Sustainability and Your Bottom Line
Revenues-expenses= net income. We think of sustainability as cutting expenses to increase the bottom line. That is true. However, sustainability can also help increase your revenues! Let’s talk about how it can work on both expenses and revenues. When I say “sustainability,” I mean completing tasks that improve the environmental or social impact of your business. Attacking expenses and revenues gives you more financial freedom, while offering a real benefit to stakeholders.
Revenues and expenses are somewhat intertwined, but I hope this provides insight into how sustainability benefits are not just expense driven. Drive sales by sharing sustainability information and detailing resources you have cut. Check yourself and make sure you are getting double benefit from your expense cutting by sharing wins with your community.
Sharing sustainability content on your own channels attracts new customers, increasing your sales numbers. When you share your sustainability, you open your business up to new markets and new people. Sustainability-minded people want to patron sustainable businesses, so put yourself out there to be one of them! Share on social media, on your website or on other channels. This will help engage current customers and find new ones.
Additional publicity from an article published about your new waste practices. When you make sustainable changes, let the local press know. Tell your chamber of commerce or other business member associations. After you start sharing on your channels, others will pick it up to share on theirs. Mentions in new places and verticals increases your reach. Again, this opens you up to new potential customers and investors. New customers increase revenue. New investment could mean the possibility of a second location, hiring more people, and other growth driven changes.
Sustainability reduces employee turnover and increases employee engagement. Hiring new people is expensive, as is training and on-boarding. This is an expense that can be reduced when you enact sustainability. Engaged employees work harder and more efficiently.
Look at your major costs. If you’re a restaurant, that might be food. If you have recreational space it might be water. Reduce expenses by setting up a sustainability program. Look at your largest operating costs or expenses. Take concrete steps through a checklist, reminder system or action plan to reduce consumption of those recognized expenses.
There are numerous examples of reduced expenses. Lighting costs reduced from purchasing LED bulbs. Lower electric bills are one less expense. Natural gas consumption lowered from scheduling oven time appropriately. This reduces your HVAC expenses. Instead of buying something new, can you purchase it secondhand?
What can you do with increased net income? You have more flexibility in hiring, loan terms, and payment plans. Increased net income gives you freedom to try new things and increases your risk appetite. Sustainability is a way to feed your bottom line, so that you have more control and options.
I would love to know how you take your net income into consideration with your sustainability strategy, share in the comments!
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