Poor people do not create poverty. It is the system that creates poor people. So far, there is only one concept of business in the world, says Muhammad Yunus. Business is to make money. Profit maximising is the mission of business.
Muhammad Yunus, founder of Grameen Bank and Nobel Peace Prize winner in 2006 has proposed another kind of business: a Social Business. It is a business to do good to people, to do good to the planet, and without the intention of gaining any financial benefit out of it.
And to demonstrate this concept, he has created several successful businesses based on this model. It can be done, and it has been done. To find out more about each of them, click on the names below:
The Grameen Danone Company was created to help malnourished children in Bangladesh and in the process also helped beggars get out of begging.
The Grameen Shakti Company provides solar lighting to villages who are not connected to the grid and helped employ women in those villages to assemble and install them.
Social Business, according to Muhammad Yunus, is based on seven principles:
- Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization.
- Financial and economic sustainability.
- Investors get back their investment amount only. No dividend is given beyond investment money.
- When investment amount is paid back, company profit stays with the company for expansion and improvement.
- Environmentally conscious.
- Workforce gets market wage with better working conditions.
- …do it with joy.
Social Business is not meant to be a replacement for the profit maximising business. It is an alternative – for those who want to do good for others. People who work there will not need to sacrifice their living standards to work there, but they should not expect exhorbitant salaries. Just like the investors, everyone in a Social Business is there because they want to help others, do it sustainably, and not focused on personal gain. All profits, after the initial investment is returned to the investors, are reinvested for expansion and doing more good.
You too, can create a Social Business. All it needs is an entrepreneur and the right business idea with the goal to help others. (read more about Tips for Entrepreneurs).
If you have Social Business ideas or comments you want to share, post a comment below.
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