Business is Not Just Business, Its Charity

April 2, 2008 - PRLog -- Introduction

A new type of business model is changing the way some do business. In essence, an new type of entrepreneur is appearing in the business world--philanthropic entrepreneurs. These entrepreneurs don’t only want to make money, but also help a good cause. An interesting business model allows these entrepreneurs to do both at the same time. This model is not new, but it has been empowered with new tools.

An Example

One great example is My Nice Tie (http://www.mynicetie.com) . After about a year of struggling to make money, this unique business model was presented to the founder.  Its called the Win-Win-Win Model. In typical business transactions only two parties win, the customer wins by enjoying value from a product (hopefully), and the business wins through profits.  In the Win-Win-Win model, one other party participates in the transaction, and that is those in poverty.  This business model takes some, or all of the profit and loans it to entrepreneurs in third world countries at 0% interest. It is essentially a micro-finance loan. The business sacrifices some of its profit for a time, the customer knows he or she is helping a good cause, and the ambitious in third world countries are given a chance not otherwise possible.

Eureka

My Nice Tie realized that this business could help many people all over the world. Currently, 20% of the purchase price of each necktie is lent to select entrepreneurs in third world countries at 0% interest. This model was only implemented two months ago, but as soon as My Nice Tie generates enough profits, it will begin to lend all of its profits for six months to a year.  These loans will eventually be paid back, and the business will operate with a slight cash-flow delay.

The Tools

The model is made possible by an organization called KIVA (http://www.kiva.org). KIVA is not the only micro-financing company in existence, but it is unique in that it connects everyday people in developed countries with everyday people in struggling countries.  For My Nice Tie, KIVA is the tool that allows the business model to work. The recipients of these loans are ambitious and enterprising. Some are peanut makers that need as little as $25 to buy the necessary equipment to become profitable. Others are delivery drivers that could start their own business if they could only get $50 to buy a bicycle.  They have ideas and they come to KIVA to ask for funds.

Conclusion

It doesn’t take a rocket scientist to know that there is a great need in the world. This need is hunger, shelter, and warmth. We all want to help this need any way possible. The Win-Win-Win model helps us fulfill some of these needs.  Not only philanthropic entrepreneurs want to help, but customers too. If they could buy a product that helps someone verses a product that doesn’t, which one will they choose? Please forward this newsletter to ever entrepreneur you know. Thanks.

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