The first rule of business is make money.
Whether it’s donating a certain percentage of profits to charity, organizing staff volunteering events or committing to being “green”, doing good doesn’t always make the high priority list for busy entrepreneurs.
Business owners focus on ensuring profits are good and operations are going smoothly before considering any altruistic programs.
This is called a transactional business model and it’s a common way of doing business. Essentially, someone buys a product or service from you and they give you money for it, and that is it.
But studies are showing that transactional businesses are facing a growing disadvantage.
According to a survey by Goodmustgrow.com 30% of respondents said that they expect to increase the amount of goods and services they buy from socially-responsible companies and 60% of people said that buying goods from socially-responsible companies is important to them.
We can see sales of up to 10% more by having a seal at the bottom of your website that says, “hey, a certain percentage of these sales are going to charity.”
The world is getting smaller, and we are all feeling the impact of things like environmental disasters, refugees, wars etc. and it’s becoming more and more important from both a fiscally and an ethically responsible perspective to make sure that your business is a force for good.
The alternative to a transactional business model is a transformational business model.
A great example of a transformational business is Tom’s Shoes, they’ve got what’s called a triple bottom line. That is, impact, amount of people served, as well as profits. If you’re not familiar with Tom’s Shoes, every time you buy a pair of shoes they give a pair of shoes to a child in need.
I’m asking you now, how do you think that you could use your business as a force for good in the world, and turn it into a transformational instead of a transactional business?
I’d love to hear your thoughts. If you like this video/blog post please “like” it, and consider sharing it with your network.