According to the Social Enterprise Alliance, social entrepreneurs work to solve critical social problems and address basic unmet needs through innovation. Their entrepreneurial endeavors create system change, improving the lives of underserved or marginalized groups.
Unlike nonprofits, social entrepreneurship still earns a profit, but the focus is placed on the social or environmental change made while earning that profit. There are examples of social enterprises that are more than 100 years old, but social enterprise is relatively new as a growing sector of activity in the U.S. and beyond.
The Thomson Reuters Foundation reported the United States is the best country for business leaders seeking to tackle social problems, according to the first experts’ 2019 poll on the top nations for social entrepreneurs.
As an indication of the strong growth in this area, the total assets under management (AUM) for the impact investment sector hit an impressive high of $502 billion in 2018. This total AUM has been more than doubling each year (130% CAGR) since 2015.
Mentoring Focus Areas for Social Entrepreneurs
Mentorship has many benefits, but for social entrepreneurs, these benefits could mean the difference between trying and succeeding – and making social change a reality.
Tony Loyd is a leadership development expert. He believes that for social entrepreneurs, it’s especially important to pick the right mentor, one that understands your unique needs. Mentoring accelerates personal and business growth for faster results. It synthesizes lessons learned by others, condensing knowledge into useful insights. Mentoring provides a systematic process that can be used over time for consistent results.
In Loyd’s view, mentoring social entrepreneurs should focus on four areas: Personal Growth, Social Impact, Business Growth, and Leadership. It takes all four elements to succeed as a social entrepreneur.
1 – Personal Growth
Social entrepreneurship starts with a change leader. Exceptional change-makers know themselves the best, and it begins with self-awareness. Personal growth includes self-management, an ability to manage our emotions and behaviors, social awareness, our impact on others, and relationship management, the foundation of success in any initiative. Personal growth might also include learning new skills or gaining new confidence.
2 – Impact
Just as any business has to niche their market, social entrepreneurs must niche their effect. A lack of focus on specific, achievable impact goals can dilute your effectiveness. Sometimes social entrepreneurs need mentoring to help them focus on a particular impact area and plan how to get there.
3 – Business growth
A social business is, in the end, a business. Businesses survive and thrive from sustainable, profitable growth. Social enterprises have a social impact only when we sustain the business, create profit, and grow.
4 – Leadership
If you hope to scale your impact, and therefore your business, at some point, you have to multiply your efforts by leading others. Communicating, coaching, creating a culture, and other vital skills begin to take priority over your technical know-how. You must learn how to attract, recruit, grow, manage, motivate, and lead others. This can be a bottleneck to growth for startups, moving from a team of co-founders to a team of teams.
Creating Change Makers
Ideally, a mentor feels a similar concern or passion for the social issue that their entrepreneur is striving to impact. By understanding and relating to an entrepreneur’s mission-driven motivation for creating social change, mentors can build a solid foundation for a successful mentoring relationship based on shared values.
The greatest value to social entrepreneurs is having a mentor’s input during a startup’s early stages and the first two years of business development. Through mentorship, an entrepreneur gains feedback and encouragement and can learn how to overcome challenges that range from current legal structures and financial models to staff management and investment decisions.
Having a mentor not only helps social entrepreneurs to develop their businesses successfully, but it also helps them to develop into more effective leaders and change-makers. When you have become a successful social entrepreneur, you should give back and mentor others as well.