I know that these are just the first three of the lessons I will learn as an entrepreneur and small business owner. After all, every startup learns lessons the hard way. What lessons have you learned as an entrepreneur?
The end of the year is a great time to plan for the new year. This is an opportunity to reflect, evaluate what worked and what didn’t, and set goals for the new year.
As a business owner, you are already constantly working on four of the five key areas for a sustainable business: planning and strategy, finances, operations, and sales and marketing. The fifth area – sustainability – is one to begin working on, if you haven’t done so already. Taking the time to review your performance in these areas during the past year and engaging in reflection and planning will prepare you to get off to a strong start in the new year.
While this may seem overwhelming, the key will be to keep it manageable. Set aside some time to review each area of your business, identify the key improvements you can make, and plan out your strategy for the coming year. Even a day or an afternoon devoted to each area will help you to get prepared for a successful 2011. (Of course, don’t forget to take some time from all the planning to rest and enjoy time with friends and family!)
What would you add to this list? Are there other end-of-year business activities that you recommend?
The conventional wisdom when it comes to business is that, as a business owner, you have to make a choice: you can either make money, or you can do good.
This is, however, a false dichotomy. You don’t have to choose to either ensure your personal livelihood or to live according to your values. As one of my instructors from the Green MBA used to say, you can choose “both/and” – you can both make money and do good.
What are B Corps?
Benefit Corporations, commonly known as B Corps, are a new type of corporation. Unlike the traditional corporation that gives priority only to financial profitability, B Corps actually use the power of business to address social and environmental problems.
How do they do this? Among other things, they “institutionalize stakeholder interests.” Instead of taking the shareholder as the primary person to which they are responsible, B Corps give primary consideration to the stakeholder. This is a very important distinction. A shareholder, as we know, is someone who owns shares in a company; a stakeholder, by contrast, is someone who has a stake in the company, regardless of whether he/she actually own shares. Who can have a stake in the company? Anyone who is affected by the actions of that company, such as employees, members of the local community in which the business operates, or members of the community in which the business has an environmental impact.
A traditional C Corporation will focus on increasing shareholder profits, often without regard to how that affects other stakeholders. This is why corporations sometimes do not pay living wages or provide inadequate health benefits – because those are costs that, if saved, can provide profit for shareholders. B Corps, however, are committing to taking social and environmental interests into account when making decisions.
Why are B Corps Important?
B Corps are important for several reasons:
However, beyond all of these reasons, there is one primary reason why I believe that B Corps are important. They are fundamentally changing the rules of the game when it comes to business.
You see, when a company becomes a B Corp, it doesn’t just earn a certification. It also commits to changing its legal organizing documents to include consideration of stakeholders. Earlier this year, the states of Maryland and Vermont became the first states to legally recognize B Corps.
One of the co-founders of B Lab, the non-profit that issues the B Corp certification, explained why this is important on the B Corp blog earlier this year:
“Today, there is a critical mass of entrepreneurs, investors, consumers, workers, and policymakers seeking to create social and environmental impact through business. However, they face two systemic obstacles: 1) the absence of transparent standards which allow all of us to support “good companies” not just good marketing; and 2) the legal concept of shareholder primacy which makes it difficult for corporations to include employee, community, and environmental interests in decision making.”
B Corp provides a fundamental alternative to these obstacles by establishing transparent standards and challenging the legal concept of shareholder primacy.
How can B Corps Help Your Business?
There are several ways that B Corps can help your business:
To learn more about B Corps, you might want to read a related post about “Completing the B Corp Impact Assessment.”
The statistics from the last few years confirm that women entrepreneurs are a force to be reckoned with. Women are starting businesses at twice the national rate, and the revenue from women-owned businesses is estimated at $2.8 trillion, according to an October 2009 report on the economic impact of women-owned businesses. If U.S.-based women-owned businesses were their own country, they would have the 5th largest GDP in the world.
At the same time, we’re seeing that many of our most common business practices are fundamentally unsustainable. For example, many businesses today are built on the use of cheap labor from third world countries to develop products full of toxins that are then shipped worldwide using fossil fuels. How long, realistically, can such a model be sustained? The rise of sustainable business is in large part due to the realization that business models dependent upon the indiscriminate use of both social and natural resources are not sustainable in the long term.
Both women-owned businesses and sustainable businesses are fairly new trends in business. Neither had an impact until perhaps the past 20 years, and weren’t even a consideration during the Industrial Revolution when many of our business practices were established. Now, however, they are both positioned to significantly change the way we do business in the 21st century.
The opportunity that we have with women-owned businesses is this: to harness that entrepreneurial activity and steer it in a sustainable direction. By doing so, we can demonstrate that businesses can be successful without depending upon the exploitation of workers in third-world countries. We can show that businesses can be successful without destroying our natural environment or exposing us to toxins in the products we bring into our homes. We can show that business has a role to play in mitigating the effects of climate change. We can develop businesses that benefit the communities in which they operate.
All of this is possible through sustainable business, which shows that businesses can be financially profitable while also being ecologically sustainable and socially beneficial. And women can lead the way, because we are the ones who are currently driving much of the entrepreneurial activity. If small businesses are the engine of the economy, then women are in the driver’s seat. We can choose the path that we want to take.
What do you think? Would you like to develop your business to be sustainable? Why or why not?
Do you remember rotary phones? At one time, rotary phones were in every home. Now they’re relics of the past, displaced by better, newer, faster technology.
If you were starting a business today, would you set up a rotary phone for your business? Of course not. The very idea is ludicrous. However, you wouldn’t do it because the rotary phone doesn’t work; technically, you would still be able to make and receive telephone calls. The reason you wouldn’t do it is because the rotary phone is not suited to the business needs of the present. To keep up with the pace of business today, you need a phone that you can take with you, that allows you to read email, search online, and send and receive text messages.
Many of our business practices and beliefs are just like the rotary phone. They were developed during a different era, in which they were widely used and met the needs of those times. However, they are not suited to the needs of the present, much less the future. Consider a few long-held beliefs that are now being challenged:
These are just a few examples, but they illustrate the point that some of our most central business ideas were developed under vastly different circumstances than the ones in which we now find ourselves.
It is time for us to reimagine business for the 21st century.