Getting off the ground with a startup can be challenging — particularly if you plan on doing things differently than what consumers are used to.
Data shows that 20% of new businesses fail during the first two years of being open. Plus, making a name for your brand in a competitive industry can be even more difficult if you’re trying to beat well-established household names that have been dominant for decades.
With all of these obstacles in mind, you may be wondering whether to even begin the process of building a social impact startup. But the truth is, these types of businesses could be the way to the future. After all, 48% of consumers want companies to do more regarding social issues. Plus, companies that advertised environmental, social, and governance (ESG) claims saw a 36% bigger growth than competitors who didn’t in 2023.
So, if you’re considering starting a social impact startup in 2024, here’s how to do it right.
Pick a Cause You’re Passionate About
Choosing a popular cause to build a startup on can seem like a lucrative business idea. After all, today’s consumers want to support organizations that make ESG claims, right?
Well, that may be correct. However, if you don’t care about the issue your brand aims to support, you’ll set yourself up for failure. This is not just because today’s buyers demand brand authenticity and transparency but also because you risk approaching a (potentially) tricky subject with a lack of understanding.
Furthermore, as you explore the idea of starting a social impact organization, ensure you pick a focus you and your team genuinely care about. Research shows that most professionals do better and more inspired work when they feel their work is meaningful and makes a positive impact.
So, instead of aligning your brand with a random purpose, try to find a guiding principle that aligns with your personal values. That way, you’ll appeal to the right consumers and you’ll be more fulfilled in your entrepreneurial role.
Identify Your Target Audience and Their Primary Pain Points
Once you’ve chosen the idea to guide your business decisions, it’s time to start researching your audience.
For any professional undertaking to work, you must have a strong sense of your ideal customers. So, make sure you conduct in-depth audience research. Learn about your future prospects’ pain points. And identify ways your organization can help remove frustrations and solve people’s needs.
Yes, your social cause will play a role in helping you connect with potential clients. But a claim alone won’t be enough to win over a loyal base of buyers. To accomplish that goal, you’ll also have to create an outstanding product and deliver a second-to-none customer experience.
Seek Out and Accept Help
In the business world, making it on your own is difficult. And it’s even more challenging when your social impact startup has to align with numerous criteria that could limit how efficiently you can make a profit.
With this in mind, you want to surround yourself with the right people. And this doesn’t just mean putting together a highly skilled team of people who are as passionate about your brand’s social cause as you are. Additionally, you will need to identify the right business contacts as well. This will include your partners, suppliers, the companies you outsource to, etc.
For this reason, you must know where to look for like-minded professionals. Joining a community for startup founders can be an excellent start, but if you want to achieve something extraordinary, don’t hesitate to take a step further in making contacts.
Reach out to the organizations that support your goals. Build connections with the people whose lives you wish to improve. And, of course, don’t underestimate the power of social media in helping you reach individuals who would love to contribute to your goals.
Create a Business Model with a Chance of Survival
Once you’ve finalized your preparatory activities, it’s time to launch your solutions. With a solid business plan and an effective marketing strategy, you’re guaranteed to start converting clients (and making profits) relatively quickly.
But remember, your job isn’t done once you’ve started making money. On the contrary, for your social impact startup to survive, you must continually provide proof of your organization’s commitment to the cause it claims to support.
In addition to keeping your clients up-to-date on the results you’ve achieved (transparency is always the best course of action), you will also have to provide partners, sponsors, and investors with in-depth information on your brand’s activities. So, if you choose this route — especially if you plan on acquiring B Corp certification — be prepared for a lot of extra work compared to running a regular startup.
Furthermore, as a social impact startup, you must understand that your costs will inevitably be higher than those of your competitors’. So, make sure you develop a business model that’s sustainable and that you’re not just hoping for miracles. This might mean adjusting your pricing policies and having your products veer towards the more expensive end of the spectrum. You may even have to sacrifice some profits in the name of making your solutions more accessible without risking the financial or physical well-being of your employees.
Final Thoughts
There’s nothing more satisfying than knowing that your life’s work makes a positive difference in the world. But the truth about running a social impact business is that it’s not all sunshine and roses. On the contrary, keeping a socially impactful business afloat can be extremely difficult.
So, before you make your final decision, do your best to take any necessary steps to prepare. Conduct in-depth audience research. Build a bulletproof business plan. Surround yourself with the right collaborators. And always measure your business results to find areas where you can improve and make your ultimate goals easier to accomplish.
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