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Going Green, Part II: Growing “green” businesses opportunities

By Jen Hickey.

Going-green-article.jpg

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.

Going_gree-quote.pngGreen Franchises

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.”

Additional Resources

Green Products

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%.

Green Services

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.

Eco-Consultant

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.

Energy Auditor

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.

Solar

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.

September 23, 2011 Today's Business, , , , , , , , , 4 Read more >

Going Green, Part I: Is the payback worth the investment?

The following is Part I of our two-part series on green technology and the small business. Part II, which will follow tomorrow, focuses on business opportunities catering to the “green” crowd.

Situated across the harbor from the gleaming skyscrapers of Lower Manhattan, in the once rough and tumble waterfront of South Brooklyn, Linda Tool has not only survived the continued contraction of New York City’s manufacturing sector (down 8 percent over the last decade) but has expanded, adding four employees since September 2008. Established in 1952, Linda Tool manufactures precision components and assemblies for a number of major aerospace and industrial concerns in the U.S. While it would not be considered “green” in some circles, Linda Tool’s president, Mike DiMarino, believes the integration of green practices and technologies into workplace operations makes sense not only for business, but also for the health and well being of his employees.

“The skilled employee base, or ‘human capital,’ needed to succeed in any business is hard to sustain,” DiMarino says. “Creating a safe and healthy work environment, coupled with a livable pay scale and a menu of benefits, helps to ensure that Linda Tool will have that skilled workforce for years to come. Linda Tool has not had a layoff since 1983, a record we are proud of.”

One Company’s Path to Green

Among the several clean technology steps that Linda Tool has taken are the installation of an air conditioning system with HEPA filtration and mist collectors on every machine tool and the switch to water-based machine fluids and lubricants to help reduce waste. DiMarino sees these as a “tremendous benefit for employees and I believe it is greatly appreciated.” In addition to recycling employee-generated waste, Linda Tool reuses packaging material and recycles all chips from machine operations, which saves on both labor costs and the purchasing or re-purchasing of packaging materials.

These steps are all laudable, but the crown jewel of Linda Tool’s sustainable business practices is the company’s “green roof.” With the help of a Department of Energy (DOE) “cost share grant” of $250,000—bringing Linda Tool’s share of the project to 44 percent—the factory’s 12,500-square-foot tar top was replaced with a patented soil blend of recycled polystyrene and local compost created by Paul Mankiewicz of the Bronx-based Gaia Institute. In place of a long, black, uninviting slab, a lush, wild garden now blooms. This green roof better insulates the building as well as absorbing rainwater that would otherwise run into sewers. Intrigued by the long-term benefits of the project, a team from Columbia University has installed a combined sewer overflow (CSO) device atop the roof to monitor its effects.

Since completion of the project in 2009, Linda Tool has seen savings of 40 percent on air conditioning costs and a 20-percent reduction in heating oil consumption, explains DiMarino. “The temperature in our facility is now very stable 24/7, 365 days of the year…a constant 74-degree atmosphere with a 35 to 40 percent relative humidity,” he notes. Not only has the green roof produced immediate savings for Linda Tool, but it’s also made the building more efficient by keeping the shop environment more stable, which “is important for the products that we make.”

Starting Small

While a large-scale project such as a green roof may seem daunting, the Small Business Administration (SBA) and U.S. Environmental Protection Agency (EPA) offer information and resources to small businesses looking to take more incremental steps on the road to “going green.” Making your business more energy efficient is a good place to start. Simply turning off lights and machines when not in use, sealing up those energy-depleting leaks to the outside, replacing incandescent light bulbs with compact fluorescent light bulbs, getting rid of those old fax machines (faxpress has made them obsolete), replacing outdated equipment with Energy Star products, and reducing paper usage by recycling can all measurably cut utility costs. There are also federal incentives and various state programs in place to help offset pricier clean technology and retrofit costs.

Green Irene, the country’s fastest growing eco-consulting service, and the Green Business Bureau (GBB) have joined forces to help small and midsize businesses adopt sustainable business practices through a green standards certification process. For more comprehensive changes, GreenBusinessPlans.com offers business plan assistance to companies that want to green their operations. “Of the 100-plus business plans developed in the last few years, well over half have been to incorporate green business practices,” CEO Tim Cassidy points out. His consulting company has helped restaurants, demolition and construction companies, gyms, and salons go green. “From a branding perspective, the value of being green outweighs the initial costs,” says Cassidy. For example, “it costs only two to three percent more for a builder to be LEED certified.”

For Linda Tool’s DiMarino, going green has not only been good for the bottom line, but also good for business. “It is a very good selling tool. People are interested in this, and I think it shows that Linda Tool is a forward thinking company. It makes clients realize we are there to look out for their best interests.” Linda Tool’s factory goes almost unnoticed nestled in the industrial blocks between a mega Fairway Market, housed in a Civil War-era warehouse along the waterfront, and a 35,000-square-foot IKEA store that now sits upon a once busy dry dock. While the longshoreman have been replaced by tourists disembarking from the Queen Mary 2, Linda Tool remains, carving a new “forward-thinking” path for Red Hook’s economic future.

September 21, 2011 Today's Business, , , , , , , , , , , , 8 Read more >