This article is part of our Future of Business series, where we explore how founders can build purposeful businesses which consider the impact their startups will have on people, planet and profit, equally.
The distance between brands and their consumers has never been smaller. Through social media, instant messaging and chat apps, startups are able to communicate directly with their customers in a number of ways - which means transparency and honesty are essential elements to building your brand online.
As consumers become ever more conscious of their purchasing decisions, they are taking a closer look at the companies they buy from, and research shows they are ever more likely to purchase from brands which are putting sustainability first.
Transparent production is an integral part of a sustainable supply chain. For startups, this means being clear about where you source your products from, explaining exactly which steps are taken in the supply chain so your products can reach your customer’s doorstep.
As more and more companies make supply chain transparency an important factor within their businesses, companies are understanding what is required of them in order to be responsible businesses.
For startups, this is a unique opportunity. Established businesses who’ve built well-entrenched brands will have a harder time proving their transparency, but more nimble brands can build themselves with transparency in mind from the beginning, leading with purpose and building customer trust from the outset.
Transparent production can encourage more businesses to play their part in tackling the climate emergency, and as more customers respond to sustainably-driven decisions, their purchasing power will continue to drive this change.
It’s been shown that customers are willing to pay 2% to 10% more from businesses that are transparent about their products.
Being honest about your supply chains
Consumers can often take what a brand says at face-value - so it’s up to us to be honest about how and where our products come from. Business is an act of service, and part of this service is helping customers make more informed decisions.
Over the last decade, business practices and supply chains have been put under tighter scrutiny in light of the accelerating climate and ecological emergency.
Accountability came to the front of the agenda particularly within the fashion industry, after the Rana Plaza building collapse in Bangladesh in 2013 killed over 1,100 garment workers, and recent research has found 10% of the entirety of global carbon dioxide emissions come from fast fashion businesses.
Demands have increased from customers and governments to ensure all businesses share key information about where and how their products are made.
But the difficulty is that supply chains are not, by nature, transparent.
By revealing often proprietary details about your supply chains, you risk opening your business to a competitor’s advantage, and there’s a greater chance of reputation being affected or products counterfeited.
It can also be difficult to get information from your suppliers about their practices, and often these details can be thin on the ground.
However, the good news is it’s possible for your startup to start making a difference.
Brands that are doing the right thing
Patagonia has led with a sustainable, transparent business model from the beginning. The outdoor clothing brand thinks planet-first, with its website detailing exactly where the company does business, and how the products get to the consumer.
Long-established businesses such as Nike map the supply chain journey, offering transparency for consumers who want to know exactly how and where their products are made.
Changes your startup can make
It can often feel overwhelming as a startup knowing where to begin. Resources and budgets are tight, so being perfect straight away is not an option. But always looking to do better is. Here are some things your startup can do to up the transparency of your production:
1. Set realistic goals
Founders are ambitious, but we need to set ourselves smaller, more regular targets at first, rather than aiming for the moonshot straight away. Everything from the number of employees, to stakeholder interests and funding impacts a startup’s ability to be as sustainable as possible.
So, instead, ground your goals in the present, and set targets for further ahead for the development you wish to achieve in the future. What you can do from the start is develop a code of conduct for your startup, ensuring each supplier you work with complies.
2. Understand the supply chain journey
Identifying areas for improvement, mapping the supply chain journey and visualising what needs to be done to secure more sustainable practices of working is essential. Ensure there are no gaps in your understanding. It’s better to know what needs to be improved, than have question marks resting over essential components of your product journey.
3. Be transparent with suppliers
Engage within the supply chain and collaborate with your suppliers to improve the processes involved, and continue to monitor activity. Open communication will result in a company you are proud of being transparent about.
4. Be transparent with your customers
Ensure your transparency is a key aspect of your startup marketing. Whether that’s including a page on your website which discusses your supply processes, shouting about it on social media, or sending notes with your products to your customers, being transparent with them builds trust that will ultimately lead to customer loyalty.
Changing business for good
Transparent production holds startups accountable. It ensures steps are continually being taken to do planet-friendly business, and your customers will trust your brand - for good reason. It makes a strong statement that your startup is working hard to become part of the future of business.