Can Your Business Be Ethical and Profitable?

Can Your Business Be Ethical and Profitable?

Entrepreneurship is almost always sold to us by the media and by government as something that should be pursued solely with the aim of making a profit. However, entrepreneurs who want to give something back and build businesses with more meaning and purpose than what their bottom line says don’t have a hard choice to make. Profits and prosocial behaviour can co-exist. Here’s how your business can be ethical and profitable.

There’s Nothing Wrong with Making a Profit

If you are caring and compassionate and you want to make a difference in the world through your business, you can still make a profit. Earning money for your time, expertise, and hard work doesn’t make you a greedy capitalist.

The chances are that if you start out with the aim of being as prosocial as possible in business, but you either don’t charge what you’re worth (or you don’t charge at all), you will burn out and your business will fail.

This is not a healthy or sustainable approach to prosociality. Your literal and metaphorical cup will soon be empty, and as the saying goes, you can’t pour from an empty cup.

What is a Better Way to Approach Being Prosocial?

Rather than taking the view that being prosocial means giving freely and not receiving much at all in return, you can think about the benefits it brings, some of which are financial. For example;

Being prosocial can elevate your brand

Imagine you run an ethical business that does a lot of good in the community where you operate. How much more passionate would that make you feel about telling the world about what you’re doing? How much easier would it be for employees, suppliers, and customers to feel they can trust you?

Ethical behaviour can increase your profits

When clients and customers are treated ethically, word will spread about how great your business is to deal with. This can equal more business and an increase in profits.

You’ll feel better about running an ethical business

Doing the right thing feels good and you’ll feel better if you’re running your business in a way that matches your prosocial values. Remember that it doesn’t have to be all or nothing, either. There may be a part of the business that doesn’t run as prosocially as you would like, but that’s okay. The important thing is that you’re doing enough good to make prosociality the overriding goal.

To Be Truly Prosocial, You Must Approach it Strategically

So the way to balance prosociality and profit is not to give too much of yourself to your detriment, but to approach it strategically in your business.

Look at the overall picture. Which areas of your business lend themselves naturally to prosociality and which probably never will? Be fine with that and consider exactly how you are going to be prosocial.

• Will it be by making your products ethically? Yes, this can push up your costs in some areas, but consider the value of really being known by your customers as a truly ethical business. The ethical consumer is not a myth and people often won’t mind spending a bit more on an ethically made product.
• You may consider being more prosocial by taking feedback on board, both from customers and employees. It could shine a light on where the business needs to be more ethical and where you need to improve your business practices.
• You could start by creating a prosocial culture from the top. As a business owner, you get to set the standards and communicate the business’s values. Make sure you lead by example and show people the kind of behaviour you expect. Show them what it means to run an ethical business.
• You could choose to be more prosocial by giving back to the community that your business operates in. This is not just about doing what looks good, it’s about doing the right thing. Remember that your customers live in that community and they do notice what you do, and what you don’t do.

Ethical or Profitable?: It Doesn’t Have to Be Either/Or

So you can be prosocial in business and make a profit, it’s doesn’t have to be either/or. The business doesn’t need to be run solely to give something back, a healthy, ethical business can turn a profit too. Rather than making your profit your enemy, see it as one of the many benefits of doing the right thing.