If you’re reading this, you’re probably faced with the same challenge as many social entrepreneurs. Do you contemplate running your social enterprise or shutting things down to find a “profitable” path? If you answered yes, you are not alone; many entrepreneurs seeking to do good while making profits arrive at this cross-road in the face of global economic crises. The good news is you don’t need to shut down just yet. If you answer no, you are also in the right place to gain insights, share some tips, and inspire impactful entrepreneurs who may be at the crossroads to keep walking and making the world a better place for all.
Here are ten tips to help stabilize and turn things around for the better as you take the bold step to run a social enterprise or inspire an entrepreneur to thrive even in an economic downturn.
1. Reflect on your social mission
To succeed in running a social enterprise, it is important to reflect on your social mission, goals, and values during times of economic crisis. This includes answering questions such as why did you start your business in the first place, narrowing your mission down, taking time off to reflect on what impact means to you, using the outcomes to refine your core mission and values, serving as the baseline for decision-making, and guiding your processes and day-to-day activities. Set up an activity to get your team to do similar reflection and brainstorming exercises, and use creative ways or team bonding exercises to keep your team constantly reminded of your mission and why they come into the office daily. When your social mission and goals remain top of mind during challenging times, people are subconsciously influenced to stay on course, innovate and remain resilient to achieve your vision despite the roadblocks.
2. Seek partnerships and collaborations
Running a social enterprise during an economic downturn presents many opportunities, including partnerships and collaborations. It is important to consider what you need and can offer and find like-minded people and organizations to collaborate with to reach your goals and objectives. Make use of online resources such as LinkedIn to find and connect with potential partners. If LinkedIn differs from where most of your audience or potential partners are, consider other social media or networking platforms you are active on, make new connections, activate old ones, and share what you need guidance/support with. Attend industry events and join professional associations to explore potential collaborations. Look for organizations that share your values and have complementary skills or resources.
3. Balance impact and financial sustainability
Take a second look at your business model and consider its sustainability. Focus on identifying and targeting customers interested in socially responsible products or services and reducing negative environmental impacts. If your current operations focus on people/customers/beneficiaries who cannot or do not pay for the service delivered, focus on creating an additional customer segment that pays for your products/service. Consider other scenarios where people pay for your existing products/services or resources/capabilities. Brainstorm an approach to target serving customers in those scenarios or buying situations. Your revenue generation from paying customers can be business-to-business, business-to-customer, subscription-based, or on-demand business model. Explore investment opportunities and prepare to apply for or participate in funding programs or competitions. Look out for investors concerned about your social impact through research, networking events, and social media platforms. Remember that funders and investors want to see that your business is sustainable and can stand the test of time.
4. Seek funding opportunities from diverse sources
In order to successfully fund your project or business, it's important to explore all possible avenues for funding. Here are some ways to seek out funding opportunities:
- Research government grants that may be available for your industry or business type.
- Look into private investment firms or angel investors who may be interested in investing in your venture.
- Consider crowdfunding platforms such as Kickstarter or GoFundMe, which allow you to raise funds from a large pool of individuals who are interested in your project.
It's important to keep in mind that each funding source has its own requirements and application process, so be sure to carefully review and follow all guidelines to increase your chances of success. Additionally, consider seeking out the advice of a financial advisor or mentor to help guide you in the funding process.
5. Diversify or expand your revenue streams
In an economic downturn, consider diversifying your revenue streams by offering new products or services. If you are a social enterprise in the technology industry, you can develop a subscription-based model for your products and services. If there is nothing new you believe you can offer, explore new markets and segments and think about how your existing product or service can serve them. Invest in available stocks and other financial instruments and seek the advice of an expert together with your finance team. This way, you always have revenue coming in to sustain your social enterprise and increase your financial stability.
