Business models for sustainable business

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The key to a successful sustainable business rests largely with the business model itself – in other words, how revenue comes in and how goods and services are produced and create value for the customer.

You don’t need to start a new company to make your current business concept sustainable. However, you may need to consider how you can deliver the same customer value in a new way.

With digital solutions, for example, there are good opportunities to create business based on rental and sharing rather than sales. This type of “function-based” business model often goes hand in hand with reduced use of resources and more long-term customer relationships. It’s essential to have a well-thought-out format for this type of service. The sustainability benefit increases, for instance, when a product is used multiple times. If the format of the service results in an increase in transport activity, consumption of consumables or repairs, this may cancel out any benefit.

General economic analysis is an important factor in a changing world. Reading about what is happening in the world from a political, economic, technical, social and environmental perspective is a useful way of enabling you to act at the right time in the event of new circumstances or trends.

Factors that will be important moving forward are partnership and collaboration. As a business you don’t have to handle everything yourself. Obtaining help from partners in order to offer certain auxiliary services enables you to focus on your core strengths, and at the same time satisfy more of your customers’ needs.

There are different ways of creating a sustainable business model, including:

  • Services that don’t require materials or transport, but that are wholly or partially digital.
  • Quality products that are long-lasting, in terms of both trends and wear and tear. You can also sell additional services, such as spare parts, repair services or upgrades to satisfy expanded needs. 
  • Used products, thus ensuring they have a new lease of life before being discarded. 
  • Rent products or sell access to products via different service arrangements.
  • Base your business on a raw material or input commodity that would otherwise be thrown away.
  • Focus on quality, organic and locally produced or contributing to the local community. 

Circular economy

Unlike a linear economy, which is based on producing, consuming and then throwing away, a circular economy is founded on making the most of the value of materials and energy, with business models based on this value creation. In a circular economy, business benefit goes hand in hand with resource efficiency and reduced impact on the environment and climate. For companies, the circular economy represents new ways of earning money through new business models.

The circular economy and its impact on the business sector on the Confederation of Swedish Enterprise website (in Swedish)
The delegation for a circular economy on the Delegation for circular economy’s website (in Swedish)
Cradlenet – A cross-industry network for companies that are aiming to become circular

Questions to consider
  • In what way is your company’s business model sustainable?
  • What trends in society affect your business model?
  • Can you find a way to earn more money when you sell/buy fewer products or a smaller quantity of materials?
  • Can you earn money from helping people to live more sustainably?
  • Can you solve a problem on the market by means of a digital service instead of a physical product?
  • Who can you collaborate with to create even more value for your customers?
Links and detailed information

The Swedish Agency for Economic and Regional Growth (Tillväxtverket) has collected information about circular business models and social entrepreneurship.
Circular business models on The Swedish Agency for Economic and Regional Growth’s website (in Swedish)
Social entrepreneurship on The Swedish Agency for Economic and Regional Growth’s website (in Swedish) 

Stiftelsen Svensk Industridesign (SVID) has joined forces with other stakeholders to develop a sustainability guide for product development.
The sustainability guide on SVID’s website (in Swedish)

Almi has several online seminars aimed at business owners, both new and those looking for new inspiration. Each chapter is divided into a number of sections that deal with relevant topics. The chapter “Räkna på din affär” (Count on your business) includes a section on sustainability.
Start-up seminars online on Almi’s website (in Swedish)

The Swedish Environmental Protection Agency has information on sustainable business models for the textile industry.
Sustainable and new business models in the textile and fashion industry on the Swedish Environmental Protection Agency website (in Swedish)

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Responsible: Swedish Agency for Economic and Regional Growth

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