As a purpose-driven entrepreneur, I know you not only want to be able to live in alignment with your gifts and your purpose, but you also want to give back and do good. That’s great news because one 15-year study found businesses who supported a good cause outperformed the S&P 500 fourteen to one. But it’s not just about giving back, if you want to amplify your impact having the right business model can not only ensure you have that impact but it can also make your business profitable. After all, you can’t impact the people you want if you don’t have the money to direct in ways you want, or if your business is floundering.
So what business models can you choose to leverage your impact and profit?
4 Business Models to Leverage Your Impact and Profit
There are 4 business models you can choose to leverage your impact. They are not mutually exclusive, in fact, many great impact-driven companies combine a few of these points of leverage. When you are considering which business model to use, think about whether you are a product or service-based business, who your community of impact is (whose lives do you want to change) and also who your customers are and what they would care about most.
Donating for Impact
This is the model most people are familiar with, donating a percent of profits to an organization or cause you care about. This can be a portion of overall profits or profits from a particular product or profits from a particular profit for a particular period of time. A true impact business would most likely donate a percentage of overall profits, providing a more consistent and built-in impact.
The 1 for 1 model is an example of this type of business model. Toms shoes was one of the first businesses to pioneer this type of social impact model and while there have been some unintended consequences, it has been a model that has been adopted widely.
If you are a service-based business, your biggest point of impact is likely either donating profits or skills. But donating your skills to a specific group that is aligned with your mission and service is a the key to growing your business. It seems obvious but that alignment is crucial because it shows that your business is not just doing this for marketing or PR purposes.
When choosing this particular business model, it is important to consider the cause you are donating to, how it is aligned with your over all mission and how you can leverage your dollars or time to create more impact. Customers are keen on any superficial type of doing good, so if you are investing in your community of impact showing that you are also investing in other ways such as through skills, time and using your platform for that cause shows genuine impact.
A great way to leverage this business model to grow your business is to make sure you include ways to remind customers about how their purchase has translated to dollars donated or number of people impacted. This keeps customers involved, educates them and allows them to feel good about their purchase every time they use it or look at it.
Sourcing for Impact
Sourcing from specific vendors aligned with your values is another great way to have a direct impact. You source materials or products directly from the community of impact and sell to your customers. For example, if you are in organic skincare that could mean sourcing sustainable, USDA certified organic, non-toxic ingredients.
Consumers care a lot of about where their products are made and what it is made of. By highlighting the quality of your product and how it was sourced you provide customers that connection to the impact that they want to have as well. Being clear and demonstrating transparency in your sourcing is a key way to leverage this business model to grow your business.
Employing for Impact
Another very direct way to impact your community is to employ people who you want to impact. Employing people who’s lives you want to change in your business is a very direct way to create the change you want to see. The Giving Keys is an example of this, they employ people transitioning from homelessness and provide them with an opportunity to lift themselves out of poverty directly through making the jewellery they sell.
This is a powerful business model as it is a very tangible way to see how your business impacts others. Another example of this is in small batch ethical fashion, where customers can connect directly with the seamstress who made the item. Featuring the people you employ and how their lives have changed by being a part of your business is a great way to use this model to grow your business.
Product for Impact
The most direct way to create an impact is when your product directly changes the lives of the community that you want to impact. So your customers are your community of impact. These products are specifically designed for social impact. One example of this is Trabasack, a wheelchair lap desk specifically designed for people in wheelchairs. Or consulting or tech support specifically for the community you want to impact.
Product for impact is a model that puts your business closely in touch with your community of impact because they are also your customers. This allows you to be more in-tune with emerging trends by directly meeting a need and understanding what problem you solve for your community. It also situates your business as the main service-provider or product for that community and generates referrals because you become top-of-mind.
Whatever business model you choose, being transparent, letting your customers become part of the journey by reminding them how they have contributed and telling the story of your staff, your sourcing are important ways to leverage your impact business model to grow your business.
If you want more clarity on how to create a purposeful business and leverage your impact, book your free strategy call with me now.