Community based business models
As a business owner or entrepreneur, there are many options for how you decide to structure your business. The type of business model you choose to practice business from should directly relate to your organizations core values, mission and vision. Community based business models, often also referred to as Social Enterprises, are one option that we can choose to implement, which is getting more and more attention due to society’s increased desire for connection, collaboration, support, and advocacy. Business owners that instill a community based business model (or Social Enterprise) are often referred to as Social Entrepreneurs. The world of business and business practices have changed drastically over the course of 2020 and 2021 due to a rise in collective activism and desires for social as well as environmental change. Society is turning to corporations and businesses, holding them responsible for their part in contributing to our collective wellbeing. This responsibility that is put on organizations shows a consumer desire for businesses to include people and the planet in their business practices, goals and missions. One way that business owners can embrace their social and environmental responsibility is to integrate a community based business model. My personal experience with community based business models has been nothing short of incredible. Social enterprises that center community in their efforts have such a different vibe than businesses that do not do so. From radiating the feelings of belonging, to expressing that their organizations are about things beyond profit…a social enterprise that centers community allows consumers to gain a sense of value, respect, consideration, and partnership with the business. Taking this sort of approach to business is a way for business owners to incorporate people and the planet into their business practices in such a way that creates an environment as well as culture of coexistence.
What is the difference between community centered businesses and traditional businesses?
The biggest difference between a traditional business and a community based business is the end goal the business is striving toward. For business owners and entrepreneurs who are driven by the desire to make the world a better place while also growing their business, turning to a community based business model is a great opportunity to do just that. Traditional business models typically prioritize profit above and before all else, which often times leaves advocacy and impact based business owners feeling misaligned with their efforts and approaches. It is important to note that community based business models are not intended to be a method business owners take to simply project or portray themselves as socially responsible while in the same breath still upholding toxic capitalist and anti-community business practices. Community based business models fully acknowledge the interrelatedness and interconnectedness of all things, therefore instilling this type of model is done out of a desire to truly make a difference on people and the planet. Community based businesses center community in all parts of their organization, from sharing ideas and building bonds to connecting in a collaborative and authentic way with others over shared missions and visions. Differently, traditional business models center profit and growth for the business owner as well as stakeholders. Community based businesses are ambassadors and advocates for their desired social, economical and environmental change that they wish to see unfold and their businesses are structured in a way that helps contribute to the change they wish to make in the world. Oppositely, traditional business models don’t tend to put much emphasis on the impact their efforts have on people or the planet, and when they do emphasize these things it is usually after the business has already prioritized profit first. Don’t get me wrong, there are some beneficial aspects to traditional business approaches, which is why traditional business is the current norm and community based business is not! Yet, in the current reality we exist in as a collective, many traditions have become outdated and obsolete. This is an opportune time for business owners who want to make a difference in the world through the work that they do to step forward and learn how to implement a community centered business model. Community based businesses do not just talk the talk when it comes to practicing social responsibility and positioning themselves as an ethical, conscious, or sustainable community based business, they walk the walk by putting those concepts into practice. For anyone who is feeling the desire to make their business become a form of advocacy toward the type of world they wish to see exist, shifting out of traditional business norms and into community centered norms will be a powerful transition to embrace. Depending on the current business model you are functioning in, this provides you an opportunity to either transition your model to a social enterprise model or to simply begin implementing community based business standards that help you uphold your social and environmental responsibilities.
Socialenterprise.us states that Social enterprises span the spectrum of nonprofit to for-profit entities and that there are three general social enterprise models:
- Opportunity Employment: organizations that employ people who have significant barriers to mainstream employment. Example: Goodwill
- Transformative Products or Services: organizations that create social or environmental impact through innovative products and services. Example: Soles4Souls.
- Donate Back: organizations that contribute a portion of their profits to nonprofits that address basic unmet needs. Example: The Thx Co
Learn more at socialenterprise.us
What does a community based business look like?
