Chapter 25
Managing RESOURCES

IN This Chapter
Setting priorities
Saving energy and resources
Green procurement
Pollution prevention

Introduction
As energy, fuel and water prices rise, and global regulatory and competitive pressures intensify, there is no business that can’t benefit from managing resource use. By improving efficiency, and looking at the real costs of doing business, businesses of all sizes are improving their quality and their bottom line.
Other businesses are finding that product redesign can reduce costs, enhance brand identity and competitiveness, and lessen regulatory burdens.
Setting Priorities
There are many options for making your business greener. Some are easy, like recycling paper or turning off lights and office equipment when they’re not in use. Others involve a bit more capital up front, but will pay for themselves in a comparatively short time, like installing a solar water heater.
Then there are projects that represent a serious commitment to green principles, like getting your business off the electrical grid, achieving zero emissions, or being certified by an eco-labeling organization. Steps like these require a considerable amount of capital, coordination, and planning, so they must be appropriate, affordable and obtainable for your business.
Therefore, it’s important to prioritize green goals in terms of their expense, impact, difficulty, payout and timeframe. Start with the things anyone can do—like setting your air conditioner a little higher in hot weather—and build toward more ambitious goals (e.g., by putting the money you save on lighting or heating toward next steps).
This will help you to avoid squandering resources on goals you’re not ready to achieve. It will also help you to shift your company’s culture naturally toward a greener outlook, instead of disrupting operations and employee morale with lots of new demands and expectations.
Another option is to research green initiatives launched by other companies in your industry, which may help you to avoid pitfalls and reduce rollout time.
Here are some of the questions you should ask when setting priorities:
What regulations must I obey? How much time and money does it cost to obey them? Are there ways of changing my business that would avoid these regulations?
What hazardous materials does my business use? Does using them increase my shipping, storage, training or insurance costs? Are there nonhazardous substitutes that would solve these problems?
What materials flow into and out of the business? What processes and products are causing pollution, safety risks and inefficiency?
Is poor inventory management adding to our disposal costs? Are we throwing away materials that could be reused, recycled or upcycled? If packaging from suppliers is going straight into the trash, could we ask them to eliminate it or make it recyclable or biodegradable?
What are my energy costs? Where and how is energy being wasted?
What are my competitors doing to be greener? How are they communicating those efforts? How are their customers and other stakeholders reacting?
What do my customers want? How do they feel about local, national and global environmental issues? (Note that many people who claim to dislike “environmentalism” may still have strong negative feelings about pollution and waste.)
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When the housing market collapsed, it definitely hurt. I had to drum up business any way I could, and I was also looking to cut way back on my costs. I didn’t know how long it would be before things got back to normal, but I knew I’d have to tighten my belt until then.
Joel Gandy runs Silver State Stonecutting, a small masonry firm in Reno, Nevada, which designs, cuts and installs countertops and tiles made of granite and marble.
Normally, remodeling and new construction jobs gave his business as much work as it could handle. But when the housing market crashed, Joel’s revenue dropped considerably, and he started looking for ways to cut costs.
Unfortunately, it was hard to see where he could make cuts. He’d always prided himself on running an efficient operation. Outside of laying off employees, which was his very last resort, he couldn’t see too many ways of saving money.
The answer came to him almost by accident, when he accepted the offer of a free energy audit from his local utility.
I figured, well, maybe they’ll save me 50 cents here or a dime there. I really didn’t expect much. As it turned out, the savings were substantial—several hundred dollars—but what’s more important is that it changed my thinking. I started to look at my business in a whole new way.
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Calculating Costs
Once you’ve identified a problem, the next step is to look more closely at how much it’s costing your business. This requires you to look at a wide range of factors, from employee training costs, to transport and disposal costs, to time spent dealing with regulatory agencies, to storage costs, to special equipment and protective gear. You should also consider any risks a given material or process presents and the cost of insuring against that risk.
In addition to these direct costs, two other types of costs are very important when considering green business decisions.
External costs are costs of doing business that society pays on your behalf. For example, if your product comes in a Styrofoam container that consumers throw away, the costs associated with the cleanup and disposal of these containers are external to your business, because you’ve passed the responsibility for dealing with this waste onto your community. Consumer awareness of external costs is increasing, which is causing many businesses to reduce or eliminate them.
