How Businesses Can Do Good and Still Make Money

Jason · 00:00Welcome to episode 256 of the Numbers Game. I'm Jace. I'm here with Nick and Marty. And Marty, you've got a interesting one for us today. I don't even know where to start and where to finish, so I'm not even gonna try and make a joke mate. What is happening? Well,

Marty · 00:13well, mate, you might remember a few episodes ago, going back a little while that I bought and cracked open a can of liquid death.

Marty · 00:21You know, in regards to how to make water interesting, water exciting. So today you'll have to go to YouTube, but today I bought a roll of, uh, toilet paper with me. Now, unlike the liquid def, obviously not demonstrating this one obvious reasons, but, um, it's just an interesting company in regards to, uh, who gives a crap.

Marty · 00:43I just noticed this, uh, toilet paper around our house all of a sudden, and I'm not, you know, my wife's much more conscientious with this sort of stuff than I am, and I'm going, why have, why have we got this in the house? Like, I'm seeing this, it's all fancy colors and everything. And, and then she goes, oh, it's.

Marty · 01:00Going towards a really good cause. It's, um, they basically, you know, help sanitize, you know, countries overseas with toiletries. And, um, I'm going, uh, okay, that sounds good. Uh, but how does it work? And I had a look into the company and it's been, it's been around. I know how it works. But you, you gimme some advice in regards to this, but, uh, I, I've got questions,

Jason · 01:25but they're not appropriate for this format.

Jason · 01:27Back front.

Marty · 01:28Front the back. Yeah. That was it. He got me. Yeah. Yeah. Well, you know, it's, um, you know, use your imagin standing, standing up, sitting down. Yeah. There's a blow out

Jason · 01:37there.

Marty · 01:37There was a business angle, not just the wiping angle. Ja. So it, um, the interesting thing for me was, um, when I looked up the business, and they've been around since 2012, but there.

Marty · 01:49Their charity work, their mission work is directly related to their profitability, and I really kinda like that. So even though they had a mission to, you know, give good sanitary toiletry, you know, all around the world, um, it was linked to a commercial, um, expectation. So you see a lot of the times, you know, businesses are very mission driven.

Marty · 02:12And, you know, sometimes they lose money and they get a lot of charity money and stuff like that. But I kind of like the idea because obviously the people are buying it, uh, invested in the mission beyond just the use of a boring product. Right. And then obviously staff are getting on board. They're feeling like there's a bigger purpose than just, you know, making money into the business, and they're giving away, obviously, 50% of their profits.

Marty · 02:38So the growth is linked to the mission and I just. Got to thinking, how, how do we need to be thinking about this moving forward? And I'm not saying give away 50% of your profits, but like, like they're doing, but. We all sort of give some money to charities on various different things, but how often is it actually the business is led from that perspective?

Marty · 03:05Like, this is what we do and this is why we do it, and then our. People that use the product become our advocates and get us out to the market. So we might not have to give away 50% of course, but maybe it's 10%, but it's a purpose led mission. So I just found it interesting and it sort of reminded me a little bit of liquid death too.

Marty · 03:25'cause it was, you couldn't get more boring a thing. And yet, here we go.

Nick · 03:30Thoughts? I, I love the theory. Um. Just thinking about our own business and you know, what we, in, I, I think, think you get involved in charities or you get involved in, you know, things you think are are ethical because. Not because you feel like you should, but you almost want to, to give back.

Nick · 03:50But I guess what you are talking about is your, I guess that um, that driving your underlying strategy and also your, your marketing at the same time. Um, so I don't mind it. I'm just thinking could you do it with any business? Um, probably not. I dunno.

Marty · 04:10Yeah, it's sort of humanizing business, but the starting point is the, is the mission itself, which is interesting.

Marty · 04:17Take.

Jason · 04:18Yeah, I'm just finding, I think I just went to a presentation recently with Simon Griffith, so I'm just trying to find, there you go. Uh, there we go. Yeah. Who's the founder? I attended a night with Simon Griffith recently. Um, so who gives a crap or a certified B Corp. Um, so B Corporations go under an assessment to be.

