As co-founder of social enterprise support charity, All Good Ventures, Dr Rod Claycomb says the organisation has seen entrepreneurs with great ideas for businesses that can ‘do good.’ But turning those ideas into successful, profitable companies is a big leap for many.
“Over the past four years of assisting entrepreneurs to start social enterprises, we’ve seen no lack of great ideas for businesses that can do good in the world. But what is very clear is having a great idea is the easy part. It takes a lot of time, effort, money and perseverance to deal with the challenges that come along with actually creating a profitable, sustainable business out of a great idea.
“Through the mentorship we provide our entrepreneurs, we try to inject this realism early on to get the business on track to profitability as quickly as possible,” he says.
On 1 March, All Good Ventures launched its fifth round of annual funding and support for social entrepreneurs. Since launching in 2018, the charity has assisted 14 entrepreneurs in seven countries including, New Zealand, Uganda, South Africa, UK, Australia, Kenya and Canada.
From the charity’s experience of supporting its first 14 social entrepreneurs, Claycomb says he’s seen first-hand five critical attitudes and principles founders must adopt to be successful.
“The first is understanding the business idea is the easy part. The hard part is yet to begin. And it will get boring, and it will get tedious. And, as your passionate vision of using your idea to help people in need turns into a strategy and a five-year plan, you will eventually need to decide what you’re going to do for the next 12 weeks. And the next 12 weeks. And the next. And so on. You need to be ready to put in the hard yards for a sustained period in order to achieve your original passion,” he says.
A second critical principle for social enterprise start-ups is to prepare yourself for set-backs and unforeseen issues. “For those who haven’t built a business before, they will experience numerous unforeseen steps. The process will be slower and more expensive than you ever thought. And when that happens, it is essential to keep your eyes on the people you want to help through your social enterprise – that vision will help you persevere.”
Dr Claycomb says the most successful social enterprises All Good Ventures has supported see the founder working in the business full-time. “Building a successful, profitable social enterprise can’t be a side hustle. You need to work on your business full-time for it to succeed long-term.”
He also says profit cannot be sacrificed. “Since our inception, All Good Ventures has existed to support seed funding for social entrepreneurs just starting out. What we’ve seen over the first four years is that the profits in a social enterprise typically need to be higher than normal businesses. One-for-one models, giveaways, and catering to vulnerable communities all require higher margins to achieve cause-related goals.
“This might be a controversial stance, but a prevailing attitude we have seen in the social enterprise sector is that a business’s focus should be on: ‘people not profit’ or ‘planet not profit.’ Alternatively, All Good Ventures preaches: ‘people by profit’ and ‘planet by profit.’”
And finally, Claycomb says social enterprises which are reliant on grants rarely last the distance. “As soon as the grant money lands, the focus often shifts to the grant money running out. This in turn takes your focus and time away from building the business. Don’t get me wrong – grants can be a crucial part of building a foundation in the early years. However, I would suggest a good test is to develop a budget that assumes there is no grant money and see if your social enterprise business idea can succeed without it.”
All Good Ventures 2023 funding and support round opened on 1 March and closes on 31 March. The application form is on its website: www.allgood.ventures.
All Good Ventures is a registered NZ charity founded in 2018, based in Hamilton. It supports social entrepreneurs to start businesses for good with money (grants), mentorship, and muscle (in-kind support): www.allgood.ventures. It has supported 14 enterprises in 7 countries and on 1 March its 2023 support and grant round opens to new applications. The charity was founded by husband-wife team, Dr Rod Claycomb and Heather Claycomb.
