Bonus episode: How to Stay Profitable While Giving Back

[00:00:00] Heather: I think we want all of our businesses to do well by doing good. I think there's no longer any patience for businesses which aren't thinking about the wider consequences of how they're generating money. And so businesses do well by doing good by thinking intentionally about what is their social value proposition.

[00:00:20] Host: Hi, This is Small Business, a podcast brought to you by Amazon. I’m your host, Andrea Marquez. On This is Small Business we cover all things small business that will help you start, build, and scale your business. We will hear from guests with diverse backgrounds, point of views, and stories, with the hope of hearing from many types of small business entrepreneurs. By the end of each episode, I'll point out key takeaways that you can use on your business journey.

From a customer’s perspective, when I'm looking at different options and find two products that are similar in price point and quality, I usually then look at the impact they're having to decide which to buy. But even though helping the community is important and you'll probably get more customers by doing that, it is a business at the end of the day. [00:01:00] And sometimes I wonder how a business that revolves around giving back can stay profitable.

Coming up -- I'll talk to Heather Cameron, a social entrepreneur, and Michael B Kauffman Professor of Practice, at the Washington University in St. Louis. She'll be telling us how you can grow your business when the foundation of your business model is social responsibility. But first -- I want you to meet Andrew Glantz, the Founder & CEO of GiftAMeal, a marketing platform for restaurants that revolves around giving back. Each time a customer takes a picture of their meal from a partner restaurant, GiftAMeal feeds a family in need from a food bank. And even though GiftAMeal's business model relies on giving back, they've managed to secure more than 700 partner restaurants and stay profitable. So if you've been wanting to give back to your community through your business and continue to grow, this episode is for you!

Today’s episode of This is Small Business is brought to you by Amazon Business who provides a wide product selection, business-only pricing, and account features that can make running your small business easier. [00:02:00] Amazon Business supports small business through various programs such as the Small Business Grants where Amazon Business gives over $250,000 to 15 small businesses who are Amazon Business customers. Amazon Business is committed to the growth of small businesses and invests in grants to help small businesses overcome challenges they face, freeing up their resources to focus on their mission and customers. Small Businesses are the backbone of our economy and when they succeed, we all succeed. Create your free account today at amazonbusiness.com.

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[00:02:45] Andrew: So I founded Gift A Meal when I was still a student at Wash U in St. Louis. I'd done a lot of volunteering growing up for my local community and when I went to college, I had an internship at a venture capital firm where I learned about the startup world. [00:03:00] The managing partner exposed me the idea of a profits with a purpose business model and I loved the scalability of making an impact that that could provide. And so when I was on a lunch break with the other intern. We were talking about how we could give back to our communities and support businesses that give back and came up with the idea of Gift A Meal pulling from Tom's shoes and Warby Parker buy one, give one models, as well as pulling from the idea of people posting photos of food on social media and came up with Gift A Meal by pulling it all together where each time a guest takes a photo of their food or drink from a partner restaurant, we make a donation to a local food bank to help provide a meal to someone in need.

[00:03:34] Andrea: This is amazing that you thought about this and continue to work on making it grow. And speaking of growing, I want to talk about your business model. The words you use to describe your business model are: doing well while doing good. Tell me more about that.

[00:03:50] Andrew: Yeah, I think that when you're a social venture, it's really important to have profit and purpose be consistent goals for the business. With Gift A Meal, it's totally free [00:04:00] for the customer at the restaurant taking their photo, and it's funded by the restaurant as a mix of marketing and giving back. So the restaurant pays a flat monthly program fee to be involved, and then out of that program fee, each time a guest takes their photo on Gift A Meal, we make a donation to a local food bank to cover their cost of getting one meal's worth of food from their facility to a neighborhood pantry where those in need could access it. The guest is then invited to share their photo on Facebook, Instagram, or Twitter, now X, and then we give an extra meal for each, platform they share on. And so it really allows the guests to multiply their impact. And from the restaurant perspective, the guest is promoting them to all their friends in a positive and uplifting way, while also having a feel-good experience for that guest where they feel that sense of emotional connection to the restaurant. So that way they're going to hopefully return more frequently so for that business model, it's really driven by that restaurant program fee. And as we are able to sign up more restaurants. Revenue grows, but then we're also going to make a larger impact as people take more photos [00:05:00] to create that sustainable business model.