Jason · 04:33Given a B Cer B Corp certification, um, and the Commons, which is uh, my, our offices at Future advisory use forum, which is part of the commons. So Simon came along and did a fireside chat, um, and answered a bunch of questions and it was really interesting. A lot of people there are amongst the early, the early people who were that charitable.

Jason · 04:53You know, if you buy from us, this happens a bit like, thank you water back in the day. Mm-hmm. You think about where thank you water took off and it was, you could track every bottle or everything that you bought from, thank you. Water then showed you where it was impacting the world. So it did tie that, that powerful.

Jason · 05:09Why, like, you know, if you're gonna buy a toilet paper, you might as well have an impact where, where you're having a benefit somewhere around the world. Um, you know, if Sorbent or Kleenex or whatever the brands are, why make them more profitable and not really see a benefit out of it. If you can buy thank, um, who use a crap, now I'm getting all the brains confused.

Jason · 05:27Yeah. You know, we, and it's funny, you know, uh, those toilet paper rolls are across all of our offices, um, or all of the Commons and Forum, you know, I traveled to Sydney recently and, you know, went to the bathroom at the Commons, and there it is. So, um, I think through those partnerships as well, um, the branding's really great, obvious.

Jason · 05:45And that that connection back to a real meaningful thing, uh, makes a lot of sense. And it does make you think in, in your business day to day. Is there a way you could tie in something that is meaningful or purposeful, that that has a bigger impact beyond just, you know, and obviously business exists to make money and that's not a bad thing.

Jason · 06:03Um, but, you know, is there a way you could tie it into. Driving and gamifying or make, making it more exciting and more purposeful. Yeah.

Marty · 06:11And, and business. It's, it's there to make money. And what I've seen in the past, like, I always remember there was a US company, and I forget what they were called, but every time they sold a pair of sandals, you know, someone in a third world country or get a pair of sandals as a, you know, as a gift, but they come out of the gross, you know, the gross, uh, you know, revenues.

Marty · 06:31What I, what I like was the business thinking around, um, the profit. Being the hero of the story and doing more good, the more you know, the more profit that was made in the business. And even in regards to, and this was not this financial year, they haven't updated their figures, but I think they had a 70 mil turnover and they donated a record 5.85 mil.

Marty · 06:54Um. Towards, uh, their mission. So I thought, I, I actually like the fact the better we do profitability wise, just the discipline of it, the more good we do around the world and everyone is on, including the clients, everyone's on that mission and that makes profitability okay, all of a sudden. And as it should be really in business.

Marty · 07:17So there's gonna be a counter argument because. I sort of thought to myself, well, like the Royal Children's Hospital do so much good and they need donations and their cause is they're doing so much good. So it probably wouldn't relate to something like that. But I think, you know, medium enterprise type businesses, um.

Marty · 07:38Could lead in with something like that. And I always remember, um, for me, when I was 17, I might have spoken about this before, I did a what Works business course in, uh, and it was council, uh, led. So obviously council gets all the rate payers money and what they were doing were investing back into the youth, into the area to be entrepreneurs.

Marty · 08:01And I got more out of that 12 weeks of learning about business that. Than I did in the last three years of school. And because you got a plan of attack, you could state your vision for your business. And for me, I ran standup comedy nights in the Yarra Valley, but the purpose was connecting community through fun, laughter, and good humor.

Marty · 08:26And that was actually the purpose drive. And we were feeling, you know. Pubs with a hundred people in those pubs and learning so much in marketing, going on radio, going to local businesses, filling those rooms even in regards to, um, you know, getting a clip of the bar tab as well, which probably shouldn't have been doing as a 17-year-old.

Marty · 08:47But hey, you gotta. You gotta cut your jib in life, right? But it was, it was, it was a fantastic initiative, um, from council. It was purpose driven to really fuel young people to make an impact in the local area. And I just was thinking about, like, I thought future advisory, like future preneurs, you know, what are we doing to stimulate our youth coming through?

Marty · 09:11How do we, how do we do this to better effect. Um, not so much just pure charity, but how could we do it maybe in a progressive sense, in financial literacy and, and really empowering young people to take that step and build their first business before they, before they buy their house. Maybe they could get a 500 grand exit and, uh, buy their house outright.

