Posts Tagged How to Build a Sustainable Business

How to Build a Sustainable Business – Step 1

What is a Sustainable Business?

A sustainable business is a legal entity that is independent of its owners which can create income on an ongoing basis without damaging its future. The Credit Crunch has shown that traditional businesses are unsustainable, even without taking into account the pollution & climate change the Governments have being subsidising for the past 200 years because they assume plundering a profit is always beneficial despite the evidence.

To make a profit a business traditionally extracts money from customers in-excess of the money it pays to obtain the goods it sells so customers can only remain customers while their money supply is growing faster than prices. A sustainable business will do what it takes to use its resources efficiently to maintain its ability to serve people’s needs now & long term because they know what they do not only effects them but effects their suppliers; their customers and the rest of planet Earth. A sustainable business will treat existing customers with the respect they deserve as essential partners (because they know they are up to 10 times cheaper to sell to than new customers) – trading a nominal token of value called money for a solution to their problem.

1st Step to building a sustainable business is to identify the reasons you want a business.

Do you want to have a business because you do not like to be told what to do?

Well the bad news is – owning a business is not going to be for you unless you are in the 4% of entrepreneurs who plan & structure their business activities in advance.

The 96% of businesses that plan to fail – by failing to plan for

•    success or normal events like

•    the change in regulations,

•    the change in demand with the phases of the economic cycle

•    the reduction of market share when more effective competition enters the market

•    just reacting to crises as they happen

as a result the entrepreneurs are wasting their time; family life & health on enslaving themselves to work for a business (even after they beat the odds and find someone to buy it).

Successful people know a business is only a tool to create an independent income stream when the owner works on the business instead of in the business.

Working on your business is providing the purpose for the business & choosing the strategy to enable the exchange of value with customers.

When the business’s purpose is just to get money to fund the owner’s lifestyle then it will be a struggle to deal with the employees who are only there because they do not know of better ways (like share trading or eBay or blogging) to get an income.

However when the business’s purpose combines the creating the real benefits to users (that the voluntary sector demonstrate) with benefit to business stake holders (owners; workers; suppliers & customers) for a win win win situation, instead of the normal win – lose scenario that created the Credit Crunch, everyone will be prepared to help your business become the sustainable (long lasting) independent income producing center that legally it is already. Having a clearly defined purpose will guide the right workers & customers to you and will enable you to make the right decisions about which changes you should adopt and let everything come together without all the hassles so productivity increases. Having a clear purpose will enable to owner to design the business so he will have the choice to sell up for 10 times the annual profit any time he wants in the future.

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