Opportunity cost is the cost of the things you decide not to do. As a simplistic example, let’s suppose that you save 10 cents per unit by keeping your traditional Styrofoam packaging instead of switching to biodegradable packaging. If you sell 100,000 units per year, this will save your business $10,000 per year.
But what if by changing your packaging, you could compete in the European Union and sell an additional 25,000 units per year? If your profit margin on each unit is $3, then the opportunity cost of keeping your old packaging is $65,000 per year (i.e., $75,000 in new sales that you forfeit, minus the $10,000 that you save by keeping your old packaging). As you can see, the savings are smaller than the opportunity cost.
In the real world, few business calculations are this simple. But external and opportunity costs are real economic factors, and they affect how your business is perceived by your customers. Keep them in mind when assessing your options.
Once you have a good sense of your costs, you can assess your options for addressing problems and prioritize them based on cost and effectiveness.
In the following pages, we’ll introduce some of the most common methods of greening business operations, with an emphasis on reducing waste, improving efficiency and safety, increasing competitiveness, and reducing or eliminating regulatory and insurance costs.
Saving Energy and Resources
Saving energy and resources is fundamental to any well-run business. You may be able to lower your costs by 30 percent simply by making small improvements to your lighting, heating, air conditioning, weatherproofing and office equipment.
You can earn even bigger savings by taking a closer look at your energy use. One of the easiest ways to do this is to request a free energy audit from your local utility, which will include tailored advice on reducing energy use. Your local SBDC may also offer energy audits for small business. Alternatively, you can hire a green business consultant, who will look at everything from your equipment to your supply chain and offer tips on improving efficiency.
One important thing to keep in mind when taking steps to become more efficient is the rebound effect, which explains how greener technology sometimes increases consumption: If you use low-energy lightbulbs or install an on-demand water heater, employees may worry less about leaving lights on or wasting hot water.
As you can see, it’s not enough to install the latest energy-saving gadget; behavior has to change, too. And that requires leadership and commitment on your part.
Saving Electricity
Before you look at any other green ideas, how about turning off lights and appliances when they’re not in use? IBM estimates that this simple action saved them $17.8 million in a single year.
It often takes more to turn off an appliance than hitting the power button. Many appliances continue to use energy even when they seem to be off. Advanced power strips that cut the power to unused appliances can solve this problem. Some strips can be programmed to turn off with a timer, while others turn off when they sense the appliance is no longer in use. Using these devices to eliminate unnecessary “vampire loads” can save a business hundreds of dollars per year.
Here are some more suggestions:
Look for products with Energy Star certification (www.energystar.gov).
Use large equipment during off-peak hours (7 p.m. to 7 a.m.), if possible.
Choose laptop computers, which use up to 90 percent less energy than desktops.
Allow employees to telecommute when possible.
Use occupancy sensors to turn lights off when the office is unoccupied.
Unplug chargers when not in use.
If your goal is not just to save money, but also to support renewable energy, many utilities offer totally renewable power for a small monthly surcharge. Some businesses find that this is a relatively inexpensive way to earn positive PR. Contact your local utility for more information.
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Erin Walsh was an energy auditor for the local utility district. The first thing she saw when she pulled up to Joel’s building was that his sign was lit with floodlights in the middle of a warm spring day.
She felt a chilly breeze as she walked through the open door. The air conditioner was running at full blast, even though it was only 70 degrees outside.
I went through the whole building with Erin, and she kept finding all these little problems. There was a broken window in the warehouse. Some doors didn’t have weatherstripping. Our old fluorescent tubes were inefficient. Lights were on in empty rooms. One of our faucets was leaking. Little things, but a lot of them.
I was surprised, especially when Erin told me these problems were probably costing me about $750 per year. I always thought of myself as a pretty conservative guy, but here I was just throwing money down the drain.
Most of the changes Erin suggested were easy to accomplish. In the first week, Joel fixed the broken window, installed weatherstripping and replaced his old fluorescent lights with more efficient bulbs.
It was a good start, but Joel was wondering what other hidden costs he was missing. So when Erin suggested that he contact the local SBDC and ask them for help, he was quick to make an appointment.