Marty · 09:32You know, you never, you never know. So they're the sort of things that were running through my mind and, um, yeah, I, I thought, yeah. We probably don't think about this as business owners enough. Yeah. So,

Jason · 09:43yeah, I, I think for me, for me, my brain's gone to a bit of a weird point here and let me elaborate. I think it opens up.

Jason · 09:52Judgment to be able to do something like that. So in just a few little searches, you know, I've had a look and gone, well, uh, who gives a crap raised 41.5 million a couple of years ago in a cap raise. Yeah. And it's like, okay, cool. So what, what, what did that 41.5 million get used for? And again, just, this is my, not a judgmental thing, but so the way the brain works and the, the general public are gonna go, well, hang on a minute.

Jason · 10:16Like, I'm buying this toilet paper and money's meant to be going to charity, but they've raised 41.5 million. And, and as long as the thought process is that, that is then helping them reach more homes, get their toilet paper out there, so then there will be more money that goes towards this charity, if that is what the whole purpose of it is for.

Jason · 10:33And yes, there's an element that's about profit, but also there's an element of having enough profit to give half of it. To, you know, to charity. And then it talks about in one year they had a great year and they had a 750% boost in profit and donated, you know, nearly 6 million back in 2020. The following year they had.

Jason · 10:52A bad year and they only donated 2.5 million. So business retracted COVID, that's business. You know, those kind of, that is business. So it's very much, even though they're not a publicly traded and their financials aren't publicly available, if they then go and talk about what donation they made to be transparent.

Jason · 11:09To the public essentially. Then it opens up the thoughts of, well, what's going on? You know, with that, they've got some great investors though, I think, um, Canon Brooks, uh, got involved. Um, so, you know, he, he's often quite big in, in venture cap, uh, you know, backing things that, especially in the Australian startup scene, I think he's got a deep care of trying to do better in Australia.

Jason · 11:29Um, so it's interesting to go where, where do you go with that? And I think of some other ones. Then. You guys heard of 1% for the planet.

Marty · 11:38No, I don't.

Jason · 11:39No. So, um, Carly Carly, who's a friend of the show, um, Carly, uh, runs a business called Code Accounts and she's over in Perth. Um, she's has a deep love of the planet.

Jason · 11:49She loves diving, um, you know, loves the ocean, and she's aligned her business model with a, with an organization called 1% For the Planet. It means that 1% of everything, um, that goes through her, her organization, she will donate to 1% for the planet, which then goes on to, you know, the, the things that they support.

Jason · 12:08So Patagonia is an example of a business who's on 1% for the planet. Um, you know, as, as probably the biggest, you know, most well-known brand. Um, they're involved in that and I think they've, they've donated more than. 800 million in certified giving over the years. So all of a sudden, you know, that's a pretty, pretty impactful thing.

Jason · 12:26If you've got 1% of, you know, of a particular, whether it's revenue, um, or profits, depending on how, how the model works or from your side, but that's huge. 800 million, there's from a lot of businesses doing it, there's some big impact that can be had there.

Marty · 12:41But that's, that's good will, isn't it? Like, that's good.

Marty · 12:44Will that, she's doing that, which is tremendous. I have no, you know, I think that's, that's wonderful. She does that, but. Can the mission drive the profit? Is that okay? I know you say it's, it's judgmental. I love the fact that everyone that makes a purchase actually incentivizes that benefit to the mission.

Marty · 13:03Uh, 'cause that, that, that's building up your pipeline from a commercial perspective. Um, there's, there's something unique about that, that, um, that sits better. Uh, just for me as a, as business person, right?

Jason · 13:18Oh, the, the world needs more people trying to do good things and, you know, building toilets, improving sanitation in a, in the developing world, I mean, that is impactful and meaningful.

Jason · 13:27So I think they're doing a great job. I think it's just the business brain goes. You know, how much, how much do you do, how much do you show, and how much of an impact does that have on people's decision making? Like if I'm in, uh, Lana, in South Yarra has the, who gives a crap toilet rolls for sale on the shelf there?

