SBC103 case

Case study

FiberGood’s Capital Management

 

• Introduction

Social businesses are created with the main objective of making a positive impact on the community and the environment. These organizations strive to help the common good while pursuing financial sustainability. That is why they encompass many aspects ranging from social, environmental, economic/financial to intellectual and creative, among others. One of the most outstanding characteristics of these businesses is the diversity of their sources of financing. The great diversity of capital in social enterprises offers great benefits and opportunities for growth, allowing them to meet their economic, social, and environmental objectives. A company cannot be what it is without capital, which is why all parties are important.

Throughout the development of this great project that is FiberGood, we have had contact with stakeholders, backers, partners, and volunteers, who helped us define every aspect of the project, including, of course, the human and social capital.

Every one of them has contributed things that have added up and helped build what FiberGood is now. We would not know what we know now if it had not been for the help of one of our initial social Backers: The Aquatic Ants. They contributed a lot to the social capital of our project. They educated us on the uses and process of utilizing water hyacinth, and of course, motivated us to move forward by offering their full support.

However, FiberGood does not only have social capital. FiberGood is a business with different types of capital, such as intellectual, financial, manufactured, and human capital. All of them constitute what FiberGood is.

In this case study we will discuss and further analyze the types of capital that FiberGood has, explaining each of them and offering examples that will guide and make you understand why we are what we are.

 

• Body

 

1. Intellectual Capital

Intellectual capital in a company is one of the most important things you can have, since it represents the essence and raison d’être of the business; not only refers to the fact of registering a logo or a brand, but also to all the processes and knowledge that are the basis for achieving the objective of the business or company in question.

FiberGood is a venture created by a group of students just a few months ago, so it has a modest capital, although this has been strengthened as the business partners have grown, as well as the ideas have evolved thanks to the feedback we have received from our coaches, judges, and consumers.

The intellectual capital of FiberGood is mainly composed of the production process of the Eco fiber made from water hyacinth, as this process comprises a mixture of the knowledge we gained at the beginning of this adventure, thanks to our stakeholders who already had previous knowledge, as they have dedicated much of their lives to working with aquatic weeds, including hyacinth, and steps improved through trial and error by our production manager, Diana Lugo. Also, the entire FiberGood team is part of the intellectual capital, as each member has specialized in the department they oversee, and they have applied the knowledge we have all been learning and adding it to this social business.

Finally, part of the intellectual capital of FiberGood is the very name of the project and the beautiful logo we have. Fortunately, thanks to the technology portals in our country, and the Mexican Institute of Intellectual Property, specialized in the registration of trademarks, we have made sure that there is no other company or business with the same name or logo as us. This allowed us to begin the process of registering our name and logo, which will take 6 months. Finishing this process and making it official, will consolidate us more as a company, and will give us more credibility and trust with our future consumers.

2. Human Capital

Continuing now with human capital, we can say that it goes hand in hand with intellectual capital, since the people who make possible the development of the intellectual capital of the company are the employees themselves who make up the human capital. Human capital represents the people and the knowledge and skills that have been invested in the development of the business.

At FiberGood, each member of the project has been indispensable to the successful development of the project. Each team member has assumed specific responsibilities to achieve FiberGood’s goals. Some handle finances, production, marketing, and relations management, allowing them to develop and focus on tasks aligned with their expertise, as our team primarily holds administrative and economic knowledge.

However, since the project demands certain agricultural and herbal expertise, we have partnered with the Agricultural and Rural Development Office and Aquatic Ants, as they possess the necessary knowledge to control and repurpose this invasive plant.

At the same time, an indispensable part of our project are the volunteers from the communities affected by the water hyacinth, because thanks to them, we can make our project better known regionally, and they help us to create awareness in the same community, so that FiberGood can grow. They are also a very important part of the production process, as many volunteers oversee collecting the water hyacinth, making possible the creation of our two products, the Eco fiber and the organic fertilizer made from the plant.

3. Social capital

The social capital of a company is one of the most important areas that are often forgotten, as it consists of creating relationships with people who could contribute significantly to the business, such as stakeholders, investors, volunteers, and the community in general.

FiberGood’s social capital has been built steadily since the beginning of the project, since when it started with just the ideas of the business, the members were forced to knock on doors everywhere in Veracruz and Mexico.

