What drives someone to take the risk and start their own business? Sometimes it's a great product or an idea that solves a problem. But many small- and medium-sized businesses today have another focus: socially and environmentally conscious causes.
Take, for example, small business Bayou with Love, which partnered with Dell to create a jewellery line using recycled gold from old computer motherboards. The jewellery line is just one example of a small business prioritizing doing good for the planet.
Cuvee Coffee practices a direct trade, a model that considers environmental, financial and social sustainability as well as personal relationships. It builds partnerships with farmers who are good stewards of the land, pay fair wages to their workers and are often leaders in their communities. Cuvee then pays above market prices for their coffee. In return, the company gets the best coffee and the farmers make substantial profits.
Warm cookie delivery company, Tiff's Treats, donates all sales from opening days at new locations to a charity. Past grand openings have benefited Small World Yoga, St. Jude Children's Hospital, and Gabriella's Smile Foundation. In total, their grand openings have donated over $150K to various charities. In June 2018, the Tiff's Treats Grand Opening in Atlanta benefited Reese's, Magic Fund.
Using ethical and altruistic principles to guide business practices, these entrepreneurs are practicing "conscious capitalism," and investors are taking notice.
Angel investors and venture capitalists have helped these businesses play their part in a national and global trend toward social betterment in business.
Here are a few ways small businesses can benefit from conscious capitalism.
It opens the door to more capital
When a company launches a humanitarian initiative or implements an ethical program, people pay attention.
According to Fundivo, angel investments in altruistic businesses have been steadily growing since 2002 and roughly four jobs are created per investment. Moreover, a recent study from The Forum for Sustainable and Responsible Investing reported that under sustainable and responsible investing guidelines, a total of $8.72 trillion was made in 2016, showing a 33 per cent increase since 2014.
Increased networking opportunities
By helping businesses reach like-minded changemakers, the tech industry has made it easier for small businesses to maintain a conscious mission statement along with a profitable bottom line.
Funding for socially conscious businesses has become more easily achievable through crowdfunding campaigns on Kickstarter and Indiegogo. Even Kickstarter owners Yancey Strickler and Perry Chen insisted that their crowdfunding platform become a Benefit Corporation, ensuring they remain focused on their mission to bring creative projects to life rather than simply increasing the size of their own profits.
These crowdsourcing platforms are an efficient way for companies to find investors, but also to network and get their message out.
A boost from tech
At the center of many altruistic businesses is the robust use of technology, which has allowed many highly successful small businesses to support social and environmental causes.
Having dependable and easy-to-use technology is critical for these businesses, and many tech giants have also implemented programs to support conscious capitalism in small businesses.
For instance, Dell has been particularly passionate about helping businesses with an eye for social change and environmental consciousness. Through its 2020 Legacy of Good plan, which outlines its sustainability goals, it has helped small businesses use technology in a way that drives progress and social change.
Dependable and affordable technology is essential to promoting social change, and that's why so many entrepreneurs and investors are realizing that when paired with technology, ethical business practices can do a lot of good - and turn a profit.
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