Many small businesses are facing challenges these days. With faster than ever technology advancements, small businesses are left to compete with big-box businesses and their larger capacities to innovate and shift with such technology.
So, a few days ago, we sat down with Madeline Toubiana, Assistant Professor in the department of Strategic Management and Organization at the University of Alberta, Alberta School of Business. She had a lot to say in regards to how small business can stay relevant and innovative in changing times. One solution? It just might be social enterprise.
What is Social Enterprise and Social Entrepreneurship?
Madeline emphasizes that there are a large number of ways to define social entrepreneurship, but that generally, it involves “using the mindset and tools of traditional business to pursue a social and environmental mission.”
So, this means that a social enterprise would still be generating profits – in fact, that’s a key component. But the difference between a regular enterprise and a social enterprise is that the latter reinvests the profits into furthering this social mission.
Now, this shouldn’t sound so foreign. A quick wiki-look shows that this movement has been around and evolving since the 70s.
In fact, Madeline expands on this and gives a real, tangible example of how the movement has been evolving. She prompts us to consider corporate social responsibility, or CSR – and points out how it’s a movement that evolved out of a simple acknowledgement: that businesses were responsible for more than the bottom-line and encouraged to be accountable for social and environmental impacts, not just economic ones. Madeline goes on to say how companies are now evolving even further, beyond CSR promises. How? Well first, why does it matter?
Why Does This Matter for Small Businesses?
Well, to state the obvious, small business plays a big role in the local economy. Small businesses have the opportunity to have a direct impact on the local economy… And this can be true of their social impact as well.
Let’s not forget how truly connected small businesses are, to their community – after all, being rooted in the community is what’s made us at the Raj Manek Mentorship Program so successful for the last 20 years.
So, making conscious and meaningful choices that result in social and environmental benefit (in addition to economic) can really be a great thing for the local society.
For example, our organization’s focus is on small and medium sized business owners and providing them with the tools and mentorship to thrive and succeed. Through this, we not only drive the local, Saskatchewan economy (and more recently, Albertan too), but we also benefit the many local entrepreneurs with which we’ve had the pleasure of connecting over the last 20 years.
Although, as a non-profit, reinvesting any profits into this mission is a built-in mechanism, it can be easily done as a corporation too – if you wanted. Your focus can be anything from hiring marginalized groups to empowering youth to creating a zero-waste manufacturing process or facility.
An example of a company operating as a social enterprise is CMNGD – an organization operating in Calgary, Alberta, providing linen services. Check out their video:
Amplify Your Business - ATB & CMNGD from CMNGD on Vimeo.
Essentially, they are providing a needed service to the local business community, generating profits and growing the economy. Meanwhile, they are also achieving a social impact by providing employment opportunities for the homeless. It’s a great example of the triple bottom line in action!
The point is reinvesting your business profits into a socio-environmental mission to generate social impact is fantastic for the local community. Not only do you have a direct impact on the local economy, but you change the lives of locals – the very people that you depend on and make your business worth it, every single day.
Actually, Madeline points out that it can be one way of differentiating yourself and attracting people away from big business, causing a domino effect in consumer reach. Do we hear a new competitive advantage?
How Can Small Businesses Navigate This Changing Landscape?
Again, CSR is great. More and more businesses are implementing it. But it might only be the beginning. The benefit of focusing on the social and environmental spheres can increase exponentially with true integration of such concerns into a business’ mission and purpose.
Actually, Madeline mentions a few ways that people & businesses can do more to act on their shift in perspective and focus – if they are so inclined. For example, she mentions ISO certifications, B-Corp status achievement, and personal environmental professional certifications. These will also add credibility to you and your business, so you can walk the walk and not just talk the talk!
Other Resources for Small Businesses
She also encourages exploration of other resources that are bound to exist within your region. In Edmonton, where she is located, she identifies 2 great resources including: the Social Enterprise Fund and eHub.
Saskatchewan is also up-and-coming with resources for socially-focused businesses as well, including UrbanMatters – an organization that delivers consulting services and venture incubation for social ventures.
Anywhere you are though, it doesn’t hurt to connect with relevant university faculties and departments as well as the Social Enterprise Council of Canada.
Still need convincing on the matter? No problem. Take your time. Do your research. Connect with people in the ecosystem by going to community events.
We’ll leave you with Madeline’s parting advice & wisdom:
“You don’t have to be a huge company to make a difference... Little ripples can turn into big waves”