Have a great ethical business idea but don’t know what to do next? Our ethical business columnist Heather Wilkinson can help. She offers her top tips on starting an ethical business.

DEVELOP A PASSIONATE IDEA
An ethical entrepreneur is often passionate about a ‘cause’, whether it’s a desire to make a change in the local community, environment or society. The challenge is to turn this passion into a sustainable business that generates both commercial revenue and social impact. Combining ethics and business is fast becoming a trend in response to consumer demand, and there are plenty of best practice examples to draw on.

BE 100% COMPETITIVE!
Researching your market is essential to starting any business. Understand the dynamics that underpin your competitors and their marketing strategies, suppliers and how they operate, customers demands and industry trends. As a business you need to know your Unique Selling Points. An ethical slant will offer you some competitive advantage, but you will also need to be competitive in brand, quality, design, customer service, etc. 

DEVELOP A CAMPAIGN STRATEGY
An ethical business needs to connect to, or develop a campaign to reinforce its role and contribution to its chosen “cause”. This may mean developing relationships with appropriate NGOs, charities, social enterprises, community groups or campaign organisations.  This will refine your role as a reputable organisation within your field. A classic example is Anita Roddick of the Body Shop.

UNDERSTAND WHAT IT WILL COST
An Ethical Business often incurs additional costs due to the holistic quality standards integrated within the business. This often means paying fair trade prices from ethical suppliers which are usually higher. Other costs include infrastructure, communications, marketing and PR, and human resources. Be realistic, always overestimate your costs. It will always cost you more than you imagine.

SET A FAIR PRICE
Research has shown that consumers are prepared to pay that little bit more for an ethical product or service, for example, coffee or chocolate. However pricing is still competitive even amongst ethical suppliers. From assessing your costs, competitor prices and consumer purchasing power you will be able to assess and set a realistic profit margin.

RESEARCH FINANCING YOUR PASSION
Once you know your costs, make sure you have sufficient finance to start the business, otherwise you may be forced to compromise your values and ethics if you don’t, which will be a problem. In the early stages, it is advisable to maintain a reliable income stream to fund yourself and to provide funds to plough into the business, to achieve sustainability. You may want to explore the ethical finance options available to you. For example with the Co-operative Bank, Triodos etc.

CONNECT TO LIKE-MINDED PEOPLE
Ethical entrepreneurs are often the best at networking because they have a passion and desire to “make a difference”. Working together you are likely to make a much bigger impact to a “cause” than if you worked alone. Joining networks of like-minded people is key to building a foundation of good business relationships, whether it’s to connect to suppliers, partners and clients, or other entrepreneurs who offer inspiration and motivation. 

BUILD A TEAM AROUND YOU
Running a business requires many skills and it’s impossible to do it alone. An ethical entrepreneur will often find that others are as passionate about the “cause”, and are keen to offer time and support. However, don’t just take anyone on board, make sure you focus your time on your strengths and delegate the rest. Recruit new team members, volunteers, or professional experts to help you with different areas of the business.

MEASURE YOUR IMPACT
As an ethical entrepreneur it is important to set targets for your social or environmental impact, or else you, your team and your customers won’t know what you are working towards. Transparency and measurement of achieving these targets is essential. Communicate the results in a corporate responsibility report on an annual basis.

Heather Wilkinson is an entrepreneur, strategy consultant and business coach who founded Striding Out, an inspiring, fun and robust support service and community for entrepreneurs. Heather launched Striding Out to attract and connect a group of like-minded entrepreneurs, in the belief that together we are greater than working alone. Find out more at www.stridingout.co.uk