Entrepreneurs and new ventures are aided in three areas: access to networks, capital, and skills. Typically, the most basic business networks are built through family, school, or community – thus it helps, of course, to come from a family full of accounts, lawyers, bankers, and others who can provide discipline-specific business advice. Likewise, early-stage business capital often comes from family and friends, and the wealthier the family and friends, the more capital for your venture. The skillset to launch a new venture, though, comes from experience, education, and natural ability.
Those interested in increasing the number and success of businesses with a sustainability mission have taken note of these three areas, and many organizations are accordingly building special avenues for networking, capital access, and skill building.
Take the example of Good Market. Good Market is building an entrepreneur-networking platform “that makes it easier to find and connect with social enterprises, responsible businesses, changemakers, and other participants in the new economy.” Businesses commonly form networks around a specific industry, like a trade association, or in a geographic location, like a chamber of commerce. Good Market is building a network of businesses that share a common idea of how a business should operate: sustainably and with a social mission. The hope of this network is to increase business-to-business contact among those in the social enterprise community. The platform allows like-minded entrepreneurs to interact with and learn from one another’s business models. Consumers and producers who place a high importance on sustainability can visit the platform and find businesses with similar values.
In the area of skill building, entrepreneur-training organizations are beginning to offer training specific to entrepreneurs interested in sustainability and social enterprise. The ability to gain skills in the areas of sustainable business practices and social enterprise will mean more entrepreneurs deciding to structure their venture with a double or triple bottom line.
For access to capital, the size of the global impact investing market is $502 billion USD, and investing with ESG principles is increasingly popular.
But, to increase the number of new businesses with a sustainability mission, it is helpful to consider whether there are specific things holding back the creation and development of businesses with a sustainability mission, and what the next steps may be.
For instance, moving forward we will likely start seeing more networks centered on sustainability criteria, which may in turn move alongside the recognition of requirements to be a “social enterprise” or criteria to be considered a sustainable business.
Much more could be also done in the area of skill building related to sustainable practices. As just one example, organizations that assist entrepreneurs in writing business plans have an opportunity to teach on alternative business models and how to market sustainable practices. Broadly speaking, even, the research on different ways to structure a business is underdeveloped: Most new entrepreneurs are not thinking about worker-ownership or other non-traditional ways of structuring a business. And, introducing alternatives early on in the creation process might encourage more businesses to take on a sustainability mission.
Special treatment from capital providers for sustainable businesses also appears to be growing, and more community development financial institutions are providing a road map for investing in businesses with a high emphasis on the mission.
Ultimately, as much of the growth of sustainable business practices depends on consumer preferences, the speed of business growth in the short and medium term will likely rely on expanding access to differentiated capital access, networking and learning ventures, and skill building opportunities.
Image courtesy of Flickr. Originally published by S&S on October 31, 2019.
