facilitated by three major strategic moves: challenging conventional wisdom; setting up appropriate partnerships; and undertaking experimentation.

Profit orgs focus on making financila profiut, non-profits only focus on fulfilling social objectives. The social bjusiness is a mix of these in that it has to cover its full costs from its operations, and its owners are entitled to recover their invested money, but it is more cause than profit-driven.

Its position in the lower right quadrant shows that it has both the potential to act as a change agent for the world, and sufficient business-like characteristics to ensure it survives to do so.

It is not a charity, but a business in every sense. The managerial mindset must be the same as in a business: when you are running a social business, you think and work differently than if you were running a charity, even though your objective is different from a profit-maximizing company. At the same time as trying to achieve their social objective, social businesses need to recover their full costs so they can be self-sustainable.

Rather than being passed on to investors, surpluses generated by the social business are reinvested in the business, and thus, ultimately, passed on to the target group of beneficiaries in such forms as lower prices, better service or greater accessibility.

no-loss, no-dividend, self-sustaining company that sells goods or services and repays investments to its owners, but whose primary purpose is to serve society and improve the lot of the poor. Here it differs from NGOs, most of which are not designed to recover their total costs from their operations, and are therefore obliged to devote part of their time and energy to raising money.

Value proposition

Value constellation

Profit equation

Difference between conventional and social business models: The first change is the specification of targeted stakeholders, and the provision that the value proposition and constellation are not focused solely on the customer, but are expanded to encompass all stakeholders. The second is the definition of desired social profits through a comprehensive eco-system view, resulting in a social profit equation. The third is that the economic profit equation targets only full recovery of cost and of capital, and not financial profit maximization.