The benefits for small businesses going green
As we celebrate earth day, small businesses can take advantage of the holiday to allocate portions of their working capital to more green-friendly initiatives. There are several advantages small business owners can benefit from by deciding to go green. As the owner of a small business, you have to do whatever possible to ensure overhead is low and profit margins are high, and one of ways to go about this is by implementing an eco-friendly business plan.
According to a recent survey by Office Depot, 51 percent of small businesses plan on going green in 2016. Three years ago, only 34 percent of respondents said they were going to go green. This represents a major increase in just three years, indicating a growing commitment to businesses that want to do more to reduce their carbon footprint and improve their environmental stewardship. While cost reductions were a big driver for pursuing eco-friendly initiatives, 67 percent of SMBs also cited concern for the environment as the main motivation for going green.
“If a majority of small businesses say they are committed to going greener, perhaps we have reached a tipping point in the environmental sustainability movement,” Yalmaz Siddiqui, senior director of sustainability for Office Depot, Inc., explained. “For decades environmentalism has felt like a niche idea, but when you get to 51 percent, that’s the definition of majority.”
But what exactly does going green mean for a small business? To start, it’s more than simply using recycled paper in the printers or turning off the lights at night. While those are good first steps, sometimes it can take a bit more effort, reorganization and a small investment to truly make the change to going green. Further, although some steps do require some upfront capital to implement, more often than not, going green provides substantial savings in the form of reduced energy expenditures and tax savings.
Lower energy bills
Reducing overhead from energy consumption is one of the primary reasons businesses go green. There are several ways to lower your company’s energy bills. Replacing existing light bulbs with Energy Star compact fluorescent lighting can save up to 75 percent on electricity costs. Further, ensuring all computers, office equipment and appliances are turned off the evening can contribute additional energy savings.
Another good way to lower electricity bills is by having employees occasionally work from home. Unfortunately, not every small business can implement a work-from-home policy: Retails stores must have cashiers and restaurants need wait staff. However, many other types of enterprises can still function effectively even if employees have the option to occasionally work from home. Not only does this boost worker morale, but it also lowers the company’s energy consumption by leaving computers and other lights turned off. In addition, by eliminating employee commutes, companies can further reduce their extended carbon footprint. Even holding virtual meetings and brainstorming sessions can be a great way to lower the company’s energy bill.
Implementing green initiatives can qualify your company for tax credits as well. According to Intuit QuickBooks, if you make energy-efficient improvements to your business, many state and local governments provide tax incentives. These vary, so be sure to check with your accountant to find out more. Typically, though, you can qualify if you’re able to reduce the enterprise’s energy consumption 50 percent. However, the federal government also provides a tax credit for the installation of renewable energy systems such as wind, solar or geothermal power generators. According to GreenGeeks, the credit will cover 30 percent of the installation cost. This means that not only does the government help cut the expense of switching to a clean, renewable energy source, but the credits and incentives also assist in helping to lower your energy bill by encouraging the transition to using solar or wind power. With better business financing, you can strengthen your company’s footing and position it for future growth.
Not only does going green lower your company’s carbon footprint, reduce energy bills and qualify you for tax credits, but it also engenders goodwill among your customers and clients. Customers prefer to buy goods and services from environmentally conscious businesses. Not only that, but according to a recent Nielsen survey, nearly 75 percent of millennials and Generation Y said they would be willing to pay more for products and services from eco-friendly businesses, while 51 percent of baby boomers said they would fork over extra cash for these products.
“Brands that establish a reputation for environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending millennials of tomorrow, too,” said Grace Farraj, SVP, Public Development & Sustainability, Nielsen.
This Nielsen survey isn’t an anomaly either. Another survey by Harris Poll, commissioned by SCA, discovered 78 percent of Americans reported buying sustainable products over nonsustainable ones. It’s clear that U.S. consumers prefer companies that demonstrate a commitment to going green, and reward them with their business and loyalty.