Social business enterprises

 Preface

Most businesses provide products or services that are helpful to people. The free market economy is guided by a free price system, the mechanism of demand and supply. And, we often limit ourselves to a narrow definition of an entrepreneur, "a person who attempts to make a profit by starting a company and taking the risks." We only take the word "profit" because we love money and make it become the only reason why we are doing or start our businesses. And then, we do all our best to maximize it. However, social business enterprises are not the same. From the beginning, maximizing profits is the only thing it cares about. The Prisoner's Dilemma is also a great example here to illustrate the key point. If you only care about yourself, your options will be limited. But, if you can see a thing through a comprehensive view, as a chess player, you will not be limited within the view of each piece. Zoom in, you only see the roads and their names on the map, zoom out, you will see the whole map. 

What Is a Social Enterprise?

A social enterprise is a business that has specific social objectives that serve its primary purpose. Social enterprises seek to maximize profits while maximizing benefits to society, the environment, and are principally used to fund social programs. Social enterprises seek to balance activities that provide financial benefits with social goals, such as providing housing or food to poor families. Earning profits is not the primary motivation behind a social enterprise. Therefore, the revenues they generate are principally for the sustainability of the venture. 

What Are The Differences?

i. The Goals and Objectives

Social enterprises seek to balance activities that provide financial benefits with social goals rather than only maximizing profit by supplying products and services to satisfy demands. 

ii. Where The Profits Go

Social enterprises can also be profitable, but most of them go to reinvest profits into their social mission, rather than fund payouts to shareholders. As mentioned before, the revenues they generate are principally for the sustainability of the venture. By doing this, they can keep their steps on the way to achieve their goals.

iii. Their Employees

Most social enterprises seek to provide a reasonable living wage such as above the minimum wage. In addition, employees of social enterprises are priority given to those who are from at-risk sections of the community.

iv. The Purpose

Social entrepreneurs seek innovative ways to fulfill a business purpose and solve societal needs through their commercial activities. For example, a company that recently filed for IPO, Warby Parker is an American eyeglass retailer that donates a pair of glasses to someone in need for every pair sold. 

Reference

Barone, A. (2021, May 19). The aims of social enterprises. Investopedia. Retrieved September 24, 2021, from https://www.investopedia.com/terms/s/social-enterprise.asp.