What happens to sustainability when everyone stops spending?
In the past, economic slowdowns have caused corporates to drop environmental and sustainability programs like burning hot coals, often being one of the first things to go. But with these programs becoming structurally embedded into large organisations, dropping them will be far more difficult and perhaps even more costly than keeping them on.
On the other hand, investing in cost trimming exercises such as reducing energy expenditure and firing lazy staff will help to buffer any losses in income that might accompany such times.
So for typical large businesses there will have to be some sort of opportunity cost calculations taking place to weigh up the short- and long-term benefits of these aspects. For small business and start-ups however this is a very different situation.
So for those SMEs that have already reduced their energy consumption and fuel costs they may be better placed to withstand a slowdown, or not. They may be able to hang onto dwindling customers better, the sort of customers that value the lesser impact approach, or not. They may have happier staff who are willing to take a pay cut when things get tough, or not.
In reality most small businesses consider sustainability for as far as it will save them money. This is fair enough, but in today’s marketplace, opportunities for new ideas and revenue streams often occur in the area of sustainability services and products, which is a fast growing sector.
Customers who are looking to spend money in order to save money into the future may well be the best customers you can get right now and if you provide this sort of product or service on a cost-effective basis everyone wins.
Some areas where green products and services are growing rapidly include:
- Locally sourced food products that have low “food miles”.
- Organic/free range produce.
- Natural cosmetic products.
- Alternative therapies and medicines.
- Energy efficiency which encompasses a whole range of products and services from LED lights to power factor correction.
Nations worldwide are pouring more and more money into sustainability as a direct response to climate change. This can only mean new opportunities that didn't exist a short time ago.
Like many entrepreneurs say, times of poor economic activity are often when the best opportunities arise. What are you doing to take advantage or minimise the possible effects on your business from current declines?