Social Entrepreneurship: A Business Environment Report Analysis

This report delves into the realm of social entrepreneurship, defining it as the initiation of businesses to address social, environmental, and cultural issues, with success measured by societal benefit. It contrasts social entrepreneurs with traditional business entrepreneurs, highlighting their focus on societal welfare over solely profit-driven motives. The report explores the literature review, characteristics, and challenges faced by social entrepreneurs, including funding constraints and the need for sustainable business models. It then categorizes social enterprises into hybrid non-profit, leveraged non-profit, and social enterprise ventures, providing examples such as TOMS Shoes, STATE BAGS, and Warby Parker. Each example details the enterprise's purpose, impact, challenges, and outlook, demonstrating the positive influence of social entrepreneurship. The report concludes by emphasizing the importance of social entrepreneurship for community development and offers recommendations for future entrepreneurs to embrace this model.

Running head: BUSINESS ENVIRONMENT 1
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Introduction
Social entrepreneurship can be defined as starting up companies in order to get solutions to
environmental, social and cultural related problems, the success of social enterprises is measured
in terms of its benefit to the society. It is connected to voluntary sector covering fields like;
community development, poverty reduction, and health care. The main difference of business
entreprenuers and social entreprenuers is that business entreprenuers focuses more on profit
making while social entreprenuers focuses on society welfare. Profit- making enterprises can
also be part of social entrepreneurship, giving an example of an organization intending to
provide employment may decide to run a restaurant that will offer employment opportunities and
also make profits. Social entrepreneurs look for problems in the society, tries to understand them
and finally comes up with an innovative idea to provide solutions to the problems. They may be
faced by a number of challenges and the main one being lack of funds to run their enterprises,
this is because most investor fear investing on social enterprises. Their motivation is the need to
provide solutions to problems in the society.(Dees, 2017).
Literature review
Many researchers have defined social entrepreneurship in different ways, but they all have one
thing in common which is the nature of solving problems in social entrepreneurship. It involves
developing plans and implementing them to benefit the society. Social entrepreneurs are not
happy about the number of people who walk into their offices but the number of people that walk
out having benefited, they get their motivation to start social enterprises from challenges,
previous experience, social problems, and social networks. Some researchers define social
entrepreneurship more deeply and claim that social entrepreneurship can occur in non-profit
making companies, public or private organizations. These researchers emphasize the

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innovativeness and creativity brought by the entrepreneurs to solve the problems uniquely
instead of focusing on the benefits of the products and services provided (Cepel, Stasiukynas,
Kotásková & Dvorsky, 2018).
Social entrepreneurship has several characteristics which include: creativity, impact to the
society, and ethical fiber. Creativity has two dimensions one being the ability to solve problems
and the other being the ability to set achievable goals. Entrepreneurs need to be creative enough
to get solutions to questions and have should a vision of the society when the ideas are
implemented. They have to work on goal-setting to ensure that the vision come to reality. The
impact on the society is used to determine if the idea to be implemented will bring changes to the
situation of the society even with the absence of the founder. Importance of ethical fiber is that
entrepreneurs who want to positively change society must be honest and trustworthy. Social
entrepreneurs are also characterized by not taking credit after making change; they believe that
the move was successful due to everybody around them (Audretsch, Belitski & Desai, 2018).
Social entrepreneurs are faced by a number of challenges one of them being, the way they deal
with predicted or less-researched issues such as overpopulation, food shortages among others,
and this makes it hard to found a successful business on possible solutions because investors are
not ready to get involved such kind of risky activities. They are generally unsuccessful because
they offer assistance to those not able to pay for it, capitalism is based on an exchange of money
for products and services, and social entrepreneurs have to look for business models which don’t
rely on capitalism to sustain their organizations. It is the self-sustainability that differentiates the
social enterprises from charities which depend on donations for survival (Singh & Gaur, 2018).
There are three types of social entrepreneurs namely: hybrid non-profit, leveraged non-profit
and social enterprise ventures. Hybrid non-profit applies where an organization structure takes

