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  • Donna Rosa

Transitioning a Developing-Country Business into a Social Enterprise

Updated: May 6

By Donna Rosa

Women sorting vanilla beans in Madagascar - Donna Rosa

One thing that has always impressed me about working with entrepreneurs in developing countries is that many start businesses so they can make a social contribution to their local communities. I find it extraordinarily admirable, especially since they operate under such difficult circumstances.

Social entrepreneurship goes beyond a traditional business’s sole objective of making a profit; it seeks to have a positive impact on society. In one sense the dual objectives of earnings and altruism create added pressure for the business owner. But it doesn’t have to create extra work if you select what works for your business.

Most social enterprises stem from the entrepreneur’s primary motivation to do good, and the business is set up that way from the beginning. It is simply using a business model to generate the needed funds or mechanism for social impacts. However, it’s possible for a developing-country entrepreneur to turn almost any business into a social enterprise, and the possibilities are endless.

A mindset change will be needed first, since the primary business objective is social rather than profit maximization (although the more the financial success the higher the potential social impact). The latter is not a byproduct of the business; it’s the enterprise’s reason for being.

If you’d like your business to serve your community or society in general, here are some ways to transition it.

· Make it your mission to be “exclusively inclusive” with your suppliers. Procure only from minority-owned businesses, women, indigenous people, the disabled, farmer cooperatives, craftspeople, or other underrepresented groups. Or buy only locally produced raw materials.

· Be sustainable with all business practices. Beyond producing sustainable products, this can take the form of process waste reduction, using recycled raw materials, organic, vegan, or other inputs and outputs, or climate initiatives.

· Develop employee volunteer programs that serve the needy, clean up the environment, raise money for charity, teach literacy and numeracy, mentor youth, etc.

· Use the business to train and employ the underemployed such as youth, people with disabilities, women, and former convicts or addicts.

· Collect and donate items like books, shelf stable food items, or clothing.

· Share a portion of your profits to support a charity or NGO, or donate a product or service with every sale.

· Set up a side program such as microlending, skills training, networking/job seeking support, or scholarship fund.

Get creative and enlist the help of your management team or employees for ideas and feedback. As with any new business initiative, you must develop a plan and identify the resources needed. Start small and test the water. And be sure that everyone involved benefits—your business, employees, customers, and other beneficiaries and stakeholders.

If you don’t want to go all the way over to a social enterprise, you can always just incorporate responsible and ethical behavior into your business. Now that feels good, doesn’t it?

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