[00:05:04] Andrea: I think one of the first questions as an aspiring entrepreneur that you're going to have when trying to connect social responsibility to a business is, how does this last? So, how do you measure that success? And I know it might be tied to the fact that you're doing good and you're helping people, but you’re still a business and I’m sure you’ve got employees that need to get paid.

[00:05:22] Andrew: Right. I mean, you know, even though we're making a tremendous social impact, we are a business at the end of the day. And like you said, we need to pay payroll, and we need to pay for marketing and all the other things that come with the business. And so, you know, those key performance indicators, KPIs, that I'm looking at are, are monthly recurring revenue that we're getting from the restaurants. Our retention percentage versus our churn of how many restaurants are staying on Gift A Meal each month versus dropping. Looking at the user engagement, the number of new active users on Gift A Meal. How many times each user is taking a photo on Gift A Meal and are they going to the same restaurant or are they trying new restaurants [00:06:00] and using Gift A Meal. Looking at the social share rate of what percent of customers are sharing their photos on social media from Gift A Meal and the impact that that's creating for the restaurants, in addition to the social impact metrics, like the number of meals we're providing each month, and all time. So there's a number of metrics that we're looking at. We're looking at, you know, our bottom line in addition to top line revenue, we're looking at our profitability as a company to get to sustainability and getting to break even. Uh, so that way we can continue to grow, um, our company based off of sales rather than having to fundraise millions and millions of dollars. We can grow organically by creating a sustainable model.

[00:06:40] Andrea: I'm so impressed and really inspired by you -- and I'm sure anyone who hears your story will feel the same way. So, tell me, if someone wanted to follow a business model similar to GiftAMeal’s, what would your advice be to them in terms of being scalable?

[00:06:55] Andrew: I think at the very beginning, if a business is looking at adding in a social impact element, [00:07:00] they need to think through whether it's going to be something as a one off or something that's going to be incorporated into the core business model. I would kind of refer them in terms of how to implement that social responsibility with kind of what I would call the ABCs of social responsibility. It needs to be authentic, it needs to have a right branding fit, and it needs to be consistent.

So going through those, authenticity is key because once you incorporate any type of social impact to your company, you're immediately held to a higher bar because you don't want to be seen as scammy or using a cause. You want to make sure that it's something that's genuine and authentic and especially for younger audiences like Gen Z and Millennials. They can sniff out inauthentic behavior for brands. You have to really make sure that it's authentic in all capacities. The second is branding fit. So making sure that it's something that resonates with your customers, your team and your company culture as a whole. The last is making sure that it's consistent behavior. So that's consistency in terms of the messaging, and in terms of how you're actually going to be making that impact [00:08:00] to make sure that you're really hitting home on that message so that people start to associate that social impact that you're doing with your brand identity. And if you're consistent, that'll also boost your authenticity. So I think those are kind of the key things at the very onset that you have to look at as a business and then to get customer buy in, it needs to be something that's easy for customers to understand and participate in. It has to be something that they feel like makes an impact and is meaningful and relevant to them.

And then ideally something that's shareable as well so that customers can be promoting the business to friends. There was a study done in the hotel industry where it was looking at tweets by, about social responsibility that were done by people that stayed at the hotel about the hotel social responsibility. Versus the hotel tweeting out about it themselves. And it was found to be a lot more authentic if it was the tweet from the person that stayed at the hotel versus the hotel themselves, kind of tooting their own horn. And so getting that shareability component of social responsibility is really important. [00:09:00] And then that last piece that you were talking about of the sustainability of the business model is just making sure that whatever you're doing from a social impact perspective is going to be fueling the profit incentive of the business. If it's something baked into the core business model and the profit driven incentive is going to be fueling the social impact.

So as you're able to grow your revenue and profits, you're able to make a larger social impact. And as you're making a larger social impact, you're able to make the business more profitable. So having those be, have synergies with each other and fueling each other rather than cannibalizing each other is important. Now, if you're just looking to do a one-off thing for social impact, then that's fine. You can pull from profits and donate to different causes and things like that. And that is totally okay to do. There's not just one right way to do this, but I think there's definitely a big opportunity. Where social impact isn't just a single donation, but it's something that can be a driver of the business and not a cost generator.