I’m the type of guy who has to keep busy when things are tough, so I focused on improving our efficiency. That was a good move, because it turned out that going green helped me with costs and revenue.
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Lighting
According to the U.S. Department of Energy, lighting accounts for roughly 29 percent of the average office’s energy use. Here are some ways to reduce this expense.
Natural lighting. Well-placed skylights can provide some or all of the light the average office needs, and studies suggest that it may have the added benefit of improving your employees’ mood. Solar tubes are another possibility; they diffuse natural light through your office by means of lenses and reflective tubing. They can also deliver light to areas with no windows, like basements and storerooms. A more expensive option is fiberoptic solar lighting, which uses a rooftop collector to gather sunlight and fiberoptic cables to direct the light into your building.
Light emitting diodes (LEDs) are small semiconductor devices that efficiently convert electricity into light. They last considerably longer than incandescent and fluorescent bulbs, and they cost much less to run. The LED lighting market is projected to grow to $25 billion by 2023, as this technology replaces outdated incandescent lighting.
Compact fluorescent bulbs (CFLs) use much less electricity than incandescent bulbs and usually last much longer. Like all fluorescent lights, they contain a very small amount of mercury. Some people worry that breaking a CFL involves hazardous materials response teams and high fees, but that’s an urban myth. Sweeping up the glass and wiping the area with a damp cloth is sufficient. Large retailers like Walmart and Costco offer collection bins for old CFLs.
Solar Photovoltaics
Solar photovoltaic panels convert sunlight directly into electricity. Choices range from small portable devices that can recharge your laptop or cellphone to fixed photovoltaic (PV) arrays that generate enough power for most small businesses.
Before weighing the costs and benefits of solar photovoltaics, have your electric utility conduct an energy audit so you’ll know how much electricity your business actually uses. It’s best to cut your power usage and increase your efficiency as much as possible before installing PV panels. Your contractor can help you with this.
PV regulations vary by region, as do tax incentives, loan programs and permitting fees. Some cities and counties make low-interest loans to businesses that install solar panels; loan payments are typically less than the business’s current monthly utility bill.
Air Conditioning and Heating
Depending on where you live, heating or air conditioning may be one of your business’s largest energy costs. It’s also one of the most controllable. This is one area where simple behavior changes can have an immediate effect on the bottom line.
Staying Cool
One of the simplest ways of reducing cooling costs is to apply transparent energy-efficient film to your windows. This inexpensive product can block up to 70 percent of the sun’s heat. It can also greatly reduce cold air infiltration in winter.
If you’re going to use a traditional AC system, buy an energy-efficient model and make sure it’s the right size for your space. If it’s too big, it will waste energy and money, and it may also fail to dehumidify your space.
Check the unit’s energy efficiency ratio (EER). A window unit should have an EER rating of at least 11. A central unit should have a rating of 13 or higher.
Here are some tips on getting the most from your air conditioner:
Install your unit in a shady area. This can reduce air conditioning costs by as much as 2 percent.
Set your thermostat to 78 degrees, or as high as comfort permits. You can save up to 5 percent on electric costs for every degree you raise the thermostat.
Close blinds and curtains during the hottest part of the day.
Close cooling vents in unused rooms, and keep their doors closed.
Clean filters twice a month, and clean the outside condenser coil once a year.
Keeping Warm
Sealing and weatherstripping your facility is the cheapest and easiest step you can take to save heat. Most utilities will either tell you how to do it or do it for you.
You should also consider various types of insulation. In large, drafty buildings like warehouses, you can easily install a radiant barrier (also known as foil insulation) across the rafters to reduce heat loss.
Double-paned windows are a great way to keep heat in, but there are also cheaper options. Covering existing windows with comparatively inexpensive storm windows can reduce heat loss by 25 to 50 percent.
Here are a few more tips:
Set the temperature as low as possible. Lowering the thermostat by just a couple of degrees can save 10 percent on your heating bill. If you have a programmable thermostat, you can set it at a lower temperature at night. Also, replace or clean furnace air filters frequently.
Seal off heating vents in unused rooms. Inexpensive magnetic vent covers are available at most hardware stores.
Install a low-speed overhead fan to circulate warm air throughout the room.
