By Penny Bauder.
What is a green business?
A green industry business is one that uses sustainable materials to make its products. Green industry businesses aim to use as little water, energy and raw materials as possible while cutting carbon emissions, or it finds ways to utilize these materials in renewable and eco-friendly ways. This business approach minimizes the company’s strain on natural resources and contributions to climate change.
Green businesses make sense from a financial viewpoint. Millennials make up the largest group of consumers besides baby boomers, and 72 percent are willing to pay more for products from businesses committed to sustainability.
Brands that establish a reputation for environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials of tomorrow, too. Win millennials over now with a sustainability-minded small business, and you’ll have loyal customers tomorrow.
And that’s just among millennials. Small Business Trends’ Jeff Charles reports that, overall, 73 percent of consumers are willing to switch brands based on a cause they support. Consumers have more choices now than ever, meaning they’re more likely to make choices based on the perception of a brand’s ethical legitimacy.
If you’re interested in starting a business and you’re passionate about sustainability, there’s a good chance your small business could go big in the future. So, how do you go about it?
What is a green business model?
With a traditional business model, a company outlines raw material budgets, design processes, and service delivery or product distribution methods. A green business model, while ensuring ample revenue, prioritizes minimizing the company’s environmental impact instead of maximizing its profit. A green business model may involve restricted use of fossil fuels while emphasizing power supplied by solar panels and other approaches to drastically reduce energy consumption.
How do I start a green business?
To start a green business, first identify an eco-friendly service that nobody in your market currently offers. Next look at your circle or tribe and ask yourself it there are people in your network that reflect the values and services of the green business you are looking to start.
Starting a business can help put your dreams into motion, and it’s not as hard as you might think. Developing a unique offering, one that will appeal to people and is also something you’re passionate about, is the hardest part; that’s where market research comes in. So for example, at Green Kid Crafts I was interesting in providing environmental friendly STEAM AND STEM KITS for kids. So I had to look into supply, demand, major players and projections on growth —I had to research and look at the entire market for eco-friendly science and craft kits. What I do that’s was unique, innovative, even groundbreaking? In my case there were no eco friendly kids STEM and art subscription boxes 10 years ago and I found that out through my research. Once you determine what you have to offer and why people want it, it’s time to get started.
Your next step is writing your business plan. This is what you’ll use to convince investors and banks your idea is viable. But it’s also an important step is organizing your thoughts and figuring out how your dream will become a profitable one. In my business plan I also included information on how I would source all the difference components of my kids STEM and art kits.
Next comes funding. How much will you need to get started? Your business plan should include a projection on how long it will take for you to become profitable. You’ll want to approach friends, family, and crowdfunding sites to start. You’ll also want to look into loans and grants for which you qualify. Sometimes, you can secure a loan based on more than just your financial standing. For example, there are loans specifically for women, loans and grants specifically for green businesses.
Next, figure out where you’ll be conducting business. If you can do it from home, that’s a plus. Remember, you’re wanting to prioritize sustainability with your operations, and your business location affects that a great deal.
First pick your name: If you’re going to do business under your own name there’s no need to register, but if you have another name for your business, register it with the state.
Pick your structure: With a sole proprietorship, you assume the most risk; that’s why many small business owners choose a limited liability company (LLC) structure; if you’re unsure about structure, a business entity wizard can help.
Get permits: Check with the city, county and state to see which licenses and permits you’ll need.
Next Get an Employer Identification Number (EIN) from the IRS before you register to pay state and (if applicable) city taxes.
Each state has its own online resources for registration, permits and licenses, as well as tax registration). A fantastic resource is the Small Business Association website. Through the site, you can find a counselor, secure financing, look into government contracting, and much more.