Becoming a profit for purpose business

18 August 2021

For some business owners, making money isn’t the only motive for running a company. Here’s what it means to operate a profit-for-purpose business, and how to approach transitioning your existing business into one.


Businesses are made up of a range of different facets. They offer products or services that are needed by a specific market, they provide fulfilment and a livelihood to their employees, and they are generally run with the aim of turning over a profit.


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In recent times though, some business owners have been looking to add another dimension to their offering: a purpose that goes beyond profitability – a purpose of social impact.


These ‘profit-for-purpose’ businesses are not to be mistaken for non-profits or charities. While they operate like any other for-profit business would, they also utilise their resources to support and advocate for a particular cause and run their operations in line with the ethos of that cause.


Running a profit-for-purpose business can be very rewarding, but it doesn’t come without its own set of challenges, so being aware of the benefits and knowing how to navigate the difficulties is crucial in taking on this endeavour properly.


To gain practical insight into how operating a profit-for-purpose businesses works, we reached out to entrepreneurial sisters Jess and Stef Dadon, who recently morphed their profitable shoe business, Twoobs, into a profit-for-purpose company.


Despite seeing great success in their for-profit business, the Dadon sisters decided that they wanted something more out of Twoobs and chose to make environmental sustainability an intrinsic part of their offering.


“We realised that we wanted to use our brand to affect genuine change and recognised the opportunity we had to move toward a completely sustainable offering,” Jess told The Pulse.


The benefits of going profit-for-purpose


According to the Dadon sisters, aside from the obvious benefits associated with social impact, there are many other positive aspects of running a profit-for-purpose business.


“We found that taking our business down the profit-for-purpose pathway changed our business for the better,” Stepf said.


“Many of our customers were excited about this change, and changed from regular consumers to brand-ambassadors, something which is very difficult to achieve without standing for a purpose.


Stef also emphasised the benefit that this move had on their business’s employees’ approach to their work.


“It’s difficult to motivate young people solely based on mercenary rewards. We found that adding a purpose beyond profitability to our offering gave our employees a level of excitement and fulfilment that had not been there before.”


“The follow on impact on the rest of the business was just amazing to watch.”


Having successfully transitioned from a regular for-profit business to a company that is driven by purpose, the Dadon sisters had a number of pointers to share with other business owners contemplating making this change as well.


1. Consider your motives

The first pointer, which came from Stef, was for founders to make sure that their motives for making the transition come from the right place.


“Making the change to profit-for-purpose should not be in order to introduce something exciting into a mediocre business model,” she said.


“Impactful change occurs when founders are confident about their ability to run a successful business and have strong relationships with their customers and employees.

“Make sure you tick those boxes before venturing down the profit-for-purpose route.”


2. Transparency makes all the difference


The next piece of advice came from Jess, and it was all about being genuine.


“Don’t oversell your impact,” Jess said.


“Offer full transparency to your customers and employees. Don’t just use buzzwords and throwaway lines in your marketing communications. Make sure to find out where your ability to affect change actually lies and tell that story to your customers.


“By being honest with your people, you’ll receive the credibility you need in order to bring them along the journey with you.”


3. Purpose requires education


The next tip that both Jess put forward was the important role that education plays in devoting your offering to an important purpose.


“Self-reflection and education are two of the most important parts of starting a profit-for-purpose offering,” she said.


“When we started, we had no idea about what sustainability actually was, and what it meant to the two of us as individuals and business owners.


“We did months of thinking, reading and learning, just to make sure we were setting ourselves up to do it right, and the learning is ongoing.”


4. Expect some disappointment


The final pointer came from Stef, and it was all about bracing oneself for the downsides of changing your business offering to operate in line with the ethos of your purpose.

“Running a profit-for-purpose business requires passion, and the reality is that not everyone will share this passion, and some may even take a disliking to it,” Stef said.


“If you’re not disappointing someone, you’re not pushing forward, so when taking on this big task, don’t be afraid to lose some of your customers.


“The depth that you will create within your business will not only make up for it but will ultimately make your business stronger than ever.”


Running a profit-for-purpose business isn’t for everyone, but for those who do decide to take it on, the advice here is clear.


Having genuine motives, being completely transparent with your people, upskilling on your particular area of impact and preparing for some disappointment along the way will enable your business to enjoy all the benefits that running a purpose-driven company has to offer.

