Do you know what financial sustainability is and how it relates to the health of companies? Check out this article for concepts and tips on how to implement them in your business
The agenda of financial sustainability has been gaining more and more space in corporate discussions. You may not relate the term to the concept, but it is as old as the need to be implemented in companies.
It is the effective management of resources that keeps a business healthy and viable. Although this theory seems obvious, it is not always put into practice. And the result of this is deficient and unbalanced companies.
In the text below you understand more about the concept and importance of financial sustainability. Additionally, there are tips for implementing it in your business. Good reading!
What is financial sustainability?
Probably the first association you make with the term sustainability is environmental. Although this is, in fact, the most common application, there are also other scenarios, including financial ones.
Just like the environment, financial sustainability talks about wasting resources. When we talk about a company's resources, we refer to everything that keeps it active. This is the case with material, financial, human resources and even information.
And what is a financially sustainable company? It is one that uses its resources intelligently and makes full use of them, avoiding unnecessary expenses. Those who apply this model in their business act strategically, meeting the needs of the present, but envisioning the needs of the future.
>>> And speaking of the future, have you heard anything about Decentralized Finance (or Defi)? In this text from iFood News you understand more about the concept that will revolutionize the financial future of people and companies.
Why apply financial sustainability in companies?
When you talk about a healthy company, what type of business do you think of? Probably those who have cash in the black, who manage effectively, who make the most of their resources and who strategically plan their actions, right? For all of these topics, having the finance sustainability is fundamental.
When a company optimizes the resources it has available, it automatically optimizes its costs as well. After all, when a resource is exploited to the maximum, there is no need to spend more investment to replace it. This makes it more sustainable, generates greater savings and increases profits.
Another advantage of generating savings through the rational and intelligent use of resources is to enable business development, whether by maintaining long-term projects or by executing initiatives that require investment. Not to mention the possibility of keeping reserve funds for emergency situations.
How do I start applying this to my business?
The essence of financial sustainability is directly linked to effective management and strategic planning. Therefore, its implementation requires attention to all aspects of the company, from leadership to people management. Check out some tips below on how to put it into practice within your company.
>>> Do you want to start a business, but are you worried about finances? Check out five fundamental tips for taking your first steps.
Have vision and balance of expenses
It may seem crazy, but many companies don't have a broad view of their monthly expenses. When this happens, they only consolidate their fixed costs, such as salaries, rents and taxes, leaving aside smaller investments, such as the purchase and maintenance of equipment and the acquisition of software and platforms.
To reverse this situation, the tip is to put everything at the tip of a pencil – or, better said, in specific financial control systems. This way, you have a full view of what consumes money and can create plans to contain or make better use of the money.
Pay taxes on time
Although we said in the topic above that companies have vision about their taxes, they are also often neglected amid the disorganization in the area. It's not even necessary understand finance in depth to find out how much damage this causes to the health of a business.
In this case, the solution is to have efficient tax management, which evaluates all taxes and dues, organizes them and makes projections and due monitoring of all of them.
Plan every move
Planning is key for any person or company that wants to be sustainable, healthy and, above all, durable. And don't think that this is just related to putting ideas on paper.
Planning involves defining goals and deadlines, monitoring indicators, preparing projections, defining costs, as well as expectations of gains and losses.
Conclusion
There are countless challenges in having and, above all, maintaining a company. It is not enough to look to the future without a sustainable environment being created in the present – and this requires discipline, planning and strategy. This is why sustainability must be increasingly incorporated into business. And more: seen as one of its pillars.
Extra tip: even more important than looking at your business, is looking at yourself as an entrepreneur. After all, only a well-founded foundation is capable of bearing fruit. If you want to grow in 2022, check out in this article the tips that LinkedIn Top Voice Eberson Terra has for you.
