By Jen Hickey.
This is Part II of our two-part series on green technology and the small business. Part I (click here to read), focuses on the return on investment for green products and technology.
More and more people are greening their purchases when it makes sense to do so. The entrepreneur that can provide a green product or service that has clear benefits and can help consumers save money at the same time will find the market wide open. According to a 2007 Simmons study, the number of “behavioral greens”— consumers with the greenest behaviors and attitudes — has risen to 34 million, or 31 percent of the U.S. population. What’s more, as the price differential between green and non-green products has shrunk significantly, increasing numbers of consumers are losing their inhibitions about buying “green.” And despite the recession, the trend toward green continues. According to a 2009 Global Green Consumer survey conducted by the Boston Consulting Group (BCG), there were more purchases of green products in 2008 than 2007 and many consumers said they are even willing to pay a higher price for green products if they are of higher quality.
Opportunities are particularly good for businesses that can distinguish their product from the competition while communicating a clear message about what it means to be “green.” Although sales for Clorox’s GreenWorks have dropped off in the last few years, those of household-product brands like Method and Seventh Generation rebounded in the double digits in 2010. While these products can cost as much as 25 percent more than their non-green competitors, the companies that produce them have a committed record of environmentally sustainable business practices, which tends to attract and retain customers. As the BCG study concluded, consumers not only expect added value when purchasing a green product, they tend to trust the claims of those companies that practice what they preach.
While the market for green products may seem saturated, franchise opportunities abound for the entrepreneur looking to sell niche products and services directly to the consumer. Founded by Beth Remmes, an environmentally conscious mom looking to do more than recycle, Zola Goods operates on a home-party model that is organized by “coordinators,” who help educate and sell affordable green household and party products directly to family and friends. A start-up kit costs just $149, and coordinators are paid 20 percent on all sales. OnlyGreen4Me offers exclusive dealerships to entrepreneurs looking to open their own on-line Eco-Stores, selling a broad range of green products, with a focus on the office. A setup fee of $2,500 includes the first year hosting and maintenance fee of $1800, with ongoing hosting and maintenance fees of $150 per month in subsequent years. Dealer commissions on products sold range from 10%–30%.
As Glenn Croston, PhD, scientist, committed green practitioner, business adviser and author of 75 Green Businesses and Starting Up Green, notes, business opportunities exist for everyone, whether your background is in sales, finance, education, law, health, art and design, construction trades, or manufacturing. “While the downturn has been challenging, there are businesses that have grown and have even been helped by it. Small green businesses that have done well are those that have found a better or more efficient way to do something that helps homeowners and businesses save money.”
An example of this is America’s first zero-waste pack-and-move solution. In 2005, after seeing how much waste he produced when he moved his small office across town, Spencer Brown created The Recopack (Recycled Ecological Packing Solution) from 100% post-consumer trash, from which his Rent A Green Box venture was born. Recopacks and other recycled packing material are rented for two-week blocks. The rental fee includes free drop off and pick-up. Replacing cardboard boxes with reusable Recopacks can save movers up to 50 percent. After perfecting his business in the Los Angeles area, he is selling franchises across the country.
According to Croston, the successful businesses are those that are meeting the demands of the “conserver economy.” Many homeowners and businesses are willing to pay to save on water and utility bills. Green Irene offers self-paced, online Green Business Bureau (GBB)-certified training and marketing support in the growing field of Eco-Consulting for $150 (home consulting; $29.95 annual renewal) and $350 (home and business; $49.95 yearly renewal). Pro Energy Consultants offers HERS Energy Rater Certification and BPI Building Analyst Certification franchise opportunities ($29,900 total investment) as an energy auditor.
A Solar Boom
With the help of the continuation of the federal Section 1603 Treasury program, declining technology costs, and the expansion of new state markets, the solar industry has boomed throughout the recession. According to U.S. Solar Market InsightTM report, published jointly by Solar Energy Industries Association (SEIA) and GTM Research, solar market value grew 67 percent from $3.6 billion in 2009 to $6.0 billion in 2010 and was the fastest growing energy sector in the country. Grid-connected photovoltaic (PV) installations have more than doubled in the past two years alone. “Becoming a solar broker is a way for someone with a sales background to break into the solar industry at fairly low cost,” Croston notes. Prime Solar Network, a one-stop shop for all that is solar, offers regional licensing ($75,000-$150,000 in capital) and brokering opportunities, as well as consulting services and training for those looking to get into the renewable energy market.
As Tim Cassidy, CEO of Prime Solar and its brokerage affiliates Empire State Solar and JerseySolar.net, explains, “we do the shopping, from researching multiple panel options and competitively bidding on installation and design,” saving his clients time and money. Although Section 1603 is set to expire at the end of this year, more than half of all U.S. states have mandates in place for 15 to 30 percent of all energy to be generated from renewable sources over the next 20 years, and with the breakthroughs in solar thermal storage and innovation in thin-film technology, opportunities abound for those with contracting, construction, engineering, financial, and skilled trades backgrounds.
Have a Plan
Wanting to “do the right thing” is not enough, the “ecopreneur” must find the means to produce, market, and sell his/her idea. To do that, you need a plan. SolarBusinessPlans.com, Tim Cassidy’s consulting service, offers assistance to entrepreneurs looking to start a green business as well as those existing businesses trying to incorporate green standards into their operations. While SBA Express has streamlined the process, loan officers “want to see personal investment, demonstrated sales and strong background,” Cassidy cautions. “With passion comes overconfidence, to succeed you must have a realistic, staged plan for growth.”
Zola Goods Sell green products that everyone needs as a home-party coordinator. Start-up kit costs just $149, and coordinators earn 20 percent on all sales.
OnlyGreen4Me Open on-line Eco-Store, offering a broad range of green office and household products. Initial setup fee $2,500, with hosting/maintenance fees of $150 per month after first year. Dealer commissions on products sold range from 10%–30%.
Open a Rent A Green Box franchise in your area and help movers save up to 50% by renting/selling reusable plastic moving boxes and other packing material.
Become a GBB-certified Eco-Consultant Green Irene for $150 (home consulting; $29.95 annual renewal) and $350 (home and business; $49.95 yearly renewal) and help people green their homes and offices.
Become a HERS Energy Rater and BPI Building Analyst Certified Pro Energy Consultants franchisee ($29,900 total investment) and help homeowners reduce their utility bills by making their homes energy efficient.
As a Prime Solar broker affiliate or regional licensee ($75,000-$150,000 in capital), you will have access to a network of installers and exclusive access to territory in this growing industry.