Why impact entrepreneurship is much more than 'for-profit' entrepreneurship
It always seems uncomplicated as an idea at the inception of building a substantial enterprise. An issue when identified results in a solution which provides relief to individuals, communities or groups.
India covers a vast geography without the necessary infrastructure and thus faces many societal issues starting from basic necessities like clothing, shelter and food to lifestyle solutions such as quality education, healthcare and employment to name a few of the national challenges that we must collectively solve for to uplift the community.
Difference between Impact Entrepreneurship and For-Profit Entrepreneurship
An inaccurate perception is that it is the same as starting an NGO or a non-profit. This could not be further from the truth. Impact entrepreneurship is all about leap frogging the current Fourth Industrial Revolution and going beyond just gaining profit. It is about aligning profits with purpose-driven leaders in society. To kickstart the Fifth Industrial Revolution in order to meet the demands of the society, create impact, raise funding to solve issues using exponential innovation and technology for a sustainable future.
A typical for-profit entrepreneur enhances the industrial market while a social entrepreneur enhances the social conditions. They both attempt to find loopholes in market and build a new project to serve this unserved marketplace.
However, the key for an impact entrepreneur is to operate as a “for-profit” organisation with the double bottom line of a “purposeful impact” end goal. Any business, benevolent or otherwise, needs an understanding of the reality and reasons underlining why a certain opportunity in the market exists. It is important to evaluate the companies’ massive transformational purpose and then inoculate the services required to an extent where it can positively impact a billion lives in our country.
Additionally, there are separate set of investors for both type of businesses. Venture capitalists primarily invest in for-profit entrepreneurship and they are also engaged in the decision-making process; on the other hand, philanthropists who raise and donate money for charitable institutions or causes are key investors in social entrepreneurs’ endeavours.
Why are Impact Entrepreneurships gaining momentum?
In the past few years, India has excelled in producing global citizens who were able to break borders to become global leaders, redefining industry sectors across markets. Social entrepreneurship has changed from a charity model to an essential business model that allows organisations to build a sustainable and better future.
It has gained popularity with a new generation of progressive technology-driven socially-responsible impact investors and entrepreneurs worldwide, especially among the millennials and Gen Z.
One major reason why impact entrepreneurship is gaining momentum is due to the ease of procuring funds. According to a research from the Thomas Reuters Foundation, India is the 14th best country to be a social entrepreneur. We stand ahead of Australia (ranked 26th), China (ranked 34th), and Brazil (ranked 40th). It is the ease of locating finances that brought up the India’s overall ranking in the survey but there is still room for progress in the areas of government contracts, public awareness and gender equality.
Statistics reveal that in terms of ease of access to investment funding, India ranked fifth and eighth in the area of having access to grant funding. This shows why impact entrepreneurship is gaining popularity. This type pf entrepreneurship also gains funds from traditional sources of philanthropic funds. Hence, India also ranked relatively high, for the successful earning by social entrepreneurs through their work.
The interesting aspect of social entrepreneurship is that it focuses on business practices and tries to discover solutions to environmental, social or cultural challenges. They are the subcategory of a business enterprise.
Business entrepreneurs continually challenge the status quo and introduce a change by recognising and grabbing opportunities.
These startups in various industries through different mediums have uplifted society by alleviating suffering while developing sustainable businesses that do well while doing good. The evolution of new social entrepreneurs today is resetting societal norms and the nature of how we have access to services in different sectors in ways to better humanity and usher in a social impact revolution.
There has not been a better time to be an impact entrepreneur in India, considering COVID-19 and the support government has brought in to help protect and serve people from underserved communities.
Even though the essence of social entrepreneurship is still nascent and developing, it is an extraordinary time to enter the arena and become a pioneer in the field.
How to be an Impact Entrepreneur?
Impact entrepreneurship is not a path as to where you start out with the idea of profits in mind. But this does not mean you don’t raise the capital and acquire the resources necessary to make a success of your venture.
It is important create a business model, align impact investors and make profits with the idea of a purpose in mind. Like earlier times, it is not an uncommon practice to involve family members to run the business, but it is crucial to involve the right talent and build the best team to streamline operations and yield exponential growth.
An enterprise with a massive transformational purpose takes the team leaders to a larger state of thought. A multitude of issues are addressed with a potential to change the lives of many with a sustainable and growing business model. Be it any business where making a profit is involved, it is crucial to monitor progress or failures of a venture and align them with the purpose.
Understanding and accepting as to what works and what does not within a group is at the heart of impact entrepreneurship where practicing your values in action matters the most.
In a complex socio-culture and economic country like India, impact entrepreneurship will play a critical role as we enter the new normal in curbing inequalities between the “haves” and “have-nots”. The youth in India in particular will serve as a force for good and triumph the orthodox old ways of business as usual to bring about the change this nation requires and usher in the generation were impacting a billion lives is more powerful than just making a billion dollars.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)