Consider underfloor heating, which uses either circulating hot water or electricity to warm the floor. A hot-water system will be more expensive to install than a traditional radiator, but it can save 15 to 40 percent on energy costs, which may make it a better deal in the long run. Electric systems have much lower installation costs, but are usually less efficient unless they’re powered by renewable sources.
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Joel’s SBDC counselor, Danny Liang, pointed out that running Silver State as a green business could do more than save money; it could also help him get back on his feet by attracting new, affluent customers.
I had a lot of homework when I came out of that first meeting with Danny. Not only did I have to overhaul everything—and I mean everything—but I also had to come up with a marketing plan that would address the changes in my target market and the new options for profitability.
Like Danny said, there’s not much point in going green if you’re going to be out of business in a few months anyway. I felt like I had to go green in order to prosper, but I also had to prosper in order to go green. Either way, it meant a lot of research and a huge change in the way we did things.
Joel decided to focus on tactics that offered a rapid payback, either by saving money or attracting new business. With that in mind, he worked to save energy and water wherever he could. At the same time, he concentrated on efforts that would have some PR value, like switching to drought-resistant landscaping around his office. His main goal was to emphasize Silver State’s credentials as a green business, particularly among local contractors, developers and real estate agents.
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GeoExchange Systems
Geoexchange systems are very efficient and environmentally friendly, and can save up to 60 percent on your cooling and heating bills. Most systems can also be designed to provide free hot water.
These systems use the subsurface temperature of the earth to provide heat in the winter and cooling in the summer. When the air in the building is colder than the ground 10 or 15 feet below the surface, subsurface heat is transferred to the inside of the building through pipes. In summer, water at the subsurface temperature is pumped into a radiator. A fan blows hot air over the pipes, which cools and dehumidifies it.
If you decide to investigate this option, look for a dealer who is very familiar with local ground conditions, permitting, codes and fees. Although geoexchange systems have much lower operational costs than conventional heating sources, upfront costs can vary considerably based on location, building size and system type. A good dealer should also be able to tell you about local, state and federal incentives for geoexchange systems.
Heating Water
It takes a lot of energy to run a traditional water heater, which keeps water hot even when it’s not being used. This has led to the development of on-demand heaters, which heat water as needed. Unlike traditional water heaters, they never run cold.
These heaters aren’t cheap, and their energy efficiency varies by manufacturer, model, location and time of year. Research your options carefully when considering an on-demand system.
Solar water heating systems may be preferable for some businesses. They’re very simple and comparatively inexpensive. Water heating panels are cheaper to manufacture than PV panels, and they capture more of the sun’s energy.
There are two primary types of solar hot water systems:
Passive systems are usually mounted on the roof. They comprise a solar collector to heat the water, a tank to store it, and pipes to distribute it. They’re called “passive” because they have no moving parts; heat and gravity force water through the system.
Active systems have a pump that forces water through the collector or—in the case of “closed loop” systems designed for colder weather—a non-freezing fluid that transfers heat to stored water. This makes them more versatile than passive systems (and possibly cheaper, as they don’t have to be mounted on the roof).
Another option for saving hot water is heat recovery. These systems capture the heat from water as it goes down the drain and use it to heat water in a storage tank. This reduces the amount of energy required to heat the water to the desired temperature. A properly installed system can save a lot of money whether you heat your water with natural gas or electricity. It may also make you eligible for a rebate from your utility.
Saving Water
Municipal water shortages and droughts have been common in recent years, and this trend is expected to continue. Many areas impose fines and surcharges for wasting water or offer rewards for conserving it. Here are some ways to reduce water use.
Fix leaky faucets and dripping pipes. Every leak you stop will save about 20 gallons of water per day.
Choose native plants and grasses that are adapted to your climate and require little or no water. Your local nursery can help you with this.
Don’t leave the hose running while washing your vehicle fleet. Instead, use a bucket of water and give the vehicles a quick spray when you’re done.
Use a broom instead of a hose to clean driveways and sidewalks.
Install low-flow, dual-flush toilets where possible. Also, watch out for toilet tanks that don’t shut off when full. They can waste up to 1,200 gallons per month.
Install faucet aerators. These simple screw-on attachments reduce the flow of water from your faucets. Each one you install could save you from $40 to $150 per year, depending on where you live.
