Business development · 15 October 2021

How to create a sustainable business model: top tips for long-term success

How to create a sustainable business model

The modern world moves at a breakneck pace. In the blink of an eye, the latest and greatest advancements in technology are rendered obsolete by something new and improved. It’s no wonder that many businesses struggle to keep up with the ever-changing landscape. In the modern era, it is more important than ever for businesses to recognise trends, move with the times, and stay ahead of the competition. This is becoming more and more difficult as customers are becoming more demanding and competitors ever more savvy. However, for those companies who get their models right, the rewards can be enormous.

In this article, we will discuss how to create a sustainable business model to help give businesses the best chance of success for years to come.

What is a sustainable business model?

In order for your business to be successful in the future, a focus on sustainability is key as the modern world is always moving forward. A sustainable business model is one that has a long-term outlook and can adapt to ever-changing conditions. Having a sustainable business model also means that a business is prepared to move with, and benefit from, any changes in consumer preferences or industry trends.

With today’s consumers demanding more for less money, and the competition in every industry at an all-time high businesses now need to follow a comprehensive strategy in order to ensure continued success. Here are our 13 steps to a sustainable business plan:

1. Always take a long-term approach

The first step towards creating a sustainable business model is to create long-term goals and strategies. Businesses need to have at least a one-year, two-year and five-year vision in order to identify potential future problems or opportunities that might arise. This means thinking about where your company will be in five years time so you can plan for it accordingly now rather than being forced into reacting by market forces down the line. As the old saying goes, “failing to prepare is preparing to fail”, so make sure you leave nothing to chance. These days, the businesses which thrive long-term tend to be those which are proactive rather than reactive, so try and stay ahead of the curve so that you are not caught out by changes in the market.

2. Know your customers inside out

A huge part of staying ahead of the curve is being completely in touch with the wants and needs of your customers. This has always been important, but today it is absolutely vital for the sustainability of a business. In order to know and understand your customers, you need to develop a thorough understanding of their demographics. What age are they? How much money do they make? Where do they live? Once you know this information, try and think about the trends within that market in order to discover what customers are looking for now and in the future. Sometimes, you may need to sacrifice your existing customer base for one which has longer-term potential. This can be a big risk, but if you get this transition right, it can help to guarantee the future success of your business.

customer research for sustainability

3. Create value for customers at all times

Creating value for your customers is the best way to ensure customer loyalty and it will help you to build a sustainable business model. In order to create value, you need to identify what unique selling point sets your company apart from the competition which will ensure your customers don’t start to look elsewhere. Your USP could be anything from lower prices to faster delivery, so try and think outside the box. Once you’ve identified your USP, take action in order to make it a reality. For example: if you feel that one of your competitors is getting ahead because they offer free shipping on all orders over £50 then perhaps this could be an opportunity for you too. As well as offering the same deal, you can also guarantee that your product will always arrive before theirs. An added perk like this might seem trivial but when customers are making purchase decisions time after time, these little benefits can have major impacts.

4. Hire the best talent

The next step towards creating a sustainable business model is hiring the best talent. In order to create an adaptable, long-term plan for success your employees need to be some of the best in their field and have diverse skill sets that can help them tackle any problems or obstacles that might arise down the line. When it comes to recruitment, businesses must always look at people as assets rather than simply expendable cogs in their machines in order to keep them at the company long-term. If you want to attract and retain the best talent, you will need to show people that they are valued. This means offering competitive salaries and benefits, as well as other incentives such as career progression, training and mentoring opportunities. Invest in your employees and they will pay you back for years to come.

5. Utilise your team’s knowledge and skills

The whole point in investing in the best talent is because of what they can bring to your company, and yet so many small business owners fail to utilise their teams. This is a huge mistake. A diverse team full of skilled and talented individuals will be able to provide the best solutions to problems, so you should always consult them before making important decisions. Allowing your staff to share their ideas with management could lead to big breakthroughs which nobody would have thought about otherwise. If every member of your team is confident to share their ideas, it won’t take long before these small improvements add up and make a huge difference in helping your company to grow.

6. Reinvest your profits

This is especially important in the early stages of your company if you want to ensure long-term sustainability. Far too many new business owners take all the profits out of their business so that they can fund a lavish lifestyle straight away. This may seem tempting, but when the time comes to expand or invest in new products and services, you won’t have the necessary funds. Instead of taking all your profits out for personal gain, make sure that the majority is reinvested back into your company so that there are funds available when they are required. Take a long-term approach to your business’s finances and you will reap the rewards later on.

7. Utilise up-to-date technology and software

In order to keep your business at the forefront of its industry, you need to utilise up-to-date technology and software. This can help a company stay ahead of emerging problems or trends whilst also streamlining your organisation’s processes to run more effectively and efficiently than before. Some of the most important technological considerations modern businesses need to make are to do with security, storage, file transfers, communication and conferencing, online payment and business processes. Make sure all of these are cutting edge and you will avoid potential risks and wastage. The average small business now spends around 6.9% of its budget on IT systems alone, so you need to consider where the money is best spent to help guarantee a successful future.

8. Create diverse revenue channels

In today’s business landscape, it is increasingly important for companies to have a diverse revenue stream. With the modern world moving at such a rapid pace, it is critical for businesses to stay ahead of the game and not be reliant on one or two revenue streams. If these dry up, then your company may face serious financial problems which could result in an uncertain future. Look for revenue streams through products, partnerships, research, consulting services and any other means at your disposal. By having a diverse revenue stream you will be able to deal with any problems or changes in the marketplace. Every business experiences downturns at some point or another, but with income being generated in diverse ways, you will be better equipped to ride it out until things take an upturn.

digital marketing for sustainability

9. Embrace modern marketing strategies

In the modern era, marketing is more important than ever. With so much competition in every industry, it can be difficult for businesses to stand out from their competitors and attract new customers. This means that you must utilise various forms of advertising such as social media campaigns, digital ads, search engine optimisation (SEO), influencer marketing and customer loyalty schemes. With these, your company can reach a much wider audience and gain the attention of new audiences, particularly those in younger demographics who will hopefully become your loyal customers for years to come. Focus on these groups when you are doing your market research. Find out which online platforms they are using, what they expect from your business, and how best to deliver it to them.

10. Stick to your company’s values


 
TAGS:

ABOUT THE EXPERT

Tax & admin