16 May 2023
Over three in five (62%) of small business owners admitted sustainability goals have taken a back seat during the cost of living crisis.
However, 77% say that having a business that is seen as being environmentally friendly is now crucial in attracting quality employees.
Prioritising sustainability in business is key for the young entrepreneurs of the future.
New research published by the UK’s largest small business lending platform, Funding Circle, highlights the importance of sustainability as small business owners are eager to go green, but are not able to prioritise due to challenging factors such as the cost of living crisis. Looking into the what the future holds, a new video featuring young entrepreneurs shows that sustainability is front of mind and a priority in creating a successful business.
It comes as a poll of 500 small to medium sized business owners revealed that 62% admit sustainability goals have taken a back seat during the cost of living crisis and on average, they don’t believe they will reach their green targets for another 14 months.
Maximising eco-friendliness only ranked fourth in the list of priorities for the next year, with simply bringing in more money top of the list. Second was investing to grow the business, and the third most-common goal was to reach new customer bases.
Despite cutting back on green measures, 77% of respondents agree that having a business that is seen as being environmentally friendly is now crucial in attracting quality employees. Meanwhile, one in 10 admit they are not entirely sure about the most efficient ways to cut energy costs in their business.
When speaking to current and potential future small business owners, it is clear that being green is beneficial for the business and community alike. In a video featuring what could be the future’s next big entrepreneurs, the footage shows kids explaining how they'd make a shop eco-friendly, whether they'd pay staff an equal wage no matter their age or gender and what their ideal working hours would be.
Growing up in a world aiming to be sustainable, these youngsters may be greener than many adults, with suggestions including having solar panels on the roof of all business premises, upcycling furniture and using eco-friendly packaging.
Holding their grand business ideas up for people to read, nine-year-old Henry said, “what makes a boss good is friendship, kindness and helping each other.” However, Reya, also nine, said: “I’d tell them what to do!”
When it comes to going green, Henry said, “use solar panels, stop using plastic and use paper” and for nine-year-old Teddie’s Make Your Own Football Boots business, he will “use some people’s football boots that they’ve recycled.”
For current small business owners, the next 12 months will be the most challenging as nearly four in 10 (30%) say that the single biggest challenge is the cost of living increase. Another 30% will struggle to maintain a steady cash flow, while 20% will have trouble paying for raw materials. A further one in five admit that prioritising environmentally friendly practices will be a big challenge.
Despite the difficulties faced, 39% have reduced their energy use in general, and 33% have started recycling more paper products. Another 31% make sure to turn off electricity and heating systems every evening.
UK Small Businesses’ Top Priorities Over The Next 12 Months:
To bring in more money
Investing to grow the business
To reach a new customer base
To generate returning customers
To release new products
Simply survive the year
To build a new/updated website
Introduce the business to a new country/ location
To give money back to the local area/community
Alexander Allen, UK Managing Director at Funding Circle, said, “Getting greener is vital for everyone, from huge corporations to smaller businesses. And of course, as individuals we all have a part to play as well, in ensuring there is a future for younger generations to enjoy. However, with a cost of living crisis to contend, it can be easy to let standards slip in the name of cutting costs.
"Making small incremental changes to go slightly greener doesn’t have to cost a lot, or take a huge amount of effort. Things like only heating spaces that get used, during times they’re occupied, is a pretty easy fix that needs to become second nature. This could be a great place to start and could build the foundations in your company so bigger initiatives can be explored as time and cost allows.”
Notes to editors
In partnership with One Poll, 500 small to medium business owners were surveyed through 21st to 25th April 2023.
For more information
About Funding Circle
Funding Circle (LSE: FCH) is a lending platform for SME borrowers. Established in the UK in 2010, and now the leading lending platform to SMEs, the Group also has a material and growing presence in the US. Globally, Funding Circle has extended more than £15bn in credit to c.135,000 businesses.
For SME borrowers, Funding Circle provides an unrivalled customer experience, delivered through its technology and data, coupled with a human touch. Its solutions continue to help customers access the funding they need to succeed. For institutional investors, Funding Circle provides access to an alternative asset class in an underserved market, and delivers robust and attractive returns.