advertisement
advertisement

6 Steps To Building A Purpose-Driven Business

Consumers and investors want to back businesses with social good in mind. But sometimes a well-meaning mission is easier said than done.

6 Steps To Building A Purpose-Driven Business
[Photo: Flickr user Roberto Taddeo]

As social innovation continues to gain traction in the business community, more entrepreneurs are entering the space as company founders. Yet many wear rose-colored glasses, underestimating the challenges that come with building a purpose-driven company.

advertisement

I’ve discovered from personal experience that it’s hard to stay true to your vision of enhancing others’ lives without losing money and your own sanity in the process.

Matt Pohlson, cofounder and CEO of charity prize auction site Omaze, points out that for-profit companies working in the social impact and charity space used to face more resistance, but there has been a recent shift. “Most people now realize that while the nonprofit model works well in some contexts, in other situations it’s best to harness market solutions to drive change,” says Pohlson.

Whether your business is for-profit or nonprofit, here are six steps you can take to increase your chances of successfully building a purpose-driven business that inspires change, empowers others, and drives business results:

1. Take It Slowly

In the early days of founding a company, your ideas come fast and furious, and you’ll be tempted to move quickly to implement them all. But if you grow too fast and get ahead of what your business can support today, it will likely be much tougher to recover than if you had let the organization evolve at a slower pace.

This principle applies to your expectations as well. During the first holiday season after launching Shopping for a Change in 2010, I expected to be flooded with orders–but that didn’t happen. In retrospect, I realize it was a blessing in disguise, because we weren’t ready to manage that volume yet. It took two to three years to build a solid foundation through systematizing the business and developing our brand. By the end of 2013, just before the holidays hit, I was ready to handle the huge influx of orders that came our way.

2. Do Things Differently

You don’t have to be the first on the block with a concept in order to create a winning model or product. But to be successful as a new organization, how you bring something to market becomes critical. You must consider not only the design and implementation of the product or service itself but also the style in which you provide it to customers.

advertisement

Never lose sight of figuring out how your offering can bring greater value to the consumer than your competition can–and communicate that distinction with clarity and flair. The ultimate example of a leader who did “different” right? Steve Jobs.

3. Don’t Go It Alone

Glen Moriarty, founder and CEO at emotional well-being service 7 Cups of Tea, notes that shared vision and community development play central roles in learning and alignment. “The overall community can work toward strategies that meet both the social good and business objectives,” says Moriarty.

In other words, if you hope to grow your enterprise, you need to widen your sphere of collaborators over time, which can increase your ability to achieve business goals.

A few years ago, I was creating an animated promotional video and wanted to attain the rights to use a song by the BareNaked Ladies called “Shopping.” After working some connections, we were granted permission to use it with no licensing fee attached. Our informal collaborations have also led to us receiving pro bono legal support from a globally recognized law firm when trying to protect our trademark, as well as deeply discounted assistance from the animation, film, and tech industries.

4. Master The Art Of Fundraising

In running a nonprofit e-commerce business, I’ve learned that I have nothing to lose by asking for help whether through pro bono assistance, in-kind donations, or price breaks. It doesn’t take a lot of money to make a significant difference in someone’s life, especially in the developing world.

Extending this concept, it’s important to remember that there’s more than one way to engage others to achieve business results. Ravi Patel, founder of This Bar Saves Lives, notes that because he and his partners are all actors, they had no need to start a company for their own financial gain, but did so to complement pre-existing charitable efforts.

advertisement

“If your bottom line is truly about doing good for others and you are transparent about it, then it’s up to you as an entrepreneur to understand how to leverage your mission into in-kind opportunities, which can be significant,” says Patel. “Goodwill and branding can be more currency than cash if you treat your mission with respect.”

5. Be Prepared To Go Off-Road

Launching a business from the ground up has taught me that there’s rarely a straight path to achieving your desired outcome. When I first started the business, the road before me was unpaved–I had no map and still don’t.

Each day I determine what I need to accomplish to get one step closer to making Shopping for a Change a household name. I rely on my background and follow my instincts. I ask for guidance from people whom I respect and feedback from our customers. I also read a lot to learn from the successes and failures of other businesses.

6. Look At Your Accomplishments, Not Just Your To-Do List

I’ve ridden over many potholes while building the business, and the journey has been slower than I expected. Despite some angel funding, we’ve had to bootstrap our growth. As a result, I wear many hats, and we’re still an all-volunteer organization.

Because of these ongoing challenges, I have to remind myself to look back at our achievements rather than focus solely on where I still want to take the organization. In the four years since our launch, the business has grown from partnering with 11 artisan groups in Africa and South America to over 40 artisan groups spanning four continents and 28 countries, touching more than 25,000 lives domestically and abroad.

Though there’s still so much to do, there’s certainly plenty of accomplishments to be thankful for. If you find yourself caught up in where you want to be down the road, change your mindset to appreciate all that you’ve already achieved.

advertisement

Stacey Horowitz is the founder of Shopping for a Change, a marketplace for fair trade products by artisans from economically disadvantaged areas. The company’s mission is to help the artisans raise themselves out of poverty, fund community improvement projects in the artisans’ communities, and raise additional funds for U.S. based nonprofits. Stacey’s background encompasses years in the creative and promotional departments of advertising agencies and in the wholesale consumer products industries as a manufacturer’s representative.