At the start of September, we acquired an exciting new client named Jim Munchbach (see press release for more details). Jim works as a professor of personal finance at the Bauer College of Business within the University of Houston. In addition to role his role as a professor, Jim is also trying to generate activity behind a concept called social business. In this blog entry, I am going to explain exactly what that concept means – and the power it holds.
The Basic Definition
Professor Muhammad Yunus, a Nobel Peace Laureate, outlined the concept in a couple of his books. Social business occurs when a business is created with the purpose of addressing a social problem. In addition, all profits generated by the business are reinvested in its development or else invested to other businesses in the community. Overall, the focus of social business is to prioritise sustainability over profit maximisation.
Social Business Discussion
As of this month, Jim launched The Social Business Podcast. In a nutshell, it exists to share the stories and ideas of thought-leaders within social business. Jim’s second guest was a man named Peter Billingham, who works as a public speaker and speechwriter. During their discussion, Peter shared a number of fascinating insights into his interpretation of social business.
Hard Work vs. Charity
Peter’s insights on social business were very much in line with those of Muhammad Yunus, and that was great to hear in the podcast. He mentioned how most of the people living in poor communities want the opportunity to work for their livelihood, not to wait around for charitable handouts that may or may not arrive. Social business is about helping these people to make the first step into sustainable enterprise. This can be achieved through early assistance provided in the following ways:
- Teach them the skills they need
- Assist with the initial distribution
- Provide them with resources to expand
On-going Development for the Community
The pay-off of the concept is that social businesses invest their profits into other businesses in the community. Muhammad Yunus explains that this makes one dollar in social business more valuable than one charitable dollar. Social business is all about on-going development for the benefit of the community.
There is More to Discover
Social business is a fascinating concept and one that we are excited to be a part of. You can learn more by listening to The Social Business Podcast on iTunes – personally, I find the stories to be very engaging. (Photo credit to Jay Galvin)
By Mike Porter