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Want to start an ethical business? Don't forget about the business part of it

Employees sort pieces of cloth at the Estee garment factory in Tirupur, in the southern Indian state of Tamil Nadu June 19, 2013.
Mansi Thapliyal | Reuters
Employees sort pieces of cloth at the Estee garment factory in Tirupur, in the southern Indian state of Tamil Nadu June 19, 2013.

One of the advantages of co-founding a social enterprise is that people tend to like what you do. I've had countless conversations with people who become very enthusiastic at the prospect of giving back with their purchase. Before we even had the idea to start Bella Kinesis, my business partner and I felt incredibly passionate about incorporating a social angle to our business model. We knew we wanted to produce ethically made clothing and work with a foundation that improves the lives of women in a society where they are often forgotten and left behind.

This proved to be harder than we expected. We had to take baby steps to work toward this goal and create lists of what we were trying to achieve. There was nothing out there that gave us a step-by-step guide of actionable advice on how to create an ethical brand. So with that in mind, here is a breakdown of what we did to accomplish our target.

1. You know why you're starting a social enterprise, but customers may not — educate.

Social enterprises' ambition for success comes from their values. They are created to voice their social or environmental mission, similar to traditional charities with the exception that social enterprises earn their income through trading in the marketplace. You cannot always guarantee people will notice or care that you give back with their purchases, but it is important to educate your customers on why this matters to you because the only way to make a difference is by building something sustainable.

2. An ethical business depends on understanding the nonprofit universe from the outset.

The first thing we did was research different foundations. We knew what we wanted to work toward but didn't know whom to work with. We got in contact with as many people as we could who had experience working with charities. We felt it was extremely important to understand what they do and make sure their mission align with our business. A good example of this is well-known shoe brands Toms. The founder Blake Mycoskie started with the premise that with each pair of shoes sold he would send a pair to a child in need. Since then the company has grown substantially and expanded their range of products to help with other social issues and now has more than 100 giving partners in over 70 countries.

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3. Don't expect nonprofits will jump for joy when you ring them — expect skepticism.

Once we identified that Mann Deshi — which focuses on female entrepreneurship in India — was the foundation we wanted partner with, we reached out to the founder, Chetna Sinha, but she was, understandably, wary of us.

There is a misconception that foundations will blindly partner with anyone in return for donations. We needed to build up a relationship and trust with them, so we visited them in Satara, Maharashtra. The visit helped us see where the donations go and how the funding is spent. Sinha also needed to make sure that we were good enough to represent them, as we are not their only benefactors. It is incredibly important to keep in constant contact and build a relationship. As Mann Deshi is a relatively small foundation, we often get updates and personal success stories of the incredible work they are doing and can share it with our customers.

4. You are only as good as how your goods are made.

The clothing industry is among the biggest polluters. In recent years, we've seen a rise in fast fashion, which generates cheaply made and disposable garments in large quantities. With that in mind, people have become aware of their responsibility to buy into conscious consumerism. There are a few things you need to factor in when considering how to go about creating your product, such as where it is made, what will it be made from, and what is the life span of your product?

As a product developer you need to take social responsibility for how your goods are made and that only comes through research and transparency. You need to understand where your merchandise is coming from.

5. Haste makes waste, and that's not acceptable for an ethical company.

One eco label that has stood out is Reformation, founded by Yael Aflalo in 2009. After visiting China and seeing the reality of what the garment industry has become, she became determined to create an eco-friendly brand. Aflalo began designing and manufacturing in downtown Los Angeles. She opened her own factory and started to watch the trends. By noticing what her customer like and dislike she can create demand without the waste. In 2014, the company's revenue was $25 million and in 2015 it raised $12 million from outside investors.

Being part of a social enterprise is very rewarding. The business will go through many ups and down, but your drive will ultimately come from your values. When starting your company the best advice I can give you is to take baby steps, plan everything to the last detail. Now that Bella Kinesis is two years old we understand the trends better and can start to scale up. We are able to shed light on bigger issues.

Remember, the only way to make a difference is by building something sustainable.

By Shaleena Chanrai, co-founder and art director of Bella Kinesis, a sportswear brand that helps fund business education for women in rural India through customer purchases. Chanrai is also a YPO Next Generation member.

About YPO

CNBC and YPO have formed an exclusive editorial partnership consisting of regional "Chief Executive Networks" in the Americas, EMEA and Asia-Pacific. These Chief Executive Networks are made up of a sample of YPO's global network of 24,000 top executives from 120 countries who are on the front lines of the economy and run companies that collectively generate $6 trillion in annual revenue.

This story is part of NBCU's Share Kindness. Follow the series on Facebook, Twitter, and Instagram. #ShareKindness