Best Practices to Run a Successful Sustainable Business

The term ‘sustainability’ is used when a business aspires to give back more than it takes from society or the environment. And while it’s never been easy to start any business, building one with ethical and commercial sustainability takes creativity, knowhow, passion and strong support structures. We know this having done it multiple times, with multiple companies. And each time, we discover something new. We’ve learnt how important it is to make a business idea tangible, to prove that it works technically, to make sure it holds up in the real world and that people will want it. We’ve learnt that it’s crucial to find a commercial model that works, ensuring sustainability for the business as well as the product, and that this is tested with real customers, generating demand and scaling to meet it. Having started many businesses, I also strive to help others do the same in a variety of ways, culminating in the establishment of Mitra Ventures, an enterprise dedicated to helping new entrepreneurs find their feet.

Commercial Model

Start-ups are not for the faint-hearted, especially those with an ethical focus. You may have a ground-breaking idea for doing good, an idea that makes sense to you and your supporters, but if your business model doesn’t deliver a profit eventually, it will almost certainly fail. Markets move quickly and founders must dedicate their passion and effort to their ideas, as well as nurturing an awareness of how market movement affects their offering. They need coaching and mentoring to get their ideas off the ground and they need a strong commercial business model for delivering financial returns if it is to have any hope of survival in the long-term. One should not forget the basics of investment: Price-to-Earnings (PE) ratio, the most important financial metric, is based on the income or profit you generate vs the value of the business.  

The questions your commercial model should answer are:

• Who are the customers?
• What are the business processes that need to be established?
• What are the resource gaps and how are they filled?
• Who are your business partners and how can they support you?
• What is your value proposition?
• What is the business plan and revenue model?
• Is there a network effect for hyper-growth?
• How do you bridge the gap between a good cause and a commercial case?
• How will we deploy and market the product?
• How can we look after customers and partners?
• What is your customer service approach?
• How should we drive different sales channels and acquire the right channel partners?
• How will we run operations and support end-customers?
• What are your critical success factors?

Once you’ve had your idea for good, established what problem your product solves, identified your target market and done your sums, bridging the gap between the good cause and the commercial case will need broader thinking around your network of stakeholders. Your path to market may not always be via obvious means and it can pay to be creative. Ask yourself ‘How is the problem currently addressed?’, ‘Who picks up the tab to solve the problem now?’ and ‘How does your solution help others in a wider sense?’.

A Brand Strategy is also vital. Entrepreneurs must understand how a product or service becomes a brand that is authentic, is visible to targeted customers, solves a problem that has value for them and wears its ethical and sustainable credentials on its sleeve, differentiating it from the competition. This work helps founders and consumers alike understand who this brand is, what it stands for in the world, and how it fits into our lives. The Brand Strategy becomes the internal compass from which the company makes decisions, creative or infrastructural. 

Creating Prototypes and MVPs

An idea is just an idea until it gains form, function, momentum and fans. To that end, at commencement, building a prototype or a proof-of-concept to prove your concept works, to yourself and to potential investors, makes perfect sense. But it’s not the whole story. Prototyping can be a costly business, and as a sustainable start-up, you will need to keep those costs as low as possible.

Be as creative as you can when you are looking to make savings:

• Do as much of the work as you can yourself possibly using low-code or no-code platforms to develop your product
• Check out gig sites such as Fiverr to find low cost designers and coders who can help you
• Consider using tech students looking for real world projects as coursework
• Call in favours, and ask for new ones
• Use a virtual CTO or a tech partner who is willing to share the risk and the rewards
• Partner with an incubator or an investor who can help you assemble a great team to execute on your vision
• Do just enough at each iteration of your product to learn and improve.
• Using your own capital, or that of friends and family, as much as possible, will mean you can make your own decisions, and with friendly investors who are going to be wholly supportive of your plans, you won’t have to give away precious equity in your business.
• Always investigate what grants and awards are available in your region and sector, for a list in the UK see the Entrepreneur Handbook.

