The motivation to build up a socially conscious startup is there for entrepreneurs who are willing to take up the cause. A common deterrent factor for businesses on the verge of taking a practical interest in the difficulties and challenges of the community around them is fear that it will have a negative influence on company growth and profits.
Entrepreneurs do need to be aware that there are very real costs attached to building a company that maximises on profits, people and the planet. It’s a tripled bottom-line investment that requires initial outlay for future return. Many start-ups are discovering that the funds of pursuing of a socially conscious business model are far outweighed by the value and satisfaction derived throughout the journey. For this reason, capitalists have outlined the three ways in which it pays to support companies that benefit shareholders, customers, the environment, and the greater community.
4 Reasons to Build a Socially Conscious Startup
- Investors favour social responsibility: A display of integrity that poses less risk and higher profits, businesses that earn their B-corp status, a legal grading system meant to reduce investor suits and give consumers an easy indication of authentic social commitment, are generally favoured by investors.
- Product pricing: Socially conscious products are able to sell at premium price. Popular consumer consensus shows evidence that individuals believe that sustainable products are worth more than products that aren’t. The conclusion is that startups can improve their profitability, while decreasing financial risk just by looking beyond their own aims.
- Broader customer base: Since it’s been ascertained that socially conscious corporate strategies add value to products and services, it is a natural progression that this perceived value will easily attract a more sophisticated and broad customer base. Besides building an extensive clientele, stats also show that 68% percent of global consumers are willing to remain loyal to a brand if the company behind it practices social responsibility.
- Human capital: Socially responsible companies have also been shown to be more interested in their internal staff. Employees that stay longer at a business tend to become more specialised at their job, while simultaneously reducing recruitment and training costs, which tend to mount with higher staff turnover rates.
Finding the balance between social/environmental commitments and company growth is a challenge that business owners need to figure out. What your business does is the ultimate determining factor as to whether it succeeds or not. It does help, however, to have the goodwill of the relevant customer community when attempting to break into a market – meaning that socially conscious business models are more likely to thrive than companies that take no interest in their surroundings.
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Bella Gray is a corporate blogger based in Dublin office space. A maestro of tips and strategies for navigating the workplace, Gray is the perfect go-to-gal for all your business solutions.