Guest article "Sustainable start-ups: steady success"

Growth and ever more growth. When you read the success stories of startups, it seems as if growth is the only thing that matters. Investor money is raised, dozens of employees are hired, and everything is geared towards expansion. Profitability and earnings seemingly become secondary as long as there is enough investor money. The end result is a spectacular multi-million dollar exit for the founders, and a corporation takes over the business. If you don't think outside the box, you quickly get the impression that this is the rule. But it's actually the exception.

The majority of startups have to work hard for years to achieve success. If you don't have easy access to investor capital, sustainability becomes a crucial factor. Let's take a look at how to use your resources as efficiently as possible and how to achieve success with patience and perseverance.

What does sustainability mean in a startup?

In its simplest form, sustainability means using available resources as efficiently as possible and wasting as little as possible. As a startup founder, you have a variety of resources at your disposal:

Money: Money is the most important resource in a company; without it, you don't have any of the other resources. It determines the company's success or failure. You can do a lot with money. But therein lies the danger. While you can do a lot, not everything makes sense. So always consider the purpose for which you are investing money and whether there might not be a more important investment at the moment. Sustainability here means carefully considering where the least amount of money can have the greatest impact.

People: While it may sound a bit harsh to call people resources, in a business context that's exactly what they are. They offer you, as the founder, their time, as well as their experience and skills. Since personnel expenses are usually among the largest items in a company, it's important to use your employees' time and your own as efficiently as possible. Don't waste working time on tasks whose purpose you don't know. Every action should have a clear goal and result. This way, you and your employees avoid wasting time on the wrong tasks. Failure to do this will lead to frustration for both parties.

ProcessesWell-formulated and planned processes are the essence of sustainability. They allow you to plan specific workflows down to the smallest detail. This gives you the opportunity to eliminate friction from the outset. They also make it easier to integrate new employees into the startup without having to undergo lengthy training. If everything is documented and process-based, misunderstandings are less likely to occur. But be careful: A process must always be adaptable. Rigid and outdated processes have the exact opposite effect on sustainability. Therefore, they should always be reviewed and adapted if necessary. Feedback from those involved is extremely important here.

What are the benefits of sustainability for my startup?

Of course, sustainability isn't an end in itself. Startup founders generally can't afford to do something that doesn't provide direct benefits. Here are a few examples of the economic benefits a focus on sustainability can bring to your company.

Crisis security

For every successful VC startup that has thrived through extreme growth, there are numerous unsuccessful examples. The reason for this is the risk that such a strategy entails. Ultimately, with extreme growth, money is invested in all directions, looking for where it will make a difference. More resources are then deployed in that area. This method, of course, has extreme wastage. You may sink large amounts of money into strategies that don't work in the hope of finding the right one. Most run out of money beforehand. A lucky few find their method before they run out of funds and manage to exit.

Sustainable commitment prevents these types of high-risk investments. All investments you make as a sustainable founder are based on well-thought-out and proven strategies. While this takes time and effort, you can be fairly certain of the outcome of your investment. Planning also ensures that you don't overextend yourself financially, as you conduct a cost-benefit analysis for each project.

Company Culture

Unfortunately, the impact of a positive corporate environment is still underestimated by many. Your employees are the ones who keep your company running. Providing them with a good working environment should be one of your priorities. Because only satisfied employees perform well.
No one likes to feel like their time is being wasted. This feeling can arise when you assign employees too often to tasks outside their area of expertise. Likewise, negative feelings arise when you don't create the conditions your team needs to get the job done well. Your employees' performance depends heavily on whether you create the right conditions and have a well-thought-out plan. Your employees will repay you for both with good work and loyalty.

Long-term success

A startup is a long-term commitment. There's no getting around it. It will determine your life for years to come and require a lot of energy. This makes it all the more important to choose the right motivation. The idea of building a company only to sell it as quickly as possible is a bad motivator. Your chances of being among the aforementioned group of successful VC startups are extremely slim. Instead of making a bet with extremely low odds of winning, you should plan for the long term.

The sooner you decide to build a business and lead it to long-term success, the better. Once you're free of the time pressure, you can build your company piece by piece, from the foundation to the roof, instead of trying to build a roof first without coordination. Processes and long-term strategies provide the necessary foundation on which you can gradually build a healthy, growing company. Because you waste fewer resources, plan better, and keep your employees motivated, risks are limited.

Over time, you can focus on making your processes efficient enough to make your business profitable. And who knows: After a few years, someone might come along who wants to buy your healthy company. Exiting isn't inherently a bad thing, but it shouldn't be your sole motivation.

Conclusion

Sustainability is a buzzword that's thrown around a lot. As a result, the concept is sometimes ridiculed. Yet, virtually every founder is a sustainability advocate. Who likes to waste money?

Sustainability should be a guiding principle for all your company's decisions. Surround yourself with people who share your views and pool your expertise to continually increase efficiency. Don't let yourself be pressured into anything, but go ahead with your investment once you've decided to do it. Over time, you'll see that your small startup has grown into a strong and, above all, sustainable company.

About the author:

Julius Pankoke is a content contributor and startup enthusiast. He specializes in entrepreneurship, business development, and digital marketing. At SmartBusinessPlan, he helps founders write business plans.