Why You Should Start a Social Enterprise

We are inspired daily by a new crop of business leaders who, no longer content with the profit-above-all business model, seek to change the world with mission-driven businesses.  These social entrepreneurs are creating businesses that are profitable because of the social good that they contribute to the world.  They recognize their corporate responsibility by minimizing negative impacts on the local community and global environment and by paying living wages and benefits to their employees.

The social enterprise functions in the economy as a profit-making entity, yet its reason for existence – its mission – is driven by solving a social problem.

Social enterprises run the gamut from companies like Patagonia – the first California Benefit Corporation, which is as driven by its environmental mission as it is by creating the best outdoor gear for its customers – to nonprofits like REDF – a venture philanthropy organization that creates jobs and employment opportunities for people facing the greatest barriers to work, such as the homeless and individuals who are formerly incarcerated, addicted, or suffering from mental illness.

Recently social enterprises have gained so much traction that states are creating new legal structures that codify the social enterprise. The social-enterprise-choice-of-entity-article are all examples of such legal structures.  These legal structures provide a framework from which a company, its shareholders and stakeholders can create metrics and criteria for measuring the mission-driven goals of a company in addition to its profitability.

The attorneys at Sustainable Law Group assist many entrepreneurs who are creating businesses that satisfy their need for income as well as their desire to make a positive and meaningful impact on an issue that matters to them.  Some of the questions that we encourage our clients to ask when starting a social enterprise (and then regularly thereafter) include:

  • What exactly is the social problem I want to solve?
  • What is the most effective solution?
  • Does that solution generate income?
  • Do I have the resources (e.g., time, talent, money) I need to open the doors and, if not, how can I obtain them?
  • How can I ensure that as my social enterprise scales larger that my original social enterprise intentions will be achieved at all levels of the company?
  • How do I measure success – including profitability and mission-driven criteria?

Once you explore the answers to these questions, you will need to set up your corporate entity and truly open for business. The Sustainable Law Group is here to help you understand the corporate, legal and organizational aspects of getting started, and we encourage you to learn more and talk to us when you’re ready.

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