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different forms but is different because it’s willing to spend profits from some productive
activities to maintain other operations that have a community or social benefit. A leveraged non-
profit is a structure that uses finances and other available resources to solve social problems
through innovation and creativity. Social enterprise ventures are businesses that were created to
bring change via social means but experienced financial constraints and were therefore forced to
be for-profit businesses because of difficulties to acquire loans for social enterprises (Welsh,
Kaciak & Shamah, 2018).
Examples of social enterprises.
There are several examples of social enterprises one being TOMS shoes. It was touched by the
truth of many children living in underdeveloped and developing countries don’t have shoes, and
some who have, are not fitting or comply with the required health standards. They found it
essential to provide shoes for these kids and started a program where for each pair bought from
them, they donate a pair of shoes to a needy child. These shoes given will enable them to walk to
school and play safely thus improving their health, TOMS has been able to donate over fifty
million pairs to the needy children. They have not encountered many challenges with this
program except for selfish people entrusted to distribute these shoes, and they decide to make
profits out of the donations.TOMS shoes have greatly changed the lives of many children who
now have good shoes and thus better health for them.
Another example of a social enterprise is STATE BAGS. It was established to help needy
children in America that live in bad and challenging conditions. For every bag bought, they
donate a bag-pack inclusiveness and education. The backpacks are given out by PACKWOMEN
and PACKMEN who have lived in the same conditions but were able to successfully overcome
them and make a better living, this is used as a success example during promotions and

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awareness in these communities; they use their experience to help and encourage others. STATE
BAGS have successfully changed the lives of children in America and have promoted education,
they are faced by a challenge in market penetrating flooded with many types of bags but have
come up with a strategy to cope with the challenge and are greatly improving.
Warby Parker is another social enterprise that provides glasses to needy people. It aims to
overcome the current challenge of over 703 million victims who are not able to access the
eyewear. For each pair bought from them, they give an equal amount to a non- profit provider of
glasses. The non-profits then train people living in developing countries to provide an essential
examination of eyes and to sell eyewear to members of their community at a relatively low price.
It has resulted in an increased accessibility and awareness of eye-care in all developing countries,
they have already distributed over one million pairs of glasses. Warby Parker experiences a
problem in dealing with competition, they have the right, and quality glasses but their record of
sales are very low. They have greatly helped needy people in developing countries and could
make a more significant impact if they market their glasses and increase sales. In conclusion, social
entrepreneurs are those who start up businesses with the aim of solving societal problems, they differ
with business entreprenuers because they are least intrested in profit-making. Social entrepreneurship
is very beneficial to the society and community development, it comes up with solutions to problems
and benefits the members of the community, though may be faced by financial problems because
investors don’t want to invest in social enterprises, they can be profitable too in cases where they
are running a business to help members of the society and to make profit at the same time. Some
social organizations are forced to start a profitable part of the entire organization so as to be able
to run smoothly because its hard for them to acquire funds from investors or bank loans. It is
characterized by creativity, ethical fiber and solving problems. There are three types of social

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entrepreneurship with different business models; they include: leveraged non-profit, hybrid non-
profit and social enterprise ventures. Entrepreneurs should embrace this type of entrepreneurship
for a better world through innovating possible solutions to community issues and solutions to
unpredicted problems. Several organizations with given examples of Warby Parkers, TOMS
shoes, and STATE bags, are practicing social entrepreneurship and have significantly impacted
the lives of many needy people (Audretsch, Belitski & Desai, 2018).

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References
Audretsch, D. B., Belitski, M., & Desai, S. (2018). National business regulations and city
entrepreneurship in Europe: A multilevel nested analysis. Entrepreneurship theory and
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Audretsch, D. B., Belitski, M., & Desai, S. (2018). National business regulations and city
entrepreneurship in Europe: A multilevel nested analysis. Entrepreneurship theory and
practice, 1042258718774916.
Cepel, M., Stasiukynas, A., Kotásková, A., & Dvorsky, J. (2018). Business environment quality
index in the SME segment. Journal of Competitiveness, 10(2), 21.
Dees, J. G. (2017). 1 The Meaning of Social Entrepreneurship. In Case studies in social
entrepreneurship and sustainability (pp. 34-42). Routledge.
Singh, S. K., & Gaur, S. S. (2018). Entrepreneurship and innovation management in emerging
economies. Management Decision, 56(1), 2-5.
Welsh, D. H., Kaciak, E., & Shamah, R. (2018). Determinants of women entrepreneurs' firm
performance in a hostile environment. Journal of Business Research, 88, 481-491.