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Today, consumers are increasingly concerned about doing business with firms that may clearly display that they’re committed to improving the world around them. These motivations can range from supporting essential social causes to providing environmentally friendly products. In fact, over 40% of consumers admit that they usually tend to buy services or products from firms that practice sustainability. For this reason, it shouldn’t be surprising that almost 100% of all S&P 500 firms have environmental and sustainability goals.
There is a misconception within the small business community that ESG (environmental, social and governance) initiatives are something only large firms can afford. But that is completely flawed. For small businesses and entrepreneurs, sustainability efforts can actually improve operational efficiency, increase customer demand and increase profitability. Here are six easy ways small businesses can reap the financial advantages of sustainability.
Related: How to harness the facility of sustainability in small businesses to extend profits and capital
1. Implement energy-efficient solutions
Many firms require loads of energy to operate, especially in the event that they have a producing center. One of the best and best ways to advertise sustainability is to implement solutions that reduce the corporate’s energy consumption. These measures include switching to LED lights, installing smart thermostats, replacing fossil fuel vehicles with electric vehicles, and replacing appliances with energy-efficient models.
In addition to reducing energy consumption, firms also can deal with clean energy production by installing solar panels or purchasing renewable energy certificates to offset fossil fuel consumption. Ultimately, lower energy costs can directly reduce your operating costs and increase your profit margins. In addition, promoting your commitment to renewable energy is an efficient marketing tool to draw environmentally conscious consumers and improve your brand repute.
2. Develop environmentally friendly products
Consumers have gotten increasingly aware of the strain that consumption is putting on the world’s natural resources. Cheap disposable products equivalent to single-use plastic and fast fashion are quickly losing their appeal. Durable products, especially those produced from recycled or sustainable materials, are currently in high demand.
Depending on the materials used, firms can save raw materials by producing environmentally friendly products. Even higher, some products may very well be converted to completely digital formats that don’t require physical resources. For example, a small publisher could switch to e-books as an alternative of printed products. Another advantage is that Consumers often pay a surcharge for products which are produced sustainably.
3. Implement circular economy principles
The circular economy is an financial system based on the reuse and recycling of products and materials. Developing products from recycled materials is just the tip of the iceberg. Other circular economy practices include take-back schemes, refurbishment programs, and refill systems. For example, a technology company can encourage customers to return old devices for refurbishment, which reduces waste while encouraging repeat purchases. These old devices can then be resold at a reduction on second-hand markets, making a recent revenue stream.
Related: How the circular economy of consumer electronics can transform sustainability
4. Promote distant work and versatile working hours
Labor costs are sometimes one among the biggest operating costs for small businesses. Many firms are embracing and inspiring the choice of getting their teams do business from home or switch to flexible, hybrid work schedules. From an environmental perspective, this might help reduce the corporate’s overall carbon footprint by avoiding or minimizing greenhouse gas emissions from commuting.
From a business perspective, offering distant work can improve worker well-being and productivity, and it could also save the corporate money on office space and salaries by recruiting employees from regions with a lower cost of living.
5. Use Lean Manufacturing
Another effective technique to cut costs and reduce resource consumption is to implement lean manufacturing processes. By streamlining production processes and minimizing waste, firms can improve their manufacturing times and reduce production costs. The savings related to improved efficiency can then be used to extend your profit margins or offer cheaper prices in comparison with your competitors.
6. Use local suppliers
Consumers are fed up with the standard mass-produced products. Sourcing materials and products from local suppliers can create the right balance between customer demands and sustainability. By working with local suppliers, small businesses can reduce their carbon footprint by reducing transportation emissions and save on shipping costs, while boosting the local economy.
Related: I exploit these 7 ways to make my business more environmentally friendly—possibly you need to use them, too.
Incorporating eco-friendly practices into your small business is just not only best for the planet. It also can lead to significant financial advantages. By implementing sustainability, firms can deliver the services and products consumers want while setting themselves up for long-term success.
