Dear Frankie,
For the sake of this post, I am going to refer to being B Corp certified not being a B Corporation which is different as it is the legal structure of the company.
It takes a special person or company leader to certify their company as a B Corp. These people are able to see beyond the traditional business model which for the most part is all about the money. They look at their businesses as a tool to help make things better for not only the environment but also the people inside and outside of the company. Shareholders and stakeholders. In short, they are a very forward thinking and special breed.
What I don't see in the other posts is much discussion about how B Corp companies define success in ways other than the single bottom line. B Corps generate value for their shareholder and stakeholders in many ways and thanks to the ability to measure these, B Corp companies can act differently.
It also takes a special investor to see beyond the current model of money in money out. There are more reasons for an investor to invest other than financial return on investment. Perhaps one of the reason investors are investing in B Corps is to reduce risk. The chances of a B Corp doing something stupid, using "creative accounting", having their products manufactured in alarming ways with questionable labour, having labour disputes on and on is far lower than a traditional company whose sole goal is to maximise their profits often at all costs.
There is over a trillion dollars of impact funds that are waiting to find companies to invest in. The problem at this point is there is far more money then there are "suitable" companies to invest in. This is mostly because to date, social companies have not had a standard or a way to measure their impact leaving too much open to interpretation of both the entrepreneurs who may well over state their impact and the investors who have no way to make a real comparison. In my opinion being a B Corp actually increases your chances of getting investment though those channels may not be the standard go to VC funds.
B Corp companies measure their success in many ways. For instance, looking at how much money they saved by being a B Corp, how much marketing value they got from their actions, the cost of attracting and retaining top talent. Young talent are looking for companies who they want to work for as part of their purpose in life not just the money and goodies they will earn. While the fortune 500 companies have to work hard to attract the best and the brightest, B Corp companies are saddened that they have to turn some incredible talent away at the doors.
B Corp is not for everyone and that is a good thing. It is best suited for sustainably minded businesses who are already dedicated to a new way of doing business but may not be able leverage their actions by being able to prove to an often cynical audience how they are different than their competitors who are not dedicated to a new way.
Though B Corp is for companies of all sizes, as an entrepreneur, I see great value for start-up and young entrepreneurs. Most innovative people and entrepreneurs are not experienced business people actually usually the opposite. By following the assessment, young business can learn how to set up solid foundations that they can build their businesses upon from day one. There is a vast amount of information, tools and resources available in one place that young companies can use that will ensure their companies are not only following an idea but are actually documenting it as a practice, providing consistency and clarity. It helps companies prioritise which processes to document first. It also helps them insure that the original vision and mission of their company remains in tact and not in motion constantly changing due to the ever changing business environment, investors or new partners who may join the company with their own visions.
There are costs involved. However, if you look at the savings and value in other areas that are gained it is a pretty solid investment in your business.
B Corp is best for people/companies who can see value in their company in more ways than reading their financials. Anyone who is basing their decision to become a B Corp on the costs involved would be best advised to give the movement a few years to provide the reduction in risk these people will need to jump on board. Those who believe that they will become less attractive to investors may want to think about that long and hard. Do they want an investor who is going to want to see them maximising profits at all costs or do they want an investor who is going to work with them to increase the value of their company in ways that are not measured by the almighty dollar. I often think entrepreneurs think VC are like angel investors. They are not. Most are out to make as much money as quickly as possible and put tremendous pressure on the founders to generate profits quickly. If your focus is mostly on earning, it will leave you little time to work on the fundamentals. You will find yourself frantically working in your business to meet financial goals instead or working on your business to reach your company goals. You may even find that you have to operate in a way you don't like just to keep the investors off your back. Not the kind of key partner I would want in my company. Perfect for many traditional businesses. It has worked for decades.
B Corp is not your usual business model but then again B Corp companies are not your usual companies. This is what makes them special, poises them for long term success and gives them the upper hand when it comes to providing products and services to the fast growing number of consumers who do care about how those behind what they buy act.
It's easy to remain cynical about business. I think if you look around, consumers are highly critical of the way business is being done. We are fed up with what appears to be sheer greed that benefits a very few key people at the expense to everyone else. A certified B Corp by its very nature is above the old ways of doing business. The certification relieves companies of having to defend their actions and finally their is a way to measure the impact of social companies in a way that allows them to be compared with other companies. Apples to apples not apples to oranges and this is why I think B Corp will continue to grow and those who have made the investment in themselves continue to reap the many rewards including financial success.
It's only for the brave and devoted at this point. As times goes on like any new innovation, it will be adopted by more and more companies. Now it is the early adopters who often make decisions from the hearts and their heads and enjoy taking risks as well as reaping the rewards of being first. New innovations are not for everyone and B Corps is an innovative new business model. It will take time for it to be adopted just as any innovation is. The iPhone and most innovations go through exactly the same process of adoption. It's not for everyone at this point. It will prove its worth and therefore reduce the risks associated with using it as time goes by.
That's my humble opinion not based on any kind of authority on the subject just a lot of research into B Corp as someone whose business would have thrived had it become a B Corp instead of it going bankrupt because it was nearly impossible to differentiate ourselves from the low cost competition who were able to copy our sustainable techniques without having to invest in what it takes to be sustainable businesses yet still be seen by companies as sustainable which in fact they were not. Standards that allow proper comparison are very important for those taking the extra steps needed to change the way business profits our society as a whole not just a few.
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