Feb 03, 2020

The Rise in Ethical Spending Is Boosting Small Biz Potential

“Every time you spend money, you’re casting a vote for the kind of world you want.” – Anna Lappe 

The rising generation knows what kind of world they want, and they’re putting their money where their mouth is. Organic, local, non-GMO, recyclable, slave-labor free. No longer do these claims and certifications sit shyly on the shelf—they’re influencing buyers like never before.

Entrepreneurs can’t hang their integrity on the coat rack when they enter the office. Consumers demand sustainability, and they’re not afraid to boycott bigots, crooks, and hypocrites.

The rise in ethical spending isn’t just making the world a better place—it’s boosting the growth and potential of every small business. Or at least the ones with morals.

Here’s how the growing focus on sustainability is impacting small business for the better.

Nice Guys Don’t Have to Finish Last

Ethical small business owner

Finally, the Law of Reciprocity is giving ethical small businesses a level playing field. No longer do you need the highest quality product or the quickest delivery times to win the market—you just need to support a good, genuine cause. 

Close to 90% of consumers are likely to switch to a brand connected to a good cause, and 66% admit they’d even pay a premium for more sustainable goods.

What’s this mean for you as a small business owner? For starters, you can stop playing tug-of-war with your morals and your business’s profitability. The 2 are more intertwined than ever before. 

Dollars invested in sustainable practices and ethical processes don’t go unnoticed. So while it might make sound financial sense on paper to cut corners and pinch pennies, consumers play by a different set of rules. 

Using sweatshops may increase profit margins per unit, but it may just cost your company a large percentage of its sales. Beefing up your chickens with genetically modified corn might preserve your farming land, but it’s not going to win you many members of the millennial market.  

Consumers are speaking with their wallets, and they’re voting for the nice guys to finish first.  

Sustainability Comes in All Shapes and Sizes

Generous buy-one, give-one models from businesses like TOMS and Warby Parker may not be possible at a small business’s scale, and that’s okay. There’s no best way to be sustainable, and the spending public understands. We give where we can.

Think of how your business can financially and authentically give to make the world a better place. Start simple with one of these ideas:

Sometimes, the business’s mission is charity itself. A local clothing brand focused on American apparel and keeping jobs in the US can push its mission through the business. The company could only use American labor and resources to craft and sell its goods. Yes, it’s missing out on huge advantages by not outsourcing certain aspects of the business, but they’re remaining true to their purpose.

It’s vital that whatever you contribute or focus on is authentic to you and your business. You can’t just use philanthropic opportunities to push your business’s profit margins. It’s 2019—consumers are trained to detect hogwash. You need to be real, honest, and genuine.

Find an issue that you care about on a personal level, whether that’s going green, supporting the community, building wells, or constructing homes for families in need.

Your business doesn’t need to be well-off to contribute to sustainability—it just needs to make ethical practices a priority.

Even Unnoticed Acts Will Be Rewarded

The Rise in Ethical Spending Is Boosting Small Biz Potential

The world’s focus on sustainability has been a catalyst for making it easier than ever to be environmentally friendly. Although you won’t be recognized in the newspaper or garner customer fandom for it, several sustainability best practices can directly boost your bottom line.

From installing energy-efficient appliances to using LED light bulbs, you can protect the environment and save money at the same time. Here are just a few potential ideas.

It’s Not Just Consumers—Employees Demand Sustainability

These sustainability practices don’t just save money—they boost employee morale. In a recent survey, more than 50% of all respondents (and 75% of millennial workers) said they’d be willing to take a pay cut to work for an environmentally responsible company. And 10% said they’d even take a $5,000–$10,000 pay cut. Yes, you read that right.

Now, that’s not to say that your investment in sustainability should retract from your employees’ salaries. It just shows how important it is to your hiring pool and current workforce.

More than 30% of respondents in the survey said they’d left a job before because of the company’s sustainability plan or lack thereof. If you want to hire and retain the best of the best, you need to make sustainability a priority—even a raise and a healthy bonus won’t be an adequate substitute.

Sustainability Is the Future

Regardless of your industry, sustainability is the new battleground. It doesn’t matter if you sell handbags or hamburgers—consumers demand environmental, economic, and social responsibility.

To survive, small businesses need to look forward. Today’s consumers are already drawn to sustainable products and practices, and this trend is only going to intensify. Jump on the sustainable bandwagon now to benefit the world, your business, your employees, and your bottom line.

 

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About the author

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Jesse Sumrak
Jesse Sumrak is a Social Media Manager for SendGrid, a leading digital communication platform. He's created and managed content for startups, growth-stage companies, and publicly-traded businesses. Jesse has spent almost a decade writing about small business and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped startup. When he's not dabbling in digital marketing, you'll find him ultrarunning in the Rocky Mountains of Colorado. Jesse studied Public Relations at Brigham Young University.

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