I’ve long battled little people talking in my head. Trying to figure out the world, how things are and how they could be. Some things I’ll never get - like the idea that profit is what drives a business.
I think we’ve lost our way
Businesses are classed as not-for-profit or for profit. So Limited companies in the UK are for profit. Charities are not for profit, social enterprises can have profit with clauses within them to re-invest money into the business and there is also the need to have a socially driven mission.
So the first thing that you need to do when you start a business is decide whether you are in it for profit or for good. Is it only me who feels this is wrong?
I want to run a company that is profitable and does good - for customers and the community around us. There is no ‘or’. There is only ‘and’. Businesses by default should be doing both.
I’ve set my company up as a limited company because it gives me the freedom to decide and choose how we do things. I dread the slowness of decision making and paperwork involved with a charity or social enterprise. I answer to myself, my customers and my desire to run a meaningful business. I aim to make a profit because this is what will make us sustainable (and have some growth). With sustainability comes the ability to invest comfortably in the business and ‘other things we believe in’. Sustainability and profit can free us from basic worries (paying the rent and buying food) and empower us to be free to work on more meaningful projects.
What questions should we ask when in business?
Why is meaningful business not the norm? Why shouldn’t everyone who sets out to start a business aim to do good as part of who and what their business is? Why is it not part of a business plan? Imagine if different questions were asked when you were setting up a business, would it make people do things differently?
- what values are important?
- what would make you happy?
- what would make your employees and your community happy?
- how do you plan to achieve sustainability?
- how will you grow your business ethically?
- at what point can you invest money into other causes?
- how will you grow a business without detrimental consequences to your (and your employees) health?
- how do you want to achieve change?
JustGiving - a great living example
I was at Meaning Conference last week where Anne-Marie , the founder, was giving a talk about her experiences. I hadn’t looked into the set up of Just Giving as a business, but I was pleasantly surprised to hear that it is set up as a for profit (limited company) with investors too. Investors who are yet to see return on their investment. A key driver for JustGiving to being a Ltd company was the ability to reinvest money into the business without complications. (I think the video will be available online on the Meaning Conference website soon).
Why aren’t more technology heavy companies out there aiming to do good? Why is there such a focus on growing fast and selling out quickly?
The people behind JustGiving are clearly determined to create a viable and sustainable business that does good, will reward their investors down the line and have (hopefully) proven that this can be done without being a non-profit. An truly awesome example of good business.
Profit should not drive business
I think too many people see profit as a bad thing. Big business is probably to blame for this as profit always seems to be their driving focus. I’m not sure what it will take to change this, but I really think we should all embrace profit as a positive thing as long as the right things are done with the money made.