Introduction
Entrepreneurship has always been the key driver of economic growth, innovation and job creation. But within the broad field of entrepreneurship lies a significant difference between social entrepreneurship and traditional business entrepreneurship. Even though they both seek to create value, their aims, motivations and methods are fundamentally different from one another. This article seeks to look at some distinctive features or aspects that differentiate social entrepreneurship from traditional businesses as well as its impact on society.
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Ultimate Goals
Traditional Business Entrepreneurship:
The main objective for any typical business venture is profit making and maximizing shareholders’ wealth. Entrepreneurs in this category identify market gaps, invent new products/services and grow their enterprises financially through scale up strategies where profitability acts as the driving force behind such activities.
Social Entrepreneurship:
On the other hand social entrepreneurs primarily aim at bringing about positive changes within society or environment. They usually spot challenges facing communities then come up with creative solutions that can address them. While financial sustainability is necessary but not sufficient condition; what matters most to these individuals is whether lives have been transformed socially or ecologically systems have improved due to their efforts thus treating it as their primary aim instead of secondary one among others.
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Motivation & Values
Traditional Business Entrepreneurship:
For conventional business people personal profits, market opportunities coupled with desire for more sales volumes may drive them into certain ventures however competitiveness becomes so important when talking about traditional entrepreneur characteristic which involves innovating around existing needs so as capture wider customer base eventually leading towards increased percentage shares within markets being served by given industry players.
Social Entrepreneurship:
Social entrepreneurs are motivated deep down inside themselves by need solve societal problems or protect environment (sustainability). They possess empathy towards others less privileged than themselves hence believing that all human beings should be treated equally irrespective of their socio-economic background situations therefore they work hard day in day out until there is fairness achieved in terms of access to opportunities among different groups within community. Most times such people have strong desire improve lives for those living below poverty line also taking care these words “leave no one behind” thus ensuring overall development where nobody feels left out either socially politically economically.
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Business Models and strategies
Traditional Business Entrepreneurship:
Profit driven models are usually adopted by entrepreneurs in this category of business establishment who concentrate on product development, marketing, sales promotion activities leading customer satisfaction which drives revenue generation so that it can be reinvested back into the company to ensure further growth is attained. They may use competitive pricing as a strategy to gain market share while expanding their operations hence aiming at maximizing ROI through cost reduction techniques.
Social Entrepreneurship:
Hybrid models balancing between financial sustainability and social impact creation are commonly used under social enterprises. Here, they combine elements from both non-profit organizations as well as profit oriented ones thereby coming up with new revenue sources besides traditional ones like grants or donations only; however there must still be some level profitability achieved for them continue doing good deeds within their communities served. Such establishments could rely upon different streams of income such us donations received from individuals or corporations interested in philanthropy work being done while others invest money intended help solve specific societal problems whose returns take longer period seen due higher levels risk involved during implementation phase so that more sustainable ways can be found alternative being expensive but potentially beneficial future generations too.
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Measurement Of Impact
Traditional Business Entrepreneurship:
In ordinary businesses performance is evaluated using financial indicators such as quarterly earnings reports which reveal total revenues earned over particular time frame (usually three months), net profit margins percentage figure representing how much remains after deducting all expenses from gross income generated during same 90 days period plus stock prices reflecting investor confidence level towards company’s future prospects based on current market conditions including perceived threats posed by competitors operating within same sector.
Social Entrepreneurship:
Success here is gauged through combination of economic, social and ecological measures as well. Therefore, social impact assessment tools will be needed in order to monitor effectiveness of interventions being implemented by these entrepreneurs who strive towards positive changes within communities or environment at large. Key indicators may include number lives saved/improved; acres land protected/conserved; social return on investment; among others this implies that there exists need for publishing reports which can act case studies so that others learn more about them
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Involvement of Interested Parties
Traditional Business Entrepreneurship:
For regular business entrepreneurs, shareholders and customers come first; the goal is to create worth for these stakeholders through profitability and provision of high-quality goods or services. Employee engagement and corporate social responsibility (CSR) initiatives can also be part but are frequently not given as much attention as financial performance.
Social Entrepreneurship:
The goals of social entrepreneurs go beyond their beneficiaries alone. They take into account communities, workers and investors among other interested parties. They work hand in hand with these people so that they may be able to develop solutions together which are responsive enough towards meeting community needs while at the same time reflecting community aspirations. Their strategies for engaging stakeholders rely on such things as transparency, collaboration as well ethical practices.
Conclusion
Traditional business entrepreneurship and social entrepreneurship share a foundation based on innovation and enterprise however this is where their similarities end because they have different objectives, motivations and approaches towards achieving those objectives. Market opportunities with financial growth being the main focus are what drives traditional business entrepreneurship whose primary aim is profit making only but on the other hand social enterprises seek to make change happen by addressing various needs within societies environmentally or otherwise thus putting impact before profits.