Today the importance of sustainability practices in business cannot be overstated. More people than ever look to sustainable practices and products when deciding who they’ll do business with. If you’re looking to adopt a sustainable business model of your own to reduce your impact on the environment, then you’ll need to get to know some key sustainable business model archetypes so you can build a sustainable business of your own – and one that people really connect with.
Business model innovation often starts with small business owners. When you take up the mantle and focus on creating a business your customers care about, others will follow suit and eventually sustainability practices will be at the heart of every business. But it starts with you.
Before you start, however, you’ll need to understand what a sustainable business model is, best practices, and how to get the most out of sustainability practices as a business. You need a string foundation and solid plan to succeed as a sustainable business, so let us show you how to do it below!
What Is Sustainability In Business?
Sustainability efforts are all about meeting needs in the present without risking the future. It’s all well and good being able to create a fun plastic toy for children aged 3-5, but what happens when that toy is past its best? More often than not it ends up in landfill as a single use plastic, and that’s not good for the environment. But what if you created the toy with sustainable development principles? Chose a material that can be reused with ease, broken down and turned into something new? That meets the need of your customer in the here and now, without compromising the environment when it reaches the end of life stage.
That’s sustainability in a nutshell. But how does that translate to a business model?
What Does A Sustainable Business Model Mean?
Business models are all about creating a plan for making money. They’re the blueprint of your business, and a traditional business model would typically prioritise profit above all else. A sustainable business model still prioritises generating revenue, making profit and ultimately making your business as successful as can be. But with a sustainable focus for all of that.
You focus on making money now and adding value to your customers in the present, but without compromising the future by draining resources or creating a product that might be harmful. Sustainable business model innovation focuses on doing things differently for the benefit of everybody in the future. You won’t see as many quick wins as a sustainable business, but you will make a big difference to the world by focussing on your environmental and social impact – something customers look for from any new business today!
What Do Sustainable Business Models Focus On?
A sustainable business model must focus on sustainability efforts at all stages: economic growth, social and environmental impact, business processes, value proposition, and customer relationships. Only then can you make your new sustainable business a resounding success.
Triple Layer Business Model Canvas: Making Your Sustainable Business Model Work
There’s something known as the triple layered business model canvas in sustainable business models, and they focus on:
- 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 An Example Of A Sustainable Strategy In Business?
Sustainable business strategies focus on social, economic and environmental goals that support overall business growth. You can utilise these three key pillars of your sustainable business model as key performance indicators for the strategy. You’ll know you’ve been successful with your goals if you meet measurable targets in terms of your social impact, economic growth, and environment-first practices.
The Importance Of A Strong Sustainable Strategy
Why bother creating a sustainable business model strategy to start with? Because if you do, you’ll notice a plethora of benefits:
- long term, measurable goals – this helps give you a strategy for years and if you get it right now, it could be a sustainable strategy that doesn’t need updating for decades!
- learn industry trends – creating your initial business model and strategy necessitates that you look at your industry closely and learn the direction it is pivoting in so you can get ahead of the game and create a sustainable business that’s relevant right now, and relevant in the years ahead.
- get to know your customer base – customer relationships are the key to any business’ long term success and when you create a business model you have to think carefully about your target customers and what they want and need from your business; getting this right automatically puts you ahead of competitors.
- build a brand identity off the bat – another thing you have to think about when building a sustainable business model specifically is who you are as a business; knowing your business values and goals early helps build an identity your customers can relate to and get to know when your business launches.
- forces sustainable innovation – successful sustainable businesses get to where they are because they have to think creatively and sustainability innovation means you have to look at integrating environmental and social best practices at every stage of your product/service design and delivery, forcing you to think differently to competitors and ultimately gain a competitive advantage over them.
Where To Start With A Sustainable Business Model
Ultimately, if you want any strategic success as a new sustainable business, you’ll need to start with a value proposition statement. This tells you exactly:
- why you’re starting the business to start with
- what solutions your business offers to current sustainability concerns
- how the business makes improvements to society, the economy and environment
- how your business meets your customer’s needs in a sustainable way
Knowing these more basic points of your business model helps you create a brand identity from the start. A more sustainable business model puts your identity at its core, showing a thoughtful approach to business that protects your business growth, but also the future of the world, too.
