Purpose pays: How young entrepreneurs can build businesses with impact

There used to be a common misconception that doing good and doing well were mutually exclusive in business. However, as an impact investor, Business Partners Limited has long embraced the dual mandate of driving financial performance while creating meaningful social impact. Now a report by Deloitte puts that to rest once and for all, proving that companies who are leading with purpose consistently outperform their peers across key financial and operational indicators.

 Deloitte’s research found that purpose-driven firms achieve what it calls a “purpose premium” – a measurable advantage across six drivers of long-term value: brand and reputation, sales and innovation, capital access, operational efficiency, talent, and risk mitigation. High-purpose brands, for instance, recorded nearly a 20-percentage point premium in annualised shareholder returns compared to those with low purpose scores, and achieved faster market-value growth – sometimes up to four times faster.

 But while the world’s biggest corporations are formalising purpose strategies, the real opportunity may lie with smaller, more agile businesses. For SMEs still defining their identity and long-term vision, integrating purpose from the start can help differentiate in crowded markets, attract customers and capital, and build resilience through economic uncertainty.

 The business case for purpose

 Deloitte’s analysis is unequivocal: purpose drives performance. Nearly 80% of consumers are more likely to remember and trust brands that exhibit a strong sense of purpose, while brands with a clear social or environmental mission are six times more likely to be protected in the face of negative publicity. Purpose also directly influences purchasing behaviour - sustainability -marketed products command an average price premium of nearly 40% over conventionally marketed alternatives.

 For SMEs, these statistics translate into practical business advantages. When customers believe in what your business stands for, you are less exposed to price competition. A clear purpose can justify a premium, attract loyalty, and turn clients into advocates as we see with Tshepo Jeans. The same is true for talent. In Deloitte’s study, 78% of people said they would prefer to work for a purpose-driven company, while a 10% improvement in employees’ connection to their organisation’s mission was linked to an 8% decrease in turnover and a 4% increase in profitability.

 Access to funding is another area where purpose can make a measurable difference. ESG-linked investment is growing three times faster than traditional capital, and investors increasingly use purpose-related criteria to evaluate long-term viability. For entrepreneurs seeking equity or debt finance, demonstrating how their business contributes to solving real-world problems can help open new funding channels.

 Building a purpose-driven SME

 The challenge for entrepreneurs is how to operationalise purpose without adding unnecessary complexity. Start by defining the differentiated role your business serves in society: what specific problem are you solving, for whom, and why does it matter? This doesn’t need to be grand. A logistics start-up reducing rural delivery times, or a fintech firm improving financial inclusion, both serve societal needs with tangible commercial upside.

 Next, embed purpose into your systems. Deloitte emphasises that purpose-driven organisations align their processes, incentives, and measurement tools around their mission. That means linking performance metrics to outcomes that reflect both profit and impact – for example, client retention alongside community reach, or energy efficiency alongside cost savings.

 Finally, communicate it authentically. Today’s customers, investors, and employees can spot tokenism quickly. Purpose should be demonstrated through consistent behaviour – fair treatment of suppliers, transparent governance, responsible lending, or sustainable sourcing. SMEs that live their purpose build trust and resilience that marketing budgets cannot buy.

 In a market as dynamic and unequal as South Africa’s, the potential for purpose-led innovation is enormous. From green manufacturing and agri-tech to healthcare access and township retail, entrepreneurs are uniquely positioned to create solutions that meet social needs while generating value. And the data now shows that doing so is not only morally right; it’s commercially smart.

Jeremy Lang, Managing Director at Business Partners Limited

*** The views expressed here do not necessarily represent those of Independent Media or IOL.

BUSINESS REPORT