Profit (economic value)

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Unlike nonprofits, social businesses do care about profits. However, these profits are not emphasized as much as in the traditional business and they never achieved at the expense of human or natural capital. Regular businesses have the main goal to maximize their shareholders’ wealth. So, if profits will be higher when company uses unethical environmental practices or unfair pay to cut costs, they will do this. But not social entrepreneurs, they are ready to have smaller profits but positive social and environmental impact.

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Non-profits are often run by volunteers who are eager to invest their time to help the beneficiaries. They usually don’t get paid and can only invest as much time as all their commitments allow. For example, adults will need to earn salary to sustain themselves, which means that they will work to earn money and won’t have so much time available to spend on volunteering. But Social Enterprise pays people who run it. This ensures that these individuals can spend more time creating positive impact, since they don’t need to worry about bringing bread home. 

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Profits which Social Enterprise make are used to pay salaries to their employees, give back to community and reinvest surplus in growth. The more profits the company invests back into improving operations and expanding, the bigger the impact it can produce. Moreover, donations are less stable than profits, so having a reliable revenue stream takes fundraising burden away and allows to focus on what really matters – creating positive change. 

Take a moment to think, how your social enterprise will ensure sustainable revenue stream? What would be all the costs associated with running it? What would be salaries you pay all of your founders and employees? How much of the financial surplus will you give back to the community and how much will you reinvest in growth of your business? Share your thoughts with your teammates. Your leader will then be responsible for summing them up and writing the main conclusions.