A green business seeks to turn a profit while minimizing its strain on natural resources such as water, energy, and raw materials. Some green businesses focus on cutting carbon emissions. Before you dive into entrepreneurship, carefully consider the reasons why people choose ecopreneurship and learn more about how to go about building a green business.
The Advantages of a Green Business
Green businesses present several attractions for aspiring entrepreneurs.
Their business is good for the environment. Green businesses have a good brand image which enables them to compete favorably.
Higher costs are offset. Consumers will pay a premium for a sustainably-produced product.
Sustainable businesses are innovative. Improvements in efficiency can reduce operating costs, thus improving margins.
Ready for changing regulations. Businesses built to operate sustainably from the get-go won't need to adjust their sourcing and processes. They're ready for any legislative changes that may arise.
How to Develop a Green Business Model
The first step while building any business is to identify the problem you’d like to solve. Are you offering a product that’s more sustainably produced than what’s currently on the market? Are you creating a totally new product and carving out a niche for it? Is your business a consultancy providing expertise on sustainability? Professionals in the consultancy space have vast opportunities to help businesses attain sustainability goals.
Once you settle on a business idea, you’ll need to decide how to structure your business. An LLC is a great option for many, as it offers protection of your personal assets from being liable in business matters. A Virginia S corp is often the favorable option for entrepreneurs who want to save money on self-employment taxes and are interested in the option of pass-through taxation. Most business owners aren’t familiar with how to start an LLC in Virginia or an S corp in the state, which is why working with a formation agency can be a huge help.
In addition, you’ll need people who can see and understand your vision while offering valuable input. Hiring people on a full-time basis is not always sustainable. For example, you can use virtual receptionist agencies to help you find the perfect person for that particular role — and the same goes for IT and marketing freelancers as well. Job boards help you vet prospective hires using factors such as their past reviews, years of experience, and how much they charge per hour.
Funding a Green Business
Green businesses present a unique challenge — initial setup costs may be higher than they would for an equivalent conventional business. For instance, to start an eco-friendly laundry service, you'd likely need to acquire:
Energy-efficient commercial washing machines
An alternative energy source (such as solar panels and cells)
An energy-optimized vehicle fleet
Biodegradable packaging solutions
Fortunately, there are many individual investors and dedicated investment funds geared toward green businesses. You could also approach a traditional financial institution with a sound business plan.
Marketing a Green Business
Developing a marketing plan requires careful thought about the target audience. Identify their personal reasons for identifying with your brand. Develop a brand voice and a communication strategy. Consider your pricing approach so that you remain profitable while still staking your claim in the market.
Risks of Green Businesses
When building a green business, there are risks — the idea may not pan out according to plan. This is often on the minds of those leaving traditional employment to start their own businesses. However, careful planning and finding the right talent to build your team can help mitigate the risk of failure. Entrepreneurship lets you be the problem solver, but you must remain persistent when faced with hurdles.
Join the Smith Mountain Lake Regional Chamber of Commerce to connect with other local entrepreneurs and access resources that will help your business grow.Image via Pexels