Statisticians create fear in the heart of every aspiring entrepreneur. Any good bookkeeper will tell you the odds are high against any new business, let alone a potential social enterprise. South African Minister of Trade and Industry, Dr Rob Davies, confirmed that five out of seven small businesses started in the country will fold in the first year.
Mary Kay Ash, who started a small cosmetic company in the USA in the 1960s as a 45-year old widow, had a remarkable approach towards her business which has grown into a company with a global independent sales force of more than three million women. She motivated herself and shareholders by reminding them that they were doing something far more important than just selling cosmetics. They were changing lives.
How to create business ideas
A good place to start any business idea is to glean from the successes and failures of others.
Muhammad Yunus, the most famous social entrepreneur in the world who founded over 40 successful companies in Bangladesh, provides invaluable guidance about the largely uncharted territory of social business.
Related: Change-makers redefining success
1. Find a specific problem and create a solution
Yunus learned that women in Bangladesh, even poor women, have enormous potential as entrepreneurs. He observed that when they received small loans, they did not squander their money on snacks or luxuries as many men did. Instead, they used their funds to buy chickens, a cow or seed and were able over time to improve their families’ diet, pay for their children’s school fees and so contributed to the cycle of poverty alleviation.
In South Africa the Clothing Bank’s mission speaks to a specific problem - the high number of unemployed mothers. They assist unemployed mothers to become financially and socially independent through their enterprise development model.
2. Find a gap in the market
Identify a need that is not being met, that is costly to solve. Look for a smarter solution. An example is the Grameen Bank in Bangladesh, which has over eight million borrowers and Grameen Phone, which is the largest telecommunications provider in that country.
An example in South Africa is again the Clothing Bank. It is deemed not just another charity organisation, but an initiative that allows women to mobilise their communities and support their families whilst equipping them with skills and merchandise to start their own mini-retailers in the informal sector. The Clothing Bank, has won the 2016 Schwab Foundation’s Social Entrepreneur of the Year award.
3. Research your idea
Research your social business idea. You have a valuable resource in the search engine Google. Henry Ford did not invent the motor vehicle. They were already made before the turn of the 20th Century, but were only available to very rich people.
Henry Ford simplified the manufacturing process through mass production facilities, thereby creating new markets for motor vehicles among the middle class who were relying on horse drawn carriages.
4. Solve a real problem with a simple strategy and passion
The key ingredient of all successful social and for-profit business ideas is that it solves a real problem through a simple strategy, which is executed with passion and consistency.
Some successful businesses started with the following dreams:
- “Wouldn’t it be nice when I bought a pair of shoes that someone in the third world could have some too.” Tom’s Shoes
- “Wouldn’t it be great if we could provide clean drinking water in poor communities?” Thankyou Water.
Related: 9 Billion reasons for rural women and youth to become economically active
Case study – the clothing bank
The Clothing Bank is a South African based non-profit organisation started by friends who were interested in using their expertise and experience in constructive ways to benefit the many unemployed women in Cape Town.
They focus on enterprise development by equipping women with the mind-set and tools needed to manage sustainable businesses. They do not only donate excess garments to registered Non-Profit Organisations, but they also provide business solutions to the emerging micro entrepreneurs. They have grown significantly since 2010 - they can recruit 300 new women per year. Read more about them at www.theclothingbank.org.za
“If you just work on stuff that you like and you’re passionate about, you don’t have to have a master plan with how things will play out.”
- Mark Zuckerberg, founder of Facebook.