Social enterprises are businesses that combine profit with a social purpose. The business skills needed to run a successful social enterprise are myriad, so it’s no wonder that many are led by people from a business background who want to use their skills to make a difference in their communities. “The Business of Social Enterprise” blog series profiles just some of the incredible leaders we partner with who are doing just that.
As CEO of Goodwill Silicon Valley, I want to make an impact on people’s lives. But I can’t do that without making an impact on our bottom line. When I joined in 2008 we ran a deficit of $2.7 million. And we weren’t doing a great job of serving the people we were supposed to help. At the time we looked at metrics like “people served.” If you came and filled out a job application we counted that as a person served. But filling out a form doesn’t make much of an impact on a person’s life.
I wanted to change that. I knew I had to change the direction the numbers were going. But I also knew I had to change the culture of the organization. Now, with everything we do, we ask, “What’s the impact?”
To change the culture, I began to change the standards. When I joined GWSV I joined a team that felt they had failed. As CEO I believed it was important to show them it was possible to start succeeding. So I built a culture of small wins. Winning turns around a culture. One small win was simply setting up a business plan.
When I joined we had no business plan in place. So the first thing I did was get the team to write one. I joined in October. By December we had put together a one-year business plan. All business plans are not created equal. It’s really important that your business plan includes defined, measurable goals, without any fluff. Instead of describing how you are going to hit the goal, just describe the goal. Don’t get wordy. Make your plan concise, transparent and understandable.
Our business plan was to show a profit of $60,000 in one year. Considering we only had four weeks of cash on hand, even this was ambitious. By January we made $3300 dollars, instead of losing $6000. By March we made six figures. Success feeds success. By the end of the year we made $1.2 million, and nearly doubled the contributions to our Mission service.
A start up for people that need a second chance
At Goodwill Silicon Valley we work with “re-entry people.” People coming out of jails and prison. I knew having employment would make a significant impact on their lives, and the community. But putting these folks in a retail environment was intimidating. I needed a business that could employ folks with these kinds of serious employment barriers.
My brother-in-law ran a successful car dealership in California. I knew car dealers needed their cars detailed. With help from REDF, who invested their financial capital in us in the form of a Farber intern, we were able to do the research and write a business plan for Clean Wheels Silicon Valley, a car detailing service that last year employed 43 second-chance people.
What I learned at GWSV I was able to extend to starting up Clean Wheels. First, you have to have a business plan. You have to do the research. Is there a need? Do the people you serve even want to work in an auto detailing business? For us, the answer was yes, since there’s nothing cooler than working on a $200,000 Ferrari.
Secondly, you have to measure quality. If you aren’t focused on quality, your customers won’t buy from you. They don’t necessarily care about your mission. The world won’t beat down your door because you are a social enterprise. So we go through a quality checklist, with 1 being fair, 2 being good, and 3 being excellent. We don’t want customers to leave with a 2. If it’s not checked and done properly, we go back and do the car over again. If there’s a drop of water streaking the door, we fix it. One of our employees will notice it, even if the customer won’t ever see it.
Third, you have to determine if there’s really a market for what you offer. In California car detailing is a big business. We have 300 days of no rain. There’s a lot of opportunities to wash and detail cars. That makes for fertile ground.
Finally, you have to get into the trenches. That doesn’t mean micromanage. You are there to observe. See what’s going on. But don’t tell people what to do. Your team wants you to know what they know. So you have to be on their level to see that.
Coming from the “for profit” world—I ran ME Fox and Company, an Anheuser-Busch distributorship for 27 years—it was all about supply chain optimization, and being efficient at selling, distributing and getting the product to market. That business sector experience made it easy for me to see the issues GWSV faced, the duplication and inefficiencies. I know about retail conditions, product mix optimization, the variables of selling products, getting stores to look good. Having a business background helps you understand the importance of increasing average transactions and growing the number of occasions our customers shop our stores.
At Goodwill Silicon Valley, success means more than numbers on a spreadsheet. Increasing our growth has funded our mission. Today we have zero debt, we have $8 million in the bank, we pay higher wages, and we’ve put over $14 million into capital improvement and store remodels. More importantly that growth has enabled us to serve more than 14,000 people in one year, versus 3,500 when I started. That’s impact.