[00:09:57] Andrea: I think that’s such an important way of looking at this and I want to double tap on it, [00:10:00] which is to understand that there are different ways to make an impact and it doesn’t need to be built into the business model, but you can totally make it so if that’s what you want, while still making is a profitable business. I also want to touch briefly on your experience funding an idea like this. And your experience though Amazon.

[00:10:20] Andrew: I got an email from Amazon Business. And it was an email letting me know about an Amazon Business grant. thought it was throwing a dart at the dartboard, but why not? You know, we have a good story to tell. We're making an impact. And, um, so I filled out the application for the Amazon Business Grant for 25,000. And then we got a notification that we were one of 15 semifinalists. And then when I looked into it, I was like, wait, all 15 semifinalists are going to get some type of money regardless of if you ended up being the winner or not. So that's awesome. Didn't expect to be the winner. And then it was held up for a vote for all Amazon Business users to vote for their favorite company that was a semifinalist. [00:11:00] And then I got the email officially notifying, and 25,000 grant is huge for any business and, for us, that's something that's going to be majorly impactful as we're going to be able to use it to help continue our growth across the country and to be able to support more communities and more restaurants and more local food banks. And, so it's not something that I expected at all, but I guess that kind of always goes to show that to always put yourself out there and give things a shot.

[00:11:23] Andrea: That’s wild! What was the application process like?

[00:11:28] Andrew: I mean, I think for the application, whether it's Amazon Business Grant or for any other type of application, you need to very clearly explain what it is that you're doing, the traction that you have so far, and what the impact of the winnings would be for your business and where that would allow you to go. Sometimes an entrepreneur has a great story to tell. But, you know, there's so much fluff that's in the application that it's hard for a judge to be able to just nail down specifics or it gets overly confusing. So there's, you know, a lot of value in being concise [00:12:00] and precise with your wording in these applications and making it really easy on the judges in order to evaluate the application and understand the business model, how it works, how it's sustainable and what the impact is going to be for the business if you end up winning and really getting the judge to want you to win, um, is something that I think is really important.

[00:12:20] Andrea: This is something I try practicing every day when communicating with anyone, trying to be concise and clear is harder than it seems. Andrew, if you could give any advice to an early-stage business owner, what would that be?

[00:12:35] Andrew: The first would be just get out there and do it and get started. Usually that's the biggest mental hurdle. And so you don't have to have the final finished product to get started. You can just have a very small minimum viable product of just the core feature without any bells and whistles. And start running it by your market that you're going to be selling into to get their feedback off of it. Because if you don't have something, it's really hard to get past that. So getting from that idea stage to product as quickly as possible, [00:13:00] I think is great. And then being willing to have a low ego and fail and learn from failures and adapt.

I would also say quantify your value as quickly as possible that was when we really started to see things take off for Gift A Meal, is when we performed case studies with our partner restaurants, and we found that on average, guests using Gift A Meal were returning 39% more frequently, spending 20% more per order, and tipping 32% more. So it wasn't that it was just a feel-good experience, but we were actually driving revenue for our partner restaurants and sales became so much easier to sign up another restaurant and gift a meal once we quantified our value, especially if you can tie it to those key performance indicators that the restaurants care about like revenue and loyalty and tip size and check size outside of just a survey. I mean, if you have to start with a survey results, that's fine, but surveys people take with many grains of salt, but if you can tie it to those actual KPIs that the business cares about, then that's something that is super helpful for sales. [00:14:00] So to summarize, just do it, get yourself out there, be willing to fail, learn, pivot, ask for help, be able to quantify your value as quickly as possible. And also you can do it qualitatively by getting testimonials from early customers.

And then also, I'd say the last thing, which is probably the most important thing is understanding that yourself as a business owner and entrepreneur are the most important asset to the company. And so if you burn out, then the company dies. So making sure to take care of yourself and your own mental health in order to be there for the business. So you don't have to work 24 hours a day on the business. Take care of yourself so that you can be there for the business and present your best self for the business too.

