How can Businesses be more Profit-Driven & Sustainable?

Adopting sustainable models and practices into business strategy is becoming more and more popular in recent times. Research studies published by premium management consultancies in the world show that sustainable practices drive profitability, efficiency, innovation, and exponential growth. Developing sustainable strategies encourage businesses to optimise resources while increasing productivity which results in constant product innovations. This automatically drives down the costs and increases profits.

Many companies are now appointing a Chief Sustainability Officer (CSO) who designs sustainable policies and initiatives in line with the business goals. The R&D function is gaining popularity since there is a constant need to innovate sustainable products to satisfy the needs of clients or customers. Governments are supporting business owners with incentives for being environmentally friendly. With more and more sustainable businesses coming up, the government is tightening the limits on pollution and emission levels.

Before delving into business growth tips and how to make the business sustainable, let us first understand what sustainable business models mean and their impact in the context of businesses.

Sustainable Business Model

If your business focuses on its impact on natural resources and the surrounding environment, along with ROI and profitability, you are said to have adopted a sustainable business model. At a business level, sustainability is taking time and effort to recycle and conserve non-renewable resources, optimising energy usage, and minimising the negative impact on the environment.

Why do we need these sustainable business models for businesses?

These models by definition, create lasting value for the business and enable durability and resilience. It makes the business more attractive and changes the perception of customers, investors, employees, board members. It is commercially viable and drives profitability.

The adoption of a sustainable business strategy helps in scaling exponentially with less risk and acts as a differentiator in the market, which in turn increases the competitiveness of the business. Commoditisation is reduced, and an environmental surplus is created. It aligns the business with the emerging environmental trends. Impacts the business ecosystem is reshaping into other dimensions. Augments the social purpose of the businesses as a whole.

How to make a profit in business? — 6 Key Sustainable Business Tips

1. Have a clear vision, short-term and long-term goals

Before you even begin to think about building a sustainable business, understanding the need and connecting with the issues is necessary. Do diligent environmental study/research and analyse the damages that we create on a daily basis and their impact on the natural resources and the planet. A personal connection is more effective and gives a clear perspective on “why”. Make the entire organisation understand and empathise with the idea of sustainability, carbon footprint, and everybody aligned before you begin.

Have a holistic vision for the entire business. Make the short-term and long-term goals clear to all the stakeholders. For example, the goal can be to reduce the carbon footprint by 20%, or supply chain pollution optimisation. Develop clear goals and plans and communicate effectively.

2. Develop Sustainability as a Core Principle

Developing the idea of sustainability as a core principle on which the organisation runs is extremely critical for the success of your business. Develop a plan on how the business can impact environmental concerns, bring change, and impact society. Make sure all your business plans, strategies align with the sustainability principles and values established.

Partner with various organisations that are on the same mission as yours. If you constantly think about how to make a business sustainable, one key to it is to have sustainability the core principle that drives the business. Set a strong culture in the organisation.

3. Build the Right Organisation.

Make a solid business case on why you are opting for a sustainable business model for your business. How it impacts profitability, brand value, sales, stock value, industry perception, and the key metrics of your respective business.

Many organisations consider global environmental goals and align their sustainability strategies with them. It also directs the organisation towards equality, diversity, and fair wages along with preserving the environment and natural resources. Build an organisation where every stakeholder believes in the core concept of sustainability.

4. Promote Constant Innovation

The world is evolving, and there is a need to innovate products, solutions, and technologies constantly. Every aspect of the business strategy might need change and alignment with the sustainability practices. Empower all the stakeholders in the organisation (employees to board members) and bring alignment into the system. Develop strategies and plans which will deliver sustainable outcomes. Innovate products and solutions whose execution can drive customers to choose sustainable options. Promote, reward, and encourage innovation in the company. Constantly keep up with the emerging technologies and product innovations in the sustainable business space.

5. Maintain Transparency

If you observe sustainable businesses, their websites, products, and almost everything promote how they contribute to the environment and preserve natural resources. The entire supply chain is transparent, where they source their products, their manufacturing processes, labour policies, raw materials, and how each element in the value chain is sustainably driven. This significantly contributes to the brand value and helps build trust among customers. Being transparent also brings accountability and responsibility to adhere to standards and also constantly improve on sustainability metrics.

6. Embrace Competition

Usually, when one business in a sector becomes sustainably driven, others follow suit. Adopting sustainable business models increases the business’s brand value and changes customer perception while impacting the environment positively. Slowly, your competitors and other businesses in the sector start adopting various business models and strategies. You will have to constantly address the question, how to grow my business, in this case. Embracing competition and constant innovation is the key. Constantly monitor the market and be on top of emerging products and new-age innovations.

Wrapping up

Research states that sustainable business processes augment the financial performance of the business. If you are a business owner wondering how to make a profit in business, adopting sustainable business models and strategies can accelerate your business growth. Studies show that the long-term profitability and success of the business are directly proportional to the sustainability of the business model.

Sustainable businesses or businesses with plans to adopt environmentally friendly processes usually have a higher Return on Investment (ROI) than those that don’t. Also, there are many platforms that help businesses manage their books and keep track of their finances. Okcredit is one such platform that provides a seamless experience.

There is a huge market opportunity for organisations that promote sustainability practices. It is one of the lucrative business models to choose from. It is very important for us to help the global economy and adopt sustainable strategies without compromising on the profitability of the business. Become environmentally friendly while being profitable. Give back to nature.

Also read:

1) How to Make Online Business More Eco-Friendly?
2) Do You Consider Yourself to be Eco-Friendly? Let’s Check!
3) How to Build an Eco-Friendly House?
4) How Would You Set Up An Eco-Friendly Home Office?
5) OkCredit: Simple, Paperless & Secure solution for businesses

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FAQs

Q. Why do businesses hesitate to implement a sustainable business model?

Ans. There are many barriers to implementing a sustainable business model. Most importantly, it is the lack of clarity on what sustainability means and how it impacts the business. There is a huge learning gap in the market that needs to be addressed. The adoption of sustainable practices requires some changes in policies, regulatory constraints, etc., which have to be understood. Many businesses struggle to devise strategies, and this is causing the slow response to implement and act.

Q. What are the main motivations of businesses to engage in sustainable business models?

Ans. Many businesses consider this to augment their brand value, reputation and gain a competitive advantage in the market or in their respective industry. Some motivations include legal and regulatory advantages, the potential to source resources at a lower cost, change in public perception about the business, brand value boost, and competitive advantage.

Q. Is building a sustainable and profitable business all about the environment?

Ans. No. Though a major part of building a sustainable and profitable business is about climate change, preservation of natural resources also includes other areas like equality, health & well-being of employees, education for all, sanitation, diversity, etc.