A business can generate revenue while producing a product or service that helps cure a social problem. The best way to plan such a business is by taking small steps and preparing for the unexpected. In The Social Entrepreneur’s Playbook, Ian C. MacMillan and James D. Thompson set out a process for social entrepreneurs to follow.
Social entrepreneurs–individuals who want to start a business that will also help solve a social problem–face long odds. The Social Entrepreneur’s Playbook advises that such entrepreneurs dedicate time and energy to thoroughly vetting ideas before wasting limited resources on ill-conceived ones. This process includes:
- Defining the problem and determining if the proposed solution will work. Too often, social entrepreneurs from developed nations misread the needs or desires of intended users and ignore the appeal of alternative solutions.
- Understanding the beneficiary experience. Entrepreneurs must learn what steps beneficiaries have to take in order for the solution to work, and they must determine how difficult making those changes will be.
- Identifying operations realities. Social entrepreneurs must figure out how to access the skills, systems, assets, and resources needed to operate their organizations.
- Dealing with sociopolitical issues. Social enterprises can encounter potential allies and opponents; organizers should have strategies for dealing with both.
- Framing and scoping the enterprise. After determining that the plan is plausible, social entrepreneurs need to generate estimates of what it will cost to run a business large enough to have the desired social impact. Concepts should be tested with target customers.
- Establishing checkpoints. Because so much of the planning for a social enterprise rests on educated assumptions, the entrepreneur must constantly monitor them to make sure they reflect reality. Checkpoints are designed to test assumptions.
- Launching the business. The business should use a controlled launch, focusing on learning before making major investments.
- Managing the downside. Social entrepreneurs must know when they are failing and have a disengagement plan that will not leave beneficiaries in a lurch.
- Scaling up. Social entrepreneurs must be prepared for the growing pains that come with success. In order to help more beneficiaries, they should consider planning for an expansion of their enterprises.
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