The first points added to the social capital of FiberGood were when we approached the Municipal Women’s Institute of Boca del Rio, in Veracruz, thanks to them we were able to learn about the growth process and the incredible things we could create with the water hyacinth, we were related even more when we went on water hyacinth collection trips and in a disinterested way, they continued to provide us with their knowledge about this plant.

Going further along FiberGood’s trajectory, our social capital also consists of our strongest stakeholders, the Water Ants and the Agricultural and Rural Development Office, the relationship we have had with our stakeholders has become fruitful because we can offer them a product or income that benefits them, at the same time they benefit us by being our buyers or who have helped us connect with other entrepreneurs, government agencies and even investors.

4. Manufactured and Financial Capital

The manufactured capital represents all the fixed and tangible assets that a company or project may possess, such as buildings, offices, warehouses, machinery, land, etcetera.

Returning to the idea of the first paragraph that has been written about intellectual capital, we must emphasize that FiberGood is an early stage project, although with a fairly accelerated growth and development thanks to the demands of the Social Business Creation competition, but this means that FiberGood does not yet have very significant fixed assets, However, it is in our plans to invest in improving the machinery necessary for the production of the ecofiber of aquatic hyacinth that we produce, as well as another part of the manufactured capital would represent the composters necessary for the production process of our fertilizer, which are already contemplated in our cash flow projections.

FiberGood as such does not have its own land or buildings, since the place we use to produce the fertilizer is rented from one of our stakeholders. Likewise, within the financial capital of FiberGood, we can highlight the investment capital necessary to be able to work at the rhythm we want, which is approximately $50,000 USD, thanks to the projections and calculations made by Karime Lazaro, the co-leader and finance manager of the project.

• Conclusion

In the world of social businesses, the comprehensive approach of making a positive impact while also achieving financial sustainability stands out as a catalyst for change in today’s global landscape. The journey of FiberGood, an innovative initiative dedicated to benefit from water hyacinth for ecofiber and organic fertilizer production, portrays the nature of social enterprises. This case study casts a revealing light on the diverse forms of capital that converge to develop FiberGood, encompassing intellectual, human, social, as well as manufactured and financial capital.

Intellectual capital stands as the bedrock of FiberGood’s existence, encompassing the knowledge, processes, and insights that define its mission. From the ecofiber production process to strategic branding and logo design, intellectual capital encompasses every facet that drives the business forward. Notably, partnerships with knowledgeable stakeholders like the Aquatic Ants and the Agricultural and Rural Development Office have fueled intellectual, human, and social capital for FiberGood.

Human capital complements the intellectual aspect, reflecting the team’s dedication, skills, and expertise. Each team member’s unique role and responsibilities contribute to the project’s development, showcasing the fusion of administrative, economic, and agricultural knowledge. Moreover, community volunteers, whose efforts extend to both awareness-building and active participation in water hyacinth collection, form an integral part of FiberGood’s human capital.

Manufactured and financial capital, while currently evolving in FiberGood’s case, encompasses tangible assets crucial to business operations. From machinery for ecofiber production to composters for organic fertilizer, the venture’s growth projections indicate a clear plan for advancing manufactured capital. The rented facilities and equipment partnerships showcase resourceful management, enabling FiberGood to optimize its manufactured assets.

In conclusion, FiberGood’s journey exemplifies the development of intellectual, human, social, and manufactured capital within the landscape of a social business. The convergence of these capital types not only defines the venture’s success but also underscores the holistic nature of socially responsible enterprises. As FiberGood’s diverse capital sources converge, it develops the business toward achieving its main objectives of sustainable production, community engagement, and positive environmental impact. This case study serves as a proof to the important relationship between various capital types, illuminating the path for future entrepreneurs seeking to make a difference in the world.

• References

Fernando, M. A. A. (s. f.). LA ESTRUCTURA DE CAPITAL EN LA EMPRESA: SU ESTUDIO CONTEMPORÁNEO. http://www.scielo.org.co/scielo.php?pid=S2248-60462013000200008&script=sci_arttext

De Urbina Criado, M. O. (2002). El capital intelectual en la empresa: análisis de criterios y clasificación multidimensional. Dialnet. https://dialnet.unirioja.es/servlet/articulo?codigo=716729