Are your goals in going into business for profits or to advance social good?

Evil, evil, evil. Listen to American politician Bernie Sanders and one hears almost devilish personification about the activities of for-profit corporations.

He shares the opinion of great business writer Peter Drucker who famously lashed out at unbridled capitalism with companies whose only motive standing as profits could do anything outrageous and societally harmful in order to achieve their goal.

Inasmuch, Drucker argued for greater accountability for businesses.

On the opposite side of the philosophical spectrum stands one of the greatest thinkers of the 20th century, Milton Friedman, who proclaimed that the sole exclusive purpose of companies existence is only to generate revenue and not partake in corporate social responsibility or overly generous labour practices that take away from core profit motives.

He argued that companies should only do what they are best at doing: making money. All other activities represent sideways energy that lower productivity and efficiency.

Every entrepreneur must decide their core viewpoint as they enter the market. Those of us in the tertiary education fraternity see students often torn between starting non-governmental organisations (NGOs) to altruistically help society or forming a business to purely make money.

However, modern business philosophers such as the phenomenally successful Bill Gates claim that for-profit business entities can fall in the middle to solve social problems while making money responsibly at the same time.

So before you kick off idea generation and discover what customer pain points to solve in your up and coming business, sit back and think hard about your end goal.

Marathon runners, airplane pilots, and even entrepreneurs all need the finish point in mind when embarking on their paths. Inasmuch, what exactly do you wish to accomplish with your business?

Now please take a piece of paper right now and draw a straight line across the page. On the far left side of the line, write the word “Social”. Then, on the extreme right side of the line, pen the words “For Profit.”

You see, all businesses exist on some continuum on the line. Perhaps your goal involves only earning money for yourself no matter what affect to society comes thereafter.

Tobacco companies stand as examples of a purely profit motivated business. Tobacco sales lead directly to customer deaths. That is to say that a tobacco firm provides no benefit to society whatsoever except making money for the owners.

Then, on the other hand, a purely social entity focuses exclusively on benefits to society in terms of people and the planet.

NGOs, theoretically, operate without thoughts of profit and only on how to help the world. However, NGO workers often enjoy some of the most lucrative remuneration packages in Kenya.

So while the organisation does not technically earn profits, the mid-level and senior managers frequently earn handsome returns in their pockets.

Instead of thinking about a professionalised NGO on the left hand “Social” side of the line, think of a community-based water project whereby the women in a rural community come together and decide to chip in cash and collectively drill a borehole for access to a clean stable water source.

Such an initiative holds purely social community benefit rather than enriching a few. However, in the absence of profit motives, sometimes even the best community efforts fail to gain traction and exist sustainably.

Profit motives lead to sustainability and ensure greater success for societal improvements. The East Asian economic tigers, including Taiwan, South Korea and Singapore famously held the same level of economic development as Kenya in 1960.

However, the three countries in particular now enjoy “first world” developed economy status. Why? Did NGOs work together to pull them out of collective poverty?

No, but rather solid government export-led growth policies encouraged entrepreneurship that boosted the nations.

Given the two extremes of the spectrum, killing customers versus only saving the world without profits for sustainability, where do you desire your new business venture to fall?

Corporate social responsibility (CSR) alone does not make a firm socially conscious.

Take Safaricom and Coca-Cola as an example. While both firms invest heavily in CSR activities, their very core businesses also help society despite the massive profits earned.

Communication capabilities and convenient money transfers boost our whole national economy forward through easier business transactions.

Similarly, clean nutrient fortified drinks assist our counties towards better nutrition and water source supply chain management.

So, Safaricom and Coca-Cola, like countless other business ventures in Kenya, fall in the middle of the line because of their focus on people, profit, and the planet.

What about you? Might you do good for the world and make money at the same time? Decide your desired state and then stay tuned to the Business Daily.

Next week, Business Talk starts a new entrepreneurship series by addressing how to think innovatively in order to create your first product. Discuss entrepreneurial purpose on Twitter with other Business Daily users through #EntrepreneurshipKenya.

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Prof Scott may be reached on [email protected] or on Twitter: @ScottProfessor