Every impact-driven organization wants to maximize its impact portfolio. Having effective impact measurement and management (IMM) can help a social enterprise develop from the early stages of business to the growth stage. This article discusses what social enterprises can do to embed IMM in the three stages of business growth:
- Early Stage
- Mid Stage
- Growth Stage
Here, we mean the very early stages of a project. You have an idea, you’ve identified a problem, and are developing a product that is a solution. This early stage is a pre-seed stage, so you haven’t received any investment money at all.
How can your social enterprise look at IMM at this point?
- Theory of Change. Start working on it. You don’t have to finish it, but you need to get started. This basic logic model will guide your social impact.
- Key outcomes. What is it that you’re doing for the world? Clearly delineate what broader social impact outcome(s) you are looking to achieve.
- Focus on stakeholders. Always stay focused on your stakeholders. These are the people whose lives you’re trying to improve. They need to be engaged at the fundamental level in your social enterprise.
The sooner a social enterprise can embed IMM in the core of its business practice, the more successful it will be at creating real social impact.
In this middle stage, you have perhaps received your first seed investment. You’re continuing to develop your product and putting it out there. You’re building clients, generating revenue, and creating a viable business.
How does IMM look at this point?
- Engage the stakeholder in product-market growth. You’ll get critical feedback on your product for improvement. Listen to them by conducting stakeholder surveys.
- Continuously learn and improve your business model. Social enterprises learn by doing. Test your product in impact experiments so that you’re constantly getting feedback and opening opportunities to revise your business.
- Raise Impact Capital. As a dynamic learning organization, armed with a functional theory of change, and data showing the impact you’ve caused, you’re ready to raise your next impact capital. This is where you can apply to foundations, impact accelerators, and other institutional funding.
In the growth stage, an impact investor has recognized that you have a great product and a track record of success. As a result, you’ve received your first serious Series A impact investments.
- Scale through good data. Scaling is when your company generates more revenue and social impact without adding new costs. Good data and technology are the keys to scaling. For social enterprises, that means effective Impact Measurement and Management.
- Support. Different players have an important role in IMM for growing social enterprises. Investors, accelerators, philanthropic organizations, universities, etc. can support social enterprises by providing the expertise, technology, and funding for IMM.
Impact measurement is business growth
Data is the key to helping a business make it through the early stages and scale-up in the growth stages. For social enterprises, that data is IMM. The sooner a social enterprise can embed IMM in the core of its business practice, the more successful it will be at creating real social impact.
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