Knowing exactly how to conduct yourself as a social entrepreneur isn’t easy. In fact, the more your enterprise grows and you settle into the rhythm of running the business, the less likely you are to pay attention to your own leadership style.
This isn’t a failing, nor is it reason to suggest that you don’t have it in you to be the best social entrepreneur in your niche – it’s a common trait among business leaders throughout the world.
We think there are five common traps social entrepreneurs can fall into, but you’ll be glad to hear they’re remarkably easy to avoid once you know what they are.
1. Compromising on the financials
A social enterprise is a business with a social purpose. That means it still needs to turn a healthy profit and have an eye on growth.
At Inspire2Enterprise, we’re also keen to point out the fact that social enterprises are businesses where society profits. And, while that’s true, it isn’t something that should ever lead you to compromise on the financial aspect of your enterprise.
If you find yourself making decisions that significantly impact your business model or the ability for your organisation to make a profit, step back and reassess. Even if it goes against your mission statement, reversing such decisions (unless they’re based on a calculated risk) will help secure the long-term future of the business.
2. Seeking investment too early
If you’re yet to write your business plan or fully consider the business model for your social enterprise, it’s unwise to start hunting for investments.
It might feel like you need that injection of cash and experience from an investor as soon as possible, but in truth, few investors (or banks) will take your word if that’s all it is. They’ll want to see plans and financial forecasts before opening their wallets.
Investors aren’t going anywhere – there’ll always be someone out there willing to put their money behind your social enterprise. Just give yourself the best opportunity of finding the right investor by doing your homework first.
3. Failing to understand your customer
One of the biggest mistakes made by social entrepreneurs is to design for customers rather than with them.
Your target demographic will evolve as your social enterprise grows, therefore if you don’t take time regularly to get out there and speak to customers, you’ll never be able to keep up with them and create products and services that they’ll want to buy.
Designing your offering based on what you think they want won’t get you very far. To build a sustainable, profitable social enterprise, you need to truly understand your customers and treat your relationship with them as a collaboration which helps you develop the best possible product.
4. Chasing fame
Now, we’re not suggesting you’re big-headed. Far from it. But there’s no escaping the fact that once the press gets a whiff of the good work your social enterprise is doing, the attention can be rather addictive.
At first, it’ll feel like you’re chasing that attention to increase brand awareness and, if it stays like that, you’re onto a good thing. The trick is to identify when it goes from brand awareness to self promotion, and if you find yourself clamouring for any form of interview or radio spot just to increase your follower count on social media, for example, it’s time to take a look in the mirror.
5. Having unwavering devotion to your business plan
Your business plan might be wrong. It may contain countless goals that simply aren’t achievable and ideas for products which your target market won’t be interested in.
This is fine, and in no way a failing as a social entrepreneur. It takes time for business plans to evolve, but in order for them to do so, the author has to accept that they may have got it wrong the first time around.
If you love your business plan a little too much, your blinkered view of the social enterprise may end in failure.
Listen to the criticism, observe your market and be willing to adapt your business plan accordingly.
There’s no such thing as the perfect social entrepreneur, but if you follow our tips above, you’ll avoid the common traps that prevent you from reaching your true potential.