There are two meanings for the word sustainable within the business realm. One means to create a business that is self-sufficient or easily maintained, producing a passive income.
The other sense of the word refers to businesses that align their business practices around a healthy triple bottom line, ensuring maximum corporate social good with a minimal negative impact on the environment.
There are of course plenty of sustainable businesses online that meet the first definition, but fewer that meet the second. In light of this, we felt that it would be good to discuss how to create a profitable online business that is truly sustainable, in both senses of the word.
Profitable Passive Income
Simply put, a profitable online business from which to earn a passive income can be elusive but not impossible; it merely means that you need to have a very good idea and for that idea to accrue reoccurring traffic or business/sales.
One of the easiest ways to do this is to offer some kind of membership program or subscription service that charges a fee – think Netflix and Spotify. This type of business model ensures that once a customer has converted, you receive recurring payment from them.
One-sale business models are never going to be truly passive income, unless the business becomes a household brand where the name sells itself, which, unless you are Coca-Cola, is unlikely and a very long process in any case.
That being said, any online business is just that, a business. It cannot be profitable without the right amount of promotional effort.
This means effectively marketing this business, through online marketing techniques like paid search ads, social media marketing, and taking advantage of affiliate marketing opportunities.
This will be what assumes most of your time and energy in generating a self-sustaining, passive income from your business. Of course, when it comes to making the right connections between advertisers and affiliates for your business, this will also take some time and require some strategic thinking. Affiliate offers won’t come over night, nor do you want to accept just any offer that comes your way.
Ultimately, this type of marketing partnership needs to benefit both businesses and the connection needs to make sense.
Moreover, if you intend to have a healthy triple bottom line, you also want to ensure that your marketing partnerships are with companies that are making similar commitments in their business operations. Otherwise, this partnership is counterproductive to what you are trying to do with your business, regardless of the profit they may offer.
Environmentally Friendly and Socially Responsible
Of course, the problem with everything moving increasingly online, despite its practicality and efficiency from a business point of view, is that the internet requires more and more energy, increasing its electricity demand yearly.
As Gary Cook, Senior IT Analyst for Greenpeace, explained in The Guardian, “the internet now uses 2% of the world’s electricity – as much as the aviation industry – and that figure is expected to increase rapidly as we move from three billion people online today to as many as six billion by the end of the decade.” Written back in 2014, that 2% has now risen to 3% as of 2016.
With such rapid growth, the only way to ensure that the internet doesn’t go the way of industries like automotive and air conditioning – creating devastating harm to the environment – is for internet-based companies to invest in renewable resources to fuel their business, instead of relying on polluting sources of energy.
As Cook outlines, some businesses like Google, Apple and Facebook, who occupy extensive online real estate, are doing their part. These internet giants have been leaders in renewable energy use, investing in wind and solar energy to power business operations for almost half a decade now.
However, the behemoth Amazon has been slow to the draw; they only launched their sustainability efforts in 2016. Of course late is better than never. The hope is that more and more companies will begin to consider their social and environmental responsibilities in regards to internet use and energy consumption and follow suit.
So how does this coincide with making your business environmentally sustainable? Looking for green web hosting services from companies that power their data centers with renewable energy would be a start. And of course whatever your business is based on, it needs to include environmentally friendly products and services.
If you are an ecommerce business, you need to look into environmentally friendly packaging and shipping methods, and whether working from home or an office space, going with a green energy provider and practicing environmentally friendly work practices also go a long way.