Why Most Impact Businesses Fail Financially

Source

Impact businesses fail for one simple reason and that is because they avoid financial truths.

There are many impact businesses such as social enterprises or environmental conscious businesses with good intentions but in a financial mess. Good intentions don’t pay salaries or keep you afloat.

Most impact businesses founders rely on grants to keep going. They pay salaries from grants and other expenses. This is unsustainable in the long run because of what happens when the grant runs out. Applause or Instagram show-off don’t equate sustainability.

Your impact business should be profitable and not just rely on grants. You should fix your unit economics and ensure you have ready market for your products.

If your impact business model collapses without donations, it’s fragile and needs to be modified.

The real challenge you should focus on is building businesses that do good and stand on their own financially not relying on grants or government subsidies.

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