There are a few ways that you can set your start-up apart. One of the easiest ways to do this is to declare yourself a B-Corporation. Let’s break down the B incorporation meaning and whether it will help or hinder your business.
What It Means To Start A B Corporation
Attaining a B Corporation certification means that you are dedicated to the triple bottom line. This means you will factor in social and environmental impacts when making decisions. B Lab puts strict rules in place to help you meet these goals.
It’s not enough to just declare that you will follow these standards. You’ll need to make a legal commitment. This includes changing the way that you have structured your company. B Labs will carefully inspect your organization. You’ll need to score 80 percent or higher on their test to become a B-corp. That’s not all, you’ll need to apply for re-certification every three years. If you can meet the standards to become a B corporation, you’ll be joining elite company. There are only 6,856 certified B corps globally.
Advantages Of A B Corporation
To fully understand the B-corp meaning we need to look at how it will affect your startup. There are plenty of benefits you can unlock. First, many employees are looking for more than just a paycheck. They want to know that they are making a positive difference in the world. Because of this, B-corporations might find it easier to attract and retain employees.
Many consumers want to work with companies that are trying to do the right thing for the planet. However, this has created a problem. Lots of organizations are trying to greenwash themselves. They claim to be environmentally and socially responsible when they aren’t. Becoming a B-corporation proves that you are committed to these ideals. This can help build trust with customers.
B-corporations might also find it easier to attract investors. Many people want to put their money into a startup they think will make a positive difference. Because of this, it can become simpler to convince them to back your cause.
But starting a B-corp isn’t all about the money. Many startup owners who pursue this route are looking for loftier goals. They want to be a part of a movement that views business fundamentally differently. The goal is to change the way we measure success. Traditionally, it has been about returning the most money to shareholders. While they still want to make a profit, B-corporations place more focus on the social and economic good they are doing.
Downsides Of A B Corporation
Of course, being a B-corporation also comes with a few drawbacks that you need to think about. First, you’ll have to deal with more scrutiny. Every decision you make needs to be carefully considered. This can include doing additional research to minimize environmental impacts. This takes time and can end up slowing down your startup’s growth. Plus, documenting your compliance with the rigorous B-corporation standards also takes a substantial amount of time and effort. This is especially taxing for startups, who only have a small team available to cope with the growing workload.
It’s not just the decision-making that can get time-consuming. Applying to become a B-corporation also takes a long time. You’ll need to fill out plenty of paperwork. Plus, you’ll need to make sure that your startup has been structured properly. Getting ready to apply to B Labs can take months for a startup. For larger, established businesses, it can take years.
It’s also worth noting that some businesses find the B-corporation label can put them under additional strain. It’s not just B Labs that are checking your compliance. You’ll also be scrutinized by activists. As we mentioned, if you do this right, you can build a loyal fanbase. But this is a double-edged sword. If you make a mistake, and break the customer’s trust, you could be severely punished. Likewise, you can walk away from the B-corporation standards at any time. But you will need to be prepared to face some customer backlash.
It’s possible that becoming a B corp could expose your business to additional costs. This means that your shareholders will get less profit. This can make it harder to attract investors. It also means that your products or services might need to be sold at a higher price. Depending on your sector, this can make it harder to attract customers. Don’t forget about the certification fee. For small businesses, this can be $500. But for larger companies, this could be closer to $50,000.
Conclusion
Understanding the B-corporation meaning is only part of the challenge. You need to decide if it’s right for you. If you want to build an environmentally and socially responsible company, this certification can prove your commitment. However, it’s also important to look through the strict rules to consider whether maintaining these standards is feasible for your company.
