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Module 11: Sustainable Business Entrepreneurship – Case Study

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Case Study - Simply Green Biofuels

Lesson Summary

Simply Green Biofuels

Founded by Andrew Kellar, Simply Green Biofuels offers green alternatives to home heating, diesel, and marine fueling.

The company’s biofuels are locally sourced from waste vegetable oil. When refined, this is combined with traditional petroleum products to make biofuel blends.

The company offers a bio heating oil product called BioHeat and biodiesel for motor vehicle use.

Simply Green was originally an erosion control and hydro-seeding business. The business had a negative environmental impact by needing to use diesel fuel for trucks and equipment. Andrew looked into the biodiesel market in order to try and reduce the company’s environmental impact.


Challenges and Overcoming Them

Challenges for Simply Green Biofuels:

Entering an established home heating oil industry with a new product.
Andrew did not have experience in fuel procurement and delivery.

Having the hydro-seeding business Simply Green was better positioned in terms of capital.

Self-funding involves funding a venture through savings accumulated on your own or in a previous business.

Simply Green Biofuels used a soft market entry approach to test the market through early adopter customers and educate potential customers about the products.


Challenges and Overcoming Them

An early adopter is a person who embraces new technology before most others do.

A value proposition is a business or marketing statement that summarizes why a consumer should buy a product or use a service.

As Simply Green Biofuel was blended with conventional fuel it had to be regulated just like any other heating oil or diesel provider.

Getting the Business Off the Ground

Simply Green had a price range that was on either side of the conventional competition.

Simply Green has benefits over their competition. It allowed engines and furnaces to clean themselves as the biofuel acted as a natural solvent. This lowered customers maintenance cost, extended the life of their furnace or engine, and increased the burning efficiency.

Simply Green engaged in creative marketing and outreach which included calling music performers whose fans were concerned about the environmental footprint of the performer’s tours.

Recruited employees wanted to work for a socially and environmentally responsible company that was contributing to the community they lived in.


Getting the Business Off the Ground

Simply Green opened up a gas station selling biofuel. It became a visible showplace for them to educate more customers. This allowed the business to grow.

Critical to the company’s success was its filling of a market niche, focus on core products, and effective messaging and education.

Simply Green used consistent and persistent branding to show it was a sustainable business concerned for the planet and people and focused on helping customers act on their own concerns for the environment.


Lack of Profitability

Volatile oil prices and changing overall economic conditions were a factor in the lack of profitability of Simply Green.

Simply Green lost customers who may have went to another oil dealer to get fuel at market price, some may have turned their heat down to reduce oil consumption, and some may have burned more wood.

An equity interest is an ownership interest in a business entity.

Private equity refers to any type of equity investment is an asset in which the equity is not freely tradable on a public stock market.


Lack of Profitability

Simply Green’s priority to always do the right thing for the environment and people meant need for capital and adequate cash resources was neglected.

Potential scenarios were not thought through so there was no resources on hand when scenarios occurred.

Working capital measures how much in liquid (readily available) financial assets an organization has available to fund and build its operation.

In general, companies that have a lot of working capital will be more successful since they can expand and improve their operations.


Future of the Business

Simply Green focused on developing a marketing plan to get out to the next group of customers beyond the early adopters to the early and late majority customers.

Andrew left Simply Green and became an entrepreneur in residence at the University of New Hampshire’s Green Launching Pad program.

Andrew suggests to students interested in being sustainable business entrepreneurs to:
• take advantage of the resources available to learn all you can about sustainability science, engineering, and business;
• try to get an internship with a local sustainable business;
• on your own or with a friend, try out a small sustainability project idea at your school and in communities.

End of Unit