[00:14:40] Host: You're listening to This is Small Business, brought to you by Amazon. I’m your host, Andrea Marquez. You just heard from Andrew Glantz, the Founder & CEO of GiftAMeal. You can find out more about GiftAMeal in our show notes on our website: Thisissmallbusinesspodcast.com.

[00:15:00] I loved how Andrew ended by reminding us about the importance of self-care as a business owner, which can seem obvious at times, but really should be at the top of our lists. Andrew showed us that you can definitely be profitable if your business model is centered around social responsibility. He said that when you're building a social venture, there are two consistent goals that you've got to focus on: purpose and profitability.

It was also exciting to hear about GiftAMeal’s experience with winning the Amazon Business grant. If you want to learn more about Amazon Business… Create your free account today at amazonbusiness.com.

The small businesses we feature on This is Small Business are some of the many small businesses selling in the Amazon store who have tapped into some of the tools and resources offered to help them succeed and grow. One of those resources is the Amazon Small Business Academy where you can find the help you need to take your small business from concept to launch and beyond. You can strengthen your skills at no cost with live and on demand trainings, Q&As, events, and even find more This is Small Business content. If you don’t know where to start, you can take the free self-assessment on the Amazon Small Business Academy site at www.smallbusiness.amazon.

[00:16:00] So far, we've talked about how Andrew managed to keep his business that's centered around giving back profitable. So let's dig deeper into how you can continue to scale a business that's focused on social responsibility with my next guest: Heather Cameron, a social entrepreneur, and Michael B Kauffman Professor of Practice, at the Washington University in St. Louis.

[00:16:25] Heather: We hear a lot about the importance of knowing how you're creating value for your customers. And what we want to think about is how you're creating value for your customers, how you've got exciting products and programs, but how are you also creating value for your employees and for the wider community. And it's not actually that hard, right? Most businesses have something that they're contributing, but rather than just see it as kind of a nice to have, how do you measure it? How do you, how are you transparent about how you're communicating it? Because you will attract more customers, you'll be able to recruit better people, and you'll have the opportunity to raise capital in different ways than just sort of an old style, don't care about a business.

[00:17:00] Andrea: Why should this be one of the top things entrepreneurs work on when starting out their business and conceptualizing their business plan?

[00:17:10] Heather: I would say it's a lot about alignment, right? How are you aligning your brand with things that, you know, matter to your customers, but even more important, how are you aligning your brand with stuff that matters to your team and how are you able to get a higher quality staff members and commitment from people who are also feeling good about the work that they're doing and that it's clearly communicated and it's measured. So it’s people who are in it with you as the business owner to really commit to, to making your business grow. And then how is it also giving you as the business owner, extra energy and extra alignment so that you're feeling really good about the work that you're doing and that you have that energy and the commitment that we need that we know is necessary to be successful as an entrepreneur. After a while, people's businesses start to pull them in different directions and they can kind of fall apart if you don't have that alignment. And so I think for small business owners, it's not just about aligning with a customer. [00:18:00] It's also about making sure that your business processes, including your HR and including the way that you think about how you're communicating is all in alignment. And that gives you extra energy, gives you extra advantage in a competitive space.

[00:18:12] Andrea: So Heather, you know about GiftAMeal and its business model. And one of the things that I immediately thought when we were first talking about the business model was how do you make this scalable? Especially if it's not a tangible product like with GiftAMeal?

[00:18:30] Heather: The beauty of the Gift A Meal model is that it is allowing people, when they're enjoying their own meal, to feel even better about it because they're making a meal available to somebody in need. And unfortunately, all across the United States, there are food banks and there's food banks that need to get that food to people. So by concentrating on college towns, by concentrating on places where there's lots of young people who've got money to spend and want to enjoy time socializing and enjoying a meal, Gift A Meal has a way to scale by basically finding communities [00:19:00] which have that combination, which is not so rare: College Town, plus access to food banks who need support in order to get meals to people.

