My farm was part of the first cohort of Benefit Corporations signed into existence on October 1st, 2014, when Connecticut passed legislation incorporating Benefit Corporations as legal entities in the state. It wasn’t an easy decision for us. It cost us a good chunk of change at the pivotal early stage of our business. There were a dozen other things on our plates.
So why did we make the decision to go forward and convert to a Benefit Corporation? Well, thats what this article is about.
Benefit Corporations are Mission-Driven and Powered by Profit
As a benefit corporation, we do not live off of donations. By accepting payment from our customers, we are driven to deliver high value and make sure what we are offering is wanted by our customers.
Our mission of food equality is not tied to some donor’s agenda and we are not beholden to quarterly profits. Our business is in business to bring food to people and “teach every man to fish”.
For example our farm has the following core beliefs: We believe every person deserves the best quality food, no matter what. We believe agriculture should benefit the environment, not harm it. We believe we should feel connected to our food and know the source. Our farm grows the highest quality produce and delivers it to our local community. Our farm also teaches people how to grow their own food sustainably in their own backyard.
We’re not a charity, nor are our actions legally charitable. Instead, we are dedicated wholeheartedly to our convictions and our business operations reflect that. Everything we are able to do for our community is funded from the profits of our benefit corporation.
We can only really make a profit by benefiting others, otherwise why would anyone give us their hard earned money?
Takeaway: Benefit corporations are unlike non-profits, which are reliant on donations and funding. We are able to use our for-profit enterprise to expand our operations and create new projects so that we can bring the benefit of aquaponics to even more people.
Choosing Yourself and Leading the Way in the New Economy
The new economy goes by many names. James Altucher calls it the Choose Yourself Economy. Gary Vaynerchuk calls it the Thank You Economy. Seth Godin calls it the Connection Economy.
No matter what you call it, it is clear that there is a paradigm shift happening in the way we do business.
One of the main facets of the new economy is total transparency.
Total transparency keeps everyone honest.
We now have direct contact with our customers and they have direct contact with us. The new economy is built upon total transparency between the customer and the businesses they shop at.
As a benefit corporation, we get to release an annual report of social and ecological performance. Well we get to, but we also legally need to release this document once a year.
Rather than viewing this as a burden and more paperwork, we view the annual report as an awesome chance to alert the community to all the amazing things going on around them!
The report amounts to a legally sanctioned chance to tell people how cool your company is and why they should love you!
It also helps to ensure that the transparency inherent in the new economy.
Takeaway: Every person has the chance to choose themselves, as entrepreneurs we know this. What some people forget is that every business has the chance to choose themselves too. Bask in the transparency and take the chance to define your company before your customers do it for you!
The Disappearance of the Gatekeepers
The new economy continues to be hugely influenced by the Internet and one of the most dramatic paradigm shifts comes from the disappearing of the gatekeepers. This trend is one podcaster James Altucher talks about quite frequently. On his podcast, James often mentions the disappearance of gatekeepers, citing examples such as the publishing industry. It is easier than ever to become a published author because services like Amazon KDP have removed the gatekeepers of the traditional publishing world. James is a prolific writer and a huge advocate of all things self-publishing.
The benefit corporation represents the synergy of the two facets of the new economy: total corporate transparency + disappearing gatekeepers = the benefit corporation. Let me explain, up until the benefit corporation, there were some major barriers to doing good, socially conscious work. First, there was no way to tell what good a company was doing due to total opacity in the board room. Then, with the non-profit there was at least a form of transparency to the traditional corporate structure. However, the gatekeepers remained. In order to run a successful non-profit, donations are necessary. The funders, philanthropists and other donors are those gatekeepers. The Benefit Corporation represents the modern evolution of the traditional corporate structure, no gatekeepers, total transparency. Profits driven by the Benefit Corporation’s activities removes the gatekeepers
Takeaway: Gatekeepers are disappearing left and right and it is a better time than ever to start a business. Benefit corporations are for those who have a vision of a better future and are ready to act on it. For it is those who lead the way that are defining the new rules. Do you want to define yourself and your business? Then benefit corporation status may be for you.
Legal protection and dedication to our ideals, even when we’re not around
We may be a young startup, but our status as a benefit corporation lends legitimacy to our business and our mission. Before we even walk through the door everyone knows that we are true to our ideals. In other words, your reputation and your mission will precede you as a benefit corporation.
As a benefit corporation, we are actually legally beholden to consider how our actions and decisions affect not only our shareholders, but also other “stakeholders” such as our employees, our community and our global environment. This helps our company rise above the current bottlenecks to social enterprise.
That means that even once we are gone, or if we ever sell the company, our mission is protected.
Takeaway: Let your mission define your reputation because your reputation precedes you wherever you go. The mission of your benefit corporation is legally protected so that no matter what happens, you’ll know that your mission stays the course.
Part of an exclusive group of big thinkers
I’ve got a definite FOMO, fear of missing out. This was a definite problem in college. Parties could easily overtake studying on my priority list. My FOMO went from being a problem to a benefit once I directed it towards innovation in my business. Once I find out about something on the cutting edge, I gotta be there!
As an aquaponics farm, we are striving towards innovation and being on the cutting edge. This goes beyond the advanced aquaponic technology we use. Becoming a benefit company is totally an attempt at staying on the cutting edge of what we find meaningful.
So far only 26 states have ratified Benefit corporation legislation
By joining the ranks now, you’ll distinguish yourself in your community and draw like-minded partners, sponsors, investors, and clients. Since becoming a benefit corporation, my farm has seen a huge influx of attention from people of all sorts. New opportunities arise daily and we continue to meet amazing people all the time.
For example, in our community of Hartford, there is a community developing amongst all the benefit corps in the state. This brand new group represents a very diverse group of people with only one thing in common: true dedication to their social and environmental goals.
Takeaway: Just about all of my virtual mentors say, “you are the average of the 5 people around you most often. Surround yourself with the people you admire and want to become. The small group of benefit corporations is passionate and forward thinking.
For more information about benefit corporations, look for your local social enterprise-based entrepreneurial group. In Connecticut, we work with reSET.