Green Entrepreneur: Don't Choose Planet Over Profit!

07/21/2016 02:38 pm ET Updated Jul 22, 2017


Even if you started your business to make a difference for the environment, you should not choose profit over planet if you want to succeed.

Running a successful business with eco-friendliness as a part of our DNA, I often get contacted by other green entrepreneurs who seek advice on how to grow their company and still be sustainable at heart.

First of all: what is a green entrepreneur? I define it as a person with a green business model that:

1. supports the development of products and services with environmental benefits
2. reduces waste and resources
3. is economically viable

As most entrepreneurs know, making money can be a challenge, but it seems like especially green entrepreneurs are struggling harder with this. Why is that?

I think it has to do with motivation. Most green business owners are driven by a desire to make a difference for both people and the planet we live on. In fact, it became clear to me that money is secondary or simply not important when I stopped by Greencubator's offices in Copenhagen the other day.

Making money is taboo
Greencubator is an office partnership for green startups in Denmark. Their tag line "Planet over profit" reveals it all. It is not the desire to make money, but rather the dream of making a mark for the benefit of future generations that drive them. And though it is a beautiful vision, it is also what causes the problem.

As a member of the Greencubator advisory board, I am blown away by all the passionate souls whenever I visit the office. However, on my way home, the enthusiasm often turns into concern because I can see how the businesses are struggling to make money.

In those circles, it seems like making money is a taboo and this is why that part of business is out of focus. That´s a big mistake. Because if you are not making money, you are not able to develop a long-lasting business, and then you can't make a difference. It makes absolutely no sense to talk about sustainable business, if the business is not making any money and has to shut down.

Shift your focus and become more attractive
In order to make a business grow, it often requires external funding from investors, loans or, possibly even crowdfunding. And this is where it might get difficult for entrepreneurs to get help from investors. If their focus is merely on the environmental benefits of their product or service, it's simply not attractive for an investor who typically has profit as a measure of success.

A study by Warwick Business School in England shows that green entrepreneurs has to balance "what is important to me" with "what is important to them", if they want to attract capital and create a successful business. The researchers of the study followed six green startups for four years, and the conclusion is that entrepreneurs have to balance "what's in it for them" higher, in order to gain success.

Even though it can be frustrating and stressful to focus more on profit and less on being 100% sustainable, it has to be done. Making your business economically sustainable will allow it to be more eco-friendly - and hence make a difference - in the long run.

Choose both profit AND planet
I find this study interesting because it is a conflict I often observe in my network, but also within my own company, Sprout. A continuous discussion in Sprout is how sustainable we need to be in order for it to be enough.

I will give you an example. When we started back in 2013, we wanted to have organic seeds in all of our pencils, but it was way too expensive, so we had to compromise and "only" use non-GMO seeds instead. Now, with the prices on organic seeds dropping slowly, we have started introducing them in some of our pencils.

As long as we know when we are sustainable enough, it's okay by me to compromise for a period of time. To think either profit or sustainability is unsustainable in the long run.

Thinking profit AND planet is a much better alternative.