Profit Minded

How to turn social values into a valuable business

It’s been several decades since big companies started proving that earning profits and being socially responsible are not mutually exclusive. Ben & Jerry’s, Patagonia, and Whole Foods come to mind. And IBM, HP, and Sprint topped the Daily Beast’s 2012 list of American green companies.

But is it affordable for even the smallest businesses to earn a living while being socially and environmentally conscious? Susan Chambers says yes. Her new book, Small Business, Big Change: A Microentrepeneur's Guide to Social Responsibility, offers steps that owners of business with fewer than 10 employees can take to align their life's work with their spiritual and social values.

Chambers, a writer and editor who is passionate about helping businesses to become agents of social change, provides case studies of numerous microbusinesses that adopted sustainable values. In their choices of vendors, clients, product materials, packaging, employee policies, community service, and more, each company is making a small difference, which Chambers says adds up to a big one. In addition to checklists and tools for business owners who would like to follow suit, Small Business, Big Change includes resources entrepreneurs can use to find data and advice on socially responsible choices.

Yahoo! Small Business spoke with Chambers today about how to translate social values into a valuable small business.

Yahoo! Small Business: Does a small business need to start out with socially responsible values in mind, or can a business shift its operations to become sustainable?

Chambers: The book was written for microbusinesses that want to become more socially responsible, but the same principles would apply to someone starting up. It would be easier to go into the business with those principles in mind instead of evaluating how to change. I started from the point of view that before you do anything, you need to take a look at the three Ps—people, the planet, and profits.

YSB: Why people?

Chambers: People is a big category. It involves how you treat your customers and employees, how you work with your community, how you give back and collaborate. It looks at vendors and suppliers. For example, if you have employees who aren’t being valued as highly as they could be, it’s going to have an impact; that reflects a less socially responsible atmosphere. I recognize it’s hard to pay a living wage if you’re getting started. You can find ways to reward people that don’t cost a lot of money, such as allowing employees to telecommute, or finding ways to reduce transportation costs.

YSB: As consumers we know it can cost more to make the environmentally friendly choice. Isn’t it more costly for small businesses too?

Chambers: The point is not just to keep the planet sustainable, but to be a sustainable business. It doesn’t work to go broke with green fixes. Start small and build on that.

If you work with what you’ve got and build slowly, you’re going to be more sustainable over the long run, and less likely to burn through your company’s money or your own enthusiasm. If you’re going to look at it as a long-term commitment, then taking small steps and building on those is what will create a much more solid foundation.

Start small not just in magnitude, but in the number of steps you are taking. When you’re trying to track what you’re doing, the more outcomes you’re tracking and entering into a spreadsheet, the more complicated it gets.

YSB: What’s an example of an outcome to be tracked by a socially responsible small business?

Chambers: The Soap Dispensary is a retail store in Vancouver, BC, that is committed to reducing the amount of disposable goods and plastics in the world. Owner Linh Truong encourages customers to bring their own containers. Instead of going and buying an entirely new bottle of soap, go to her store and refill your bottle. She’ll even wash out your bottle. She tracks how many customers are doing that and how many bottles are being kept out of landfills. Last June she diverted 415 bottles from the waste stream in one month. That’s also preserving the embedded energy that’s used. Her sales transactions break out re-sales versus new-bottle sales. She could translate that into a reduced carbon footprint in terms of not having to recycle, and how much water and raw resources are being saved by eliminating the need to buy new bottles.

She has the same agreement with her suppliers, so she’s not buying new containers. She saves money there, and has to recycle less packaging, which also saves costs, because in Vancouver commercial properties have to pay to have recycling picked up.

YSB: It sounds like being socially responsible is profitable for that business. Do you see other small businesses that chose to tradeoff some amount of revenue in order to stick to their social values?

Chambers: Yes, there are some who will make tradeoffs because they’re committed to their values. Joseph Hodgkinson, for example, owns Foda Catering in Mountain View, Calif. He is a chef who spends more on ingredients that are local and organic both because it helps to support local economies and sustainable agriculture and that is what his clientele expects of him.

If you’re going to be fully committed you have to step out of the mindset of increasing your profit every quarter. In the long run it’s about contributing to the value of the community—about giving back and keeping the local economy stimulated and growing. In Canada it is already included in legislation that corporations are to look beyond their bottom line profit [to community impact]. I personally think we do need to see a shift in how we do business—we’re a little heavy-footed on the planet.

Susan Chambers, author of Small Business, Big Change

YSB: Anyone who is interested in shifting their business to be more socially responsible will get a lot out of reading your book. But before they get their hands on it, what quick advice would you give?

Chambers: I really would emphasize taking the time to sit down and go through an assessment of your business to see: What are you already doing? And what resources do you have?

Incorporating social values into your business doesn’t have to be expensive or time consuming. There are a lot of places, such as business associations, geared toward small and local businesses. It is worth it to collaborate with other local businesses to work together to find ways to create a few more benefits for employees and the community.

There are now 12 U.S. states that have passed legislation allowing B Corporations as a legal business structure. And the Vancity Community Foundation's Demonstrating Value Project is a great resource for helping socially responsible microbusinesses identify and track social and environmental impact goals.

And at a more general level, I would encourage people not to feel daunted by experts who say small steps don’t make a difference, because when enough are doing it, it makes a difference.

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