The art of delegation

11 August 2025
How often do you get to the end of a working day and wonder where the time went? Perhaps you never got to item 3 (or even item 1!!) on your to-do list. How can you solve this problem without working longer hours? The answer is very simple, but the art in the solution is where the gold is. The answer to free up time is to delegate more – either to existing team members, new people you recruit, or externally to outside contractors. However, if delegation were that easy, everyone would be doing it now, right? So, what is the art of delegation? We say art, because delegation is not an exact science; different approaches are needed depending on who the ‘delegate’ is. Time and effort are required to effectively pass on tasks to others. Often, the time the delegator needs to put in initially is greater than if they did the work themselves – that’s why so many people don’t delegate. The view that ‘it’s quicker for you to do it yourself’ holds you trapped and unable to be more productive and effective yourself. It also stops others from developing better ways to do things than you already know, i.e. if you teach them your way, then they can master that AND add their own value – two minds being better than one. Here are some essential principles to apply to help you to delegate (as opposed to abdicate!): Delegation Assess the task, issue to the right person and support - helps build trust and respect Be specific and crystal clear for greater communication Request they repeat back instructions, so you know you were understood, enabling higher productivity Set a time frame and request clarification that the task has been achieved, ensuring jobs are completed on time and are profitable Both parties to review - opens the door for future work Abdication Issue tasks to anyone and forget about it - shows distrust and a lack of respect Giving unclear and little information results in poor communication Don’t ask if you were understood - results in low productivity Don’t set a time frame – it can mean jobs are delayed and over budget Different expectations can result in disgruntled clients No review results in no future work Delegation is a skill to be learned; applying these principles consistently will ensure long-term success. “No person will make a great business who wants to do it all himself or get all the credit” – Andrew Carnagie Action list: Which tasks am I currently doing that I could delegate to others? What can I do with the time I free up? Who are the best people for me to delegate these to? (Make sure they want to do these as part of their career development). What is the best way to document what is expected and how it should be done? What support and review process is needed to ensure success?

Work vehicles? Stay on top of tax with logbooks

11 August 2025
Logbooks are useful records of business expenses relating to work vehicles and this is important when calculating what tax deductions you can claim. Depending on your business entity type, different tax rules apply when you use motor vehicles to earn income, and you might use a logbook to track expenses in different ways. Sole traders and partnerships can claim income tax deductions for motor vehicle expenses if the vehicle is used to help earn income for the business. If you don’t use the vehicle exclusively for business, you can’t claim 100% of vehicle expenses. You need to work out the business use of the motor vehicle to calculate what deduction you can claim. You can do this either by using a logbook to track actual costs or using a logbook over a test period to establish the average business usage. Companies are a bit different. Where company vehicles are used partly to earn income and partly for private use, vehicle costs associated with private use are liable for FBT. Companies can use logbooks to keep track of work-related costs and show either that the vehicles are work-related vehicles which don’t attract FBT where used for work purposes only, or that FBT is accounted for correctly where there is some private use of other vehicles. The logbook becomes a record of work-related use and of private use subject to FBT. Where a company restricts private use of the vehicle, a logbook is used as evidence that employees have complied with the restriction. Whatever type of business structure you have, we can advise you on keeping good records and understanding what you can claim.

Changes to KiwiSaver: How to get your business ready

11 August 2025
Major changes to KiwiSaver were announced in Budget 2025. The KiwiSaver voluntary savings scheme is aimed at helping New Zealand workers save for retirement or buy a first house. But with the rising cost of living, action was needed to make KiwiSaver fit for purpose and more fiscally sustainable as a savings scheme. How will these changes affect your employees and your small business? Let’s take a look at the details of these KiwiSaver changes. Changes affecting your employees First off, let’s outline how the initial changes announced in Budget 2025 will affect your employees and other Kiwi workers: Since 1 July 2025: Younger workers will qualify for government contributions: People aged 16 and 17 will qualify for government contributions, so long as they meet other eligibility requirements. Prior to 1 July 2025, members must be 18 or older to qualify. Government contributions to halve: The government KiwiSaver contribution will halve, reducing the maximum government contribution from $521.43 to $260.72 each year. High earners to lose government contributions: People who earn more than $180,000 of taxable income in a year will no longer qualify for government contributions. No change to 2025 government contributions: There’ll be no change to government contributions for the year ending 30 June 2025. These will be paid in July and August at the current government contribution rate. Changes affecting your small business Next, let’s lay out the KiwiSaver changes that will directly affect your business: From 1 April 2026: Employer contributions will rise to 3.5%: From April 2026, the default KiwiSaver contribution rates for both employers and employees will rise to 3.5% – up from 3%. Employees can choose to remain contributing at 3%: Employees who are members of the KiwiSaver scheme will be able keep their contributions at the current rate. They can apply for a temporary rate reduction from 1 February 2026, if they want to continue contributing at 3% from 1 April 2026. Employers can match the rate reduction: As an employer, you’ll be able to match your employee’s temporary rate reduction. Once your employee moves to a higher contribution rate, you’ll need to increase your employer contributions to the default 3.5% rate. Inland Revenue will notify you of this change. Younger workers will qualify for KiwiSaver contributions: People aged 16 and 17 will qualify for employer contributions. If they contribute to KiwiSaver from their wages, you will need to start making employer contributions. From 1 April 2028, the default contribution rates for employers and employees will rise again to 4% (up from 3.5%). Getting ready for the KiwiSaver changes These amendments to KiwiSaver could have a significant impact for your small business. Increased employer contributions will increase your payroll costs and stretch your cashflow, as will making contributions for younger workers in the 16 to 17-year-old age bracket. You'll also need to update your payroll software and processes, to ensure you’re making the correct contributions for the right people, at the right rates. 
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