So I think the challenge for anybody who's kind of a hometown hero, like the founder of Gift A Meal, is how do they create and develop a potentially remote sales force who are able to go out and make that argument in other cities about how restaurants can attract a certain type of customer who they've been able to show, are actually making bigger tickets for the restaurant. The people who are participating in Gift A Meal are giving bigger tips and are having, you know, bigger receipts. They can make that case and then that's a case that can be made in any city in America. It's just a question of when you're an entrepreneur, how are you managing perhaps remote sales teams. Because GiftAMeal was born and built up in St. Louis. That means when they move to other spaces, they're going to need to have people from those spaces that can do it. But obviously there's top salespeople all over and then that then becomes almost like an HR recruitment challenge, less so a scaling challenge.

[00:20:00] Andrea: Scaling is a top-of-mind challenge for business owners, so it’s interesting to think about it from a perspective of HR and finding the right talent too, as one of the aspects of scaling that you need to be mindful of. What are other considerations you think small business owners should make when thinking about making impact sustainable in their business model?

[00:20:20] Heather: Just as small businesses need to think hard about customer discovery and how they find their customers and make great products for customers, as you grow, you're going to need access to more forms of capital, or even at the very beginning, angel capital or friends and family. And the clearer that you can state your social value proposition and the more transparent that you can be about how you're measuring it, uh, you will get access to different money than you, you would be able to if you didn't have that clear in your mind.

Also around recruiting. So the clearer you can be about what are your goals, what are your, the goals you want to reach through this business, then you're able to communicate them in a short and compelling way. You will notice you're going to get better staff and you're going to get better offers for funding. [00:21:00] So don't think of it as a nice to have. Think of something that its core to your business and how you're communicating it to the wider community, including people who want to fund your business and people who want to shop with you or people who want to work for you.

As an entrepreneur, it's been exciting to see my own kind of individual growth, but as I've had a chance to work with many others, I realized that we need to think in a more collective way about entrepreneurship, about building ecosystems, about lifting up others, about thinking about how it's not just one person. So I think it's, it, Interesting to think about how can you involve your workers and profit sharing? How can you involve other community priorities and what you're trying to achieve as a business? So that as we grow as entrepreneurs, we're also bringing a lot of people with us.

[00:21:43] Host: That was Heather Cameron, a social entrepreneur, and Michael B Kauffman Professor of Practice, at the Washington University in St. Louis. As always, here are some of the key takeaways on building a sustainable business model that centers around social responsibility:

• Andrew started with what he calls the ABCs [00:22:00] of implementing social responsibility into your business plan: Authenticity. Brand fit. And Consistency. Having those three things will help you build a successful plan that then has a positive impact on not only customers and your community at large, but also on the people who work in your business.
• Quantify your value. I think this one is a very important one as people tend to remember numbers and find a greater impact when it can be traced back to something measurable. No matter what your business is, when you’re reaching out to others, especially when thinking about funding opportunities just like the one mentioned from Amazon Business, make sure you know how to quantify the impact of your business as well as the profitability and opportunity for scale.
• The second point about quantifying your value is also tied to the third which is knowing how to communicate your goals to others and those within your business in a clear and concise way. Start with a good story of course, but cut the fluff and make sure people understand exactly what you’re trying to do [00:23:00] and how you plan on doing it.

I'm curious – Have you been thinking about how you can grow your business and give back to your community at the same time? Or maybe you've already successfully done that. I'd love to hear about your journey! Reach out to us at thisissmallbusiness@amazon.com to tell us what you're up to. Or let me know what you think of the episode by leaving a review on Apple Podcasts – it’s easier if you do it through your phone. And if you liked what you heard -- I hope you'll share us with anyone else who needs to hear this!

If you’re an aspiring entrepreneur, and I hope you are if you’re listening to This is Small Business. Or maybe you already have your small business up and running and you’re ready for the next step. A super valuable resource that can help you is the Amazon Small Business Academy where you can find the help you need to take your small business from concept to launch and beyond. Take the free self-assessment on the Amazon Small Business Academy site at www.smallbusiness.amazon.

That's it for today’s episode of This is Small Business, brought to you by Amazon. Until next week – This is Small Business, I'm your host Andrea Marquez -- Hasta luego -- and thanks for listening!

CREDITS: This is Small Business is brought to you by Amazon, with technical and story production by JAR Audio. [00:24:06]