Types of Prototype and Progressive Realisation

It’s all about having the right prototype for the right moment, and only taking it as far as needed to convince yourself and your audience of the validity of your idea. Don’t be seduced into spending too much precious equity on an MVP, remember it is a proof of concept, and sometimes a proof will fail, and you may discover absolutely nobody wants your product. ‘Fail Fast’ is very important and the flexibility to adapt to the market condition is paramount for all startups. Better to start with a low concept demo (this can be just a few visualisations in a presentation) and get a reaction before moving on. This costs very little compared to creating a fully formed MVP. 

• Type 1 Concept Demonstrator  – This does just enough to bring your idea to life and make it tangible for your audience.
• Type 2 Technical Proof of Concept – Proves that your concept works technically and does what you set out to do.
• Type 3 Trial or Alpha Prototype – This takes the Proof of Concept one stage further, with more features and allows you to trial your product with a small number of real customers.
• Type 4 Minimum Viable Product (MVP) – The full, end-to-end product experience with just enough core features and functionality to satisfy customers that your product works and delivers on your product claims. Typically used in a beta trial or soft launch.

Future Proofing your Technology

MVP to Production
While it may be expedient and desirable to create your MVP on a shoestring, always anticipate success. Anticipate numbers of customers growing, sales increasing and transactions, storage and speed all pushing upwards. This will help you make the right early decisions with your technology. What works for an MVP, without these considerations, will almost certainly not scale. For example, if you choose to build your tech product yourself using low-code or no-code, the advantages are speed and cost effectiveness, but without considering scalability, you might find your ability to meet more complex requirements is impeded. Consider customer service and production support as part of your scalable solutions.

Techno-Economics
Working out the actual budget for scaling your business is crucial before you commit to a platform. It’s important to think through your options from the long-term perspective as well as the short. It can be cheaper and easier to use one of the big cloud service providers, like AWS or Azure, in the early stages of your business rather than having an on-premises IT services centre and team to run it. Cloud native solutions are cheaper to run and contribute towards Environmental Social and Governance (ESG). But be careful with your sums. Cloud Shock, just one of the issues that can arise when getting the cost of scale wrong, describes what can happen if your business grows quickly, with costs rising exponentially, ending up much more expensive than using an on-prem model.

Integration and APIs
Systems integration is one of the most important aspects of scalability in any business. If the systems you use don’t talk to each other, and those you want to connect with, then your data isn’t optimised or shared, you miss out on new features and enhancements, as well as collaborations with potential partners and clients and your customer experience is compromised. As a new entrepreneur, architecting a new application, product or service, you will need to integrate with other applications and systems. Choose a platform that promotes easy integration and allows others to connect seamlessly to your systems and services through APIs.

Data is the King
The business world has evolved to adopt and embrace data is the primary wheel to drive growth. Companies such as Amazon, Walmart and JustEAT use their operational data to understand their customers’ behaviours without sacrificing confidentiality and serve personalised offerings to retain and upsell. Mastering the art of data will define the success of any new businesses. If your business revolves around your operational data and your business model leverages data to drive growth, you do have a sound business.

Cyber Security or Security First
A core consideration from day 1 is ensuring you design, architect and build your solution to be secure – always Security First. For example, data should always be encrypted whether in transit or at rest.  As your business expands so do the opportunities for things to go wrong. Whether you choose a cloud or on premises solution, ensure you don’t skimp on security. Remember, it’s not just your business that’s at risk from potential cyber-attacks, data breaches or virus infections, it’s also the security of your employees, your customers data and privacy and the reputational damage that can be inflicted by any of the above scenarios.

In Summary

I believe it falls to the entrepreneurs of today to change the world. We do this with ideas, with vision, with hard work and persistence. We also do it by creating an environment in which the next generation of entrepreneurs can begin their journey, and by understanding that their path to success will be harder than ours. Sustainable, ethical, environmental and responsible enterprises should not be a subset of the business world, our challenge is to help EVERY business strive for and achieve these credentials, across all sectors. I believe the only way to drive this seismic cultural shift is to share knowledge and experience, build prototypes and MVPs, test radical commercial models, create brand strategies, build resilience and scalability and leave a legacy of good for the next generation.