Going in Circles: How small and medium sized enterprises could find profitability without jeopardizing the environment

Abstract: This thesis emphasizes the significance of small and medium-sized businesses in the primary production of food and their adoption of circular business models. Unlike previous research, our study focuses on exploring the feasibility of implementing circular models in these enterprises in Sweden. We examine how such practices can enhance profitability, reduce environmental impact, and identify the barriers they face in this pursuit. Our thesis is based on the knowledge and expertise from multiple interviews with industry experts, as well as the main theories from the field of circular business models. Our discovery finds that financial constraints and the complexity of implementing circular practices pose some of the difficulties of the implementation of circular systems. However, small and medium sized businesses can gradually phase in circular practices or participate in larger circular systems through collaborations to tackle these challenges. Profitability however depends on industry-specific circumstances and integrating cost-effective circular practices, which are met with difficulties from regulation and legislation. Active political bodies are crucial for creating an enabling environment through regulatory frameworks, policies, and incentives. The identified barriers are characterized by high risk and financial challenges. To enhance profitability, small and medium sized businesses must evaluate their unique circumstances and integrate cost-effective circular practices. Gaining a comprehensive understanding of the circular economy and how companies can achieve a competitive advantage within this framework is crucial for scholars researching sustainable business and circular business models. This knowledge will enable the identification of significant research avenues and contribute to advancing the field.