Five tips on building a socially responsible business

Travel to Argentina and you will marvel at the sweeping vistas, the friendly people, and the beautiful beaches. Go inland, however, and you will see a country rife with poverty.

While visiting Argentina, Blake Mycoskie, a contestant on the American reality television show The Amazing Race, was amazed that children didn’t have footwear to protect themselves from the elements. After finishing the show, he had the idea to start a shoe company that would allow him to make a profit while donating shoes to kids in need. Mycoskie self-financed TOMS Shoes in 2006, and since then more than a million pairs of shoes have been donated to children in 20 different countries.

TOMS utilizes a “one for one” model, whereby a pair of shoes is given to a child in a developing country for every pair of shoes sold through their retail stores and online outlets. This model is profitable enough for Mycoskie to build a successful business while also serving a social need.

The notion that you can’t be profitable while being socially responsible is outdated. Companies are becoming more socially aware in their business practices, and being “green” is no longer a bad word. In fact, corporations regularly hire consultants to help them build their reputations as socially responsible organizations.

To be a social entrepreneur, or a socially responsible business, means you can have the best of both worlds; a profitable venture, and one that makes a positive difference.

So how do you do this? Getting started can seem like a daunting task, but fear not; here are five tips on building a socially responsible business:

Choose the right suppliers

If you own a business that sells a product or uses materials, find out who manufactures the products you are using. In the case of TOMS Shoes, all their shoes are made in China, Argentina and Ethiopia, and according to their website, they “require that the factories operate under sound labor conditions, pay fair wages and follow local labor
standards.”

Find out who is supplying you, and if it’s a company or organization that is not operating in a socially responsible manner, find someone else. This can extend out to the airlines you choose, the printing companies you hire, or anyone else you use in your business.

Let your mission statement guide you

Every business ought to have a mission statement — or at least a mantra — that guides them to make decisions. More and more companies are building socially responsible messages into their missions, meaning that they are consistently making decisions that have a social benefit. If you let your mission guide you, you will be on the right track.

Choose a cause and donate

More and more businesses are giving a percentage of their profits to causes they identify with. Crystal Flaman, a business consultant, hostel owner, and social entrepreneur from Canada, has personally raised more than US$1.4 million through fundraising and giving a percentage of her profits to causes she believes in. Like other entrepreneurs she has a busy schedule, but still finds a way to help those in need. If she, one single person operating a small business can do it, so can you.

The trick is to identify how much you can afford to give. Many social entrepreneurs give away too much in the beginning; analyze your financial statements, make sure you have a solid foundation for your business, start with small donations, and grow from there.

Host a fundraising event

Giving away a percentage of profits may be too difficult for some. This is where hosting an appeal or fundraising event can allow you to raise money without having to empty your personal bank account. It also allows you to give far more than you would likely be able to contribute on your own, so everybody wins.

The Financial Times held its 2010 seasonal appeal last year and raised more than $4.37 million for Room to Read, an organization that builds libraries and provides scholarships for girls in third world countries. With that money, Room to Read announced that 173,000 children would have access to educational programs. This staggering result came out of one single appeal, spearheaded by a for-profit company.

Volunteer your time

Get involved with charities and causes you believe in. If you can’t donate money, donate your time. Many small businesses donate in-kind support to causes that need the help. Achieng, a small charity working to provide educational support for girls in Kenya, receives in-kind support from local graphic designers, web hosting services, and business consultants. These businesses donate their services, allowing Achieng to send what money it does have to go to those who need it most.

There are many other ways to build a culture of social responsibility into your business, but for now these five tips will help to get you started. Consumers are paying more attention to companies that are socially responsible, and there is certainly no shortage of causes that can use the help, so look at your business and see how you can make a positive difference in the world.

Paul de Burger is a business consultant, author and corporate trainer from Canada. He is an associate trainer with d’Oz International Pte Ltd (www.d-oz.com).