Barriers to entry: Lack of Resources and Available Capital

This post is the second in a series of blogs addressing the barriers to entry for sustainability projects experienced by SMEs, the support that exists to implement and monitor projects and the benefits and returns typically seen when projects are completed.

Barrier to entry: Lack of capital available upfront

A substantial barrier for SMEs (Small and Medium Enterprises) when evaluating sustainability projects or attempting to create sustainability-related targets is a lack of available time, money or expertise within the organization to confidently make investments.

Projects that improve efficiency of operations and resource-use often have defined payback periods where the investment actually saves the organization in the long-term; however, an initial upfront cash expense is still required. And selecting the appropriate project to deliver the desired benefits can be a difficult prospect without the internal understanding of where the greatest benefits and best “fit” exists.

This lack of capacity can be overcome by selecting projects that are modest and affordable. The best practices found in strategies of larger organizations are often too ambitious and contain too many mitigating factors to simply be scaled down for use by SMEs. The most effective solution to a lack of capacity is developing or joining informal networks of peers that allow for the sharing of knowledge and ideas. These groups help identify trends and share sustainability solutions that are effective regionally.

Once a solution is selected that works, funding from public and private sector sources is available to overcome financial barriers. Funding sources come from the provincial and federal government, as well as private sector sources, and can come in the form of grants, loans and capital project funding. Two examples of funding sources, available money, and the project types are:

  • CME Smart Green Fund has made $25M available in project funding to help small to medium size manufacturers install projects that will reduce GHG emissions and improve energy efficiency, with up to $200,000 available per project.
  • Municipalities offer water-use assessments where business owners can receive breakdowns of their water use and receive efficiency recommendations, along with opportunities to pursue relevant incentives. Similar programs exist for replacing central cooling and heating equipment.

By tapping into regional networks and available funding from private and public sector sources, SMEs can begin to overcome the barriers to entry posed by lacking money or expertise available to implement sustainability projects and set sustainability-related targets.

Next blog in this series:

The need for a shortened payback period

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