When people talk to me about the green business they’re working on, it will sometimes become apparent as we talk that at least part of the problem they are encountering may not be what they think it is. Rather than being an issue related to planning, marketing, product development, or greening their operations, the issue is sometimes more fundamental, reflecting an inner struggle they have about making money.
This can reveal itself in discussions of larger businesses that have undertaken efforts to save money by wasting less energy, water, and other resources. “Sure, but they’re just doing it to save money,” the person will say. Another variation of this often comes out in discussion of using market mechanisms to address climate change, in which case some people say “Businesses got us into this problem – how can they get us out?”
Their thinking reveals a fundamental assumption many people have, that making money and doing the right thing for the environment cannot coexist. Curiously this assumption reveals itself in people at opposite poles of environmental issues. For some people this assumption is used to support their belief that we cannot solve environmental problems without extracting a ruinous economic toll (more on this one another day). For others though the conflict is the mirror image of this, that if you are making money you must not be doing the right thing for the planet.
Statements like these reveal an internal conflict that shapes their efforts to create a business. Deep in their mind some of these people are thinking that if they make money, then they’re part of the problem. Which leads me to make a simple statement. It’s okay for a green business to make money. In fact, it’s more than okay – it’s essential. Commitment to helping the environment is important, but if your business does not make money will disappear.
If this seems overly obvious to you and you’re wondering why you are reading this, then read no more. If this strikes a chord one way or another though, then you should explore this further.
I call the answer to this thinking “ISABS”, which stands for “It’s Still a Business, Silly.” Green or otherwise, a business needs to make money. Some green entrepreneurs do a great job at building a rationale for how they can help the environment, but lack a clear plan for how their efforts will make money. Being green does not relieve a business from the need to have a sound plan, develop great products, figure out how to sell them, and bring in more money than they spend.
Don’t get me wrong – I’m not advocating unrestrained, unregulated business. Making money needs to be balanced with doing the right thing for us all. It’s not that “Greed is Good”. But properly regulated, morally and environmentally sound capitalism is not just okay – it could be the thing that saves both the economy and the environment. Capitalism funnels capital to fuel innovation, and we need innovative and cost effective solutions for clean energy, buildings, water, food, transportation, and just about every other aspect of life. Do the right thing, and make money while you’re doing it – that’s all I’m saying.
If any of this resonates with you, take some time to examine your feelings about making money and how this might be impacting the green ideas you are working on. Working through some of these questions early on will avoid heartache and headaches later on, and help you get where you really want to go, helping the environment while building a strong profitable business at the same time.
Glenn Croston is the Fast Company expert blogger on green business, the author of “75 Green Businesses” (www.75GreenBusinesses.com), the author of the e-book “Greening Your Business On a Budget”, and the founder of Starting Up Green (www.StartingUpGreen.com), helping entrepreneurs from all backgrounds to start and grow successful green businesses. He can be reached at glenn(dot)croston(at)75greenbusinesses(dot)com.