What the heck is a B-Corp?
When dealing with the idea of becoming a B-corp, a lot of the time the people I meet with have awesome ideas that just don’t need to be a nonprofit, or sometimes they really shouldn’t be a nonprofit. And sometimes that can be a hard pill to swallow.
People usually think nonprofits = good and for-profits = evil. For-profits are exclusively profit-driven engines of super-rich greedy people, right? That’s not always true! There are lots of for-profit companies that do good deeds (think TOMS shoes or Finnegans Brew Co.).
So, you can be a for-profit and do good things. That usually brings up the question – should we try be a B-corp?
In 2015, Minnesota passed the Minnesota Public Benefit Corporation Act (MPBCA), making social-benefit driven for-profit companies a real, distinct category. Being a B-corp basically means that the board will consider public good along with what will maximize profits. There’s no tax benefit, special treatment, or punishment if the company doesn’t do what it sets out to do. If you’re interested, you can get a ton more info about B-corps here.
Related post: What Does “Nonprofit” Really Mean Anyway?
Essentially, a B-Corp is Just a Public Stance That a Company Will Consider Doing Good.
I have a lot of opinions about B-corps, but it basically boils down to this: it’s all marketing.
You don’t really need to be a B-corp. You just need to be good at telling your story and letting consumers know the mission of your for-profit company.
So, if you’re considering starting a mission-based business and it looks like the for-profit route might be the way to go, take some time to consider your options. Rushing into the B-corp designation might not be a worthy use of your time as a busy founder. Do your research to see if there is really any benefit to you to be a B-corp!