Install a recirculating pump. These devices recirculate water until it reaches a desired temperature, so that you no longer have to run the tap while waiting for the water to get hot. Different pumps have different efficiencies, operating costs and drawbacks, and some may require permits, so do your homework before installing one of these systems. Depending on the design of your facility, you may also be better off with a gravity-driven hot water recirculating loop. You can talk to your contractor or plumber about the feasibility of this option.
Harvest rainwater for irrigation and cleaning. If your building has a traditional downspout, you can either collect water in rain barrels or redirect it to an underground storage tank. This replenishes groundwater and puts less strain on the municipal sewer system (which is why many cities offer water-bill discounts for installing these systems).
If you want to make a more dramatic statement, consider replacing waterproof asphalt or concrete areas with permeable paving, which prevents stormwater runoff and thus reduces pollution of the watershed. A contractor can help you assess whether permeable paving would be appropriate and affordable at your site.
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Danny and Joel also took a long, hard look at Silver State’s waste stream, which included several tons of stone chips and fragments. Joel was paying a lot of money every year to have this material cleaned up and hauled away.
Danny told me there were companies that would gladly pay for my waste rock. There was one company called CounterBalance, over in California, that he mentioned. They made luxury countertops out of recycled rock.
I figured I might as well give the idea a chance. If nothing happened, I wouldn’t be any worse off.
Joel called CounterBalance and talked to a sales agent named Devorah Kantor, who said that they were indeed in the market for waste stone fragments. Joel was naturally curious about the countertops, and over the course of the conversation, he learned a lot about their business.
One thing I found out was, they were really busy. I mean, seriously busy. They had a three-month waiting list. She was talking about all this like it was a problem. I just laughed and told her that was a problem I’d love to have.
Anyway, they definitely had their hands full. In fact, they were thinking about farming out some of their production to help meet demand.
Joel was intrigued. Could this be the new market he’d been looking for? He decided that next week, he would drive over to Sacramento and pay a visit to CounterBalance’s facility.
When Joel saw CounterBalance’s countertops in person, he was fascinated. They were elegant and sturdy, and the technical specs on water, heat and acid resistance were impressive. They used other waste materials for some of their countertops, too, like broken bottles and shattered windshield glass, which made for an almost limitless spectrum of colors and patterns. They were marketed as an eco-friendly alternative to granite and marble, at a slightly lower price.
I decided then and there I was going to offer alternative countertops. To be honest, it wasn’t about the environmental angle so much, although I could certainly see that being a selling point for customers. The main thing was that these were unusual countertops with a lot of personality. I’d never seen anything like them.
Now that I know all about the green aspects, I’m sold on that feature as well. But my first reaction was that I knew I could sell these countertops, and I had a limited time to get out in front of the competition with a new product line. Working with CounterBalance was looking like a great opportunity, so I got busy right away with a feasibility study and a market survey.
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Saving Gasoline
High fuel prices are especially devastating for auto-related businesses like tow companies and taxicabs, but since we all rely on trucks and planes for food and other essentials, no business or consumer escapes unscathed from rising fuel costs.
Hybrid vehicles, which make gasoline go further by deriving some power from electricity, have been a popular solution to higher fuel costs. Some businesses have even converted to electric vehicles for their delivery fleet. Although electric vehicles can be pricey, their operating costs are very low, so an electric fleet could end up saving you money if you make a lot of local deliveries. You might also benefit from tax credits and other incentives; visit www.fueleconomy.gov/feg/taxcenter.shtml to learn more.
If you’re not ready to make that commitment, here are some tips for maximizing your gas mileage:
Keep your vehicles tuned up and the tires properly inflated. These are two of the most important things you can do to save at the pumps. Underinflated tires dramatically lower your fuel efficiency, in addition to being unsafe.
Don’t carry things you don’t need. The heavier your vehicle is, the more energy it takes to move it.
Keep acceleration and braking to a minimum. Pay close attention to what’s happening ahead, so you can avoid stop-and-go driving and maximize coasting.
Don’t let your engine idle while sitting. Idling for 10 seconds uses more fuel than turning the engine off and on.
Use fleet management software to monitor fleet costs and maintenance, and configure delivery routes for maximum fuel efficiency.
