Business benefits

The benefits of the circular economy translate into opportunities for entrepreneurs. This creates new profit opportunities, a more stable supply of materials, a growing demand for certain services, and strengthened customer relationships.

New profit

As a result of the transition to the circular economy, companies are reducing material costs and developing completely new markets where profits can be generated. In many sectors, raw materials are a high cost item. The extraction of new raw materials and the uncertainty about their supply in a linear economy are driving up the price of these materials. Circularity can therefore offer new profit opportunities through lower costs, increased security of supply of raw materials, tighter chain cooperation and a more robust supply chain. In addition, the organisation’s image is strengthened by showing that sustainability is being put into practice (Vermunt et al., 2019).

Stable material supply

A circular economy ensures that the company uses fewer new raw materials and more recycled raw materials, and that the value of these raw materials is maximised over their entire life cycle. As a result, an entrepreneur will incur relatively lower material costs than labour costs, which means that the costs and availability of materials have less influence on the stability of the business model. With more stability, a company can make more favourable and targeted long-term investments.

Growing demand for services

Within a circular economy there is a demand for new services, where there are opportunities for employees and entrepreneurs. Such new jobs and services include the followingare according to the (Ellen MacArthur Foundation 2015a):

  • Reversed logistics companies that collect, transport, repair and redistribute products after use in order to be reintroduced into the market;

  • Marketers and sales platforms that facilitate longer product life and higher utilization rates;

  • Experts in remanufacturing and product repair who facilitate reuse and repair

Optimized customer relations

The circular economy offers new business models and opportunities to retain customers. The transition from product delivery to services, leasing models and rental creates a long-term relationship between customer and supplier, because there is increased contact during the life of the product. When the supplier remains responsible for the delivered product, interim service, maintenance, repair, this robust communication can not only result in customer satisfaction but also in customer loyalty, a fact that ensures that the customer will buy products again after any contract expiration (Kraaijenhagen, Van Oppen & Bocken, 2016).