How to work toward business sustainability
Sustainability is one of those business buzzwords that creates a lot of confusion. You’ve probably seen it describe everything from how a business approaches social justice to its environmental impact. And let’s be honest, when used in that context, sustainability is a political munition, ready to explode into arguments, eye-rolling, and who knows what else.
But real business sustainability has its roots in a straightforward question: What will allow your business to weather economic storms regardless of who is in charge?
Here are a few tips on answering that question in your business.
Start with people
It’s not enough just to have the right people in your business. You also want to consider how long they will work for you and under what conditions. So, if you have a hiring need, then take time to weigh a few questions. Does this person need to be full-time or part-time?
Asking this gives you and potential employees a great deal of flexibility. For example, if you make a position part-time, you may help potential employees have time for school. You can also use that position to develop talent and help employees grow into full-time roles.
Can I hire a long-term contractor? This is always a great question to ask for several reasons. First, it might free you from expensive payroll taxes and employee benefits. It also lets you have a honeymoon period. If you work well with the contractor, simply extend the contract. If not, then letting a contract fizzle is much easier than letting go of an employee.
Regardless of your decision on the previous two questions, make sure anyone you hire is deeply involved in the company mission. Employees and contractors who understand your work’s importance are more committed and engaged.
Finances, Finances, Finances
Having the right people hired the right way for the right amount of time is one key to the puzzle. But no employee or contractor can help you if company finances are not in order.
If you are a startup, close the spending gap as quickly as possible. When you burn through cash, get your team on board to determine how soon you will get a good return on it. Having a return plan for every dollar spent means you are hyperaware of your financial situation. That’s good! That awareness means you will search for ways to avoid unnecessary expenses and taxes.
Don’t be afraid to enlist the help of a CPA in this area. Also, establish multiple revenue streams. It’s the oldest mantra at business school, but it’s true. If you have a service, offer products that complement it. For example, selling car cleaning accessories can add to your bottom line if you own a car wash.
Finally, don’t turn up your lifestyle too quickly once the money starts rolling in. There are ebbs and flows in business. Use that excess cash to build a safety net to protect those valuable employees and keep your business going during downtimes.
Putting it all together
Building a sustainable business is simple in theory. But it can be difficult in practice.
Think strategically and get help from mentors and professionals you trust and respect. Then, with a plan in place, the right people on board, and sound financials, your business can withstand just about any storm.