#42: Being Socially Impactful While Maintaining a Healthy Profit Margin | Episode 44
In this episode, we discuss whether it’s possible for a small business to be socially impactful while maintaining a healthy profit margin. The answer is a resounding yes.
While it is a reality that businesses aim to maximize profits, it is still essential that they maintain a good relationship with the social environment they operate in. Companies that can demonstrate reliance on society and invest in their social responsibilities tend to have a greater chance of success.
For many small business owners, the thought of being socially responsible raises questions of how much impact a small company will be able to make, and how shifting to more responsible practices might affect their bottom line. Studies, however, show over and over again that companies that fully integrate social impact initiatives into their operations can expect good financial returns on their investments. Companies integrating social impact into their business have been shown to increase sales and prices as well as reduce employee turnover.
One of the reasons companies increase profits when incorporating social impact into their business model is because customers pay attention to the way companies react to social and political issues, and will often boycott companies with negative values. Companies creating positive impact promote positive values, which ultimately increase customer traffic and company profit. Businesses that create social impact create positive externalities for society.
In this episode, I encourage you to find ways to be compensated for the positive spillover you produce by asking these 3 questions:
1. Can you charge more for your products and services?
2. Can you create intellectual property that you can monetize?
3. Can you collaborate with someone who needs what you provide who is also willing to subsidize your production costs?