NOTE: This post is based on topics first covered in this Awarepreneurs podcast episode.

As a social entrepreneur, you’re likely driven by a passion to create a positive impact in the world. However, balancing this impact with the need for sustainable growth is essential for the long-term viability of your organization. In my recent podcast episode, I explored three key mistakes that can hinder growth in social enterprises. Let’s dive into these pitfalls and how to navigate around them.

1) Overfocus on Impact to the Detriment of Business Outcomes

While it’s admirable to prioritize social impact, doing so at the expense of financial sustainability can jeopardize your organization’s longevity. You might think that a singular focus on your mission is noble, but it can lead to critical financial challenges.

Imagine a scenario where your social enterprise is making a difference, but the financial metrics are ignored. If you don’t generate enough revenue to cover your costs, you risk going out of business. Remember, if you close your doors, you can’t create a positive impact anymore.

Take the case of Emmanuel Trinity and Era92 Creative, featured in episode 272 of my podcast. This African social enterprise teaches youth web and design skills to lift themselves and their families out of poverty. Their mission is clear on their homepage, but they lead with their design services. By leading with their subscription based design service and then also baking their mission into their business model, they strike a balance between impact and profits.

To achieve this balance, consider developing a dual scorecard that measures both impact and business outcomes. This approach helps ensure that your organization remains viable while staying true to its mission.

2) Not Building a World-Class Team

One of the most significant hurdles for social entrepreneurs is assembling a team that can execute their vision. Misconceptions about hiring practices and budget constraints often prevent organizations from attracting top talent.

Ongoing training and professional development are crucial for enhancing your team’s capabilities. A commitment to a culture of excellence not only retains talent but also attracts skilled individuals. For example, in episode 337, Megan Bott shared insights from Positive Energy Solar, which has grown to over 120 employees without any recent job openings—demonstrating a waiting list of prospective team members eager to join.

Fostering a collaborative mindset and valuing diversity can significantly enhance team performance and innovation. Treat hiring and team-building as crucial investments rather than mere expenses. The long-term value of a strong team far outweighs the initial costs.

3) Not Seeking or Paying Attention to Market Research or Customer Feedback

Understanding the needs and preferences of your beneficiaries or customers is critical for success. Many social entrepreneurs neglect market research, which can lead to missed opportunities for improvement and growth.

Implementing effective feedback mechanisms—such as surveys, interviews, and focus groups—allows you to gather valuable insights from your audience. Integrating customer feedback into your product or service development can lead to offerings that genuinely meet the needs of your community.

Take the example of Terra Vera, featured in episode 344. Initially focused on the cannabis industry, they conducted thorough market research and identified a pivot towards sustainable agriculture, ultimately becoming beekeepers to combat colony collapse disorder. This pivot was driven by insights gained from understanding market demands.

To create a culture that values customer feedback, encourage your team to regularly seek out insights and incorporate them into decision-making processes. This iterative development can significantly enhance your offerings and impact.

Conclusion

In summary, focusing too much on impact at the expense of business viability, failing to build a world-class team, and neglecting market research are three significant pitfalls that social entrepreneurs can encounter. Reflecting on these points can help you identify potential obstacles to growth in your organization.

I encourage you to take a moment to evaluate your practices and consider how you can overcome these challenges. Let’s continue the conversation—I'd love to hear your thoughts and experiences regarding these growth obstacles. Remember, sustainable growth is not just about financial success; it’s about ensuring that your mission continues to thrive in the long run.