Videoconferencing
High transportation costs, along with concern over greenhouse gas emissions, has led to an increase in teleconferencing, videoconferencing and other alternatives to face-to-face meetings. In addition to saving energy and reducing carbon emissions, these tools allow you to slash common business expenses like hotel rooms and rental cars.
Saving Paper
According to the US EPA, the typical office worker generates 1.5 pounds of waste paper per day. It’s no wonder that paper accounts for roughly 40 percent of all municipal solid waste in the United States.
There are several ways to cut down on how much paper you use, including:
Switch to electronic communications, and use paper only when clients request it or the law requires it. Scan documents, or print them to PDF, and send them by email where possible.
Opt for online banking, accounting, tax processing, purchasing, bill payment and statements. (Remember to back up your files frequently!)
Buy recycled paper with a high percentage of post-consumer recycled content. Recycled paper uses 90 percent less water and 50 percent less energy than paper made directly from trees.
Print directly onto envelopes instead of using address labels.
Keep your mailing lists up to date, and remove people and businesses who don’t need to be on them.
Send ads and brochures electronically.
Shorten and simplify your documents. If a promotional mailing runs to a page and a half, try to cut it down to one page. This will save paper, printing costs and the reader’s time.
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Joel’s research showed that there was a viable market for alternative countertops in the Reno/Sparks area. Although new housing starts were down, there was still plenty of remodeling activity and many homeowners were looking for an alternative to granite.
At first glance, everything looked great. But when I started crunching the numbers, it was obvious that the market wasn’t big enough to cover my costs. Apart from licensing fees, I had new equipment to buy, a steep learning curve and employees to retrain. Even when I added the population between Truckee and South Lake Tahoe, the numbers just weren’t feasible.
I could have left it there, but I didn’t want to. I had a lot invested in this idea, so I started thinking a little bigger. There was Las Vegas to the south, Salt Lake City to the east and Boise to the north, to say nothing of the towns in between. What if I could get exclusive rights to Nevada, Utah and Idaho?
It was a much bigger job than I’d taken on before, but that was OK. The way things had been going, sticking to business as usual seemed like a bigger risk than trying something new.
I did another feasibility study anyway, knowing it would have to be pretty bad to stop me from going forward. But this time, the numbers actually looked good—good enough that I felt a lot more confident and a lot less desperate. So I decided to call Devorah back and make my pitch.
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Green Procurement
Many companies are opting for products that are designed for easy recycling or disassembly. These firms are taking a harder look at their prospective suppliers’ environmental, health and safety performance (along with normal considerations like price, quality, availability and performance).
Some green products may be more expensive than conventional brands. However, they may last longer or reduce expenses and risks associated with waste disposal. They will also reinforce your brand image as a green company.
You have two basic options. You can either look for new suppliers who specialize in green products or ask current suppliers to start offering them. Your choice will depend on the quality of your relationship with your existing suppliers,and your level of commitment to green business.
If you can find other small businesses that want green goods, you may be able to join forces and gain leverage with your suppliers.
Even so, finding reliable suppliers and products may be difficult. For this reason, and many others, it’s best to avoid making any drastic, sudden changes to your existing supply chain. Instead, place small initial orders or get samples, and evaluate them carefully over a period of weeks or months.
If it turns out that they meet your needs, make sure your supplier will be able to supply a sufficient amount (always include some room for growth in your calculations).
Most important, tell your customers and partners about the changes you’re planning well in advance. Be prepared to address their questions and concerns, and to explain how the change will benefit both of you. In some cases, you’ll also want to overlap the old product with the new, so that if there’s a problem with the new one, you’ll have something to fall back on.
Pollution Prevention
The best strategy for dealing with waste is pollution prevention (P2), which the EPA defines as “elimination of or reduction in waste quantities or toxicities at the point of generation.” In plain English, this means not making pollution in the first place.
Even the smallest businesses can benefit from a P2 program. By cutting wastes, you cut disposal costs, energy fees and water fees, and increase your efficiency.
If you wish to launch a P2 program, here are some tips:
Write a policy statement on pollution prevention for employees and customers. Explain what you’re doing and how it benefits your business, your customers and the environment.
Educate and involve all employees. A safer working environment increases employee morale and productivity. Once employees understand your P2 goals, they’ll generate new ideas.
