Building Social Business summary

Introduction

Building Social Business by Mohamed Younis Social businesses combine profit with purpose to solve global problems. What if business could solve the world's biggest problems? Imagine a company that generates profit, yet dedicates every cent to improving lives. Capitalism has brought prosperity to many parts of the world.

However, far too many people are excluded from its benefits. They live a life of crushing poverty. What can we do to make the world a better place? A great first step is to build a social business.

Charity, social entrepreneurship, and non-governmental organizations all support good causes. But a social business is something entirely different. In this summary, you will learn what a social business is all about. You will discover what differentiates it from other social enterprises.

You will also get advice on how to start your own social business.

Solving Societal Problems Through Business

Solving Societal Problems Through Business. There is a different way to do business. It is about solving society's problems rather than pursuing profit as the only goal. You have likely heard of the term social business.

But what does it really mean? Fundamentally, a social business is not based solely on its bottom line. Most businesses, private ones in particular, maximize profit. Non-profits, on the other hand, rely primarily on philanthropic donations.

A social business is distinct from both. Its primary aim is to solve social, economic, or environmental problems. To accomplish this goal, these businesses employ regular methods. They produce and sell products or services.

This makes the venture self-sustaining. For instance, Grameen Danone makes and sells affordable yogurt products. These are loaded with micronutrients. Their overriding goal is to combat malnutrition among children in Bangladesh.

But it is not quite that simple. There are two forms of social business, type 1 and type 2. A type 1 social business produces profits. However, it does not dispense dividends.

They do not regularly pay out a percentage of profits to the company's owners. While type 1 social businesses are still owned by investors, all profits are reinvested. This results in neither a gain nor a loss for the investors. Grameen Danone is an example of one such type 1 social business.

They operate without dividends. On the other hand, a type 2 social business operates like a typical for-profit company. Unlike a type 1 social business, it is owned by poor people. It is not owned by wealthy investors.

As a result, the profits go directly to low-income people. They therefore serve a social function. This is namely the alleviation of poverty. For example, the Grameen Bank is a type 2 social business.

It is owned by the poor of Bangladesh. It provides loans to low-income citizens.