4 minute read
Austria Wirtschaftsservice (aws
from Startup Guide Graz
by stadtgraz
Creating a Company That’s Profitable and Creates a Better World
Promotional bank of the Austrian federal government
There are over 2,300 social businesses in Austria (similar in size to the Austrian startup ecosystem) according to the Austrian Social Entrepreneurship Monitor 2020, commissioned by the Ministry of Economics and prepared by Social Entrepreneurship Network Austria (SENA). As the number of social businesses grows, Marlis Baurecht, the Business Unit Manager for Entrepreneurship, IP Rights and Seedfinancing at Austria Wirtschaftsservice (aws), believes that it’s possible for even more entrepreneurs in Austria to start businesses that are both profitable and create a better world. “In contrast to more traditional companies, the products and services they offer must clearly contribute to solving social challenges,” says Marlis. “And this impact must be measurable.” Prior to joining aws in 2016, Marlis worked as an innovation expert at the Federation of Austrian Industries.
For social entrepreneurs in Austria who are just starting out, Marlis suggests they use the support available to all startups. To benefit from this support, founders will need to have an idea of the problem they are trying to solve and a plan that supports the business case for it. In contrast to more traditional companies, the products and services they offer must clearly contribute to solving social challenges, and this impact must be measurable. The UN Sustainable Development Goals (SDGs) are a great starting point. “Digitalization is opening up completely new fields of application here; for example, in environmental protection, the aging society and immigration,” says Marlis.
Marlis recommends considering impact orientation from the very beginning. Impacts can be described systematically in impact models such as the Theory of Change methodology. In general, an impact model can be described as “a logical, graphically prepared representation.” An impact chain is created with the involvement of the stakeholder groups. Important here is the identification and operationalization of relevant metrics.
Most important tips for startups:
- Start with an idea. First and foremost, have an idea that you are passionate about and create a business plan from it.
Align with the UN SDGs. Use the UN SDGs to determine the social and environmental goals your company will impact.
Measure your impact. It is important for social entrepreneurs to deal with the complexity of social impact. Impacts can be described systematically in impact models such as the Theory of Change. In general, an impact model can be described as a logical, graphically prepared representation.
Get feedback early. Have a small group of people you trust who can provide input and feedback on your product and service while you’re still building it.
Moreover, financing and profitability are some of the biggest challenges social entrepreneurs in Austria face, says Marlis. Investors who are used to financing technology startups or traditional businesses look primarily at profit growth as a measure of success, but for social businesses, this isn’t the only important metric of success. This means that social businesses can lose out on these investment sources. “Thus, social businesses are strongly self-financed and the founders bear a particularly high risk.” She adds that there are foundations, impact investors and programs in Austria who focus on investing in social enterprises, though not as many as in other countries.
Social enterprises can tap opportunities that are often denied to normal enterprises, says Marlis. “For example, you can generate money through sold products and services while also mobilizing donations and voluntary support or acquiring grants from public funding programs.” One example program is the aws Creative Impact, a non-repayable grant covering up to 70 percent of the costs for idea-stage, early-stage and growth startups which can be used to develop prototypes or identify the marketability of new products.
For specific information on how to become a social entrepreneur, Marlis suggests founders look to SENA, a network and advocacy group for entrepreneurship with a positive social impact in Austria; Social Business Hub Styria, a social business incubator and network for social entrepreneurs in the region; and Ashoka, an international network for changemakers. “These and other organizations offer various training, networking and support projects for all interested and committed people,” she says.
For entrepreneurs in Austria looking to create businesses that are both profitable and create a better world, start by identifying a long-term goal using the UN SDGs, create a plan to achieve this goal using a framework such as Theory of Change, and then combine it with a solid business plan. Taking advantage of the initial support available to all startups in Austria, including public funding and connections to private investors through aws, can help social entrepreneurs succeed.
About
Austria Wirtschaftsservice GmbH is the promotional bank of the Austrian federal government. It supports companies by offering soft loans, grants and guarantees to implement innovative projects at the idea, early and growth stages of development. The Austrian Federal Ministry for Digital and Economic Affairs (BMDW) and the Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation and Technology (BMK) act as owner representatives.
[Contact] Email: 24h-auskunft@aws.at Telephone: +43 1 501 75-100
