Strategies: Mission Possible

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Costs can be higher than at conventional businesses, and investors must be willing to accept potentially lower and slower returns. The result, says Vogel: "Many, many companies don't make it."

But you can succeed, if you proceed with care and follow a few basic rules. Choose a business model that fits your mission and covers extra costs. Find like-minded investors. Figure out how to measure nonfinancial results to prove you're not giving just lip service to your social goals. And like any entrepreneur, be willing to change your business model when necessary.

JUSTIFY YOUR MODEL

Your first job is to create a business with a product or service that people will want and an effective way to sell it. "Just because you have a social mission doesn't mean you have a right to exist in the marketplace," says Gilbert. To earn that place, approach your social mission with the heart of a bean counter, refining it until you have a goal you can achieve.

Four years ago, Riney, an engineer and software consultant, decided he "wanted to found a company that could change the world." He created a business that would change a little corner of it. After thinking about ways to encourage public use of environmentally friendly cars, Riney started PlanetTran in 2003. Most limo operators treat chauffeurs as independent contractors, but Riney gives all his workers, drivers included, salary and benefits. Revenues for the 25-employee company were $1.3 million in 2006.

In some cases, the impetus to start a company may come well after you've committed to a social agenda. Seven years ago Melinda Olson, a registered nurse with an interest in herbal medicine and organic products, started making remedies for her pregnant friends' heartburn and morning sickness. "It wasn't my intention to start a business," says the 56-year-old. "But the more products I created, the more it became obvious that there was a real need for them." Earth Mama Angel Baby, Olson's $1 million company, uses recycled materials for packaging its organic, preservative-free lotions, shampoos, teas, and other products for pre- and postnatal women and babies. Two of the Clackamas (Ore.) company's 11 employees are refugees. "We prefer to hire people who are most in need of a job," says Olson. "It dovetails with our larger mission."

But like most multiple bottom liners, Olson found that her ideals came at a high price. She figures she spends 15% to 80% more for organic ingredients, and as a result her gross margins are 12% to 15% lower than those of her competitors.

Socially responsible companies can also rack up costs ancillary to their central mission. Eric Olsen, vice-president of advisory services at Business for Social Responsibility, a San Francisco nonprofit, says if you're a socially motivated entrepreneur, "everything in your four walls will have to be consistent with that position." At Borrego Solar Systems, a 107-employee El Cajon (Calif.) company that designs and installs solar electric systems, CEO Aaron Hall, 28, makes sure the company's 15 trucks use biodiesel fuel, which costs about 10% more than conventional fuel, and that it contracts only with shipping companies also using biodiesel. "Fulfilling our missions means we have to take steps that may cost a little more money, but are the right thing to do," says Hall.

Sometimes, though, complying with your mission statement will actually lower your costs. Earth Mama's Olson packs her shipments with post-consumer-waste newsprint, which she gets from local printing companies at little or no cost, and reuses bubble wrap and cartons and containers, saving 40% to 45% on packaging. At Better World Books, Helgesen salvages shelving from libraries that are relocating.

Or you can trim costs the old-fashioned way: by streamlining operations. In 1999, Melissa Joy Manning, 35, started her eponymous Oakland (Calif.) jewelry design and manufacturing business with the mission of providing a living wage to artists, including a competitive salary, health-care benefits, and a 401(k) plan.