Jason · 13:44You know, how many people are picking them up and going, yep, I'm gonna buy this because of the impact that it's having Versus clever branding or nice marketing or a nice product. Like, I think you've still gotta have the fundamentals, right? The toilet paper has to feel good and and be as good as,

Marty · 13:57yeah.

Jason · 13:57The one that you usually use as well, if it's. Crap. Then

Marty · 14:00well, good people like my wife buy that type of toilet paper for, for both. I would suggest that I've had no complaints so far, but, uh,

Jason · 14:10good to know.

Marty · 14:11But, uh, I, I just, I just like to think about, you know, the youth coming through, whether that is a driver, like they wanna be a part of.

Marty · 14:22A meaningful business. And maybe it's a, it's a slant that if young entrepreneurs are thinking about that it could, it could be mission led, but still be very commercial. And I think this could be the changing, changing of, of face of business and it could be a really lovely entry point for people to utilize that and build awareness around what they're doing rather than it being in reverse that we've done.

Marty · 14:48Well now we're going to donate. Um. No, this is what we're doing and it's in direct alignment with the product they're selling or the service they're delivering. Um, and I, like I said, even, you know, future preneurs, I was thinking not, not how to do this Jace by any stretch, but I'm just thinking what I went through with what works.

Marty · 15:07I think about some of the lessons and the first thing they said, you know, the first thing you need to do is prove that you can, the market's gonna buy what you want. Yeah, so I've met so many people over the journey that think they have a great idea that nobody wants, you know, and they're going, the execution is actual sales.

Marty · 15:27So instead of beautifying your business, go and get sales. You know, make sure it's viables. And then beautify in regards to as the profits come in and the revenues come in and so many people come unstuck on that one basic fundamental where they make the business look so good, but there's no revenues coming in.

Marty · 15:46And they said, and the one thing I always remember, they go, like a lot of people that invest in these IPOs, they talk about, um, pre-revenue. They said, never think like that. Think about revenue, think about adding value to the market. Think about the market, giving you that feedback of value. And that will be, you know, showcased in regards to the return you are getting and the sales you are making.

Marty · 16:12Pre-revenue is a very dangerous game in small business if you're thinking that way. Mm. Um, because you're doing everything else other than actually doing the thing that gives oxygen to the business so you can breathe and then. Mold your empire as you go. But even that one lesson, uh, like I never forgot it, and.

Marty · 16:32People laugh at me because I always go, all right, just make sure that what we're doing is valuable to the client and that we can at least have 20% profit margin on the back end of it. Let's manipulate work at whatever the case may be. We need to make sure that sales we're adding, meeting expectation, exceeding expectation, the client they're buying, we get proof of concept and we're actually keeping some of the money.

Marty · 16:57So very, very. Basic, basic stuff, but invaluable to me. And I've held the like, even though it's adapted, but I've held onto a lot of those learnings from the early days.

Nick · 17:11Can I just, could we just dig into the numbers? And I know the numbers might be high level 'cause they're not available, but Yeah. Have I got this right?

Nick · 17:18Um, in saying they turned over 70 mil

Marty · 17:21Yeah.

Nick · 17:23And they gave five mil away. Yeah. Which is 50% of the net profit.

Marty · 17:29Yep. So they'd be at around 11, I think they're about 5.8. So 11.6. Okay. Which is still not a high, high profitability margin.

Nick · 17:37No, it's not. And look at, mate, I don't know what the norm is for that type of, um, product.

Nick · 17:43So Jason, you're saying they raised 41 million, uh, through a cap raise? Mm-hmm.

Nick · 17:51Who do you think? I'm just asking and again, this is the judgemental piece, but I think it's not even being judgemental. 'cause at the end of the day, they gave away five mil more than what Innovate did. So I don't think you can judge. I think it's awesome what they're doing and five mil more than probably the business next door.

Nick · 18:08But do you think this is, um, a social kind of awareness of philanthropy? Play or do you think this is a smart entrepreneur going, how am I gonna build a business?

Jason · 18:24A combination of, of all of it, I reckon. Um, I, I think. I think you've to, to actually make that a reality, you have to care and you have to wanna do it.

