Key Idea: Go Green With Caution

Become a green manufacturer but only if you think your customers will pay for it.

Being "green" can be expensive. Be careful. You can almost hear the song being sung, "Green, green, we're green, I say, but who's gonna pay the bill?" (Excuse us, Christy Minstrals, for the abuse of your lyrics.) But the question needs an answer: "Who is going to pay those added costs of being green?" Can these costs be allocated to part of the marketing-sales? Will the potential customer pay a little more? Will you take a little less?

No matter what their politics, outdoors people are some of the biggest environmentalist in the world. And, anybody with an ounce of common sense would agree that we should not be depleting non-renewable natural resources without carefully looking at alternatives. But in this little clip, you hear Margaret tell us that they spend an extra $1.50 per yard for "green" fabric woven from regurgitated plastic bottles.

Q: Is this practice -- Margaret calls it their moral imperative -- hurting or helping the business? Is that extra $1.50 per yard costing so much that she is pricing herself out of margin? Would a mix of "green" and "traditional" been possible or does her moral imperative (strong words, an indication of her depth of belief) cloud her options?

A: Business is tough. Margaret perhaps has a moral imperative to keep the doors open. She has a moral imperative to pay her bills. She has a moral imperative to be fair to her team members. And now, there are some backslider environmentalists who claim that we are spending more resources collecting, sorting and converting old plastics than we do processing the raw materials (oil) to create new. It is a difficult issue; the answers are not easy or straightforward, and we are open to everyone's contribution to this dialogue.

The bottom line, however, is the bottom line; and at the end of the day, we need to stay in business.

Q: Do you think Margaret and Paula made a special appeal to every environmentalist group to buy their clothing because it was "green"?

A: Yes, they tried with the Sierra Club and the club wanted a very high fee to structure the relation ($50K). A special campaign to target these smaller markets requires added resources and time. Like most of us small business owners, they have little extra of either time or money.

By the way, the fabric company at $1.50 per yard did not survive and Margaret had to resort to traditional fabrics. They are, however, researching a corn derivative as a substitute.