Social Entrepreneurship

The Purpose Paradox

Written by Tim Morral for Gaebler Ventures

Think making money and improving the world don't go together? If so, it's time you learned about overcoming the Purpose Paradox

As a small business owner, you want to give something back to the community.

Purpose Paradox in Social Entrepreneurship

But in a competitive business environment, "greater purpose" takes a back seat to bottom line profits - until you learn how to overcome the Purpose Paradox.

So what is the Purpose Paradox? In its simplest form, it's the constant tension between turning a profit and using your business as a platform for making the world a better place. According to conventional wisdom, a company could choose to either maximize profitability or make a difference in the community - but not both. However, more and more entrepreneurs are finding ways to overcome the Purpose Paradox by combining social values with hardcore business principles.

Although there are a number of ways to merge purpose and profit in a small business, today's entrepreneurs are successfully overcoming the Purpose Paradox by employing variations of three different leadership models.

The Conscientious Owner Model

The vast majority of small business owners fall into the Conscientious Owner category. Conscientious owners are genuinely concerned about the welfare of their communities, and regularly contribute products and services to local causes. Typically, the owners' community involvement is limited to the requests that are presented to them. In other words, conscientious owners don't usually incorporate their efforts into their company's business plan, but instead respond to community needs on a case by case basis.

The Social Entrepreneur Model

Like Conscientious Owners, Social Entrepreneurs are passionate about their communities. But they take community involvement to the next level by intentionally integrating their social commitment into their companies' missions, goals, and planning processes. Rather than wait for causes to knock on their door, Social Entrepreneurs focus their efforts on either a cause they find personally appealing or a cause that is a natural fit for their business. Although bottom line profits are still a priority, these owners often leverage company resources to raise awareness and significantly benefit their cause. Many even find creative ways to enhance profitability by inviting their customers to join them in making a difference.

The Nonprofit Leader Model

Despite their social commitments, Conscientious Owners and Social Entrepreneurs both inhabit the for-profit business arena. Nonprofit Leaders, on the other hand, are primarily motivated by their desire to make the world a better place. But even though they lack a profit motive, Nonprofit Leaders need entrepreneurial skills to be effective. Fundraising, budgeting, strategic planning - these are all critical skill sets for Nonprofit Leadership, and many of the best leaders rely on their entrepreneurial training to succeed.

The first step in overcoming the Purpose Paradox is to select the leadership model that is right for you. Since your leadership model will largely depend on your personal goals and circumstances, you will need to balance your desire to do good with the hard facts of your individual situation.

Tim Morral is a veteran business writer who specializes in helping entrepreneurs launch and grow their companies. Based in Rochester, NY, Tim has worked extensively in the areas of brand communications and small business content creation.

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