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“That sounds expensive” is something I have heard (and, honestly, previously thought) when discussing the employment social enterprise (ESE) model. How could one small business — often operating in an industry with many new entrants and razor-thin margins — both turn a profit and properly hire, train, and support workers overcoming barriers to employment?
Well, over the course of last summer, I would soon find out. As a REDF Farber Fellow, I was matched with a Boston ESE called Bikes Not Bombs (BNB). BNB is a bike shop and youth training program with the mission to achieve economic mobility for Black and other marginalized people. I couldn’t have been more thrilled with the match, as someone dedicated to a career in economic equity and excited to deepen my involvement in my local Boston community.
I first became interested in work advancing economic equity during my secondment (temporary professional placement) at the Gates Foundation’s Economic Mobility & Opportunity Team and in my organizational consulting work at Boston Consulting Group. I pursued my MBA at MIT Sloan to continue my studies in these topics and was thrilled to be working with REDF to gain hands-on experience at organizations making strides in employment equity.
Once I arrived at Bikes Not Bombs, I learned there are some areas where costs are higher, such as funding support for youth apprenticeships, Bike School programming, and international shipments of bikes to partners in the Global South.
But, being an ESE also gives Bikes Not Bombs a competitive edge. This came to light in my analysis of BNB’s Refurbished Bikes and New Bike businesses. Bikes Not Bombs has made a name for itself for the last 40 years in the community as the primary place to donate used bikes, with road bikes typically refurbished and resold in Boston and mountain bikes shipped abroad to community partners.
The refurbished bike business is core to BNB’s mission. These used bikes not only provide affordable transportation to BNB customers and reduce waste, they also provide the best learning opportunities for youth apprentices. The process of refurbishing a bike helps youth apprentices learn core mechanics skills that enable them to perform other detailed repairs in the shop going forward.
Bikes Not Bombs’ competitive edge also means stronger business fundamentals. While other bike shops might be able to sell new bikes more efficiently given their lack of other costs, they cannot compete with BNB’s scale and customer loyalty in refurbished bikes. Customers like knowing that their donated bikes are going to a good cause, and between training opportunities and international shipments, BNB is able to use nearly all bike donations. What’s more, the financials reflect this advantage: refurbished bikes are one of the most profitable product types that Bikes Not Bombs carries.
Through the refurbished bike business line, Bikes Not Bombs has unlocked the true power of the employment social enterprise model. Refurbs provide better staff training, more affordable customer options, more profit to reinvest in the organization, and a way for community members to engage in BNB’s mission.
At its best, the ESE model is not an expensive version of a more traditional business — it’s a new way of operationalizing your business to drive value for your employees, your customers, your business, and your community at the same time.
With my Farber summer now complete, I’d like to say thank you to the Bikes Not Bombs staff and the REDF Farber Program. To Bikes Not Bombs, thank you for allowing me to ask my infinite questions and for the many hours you let me shadow and learn from your work. To the REDF Farber Program — I wanted to be a Farber Fellow years before I knew which business school I would attend. The program lived up to my expectations and then some. Thank you for your coaching and for the chance to witness the crucial work REDF is doing to support enterprises that create employment opportunities for all.
— Written by Leah Budson, MBA Candidate, MIT Sloan School of Management
