Sustainability is a core concern of your business — you want to foster a better environment for future generations.
However, you might’ve realized you’re low on the necessary funds to achieve this. You know you need to recalibrate your budget to meet your sustainability goals but don’t know where to start. Fortunately, identifying your areas for improvement is easy — acknowledging them already solves half the problem.
Once you know what they are, you can fix them by making educated decisions. Every business will need a different strategy, but most organizations have a few standard areas where they can downsize their spending.
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Working through these parts of your budget will give you more time to focus on advancing sustainability. Here are six expenses to watch for when analyzing your accounts.
1. Hiring
Only hire people for the vital positions within your company. Wages will occupy a significant chunk of your budget, especially if you’re a relatively new business owner. Your motto is sustainability, but you likely won’t need a chief of environmental affairs for every department. Many organizations that switch to environmentalism make the mistake of creating superficial positions. Take on only as many people as you can afford — otherwise, you’ll lose employees by reducing their salaries.
Outsource work through independent contractors and part-time workers. You’ll spend less time and money on training, and you won’t have to contend with expensive benefit plans. Before implementing this strategy, though, consider your company’s needs.
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Outsourcing depends on your business operations. You’ll keep more money in the bank, but you’ll pay a regular bill to another corporation for their services. In some cases, it’ll be more cost-efficient to handle tasks in-house.
2. Office Equipment
Every brick-and-mortar office needs plenty of equipment to keep it running. Even online businesses require tools — but they don’t need as many as physical offices. Paying the rent or mortgage each month on top of funding your equipment usage can weigh heavily on your pockets.
Keep in mind that office supplies and general expenses are often separate within a business budget. Supplies include items like ink cartridges, writing utensils and ledgers, while general fees consist of computers, printers and software. Eliminate the cost of maintaining and repairing equipment by digitizing more of your tasks.
Choose energy-saving tools such as LED bulbs and ENERGY STAR monitors to reduce power consumption. Following ENERGY STAR’s savings plan can help a company reduce its energy consumption by 30%.
Purchase refurbished or low-cost devices if you can’t digitize your operations. Brand new machines are efficient, but they aren’t forgiving to your wallet. Used equipment is as equally effective as brand-new items — don’t let labels discourage you. Buy supplies in bulk, and take advantage of specials and discounts. Ask your suppliers about price reductions.
3. Workers’ Compensation
Most companies supply employees with workers’ comp through private insurance, governmental programs or self-insurance. Self-insurance is suitable for large corporations possessing enough funds to pay their workers directly.
Stick to government programs or private insurance if your company is smaller. Both of these require you to pay premiums, but they are much less costly than paying employees yourself. A business can quickly run itself into the ground by offering payouts it can’t afford.
Personal injuries have various caps depending on the state. Be aware of local standards in case you encounter an injury claim. It’s essential to know how much your worker is entitled to depending on their damages. Large businesses running on self-insurance must always set aside enough money to cover compensation.
Non-economic and punitive damages have caps in most states, but economic ones don’t. Economic losses can take a significant portion out of a self-insured business’s funds, which is why budgeting is crucial.
4. Waste Management
Americans produced 267.8 million tons of waste in 2017, with 139.6 million tons of it heading to landfills or undergoing incineration. Commercial industries tend to output more garbage due to their large operations and increased need for resources. These inefficient practices accumulate numerous disposal expenses.
Inefficient waste management empties your pockets on disposal services and harms the environment. Employing greener disposal practices will free up room in your budget for other initiatives.
Make a shift toward recycling by placing bins around the office and educating employees on proper waste practices. It’s essential for every worker to know what they can and can’t recycle — one misplaced object can make an entire load of trash nonrecyclable.
Encourage workers to recycle their trash by creating incentivized programs. For example, if a department hits a monthly recycling goal — measured in pounds of recycled waste — they receive rewards like gift cards, free lunch or reserved parking. Send the collected garbage to a recycling plant, or have a facility compost it for landscaping use. Landfill diversion methods such as gasification can create biofuels your business can reuse for powering facilities.
5. Record-Keeping
Paperless operations are becoming a staple in many offices due to the affordability and lessened environmental burden. The ledgers and receipt books of years past fade in relevance as business owners incorporate automation.
Instead of flipping through pages of data, they can use a keyboard shortcut to find what they need in less time. This switch also makes sense through a consumer’s perspective. People adore technology, and many prefer businesses on the leading edge of innovation.
Use open-source software to reduce the costs of high-end, name-brand applications. Many of these programs contain the exact components as any paid software, and they function the same or better. Code developers frequently update their software, which means you’ll always have the latest version available.
If you splurge on anything, let it be excellent backup and encryption technology. Digitizing your documents is convenient, but it also poses cybersecurity risks. Secure your information to maintain consumer trust.
6. Product Design
If your company sells products, consider changing the packaging and design to accommodate sustainability. Redesigning plastic packaging with greener materials will depend on the products you distribute.
However, some companies have experimented with bamboo, recycled paper, mushrooms and seaweed. Products without a container are a possibility, but this strategy isn’t advisable for edible goods. Try swapping out single-use designs for reusable or refillable types.
If abandoning plastic isn’t feasible, ensure it’s recyclable once it reaches its end. Unilever recently announced plans to conduct a 50% reduction of virgin plastic in its packaging by 2025. Gradual steps like this make a big difference in decreasing pollution. Start small with rehauling your packaging techniques, and you’ll soon advance to more impactful alternatives.
A simpler product design requires fewer materials to make, which reduces your production costs. Consider changing suppliers to obtain materials at a lower cost. Always choose distributors whose environmental values align with yours. Reduced purchasing prices won’t help you reach your sustainability goals if your supplier is energy- and resource-intensive.
Implement Practical Budgeting for Better Sustainability
Track which areas of your business your money goes to and keep a realistic budget for all of them. Adhering to these financial standards will lower your expenses and ensure your status as a sustainable organization. Protect the environment and maintain your financial profile through practical business strategies.
