How to Start a Green Business

Here are some things to think about if you are considering starting a green business.

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As green marketing options are on the rise, many entrepreneurs are thinking about how to start a green business. Some business owners may start a green business to follow a personal passion for improving the environment. Others may seek to capitalize on growing consumer interest and economic opportunities in green products and services. A wide range of green options are penetrating the marketplace from food and textiles to chemicals and building products. Regardless of your motivation, future business owners need to consider a number of key concerns before deciding whether the green market is the right direction for their business.

  • Assess Your Green Skills. Before starting your green business, undertake an inventory of your skills, credentials, education, and personal and professional experiences. If you objectively evaluate your background, you may determine if you have the necessary background to start a green business. Think about green products or services that might be of interest to those in your field. For example, as a hairdresser, you might be able to leverage that experience to think about ways to offer green hair care products while someone with a construction background might think about green building options.
  • Find Your Green Market. Once you have assessed your skills, you should think about environmental issues in your industry. Talk to your peers and customers about their environmental concerns. Check out the web or social media to see what others are complaining about as environmentally wasteful or harmful in your field. Participate in industry organizations and state and federal environmental agencies to learn about important green opportunities in your market. Think out of the box on possible green products or services that can address these unmet green needs. 
  • Seek Out Relevant Grants and Funding. Private and public seed funding may help you to commence your initial research and aid your future development of your green products and services. The U.S. Environmental Protection Agency (EPA) offers green innovation grants for new businesses under its Small Business Innovation Research (SBIR) Program. You may also want to investigate your state environmental agency to determine if it offers similar green grants or loan programs. In addition, fledgling businesses may want to participate in online green crowdsourcing sites, such as Green Unite, Greenfunder and Green Fundraising, to seek out microloans or microgrants from the general public.
  • Determine Relevant Certifications. Your business does not want to fail to acquire legally-mandated certifications or lose your credibility and risk potential liability by misusing green terminology. Before slapping a green label on your products or trumpeting your green claims in marketing materials, find out about government or private voluntary certifications for your products and services. Anything from organic produce and textiles to cosmetics and renewable energy may be required to attain governmental certifications or seek out voluntary industry “ecolabelling” options. You may need to obtain certain certifications to avoid running afoul of the law, either in the U.S. or internationally. You may also want to achieve voluntary industry seals or certifications to help your products and services stand out in a thicket of commercial green offerings. The Small Business Administration (SBA) provides a list of links to domestic and international certification programs and voluntary ecolabelling sites to help guide your new business.
  • Adopt Green Business Practices. If you are selling the green lifestyle, then it is critical that your business also routinely apply green practices in its daily activities. Your new business can undertake an energy audit and determine ways to reduce your energy consumption. In addition, you may want to establish a company-wide conservation program that combines resource conservation, recycling, and donation that benefits the environment and shows your environmental commitment to your customers. Furthermore, your company should keep up and comply with any relevant environmental laws and regulations, especially if your business wants to successfully tout its green credentials in the marketplace. To learn more, see Nolo's article How to Make Your Business Green.
  • Get Involved in Green Organizations. The green market is a dynamic one that is moving rapidly in different directions. To help your business keep up with market trends, join relevant environmental groups and industry organizations committed to green practices. These associations may advocate on behalf of or set green standards for your industry. It is also common for these organizations to offer educational workshops that will help you to stay in step with changing industry standards and government mandates. Lastly, such groups may provide networking opportunities that could lead to future green business partnerships and ideas.

Visit the SBA and the EPA web sites or related state agencies for more information on starting a green business.

May 2013

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