Risk & Business Magazine JGS Insurance Magazine Fall 2019 - Page 11

PROFIT + PURPOSE So, why wouldn’t someone just start a non- profit or charity? What’s the difference? PROS TO FOR PROFIT + FOR PURPOSE BUSINESS MODEL: With non-profits, there’s a finite amount of resources. Think of a bucket that has a certain amount of money inside. Once you use that money, you’re done. You have to go out and ask for more. Fundraise. Sometimes this means filling out 14-page grant applications for a $5k grant that take a year to process. Slow moving. There are so many non-profits that are fighting for this money but it’s incredibly limited. • Your product and message IS your marketing. By simply existing, your customers are your sales people. It can become a movement. (TOMS shoes, example). Example: ArtLifting didn’t spend a penny on marketing to get started. • You know those millennials that everyone has an opinion about? They are conscious consumers – meaning they care where they spend their dollars, even if it means paying more, and this trend is transcending the millennial generation. WITH A FOR PROFIT + FOR PURPOSE COMPANY, YOU’RE GROWING YOUR BUCKET OF MONEY AND SELF-SUSTAINING. You have the potential to grow and scale your business with infinite potential resources because you’re generating revenue while also giving back and making a social impact. With ArtLifting, the homeless artist receives 55 percent of the profit, 44 percent goes to the company and one percent goes to shelters they work with. They license the art, print the art on tangible items and sell the original art as well as prints. ArtLifting is what’s called a b-corp, a Benefit Corporation. What’s a b-corp? Just like an s-corp, it’s a legal business structure that allows the government to classify your business type. The main difference is that with a b-corp, you have a legally-binding social mission so the company can protect both bottom lines – financial and social. Meaning, if you’re filing as a b-corp and you have investors, they can’t push the company away from the social mission in order to maximize profit. The company can protect their social bottom line so it’s not compromised for financial success. If investors want to shift direction or strategy in order to make more money but that will jeopardize the company’s social impact, the company can legally push back and lean on the b-corp status. There are many companies out there that have a give-back component, but they don’t file as a b-corp. You don’t have to be a b-corp. As of now, there are no tax benefits to b-corps. (Not yet at least!) • Legal protection (b-corps explained above) • You can make MORE impact as a for- profit company. • • This allows people to start for-profit companies that serve as wage-earning, full-time jobs vs. starting a charity that’s a side hobby. Because this economic model is generating revenue, it can be a “day job” where you focus all of your time and energy. You’re doing good and doing well. (Aka – have cake and eat it too. Yummy.) CONS: • Skepticism – Anytime there’s something new, people will develop innovation allergies. Some people have concerns about exploitation and companies using a social mission in order to get more profit. (When actually the impact has more potential as a for-profit entity.) • Lack of education – The business model simply isn’t well known yet. This fuels skepticism and many people are not aware they have this option when starting a company or business To learn all there is to know about this business model, listen to Liz Powers co-founder of ArtLifting, explain her journey and the details of getting started. She bootstrapped her company starting with $4k and personally living very lean in her 20’s. She quickly grew the business to six figures in revenue before receiving funding from investors like Blake Mycoski from TOMS shoes. Amy Jo is the author of New York Times best-seller Renegades Write the Rules, and host of the  Why Not Now? podcast. She founded Digital Royalty in 2009 to help corporations, celebrities and sports entities humanize their brands online through social communication channels. In 2012 Tony Hsieh, CEO of Zappos.com, and Baron Davis, NBA player, invested in Amy Jo and her company. After a successful seven-year run as the Founder & CEO of Digital Royalty and growing the business globally into ten different countries, Amy Jo recently exited the company. She is currently spending her time researching the relationship between technology and humanity. She is also investing in other female entrepreneurs so they can reach their full potential. Amy Jo is also a contributor to news outlets including the Harvard Business Review and Sports Business Journal. She has been featured in top-tier media outlets including  Vanity Fair, TIME, Forbes, The New York Times, Fast Company, ESPN SportsCenter,  USA Today, MSNBC and Newsweek. Client portfolio includes: Hilton Worldwide, Shaquille O’Neal, Motorola, FOX Sports, The X-Factor, Chicago White Sox, UFC and Dana White, Dwayne “The Rock” Johnson, Los Angeles Kings, Jabbawockeeez, Doubletree by Hilton, Tony Hsieh CEO of Zappos.com, Monte Carlo Resort & Casino, KC Royals and Hard Rock Hotel & Casino. AMYJOMARTIN.COM Do good, do well. Do double bottom line. For profit + for purpose. For sure. + 11