These days, building a small business is increasingly less about making a buck and more about making a difference.
The rise of social enterprises, or so-called purpose-led businesses, which exist to turn a profit and do some good help the environment, prevent food wastage or provide funds for basic sanitation in developing nations for instance is prolific.
A range of entrepreneurs who have been successful in this arena will gather in Sydney next week along with academics, financiers and business leaders at Sydney event Purpose 2015 to share their passion, enthusiasm and business acumen to others considering venturing into social enterprise.
A social entrepreneur (toilet) 'roll model'
To date, his enterprise has given 69,380 people access to basic toilets, saved 12,017 trees by only using recycled, forest friendly paper products, preserved 29 million litres of water by using eco-friendly materials and reduced its greenhouse gas emissions by 2311 tonnes.
Griffiths says eight years ago when he started his first socially responsible venture, online foreign aid fundraising platform Ripple, there were very few doing the same. Now it’s a boom town market.
“When we first started thinking about it, to us it was so obvious: why wouldn’t you start a business that gives back as part of the business model,” he told The Huffington Post Australia.
“But there was nothing in the marketplace that existed, particularly in Australia.
“The space has changed so much even in the last five years. Google any product that comes to mind and I am pretty sure you can now find someone who is taking a social slant on that product and starting a new company.”
Griffiths eschewed a traditional career path that his University education in commerce and engineering would normally have taken him, choosing non-profit work then varying models of social entrepreneurship with Ripple and SheBeen, a Melbourne bar selling drinks from developing countries and donating the profits, until he landed on Who Gives A Crap.
He says the idea is exciting because they get to be a financially viable business, donate to a worthy cause and encourage others to follow suit.
“We thought the silver bullet that stops most entrepreneurs from entering the social business space is that they look at it and say: ‘Yes, I’d love to be able to run a business and do good but I also want to create financial return for myself as an entrepreneur’,” he said.
“We thought that if we could show that it was possible to do that then ultimately we would attract a significantly larger number of entrepreneurs into the space which would therefore increase the total impact of the space as a whole.
“Then we can solve some pretty serious issues in the world because we’re not going to do that alone -- we need help from a lot more people operating businesses like this.”
Griffiths says Who Gives A Crap is structured in a similar way to traditional businesses -- but there’s much more pressure to be successful.
“If you are just a regular for-profit business, you don’t need to turn over a profit in your first however many years of trading,” he said.
A lot of large businesses which have venture capital funding or large amounts of investments won’t be profitable for many years -- with our business model that’s just not possible because we are promising our customers that we are making a donation for every block of toilet paper they are buying and so we have to make sure we are profitable all the time, otherwise we can’t live up to that promise.”
A powerful way to make a change
Ben Burge, CEO of renewable electricity supplier Powershop says when running a business with a social bent you need to be practical and realistic.
‘When you’re in business you need to operate to a commercial imperative otherwise it is all charity,” he told The Huffington Post Australia.
“But we don’t think that the commercial imperative is mutually exclusive from doing the right thing.
Burge says future generations of consumers will consider “conscious consumerism” as mainstream -- people won’t think twice about spending more to save the environment.
But for now, the hip pocket rules and Powershop’s business model reflects that.
“In utilities people still want cheap power,”he said. “You can’t walk away from that. If we simply launched a business and said this is better for the environment but it’s going to be a bit more expensive, I think we would have failed.
“So the trick has been how do we build a business that enables power to be delivered cheaply but at the same time gives people affordable choices to have a better impact on the future.”
The company, wholly owned by Meridian Energy in New Zealand, produces 100 percent renewable power from its two wind farms in Australia. Customers pre-purchase their power -- often through advance deals -- and monitor their usage via a smartphone app.
Powershop further enhances its eco-cred by voluntarily paying to 100 percent carbon offset all their customers’ consumption, and there is also an option for consumers to buy GreenPower products that effectively encourage more investment in renewable energy and support community energy projects, landfill gas, energy from sugar milling or other wind farms.
Powershop has been credited as a business that’s “disrupting” the traditional energy market with its green point of difference, cheeky marketing and smartphone app that lets users regain control of their bills. Burge will speak on a disruption panel at Purpose, but he says it’s less about buzzwords and more about helping to change consumers’ patterns around renewable energy.
“It is a buzzword that has had a lot of airtime recently for some reason but it’s not a word that comes up in our business,” he said.
“No customer wakes up in the morning thinking that they want to be disrupted. They are living their life and they have important stuff they need to achieve and in many ways our involvement in their life needs to be as seamless and easy as possible.”
He says in terms of conscious consumption, sometimes it is easier to change a customer’s behaviour and then explain to them why afterwards instead of trying to convince them to spend more for the Earth.
“We try to sign them up on a really cheap deal and save some money and then over time they come to understand they have 100 percent carbon offset for their consumption, they start using some of the usage tools and monitors, over time they unconsciously start to change their behaviour.”Suggest a correction