Community based business models aim to be community co-led and operated. They often prioritize a co-ownership culture where there is shared power, leadership and benefits amongst those involved in the community. Community based businesses are socially and environmentally responsible, where they are driven by the desire to reinvest in the community as a way to strengthen it. Community based business models are people centered, where collaboration, partnership, advocacy, and co-creation are top values. A community based business model is often also associated with the term Social Enterprise. The concept of a Social Enterprise is linked to Freer Spreckley, who coined the concept in 1978. There is not a one size fits all way to approach instilling a community based business model. Some of these types of businesses are run entirely from volunteers, such as mutual aid funds. Where as other community based business models do generate profits that go toward payrolls that take care of employed co-leaders of the community. Social entrepreneurs who want to uphold a community based business model can function as a soloentrepreneur, meaning they are running their organization on their own or maybe with a small (paid) team, but they are working toward social, economical or environmental issues that they want to support. In these causes, profits generated from the business of a social entrepreneur are directed toward the community to which they are looking to support and amplify. Check out our examples of social enterprises and community based businesses below for more understanding on how this type of business model can look!
The difference between community based business models and traditional business models:
Community based businesses:
Typically structured around how you want to contribute to the community
Focused on achievement of social and environmental objectives
Driven by the desire to improve the quality of life for people and the planet
Focused on providing a social and environmental value
Success is defined by the level of positive impact made
Driven by the desire to make change
Providing benefits to and meeting the needs of people and the planet matter most
Success is measured based on environmental and social metrics
Profits generated help the community in some way
Typically structured around how you want to contribute to the community
Focused on achievement of social and environmental objectives
Driven by the desire to improve the quality of life for people and the planet
Focused on providing a social and environmental value
Success is defined by the level of positive impact made
Driven by the desire to make change
Providing benefits to and meeting the needs of people and the planet matter most
Success is measured based on environmental and social metrics
Profits generated help the community in some way
Differently than community based business or business functioning under a social enterprise model, those who are practicing traditional business tend to follow a more profit driven approach. Chances are we are all familiar with traditional business and understand what it typically looks like because, well, its the norm! Traditional business models are often driven by a singular bottom line: profit. These types of businesses function from a model that prioritizes monetary growth, where profit is the largest factor that is considered when gauging success. Traditional business models are usually focused on their product or service they sell, competitive market dominance, and a hierarchal structure for how business is ran. This type of business often is not deeply concerned with social or environmental impact, and can even at times be willing to sacrifice the wellbeing of people and the planet if it means an increase in profit. Traditional business models like this will at times take a social or environmental responsibility stance, but this can often lead to things like green washing, rainbow washing, or other performative methods that are taken to position a brand as conscious simply as a way to increase profits. Seeing as how consumers are more eager than ever before to support organizations that take a strong social and environmental stance, many businesses functioning under the traditional business model have taken to incorporating conscientious advocacy simply as a marketing ploy to increase profits. It is important to note this because the main difference between traditional businesses and community based businesses is their end game goal. Traditional businesses end game always comes back to profit.
Traditional business models:
- Typically structured around a specific service or product suite
- Tend to only focus on CSR (Corporate social responsibility) after profit is made
- Focused on providing a commercial value
- Define success based on profit
- Profit often matters more than benefits and impact
- Success is measured by financial metrics
Now that we understand the differences between traditional businesses and social enterprises or businesses centering community, lets now explore efforts that we can implement to begin shifting into a triple bottom line business model that prioritizes people, the planet and profit.