Set appropriate, affordable and attainable goals. You might choose to decrease your solid waste output by 25 percent in one year, or reduce your hazardous waste by 10 percent every year for five years.
Collect data. Determining the types and amount of waste your company generates helps you evaluate options and set a baseline for measuring progress.
Most states have P2 programs, and some offer attractive incentives for instituting pollution control policies. .
Green Demolition and Salvage
If you find yourself remodeling or demolishing a building, bear in mind that there may be local businesses that will salvage cabinets, doors, windows, wood, bricks and other construction materials. In some cases, these firms will remove and transport items for free. Better yet, the value of the materials may be tax-deductible.
In other cases, you may prefer to recycle the materials by using them in the new building, which is even easier on your budget and the environment. Either way, the landfill should be your last resort.
…
After several weeks of negotiations—during which Joel had to develop a marketing and sales plan, demonstrate that he had adequate workspace, plenty of experience in the industry, and was eligible for a loan that would cover the new equipment and working capital he’d need—Joel signed a deal with CounterBalance. It stated that Silver State Stonecutting would be CounterBalance’s exclusive manufacturer and dealer in Nevada, Utah, Idaho and Montana.
This raised a new question, though. Where would I get the stone fragments I needed once my current supply ran out?
Danny suggested I look at materials exchange sites. It turned out there was a very active exchange program in Reno. After monitoring the site for a couple of weeks, I was able to get a few loads of granite chips, as well as a ton of broken auto glass and a truckload of red, yellow and green glass from discarded traffic lights.
It’s like they say: One man’s trash is another man’s treasure. I started out excited to get all this material for free. But as I worked with it, I started to feel proud that I was taking something no one wanted and turning it into something people just had to have. It changed my perspective on a whole lot of things.
As he prepared to offer this new product line, Joel maintained his focus on increasing his efficiency. Danny had insisted on the importance of being consistently green when you offer an environmentally preferable product, so Joel did his best to put as many sustainable practices and policies into effect as he could, in order to reinforce his brand image as the green alternative to the region’s traditional masonry firms.
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Purchasing and Inventory Control
Overhauling purchasing and inventory policies with P2 in mind can reduce material and energy consumption, minimize waste generation and lower disposal costs.
Factor in waste management costs when buying inputs and supplies. Remember: materials that generate hazardous waste cost more than their purchase price.
Avoid overproduction. Are there areas in your business where things are being produced faster than they can be used? A large inventory ties up money and increases the potential for spills and spoilage. Overproduction can also cause serious problems with resource allocation and cash flow.
Damaged packaging and expired products may increase your waste load. Don’t accept deliveries of materials that are broken, have an odor or show signs of leakage. Also, make sure all materials have legible labels.
Follow proper storage methods for perishable materials. Using stock on a FIFO (first in, first out) basis reduces the chance that materials will deteriorate in storage. If possible, order smaller amounts and arrange to return expired materials to your suppliers.
Storing Materials and Waste
Install spigots and nozzles to dispense fluids from bulk containers, and use drip pans and splash guards to avoid spills.
Make sure spills or leaks won’t contaminate sewer or storm drains.
Check for leaks at least once a week. Even the smallest leak can lead to waste problems and chemical exposures if not remedied. Also, check closures to prevent spills and evaporation of liquids.
Keep different wastes separated. Mixing wastes can be dangerous and may make reuse or recycling impossible. Also, mixing hazardous and nonhazardous waste increases the volume of hazardous waste, thus increasing disposal costs.
Store hazardous waste indoors or in a covered area to prevent moisture from seeping in.
Store hazardous waste in a safe location, and have emergency equipment ready for immediate use in case of spills and leaks. Train employees to use this equipment.
Materials and Waste Exchanges
Materials and waste exchanges connect businesses that have unwanted materials with businesses that can use them as a production input. Generally, these websites allow users to post a description of materials they have or are looking for, and work out a private deal on price and transportation. Waste exchanges usually offer hazardous materials and industrial waste, while materials exchanges offer nonhazardous items like paper, rubber mats and gravel.
You can find a directory of international, national and state-based materials and waste exchanges at www.epa.gov/epawaste/conserve/tools/exchange.htm.
