2020 was a year that shook up life and business as we know it. It brought about change very few people were not ready for and reminded us that our day-to-day lives and routines could change in an instant. Uncertainty has always been a part of the business environment. The sociopolitical environments that businesses operate in are constantly changing. On top of that, consumers and their preferences are also constantly changing. Many of these challenges fall under structural uncertainty – the disruption to business models brought about by technological change, rapidly changing nature of work, climate change etc.
One way to ensure your business perseveres through uncertain times is to ensure your business is backed by a sustainable business model, that can persist through hardships and uncertainty. When is a business considered sustainable? A sustainable business is one that lasts. To reach longevity, your business actions and purpose need to be equally grounded in financial, environmental, and social concerns. You need to be adaptable and ride the wave of change instead of being against it. There are a few key characteristics that many businesses with sustainable models share.
Effective characteristics of a sustainable business
Core beliefs at the center of everything
Your core beliefs make up the foundation of your business. Whether your business is 6 months old or 10 years old, every decision you make should be in line with your core beliefs. They are kind of a big deal. Everything you do needs to be consistent with what your business is built around. In essence, your core beliefs should be about how your business plans to add value and what your business stands for.
Hire employees that best represent your company
The people who make up your business are in the center of everything. Your employees are a representation of your company as a whole and it is crucial to hire the right people that fit in with your company culture and share your company’s values. Invest in the right people and they will invest in your business. Your employees are always going to be your greatest asset.
Don’t fight change, embrace it
Growth and comfort cannot coexist. Change is inevitable and when making decisions consider that in the blink of an eye things can change. Stay ahead by always reevaluating, reinventing, and reimagining how you do things. The trick is to find the balance between retaining your core belief system while constantly reinventing yourself according to shifts in the business environment.
Long-term growth over short-term gains
Never trade long-term successes for short-term gains. Often choices might arise whereby one will benefit the business in the short term (Such as by cutting corners and producing a product on the cheap to boost profit margins) and the other will lead to long-term growth (Producing your product with the best quality ingredients that build customer loyalty). Often, choosing the option that benefits you in the short term will take away from long-term growth thereby contributing to an unsustainable business model.
At the end, the business must make money. If you want your business to persevere through times your business needs to be profitable and needs to have healthy cash flow and cash reserves. This is where a lot of businesses that didn’t last through lockdown fell short. It isn’t to say your business just needs to make a lot of money all the time – being profitable is great but unexpected things happen and you can go through weeks, if not months, of losses. On another hand, a business can be bringing in a lot of money but can be spending even more money at the same time. This is where having those cash reserves and a healthy cash flow is vital.
At the end of the day, every entrepreneur and business owner want to build a business that stands the test of time. Achieving sustainable business success will ensure that your business perseveres through uncertainties and hardships and continues to grow for years to come.