Why Investing In Social Enterprises Makes Business Sense

Jay North

While many investors are amenable to the idea of investing in a social enterprise, they are probably anxious about what might happen to their money. The truth is that there is intense competition in the marketplace that causes investors to shy away from investing in a business that supports social or environmental causes and reinvests its profits to further these goals.

However, research conducted by a social enterprise groups recently would dispel such apprehensions harbored by entrepreneurs. Based on their findings, these groups suggest following five reasons that would make investors seriously consider the option of investing in a social enterprise.

The Upswing in Revenues of Social Enterprises
A majority of social enterprises have seen their revenues go up last year, while some at least maintained their sales. Only a small percentage saw a decrease in sales.

Social Enterprises’ Forays Into New Markets
Many social enterprises are making inroads into new sources of profitable business, the research suggests. A lot of them either developed new products and services or expanded into new locations last year, including overseas ventures.

Social Enterprises Are Able to Find New Clients for Business
The spurt in the growth of social enterprises’ business is explained by the fact that they are succeeding in finding new customers for business. An overwhelming majority attracted new customers last year, ranging from the public sector, the private sector, and the general public.

Research Figures Point to Social Enterprises’ Sustainability
Social enterprises are not just enjoying a transient success. A majority of enterprises covered in the research had a trading record of six or more years, while a fifth have been in business for more than two decades.

Social Enterprises Promote Gender and Ethnic Diversity
Social enterprises are more likely to be headed by women than men, as figures from the research reveal. Also, the likelihood of a social enterprises being headed by a minority ethnic background leader is more than that for other small and medium-sized enterprises.It’s a fact proven by repeated research: business enterprises with diverse managements are more resilient and show stronger performance.

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