Product Redesign
Redesign usually involves finding nontoxic or renewable inputs, reducing the amount of waste material (e.g., unnecessary packaging), extending product life, and reducing energy and material usage through the product’s life cycle. Getting rid of unnecessary inputs and production stages can significantly improve your bottom line.
The redesign process also encourages innovation by challenging assumptions and providing opportunities to create attractive designs and novel branding strategies. A patent for an innovative, eco-friendly form of packaging might end up being more profitable than your original product.
Materials Substitution
Materials substitution decreases or eliminates the amount of toxic, hazardous or polluting materials used in your business. It can also save money and time by exempting you from hazmat regulations, shipping surcharges and insurance costs.
Look into substitutes carefully. Some will solve one problem but cause another. Try to contact other users to learn how the substitute materials worked for them. Also, when considering a substitute chemical, remember to look at the Material Safety Data Sheets (MSDS).
…
Joel’s decision to sign a deal with CounterBalance proved to be a good one. Alternative countertops were a very popular choice among builders and sellers who were looking to differentiate their properties in a sluggish market. Although there are now rival brands, utilizing everything from scrap metal to bamboo, relationships count for a lot with contractors, and Joel has benefited from being ahead of the competition. In fact, he was successful enough that Devorah Kantor accepted his offer to relocate to Reno and handle his sales and marketing.
With the aid of a low-interest SBA loan for businesses that wish to install renewable energy systems, he installed a geoexchange system for heating and cooling, and he also put solar panels on the roof of his warehouse. He’s even contemplating the daring step of discontinuing marble and granite countertops altogether.
Today, the eco-friendly stuff is such an important part of our brand that I feel like the traditional products are diluting that image. I feel like if I want to make the case that this is a better way to go, I have to stand behind that belief.
There was a time when it made sense to offer all the options. We didn’t want anyone else getting the sale. But now the training wheels are off, and I believe we have to stand or fall as a truly sustainable business. It’s not what I set out to do. But now that I’m doing it, I want to be the best there is.
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Conclusion
Managing resources means looking at the real costs of your business, and its real effects on your customers, your community and your world. It takes discipline, creativity and dedication, but the rewards are worthwhile and measurable.
When your business is more efficient, everybody wins. You save money, speed up production times, reduce waste and avoid burdensome regulations. Your customers get a better, safer product or service—one they’ll feel better about buying than a competitor’s brand. And your fellow citizens benefit from cleaner air and water, and smaller demands on natural resources.
No matter what kind of business you run, it makes good sense to run it as efficiently as possible.

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Green Contract Management If you’re serious about greening your supply chain, it’s not enough to get verbal assurances or promises from suppliers. You need to set clear standards, write them into your contracts, and enforce them. Here are some key points to remember when negotiating green contracts: Show leadership. Clean up your own business as much as possible before demanding changes at other firms. Your bargaining position will be stronger if you can point to successful green initiatives you’ve launched at your own business and explain how they benefit you. Set verifiable standards and metrics. You and your partners must be able to agree on what goals need to be met, how those goals will be measured, what degree of transparency is acceptable (nondisclosure agreements may be necessary), and what constitutes noncompliance. Incorporate green goals into your contracts. These goals should be clear and specific, and refer by name to any certification, regulatory, or quality standards that guide your purchasing. If certain materials or practices are unacceptable, the contract needs to say so explicitly. It should also set forth remedies in case of breach of contract. Develop an environmental management system (EMS) that provides clear standards and metrics to your suppliers and partners. If you can create this document collaboratively with your suppliers, managing contracts will be easier.

| NxLeveL® TECH TIP BUSINESS RESOURCES AND THE WEB
Green Tax Incentives and Grants Database of State Incentives for Renewables & Efficiency lets you search for incentives by state and ZIP code. www.dsireusa.org. The Tax Incentives Assistance Project (TIAP) compiles businesses tax incentives for energy-efficient products and technologies. energytaxincentives.org/business Partnership for Sustainable Communities posts federal environmental grant opportunities from HUD, DOT and EPA. The site includes an interactive map. www.sustainablecommunities.gov Green Power Partnership offers an interactive Green Power Locator that will help you find renewable power in your area. www.epa.gov/greenpower