Sustainability has moved from the sidelines into the spotlight. Across Australia, more small to medium businesses are embracing the circular economy. Customers are choosing brands that prioritise sustainability, and business buyers are doing the same.
At The Brokerage Connection, we are seeing a clear trend. Businesses that have adopted even modest sustainability initiatives are attracting stronger interest from buyers. This shift is no longer limited to the retail or hospitality sectors. From manufacturing to marketing agencies, sustainability now plays a role in how value is perceived.
In this blog, we break down what the circular economy means for small business owners, how it affects valuation and sale readiness, and how you can take steps to future-proof your business starting today.
What is the Circular Economy?
The circular economy is a business model built on the principle of keeping materials in use, reducing waste, and creating regenerative systems. It focuses on reuse, repair, recycling, and repurposing, rather than single-use consumption.
In practice, it might look like:
- A café using compostable packaging and offering discounts for reusable cups
- A furniture business offering trade-in services or repairs
- An e-commerce brand reducing packaging size and using recyclable materials
- A service provider using only digital documentation and reducing physical waste
These efforts can lower operating costs, strengthen brand loyalty, and show future buyers that the business is aligned with customer expectations.
Why This Matters When Selling a Business
The sustainability conversation has moved beyond trend status. It now plays a real role in valuation and due diligence.
Here’s why this matters to sellers:
- Buyers are asking about waste management, energy use, and ethical sourcing
- A circular business model can reduce fixed costs and increase profitability
- ESG credentials can give a business an edge in crowded markets
- Lenders and investors are becoming more aligned with green business models
If you are planning to exit in the next 6 to 18 months, incorporating even small circular economy practices can create long-term value.
You can learn more about what makes a business attractive to modern buyers by reviewing our insights on what buyers look for.
How to Introduce Circular Practices in Your SME
You don’t need to overhaul your operations overnight. In fact, the best place to start is by looking at areas where waste, duplication, or inefficiency already exist.
Here are five practical tips for getting started:
1. Review Your Packaging
Can you reduce size or switch to recyclable, compostable, or reusable options? This is an easy change for product-based businesses.
2. Go Digital Where Possible
Digitising receipts, contracts, forms and training materials reduces paper use and helps streamline operations.
3. Reduce Product Waste
Offer customers incentives to return used items for repurposing. This works especially well in fashion, electronics, and household goods.
4. Partner Locally
Work with suppliers in your region to reduce carbon emissions and support local economic sustainability.
5. Communicate Your Efforts
Add a short section on your website or social media channels highlighting your sustainability actions. Buyers want to see it in action.
Even small changes can position your business as forward-thinking and attract more aligned buyers.
Example: A Hair Salon Embracing the Circular Economy
A Sydney-based salon we recently spoke with introduced a colour waste recycling system and now sources only cruelty-free, refillable product lines.
They also:
- Switched to energy-efficient lighting
- Started selling refillable shampoo bottles
- Created a towel-washing schedule that reduces water usage
As a result, the business saw a boost in loyal clientele, increased media coverage, and stood out to values-driven buyers. Their commitment to circular practices gave them a stronger valuation when it came time to list.
Linking Sustainability to Your Exit Strategy
performance but also your growth potential.
A business with:
- Documented sustainability policies
- Energy and waste savings
- Green certifications
- Community engagement in sustainability
is more likely to command a higher sale price.
At The Brokerage Connection, we guide clients through each step of their exit planning. That includes identifying sustainability features that add market value. If you are exploring a sale, start preparing early by reviewing our Sell Your Business guide.
We also support buyers looking to acquire these types of businesses. Our business listings often include businesses that already align with modern ESG priorities.
Final Thoughts
The circular economy is no longer a fringe concept. It is becoming a mainstream expectation from customers and buyers alike. For SME owners, adopting even basic circular practices can improve profitability and increase buyer confidence.
You don’t have to do everything at once. But the sooner you begin, the better positioned your business will be for growth, sale, or succession.
To start the conversation, book a free confidential consult with one of our business brokers today.
We’ll help you identify areas where you can implement circular practices and show you how to make them part of your sale strategy.
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