Community-Based Business and Social Enterprise Success Factors

Introduction to Community-Based and Sustainable Business

A sustainable business can be defined as one that operates within an environmentally responsible framework, or that participates in green activities, ensuring that every product, process, and manufacturing activity adequately addresses current environmental concerns while maintaining an acceptable profit margin. More narrowly, it can be described as a business that meets the needs of the current world without compromising the ability of future generations to meet their own needs, or as a process of designing products that take advantage of current environmental conditions while relying on renewable resources to the greatest extent possible.

Some reports characterize sustainability as a three-legged stool of people, planet, and profit. A sustainable business with an integrated supply chain attempts to balance these three dimensions through the application of the triple-bottom-line concept, and uses sustainable distribution and sustainable development to create impact for the environment, for business growth, and for society. When sustainable development is achieved within a business, value is created for investors, the environment, and customers alike.

Within a community, challenges related to business ventures, job creation, and financial obstacles do exist. These challenges apply to traditional ventures as well; however, the particular features of community-based business make such challenges especially prominent. For example, making a profit is not always the primary goal of community-based business, and this makes operating in the market more difficult. Moreover, the sector of activity in which community-based businesses operate, as well as their size, are among the major factors that cause financial problems (Organization for Economic Co-operation and Development, 1984).

The strategy of community-based businesses tends to involve creating a space where customers can express themselves. Community-based business facilitates tremendous brand value through word of mouth. Business prospects are more likely to spread at a faster rate when the community is actively engaged. Ideas generated by the community can help revolutionize a business's services and products (David Kam, 2008).

For a community-based business to be described as sustainable or green, it should not have a negative effect on the local or global community, environment, economy, or society, and it should strive to meet the triple bottom line. Such businesses tend to have progressive environmental and human rights policies. Accordingly, a sustainable community-based business should demonstrate an enduring commitment to environmental principles in its operations; be greener than traditional competitors; supply products or services that are environmentally friendly and can replace demand for non-green alternatives; and incorporate principles of sustainability into every business decision it makes (Seth Henry, 2012).

Within the broader sector of social enterprise, there are factors that are critical to the success or failure of community-based businesses. Through examining these, we can identify what drives a business toward success or failure. Although there is evidence explaining why a social enterprise or community-based business succeeds, it is not always derived from strong empirical research. Nevertheless, every organization tends to change, adapt, and evolve over time, and this applies equally to the factors that underpin success.