This blog is about construction, but its mostly about the business of construction. Construction thrives on your small business’ success. But in the past few years, we have seen serious decline in the long-term success of new business launches. That is where the B-Corporation (Benefit Corporation) might help – a new business model built to sustain. Have you heard of a B-Corp?
If you haven’t yet heard about B-Corporations, don’t fret. The B-Corporation was a private endeavor, formulated by a bunch of business gurus who were fed up with the traditional business model. Their goal was to promote social and environmental sustainability and accountability of business leaders. So, a few years back these leaders formed B Lab, a non-profit organization that performs third-party certification of your business.
At first glance, I was impressed by the B-Corporation standard. The model requires utilization and maintenance of local and sustainable resources, environmental consciousness in the office, and the fostering of a healthy business constituency. But most intriguing was the accountability standards, which I believe will drastically improve a B-Corporation’s attractiveness to investors, public agencies and contracting partners.
B-Corporations demand the best of their business leaders. The goal is to look after the needs and interests of all players, including employees, subcontractors and other interested parties. Through a well-written operating agreement or bylaws, your company can operate within these goals, better assuring your business partners that your business will sustain for years to come.
B Lab has been pushing their business model around the nation and its finally beginning to be absorbed by lawmakers. Some states have already enacted laws to formally recognize B-Corps as a business entity. Virginia, Vermont, Hawaii, Maryland and New Jersey are the first to take this action, but another 6 states have pushed similar legislation. Additionally, the City of Philadelphia enacted a tax benefit for certified sustainable businesses. States like Oregon and Washington already have some B-Corporation members, making a part of the nearly 500 member corporations to date.
The B-Corporation model is incredibly beneficial in the construction industry, where regulators and public agencies persistently worry that business owners take advantage of laborers and operate without concern for the future. I have already assisted contractors in their pursuit of the B-Corporation standard, and I believe that Washington will soon contemplate legislation to formally recognize the model.
1. Take and pass the B Impact Ratings System. This is an online benchmark, which ensures that the company is operating within the intended framework.
2. Adopt the B Corporation Legal Framework. B Lab provides some standard language for your Articles, but the assistance of an attorney can help add operating language to your Bylaws, Operating Agreement and/or Employee Manual.
3. Sign a Term Sheet that makes your certification official with B Lab. This step ensures that B Lab certifies your business, and that you can call yourself a Benefit Corporation.
Contact your attorney if you have questions about moving forward with B-Corporation status. Congratulations on making a great business decision!