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Is Your Small Business Ready for a Social Responsibility Program? (And Can You Afford to Be Without One?)

Posted On
8/31/2021
By
Karen Stoychoff

Cash-strapped consumers may not always have spare change to donate to the social causes they believe in, but the trend to align spend with businesses they morally support is on the rise. A Cone/Porter Novelli survey revealed that 66% of consumers would switch from a product they regularly use to one from a socially conscious company; that figure jumps to 91% for millennials. This consumer mindfulness comes with expectations that the business they support should give back to the community it serves.

Is Your Small Business Ready for a Social Responsibility Program? (And Can You Afford to Be Without One?)

When a business fails to represent consumer ideals, they can miss out on that spend—losses amounting up to 7% of a company’s market value. Far from the kind of errors that lead to cancel culture, this new phenomenon of consequence culture is a more nuanced iteration of what accountability looks like when driven by consumer dollars. Social responsibility—even for small businesses—is simply becoming part of the cost of doing business.

Pathways to Accountability for Small Business Success

For small business owners, social responsibility doesn’t always have to take the form of a financial contribution. It could be as simple as organizing an employee-led community outreach program, a charitable fundraiser like a fun run, or mentoring students in the immediate or neighboring school districts.

Another way to foster a socially conscious brand is to showcase green initiatives for recycling and minimizing waste or being more energy efficient. While some of these moves may slightly increase your cost of doing business, the good news is that 50% of customers are willing to pay more for products or services in the name of sustainability.

While far from a small business, consider beverage juggernaut Corona and the launch of its catchy first plastic fishing competition. Corona paid fishermen in Mexico to retrieve plastic waste from the ocean, supporting the effort with paid and non-paid advertising. The environmental outreach campaign netted more than three tons of plastic refuse from the ocean in Mazatlán, Mexico, along with hooking new consumers, and luring existing consumers to increase their spend with the popular brand.

No Business is Too Small to Make a Difference

Started in a backyard shed by founder and director Matt Tennant, Minneapolis, MN-based bicycle shop Full Cycle now boasts bike sales and a product line comparable to large-scale operations. The small business employs almost a dozen people and has emerged as a national model of youth-entrepreneurship programs “committed to offering relevant and creative services to our young people, excellent service to our customers, and authentic, quality relationships with both.” Tennant and team accept donated bikes that they repair—on company time—

and then deliver to homeless shelters, job placement programs, or at-risk youth. Transportation is frequently a barrier for opportunity in marginalized communities.

Involving employees in initiative selection supports teambuilding and creates a more desirable place to work—contributing factors to employee retention and attracting new employees. Socially responsible businesses enjoy a 50% reduced employee turnover rate which also saves time and money on hiring, onboarding and training.

Ultimately, the time and labor expertise of your employees can also be valuable if you can find creative ways to partner with other businesses in your community to cross-promote your initiative. Even better news is that 61% of investors agree it is worth pursuing corporate responsibility because it reduces other high-cost risks.

Authenticity vs. Exploitation

An issue or cause personal to your business or employees is more authentic than other obvious marketing ploys that consumers may see as exploitative. Many consumers said it felt like an empty gesture when businesses marked Pride Month in June by simply adding rainbow colors to their existing logo. While the move shows big business recognizes the value of appearing to be socially conscious, small business owners will be better served by committing to a cause consistent with the values that resonate with employees, customers and the community which they serve.

Consider Pete Leonard, owner of I Have A Bean Coffee Co in Wheaton, IL. When Leonard learned about issues facing the post-prison population in and around his community, he decided to get involved. Working with a local post-prison reentry program, Koinonia House National Ministries, Leonard has since employed more than 60 post-prison people over the past 10 years, all while roasting some of the best coffee beans around.

Taking A Stand Pays … and Sometimes Costs

When it comes to controversial or divisive issues, a small business owner must consider the cost / benefit relationship. Taking a stand on a hot issue may delight one segment of customers and entirely alienate another. Business owners may need to make the difficult decisions about what kind of customer frequents and remains loyal to their business.

Social responsibility isn’t just about picking a social cause that frames your business in a positive light; it can also involve publicly rejecting problematic issues. Forty-seven percent of consumers are willing to walk away if they find a brand’s statement or actions on a social matter disappointing, and nearly two-thirds of global shoppers are willing to boycott a business based solely on its social or political position. Small business owners should plan accordingly.

It’s also important to choose a cause to support before one chooses your company. Negative attention has plagued Chick-fil-A for years because ever-vigilant consumers have tracked their public history donating to groups they find objectionable. So much so that even after Chick-fil-A stopped donating to the groups in question, they continued to trend on social media as consumers urged their peers to support other businesses that sell chicken in a blow to Chick-fil-A’s profits—something in which Burger King took full advantage. The sustained anxiety some consumers have about Chick-fil-A shows the lasting effects these kinds of social decisions can have.

Social Responsibility is Good for Business

Many small business owners will walk the very fine line of supporting causes that reflect their values and beliefs, and engaging customers in important causes. While it may seem costly up front, it is more costly in the long run not to commit your business to social responsibility. If you’re ready to learn how to make a social responsibility program work for your small business, check in with a SCORE Mentor, a free program offered by the Small Business Administration.

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