Doing business the sustainable way

Posted on: 5 June 2012

I work in tourism and I set up social enterprises in all the countries where I send clients. It’s a principle embedded in my company ethos and in my personal belief, especially since I operate mostly in developing countries. The question is can it be scaled up to larger organisations or is it just for small cottage industries? And what are the principles of ‘good business’?

I believe if you follow the principles below, which are very much my ideas on business, then it’s possible to scale up to any size. And the great thing is that the principles do lead to better business and more profit in the long term.

Align with individuals

Behind the mask of every giant institution or system, there lies people. Businesses should not be seen as singular entities, but as entities composed of individuals—who, when given the chance to cultivate their personal values at work, help align the company with overarching societal values. And when companies are more aligned with societal values, they generally have products and services more aligned with customers. And hence, they generally sell more.

Sustainable thinking is needed for the long haul

Companies that focus on long-term planning are inherently more likely to be around for a long time. If you are thinking ahead, you have to make sound choices today in order to reach your long-term goals tomorrow. Fostering long-term credibility and encapsulating the broader social dynamic staves off failures and creates a financially successful company. In the end (a long time from now), everybody’s happy.

Say what you do; mean what you say

Accountability is a must. Accountability to employees, customers, stakeholders, society, the company and ourselves results in good behaviour and returns. Business leaders should hold themselves accountable for setting the tone and leading by example. We must stand in front of the mirror and ask ourselves – “what’s the most we can do to make a positive difference, to do better, be responsible, to keep challenging and demanding better?”

Bring common sense to business, share optimistic views on how we can do good for our companies and the world, but also share pragmatic advice for driving entrepreneurial change and for leading responsibly.

Gavin Bate, Moving Mountain

Striking a balance between profits and impact

Designing business strategies to deliver both commercial and social outcomes is an exciting task. But finding the right balance between these competing priorities can be difficult. The trade-offs are not always clear, which can complicate business planning decisions.

Beneficial business or shared value

Sustainable business solutions in developing economies can be activated by anyone with good business skills and a passion for Responsible Tourism regardless of their environmental knowledge.

The concept is simple. Instead of passing money to a third party it can be used in the following way:

  • Identify a sustainable business opportunity with market potential, for example a tour destination or activity
  • Hire local staff to deliver objectives and build trust and loyalty with those people
  • Put in start up costs to fund for 6 months, this cost is quite low compared to developed countries, eg £3000
  • Establish a profitable trading regime, i.e a business plan showing margins for your product and a marketing plan
  • Set targets for business to become sustainable, i.e how many trips per year will provide profit for overheads
  • Recover start up costs if the investment is a loan, or leave it there and get a dividend on future profits
  • Transfer ownership to local staff as a joint venture

The enthusiasm for this “trade not aid” model is very fulfilling and encouraging, and it provides lots of motivation and satisfaction in the long term. Locals understand that with transparency and hard work they can become business owners and share in the spoils of the profits.

Scenario modelling to create a successful inclusive business plan

It’s hard to picture a business plan that will fit all environments, but using scenario modelling helps to identify if and where there is a market. Put very simply, it’s a bit like this:

  • Analyse the current scenario
  • Engage stakeholders to finalise plan
  • Identify key levers to drive profitability
  • Forecast potential results for each lever
  • Develop scenarios to assess trade-off

Given the awareness and potential for business, this approach I find tends to create a strong sense of ethos around business which is very topical in the developed world today, but which is a matter of financial survival in developing countries. Ultimately it’s about sharing money with stakeholders, and sharing expertise and resources. Done correctly, it will always be sustainable.

Gavin Bate

Gavin has been working in Kenya and Nepal carrying out charitable work since 1999, and is the founder of the Moving Mountains Charity, which provides developmental aid concentrated in Nepal, Kenya and Borneo.

Tags: International Development, Social Enterprise, Third Sector

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