- Creating a business that works for social good requires a business owner to value people over profitability.
- Listening to customer feedback is an essential part of building a business that helps people.
- The process for starting a business that works for social good is similar to the process for starting any other business.
- Crowdfunding can be a good option for funding a socially conscious business, as social media platforms are ideal for sharing information about social causes.
When entrepreneurs start businesses, the mission of the organization is often central to their motivations. Entrepreneurs like Toms founder Blake Mycoskie find ways to build businesses with social good in mind. Toms donates a pair of shoes to those in need for every pair of shoes a customer buys. The organization is concerned with much more than making a profit – it's looking to make a social impact.
Building a business to help people is an admirable goal, but it's far from easy. It's one thing to help solve a problem with a product; it's another to solve a problem and make a social impact or even a dramatic social change.
To better understand how to start a business that helps people, we spoke with Craig Hammond, the founder and CEO of Peejamas. The company produces pajamas that serve as a potty-training alternative to diapers. The washable pajamas allow parents to stop using diapers at night, as Peejamas are designed to absorb urine. The pajamas, which the company says can be used more than 300 times before they start to lose absorbency, are designed as an environmentally friendly and more affordable version of diapers.
1. Find the idea.
For an entrepreneur or aspiring entrepreneur, it's easy to fall into the trap of pressing for business ideas. You might set up scheduled brainstorming times or intensely study industries, looking for the next groundbreaking product. While there's nothing wrong with either of those options, sometimes the best business ideas require questioning your everyday experiences.
Hammond didn't grow up wanting to create an alternative to diapers, but he saw a problem in his family that needed fixing and decided to act.
"I wasn't like, 'Hey, diapers! I love diapers!'" he said. "Never would I have imagined myself being involved in an industry that's just urine ... but doing something for my family was really what drove me."
As his son was potty training, Hammond started to think there was a better alternative to using diapers or just wetting the bed. His son climbed into bed one night with him and his wife and peed in the bed overnight, and Hammond decided to flesh out his business idea. He found a problem in his everyday life and decided to act on it using his passions for entrepreneurship and family.
He recommends following your passions when it comes to creating and developing business ideas. Take a closer look at the activities and events you enjoy and find areas where they can improve. Hammond knew he was passionate about his family, so he decided to find a way to help his son during potty training. If you're interested in entrepreneurship, Hammond believes pursuing opportunities you're passionate about is the right way to go.
"Maybe I'm oversimplifying this, but just look at what you enjoy," he said. "If you love being outside and you love hiking, think about the experience you have while hiking and what might make that better."
Hammond emphasized looking at the experience, rather than seeking out a product. Understand in detail what element of the experience can improve, and then brainstorm ways to improve the current situation. Coming up with quality business ideas is easier when you're passionate about what you're thinking about.
"Find something you're passionate about and look at everything around you in a curious and analytical way," Hammond said.
2. Research the concept.
In researching the concept, Hammond learned a lot about the industry. He discovered that disposable diapers lead to about 3.5 million tons of waste annually. He found that people wanted aesthetically pleasing alternatives to diapers, especially for older kids. He also learned more about using the proper materials and that few pajamas sold in the U.S. use fire-retardant chemicals to protect the fabric. Hammond shared the three key missions he had when he started the business:
- Helping his son potty-train more effectively
- Finding a more affordable potty-training option for parents
- Creating a product that could reduce environmental waste
By taking the time to thoroughly research his idea, Hammond found that the concept could be more than a profitable business or a simple solution for his son – it could genuinely help people. During the brainstorming and researching phases, small business owners should dig into how they can help others with their idea. Without detailed research, Hammond might not have taken the extra step to make a fire-resistant product.
Hammond also researched the business's branding. He wanted to name the company Peejamas, and a quick search showed that the URL was available. With branding underway and research under his belt, Hammond started the business.
