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Business sustainability can refer to a company’s ability to maintain growth and customer loyalty, as well as its impact on the environment. It is important for a company’s long-term viability and can lead to lower operating costs and continued relevance in the industry.
Business sustainability can generally refer to one of two different concepts that can be connected or used as standalone terms. In a sense, it generally refers to the sustainability of a business in terms of growth and development of new and returning customers. This usually deals with customer loyalty, the future of whatever industry or business a company works in, and the way the company is being run by its executives. Business sustainability can also refer to how well a business can be sustained in an ecological and global sense, with respect to the company’s environmental impact.
In whatever sense the term is used, business sustainability generally refers to the likelihood and ability of the business to remain productive and viable in the future. The economic sense of the term generally refers to how a company is being managed, how well customer loyalty is being maintained, and the future of the industry. Customer loyalty is a vital aspect of business sustainability as it can not only create repeat business but also new business as customer satisfaction leads to “word of mouth” business growth. Many companies use different programs and initiatives to increase customer satisfaction and loyalty to ensure continued business sustainability.
Company management and the future of the industry are aspects of business sustainability that can be as important as customer loyalty, if not more so. A company can be profitable but not sustainable if those funds are not being managed properly and channeled back into the company to promote growth and sustained productivity. Likewise, if the direction of an industry is changing, a company will typically need to adapt to these changes in order to survive and remain relevant within the industry.
In ecological terms, business sustainability often involves the impact a company has on the environment and its use of resources. Increased sustainability can come from programs that reduce the waste produced by the company, promote recycling and the use of recycled raw materials whenever possible, and avoid undue burdens on the environment. Many retail businesses, for example, will use dimmed lights during hours when fewer customers are likely to be in the store. Not only does this save the company money on electricity costs, it also reduces the amount of resources used by that store.
In this sense, business sustainability is vital to business for two very different reasons. On a purely altruistic level, this kind of sustainability matters because of the environmental impact of businesses on the well-being of other living beings. From a financial perspective, it is likely that a sustainable business will not only have lower operating costs, but will also remain a relevant business well into the future. Businesses that produce excessive waste and require large amounts of raw materials are often the target of government regulations to reduce waste and may simply be unable to continue operating as resources dwindle.
Asset Smart.
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