Whether business is all about money is a question that occurred to me this week. On Dragons Den for the first time, all 5 dragons went “to the wall” to discuss whether they should all invest in a project. The money was not the central issue. They were being asked for £1.00 to support Sooper Books which already had a wide variety of supporters from many different walks of life.
Normally the dragons are really tough on the numbers and to my mind definitely want to see that there is some commercial success before they invest. Also that they personally can make enough money and get their investment back.
This felt very different. It was more of a socially aware initiative to help children to read. When the results were announced Charlene was in tears, and Deborah Meaden commented that her emotions were good to see.
What are the reasons for funding?
Does this mean that hard nosed investors are becoming more socially conscious? Does it mean that this is more a version of crowd funding than “traditional” investment? Or simply that it made good television? As the world is alarming at the moment the producers thought that showing more feel good messages is just what the TV audience needs?
Obviously I don’t have the answer. But I do know that so many smaller businesses are created in order to do something important in the world. Something which is in line with their own values. The money is important, too, but given a choice between making an impact or earning billions most of the business owners I know are committed to making a difference.
Getting a loan from a bank
In the days when your bank manager knew your business personally it was possible to receive funding because of a good relationship. MY personal experience was that after a fire the bank manager stood up for the business and was the ambassador for the loan. More recently it seems that raising funding depends entirely on which sector the business is in, and is allocated according to a points system. One business I know where the owner had spent a long time writing the business plan was told in no uncertain terms that they never funded a business in that particular sector.
Early capitalists included philanthropy and social reform
Religious principles guided many of the chocolate manufacturers. They were Quakers and provided other benefits as well as paying their employees for a day’s work. Bourneville in Birmingham was a town developed by Cadbury for the employees, the legacy of Joseph Rowntree is philanthropic. Other early industrialists like Samuel Greg in Styal built houses for his workers, and William Lever built Port Sunlight which was a planned town.
Big business creates infrastructure
In Korea I understand that for example Hyundai and Samsung put their names to and build a wide range of aspects of modern life. From roads to malls to schools and universities This is a fairly common approach in Asian countries. The business is creating the future for the population, and obviously positioning itself as the employer of choice.
How will business develop?
As we all become more aware of climate change more businesses are being started which appeal to eco values. Consumers are readier to support activity which does not have a harmful footprint. The B Corp initiative is growing fast. Maybe the chance for business to be a force for good is getting more inevitable. In addition to measurements of GDP we now have the happiness index which measures the satisfaction of the inhabitants of a country.
Endless growth seems a less desirable outcome – and looks less likely to happen – so maybe the social aspect of businesses will accelerate. The dragons may have led the way on television. They did something no dragons have ever done: all contributed and without much talk about money!