Business used to be a dirty word. Movies of old used to characterize businessmen and women as heartless, money hungry tycoons driven by greed. Profit and money was everything, and if you didn’t make a business more money, they didn’t want anything to do with you.
In recent years, though, we are starting to see a shift. From the consumers to the owners, business as we used to know it is changing. And businesses that don’t undergo this shift will be left holding the bag.
Business is shifting towards an impact based model, or as Yanik Silver calls them in his book of the same name, Evolved Enterprises.
An impact-based model, or an Evolved Enterprise, is a business that bakes impact, or a cause, into its business model. It cares about doing good for the world. Whether that is by who they serve, what they make, or donating a portion of their profits to a cause, their mission is about making a change in the world.
Grant Trahant, the founder of social enterprise platform Cause Artist, says “The business and tech world is changing. More and more brands and startups are implementing Social Impact at the foundation of their ventures.”
And this isn’t just a millennial trend that makes people feel good, having an impact based business model can scale your company faster than ever.
How an impact based model can scale your company:
1. Faster Sales
When people see that your business is a social venture, a business for good, they are way more likely to buy from you. It takes less time to buy them in because they know that at the end of the day, their money is being put to good use. More today than ever before, consumers are using their wallets to vote for the change they want to see in society. Consumers are choosing brands that even have an average product but make an impact over brands that have a great product but make no impact. (Note: this is no excuse for putting out a poor product. It is still important to focus on quality). Almost everyone knows the TOMS story and their rise to fame using the one for one impact model. But there are thousands of companies growing faster than ever using the one for one or other impact models. Pura Vida, a bracelet company, has scaled to over $20,000,000 in just a few years using an impact model. Their website tells their simple model, “Founded in Costa Rica, Pura Vida Bracelets provides sustainable jobs to artisans worldwide and raises awareness for charities with products that give back.”
2. More Raving Fans and Stronger Customer Loyalty
What is even better than buying consumers in quickly? Consumers who are so bought into your cause that they start telling all of their friends about your company. This type of virality is how companies can gain flywheel momentum and scale quickly. When almost every new sale (cold market) leads to multiple sales, it takes the pressure off of paid marketing. Even further, this community allows you to release new product lines and new offerings with a market already built out.
3. Stronger Employee Buy-In
When an employee doesn’t care about their job, it is almost impossible to get the best out of them. Research study after research study has shown that after a livable threshold is met, money doesn’t motivate people. Once someone’s needs are met, more money doesn’t actually lead to better performance. But you know what buys people in?
A cause greater than themselves.
When they know that they are contributing to a cause they care about and are having a meaningful impact in the world, they are internally motivated to give the company their all. They want to rise up to challenges. If you see any high performing team, you will see team members who believe they are a part of something bigger than themselves. Having an impact based model helps them do that.
4. The Edge to Keep Going
The most important way an impact based model helps you scale is by buying you, the founder in. I see many entrepreneurs start businesses just to start one. They don’t have a deep reason or “why.” And if they don’t have a why behind their business, they quit when the going gets tough. But if you are fighting for a cause greater than yourself, if you have a true reason for pushing through challenges, you’ll find a way to keep going. You’ll claw and drag yourself through the muck for your Northstar. Having a purpose greater than yourself and your company is one of the best ways to ensure your company scales.
Peter Diamandis calls it your “Massively Transformative Purpose.”
Simon Sink calls it your “Why.”
Greg Mckeown calls it your “Essential Intent”
Whatever you call it, having a cause and baking impact into your business model creates more raving fans, it buys in your employees, it gives you the fire to keep going when the going gets tough, and it gives you the edge to scale your company (and your impact) to a level you could never imagine.
How do you want to change the world?
Go for it.
Want to break your limiting beliefs?
Check out my book here.