A social business can be defined as a financially self sustaining company (ie. it does not require outside funding to cover costs) that works to address a social issue as the primary goal. Building a social business model requires a balance between financial goals and social objectives.
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A social business is not run exclusively to make profit. However, it’s not a charitable organization, either.  Profits are still desirable in a social business, but profit that is made is reinvested into the company to expand its social impact and cover its costs. This type of business will not create much profit, but will not lose much money either. Essentially, this means that businesses of this style would not require any financial support to continue running - and to keep achieving its social goals As well, due to all profits being reinvested in the company, there is no money coming out of the business and going to shareholders, for example through stock options or dividends. 

All of this means that a social business strikes a balance between solving a social issue and making enough profit to sustain itself without outside financial support. 

What is the difference between a social business, conventional for profit business, and non-for profit business?

A conventional for profit business focuses on maximizing profits for high shareholder return. In a traditional business,the focus is on making excess money for the benefit of the company and investors. For example, if you buy a share of McDonalds and the company makes extra profit, it goes into your pocket instead of back into the company or to achieve a social cause.

 A non-for profit company requires financial aid to support the work they do to address social issues. For a non-for profit the downside is that money invested into the company is usually a one time use and not able to be turned into recurring positive impact. An example of this is the Red Cross. The Red Cross relies on donations and funding for the work they do: they do not generate their own money to sustain the company. The social business model is an entirely different type of business that balances the two sides, making profit to do work that addresses a social issue.

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Why is RadiCare an example of a social business?

RadiCare addresses the social issue of employment barriers within our societal structure. There are many people within society that struggle with finding an employer that won’t judge and would be willing to hire them. Poverty can snowball from losing a job to unfortunately living on the streets. RadiCare hires the same people facing employment barriers with the goal of providing a second chance, where the snowball effect is stopped before it can occur. With these employees, RadiCare forms a team to provide services such as professional cleaning, training and workshops, event support, washroom safety and monitoring, and street-level graffiti removal. Through these services, RadiCare is able to sustain costs of hiring employees and continue making  a positive societal impact. 
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What are some other examples of social businesses?

Grameen Bank

A very famous example of a social business is Grameen Bank. Grameen is a community bank that provides small loans to people suffering from poverty without collecting collateral. This both addresses a social issue through the social business model, while making enough profit to sustain itself. 

Newo

An example of a Canadian social business is Newo. Newo is a business with the goal of providing solar panels, with the goals of building relationships and an economy less focused on scarcity and competition. By selling a product, they can financially sustain the business. However, Newo doesn’t believe in building a company for shareholder value alone, so all profits are reinvested into the company with social goals in mind. 

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What is a Social Entrepreneur?

Social entrepreneurs address a social issue and build a business model with an innovative idea that supports the move for social change. By addressing a specific cause that a social entrepreneur cares about, the business model can be based around a specific niche to generate a long lasting social impact. One of the most famous examples of a social entrepreneur is Muhammad Yunus, who was awarded the Nobel Peace Prize for his work in Grameen Bank.

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RadiCare is an example of an Alberta Social Business

A social business model is entirely separate from other traditional business models, a social business attempts to include all positive elements of non-profits and profit-maximizing businesses. Has this given you any ideas about developing your own social business model? Click here to learn more about life at RadiCare.