am here!) to succeed as an impact-driven entrepreneur.
In fact, I have designed this article in a super practical, example-oriented way, that democratize this notion (big thanks to my amazing friend and visual storyteller Caroline Gaujour for helping me illustrating these concepts for this article!).
But first, let’s look at one of the biggest misconception around impact creation…
When hearing the words “social impact”, “good for the environment” or “sustainability”, most people associate those terms with charities and not-for-profit. Or CSR programs (you know, donating a small percentage of profits here to cover’up for how the money is made over there and keep burnout employees motivated…)
The problem is that charities, NGOs and CSR program are NOT inclusive : they separate money from impact. Good on one side, money on the other.
- That’s not scalable – the more the impact, the bigger the cost. It limits the impact (poverty is too big of a problem to be solved by donations).
- It’s not as impactful as it seems. Giving away free food with 1% of the profits of a agro-industrial chemical company will not stop hunger or global warming. It only makes us look the other way.
This is why, as a sustainability expert, I decided to dedicate my career to social BUSINESSES – which combine profit generation mechanism WITH positive impact … and NOT charities.
Social Businesses create win-win situations (not help-receive dependent relationships). Like the famous proverb says …
Empowerment instead of charity has two main benefits:
>> It is better for the beneficiaries of the impact: they learn how to fish and can be proud of themselves, instead of eating the given fish and starving again the next day .
>> It is better for the entrepreneur / solution creators: s.he doesn’t have to spend most of her/his ressources chasing grants (from the government or big corporations), and instead can focus on the heart of her/his mission!
If you think about unemployed moms for example, giving them money or assistance is nice, but it doesn’t solve the problem. Empowering them (with flexible work solutions for example) will.
DISCLAIMER ! Don’t get me wrong : in emergency situations (like a humanitarian crisis for instance), the work of charities and NGOs is essential – especially in countries with limited public resources. And I am super grateful they exist !
However for recurring problems like global warming, poverty or discrimination against women, emergency solutions won’t solve the core problems.
You might wonder how this can translate in “real life”?
Well, let me show you.
There are actually 3 ways to empower your beneficiaries, have a positive impact and generate sustainable healthy revenues at the same time:
- Selling – which means developing a solution that your beneficiaries can buy to help solve their problem
- Sourcing – which means developing a solution that your beneficiaries can sell to, to help solve their problem
- Employing – which means developing a solution that employs your beneficiaries, to help solve their problem
>> Those are the 3 approaches of Inclusive Business Models
Let’s look at each model using our example : tackling unemployment of moms (because having a child shouldn’t reduce one’s chances of earning their own living!).
Inclusive Business Model #1 : Selling (to your beneficiaries)
A first solution could be to open a mom-friendly workspace, when they can learn and collaborate to become independent contractors, freelancers and entrepreneurs.
Just like a traditional co-working space, the business earns money by providing a space at a small fee (office costs being divided by all the members) as well as giving access to resources, hosting workshops, training opportunities, etc.
Unlike a traditional co-working space, it would be mom friendly, with the option to put toddlers in daycare !
Indeed, the root cause why unemployed moms find it hard to start a business is that they cannot always afford a private workspace PLUS day care for their offsprings. Providing the right environment and ecosystem can make all the difference.
Everybody wins: the moms invest in a solution that can both host their kids nearby and support them in starting their own business, while the business generate consistent revenues… and society can benefit from what those moms have to offer (instead of being dependent on government support !)
Other examples include: micro-credit services, training services, coaching services, consulting services, etc… at the direction of your clients/beneficiaries (this is the model I chose with Creators for Good, mentoring women to start their own social business!)
Inclusive Business Model #2 : Sourcing (from your beneficiaries)
Other way to empower unemployed moms is to support them making a living with their own creations.
While many moms might have a talent for creating somethings unique (let’s say, eco-friendly jewelry), it can be difficult for them to develop a big enough clientele on their own.
Why not creating a (online) marketplace dedicated to promoting and selling creations from formerly unemployed moms?!
Everybody wins: moms can easily generate their own revenues without having to invest time and money in advertising, the social business generates revenues for every item sold (a percentage of every sales, for instance) – and so the more the impact grows, the more revenues grows, and consumers have easy access to socially-conscious goods
Other examples include: fair-trade products, fair-trade marketplaces, sustainable travel agency… sourcing from your beneficiaries and selling to (the fast growing pool of) conscious customers !
Inclusive Business Model #3 : Employing (your beneficiaries)
Not all moms want to start their own businesses ! Thankfully, they can still be collaborators while having flexible hours – especially now that many jobs can be done remotely.
Imagine a social media management agency, who would only employ moms : providing them social media trainings, and liking them with businesses and entrepreneurs who don’t have the time or skills (and yet want to benefit from having rocking social media engagement!)
You don’t believe me?
This example actually exists ! It is alive and well in the UK, and is called Digital Moms. See for yourself here: https://digitalmums.com/
Other example include: homeless-employing coffee place, deaf/mute-employing bookstore, etc… employing your beneficiaries and selling to (the fast growing pool of) conscious customers!
Need help to figure out your own INCLUSIVE business model?
If you want to both have a positive impact and generate sufficient revenues at the same time (without having to chase grants, government funding or investors money), I can help :)
Sign up for my 10 free email course below, where I’ll walk you though designing your own sustainable business model, step-by-step ^^
Solène is the Chief Empowerment Officer of Creators for Good.
She developed a methodology that allows Global Citizen to start and grow their own impactful businesses from anywhere in the world – and with no need for investors or government support.