Helping Small Businesses Go Green, Profitably

[irishbobcat]

Helping Small Businesses Go Green, Profitably
Written by Maryanne Conlin (mcmilker)
Published on August 14th, 2009

This is a guest post by Eric Cohen is a management consultant who works with small businesses, helping them to reach new levels of profitability. His work with these companies led him into sustainability, and his community site, Padosa.com, is a free site dedicated to helping members go green, profitably. He can be reached at info@padosa.com and welcomes all feedback!
I've heard this conversation a number of times at the small-to-medium sized enterprises (SME) I work with:
Green Vendor: "So Mr. CEO, how many of my carbon neutral, biodegradable, BPA-free whoozamacallits would you like to purchase?"
CEO: "This seems like a great product and of course my company wants to protect the environment. So I will give this to my purchasing manager, and she'll contact you in a few days."
Of course what the CEO says is not what he thinks. All he hears is "Blah, blah and blah. More $. Blah blah and blah. Politically correct. Blah blah and blah. No budget and no time. Blah blah."
The big companies have the resources to be more strategic in their decisions to go green. Not so for the SMEs. The vendors that I have seen succeed are the ones that have the ability to translate the benefits of the products they offer into the language that the businessperson wants to hear.
What we have here is a failure to communicate.
The sellers are not speaking in the terms that the mainstream executives want to hear. They talk enviro-talk. The executives are still evaluating purchasing decisions based on the only values they have – financial – and regardless of whether that is right or wrong, it is what it is.
Those of us who have passion for the greening of business need to change the way we talk. Changing the argument requires the vendor to overcome the 3 most common objections I've heard for green projects. Those are:
1.   We don't have the cashflow.
2.   This is just a fad, driven by politics.
3.   I don't have the staff for this.
We don't have the cashflow.
This is by far, the hardest objection to overcome when selling to an SME. The economy does not help. To overcome this you have to understand the business case behind your product. You need to establish objective criteria that speak to the cost benefit of the product. Be sure to account for the total cost of ownership of the product. Evaluate your product vs. its competition in terms of both initial cost and lifetime cost.
Lighting is the classic case. There are few projects that are so easy to justify, such as lighting. The ROI on a lighting project is a simple mathematical calculation. But the return on invested dollar doesn't change the fact that the company first needs to have the invested dollar. Several issues remain as hurdles, including the absurd non-green leases most tenants have, and the limited cash companies have for an investment in non-core projects. Brights spots include creative financing plans, such as power-purchase agreements (PPAs) that require no up-front spending.
You'll know you have solved this when your introduction to the CEO starts with a description of how you are going to save him or her money.
This is just a fad.
This one is easy to overcome. Ignore it, and resort to the way you overcame the objection to the cash flow problem. Executives will support projects that cost-justify, that is a fad that goes over very well!
I don't have the staff for this.
Overcoming this one is on the vendor. The best vendors know how to make this easy for companies. SMEs are fantastically strained at this point and any investment in something that does not directly impact customers will undergo much scrutiny. Be polished on this – have project plans for implementation ready, and a clear process that will give you potential confidence that you can get this done without taxing the existing organization.
Maybe all this will change some day when there is more competitive pressure, a greater willingness for consumers to support their green causes with their wallets, or the government comes up with standards that companies are required to adhere to. For now, we have to deal with things as they are by moving to where the clients are, and speaking their language.
Helping Small Businesses go green is the only way for America to Grow Green!
Dennis Spisak
Mahoning Valley Green Party
Ohio Green Party
www.ohiogreens.org
www.votespisak.org/thinkgreen/