Sustainable Strategies: Initial Things To Consider
When you know who you are and why you’re doing what you’re doing, it’s easy to build a strategy that will make your business launch more likely to succeed. Creating a strong sustainable strategy requires you to consider:
| Strategic context | When sustainability efforts is a core business consideration you need to think about the broader picture – where do you want to make a difference with your strategy and sustainability? Is it a local concern? National? Global? Know your goals here so you know where to point your resources and efforts. |
| Overall vision | Long-term goals should be planned out at the start of your business – long term vision makes the difference between a successful strategy and one that flops. Start with vision – the dream end point – and then work backwards, focusing on the environmental, social, and economic landscape and the steps you need to take to get from where you are now to where you want to be. |
| Action points | Once you know the end goal it’s time to plan action points that will help you get there. Business models for sustainability need to focus on sustainability performance at each of these steps, of course, but that doesn’t have to come at the expense of business growth and profits. You can buy into a circular economy model without compromising on long term success as a business in terms of profit. When you know key performance indicators along the way you have a roadmap to success. |
| Timescales | That roadmap needs to be reigned in though. You can’t just have a series of milestones for your business without a timed plan alongside it to help you achieve your vision in a timely manner. Predicted future industry trends, business growth and product/service development will all need to factor in here to set a realistic timeframe for each of your action points. It’s the only way to give you an idea about whether you’re on track for the end goal or not. |
| Monitoring | With these actionable, time-sensitive steps towards your long-term business goals and vision in place, the only thing that’s left to do is actually monitor that progress. You’ll need to record and report on the progress you’re making. This means you need to consider how you’ll record the progress, who will be reviewing that progress (will you report it to stakeholders etc), and how will you stay focussed on your sustainability goals? |
Real Business’ Top Tip For Sustainable Strategy
There’s just one thing you need to remember when you sit down to create your sustainable business model. The consumer should always dictate your strategy in every aspect of your business – social, economic and environmental.
Consumers drive business, they know what they want and you, as a business owner, need to meet those needs. At the end of the day it’s the consumers themselves that drive trends in values and dictate consumer behaviour. You then need to have a business that meets your customers where they are, satisfying their expectations.
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. We’ll show you how below.
How Do You Create A Sustainable Business Model?
Ingraining sustainable business practices into every fibre of your business is easy enough if you’re starting a new business, but it’s still do-able even if you’re pivoting your current business in another, more sustainable direction.
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 make changes to your business as you go, but getting the core values right from the off is vital. That’s because a business that changes it’s values all the time is often seen as unreliable. Make sustainability a key part of your business and you’ll have a strong starting point for all future development and steps you take.
2. Shape Values Into Something Valuable
Values don’t make a business, though. After you know what makes your business what it is, you need to then make sure you create the goods and services that align with those values and offer something truly valuable to your customers.
You couldn’t claim to be a sustainable fashion brand but then offer fast-fashion goods and services. The two don’t align and it won’t take consumers long to realise it and your business will eventually be boycotted by the very customers you’re trying to attract to your business.
But if your products and services align with the values you hold dear, then your business will be far more attractive to customers and you’ll find your business to be more successful.
3. Be Future Focused
Most businesses in the UK will grow if they have a dedicated business plan with solid progression milestones that realistic, achievable, and time-sensitive. But as a sustainable business, you’ll need to think about the impact of that growth on your sustainability aims.
When your business grows you’ll need to 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.
4. Think About Your Resources
Every business uses resources – even sustainable ones. The key here is finding out whether the resources you’re using are actually sustainable and something you can continue using fairly and sustainably in the future. You’ll need to ask yourself:
- Where do your resources come from?
- 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.
5. 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.
6. 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.
7. 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.
How To Create A Sustainable Business Model: Final Thoughts
We said it at the start and we’ll say it at the end: sustainability is vital in today’s business world. It’s not just because it’s all of our responsibility to look after the planet and its resources. Your customers expect sustainability today – and if you can’t prove your sustainability credentials, you’ll struggle to connect with today’s customers.
And another key thing to remember as a business owner is that a sustainable business model is sustainable. It allows for sustainable growth that makes your business a long-term success. Sustainability in business benefits everybody, including the business itself, so developing a sustainable business model just makes sense.
