How to properly structure your venture

No matter which sector your business operates in, it is crucial to consider the impact your business is having.

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Impact based businesses and hybrid businesses offer a lot of benefits as compared to their counterparts who are solely profit making. Other than attracting consumers, they also tend to be talent magnets and find it easier to get funding.

Impact based businesses contribute to positive societal transformation and as a result, find it easier to build a business legacy.

Most businesses are now telling their brand stories. Feeding impact into your brand story helps you build a legacy that can last for generations.

Perhaps you may be wondering how to build impact into your model. Simple practices can help, for example, charitable donations. However, you may be wishing for a more permanent and structured approach to impact. Below are are tips.

It all begins with incorporating the right type of business. There are some types of business that are more suited to impact or hybrid business. There is no one size fits all model therefore your lawyer can assist you incorporate the type that suits your needs.

Organisational policies are strong tools through which an impact based model can be attained. It is therefore good to have policies that are aligned with impact. For example, does your labour policy support mental health? Do you have an environment policy? How about anti-slavery and human trafficking?

I was once requested by a client to provide an anti-slavery policy as part of the evaluation process. Does a law firm really need an anti-slavery policy? They are really not planning on keeping any slaves, would be the obvious reasoning.

However, I understood that I had to align my policies to provide a mechanism for impact. Some clients and investors are particular on impact and I resolved to transform into a hybrid impact business.

As part of the structural approach to impact, do you have a department or a team that routinely plans, executes and measures impact initiatives? If not, it may be time to assign the task.

I know of a Kenyan firm that has a human rights committee on its its board. This committee is meant to advice the firm on human rights issues.

When it comes to matters finances, did you know some impact based businesses qualify for tax exemption? If a business is purely non-profit making, then it can get tax exemption on donations and grants.

Networking and partnering with other like impact businesses is good if you want to further develop the impact or hybrid model. There are a number of associations that support impact based businesses. There is even a global impact investors association that routinely seeks to invest in impact based businesses.

Adopt global benchmarks and standards by domesticating them into your business. Worth mention is ISO 26000 which was developed by over 500 global experts.

It is recommended for businesses that have respect for society and environment as a critical success factor. It is hinged on seven major principles including how your business can enhance human rights, labour practices, consumer, community development and fair operating practices among others.

There may be many more global benchmarks that support impact based businesses such as environment and climatic change mitigation standards. No matter which sector your business operates in, it is crucial to consider the impact your business is having.

Ms Mputhia is the founder of C Mputhia Advocates. Email: [email protected]

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