Financial Sustainability: Understand What It Is and How to Achieve It

Financial Sustainability: Understand What It Is and How to Achieve It



Effective management is the best way to ensure your business is viable. This has everything to do with the concept of financial sustainability. The idea is to balance income and mode of consumption. That is, find ways to use natural resources more consciously.

How does this impact your business? Simple: You can reduce costs and, as a result, increase your bottom line and your bottom line. For more details, follow this post and see what it is and how to achieve the sustainability of your business finances.


What is financial sustainability?

What is financial sustainability?




Sustainability is a term usually related to environmental aspects, but it can – and should – be applied to finance . As we said, the purpose is to know how to use resources in a rational way, since the expenses made with quality and the avoidance of unnecessary expenses leads to the formation of a reserve for emergencies.

This can be applied to your personal life as well as to the company. In the corporate world, the goal is to have a more comfortable and balanced reality, which ensures the possibility of maintaining long-term projects. Thus, the company can also fulfill its social mission.

What attitudes are needed for personal financial sustainability?


If an entrepreneur can not organize his own financial life, he will certainly be unable to keep the company’s resources in and out. So the first step in putting the company’s finances on the ground is to think deeply about personal spending and correct the attitudes that undermine the monthly budget.

Having a sustainable financial life means shaping the standard of living to disposable income. That is, you can not spend the salary that has not yet been paid in advance – as happens when we incur debt on credit cards, financing or installments.

In addition, planning for a sustainable retirement can provide conditions for the entrepreneur to maintain the standard of living when he or she stops working. Soon, with his future protected, he could focus on the future of the company. Therefore, you need to build a balanced family budget and have a responsible relationship with your own money to achieve personal financial sustainability.

What are the benefits of financial sustainability for companies?

What are the benefits of financial sustainability for companies?


The great advantage of companies adopting this concept lies in the fact that sustainability is related to activities of accounting, strategic planning, adaptability and vision of the future.

With this, the company manages its finances better and guarantees the fulfillment of investments and payments, as well as the maintenance of infrastructure costs. If this is not done, the business becomes unfeasible. These are other advantages of adopting sustainability:

  • increase in profit: the report of the MIT Sloan Management Review and Boston Consulting Group, published by the Journal of Sustainability , said that sustainable strategies were responsible for the profit of 37% of the surveyed. In addition, 50% of organizations modified their business models due to opportunities that arose in the area;
  • increasing competitiveness : companies that invest in sustainability invest in the quality of life and well-being of employees, in reducing environmental impacts and in maintaining positive results;
  • valuation of actions: the organization that focuses on sustainability is more efficient, because it analyzes several aspects and tries to evolve with the obtained results;
  • better corporate image: companies that adopt sustainability are well-liked by consumers and the community at large – many people prefer to buy from responsible companies with natural resources and the environment.
  • financial tranquility: the sustainable use of resources ensures more financial peace, because the budget is applied in a balanced way.

Despite these benefits, many entrepreneurs still question the validity of this concept. Problems managing and disrupting documents and data can make this process difficult, but you can apply it to your business.

How to apply this concept in practice?



The idea of ​​sustainability addresses 15 business areas. Are they:

  • strategic planning;
  • quality management;
  • leadership and sustainability;
  • sustainable purchasing;
  • financial management ;
  • productive chaining;
  • Social development;
  • people management;
  • efficient use of water;
  • efficient use of electricity;
  • solid waste management;
  • legislation, standards and certifications;
  • marketing and communication;
  • market and conscious consumption;
  • public policy.

The idea of ​​this broad scope is to allow the entrepreneur to review all his actions and, from there, identify the mistakes that are made and hurt the business.

It is important to emphasize that sustainable actions are translated into simple attitudes such as flexibility, good working environment, adequate leadership, favorable organizational climate and other situations that improve the quality of life at work.

The good use of resources and the avoidance of waste are other recommended actions. For example: to implement a technological system to reduce expenses with paper. Or use the remains of the production sector and reuse for another purpose.

What practices should be avoided to achieve financial sustainability in the business?

What practices should be avoided to achieve financial sustainability in the business?


In the previous topic, we talked about what it takes to achieve financial sustainability in a company. However, there is also the other side of the coin: the practices that should be avoided. Check some more about some of them:

  • to adopt practices with the objective of taking advantage in public competitions – the sustainable company can not be associated, in any way, to illegal schemes or corruption, since the funds diverted mean less resources for the population (transport, health, education, leisure, etc.) ;
  • use non-renewable energy sources as the company’s main electrical maintenance;
  • neglect good safety practices in the workplace or in production and thereby endanger the health or physical integrity of employees;
  • discriminate against persons and employees by race, religion, color, sexual orientation, etc. It should be noted that this issue is also valid for selection processes, which must be fair and respectful of the principles of equal rights;
  • to create confusing or unfair contracts to establish partnerships with other companies or to provide services and sales of products to customers;
  • disregard technical standards and good practices for the goods produced and, consequently, endanger the physical and psychological health and safety of consumers;
  • not to provide an efficient customer service channel (SAC);
  • inform the characteristics of the products or services in an inappropriate way for the consumers;
  • not to inform the correct disposal of packaging, products that are out of date or will no longer be consumed for any other reason;
  • do not adopt reverse logistics – when necessary – to prevent certain products from being disposed of in the environment. This point should not be neglected by companies that manufacture products that are slow to biodegrade or attack nature (batteries, tires, medicines, toxic products, etc.).

Keep in mind that all these practices affect and the company image and, consequently, your billing. And as seen, increasing revenue and profits is crucial for a business to stabilize its finances and can continue to grow.

How you could perceive, understand and apply financial sustainability is not difficult and your company has much to gain. Increased competitiveness and productivity are enough to justify the adoption of this model in your business. And if you want to have more practical tips like these, subscribe to our newsletter and see how to improve your business every day!