Types of community based business efforts:
Physical community events
Affiliation programs
Co-ops
Internet or online communities
Membership or subscription programs
Rewards programs
Volunteer programs
Events
Non profits or mutual aids
Community outreach projects
There are many ways in which we can begin to move into a model for business that puts the best interests of people and the planet in the foreground. Though this is not a difficult project for business owners to take on, it is one that requires intention, patience, and collaboration. Running a community based business is not a one person show, even if you are a solopreneur wanting to move into a social enterprise model! One of the key things about traditional business is that it is driven by quickness. Traditional business loves the hustle and the grind… and also loves instant results. The ends always justify the means if the ends bring more profit for traditional businesses, where as community centered businesses are focused on the means. Practicing community based business requires us to slow down, get more thoughtful than we ever have before, work with others and share the power so to create the vision. Here are some important aspects to consider if wanting to move into a community based business model…
Important aspects of community based business models:
- Volunteering
- Assistants
- Research and development groups
- Shared missions and visions
- Feasibility studies
- Experimentation
- Sharing the workload
- Reciprocal exchanges
- Community care
The benefits of instilling a community based business model
There are many benefits to instilling a community based business model, starting with the fact that these types of business models provide people with an exceptional experience. People who are involved in a community based business will feel a deeper sense of belonging, connection, and consideration, for community based business models put great emphasis on including and engaging their community in business practices and decisions. This in turn can create a stronger brand loyalty paired with more long lasting trust amongst community members. Brand loyalty and trust creates fantastic word of mouth for businesses, helping to strengthen a business’ reputation. Another benefit of a community based business model is that these types of models tend to help people see businesses from a more humanized lens. When businesses value community, the community values the business! Community based businesses share power with their community members, helping them to feel valued, seen and appreciated. It goes without saying that there are many benefits to this type of business model, but with that there are also some things that need to be taken into consideration. For example, running a community based business is a huge commitment and so the business owners and community members need to be all in on the mission and vision. This type of business model requires getting comfortable with not only being a leader, but also being a participant since community based business models are a co-created effort. Running a community based business also requires the willingness to develop emotional and cultural intelligence, for people skills are incredibly important in this business model. Those facilitating community based businesses will want to be skilled in their ability to problem solve, resolve conflicts, share ideas and power, listen and learn, and work consistently to create an environment of equity, inclusion and diversity. There are many skills that one would want to invest time in learning in order to create a community based business that disrupts traditional business approaches that often lead to environments of hierarchy, exclusion, and unequal power dynamics. Lastly, community based business models are not an overnight success type of approach to business, so its important the business owners are in it for the long haul if they are wanting to instill this type of model. Community based businesses are impact centered and they know that lasting change takes time. Since making collective impact is a driving force for community based businesses, those leading from this type of model need to be able to practice patience paired with trusting the process that it takes to see their vision unfold.
Since community based business models are dependent on shared responsibilities and co-creative atmospheres, it is important for community based businesses to make sure that they involve their community in managing the various departments of their organization. When establishing how one manages their departments as a community based business, the business wants to work with their community to help structure and sustain their business departments. This can look like hosting community events that allow you to do both a Needs Map as well as an Assets Map with their participating community members so to help them have a hand in establishing support networks that manage the business.
Support networks need to be established for the following departments of a community based business:
- Organizational development
- Legal department
- Financial department
- Technical department
- Marketing department
- Site management
- Moral (HR) department
- Conflict Resolution leaders
- Problem Solving leaders
Community based businesses are dedicated to positively impacting the community they are dedicated to supporting. For some, this may look like getting involved in a local or regional community in a way that the business’ efforts are directed at impacting that community in a specific way. For others, this may look like going virtual and creating community impact online. There are many ways in which business owners can instill a community based business model, but what it all comes down to is that this type of approach is not a one person process. It requires getting involved in community in order to create a community based business! It also requires listening and learning from the very groups you want to impact. If you are a social entrepreneur that wants to move into a social enterprise or community based model, the first step is to drop all preconceived notions that you know what the community needs. It is critical to take time to actually create genuine and meaningful relationships with the very groups that you want to support. To summarize, if you are wanting to impact on a social or environmental level, then that requires learning about and listening to the needs of that society or environment!
What does a community based business look like?
Some Examples of community based businesses:
At the end of the day, I personally believe that community based business models are the future…and that our future is pretty dependent on our ability to start making community centered work the norm. As we continue to witness various crises unfold throughout the world, it goes without saying how critical of a time it is to be coming together in a way that takes care of everyone. As business owners, we have the ability to transform a lot of the systems and social constructs we currently experience as norm. If we wish to create a legacy, let’s make part of our legacy be about how well we took care of each other and the earth.
Want to learn more about social enterprises or starting a community based business? Check out these recommended resources:
Reading this article and feeling interested in implementing a community based model into your business?
I’d love to support you! Check out my mentoring containers or drop me a direct email and let’s talk about your vision and goals for your business!
Until next time,
Natalie Brite
