Business Strategies for Small Green Businesses During a Recession

Counterintuitive strategies for eco-entrepreneurs during a recession

Everyone’s cutting spending.  Everyone’s cutting payroll.  Everyone is hunkering down for the Great Depression.  Why should your green business be any different?

Here are some counterintuitive strategies for keeping your company strong during this recession.

1.  Go over the top with customer service. 

Businesses will be tempted to cut back at this time on the frills offered to customers.  Thus, your customers are likely receiving lousy customer service at other businesses, and yours will shine if you treat them well.  Everyone’s talking about the economy, which is a perfect time for your business to receive terrific word-of-mouth advertising. 

2.  Spend money to save money. 

Energy efficiency programs and rebates are getting a real shot in the arm from, among other things, the stimulus package, plus many other federal, state, and local programs.  As a result of the stimulus package, energy efficiency tax credits have been raised from 10% of cost to 30%.  The maximum credit has been raised from $500 to $1500, and more expensive upgrades, such as solar panels, solar water heaters, and geothermal pumps are not limited to the $1,500 maximum.  The $200 tax credit cap on efficient windows has been removed, however, the standards are also more stringent.  All of this means that there has never been a better time, financially, to upgrade, insulate, and/or weatherize your buildings.  These investments should pay for themselves relatively quickly, given the incentives and the energy savings, and provide long term savings in addition to good PR for your company.  For example, Jiminy Peak, a small ski resort in Massachusetts, put in a wind turbine at their resort.  With an up-front cost of roughly $4M and energy savings of $450,000 per year, the turbine will pay for itself in less than ten years and provide reliable electricity for many years after.  While this is a much larger investment than you might consider making, Jiminy Peak has protected itself from fluctuations in energy costs and power outages, and meanwhile given itself a nice PR victory. 

The Small Business Association also has a guaranteed loan program for construction and renovation including Energy Star appliances and upgrades.  The 7a Loan Guaranty Program has a high degree of flexibility in what you are able to use the money for, including energy efficiency, retrofitting, and new Energy Star upgrades. 

3.  Try to hook the big fish. 

Everyone is looking to save money.  Maybe there’s an account out there that wouldn’t have even considered you a while ago, but is perhaps looking for a fresh approach and might switch their business from someone else to you if you offer a deal.  Get your foot in the door and hope to build a rapport.  Kelly Giard, of Clean Air Lawn Care, has seen  little to no attrition in his client base, and cites the ‘premium’ customers he and his company seek.  “Common sense says be price competitive”, says Giard.  “The competitors who competed on price have been losing customers in this economy.  Because we stuck our chin out and said you should pay more for green, our customer retention has been around 90%.” 

4.  Reach out to your competition.

Odds are, they’re wrestling with similar thoughts.  Many co-ops formed during the Great Depression, and it’s possible that a modern day version would succeed during this recession, where you have a friendly agreement with your competitors, maybe you go out for a beer or coffee, and see if you can help each other succeed.  You might be surprised at what you find.  Say, for example, that you’re a green home cleaner.  If you reach out to others in your area, you might find them receptive to partnerships, co-promotion, swapping some customers who are closer geographically to you, spillover business if they’re fortunate enough to have some, etc. etc.

5.  Empower your employees.

With employees fearing layoffs, there is a concern over performance paralysis, cutthroat intra-office politics, and employees spending time jobsearching online instead of doing their job.  By empowering your employees to look for ways to save the company money, let them know they could help you avoid taking drastic steps.  It costs a lot of money to find, hire, train, and retain good employees.  Laying someone off is a last resort.  Be honest with employees.  Many times they are very willing to give up the perks of the job in exchange for a bit more job security, and in some cases, they may even allow for across-the-board salary cuts so that the risk of layoffs is much lower.  Your employees may find ways to save a lot of money, too, and do things that are good for the planet.  They might find energy savings, or carbon footprint savings, such as using teleconference and video conference instead of flying somewhere for meetings.  Making sure your employees are feeling good about their jobs is a great way to keep them happy and productive.  Try a CEO blog or regular town halls.  But whatever you do, be honest with them. 

6.  Invest in expansion.

This may perhaps seem the most counterintuitive of all strategies, however, when taken to its basics, there are sound fundamentals that emerge.  Why not make your business an opportunity for other aspiring eco-entrepreneurs?  It’s part consulting, part franchising, but without the logistical paperwork mess.  With so many people put out of work right now, there are many who are looking for opportunity, and might just pay you to find ways for themselves to make some money doing what you, in essence, do.  Mark Dullea, of Drysdales 1-2-3, a Massachusetts green carpet cleaning service, has seen good growth in this part of his business:  “Whereas my Boston-area natural carpet cleaning business is more or less holding its own right now, the real growth is occurring in my spin-off business start-up program.”