How to start a purpose-driven business
More and more startups are changing the world with operational models that don't just innovate and succeed, but which also change the world for the better. Purpose is at the heart of these businesses. But how best to implement this into your own business? Matt Spry is the founder of boutique consultancy Emergent, offering strategy design and bid support to purpose-led organisations, and he's also a VSU mentor. Here is his advice for how to start a purpose-driven business.
We're lucky to live in an era of business when you no longer have to choose between making a profit and making a difference. Being purpose- or mission-driven does not mean you have to be a charity, or a social enterprise, or even not-for-profit. It simply means that you are using your business to achieve aims beyond the bottom line.
Increasing numbers of entrepreneurs are starting a business as a way to make the world a better place, using it as a platform to solve a problem they care about. There are many ways businesses can do this. For example, in in West Wales Hiut Denim produce top quality jeans from their Cardigan factory, and they're on a mission to employ 400 people from the local area - replacing the jobs lost when a local factory was shut, and production moved overseas, by an international brand. A different approach is taken in Brighton by brand and marketing consultancy Propellernet, who use business success as a platform to make their employees’ dreams come true through ‘bucket-list business planning’, all whilst delivering great results for their clients.
VSU-funded businesses with a strong purpose range from Reduce My Invoice - a startup which teams up with local businesses and schools to buy items they need in bulk, making schools' budgets go further - to businesses such as SOAK Shakes & Co and SAINT LUKE, who invest portions of their profits in causes close to their heart.
All these business have - in their own way - broken conventional business wisdom on their road to success. The missions driving the entrepreneurs that lead these companies are not marketing hype, or a retrospective explanation of why they exist, but reflect the genuine passions of the founders and the teams they have built. Their mission is clear in everything they say and do.
If you have a mission driving your startup, here are some tips to help you make it a success.
Tell your story...
Having a compelling story to tell potential customers or supporters is key for any business, but even more so if you are purpose-driven as it is a key way of making you stand out from your competition. Don’t be afraid of setting an audacious goal, and of telling your stakeholders how you are getting on. Hiut Denim’s aim of employing 400 people is ambitious, but step by step they are getting there, and their customers feel part of the journey through their excellent website, newsletters and social media use. Here is an excellent infographic on creating your business story.
…but back it up with action
When designing your business model make sure you know how the success of your business will help you achieve your mission. Make the connection explicit so that every customer knows how spending their money with you helps make achieving that mission a reality. A great example is TOMS who operate a BOGO (buy one give one) model in their mission to provide shoes for children in deprived areas of the world.
Build a team of believers
Dreams can’t be realised on your own, so build a team that believe in you and your mission. Make sure that as a group you establish and share a code of values consistent with that mission, and hold everyone - including you - to account against them. When it comes to company values it is action not words that count.
Measure what matters
The metrics you use to measure the success of your venture are a clear indication to people inside and outside your company of what’s really important to you. Use a framework like the balanced scorecard or lean analytics to make sure that your measures of success reflect the the breadth of what you’re trying to achieve, and that they evolve with you.
Consider your company structure carefully
Contrary to popular belief it is entirely possible to run a purpose-driven business as a standard limited company, rather than a CIC, charity, or other legal form. Think carefully about what you need to be able to do from within your company (raise money? pay dividends? borrow) to deliver your mission, then pick a company structure that fits.
Be known for more than just your mission
Telling the world a great story, building a committed team who behave with the right values is all great, but will be worth nothing if you don’t deliver on your promises to your customers. Fundamentally every venture must solve a problem and deliver value - purpose-driven or not. Don’t neglect the basics of good business, whatever your mission.
We are in an exciting period of transition to an economy with many more purpose-driven businesses, lead by entrepreneurs looking for ways to deliver impact as well as financial results. I would encourage everyone to think about how their company can make a difference. Dare to be different, embrace profit and purpose, and build a business that really matters.