Source: Archive
To speak of opening an impact business means that the entrepreneur will need technical and management knowledge, along with other skills to keep the finances sustainable while improving the community.
The challenge, however, doubles in size when we place that situation inside the periphery.
There, we have young people and adults seeking to have an impact on the environment they live in, but with little knowledge or experience for it.
As a result, social entrepreneurship cannot sustain itself or runs into problems without solutions, driving the business to close.
This cycle is common and dangerous, discouraging leaders who could improve the conditions of their communities or imposing invisible barriers between social classes, levels of schooling, ages, genders and ethnicities.
In Campinas, Casa Hacker, in partnership with Fundação Feac, Gerando Falcões and DigitalOcean, started the Perifaimpacto project, showing that there are brilliant minds in the quebrada being unjustly held back.
So today we are going to talk about impact businesses in Brazil — shall we?
What is social entrepreneurship?
According to Sebrae, there are eight forms of entrepreneurship: digital, business, corporate, social, green, women’s, individual and cooperative.
Among them, social entrepreneurship is one of those that does not aim at profit, but only seeks to defend a cause. Green entrepreneurship can have the same meaning, but with goals aligned to the environment, and women’s entrepreneurship may — or may not — be related to social impact.
To reach a social objective, it is essential that the business has an innovative idea and that the motivation to reach the goal is high and constant. In other words, loving what you do and working with a great deal of joy.
When an enterprise detaches itself from the common objective of the market (which would be making money) and starts to aim at a mission, it encounters other problems that can only be solved by moving as a group.
It is necessary to be available for whoever needs it, which is why collectives seek to develop to the point of not depending on the government or on charity — but that step may be the hardest of all to reach.
Just like a business enterprise on the traditional model, a social one needs to be planned, structured and to have a form of measurement. In this case, it will always be the performance of the impact.
It is essential that it involves many people, networks and connections. Both to start out and to make things happen.
That is why the entrepreneur needs communication skills and needs to develop their relationships.
It is worth stressing that social entrepreneurship is an “umbrella” term, meaning that we can find other forms of business within it, such as the social or inclusion business.
An impact business, however, sits between the second and third sectors: an enterprise that is financially sustainable, but without reaching maximum profit, while seeking social impact.
The challenges of managing collectives
There are many mistakes a social business can make on the road to operating. This happens mainly among entrepreneurs with limited knowledge and opportunities.
In the periphery, for example, we have a striking number of young people who are interested in and passionate about their causes, but with little motivation to start their own impact business.
Innovative ideas end up being curtailed because of management problems, until at some point they are abandoned.
To illustrate better what the obstacles for these collectives look like, let us cite some of the issues raised in the study “Desafios de Empreender Negócios Sociais no Brasil” by Guilherme Abranches Sucupira. In this research, the author analysed the contribution of the NGO Artemisia and of the incubator Instituto Gênesis.
On the legal side, the challenges are tied to taxation, organisation and formalisation. A lack of knowledge, or fear about how to carry on, can generate serious consequences in the future if they are not resolved from the outset.
Structuring a good business model, understanding how to align all the pieces, also requires follow-up and attention. It is common for ideas to emerge with loose ends, bringing uncertainty and insecurity.
Knowing the target audience perfectly is also part of innovation in the business, since the solution created needs to address their pains and needs, even if that means carrying out tests and modifications.
For impact businesses focused on services, one of the difficulties is scalability, which works as a way of reducing the price for people on low incomes.
Furthermore, financial return and the measurement of impact are difficult details for beginners. Depending on the business, the return is not in balance with the impact, or it has difficulty measuring the difference it has made to the cause.
Management, which is one of the most important pillars in this process, can be a real challenge. Here the entrepreneur needs to know how to handle marketing, the market, the public, finances, pricing and other areas that require knowledge and study.
But we are talking about businesses created by the periphery for itself, so we can imagine that learning administration is far from an easy task.
Finally, it is worth remembering that having partnerships is important and decisive for the success of an impact business, which can be one more obstacle in need of guidance and attention.
What is an impact business incubator?
One of the best solutions for impact businesses that are starting out or facing some of these challenges is to look for incubators.
An incubator for social impact businesses is a company that provides support to help with development. To do so, they offer training, services, technical follow-up and consultancy tailored to each business.
The idea is to offer knowledge, experience and even technology so that the company can get through its challenges and reach its main goals — the ones that matter to the cause.
Get to know Perifaimpacto
The PerifaImpacto initiative offers impact businesses and collectives led by young people from the periphery a course and incubation.
The idea is to support young impact entrepreneurs who need experience and knowledge to take their changes to the community.
In this way, new collectives are opened and, as a result, the solutions come from the quebrada for the quebrada. A very important matter for inclusion and for developing innovation in places with fewer opportunities.
The Trilha de Impacto Social Modo On is a free virtual journey for anyone who wants to build skills in content on theory of change, social innovation, strategy and team management, and much more! It is the key to incubation: the programme’s central offer
Incubation is aimed at businesses in Campinas — SP, following a selection process for the initiatives. The project also warmly welcomes collectives that include women, trans people, people with disabilities, Black people and Indigenous peoples.
Applications for the project have already opened. So pay attention! To find out more, take a look at the initiative’s page by clicking here!
References
- SUCUPIRA, Guilherme Abranches. Desafios de Empreender Negócios Sociais no Brasil. PUC-Rio.