Can Social Entrepreneurs Do Well by doing Good?
For-profit Social Entrepreneurial Ventures (SEVs) and Entrepreneurial Ventures (EVs) differ from each other in their purpose, mission and process. Many researchers were sceptical about SEVs blending social good with economic benefits. In the extant literature, there are hardly any empirical studies to refute this perceived notion that SEVs find it hard to balance both economic and social gain compared to their commercial counterparts. This study is an attempt to bridge this gap, bringing data from 140 practicing social and business entrepreneurs to answer the two fundamental questions; Can SEVs align wealth creation while serving a social purpose and do it well? Do they still lag behind business enterprises in creating profitable ventures?
The study assumed that both EVs and SEVs are two different types of businesses with different nature, striving to achieve different outcomes. The findings show that EVs and SEVs converge and diverge in many variables. There are differences in some of the “not so important” parameters like age of the venture, the number of part-time employees and the number of partners among EVs and SEVs. However, there are no statistical differences in the parameters that really matter for a venture like annual sales turnover, the number of customers, the number of full-time employees and volunteers. Current profitability status of SEVs and EVs also did not differ statistically.
The most significant finding of this study is that SEVs are able to reach the same performance level similar to EVs in terms of annual sales turnover and number of customers. They employ the same number of people and are profitable the same way as commercial entrepreneurs. One of the barriers to SEVs’ profitability emerged in this study is low employee efficiency ratio compared to EVs. The study showed the nature of the firm has an influence on sales turnover and current status of the venture in terms of profitability. Age of the venture had a significant influence on the profitability status, profitable SEVs were older than profitable EVs.
Dr. Shinu Abhi
Professor and Director - Corporate Training