The importance of impact measurement to entrepreneurs
Having discussed impact as a concept in its broadest sense, we can now focus on principles and practices of impact for entrepreneurs.
An entrepreneur is someone who creates something of value with the aim of improving on existing products, services or processes. The entrepreneur gets money in exchange for the value created.
However, making money is not the sole sale of an entrepreneur. The common good principle of entrepreneurship (ie what is beneficial for the wider society) also indicates that some entrepreneurs want to make a positive impact in the lives of stakeholders and the community. So, what does the concept of ‘impact’ represent for an entrepreneur?
Impact and the entrepreneur
For an entrepreneur, ‘impact’ represents the way in which an organisation is delivering to its beneficiaries and society as a whole (Fedorciow 2012).
The creation of entrepreneurial ventures may provide society with job opportunities which may lead to the creation of wealth and a flourishing economy. Their innovations may also increase competition and productivity to better meet the needs of their customers. Furthermore, some entrepreneurs solve societal problems by supporting local charities through their corporate social responsibility.
Impact remains a crucial element for entrepreneurs for several reasons:
- Impact is useful in enabling an entrepreneur to assess whether they are achieving their purpose (Fedorciow 2012). It facilitates the design of activities and programs to enhance the achievement of the mission and vision of the organisation.
- Impact helps entrepreneurs to hold themselves and their employees’ accountable for achieving the set targets or improving their products/processes.
- Impact enables sponsors and relevant stakeholders to check whether the entrepreneur has delivered according to the promises they have made.
Ultimately, impact tells an entrepreneur if what they are doing is working: it allows you to tell your story effectively, creating opportunities for improvement and finance; it acts as a sign to donors, investors and beneficiaries that your organisation cares about improving its offering, and is happy to be held accountable for its performance.
Deciding on the impact you wish to achieve is the first and most important consideration before beginning a business or project, as it enables you to:
- Support a mission
- Be accountable to sponsors, stakeholders, customers and beneficiaries
- Know what works in the interventions we fund in order to adapt and to do more
- Improve policy and practice
- Make choices and set priorities about the way we design our programmes and about what we fund
Reflecting on this and previous sections, how do you think entrepreneurs can improve their impact on the broader society?
Share your response in the comments and have a look at what other learners have said. If you can relate to a comment someone else has made, why not ‘like’ it or leave a reply?
Fedorciow, L. (2012) ‘Why Measuring Impact is Essential to Any Social Enterprise’. The Guardian [online] 20 November. available from https://www.theguardian.com/social-enterprise-network/2012/nov/20/measuring-impact-social-enterprise-essential
Landry, C., Bianchini, F., Maguire, M. and Worpole, K. (1993) The Social Impact of the Arts – A Discussion Document. Stroud: Comedia
Pace, C.R. (1979) Measuring Outcomes of College. Fifty Years of Findings and Recommendations for the Future. San Francisco: Jossey-Bass Inc.
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