We are currently in the midst of one of the most energized social justice movements in the past few decades. Many are engaging in frank discussions about the role race plays in work and life. What’s more, we are facing an unprecedented public health and economic crisis. Collectively, these forces have sparked an increase in entrepreneurship and the desire to effect social change. Black entrepreneurs, especially, are emboldened and VCs are showing an increased interest in finding and funding black founders.
That being said, even under the best conditions starting a company is difficult. Starting a company with a social cause is harder. And, speaking from experience, doing it as a person of color is even harder. Here are three things for entrepreneurs, especially Black and Brown entrepreneurs, to do prior to launching a social enterprise.
Step One: Do Your Due Diligence – Inside and Out
It can’t be overstated how extraordinary this moment in history is. There is a growing awareness of and support for the need for change in this country on a number of fronts: education, nutrition, housing, healthcare, and employment to name a few. But, if history repeats itself, the enthusiasm will fade to some degree. So, before launching into starting up a business ask yourself: how long will I be able to sustain this passion? What would I sacrifice now and in the future in order to make my start-up a reality? If the answer is you don’t know that’s ok, it’s just an indication that you’re not ready to launch a company yet.
If you DO know the answer, and you are confident that you would sacrifice just about anything to start and build your company, it’s time for the next step: gut checking with your trusted friends, family, advisors and mentors.
Anyone who has known you well enough and long enough to have seen how you follow through on your ideas is a good place to start. Even better is someone who checks those boxes and has started their own organization or company.
If, after doing a bit of soul searching and using people in your life as a focus group you still want to proceed, it’s time to ask yourself how much you know about starting a business and the industry you’d like to enter. If the answer is not a lot, look for conferences you can attend, industry experts you can meet with, and other similar successful businesses you can study. Dedicating this time and energy will not only help you launch with a more solid foundation, but it will also be a great test of how well you sustain your passion for the cause.
Step Two: Develop Your Vision, Mission, and Business Model
Once you have decided to move forward, take the time to craft a thoughtful vision, mission, and goal statements for your enterprise. Consistently communicating brief and powerful statements that represent the essence of your enterprise’s purpose and value will help you attract investors, partners, and employees – and build your brand at the same time.
To take it a step further you’ll also need a good business model, which is essential to every successful organization — especially a new venture.
A business model is the story of your enterprise that explains how it works. Ask yourself: Who is your customer? What do they value? How will you deliver value to them? How will you make money doing it?
Once you have started to answer these questions, put in the time to validate your assumptions. Conduct a series of customer interviews with people in your target market before you’ve made a significant investment in your concept. This does not need to be a lengthy process but it is essential to ensuring that there is a space in the market for you.
Step Three: Be Prepared for the Challenges to Come and Have Support
No matter how committed and passionate you are, and how solid your business model is, there will be tough times and you will need grit and the ability to persevere through them. This is especially true for entrepreneurs of color. Although the number of minority-owned businesses is rising every day, entrepreneurs of color still must contend with existing barriers rooted firmly in place, making it difficult to raise capital.
So what can you do? Because high-dollar funding, especially in the early stages, will probably not be an option you must be prepared to be resourceful. You will need to find other ways to fund or bootstrap your business: personal loans, credit, and day job salaries, for example. Finding like-minded individuals to be co-founders is another great way to attract additional resources and minimize individual risk. Tap your network and look for fellow alumni from your school – chances are there is someone just as passionate about your idea as you are.
Lastly, find a mentor. Someone who has already succeeded in the space. The more senior the better.
Being a founder can be a very lonely experience, and you can’t do everything on your own. A mentor can help you maintain focus and brainstorm alternative solutions to problems.
They can also fill knowledge gaps and broaden your network. Look for someone who will be honest with you who will challenge you and who you feel confident about building a close relationship.
It most assuredly won’t be easy, but by taking these three steps before diving headfirst into starting a new enterprise you can increase your chances at success, minimize some of the pain that inevitably comes from being an entrepreneur, and reap the benefits of your hard work and sacrifice – all while doing some good for the world.