Methods & ToolsCorporate Innovation Insights

The tool every social business needs to get started

By February 16, 2022March 1st, 2022No Comments

written by Michaela Stephen, Verena Judmayer, David Bierbaumer and Erik Muckenschnabel

At Pioneers, we have worked with various clients in the social innovation space. From supporting Europe’s top social entrepreneurs via the European Investment Bank’s Social Innovation Tournament, to working with UNICEF on business model innovation, all the way to launching our Scaleup4Europe Health Lab accelerator. We are passionate about pioneering with purpose. That’s why we are excited to share our go-to tool with you for starting your next social business. Let’s dive in…

The importance of understanding social business models

Often, ideas for social businesses are complex in nature. They are normally started by people passionate about creating a positive social impact and often, it is the idea of the social impact which can be created that drives the business idea forward. Therefore, there are more elements involved than in traditional business ideas, resulting in the need to map out how the social business will be viable, desirable and feasible, but also how it will create social impact. Understanding business models of social businesses is important because:

  1. It helps you to understand the key elements of your business concept i.e. how elements will come together and function, especially in terms of social impact and revenue generating activities.
  2. It enables you to test and develop your idea, ensuring it will result in a profitable and impactful business. This is relevant whether you are just starting out or at a later stage already.

Introducing our go-to tool – the Social Business Model Canvas

And luckily, there is a very useful canvas for understanding social business models as a starting point. Developed by the Social Enterprise Institute, the social business model canvas is a twist on the classic version by Alexander Osterwalder from Strategyzer. Let’s take a deeper look…

The Social Business Model Canvas

The canvas has 12 elements to be completed, all of which come together to show a first overview of your social business idea. You might already notice the ‘new’ elements of the canvas when comparing it to the traditional business model canvas: the mission statement, the social impact and the community reinvestment. 

To start, you complete your mission statement. This puts forward the social change you aim to achieve and ensures this remains a central focus when developing your idea.

Next, you complete the customer segment, the social impact, the value proposition, customer benefits and marketing channels. These elements enable you to outline the value and market of your idea. It includes the social change you are intending to make with your business idea and the problem you will solve for the customers who pay for your product/service and thus, enable you to create said social impact. It also looks into how you will market your business.

Being a social business means you need to balance the commercial elements of your business with the social impact you intend to create.

The implementation section is up next where you outline the key activities of your idea, the resources required and the key partners you will need to involve to deliver your activities. This section is important as it clearly outlines the key stakeholders you will need to involve in your idea. 

As a last step, you complete the cost of delivery, revenue streams and the community reinvestment. This section enables you to understand how much it will cost you to run your product/service, how you will make money from it and finally, how you will then invest your profits back into your social mission.

Conclusion

Being a social business means you need to balance the commercial elements of your business with the social impact you intend to create. In this respect, social businesses have models that can be tricky to balance but that’s where this tool can really help to outline the first steps to understand the complexity involved, and areas where things can be tweaked to make them work. 

One top tip from our side is that you can also separate out the key elements of your idea into commercial and impact elements. You can then map out the commercial elements in one colour, and the impact elements in another. This way you can clearly see where the two overlap and where they are also separated. As a result, you can create a better understanding of how all elements come together. 

Luckily, we’ve created an easy-to-use blank template to guide you through the process. Download it here and use it to kick start your first social innovation ideas. Interested in finding out more about tools you can use to validate your social innovation projects? Get in touch with us to find out more.

Now you know what it takes to drive business model innovation. For further information you can also read our post on our project with UNICEF. Let us know how you get on with your next project or get in touch with Pioneers if you would like to find out more about our approach to social business model innovation.

Do you like our approach on business model innovation and want to know more about Pioneers’ corporate innovation services?

Get in touch with our Senior Innovation Consultant Erik Muckenschnabel to book a short intro call and talk about the Pioneers Business Model Innovation offerings.

Erik Muckenschnabel
Senior Innovation Consultant

Erik Muckenschnabel

Erik Muckenschnabel

Senior Innovation Consultant