Jason · 18:32'cause there's so many moving parts that could end up with it falling over to then go down the path of being B Corp certified. You are opening up your books to them to certify. So there's a level of transparency there as a private company. But at the end of the day as well, I mean. If, if you bootstrap it from the start, they talk about taking on debt to build working capital to be able to then get the stock that they need.

Jason · 18:55Um, remembering as well that I, I'm pretty sure early on they were ultimately subscription and online only. I don't think they were in stores in the early days. So yeah, to also change people's mindset from very much an example of B Case and I will get down to the last roll and go, shit, we've gotta buy toilet paper and it'll be, because we're thinking of at the last minute, we're duck into Woolies.

Jason · 19:16Grab our favorite roles, whatever. And at the moment, you know, that's, that's the re revolving cycle as opposed to ch that change manager of actually going, you know what, what if I just click the subscribe button And every 1.5 months a box of who gives a crap would land at the front door down there and it'd sit there and I could grab it on my way in.

Jason · 19:34And one less thing that I have to do as a, as a busy professional is to worry about buying toilet paper. Mm-hmm. They, they tried to change that model, which meant investment, getting the online store set up, getting distribution, warehousing, all the rest. So I'm sure they. Copped a lot of costs. Then raising, I guess they, a part of that raise was then expanding into the us, uk, New Zealand, so on and so forth.

Jason · 19:59So I guess those, but at the same time, I'm sure the founders probably got a, you know, a good payday as well. They've built, set an epic company and, and so they should. Um, but I think it is then when you tie into. The profit, half a profits being donated charity. There is that I, not a stigma or there's something there that just makes you go a bit like, oh, like, you know what, what is it really, do they really care about that Or, or was it something else?

Jason · 20:22And I think it can be both.

Marty · 20:23I kinda like it. Because it's not like everything else. And, and I don't know whether I'd buy it on subscription either. I, I think it's one of those things that you just ducked down and you grab, you know, grab. I, I don't, okay. You've better plan, you've got better planning than me on that.

Marty · 20:39And, um, no, I

Jason · 20:40just, I've just saw the time of, uh, time of, um, recording now. It's, uh, around Halloween. So they've got the spooky edition and the toilet rolls are wrapped in like, you know, uh, you know, a black cat and, you know. Schoolies zombies and stuff, so you know, a bit of fun for your Halloween themed toilet party.

Marty · 20:59But I just, I just like, again, something so boring, like toilet paper could be recreated into something that actually adds a benefit. You know, socially and, uh, to community, but also, you know, embraces that, uh, still that capitalism of, of wanting to build a profitable Yeah. You know, really strong business.

Marty · 21:19So to me, that was the attraction when I, when I read into it a bit more and I just, uh, I just feel like younger people are, certainly people I talk to are very mission led, more so than in our generation, and I quite like that, but I don't want them to be mission led at the expense of running a poor business.

Marty · 21:37Right. So that, that to me is those, those two principles coming together could, um, just produce some, you know, really good opportunities in any type of boring market or exciting market.

Jason · 21:50I think as well, you know, to use an example from, from the accounting side, there was a firm, um, up in Brisbane gonna cook their name, I think it was Inspire, inspire ca, um, and they became part of an organization called Buy one, give one, or B one G one.

Jason · 22:05And it's business for good. And essentially, rather than it being about money, like being about how much money. So let's say right now we're talking about, you know. Who gives a crap, did 5 million, but they had 70 million turnover, and then your brain starts cogging. This is more for every tax return. We will donate drinking water for a year to a child.

Jason · 22:27And all of a sudden it's about the impact. So to make sure, you know, a child in a, in a third world area can have drinking water for a year, it might cost $5. But if you tie it to the impact to say we did a thousand tax returns this year, which meant that we provided drinking water to a thousand people for a year.

Jason · 22:46Impact has a big, big kind of part of, you know, the, the way our brains work together. Oh wow. A thousand people got drinking water because you did a thousand tax returns. That's cool. So that, that is an example of a business where if you are thinking, you know what, you know, this is stir a thought in me, I wouldn't mind doing something for good that doesn't necessarily strip me of half my profits business as tough enough as it is.

