Create a financeable circular business in 10 steps
Updated on 19.09.2023
Nederland Circulair! partners, Circle Economy and The Sustainable Finance Lab worked with circular business managers and financiers to identify ways to fund circular business strategies. The guide ‘Creating a Financeable Circular Business in 10 Steps’ will empower businesses to secure funding for their circular ambitions and initiate strategic decision making with the help of 10 practical steps.
More information
The circular economy is here to stay. Governments, companies and consumers are recognising, more and more, the economic advantages of circular strategies in addition to their environmental benefits. New end-of-life solutions, chain collaboration and circular design principles are becoming inherently part of future-proof business models.
However, when deciding on which circular strategies to implement, the finance ability of a business is also affected. For example, product-service combinations are seen as a promising future earning model, but they currently encounter considerable funding challenges. Challenges such as securing stable cash flows, reducing risks and matching investments with payback periods are important to address.
Additionally, evolving business strategies including changing value propositions and chain collaborations should be topics on the agenda. Enabling the transition towards these new business models is key to successfully implementing circular business strategies and future-proofing our economy.
Because of the importance of product-as-a-service business models, this paper is primarily focused on these types of business models. The paper proposes 10 steps that entrepreneurs and business managers need to consider when developing a financeable circular business model.
These steps can support businesses that wish to establish a sound circular business model and to overcome the financing barriers that such models face. They include focusing on involving the supply chain when choosing the best circular strategy, smartly shifting the business strategy, and attracting financiers to invest.
The guide also provides examples based on experiences in the Netherlands.
Relevance for Circular Systemic Solutions
The 10 steps can be attributed to all value chains and sectors and promote the idea of multiple use cycles and the integration of multiple stakeholders throughout the supply chains, which supports systemic thinking. This paper is relevant for cities and regions that are co-creating business models for their local Circular Systemic Solution together with local stakeholders and would like to support local businesses in creating financeable circular business.
