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How Start-Ups are Improving the World and Increasing Profits (Posted by Nigel Westwood)

Tue, 02 September 2014

Social and Environmental policies are no longer an option for modern companies, rather an expectation, and many start-ups are now embracing the challenge to both change the world and grow their companies simultaneously.
Aside from the obvious welfare and environmental benefits that these policies give to third parties, the companies implementing them can also reap the rewards for their efforts. Increasing numbers of consumers are taking company ethics into their purchasing decision. An online study conducted by Nielsen covering 29,000 people in 58 countries found that 50% of respondents are now willing to pay more to support a company with a social policy, up from 45% in 2011. 
 
It is becoming increasingly common to see companies build entire business models around the concept of ‘ethical business’ – Innocent Drinks or Gandy’s Flip Flops for example. Not only have these companies managed to help the world become a better place, but they have also built thriving businesses with strong margins and customer loyalty.  
 
What is it that makes start-ups such a great place for responsible business? Start-ups generally develop closer and more personal ties with both customers and vendors. A strong social or environmental policy that is tied into the values of your company can help to differentiate you from the competition and help you grow your sales. Whilst these policies give your company a clear reputational boost, other factors like attracting and retaining employees may also be happy side effects. A socially responsible atmosphere helps to build pride and cohesion within the team, one of the biggest (and most underrated) keys to start-up success. 
 
So how do you go about implementing these strategies in your start-up? 
 
Start by considering the triple bottom line of a social policy: Economic, Social and Environmental. This will give you a base to work from and help you to figure out how your company can actually make a difference to the areas you are involved with. Work with some organisations with whom your company currently has or potentially could have some influence. Understand how your expertise can help them, and the types of publicity your company can receive from this. 
 
Once you are involved in some social activities, consider how you will share the message with your customers. A great study by Forbes into consumer considerations of ethical business offers some insight. Respondents noted a company’s impact on the environment and the way they treat their employees as the most important indicators of a socially responsible company. Respondents primarily made their decisions about a company’s ethics by reading product packaging, news or press releases, or by doing their own research. 
 
Implementing these policies will also save you time and effort further down the line. Instilling a socially conscious culture in your start-up from the very beginning is far easier than looking to retrofit one later on. Many large companies are currently spending millions of pounds educating staff and rolling out green initiatives – something that could have been avoided if these considerations had been made before the companies grew. 
 
The core focus of social and environmental policies within companies should always be to improve the world around them, but now more than ever there is a strong business case to implement a social policy within your start-up. We are seeing more and more evidence from across the world that customers expect their companies to act in an ethical manner, and this is something that we should embrace, both from a moral and business perspective. 
 
The truth is, the excuse ‘social policy doesn’t make business sense’ just doesn’t work anymore. 
 

About Nigel Westwood (Co-founder and CEO of Avélére)

Nigel Westwood is the co-founder and CEO of Avélére, an innovative design company that creates open plan storage solutions for home and retail. He is an award winning entrepreneur, and his accolades include the I-3 Business Competition at Simon Fraser University in Canada and the Shell LiveWIRE Grand Ideas Award in June 2014. His company Avélére promotes consumers to take a more unique and socially responsible perspective when decorating homes, rather than settling for mass-produced furniture. 
 
You can follow him on Twitter @AvelereDesign.
 

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