6. Cut costs creatively without sacrificing quality/impact
Bring your team together and brainstorm on creative ways to cut cost without sacrificing quality or impact. Encourage each department to discuss what they can sacrifice and give them an understanding of the importance of maintaining quality and impact. Renegotiate existing contracts and implement cost-saving measures such as shift systems or work from home policies. For specific projects, consider hiring freelancers or outsourcing non-core functions.
7. Be flexible and adapt to changing market conditions
Being flexible in embracing innovation and adapting to shifting market conditions is crucial during a recession. In the fast-paced business world, market conditions can change rapidly. It's important to stay ahead of the curve and be prepared to adapt your strategies accordingly. Here are some ways you can be flexible and adaptable in the face of changing market conditions:
- Stay informed: Keep a close eye on your industry and stay up-to-date with the latest trends and developments. This will help you anticipate changes in the market and adjust your approach accordingly.
- Embrace new technologies: New technologies are constantly emerging that can help you improve your business processes and stay ahead of the competition. Be open to trying new things and experimenting with different tools and platforms.
- Stay agile: Agility is key when it comes to adapting to changing market conditions. Be prepared to pivot quickly if necessary, and be willing to make changes to your strategies and plans as needed.
By being flexible and adaptable, you can position your business for success no matter what market conditions come your way including the impacts of the economic downturn.
8. Use data to continuously improve your operations
Measuring social impact also helps you identify areas for improvement and make data-driven decisions to enhance your programs and services. It shows your commitment to transparency and accountability, which can build trust and credibility with stakeholders. Identify key performance indicators (KPIs) to track progress towards achieving goals as a social enterprise, use tools like surveys, interviews, and data analysis to gather information, and periodically evaluate and modify your strategy. Measure and track your social impact to demonstrate success and are easily identified by investors and funders. This way, your marketing team knows what to focus on and your impact speaks for itself. With this, you can communicate your social impact and value proposition effectively to customers, investors, and other stakeholders.
9. Invest in your team to fuel innovation
Invest in your team by providing training, mentorship, and opportunities for personal and professional growth. In addition, encourage open communication and active listening among team members to ensure that everyone's voices are heard and valued. This will help to foster a collaborative and supportive environment where everyone feels empowered to contribute their best work. Don’t underestimate the strength of a team that is passionate about your mission. Make sure you hire people that believe in what you are trying to achieve. Look out for those with diverse skills and expertise who can use creative ways to help you succeed. It is important to encourage open communication and collaboration among team members. Take a critical look at your team and know the strengths and weaknesses of your members. Provide opportunities for training and development to enhance skills and expertise. Also, foster a culture of inclusivity and respect for different perspectives and ideas. By implementing these, you can create a strong team that leverages diverse skills and expertise to achieve shared goals.
10. Connect with your community and stakeholders
It is important to stay connected with stakeholders and community to understand their needs and adapt accordingly. This can be done through both low and high touch channels. Low touch channels include updating stakeholders and community on topic and relevant issues through newsletters, email marketing updates and social media posts. High touch channels include a call, a meeting, a direct email or hangout with people within the community that play advisory or influencer roles. Utilize social media platforms to post relevant content and take stakeholders on a journey towards success. It is important to prioritize communication and maintain an open dialogue to build and strengthen relationships. Staying connected with stakeholders ensures you position yourself positively, stay relevant, and remain top of mind. Don’t be afraid to share your successes and challenges, vulnerability and transparency are powerful tools to connect with the most helpful people. Prioritising these engagement, ensures that you stay in the know as opportunities arise and also have a strong connection to seek advise, guidance or support from others.
In summary, running a social enterprise or inspiring an entrepreneur during tough economic times requires determination, resilience, and creativity. By implementing these tips and staying focused on your mission, you can make a positive impact on society while also achieving financial sustainability. Download The Social Entrepreneur’s Checklist to Surviving & Thriving in the Economic Downturn. This checklist provides practical tips and strategies for social entrepreneurs to navigate the challenges posed by the economic downturn. It is a valuable resource for those looking to sustain and grow their social enterprises during these uncertain times.