Sustainability can’t be a small add-on that is tacked to the end of a company’s business plan, but rather sustainability must be embedded within its core.
Many questions are answered in a business plan that entrepreneurs often don’t consider. In a sustainable business plan we ensure we not only answer those questions, but we ask if they reflect a company’s commitment to the environment, community, and team.
By the end of this article you’ll be equipped to write a sustainable business plan for your startup. One that answers all the conventional questions of a business plan while considering your enterprises carbon footprint, community impact, and measure of employee-equity.
Why Write a Sustainable Business Plan?
According to a survey conducted by Lloyds Bank, 64% of small-medium sized business owners want to improve their environmental sustainability, with economic savings being the main motivation for doing so.
In another study by Futerra, 88% of consumers said they wanted to support brands that had a positive environmental and social impact.
Sustainability isn’t coming, it’s here.
You have two options: write a conventional business plan and tack on sustainable initiatives when you realize the business case for it down the road, or to embed sustainability into your startup from day one – getting further ahead of your competition each day out.
Your executive summary should hit all the same points a conventional business plan would. If you’ve never written an executive summary before it’s essentially an introduction to your business plan, outlining a key point from each section, but without giving everything away.
Let’s get something clear: a sustainable business plan is different then a sustainability plan or strategy. A sustainability plan or sustainability strategy outlines an organization’s commitment to the local environment, community, supply-chain and their staff.
Whereas a sustainable business plan is a business plan with sustainability at the core of its operations; therefore, you need to answer the same questions in how you plan to make money, who your target audience is, why your management team is uniquely qualified and how much capital you require.
The point I’m trying to make is your executive summary shouldn’t outline how sustainable you’re going to be, but rather how your business is going to be successful. In this article we’ll equip you with the resources to ensure your path to success has sustainability worked into each and every move.
Your mission statement is something your sustainable company wants to achieve in the now. I have a perfect example, ours!
Bsbcon Mission Statetement:
“Our mission is to support sustainable brands in mitigating climate change, and building vibrant communities.”
So, is a mission statement something you can achieve in a year or two and then change? Well, it’s not supposed to be. A mission statement should be an ongoing pursuit that you service by developing more efficient products and services.
A vision statement is the effect your mission will have on the environment, community or society itself. When developing a vision statement you should consider the world you want your business to help create.
Bsbcon Vision Statetement:
“Our vision is a sustainable global economy.”
By supporting sustainable brands in mitigating climate change, and building vibrant communities, we hope to develop a sustainable global economy. Let’s discuss if that’s realistic – first off, it’s certainly ambitious. Whether it’s achievable or not? Absolutely! Engaging one business at a time, and it’s certainly attainable.
Ok, let’s zoom out for a minute. If you’re developing a sustainable business plan and your industry is in coal mining then you need to reassess. The industry of a sustainable business plan has to be one that makes this world a better place, which can be in nearly any industry.
Much like in a conventional business you will want to address the market size, growth rate, lifecycle, barriers to entry, and three closest competitors.
We say your three closest competitors because it’s not always about the three leading companies. It’s more about the three company’s whose business models are the closest to yours. This could mean that sustainability is a core part of their operations, or not, it really all depends.
If your three closest competitors have integrated sustainable practices into their brands, then it’s essential that you treat this like you would a standard competitor analysis. Seeing where there are opportunities for your company to differentiate itself, and where there’s a chance to learn from the initiatives they have in place.
Problem and Solution
Lets dissect whether a sustainable company can solve a problem that is purely market driven, rather than market and sustainability focused.
For example, Sara wants to create a business that will develop a new type of hand tool to work on cell phones. It’s a fantastic business concept which has been proven with market research. Can Sara create a sustainable business that solves a problem which is purely market driven?
Of course, she can.
Sara can ensure her staff are paid livable wages and given fair equity, that her supply-chain is made of other sustainable companies, that her organization recycles and takes the environment into consideration, and that her company is involved in community organizations.
The problem and solution of a sustainable business can be market driven, as long as sustainability is developed into the actual functions of the company. We’re just about to get to that.
Products and Services
When we discuss the products and services of a sustainable business we consider the vendors that the business utilizes to source their base materials and services, also known as their “supply-chain”.
Sadly, a theme we’re seeing more and more are multinational companies developing service contracts that require their products to be bought and sold up to two times before reaching them. Ensuring that the original source of the product is left behind, allowing middle companies to take the heat, and sell products to the final company that have been sustainably cleansed.
In all honesty, multinationals are in an ever more challenging position; competition has never been so intense, and they are often having to make important decisions that balance brand position, price-point, and a legitimate choice on sustainability.
Yes, they should have to make these decisions, we’re just clarifying the position they are in.
