Emerging win-win business model
Annamarie Rhyne, co-founder of BooksOnPurpose, is one of many business owners now following an emerging business model called social entrepreneurship, which attempts to balance sustainability and profit. "I think that it comes down to the philosophy that the more that you give to somebody, the more that you are going to get in return," said Rhyne.
BooksOnPurpose sells used books that would otherwise be thrown away, and uses their profit to help build libraries in Nigeria. It also encourages students there to read, working with them one-on-one.
"I don't like to see a book being thrown away because that's something that someone can learn from," said Rhyne. "We always have something to give; we always have value to give," she continued, addressing how most companies wait for profit before giving back. In contrast, she said she had watched her parents face many financial challenges with their non-profit program for children with special needs.
"We realized that we were able to make a much bigger difference in the community and in the world by making more money and then filtering it back through at the same time," said Rhyne.
Rhyne was one of the speakers of a panel discussion titled, "Hybrid Business for the 21st Century: The Social Enterprise Model." The event took place at the main campus of Santa Monica College last Tuesday, March 15, and was organized by Melissa Mandim, a SMC business major and president of The Social Enterprise Group.
"We, as the innovators of business, have choices," said Mandim. "We have the opportunity to give back in the most sustainable way--while still making profit."
Mandim said social entrepreneurship focuses on three bottom lines: profit, people, and planet. She said "conscious capitalism" is being aware of your surroundings and being sociably responsible in a profitable way.
"We can expand our business horizons from the traditional me-driven or free-driven to the we-driven," she said.
As an example, the shoe-making company TOMS gives a pair of shoes to a child in need every time they sell a pair. TOMS began in 2006, and with the economic crash in October of 2008, most shoe manufacturers experienced losses.
"TOMS revenue continued to climb until 2008," said Mandim. "Only two years later, they were making profit against everyone's predictions."
Mandim said social entrepreneurs focus on stakeholders – anybody directly or indirectly affected by decisions of their firm – as opposed to maximizing shareholder profit.
SMC business professor Marcella Kelly further discussed the three bottom lines of social entrepreneurship, explaining that, when you do what's right for the planet, you benefit yourself.
"Your money bottom line has got to be paramount," Kelly said, "but if you work on people and the planet, that's going to feed right into your financial bottom line."
Kelly said even big companies, such as McDonald's and Wal-Mart, aside from their bad reputation, are now leading in sustainability. While McDonald's took measures to reduce packages and produce less garbage, Wal-Mart made a commitment to being supplied 100 percent by renewable energy, as well as to create zero solid waste by 2015.
"I hope to have a planet here for my children, and eventually for my grandchildren, to enjoy as much as we are able to enjoy it, and I have real fears about that," said Kelly.