Five Factors- Part 4- Labor

Looking for a natural advantage when it comes to labor costs is a 3rd factor that will impact the potential success of your enterprise. The challenge with looking for a natural advantage in labor costs for an enterprise that seeks to create impact/transformation is that, very often, the people hired in the business are part of that transformational vision and so simply “cutting costs” by paying less etc is counter productive. In that case, we have to be more creative when it comes to finding a natural advantage for labor. A few ideas to think through that might make labor a natural advantage for your enterprise.

First, some social enterprises might hire people into shorter term apprenticeship situations with the goal of finding people long term sustainable employment at the end of 6, 12, 24 months. This means that the long term employment costs will stay relatively stable because people are hiring in at the same rate/level over time. 

Second, many new businesses struggle because there are significant costs related to paying for administrative services like accounting, payroll etc. These are expenses that are ongoing irrespective of the success of the business. Because you have a social mission, and one tied in (ideally) with a local church community, consider building a team of volunteers who can provide specific expertise and services in areas so that you save on those costs in the initial stages. This might even extend to some of the labor needed day to day as well. 

Third, consider strategies that might capitalize on another labor need within your church as well. For example, perhaps you want to hire an outreach pastor who can do this kind of work in the neighborhood. What if you hired them as both pastor and entrepreneur and the business and church work together to compensate an employee who is driving the mission forward. The same could be explored for youth ministry as well as the potential planting of another church in the community. 

In the end, its important to reiterate that we don’t advocate finding a labor advantage of the very folks you hope to walk alongside. That’s counterproductive and an example of how the business success can’t be allowed to cause mission drift. Because of that, its crucial to think through ways to create as much of an advantage as possible in other areas of labor costs. This will provide beneficial over the long haul as you seek to establish the business early on.

About Adam Gustine

Adam Gustine leads CovEnterprises for Love Mercy Do Justice and the Evangelical Covenant Church. He is also the founder of Jubilee Ventures; an economic incubator in South Bend, IN. He and his wife, Ann, live in South Bend with their three kids.

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