Top 5 tips for an ethical business

Top 5 tips for an ethical business

Below is a post that LUXTRA founder, Jessica Kruger, wrote for Startups Magazine.  

Startups Magazine

Starting a business is one of the most rewarding paths in life. The moments of elation will of course seamlessly morph into moments of aggravation and despair. But ask any entrepreneur, and there’s nothing they’d rather be doing.

Adding ethics into the mix only amps up the level of life satisfaction. But also complicates matters. Here are 5 top tips to consider when starting down the ethical path.



As much as the world is screaming for an alternative to capitalism, money still makes the world go round and it’s here that we all need to start. Ethical or not - every business needs to know how it’s going to make money. No money. No business.

For an ethical business, it’s even more critical to get the revenue model right because it will be paying the “the true cost” (i.e. more) for everything, compared to their non-ethical competitors. Being ethical means a company will be paying living - not minimum - wages, purchasing organic or chemical-free raw materials, sourcing sustainable packaging, offsetting its carbon emissions etc… the list is long.

With these additional costs, the ethical business owner needs to make sure the business can generate enough revenue to stay in business given that it will be competing with brands that have the advantage of a lower cost base.


2. THE "WHY"

Simon Sinek asks Why - and so should you. The world is already jam packed with people and stuff… so why does the planet need your product or service? Every good ethical business owner needs to have their own existential crisis and to come out the other side clear headed that people and planet will benefit from their business.

The company most likely to succeed will be the one that couples a strong revenue model with a compelling raison d’être.



Linking in with the company’s “why”, having a strong unique selling point (USP) will further strengthen the brand’s viability. A unique selling point does not have to be one single feature. Sometimes it’s a combination of features that provides a winning formula.

Espousing ethical values is a great start, but it cannot be everything. Never in history has it been easier to start a business, meaning that the competition out there is fierce. The number of ethical- and eco-centric businesses is likewise booming. Furthermore, as an ethical business, it will be difficult to compete on that customer favourite: price. The ethical business must therefore find alternative means of adding value to its customers lives. The stronger the unique selling point, the stronger the business and the more likely it is succeed.



After going through their existential crisis, a wise ethical founder will take a deep breath and realise they need to pick their battles. A brand new Startup will struggle to tick every box on the ethical checklist, nor should it try. Rather than aiming for “perfection,” a young brand should seek to champion one key issue. Maybe it will be plastic, or perhaps gender inequality, or poverty. Maybe it’s natural fibres, or circularity, or, or, or… Choose one.

Whilst selecting a “single” issue may seem narrow, when approached intelligently, it’s vastly more manageable and will strengthen the brand’s overall messaging. It will resonate more powerfully with the customer and the wider world. Customers will start to say: “oh yeah, Yoni - that’s the brand shattering taboos around periods.” Or “Yes, I know Beulah - they’re the ones getting women out of trafficking” or “Luxtra - they make the bags out of fruit.”

Tackling one issue effectively defines and streamlines the brand’s work and makes it much more memorable.



Startup life is stressful and all-consuming, so bear in mind that all powerful mantra: KISS (Keep It Simple, Sunshine). Building on the above exhortation to narrow the ethical focus, do the same with the business overall. Adding more and more SKUs to keep the offering “new” will drain cash and brainpower.

Instead, start* by doing one thing really well, nail it, then rinse and repeat. Focus on providing a great product/service and back it up with exceptional customer service. This is always a winning mix, and it will go a lot further when compared to spreading resources thin trying to cover every base.

*the “starting” time period can last years by the way.



Avoid comparisons with direct competitors as much as possible. It just tends to make one feel lousy.


Don't compare chapter 1 chapter 20


Just as it’s never been easier to start a business, happily there’s never been a more fruitful time to enmesh ethics and sustainability into the fabric of a business. These are still nascent concepts, so building a brand around them not only increases your karma quotient, but it’s also smart business.

So, ethical-innovators… get to it!

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