When the money isn’t enough: How to measure the beneficial impact of your business
All entrepreneurs are justifiably proud of their business successes. A great many are also rightly proud of the broader impact their companies have. They know that successful businesses help make hometowns and cities better places to live by:
- Providing livelihoods to their employees
- Stimulating other businesses by buying from them
- (Sometimes) even selling a product or service with an inherent benefit
All these things are what management consultants—and some investors!—call “impact.”
These positive impacts are real. Investors see that many entrepreneurs plan and put them into their business models and activities. And then measure them.
Measuring your impact requires you to take a close look at how you run your business. It engages your entire workforce, gets you focused on what you do well and will help you improve your business. It will also help you get a true measure of the real value of your business. Here’s how you do it.
How to measure your impact
1. Open your eyes
Scrutinize everything your company does. You’ll see that many regular, run-of-the-mill things you do are impactful; they create positive, beneficial value for others.
If you give your employees a fair wage, benefits and opportunities to learn. That’s impact.
If you buy supplies from neighboring businesses, helping the local economy purr. That’s impact.
If you invite different kinds of people to serve as a sounding board or advisory council, work to reduce pollution and donate to a local charity. Impact, impact, impact.
2. Start measuring it
Some of the entrepreneurs who care most about impact use a business assessment that is as broad-minded and comprehensive as they are: the certified Beneficial Corporation (B Corp) impact assessment. It’s free, confidential and online.
The short assessment takes about an hour to complete. Its five groupings of questions show you the five kinds of impact assessed:
- How you run your company
- How you treat your workers
- How you interact with the community
- How you manage your environmental impact
- Whether or not what you sell has an inherent positive benefit
Each section’s specific questions show you clearly and precisely how other entrepreneurs create and measure each kind of impact.
Finally, its comparison of your answers to those of your peers around the world gives you a general idea of how you would do in the full assessment.
3. Prioritize improvement
You’re realistic; you know you cannot do everything at once. So you prioritize. Choose what kind of impact you want to improve and precisely how to improve it.
The B Corp assessment offers plenty of precise guidance.
The questions you had trouble answering or could not answer are specific, clear points of departure for improvement. The questions for which you offered only basic or preliminary answers offer ways to give more muscle or precision.
Indeed, plucking ideas from the B Corp assessment is the best way for entrepreneurs who care about their impact to develop specific plans to improve.