Jason · 23:08But maybe I would like to have an impact where it might be drinking water. And then you can choose, like, the size of the impacts obviously have a different cost on, on this particular platform. And you pay a membership to the platform, which means that 100% of every donation flows through to the, to the end user of the charity and the organization who runs it, they make their money off the annual subscription for managing the relationships and, and having the, the charity partners on board and the businesses on board.

Jason · 23:37Um, the example then, where it goes up a little bit more might be, you know, we, you know, Greg loves running. So to be, every time somebody books a consult with Greg, we could donate a pair of shoes to someone who doesn't have shoes and that that's, you know, just ties in. So, yeah, I mean, look, it's something we've, we've, I've had in the back burner in my mind for a long time.

Jason · 23:54Yeah. So Marty, this is a perfect opportunity to revisit how we can run a business and have impact, you know, run a business for good and make some good impact as well.

Marty · 24:03I think Jay sometimes, you know, businesses do good things without building awareness, uh, around it, just for the sake of doing good things.

Marty · 24:11Like I know for instance, innovate does, uh, you know, wellbeing, financial wellbeing seminars to partners and, you know, people to attend that. And I go that, that's not marketed, but that's just, you know, supporting people on their career journeys to, you know. Make better financial decisions. So, you know, stuff like that is, you know, it's not, it, it's not widely marketed, just purely for the case of it's, it's something great that we can do for partners, but there's still a tangible, you know, business benefit in doing that type of stuff.

Marty · 24:43Building depth in relationships as well. So it's, you know, businesses do it. But I guess it's just about, like you're saying, Jace, is how are we thinking about this as a, you know, as a mission led, where everyone's involved to be, you know, create a better future and build a bigger business through that future as well.

Marty · 25:02And everyone continues to win. Not, not saying it's, it's a hundred percent right, but I like the angle of it because it's unique and it's not one way. The other, you know, it's, uh, yeah, it's interesting. Yeah,

Jason · 25:16I, it too. I think, you know, most, most business owners would love to do more good in the world. Um, but it's about making it simple.

Jason · 25:22Um, making it something that, that is rinse and repeat and doable rather than if you constantly have to stop and think, oh, what's the next thing we should do? What's the next. Charity day, we should have, what's the next way we can impact? I think that puts a barrier in the way like, you know, we, we've in the past had a, a bike building charity day where we build bikes and give it to, to children who, you know, can't afford a bike or families that can't afford a bike at that time.

Jason · 25:46And it, and it was great from a team building experience, awesome. From the way we spent our money and our team's time and the way we got together. Awesome experience. But then you go back to work the next week and it might be. A month, three months, six months before you think of the next thing that you could do as a team.

Jason · 26:01So, yeah. Yeah, I think, um, anytime you are gonna do something like that, it's great to kind of have. A way you can build in a process around it and, and something that is deliberate and considered as a firm or a business, something you care about, something you can put your name to, and then make that something regular and recurring that brings a cultural impact, ties in with your values.

Jason · 26:22And then, you know, again, not everything is about. The outside world, percept perception. Sometimes it's about the inside world of your firm as well, what it does for your culture and, and the team.

Marty · 26:31Yeah. Well, there you go. That's, that's all I had boys, but I just, uh, you know, I just wanna bring something a bit, uh, unique, but definitely on the liquid death theme.

Marty · 26:38But I feel like, uh, this, this had a bit more, you know, depth to it.

Jason · 26:42Nah. No. Very good. Marty. Look, I think, uh, as someone who sees the, who gives a crap tour that rolls every day, uh, you've definitely got my mind ticking. And now even thinking about 1% for the planet and buy one, give one, or business for good, you've just re-lit the bit of the flame of, oh, I think there's more that we can do out there.

Jason · 26:57And, uh, excited to go and revisit. Appreciate you sharing that. Marty. If you've listened and enjoyed, please like, subscribe, give us a follow or a subscribe on YouTube. I should get all my terminology right. Been an absolute pleasure having you join us again, and until next time, it's

Marty · 27:12very rare that your bum can be a hero.

Marty · 27:15Game over.

Jason · 27:17This podcast is for educational and informational purposes only. The conversations are of a general nature and do not qualify as financial or tax advice. We recommend before you make any financial decisions, you consult a licensed professional. Individuals on the podcast may hold positions in the company's discussed. ---