My fellow Small Biz Trends columnist Joel Libava recently wrote a thought-provoking post asking: Are Green Businesses Still Golden? He points to some possible signs that the green business movement may be sputtering, such as the temporary shutdown of Chevy Volt production and solar panel maker Solyndra’s high-profile failure. He questions whether businesses will continue to invest in sustainable business models and products as the economy recovers, or if they’re simply too focused on making up for lost time and money.
I offered some initial reaction in the comments section, but thought I’d give a more formal response.
I agree with Joel about the financial pressures small businesses face and how these could be slowing the green movement – especially when it comes to high-priced and high-impact investments, such as installing solar panels or wind turbines. However, there are plenty of signs that green business is alive and well, and will continue to be into the future.
For one, corporate spending on sustainability continues to grow – likely because they have the cash reserves and profit incentives to do it. Small businesses often compete against these companies and will have to keep up.
Also, consumer interest in environmentally friendly products hasn’t abated as much you might think, despite the recent slow economy. Surely, some consumers stopped buying green products due to the economy, but more consumers also started buying green products regularly. Consider the growing movement toward sustainable agriculture and organic foods. More consumers are paying a premium for healthier, sustainable foods. The Toyota Prius, which costs a good $8,000 more than typical subcompact cars, is still a hot seller. (The Chevy Volt is a different beast, considering it’s 1.) electric and 2.) costs $43,000.)
That said, there are certainly products that have suffered in the bad economy. While consumers may be willing to spend an extra 50-cents on organic grapefruit, they may not be so willing to spend an extra $200 on an office chair made of 100% recycled materials. It comes down to their priorities and perceived value. They may be more willing to devote money to eco-friendly purchases as the economy picks up.
Looking to the future, businesses that market themselves as “green” may have more of an uphill battle because so many mainstream companies are integrating eco-friendly practices and products and services into their business model. Just being green isn’t enough anymore – a business’s products and services have to be the more user-friendly, well-priced and better designed than their competitors.
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