Just starting up a business doesn’t automatically guarantee sustainability. Sustainability is the capacity of an organization to endure over time. It is something that can only evolve after an enterprise is established and proven to be viable. Therefore sustainability and viability need to be in balance and running side by side like the two wheels of a cart for it to roll smoothly forward.
It is especially tough for a social enterprise to maintain sustainability, Here are some learned tips on how it can be achieved:
1. Impact Viability- Ensuring Best fit for Impact:
Since our focus is on social entrepreneurship, it’s all about what kind of impact you bring to society. Unlike focusing on profits as in usual businesses, the goal of a social enterprise is to thrive for a social purpose. To excel in this regard, you must analyze the impact viability of your organization. As a social entrepreneur, it is important to ask the right questions: “Is my organization best suited to achieve maximum impact on social purpose? How will I achieve these goals?” When your organization is socially impactful, only then it serves as a successful business and has better chances to sustain itself in the long run. So even before you start, analysis of the viability of the impact of your business is of paramount importance.
2. Operational Viability- Ensuring Viable Business:
As social enterprises are targeted towards making an impact in society rather than generating profits, the operation doesn’t always go smoothly. Therefore you have to be mindful and ask yourself definite questions pertaining to the smooth running of the operation: Are you able to meet your operating costs? Maybe the startup was self-invested, but for how long? You may just be at a loss if you go on self investing. At some point, you need to cover up your expenses while creating a social impact. Thus, it is integral that you see that the revenue generated from your goods and services is covering up the expenses incurred. Just for the sake of making an impact, you may overlook the fact that you at least need to cover up how much you have been investing. If the revenue you’re generating is covering up the expense, then fine, otherwise you might be operating at a loss entirely out of your pocket!
3. Operational Sustainability- Covering the costs:
While we have pondered over the viability of the projects we undertake, we still need to do our homework to answer some additional questions to ensure sustainability. While viability may be just a short-term plan to accommodate the business so that it covers your operational costs, but for how long? Wouldn’t you want some profit and savings? You may not plan sustainability at the very beginning, but eventually, you need to do so. In the long run, there will be financial obligations and more operational work and expenses. Have you thought about how you will manage these? How will you manage your cash flow so that it will help you face any financial challenges? That’s what you must keep in mind and make sure you have these queries answered before launching your enterprise.
4. Financial Sustainability- Generating a surplus:
As mentioned above, self-investment for the long-term is not a good idea and often leads to failure. Whether it is a social enterprise or business enterprise, there definitely should be a certain time when you need to have some profit for yourself. If it’s just that your services are benefitting people but not yourself, it’s not entrepreneurship – its social work and that is not sustainable. You need to plan your business in a way that will not just benefit society but also yourself. So you need to plan for a sustainable financial future as well. By the use of the current resources, you need to mould your business in a way that will be most effective and efficient. Your expectations from the business should be mapped out with the inclusivity of the surplus and profit expected. If there is no financial stability to nurture the sustainability of your business, it may not prove to be an impactful social enterprise. You would just be doing social work and haemorrhaging resources in the process.
5. Impact Sustainability-Maximizing enduring impact:
Moving onto the last, but not the least important of factors to be considered: Are you delivering the impact on society that you had envisioned? Surely you didn’t start your organization on a whim and you had a long-term operation in mind. So every so often, you need to reflect on whether the business is taking a good flight or if it is faltering. You need to keep a measure of the level of impact you are creating and whether it has been meeting the purpose of social change. This can be done in a wide variety of ways. May it be by analyzing the number of customers, or addressing their feedback in your improvements. If you want an enduring and long term impact of your business that is sustainable, make sure you have managed your business and financial conditions.
Therefore, entrepreneurs! You need to be ready to set up your business – not just for the short term but to achieve a long term impact sustainably. Dwell on these 5 tips and discover if you are good to travel that long journey of entrepreneurship!