Your Ethical Business by Paul Allen 08.08.07
Your Ethical Business
How to plan, start and succeed in a company with a conscience. Paul Allen’s book, in association with P3 Capital and NGO Media is the perfect starting place for ethically motivated entrepreneurs.
With the recent explosion in both media and consumer interest in all things ethical this ‘How to’ guide is a perfectly timed release. Ethically motivated or influenced business is not in itself a new phenomenon in the UK, from the paternalistic approach of the 19th century Quaker owned businesses like Rowntrees, and the self help co-operative of the Rochdale pioneers there has been a sizable ‘ethically motivated’ sector of the British economy, indeed even that scion of free markets Adam Smith assumed the Christian ethics of the company owners meant that a portion of their profits would be spent on philanthropic ventures, a fact often glossed over in modern commentaries.
However since the rise of the likes of The Body Shop there has been a whole new emphasis on ethical businesses and ‘fair’ supply chain management. This first took two forms from the two extremes of the business world, firstly large corporations have to a great or lesser extend embraced Corporate Social Responsibility as a way to either fend off criticisms of their activities and supply chain policies or in a more meaningful way to actually reduce their carbon footprint and form ‘fairer’ relationships with their suppliers, the second was NGOs such as Tradecraft, Oxfam and Christian Aid launching trading divisions that specialised in fair trade products with more equitable contracts and social premiums with marginalised producers in developing countries- this ultimately lead to the launch of the Fairtrade Labelling Organisation, now the most well known of all the ethical certificates. Behind these however there has been a quieter, more locally based, social enterprise network of worker led co-ops, from printers to organic food retailers, and charity trading companies and community based companies that seek to provide services to marginalised sections of the community. The slow but seemingly unstoppable withdrawal of local council grant support for community service providers since the 1980s has organisations looking to continue their work have had to adopt a more mercantile business approach to their work.
The late 90’s and the start of the new millennium has seen the rise in a whole range of new ethically motivated companies as the NGO’s spin off their trading arms and return to their key tasks, and new private players emerge to satisfy the publics increased interest in ethical products. One of the largest growth sectors has been in the coming together of health and nutrition, and natural, organic products, whether it be food, cosmetics, and of course the final slowing dawning in the fashion industry that their supply lines are environmentally unacceptable.
Companies such as Café Direct, Innocent Drinks, Green Tomatoe Cabs, People Tree, Natural Collection, Adili.com, and Howies have all shown that the enterprise culture is alive and kicking in the ethical sector.
Despite all this dynamism the support network and available literature is still fragmented and in many cases none existent for start up ethical companies. Type in business on amazon.co.uk and 370,000 results are thrown up, make the same demand for ethical business and the results for books on start ups are dust.
So Paul Allen’s book is an absolute diamond. Paul is well qualified to be write the first ethical business guide, he a free lance journalist, specialising in ethical, social and environmental issues. He currently writes for the Guardian, the Times and New Internationalist, among others. He has spent years interviewing the founders of many of the UK’s most inspirational ethical businesses. From entrepreneurial young mums and energetic pensioners to former city slickers, such as Richard Reed of Innocent Drinks, he has heard dozens of inspirational stories about successfully mixing profits and principles. “Putting their wisdom and experience into a practical book for budding entrepreneurs always seemed like a good idea. None of the existing business start-up books on the shelves have come even close to addressing the huge rise in ethical consumerism or the growing demand for businesses committed to protecting the planet.”.
The book itself is packed full of information and case studies, both of small and larger, fast growing companies in the ethical sector.
While Paul doesn’t address the core issue of what exactly an ethical business is, he points three number key aspects that are defining factors for an ethical approach-planet, people and profit. The book is full of ideas of how to ensure that your business deals with all three of these key aspects, and how it is important to work out your stance on all three before you start trading as your position on each one will determine not the legal entity you create, and here Paul’s book is good on the pros and cons of each company structure available, from co-op to Community Interest Company, private limited company to charity.
The section of raising finance is particularly good, pointing to the available resources both public and private. The Public Relations section, mainly provided by Koan an ethical PR company is a great little primer on how to grab headlines, as most start ups have limited advertising budgets the old adage, “Advertising is what you pay for, PR is what your pray for”, is very apt and poignant for new enterprises.
The book is not the be all and end all total guide to start-ups, nor does it pretend to be, there are many good books on starting your own company out there written by both academics and more importantly by people who have been there and back again.
A bad business idea cannot be turned into a good business plan by adding an ethical element.
A successful ethical company needs the same devotion, business acumen and unique market positioning as every other company, people do not buy products or services solely because they are produced by an ethical motivated business, they buy because the products meet a discernible need, the ethical elements are a part of meeting that need but they do not replace the basic functionality that consumers are looking for. People don’t buy a bar of soap because it was hand made by endangered tribes in the Amazon, they buy it because it uses natural ingredients that both clean and enrich the skin without polluting the water supply, in marketing terms its is quality functionality accentuated by ethical elements that ultimately gives the product its traction, the Amazon sourcing re-enforces the natural product element, the endangered tribe is an additional benefit that enhances customer loyalty by appealing to their emotional and ethical motivation.
Your Ethical Business is a crucial and much needed start on the path of creating the support literature for ethically motivated entrepreneurs. As such it is vital reading for anyone setting off on the path of starting their own company.
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