Developing an ethical, sustainable small business – interview with a startup CEO
Among the other challenges facing small businesses at present, maintaining sustainable business practices will remain a top priority. Indeed, many business owners are keen to ensure that the leading practice developed by some of the UK’s leading small businesses are not forgotten during the current COVID-19 crisis, and indeed form a core part of the UK’s economic recovery.
We put some questions to Christian Duncan, the CEO and Founder of Dropless, a mobile, waterless car wash service that operates in both the B2B and B2C sectors, and which was founded in 2017. Like many small businesses, Dropless founded to respond to a gap in the market that could be met by an accessible service using modern technology, but with a sustainable ethos at the core of its practices. Digitisation, transparency, environmental awareness, and fair treatment of workers, including campaigning against modern slavery, are all cited as fundamental to the business model.
We asked Christian how other small businesses could develop themselves sustainably and thrive in a crowded market, and what he thinks the future might hold for sustainable business practices.
Is there special funding available for business startups?
“There are grants, prizes and funding schemes available - for example, I know that local authorities often have specific funding opportunities - but Dropless hasn’t taken advantage of these.
We went down the Seed Enterprise Investment Scheme route, which is a government-backed scheme allowing investment in sustainable businesses that lets the investor benefit from tax relief initiatives.
In our experience, sustainable investment is booming - larger venture capital firms are more interested than ever in viable green ideas. I think we can be optimistic that this will remain the case throughout the COVID-19 crisis, and especially afterwards; people will want businesses to grow again but not without the important lessons we’ve learnt in the past. Sustainable business is good business!
From a B2B point of view, B Corp is making large companies look at their business models and identify how they can improve their corporate social responsibility (CSR). This has created a market for innovative and agile startups that can help them improve the sustainability of their supply chains and processes.”
How easy is it to pitch a sustainable idea to customers? Is sustainability alone enough to stand out?
“Everybody knows that sustainability is a hot topic right now, and will continue to be as the government, businesses and individuals work towards reducing the damage we have inflicted on the planet."
A Google Trends graph showing the growth of interest in the topic of ‘sustainability’ over the past five years in the UK, in terms of web searches. In September 2019 it reached 100, which indicates peak popularity for the term.
"Although having an eco-friendly angle is likely to attract customers and investors alike, it is not enough to ensure the survival of your business. For example, we want Dropless’s B2C customers choose our service for two main reasons: convenience and the feel-good factor of our eco-credentials. If our pricing wasn’t competitive and we didn’t offer them the convenience of washing their car without having to drive to a car wash, it is unlikely that we would be able to pull them away from their current car wash habits.
In terms of standing out among competitors, we try to practice what we preach. We encourage businesses to examine all of their processes to reduce their carbon footprints, which is why we’re working towards a zero-emission supply chain ourselves.
This comes with its own challenges; for example, our vision is to use an entire fleet of electric mopeds to allow our operators to get from booking to booking. However, at the moment e-mopeds are still not advanced enough to get our operators around for a whole day and carry all of the equipment they need. Currently we have five e-mopeds that we can use for shorter journeys, but for the rest we have to use petrol vehicles. This is something we hope to rectify in the next few years.
We make sure to dispose of any trade effluent from the wash in the correct way, by using sewer drains instead of letting runoff get into storm drains. Although we are able to save over 150 litres of water per wash by using nano solutions, we use microfibre towels that need to be recycled and washed at the end of the day. Eventually we want to set up a system to catch and filter the water used to wash the microfibre cloths so that we can catch any residual effluent and make sure that it is disposed of responsibly.
Calling yourself an ecologically responsible company means scrutinising your processes all throughout the supply chain and doing your utmost to make them sustainable.”
What traps should entrepreneurs looking to move into this market avoid?
“The biggest trap that Dropless has had to face was insurance; insurance companies for fleets are not set up for young businesses. There are new, disruptive insurance firms out there such as Zego that are great for scaleups like Deliveroo, but it still has requirements for fleets up to 25 vehicles.
My advice for small businesses is to weather the storm while they build up their fleet size and can justify working with a specialist firm.”
What information should entrepreneurs ideally have before making a move in this market?
“It sounds obvious, but I can’t stress enough how important it is to deep-dive into the motivations of your key potential customers.
From a B2B point of view, it was vital for us to understand why larger companies such as DPD, Jaguar Landrover or the Chelsea Truck Company would want to work with us, and whether it was possible for them to change their existing operations. For DPD, for example, the emphasis was on achieving a zero-emission supply chain; for the Chelsea Truck Company, the benefit was that our operators could clean the cars in the showroom without the need for drainage.
Understanding how - or if - you can integrate into a business’s existing supply chain is vital to honing in on your product offering.
It’s not always possible for large businesses to change old, unwieldy business practices in order to incorporate your service, no matter how much they might like the idea. Working out which businesses to target and having a detailed understanding of your customer landscape is key.”
Where do you think sustainable small business will go next?
“That’s a hard question to answer! Based on my experience at the helm of Dropless over the past few years, I think that both bigger corporations and private customers will start taking chances on smaller, unknown brands in their search for sustainable options.
We have managed to secure contracts with some of the largest fleets in the UK, despite only having been operating for two and a half years. If your startup is nimble and willing to work flexibly with large companies, it is possible to edge out larger, outdated businesses that can’t adapt as readily.
In terms of the direction of the motor industry in particular, ‘Mobility as a Service’ (MaaS) is changing the way that we use vehicles. We are moving towards a model where commuters can request personal transport digitally and only use it as and when they need it. We predict that most if not all fleets will be electric by 2023, and as car ownership dips and MaaS grows, new opportunities will arise in the industry for savvy sustainable startups.”
- What I wish I'd known before I set out, Ian Hills, Purple Pilchard
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- Starting a business from scratch: Busting 7 mistakes and misconceptions, Lewis Bowen, AIR, and Sheffield Business School