Green Business
Learn how going green can save money

Learn how going green can save money

In this step, we will review the long term costs associated with going green.  This will include the concept of “TCO” and how to justify greener purchases in your business.

Myth: Going green will cost my business more money

Many small businesses think in terms of short term cash flow.  The challenge comes in retraining small businesses to think in terms of the long term benefits.  Yes, green products can cost more short term money up front, but will typically save money in the long term.  If you do it right, you can save money and save the planet at the same time.  You will have to assess each of your purchases to determine where going green is a more cost effective choice for your business.

The cost of not going green

The reality of today’s green market trend is that choosing not to go green can cost you customers and potentially cost you your business!  Consumers are leaning more towards green products and services, which can hurt your business you if you aren’t going green.

The cost of faking it

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Consumers are smart and their perception of your values is an important factor.  They can see through token attempts to go green, and will pass you by if they detect that you aren’t truly committed to going green.  Word of mouth is a powerful tool that can help make or break a business.  If you decide to go green, research it, commit the right resources to it, and do it right.

TCO: Choosing green options usually saves money over the long term

Total Cost of Ownership (TCO) is an evaluation of how much you will pay for an item over the entire life of the product.  This is an important measure for a green business because if you compare two similar items before a purchase, the greener item may look like it will cost more initially.  A TCO analysis may show that the greener option actually saves you money in the long term.

TCO Example 1: Is wooden deck material a “greener” choice than a composite material made of recycled plastic and reclaimed wood?

If you are replacing a wooden deck, and a plank of redwood costs $10 and a plank of recycled composite costs $15, you can quickly do the math and figure the entire deck would cost 50% more to go with the composite.  On the surface, your initial thought of “going green” might be that wood is a more natural choice than the composite.

However, if you take into account the entire life of the product, the deck wood will require staining periodically, will last for 15 years, and will require hazardous disposal (due to the chemicals in the stain).  The composite product retains its appearance, does not require staining, lasts 30 years, is made from recycled materials that can be recycled at end of its useful life, and does not require hazardous disposal.  During the 30 years, you would have to replace the chemically-treated wood deck twice, costing 50% more than the composite.

If you add in the cost of periodic staining and labor to install it twice over the 30 year period, the wooden deck will end up costing you even more.  The cost to the environment of cutting down trees and disposing of the hazardous treated wood is immeasurable.

TCO Example 2: Compact Florescent Lights

CFLs will cost more initially, but they will reduce your energy usage significantly and last longer than incandescent bulbs.  They come in a variety of form factors to fit just about any lamp or fixture.

  ABOUT THE AUTHOR:
Kevin Slovick

Lineage2, Aion, Blade And Soul