3. Start helping others.
Once you find an idea and research the concept, it's time to put your plan into action and officially launch the business. This is where understanding how to start a business comes into play. You'll want to determine whether you'll be a nonprofit organization or a for-profit entity. This leads into deciding on your legal business structure, building out your team, developing a marketing strategy and more. Becoming a business owner is a big step that requires planning and understanding.
Other aspects of starting a business include developing a social media strategy, researching potential customers, learning more about your target audience and its preferences, and seeking ways to engage your community.
Funding also plays a role. Hammond opted to crowdfund. Peejamas found tremendous success with this method, generating more than $200,000 in preorders in a 45-day crowdfunding campaign. The company has eclipsed $1 million in sales since accepting preorders in the fall.
"It is extremely humbling," Hammond said. "It's also really encouraging and motivating."
While your business idea might not see that level of immediate success, it's important to understand the business aspects of running an organization for social or environmental good. Hammond wants to help people and the environment, and he does that by using his business knowledge to his advantage. It's not quite enough to just have a good idea and do solid research; you also need to spread the word about your business, fund your project and gain a steady customer base. Even though the business looks at more than just making a profit, you still need good business sense.
That good business sense leads to a for-profit organization like Peejamas finding success outside its balance sheet. The company estimates it has reduced the equivalent of roughly 7 million diapers being sent to landfills. By reducing waste and offering an affordable product with positive reviews, the company is focusing on much more than making money.
4. Listen to feedback.
Peejamas wants to improve how it receives customer feedback. The company attempts to listen to every piece of customer feedback, whether it's on social media platforms, through email or over the phone. The company made a change within the last few weeks to take its customer service operation to the next level in hopes of better serving its customers.
"If people reach out to us, our response first and foremost is, 'Hey, can we call you? We'd rather talk to you about this to try to resolve it,'" Hammond said.
In a world where it sometimes feels impossible to get a customer service representative on the phone, Peejamas wants to welcome calls from its customers. This change of pace helps the company get more specific feedback while also making the customers feel their concerns are valued. Peejamas is working hard on better social listening to make sure it's aware of the online conversation surrounding the brand.
Hammond shared the basics of the company's customer feedback process:
- Listen to the customer's complaint or concern.
- Try to come to a solution. (This might be a tip to avoid the issue or a refund.)
- Look for ways to improve the product based on the feedback.
Hammond shared how much it bothers him to receive negative feedback, as he wants to create a product that pleases all his customers, but he also understands the importance of constructive criticism. By giving customers an easier way to share constructive criticism, the business improves its operation in a way that truly serves the customer. In its first year of operation, the company has faced criticism for sizing issues and functionality concerns. The company reviews this feedback and uses it to make the product better. This process is ongoing and something the company hopes to improve on.
"We look at every bit of feedback as a learning opportunity, but also an opportunity to improve that experience with the customer and really meet any expectation that they may have," Hammond said.
The company also receives its fair share of positive feedback, which Hammond says is one of his favorite parts of the job. By facing negative feedback head-on, the company ultimately receives more positive reviews.
"I love it," Hammond said. "When it's about the child and how it helps them personally, it's just the best thing I can hear all day."
5. Put people first.
Peejamas eclipsed $1 million in sales in less than a year, and the company had a remarkably successful crowdfunding campaign prior to launching the business. The company is successful financially, but building a business to help other people requires a focus on putting those people and stakeholders first. Yes, Peejamas wants to make money, but Hammond says the team cares more about helping its customers and limiting waste in the environment.
The company has explored making bigger sizes for older children who might have medical conditions or special needs that lead to them urinating during the night. Peejamas wants to make additions to cater to those customers, even if it doesn't help the company become more profitable. Hammond said he's focused on helping his target audience at all costs.
"If we were just chasing the money, there are so many ways in which we could cut our costs to be more profitable," he said. "But we're actually doing the opposite."
Starting a business to help others requires the willingness to focus on more than profitability. You'll need to make people and your mission the top priority.