Green Shoots

Discover how going green can not only save your business money, but also help make it more efficient.

Author: Marcus Austin, Business Editor

Going green is often thought of as an unnecessary expense, but if implemented correctly it is, in fact, a shrewd and cost-effective decision. Replacing your current technology doesn’t have to be a monumental headache. Besides, there are a number of immediately appealing reasons for going green. The first is that you can charge more for your products or services. We commented earlier that people expect to pay more for a green product, but you can recoup any costs and build credentials into profit margins. Secondly, in some markets there’s no way of avoiding having some green or sustainable element to your business. Many larger businesses look to their suppliers to provide their green credibility and to offset their lack of green credentials. For many of them, it’s one of the key questions in their due diligence and contract negotiation.

Green is also a tick-box when it comes to finding finance. Venture capitalists are getting more savvy about using green technologies such as the cloud. The last thing a venture capitalist wants to do is to invest their cash into hardware and software that will need to be replaced and upgraded in six months’ time. And if you’re planning on fast growth, then you need technology that can grow with you and which does not hold you back. Cloud-based technologies such as Salesforce’s customer relationship management software, Skype for Business, Microsoft’s Office 365 Productivity Suite, and Amazon’s storage S3 and server EC2 products all mean you no longer need to invest in hardware. Nor do you need to spend huge amounts on cooling and powering that infrastructure. By cutting out server rooms and telecoms systems you’re significantly reducing your carbon footprint and saving yourself lots of money in both the short and long-term. It also makes you a better bet for venture capitalists.

Quick to install

Let’s say you have an office with 15 people and you wanted to set up a small business server with Microsoft Exchange and copies of Office on all your PCs. You would have upfront costs of around £3-5,000. On top of that you need to cool and power the server. Then there’s the hidden cost of securing the server, upgrading it and backing it up. And if you ordered it tomorrow you’d have to wait a few weeks for it to be installed and set up. The greener cloud version of this set-up would use the cloud to store your files and host the applications. It could be up-and-running in less than a day and it would cost around £200 a month.

Cloud technologies also have the advantage that you only pay for what you use, and costs are met monthly rather than with a large upfront bill. Cloud technologies also allow you to scale quickly. So if you take on five more employees, for example, then all you need to do is add five more names to the service. Equally, the technology allows you to scale down should expected growth not arrive when you planned. If you reduce to a staff of 10, then your IT overheads are reduced too.

Energy use is one of the big business overheads and it’s getting bigger. Businesses consume megawatts of energy and much of it is wasted. By reviewing your energy usage you can be green and save money. By installing power meters, you’ll be able to identify exactly what parts and what devices within your business are costing the most money. Then you can look at replacing those devices with more efficient green devices. Some machines, such as computer monitors and photocopiers, can use nearly as much electricity when they’re in standby mode as they do when they’re on full. By replacing them with greener units, or even switching them off when they’re idle, you can save your business hundreds of pounds over the year.

Sharing resources

Another way of going green is to look into sharing resources. Photocopiers are expensive and use power while idle, but if you share a photocopier with the business either across the corridor or in the same building then you’ll be able to share the costs and reduce your power consumption. But it doesn’t have to stop there. Why not share other resources like vehicles? If your business is in a city then look at car-sharing clubs. The CarPlus website contains details of Car Clubs around the UK and has more information about the green benefits and the financial benefits of Car Clubs.

"Energy use is one of the big business overheads and it's getting bigger. Businesses consume megawatts of energy and much of it is wasted. By reviewing your energy usage you can be green and save money."

If you run a fleet of cars and vans in your business then there are numerous other ways you can go green and save. Choosing vehicles that emit less carbon and other emissions can reduce your yearly road tax bills and even reduce your overall tax. If you buy a new car for your business that has CO2 emissions of 110 grams or less per kilometre (g/km) driven, or is electric, you can qualify for a 100% first-year capital allowance. This allows you to offset the whole cost of the investment against taxable profits in the year you make the purchase until 31 March 2013.

Switching your vehicles to alternative fuels such as biofuel, or liquefied petroleum gas (LPG) or even electricity can also help you reduce costs. A conversion kit for LPG costs around £1,000, and cuts your running costs by about 30% as well as reducing your CO2 emissions. And if you drive a low-emissions car in London, you won’t have to pay the congestion tax, which saves you even more.

Solar power

If you’re lucky enough to own your office building or have land, then one way to be green and earn money is to consider solar power and solar heating. Although solar panels are costly (although they are becoming cheaper), over their lifetime they will make a positive contribution to the business, as they don’t just provide electricity for you they can also feed electricity back into the grid. Feed-in tariffs (FITs) have been introduced to encourage the use of small-scale electrical renewables to meet the Government’s renewables targets. FITs came into effect on 1 April 2010.

FITs make the business case for renewable energy much more attractive. Under the scheme, if you generate your own renewable power you will be paid for the electricity produced and for the excess exported to the grid. You will also save money, as you won’t have to buy as much electricity from a supplier. The current FITs for electricity generated from wind turbines and solar panels mean that the cost of a solar panel can be paid back in 7-10 years. After that, the units will make a positive contribution to the business and solar panels can last up to 25 years before they need replacing. That’s 15 years of free revenue.

Lastly, being green means thinking about alternative ways of doing business, and that’s a good discipline to have. By constantly questioning accepted practices you’re creating a new and innovative workforce that should make your business more agile and more innovative, which can only be a positive.

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