A social business needs to deliver results in three core areas; social impact, financial sustainability, and organisational resilience. But in order to mature in these areas businesses need more than just capital; they also require non-financial support, training and access to networks. Growth support is crucial in helping social businesses build internal capabilities to deliver great impact, learn more in our new series “Supporting Growth”.
One business we have worked with closely to help them grow is Instituto Muda in Brazil. They tackle the problem of waste management in São Paulo. São Paulo generates 20,000 tons of waste on a daily basis, yet only 5% of the residential buildings have public recycling collection service, the majority of it goes to landfill. Instituto Muda picks up recycled waste from high-income condos and processes it through waste recycling cooperatives. They directly support 85 jobs and provide employment to low-income families, formerly homeless people and former drug addicts at the cooperatives. On the environmental side, 100 tons of recyclable material is diverted from landfill on a monthly basis.
During our investment process in Brazil we carefully analyse the potential action points of a company, so by the time we are confident in the investment, we know the areas that the social business should improve on. Over the last year the Brazilian team has been following a more structured support offering, focussing on three key areas of growth support:
1) Operational Support: An operational-based problem that can be resolved by implementing correct systems and processes.
It is often the case that early-stage businesses do not already have the established processes that a larger company would have in place. When we invested in Instituto Muda, they required help in predicting their complex expenses with financial planning. We saw the need for an operational solution and referred them to an external consultant to closely analyse their financials. There wasn’t the need for a full-time and costly employee, so the connection to a competent and experienced financial advisor was the most appropriate and valuable intervention.
2) Strategic Support: Where the business requires more of a strategic support around business development that is not as simple as an operational process.
Sometimes growth support needs to be more strategic. When Instituto Muda where looking at marketing their B2B product they needed strategic advice to understand how to grow their client base. To provide this specialist assistance, YSB Brazil enlisted the VP of Branding and Marketing from a large Brazilian firm with a pro bono mentorship. They received support with pitching to other businesses, their website, tone of language used and key messaging. Mentorships are most effective when the relationship is both focused on solving a particular challenge and driven by pre-determined goals. At YSB Brazil and globally we are building a network of pro bono mentors to help all social businesses with specialised support. Read more about our approach to mentorship in our accelerator programmes here.
3) Networking. This kind of support is on an ad hoc basis, perhaps where the social business needs to hire a new position, or find a new supplier. Our network at Yunus Social Business is wide and diverse and we aim to ensure the businesses in our portfolio gain the full benefit of it.
Leveraging our established network, YSB built a partnership with a condo management firm in São Paulo which created a pipeline of contracts for Institudo Muda. Going forward we are looking to promote Institudo Muda, and the other businesses in our portfolio, by recommending them to the large corporate clients we work with in Brazil. Building synergies between smaller social businesses and corporate businesses is incredibly important in creating a diverse ecosystem of social businesses.
“The non-financial support of Yunus Social Business is extremely important,” Alexandre Furlan, the CEO and Founder of Institudo Muda told us. “Firstly because the Yunus brand can reach companies, institutions, and people that we could never do alone as a small business. We have access to mentorship opportunities with people and organisations that simply would have been possible if we didn’t have their support. When presenting our services to new clients it is a great benefit to be part of the YSB portfolio to increase awareness of the business. The portfolio management support we receive provides us with hands-on business planning, guidance in setting our revenue goals, and analyse of our expenses. YSB is constantly pushing us to do better and we see this is a really positive support to foster our development.”
It’s difficult to measure exactly how non-financial support affects the bottom line of a business. However, since our partnership with Muda over the last 18 months they have been able to reach three times the amount of subscribed clients then they had in the previous nine years before our intervention. A tremendous amount of growth! Our support is not only about money - but it is really helping Institudo Muda to grow financially.
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