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How to create a sustainable business model

How to Create a Sustainable Business Model

Surveys have shown that over the past year more than half of consumers have actively changed their lifestyle, purchasing, and recycling habits in an effort to live more sustainably. In addition, when asked, participants rated “reducing negative impact on the environment” second in what they look for from a business. The only thing consumers cared about more than the environment was how businesses treated their lowest-paid workers and looked after employee health.

These numbers should alert you to the growing need for businesses to be creating business models that recognise the importance of sustainability.

Before creating a sustainable business model, you need to understand what sustainability is and how it can factor into a business plan. Without a foundation of careful thought and preparation, your business model won’t last and will crumble under the pressures of business.


What does a sustainable business model mean?

Something that is sustainable is something that will last beyond the present at the same level or rate it is at now. Otherwise put, it is something that meets needs in the present without compromising the needs of the future.

It follows, then, that a sustainable business model is one that generates revenue now without draining resources for business and development in the future. A good sustainable business model will recognise and value the economic, social and environmental values of all stakeholders.

It is important to make a distinction here between a business model that is sustainable, and one that focuses on sustainability. Although a strong sustainable business model must take into account environmental sustainability, it doesn’t necessarily focus on it. However, with eco-friendly trends becoming clearer and stronger, having a sustainability focus can add to the strength of an already-strong business model.

A good sustainable business model will have:

  • A plan on how to stay financially viable (economic focus)
  • A plan for staying relevant and successful in a future with volatile energy sources and rising commodity prices (environmental focus)
  • A plan to engage in society and capture the ethos of the public (social focus)

What is a sustainable strategy?

A sustainable strategy aims to unite economic, social, and environmental goals in order to create consistent business and revenue. Utilising these three areas will strengthen the identity of the business and create a touchstone for future endeavours. Creating a strategy around these three areas will help you to understand the flow of business as well: both money that comes in and goes out, as well as resources that are being used and created.

The strategy itself will assist the business in taking steps towards becoming sustainable and maintaining that sustainability in the long run. A truly sustainable strategy should be sufficient to see the business through at least 20 years of development before it needs updating.

Being strategic is not going to be quick or particularly easy. You will need to know the trends and long-term predictions relating to your industry. You will need a comprehensive knowledge of your customer base and target market. You will also need an intricate and nuanced understanding of your own brand and business values and goals.

Start with a purpose or values statement and answer the most vital questions your business needs to ask to develop a strategy:

  • Why does this business exist?
  • What solutions does this business offer and what problems does it aim to address?
  • How does this business improve society, the economy, and the environment?

Knowing how to answer all of these questions will help you to create a brand identity. Your brand identity will then inform all further decisions around modelling and strategizing for the future.

With an identity in place, it’s time to start planning out a sustainable strategy. A good sustainable strategy should include:

The strategic context: all global and local sustainability issues that impact your business now or could impact it in the future. Focusing on, and prioritising, contextual sustainability goals.

The vision: the long-range goals, aspirations, and plans for the business. Without vision, strategy has no end point, but with no strategy, vision is just a dream. Carefully lay out the vision of the business in the context of the environmental, social, and economic landscape.

Action point: all the steps you plan to take to follow the strategy and achieve the vision. A full implementation plan will make the strategy easier to follow and will give clear steps. This is especially important when a business hits rough times because having a strategy that is well-researched and carefully planned gives you something to clearly guide you through difficulties.

Timescales: a clear idea of when each step should take place. Predicted trends will factor into the timescale, as will predicted growth and business development. Have an idea of when each step should take place and how long it should take to help you stay on track and stay strategic.

Reporting: a recording and reporting plan for your strategy. To help you stay focused, make sure there are measures in place to keep you accountable to your strategy. How will you record progress” Who will be reviewing the records and reports” How will you stay accountable to your own sustainable strategy?

The trick in creating your sustainable strategy is to remember that social, economic, and environmental factors are all equally important. If your main focus is on economics and the environmental aspect is just “nice to have” then your strategy will not be as strong as it could and should be. Because all business is driven by the consumer in some way, consumers dictate what business strategy should be. Consumers are also the ones who influence social, economic, and environmental values and trends, so focusing on only one of those three areas removes a third of the purpose from your strategy.

Also remember that your business can create some of the conditions it needs to thrive and be a meaningful part of a sustainable community.

Companies that don’t strategise end up stagnating. In order to evolve in a changing market you need to be ahead of trends and you need to be able to adapt quickly. Your business will be more sustainable if you are able to write sustainability into the very fabric of your business’s growth.


How do you create a sustainable business model?

Build sustainability into the ethos of your business to tap into the over 50% of people who are changing their lives to become more environmentally friendly. There are simple steps that you can take in creating your business model that will allow you to compete for longer in this demanding sustainability shift.

  1.   Start with values

You can change a lot about your business, but you can’t change the core values once your business has grown – at least not without a lot of difficulty. By building sustainability into the core beliefs and values of your business, you create a stronger starting point that will be able to support future development.

  1.   Shape values into something valuable

Your values cannot support your business on your own. The next step is to think about how your values will make your goods or services more valuable. A fashion business, for instance, cannot rely on simply having a sustainable value, the products still need to be fashionable. But when fashion and sustainability are working together, it increases the value of the product, making your business more attractive.

  1.   Be future focused

The assumption is that businesses will grow. When you are planning your business growth, consider how increased workforce, the need for larger premises, higher energy consumption, and geographical expansion might influence your sustainability. As your business grows, it will draw more on natural resources. Your job now is to consider how you can lighten that burden by planning for sustainability in the future.

  1.   Think about your resources

Every business uses resources. Are the resources your business uses sustainable Where do they come from and how are they replenished Are your supplies environmentally friendly from source or are you only looking at them from the middle of production onwards” It is your responsibility to know where your resources come from to ensure sustainability.

  1.   Be generous

Stakeholders often place more long-term trust in businesses that have shown they value sustainability in tangible ways. This long-term trust is vital to your long-term growth. Find ways to give back to the community – volunteering, donating, going green, and joining sustainability initiatives are all good ways of giving back to the environment and the community that you want to support you.

  1.   Think sustainably

Consider ways in which your office or storefront could be more sustainable. It may be as simple as having more recycling options or changing to more energy-efficient lightbulbs. Or you could end up “greening” the whole building and switching to fully sustainable energy sources. Whichever it is, make sure that sustainability is constantly on your radar.

  1.   Promote sustainability

Finally, get your stakeholders, employees, and colleagues on board with your sustainability plans. The more support you have, the easier it will be to create corporate structures that support a sustainable business model.



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