HOW VALUABLE SUSTAINABILITY-FOCUSED BUSINESS THROUGH CONSULTING AND MSME EMPOWERMENT INITIATIVES IS?

• Main Author: Akil Pratama, Ramel
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/85617
• Institution: Institut Teknologi Bandung

The growing emphasis on sustainability at the global level has had a significant impact on businesses in Indonesia, necessitating a shift towards alignment with sustainability values or adherence to the guidelines set forth by environmental, social, and governance (ESG) criteria. This research examines the value of a newly established sustainability-oriented business with a particular focus on the advisory and MSME empowerment domains, namely Economic and Business Sustainability Institute (EBSI). The study addresses critical business challenges faced by EBSI, including the establishment of a robust revenue model, the determination of the cost of capital, and the conduct of business valuation. A variety of theoretical frameworks were utilized, including Porter’s 5 Forces, PESTLE, SWOT analysis, and financial forecasting methods. The analysis suggests that EBSI adopt a multifaceted revenue model through social enterprise business model, the revenue stream including project-based research and advisory services, project-based B2B training, education initiatives, a web-based Learning Management System (LMS), MSME initiatives through community development funded by grants and CSR funds, digital product solutions, and impact investment initiatives. The cost of capital calculation yielded a suitable rate of approximately 20% for EBSI. Valuation methods, including the venture capital method, relative valuation, and discounted cash flow (DCF) analysis, estimated EBSI's valuation at Rp20,314,750,000, Rp60.922.648.513 and Rp32.332.000.105,63 respectively, with an average valuation of Rp37.856.466.206,34. Additionally, a terminal value after a 10-year forecasting period using the DCF method resulted in a company value of Rp207.024.083.191,21 with a perpetual growth rate of 14.91%.