Anuja Master Bose | December 15, 2016

Prioritising sales and making trade-offs in a social enterprise

If you’re running a social impact business then you will have considered the choice of launching your organisation as a business – called a private limited company structure for those in India – rather than as a charity or not-for-profit enterprise. Entrepreneurs I’ve worked with have varying explanations for their decision – for some it is to bring financial and business discipline to their social enterprise, for others it is to attract a certain type of capital. Whatever the reason, once you’ve decided to structure your social startup as a business, you’re in the business of making money.

If you’re uncomfortable with the idea of making money while serving those with less means, let me suggest that making money with purpose and proportion can be very helpful. Here’s how: a fundamental aspect of making money is that it provides freedom – freedom to serve the people you want, to provide them with the products and services you want and, to manage the pace of your business. (And the corollary, if your social enterprise needs a funder’s ongoing charitable support then they usually get to have an important say in how you run your business.)

You’re probably well aware of this relationship, but these choices are less clear in the fast-moving, day-to-day of running an early-stage social enterprise. I want to use the tech industry’s concept of a minimally viable product (MVP) to suggest prioritising sales and making trade-offs to afford you the freedom to pursue the vision and mission you desire.

A minimally-viable-product is the most basic version of a product that can be sold to your customer. This basic version is (relatively) inexpensive and quick to build. Customer feedback will help you determine how to improve it. You’ll learn a lot about what your customer needs most urgently, what they can wait for, and what price they are willing to pay.

Prioritizing sales -
In the initial, typically overwhelming months and years of launching a social enterprise, prioritising sales can be the critical choice that gives your business clarity, alignment and, most important, keeps the lights on. At its essence, generating sales provides the money you need to keep your business going, growing, and serving the people you want.

Say for example, you work in education and your passion lies in creating great content. For someone like you, it will be very hard to put out a work product when you know with more time and more investment it would be even more effective. If you have a near-singular focus on prioritising sales, then you’ll put out a MVP, which will give you customer feedback on what works and doesn’t work in your product and, equally important as a business, what price the customer is willing to pay.

Making deliberate trade-offs -
This is where the concept of trade-offs comes in. As a social enterprise, saying no to end-users who will benefit from your work can be very difficult. Let’s say you have a client with ‘units’ all over the country and this client wants your product and service delivered at each unit. Serving the farthest or smallest units will cost your organisation more in terms of time and money than the units that are faster to reach. You may need to negotiate omitting these less profitable units from your sale. Or, you may need to give up this client altogether – and the money that goes with it – and instead, focus on a client who you can serve profitably.

Prioritising sales and making deliberate trade-offs can be essential to the survival of an early-stage entrepreneurial venture. Done well, a social enterprise can align itself to make the money it requires to have the freedom to serve the people it wants.


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