This is the first in a series of posts that will examine how 5 companies–that were highlighted in the recent edition of Fortune Small Business–have focused on sustainable enterprises in surprisingly pragmatic ways in order to weather the economic storm.

The first best practice highlight is of Terracycle:

Entrepreneur Tom Szaky and his company Terracycle have managed to use innovative recycling (spinning trash into consumer goods like Rumpelstiltskin spun straw into gold) to double their revenue every year since 2004.  Fortune Small Business claims that Terracycle’s sales are likely to hit $15 million in 2009.  In addition to being filmed for their new reality TV show, Garbage Moguls, the recycling firm’s 46 employees dream up ways to re-design and re-purpose the mountains of trash in their 250,000-square-foot warehouse.  A few of their creations include pencil cases from Capri Sun juice pouches, picture frames and clocks from circuit boards, kites from Oreo wrappers, and fertilizer called worm poop in Coke bottles (sold at Home Depot, Target and Whole Foods).

Terracycle gets help from 17,000 trash brigades consisting of 2.6 million people, all working exclusively with Szaky’s company to collect and ship trash back to the Terracycle warehouse. The company has agreements with nearly all of the 50 corporations that produce most of the world’s non-recyclable trash.  And Terracycle does not have to give them any kind of share in sales.  Szaky plans to install recycling systems in front of 10,000 big-box stores.  Its suppliers are paying to have their brand names on the bins.

But all is not perfect in the land of newfangled recycling.  Terracycle lost $3.5 million in 2008, bringing it to the threshold between bankruptcy and massive success.  The loss was mostly due to the fact that it cost $20 per bag to make the sturdy carrying bag, the ReTote, out of used Target plastic shopping bags.  Terracycle, however, has shifted production of the ReTote to Mexico and they project a $1 million profit for 2009. 

Despite company losses and the economic downturn, Terracycle made $8 million in revenue for 2008 and recently received $4 million from investors who believe in its mission.  Terracycle has certainly shown that it pays to be green.