Sustainable business: it’s a fashionable phrase, a buzz word. But when you hear it, you think ethical. Right?
Well, sustainable business isn’t just about green and socially responsible enterprises. At base level, sustainable business is all about longevity: it’s about the long term maintenance of a healthy profit.
In these tough economic times, businesses are tested to their limits. Consumers are risk averse: they only want to deal with firms they know and trust. The upside of this is, people will do business with companies if they believe they’re going to stick around for a while.
Assuming you want to be one of those businesses, you’d best get to know what makes an enterprise ready for the long haul. Just what kind of business is sustainable?
On a case-by-case basis, of course, you can consider a business’ fundamentals: its financial statements and health, its management and competitive advantages, and its competitors and markets. But to speak generally, there are some sectors that are more likely to produce the kind of solid, sustainable business that will see out – or even benefit from – the downturn.
To give you a nod in the right direction, we’ve picked out business types we think will last the tough times:
1. Online retail
High street sales are plummeting and consumers are disappearing: but online sales creep up and up.
How is it possible? Well, web-based enterprise has all the qualities of a sustainable business: low set up costs, low running costs and the potential to garner a broad client base. If done well, it’s virtually immune to economic change.
With no high street overheads to speak of, no geographical or time restrictions and no need to display stock, online retailers are not only the shopkeepers of the future, they’re also the ones cleaning up right now.
So whether you’re thinking of selling a niche service online, plan to go live with an online information product, or aim to trade as a web-based retailer, don’t let the downturn hold you back. Because if you’re online, it won’t.
2. Funeral parlour
Setting up a funeral home might sound a bit grim, but hear us out.
Human needs remain the same no matter how the economy fares: food and shelter are everyday necessities. Illness can strike at any time. And one day, ultimately, the clogs are going to pop. It follows: businesses like funeral parlours do well no matter what the GDP.
From a demand perspective, accommodation providers, healthcare and food suppliers have the sustainability hallmark too. Even so, you have to watch out for changes in the market.
It’s worth noting that restaurants do badly in lean times, for instance. And then, the recent collapse in prices means that investment property is probably not the best way to go… But buying to let is a profitable alternative route. And supermarkets and convenience stores are a short but lucrative step away from catering.
Healthcare supply and funeral care are constants though. Business-wise, pine boxes – and pill boxes – are a safe bet.
3. Pound shop
The closest thing to ‘free’ is a 99p sticker.
It’s recession time, and customers are cutting back on expenditure. High street units are emptying across the country. If you want to set up shop and you’re keen to avoid risky ventures, you can’t go wrong opening a store full of bargains.
Toys, toilet roll and tat: these outlets aren’t classy. But they’re reliable in their offerings and are a one-stop-shop for children’s parties, Christmas lights, cheap chocolates and candles. And your stock is as cheap to buy as it is to sell.
Just make sure plastic flowers and ‘Made In China’ signs are to the taste of the high street in question.