Now, for a small business it is much easier to develop strategies to ensure a sustainable supply-chain which provides confidence in the longevity of your own products and services. Here are a few:
- Draft and enforce a supplier code of conduct that requires suppliers to incorporate sustainability principles into their business processes
- Choose to source goods and services from social enterprises, local suppliers, or indigenous suppliers, with increasing targets year over year
- Purchase goods and services that are certified as responsibly produced through internationally recognized certifying bodies. Examples include:
- Forest Stewardship Council
- Fair Trade International
- Rainforest Alliance
- Marine Stewardship Council
- Leaping Bunny
- Canada Organic
- Global Organic Textiles Standard
Your operational plan stems from planning itself, which is developed here, and on an ongoing basis from your management team. Developing a sustainable operational plan considers how efficient you can be on a day to day basis.
For example, is your company driving around in gas-guzzling Ford Excursions, or bicycling, using public transport, and driving electric or fuel efficient vehicles?
Are you working to streamline your operations in every possible way, or have you been using the same system you’ve had for the past 30 years with no consideration for change?
Here are a few more things to consider when developing an operational plan for your sustainable business:
Internal and external sustainability communication planning
Internal communications and awareness-raising:
- Staff events centred around sustainability
- Targeted information campaigns for specific initiatives
- Regular direct communications about changes to sustainability programs
- Marketing campaigns highlighting sustainability initiatives
- Sustainably produced products featured in-store & on company websites
- Pair corporate communications with educational components
Implementing company-wide sustainability policies which are publicly available
Policies could include:
- General company-wide sustainability policy
- Purchasing policy
- Waste management policy
- Local and Indigenous content policy
- Diversity and inclusion policy
- Energy reduction policy
- Invasive species policy
Human Resource Plan
Sustainability should be a part of your human resource plan from day one, when recruiting, where you should work to incorporate sustainability into your employee onboarding process, and train employees in the sustainability components of your business.
From there, you need to look at sustainability from the top down. You can’t preach sustainability unless your management team understands what that means and exemplifies it every day. We aren’t saying your management team has to be perfect, what we’re saying is they must understand what sustainability means to their organization.
A great way to facilitate this is by introducing a sustainability consulting firm to your management team and discussing the importance of this topic. Over the course of weeks or months you should come to a consensus, and develop a plan that is welcomed by your management team. From there it’s up to your leaders to make sustainability a core principle for your organization.
Properly executing on a marketing plan for a sustainable company, also known as, “sustainable brand development” is about as sensitive as placing the one hundredth jenga block.
What is the biggest challenge in marketing a sustainable business?
So, called, “greenwashing” painting yourself as sustainable when your company falls short of these assertions.
So, how do you market a sustainable business?
Only publicly marketing something sustainable unless you’re completely confident that you embody every angle of it.
If your business is brand new, take a year or even 18 months before considering any sustainability marketing. Take this time to develop your own sustainability culture, and initiatives. Sustainability marketing performs much better when people are organically spreading the word.
In a sustainable business plan you answer all the standard questions in regards to finances, and more. The conventional ones being a projected income statement, cash flow, breakeven ratio, startup costs, and compensation summary.
Whereas, for a startup that’s been in business for even six months, you should be able to use parts of that data to develop goals for decreasing emissions, waste, and energy, while aiming to increase the efficiency of the operation.
If your business is a startup that’s at the earliest of days it’s completely fine to have a financial plan that is strictly focused on the financial portion of your business.
With that being said, you will likely be in a position where you could easily choose the regular lights, over the LED ones, or a gas guzzling van over a new electric vehicle.
Just do everything you can to make a fair balance between sustainability, and profitability. Please remember that these sustainable startup costs may seem like a lot in the first year, but overtime they’re proven to actually increase profits over your competition.
In order to operate a truly sustainable company you must have integrity. This means the management team in a sustainable business plan is often made up of individuals that have shown incredible commitment and perseverance in bettering themselves, the people and environment around them.
So many people have a hard time when writing their professional bios. Questions come up like: What have I accomplished? Am I truly qualified? Does it sound like I’m boisting?
Here are some tips on how to write a winning professional bio for your business plan:
- Be honest about your story
- State accomplishments that are in some way relevant to this opportunity
- Don’t be afraid to include non-business related commitments to your community or environment
Sustainable Business Plan Format
- Executive Summary
- Mission Statement
- Vision Statement
- Industry Analysis
- Problem and Solution
- Products and Services
- Operational Plan
- Human Resource Plan
- Marketing Plan
- Financial Plan
- Management Team
A sustainable business plan isn’t a business plan with sustainability added on, but rather a business that is developed with sustainability at its core.
You should be able to utilize your sustainable business plan for funding, or attracting mid – upper level management.
Remember, sustainability is not about being perfect, it’s about being on a journey for better.
So, what are you going to choose? A conventional business plan, or a sustainable business plan?