The demand for and interest in social entrepreneurship is slowly growing. A social entrepreneur is someone who is dedicated to creating a business that can have a positive impact on society. As many problems around the world continue to be in the spotlight, many problems that have existed for a long time are reaching a breaking point. These social entrepreneurs then create businesses that help fuel the boiling pot of problems we have.
But social entrepreneurship is different from ordinary entrepreneurship. Everyone has their own business model and practices that they use to achieve their goals. Below are the five biggest differences between social entrepreneurship and conventional entrepreneurship.
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Investing in Entrepreneurship
For social entrepreneurship, many seek philanthropy for their financial resources. Although investors generally want to make a profit, they nevertheless play a more important role in the business. This is because they are more interested in business goals than monetary gain.
As for conventional businesses, they get their investors through venture capitalists and other similar firms.
How does profit work?
Social entrepreneurship uses its profits to donate to charities and local community organizations. Although social entrepreneurship involves commercial activities, it usually helps to keep the organization running. Therefore, they tend to create their organizations as non-profits.
Business entrepreneurship uses its profits to give back to investors, stockholders and stockholders. It can also be used to grow the company in various ways, such as increasing the number of employees or opening another location. It’s all about making money.
idea of wealth
Wealth is an important part of both types of entrepreneurship. However, both have different views on this. Those who are engaged in business entrepreneurship want to make money. They appreciate it because it makes them richer and helps the company grow.
For social entrepreneurship, people also care about money as it activates them in achieving their goals. However, they simply see it as a tool to achieve their goals.
Interestingly, both types of entrepreneurs seek to make a big difference by accumulating money, offering better solutions.
One against many
According to the Stanford Social Innovation Review, the magazine stated that commercial venture capitalists are more interested in investing when they see who is on the board of directors and what support they have.
Philanthropists are often the main investors in a social entrepreneur. These philanthropists are more interested in who the leader of social entrepreneurship is than many other workers who might be hired under a leader.
The review also states that truly successful change can only be achieved depending on a variety of factors. Strong leadership is often required and needed, but one person is less effective.
Approach to the problem
Writer for technori.com went to an idea conference in Chicago. This three-day event was created by Charles Lee, founder Idea consultation. It is stated that this is a must-have event for those involved in social entrepreneurship.
The article says that one of the biggest differences between business and social entrepreneurs is how they approach a problem.
Social entrepreneurs can identify a problem, but it is harder for them to find a solution. But it’s harder for business or “tech” entrepreneurs to find the problem. Rather, they create solutions that are in search of a problem.
While not every business or tech entrepreneur is like the above, it does provide a rough picture of how the two business models work.
For social entrepreneurship, it can be easy to find a problem. For example:
- Changing of the climate
- Racial discrimination
- Frame
- Poverty
- The crime
- world hunger
- Disease
These are all serious problems affecting millions of people. But these problems are often deep rooted and it can take a long time to make changes. Solutions are more difficult to find, mainly due to financial constraints.
But business entrepreneurship, or at least technological entrepreneurship, is a completely different story. Some want to create things to stand out and become the next Jeff Bezos or Elon Musk. Instead, they often do things that no one is actually asking for. Of course, this can help with some minor inconvenience, but putting all your resources into a cause is bad planning.
Conclusion
Both types of entrepreneurship have similarities and differences when it comes to their business models.
Business entrepreneurs are concerned with money and wealth accumulation. This is the beginning and end goal. However, social entrepreneurs seek to make society better by using wealth simply as a tool to advance towards a positive society.
However, they are both business through and through. They really need wealth to survive and keep themselves running. But money means different things to them. While one isn’t better than the other, it’s good that we have both.
Related Post: 10 Tips for Becoming a Social Entrepreneur
