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Circular Economy Business Models for Small and Medium-Sized Enterprises

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Dear Colleagues,

Small and Medium-Sized Enterprises (SMEs) are the main pillars of the economy, and their decisions and behavior fundamentally influence the operation of the current economy. It is also increasingly clear that the circular economic model must be considered in relation to the activities of Small and Medium-Sized Enterprises. This model proposes transforming the current ”take-make-waste” approach of Earth’s resources into one where waste and pollution are eliminated, products and materials are circulated at their highest value, and nature is regenerated. Through implementation of its three base principles, the circular economy model strives to solve global challenges such as climate change and biodiversity loss.

The ways in which Small and Medium-Sized Enterprises participate in the circular economy affect their operation, investment decisions, reputation, and effectiveness. However, due to their small size, they face several challenges in improving their resource efficiency. On this note, circular economy business models (CEBMs) support Small and Medium-Sized Enterprises in overcoming the risks of implementation, and are extremely important in developing and emerging countries where inappropriate policy frameworks hinder the circular economy's implementation in Small and Medium-Sized Enterprises.

In this Special Issue, we invite scholars from all field to contribute papers on the relationship between Small and Medium-Sized Enterprises and the circular economy, with a focus on business models and concepts.

Prof. Dr. Vasa László
Guest Editor

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Keywords

circular economy
sustainable business models
sustainability
small and medium-sized enterprises
development
policy

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22 pages, 4491 KiB

Open AccessArticle

Assessing the Financial Viability and Sustainability of Circular Business Models in the Wine Industry: A Comparative Analysis to Traditional Linear Business Model—Case of Georgia

by Vakhtang Chkareuli, Gvantsa Darguashvili, Dzintra Atstaja and Rozita Susniene

Sustainability 2024, 16(7), 2877; https://doi.org/10.3390/su16072877 - 29 Mar 2024

Viewed by 619

Abstract

In the contemporary global context, waste management and the judicious utilization of resources have emerged as pressing concerns. Consequently, the concept of a circular business model has gained prominence as a viable solution. This innovative model reframes waste not as a disposable byproduct but as an opportunity to generate new value, setting it apart from the conventional linear business model, particularly in financial, economic, and operational dimensions. Numerous industries grapple with the issue of excessive waste generation, among them the wine industry, notable for its substantial water and grape waste outputs. This predicament holds significant ramifications both on a global scale and within the specific context of Georgia. Yet, it also presents an innovative avenue for waste recycling. This study draws upon a comprehensive review of internationally recognized literature, noted for their scholarly significance and citation prevalence. In its practical segment, two distinct investment projects have been meticulously developed which seek to evaluate the financial viability of the circular business model in contrast to the conventional linear business model. The investment projects considered are as follows: 1. Under the framework of a linear business model, the company exclusively engages in the production and sale of wine. 2. Within the circular business model paradigm, the company not only produces wine but also harnesses waste processing to yield grape seed oil, which is subsequently marketed alongside wine bottles. Both models undergo rigorous scrutiny, employing a comprehensive analysis of key financial indicators essential for assessing project profitability and efficiency. The outcomes of this investigation reveal that, under identical capital investment conditions, the circular business model surpasses the linear model in terms of profitability. This underscores the potential for sustainable practices within the wine industry and the broader business landscape. Full article

(This article belongs to the Special Issue Circular Economy Business Models for Small and Medium-Sized Enterprises)

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18 pages, 516 KiB

Open AccessArticle

Application of Project Management Techniques for Timeline and Budgeting Estimates of Startups

by Ubaid Ullah Khan, Yousaf Ali, Mónika Garai-Fodor and Ágnes Csiszárik-Kocsir

Sustainability 2023, 15(21), 15526; https://doi.org/10.3390/su152115526 - 01 Nov 2023

Viewed by 2068

Abstract

This study aims to develop a framework by incorporating well-proven project management techniques to help startup owners effectively set up ventures and secure early-stage financing. Startups not only open ways for innovative and updated technologies in the markets but also bring employment opportunities in a country that eventually increase productivity and the per capita income of a country. Despite all the benefits, the success rate of startups is meager, especially in developing countries, due to ineffective management and vague business plans. Therefore, this study aims to facilitate entrepreneurs using well-proven project management techniques from the literature and devise a new framework applied to a business case, as discussed in this paper. This study presents an approach to project management techniques for smartphone app-based startups. This study utilizes the fuzzy PERT (FPERT) for the best completion time and budget estimates. Experts’ opinions from eight private limited companies have been analyzed using FPERT. The critical path method (CPM) is also used to schedule activities. Finally, a techno-economic analysis is also performed to show the growth potential of such a startup, e-Karsaz. This study aims to help startups secure early-stage financing. Tech-based business ideas need to be commercialized in developing countries like Pakistan. There is a need to show long-term profitability to make an idea stand out among others and secure early-stage financing. The scope of project management techniques is confined to construction-based projects. The results show that it would take around 692 days for the e-Karsaz startup to become fully operational, with the capital budget estimated at around PKR 1.3 billion. The techno-economic analysis shows the project is economically viable with an internal rate of return (IRR) equal to 92 percent and a benefit-to-cost ratio (BCR) equal to 10. The sensitivity analysis, including five scenarios of weighted average cost of capital (WACC), shows that the project remains economically viable even if the required rate of return goes over 20 percent. This study is helpful for startups to make time and budget estimates and to show the growth potential to secure early-stage financing. Full article

(This article belongs to the Special Issue Circular Economy Business Models for Small and Medium-Sized Enterprises)

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