sustainable business benefits

Additional to the obvious benefits of sustainable business practice for our planet and our people (cleaner air, meaningful work to name just two), there are also quite a number of significant financial benefits for businesses:

  1. The so-called Stern Review established as early as 2009 that the cost of mitigating the fallout of global warming (extreme weather, floods, fires, earthquakes) far outweigh the cost of climate change action!
  2. Based on the study “From Stockholder to Stakeholder” of more than 200 academic studies, industry reports, newspaper articles and books, Oxford University (2014), found that:
  • 90% of the studies on the cost of capital show that sound sustainability standards lower the cost of capital of companies.
  • 80% of the studies show that stock price performance of companies is positively influenced by good sustainability practices.
  • 88% of the research shows that solid Environment/Social/Governance (ESG) practices result in better operational performance of firms.
  1. The latest Colmar-Brunton “Better Futures Report” for NZ found that 90 % of consumers stop buying from irresponsible or unethical companies. According to the report, a minimum of 40 % of New Zealanders are committed to a sustainable lifestyle. Plastic waste has been identified as the number 1 concern with 85 % of people wanting to reduce plastic waste. The same report found that 86 % of New Zealanders would want to work for socially and environmentally responsible company.

These studies show overwhelming evidence that adopting sustainable ways to operate your business is a sound business investment adding tangible value and saving cost. Plus, even if you don’t care about the planet – your customers and employees do!

Dummies Guide to Business Planning

Okay, let’s talk more about the planning that you might want to do on a regular basis. Or in fact as often as you can.

At the very least, you would want to have a business plan for the next 12 months (and beyond). The business plan outlines how much revenue you are going to make and how (through which channels) you are going to make it. If your business operations are adversely affected by COVID-19, your planning for the rest of 2020 might look quite different to planning for the next 2-3 years. In this case you are most likely considering to re-position your business to target a new and slightly different group of customers.

SWOT analysis

Part of that business plan should be a SWOT analysis. Sure, we all know what SWOT stands for – strength, weaknesses, opportunities, threads. The first two, strength and weaknesses, refer to your business’ internal capabilities, whereas the other two, opportunities and threads, are referring to your companies’ external market environment. The SWOT analysis is therefore the shortest market analysis you can – and should – perform.

You would want to perform a SWOT analysis at least once a year. It should be part of your annual business plan. However, best practice would be to have an in-depth market analysis which would form the bases for your business plan and your marketing strategy. This in-depth market analysis would go a lot deeper than the SWOT analysis which is just a very quick way of assessing a new idea or a new situation, i.e. a new product or a different target customer group.

Market analysis

The in-depth market analysis would answer the following questions:

  1. How big is the market you are operating in?
  2. Who are your main competitors?
  3. What are they offering and how does that compare to your products and services?
  4. How can you differentiate your products or services from your competitors’?

What is going on in the market you are operating in and what your competitors are offering is something you would want to monitor continuously – at least once a year. If you’d like help with that – get in touch!

Use this free business plan template – it is a great starting point and will assist your planning immensely.