Home > Homes

So You Want to Start a Green Business?

Photo: iStock.com/tandemdesign1
Here's how to make your world-changing idea a reality.
Leah Cameron
Jul 20 2009 at 5:48 PM EST

Launching a green business isn’t much different or much easier than launching any other type of business—you still need a stomach built for risk, a pathological desire to spend years of your life pulling 16-hour days and a strong business plan. But if you think you have an idea that would make Dragon Kevin O’Leary cave, the payoff could be great. Think greater financial stability, true autonomy and the satisfaction that comes with knowing you are giving back.

We talked to a handful of eco-entrepreneurs and business experts to find out how you can build a business that would win over the Dragons’ Den.

1) Mind Your If-Onlys


Looking for a green business idea, but not sure where to begin? In his book Rich Like Them, author Ryan D’Agostino notes that “if only” statements are actually opportunities that point to gaps in the current market. D’Agostino’s book is primarily geared to our money-hungry side, but earning an income and doing good don’t have to be mutually exclusive. Take biodegradable coffee cup producer Jennifer Wright. A green business consultant, Wright started making the cups under the Green Shift label when she realized she had no viable solution to offer some of her clients.

Or Eden Hertzog, owner of vegan cookie company New Moon Kitchen, whose if-only question came to her when she was straight out of high school. “I’m vegan and I love dessert and there were no vegan or vegetarian desserts available in Toronto that were really decadent at the time,” she says. “That was my motivation [for going into business].” Now, 12 years later, Eden’s sales figures were $500,000 in 2008 and she ships her goodies to stores in the Greater Toronto Area, Ottawa and Montreal.

2) Be Ready to Research


Trish Graham and Sheila Graham, the sister duo behind Salt Spring Island-based Opal Care Products, asked a lot of questions while developing their product line, all-natural, fragrance-free shampoos, conditioners and body washes under the Hairy Kids label. “Ask, ask, ask. Make phone calls, read, listen,” says Trish. “And keep at it until you find the answers you’re looking for. If you want to start your own business you need to find out if the product is already out there, and if so, whether you can improve upon it,” says Trish.

3) …And to Research Some More


If you are wondering if your intended market will bite, conducting preliminary research is also a good idea. James Tansey, a professor at the Saunder School of Business at the University of British Columbia, has been advising big and small companies for more than 12 years. “If you want to spend as little money as possible at the outset, test the market a bit first. If you are not seeing an interest with the first 100 clients, there is little reason to believe your demand will increase if you approach 1,000 more.”

4) Build a Business Plan


“Having a business plan is really important,” says New Moon Kitchen’s Hertzog. She should know. She operated without one for a very long time. While she says she always had a plan of sorts in her head, getting it down on paper helped operations run more smoothly. “The best best business plans are simple and clear and explain the value proposition on the first page,” says Tansey. “Who will buy this and how will they benefit from the project? The hardest part to cost out is the process of recruiting customers; many people underestimate how difficult and expensive it is to build your own customer base. So think about ‘anchor clients,’ who may be businesses you can wholesale to or co-brand with.”

5) Consider Finding Financial Backing


“Do you have the financing to develop the product? Or can you find an investor who is willing to help you?” asks Trish Graham of Hairy Kids. “We found that starting our green product business and sustaining it cost much more than we anticipated.” “The things that make green businesses succeed or fail are the same things that cause all businesses to succeed or fail,” says Tansey, “like the ability to attract quality management and capital.” Attracting capital has always been challenging for green businesses, but this is slowly starting to change, mainly in the green-tech and clean-energy sectors.”

If you are really confident in the uniqueness and marketability of your product, but don’t have the chips to bring it to market, Tansey says there is no harm in picking up the phone. “Phone up a VP of marketing at a company and say I have an idea and you should look at it. It takes ballsy-ness, but people are often impressed by confidence.”

6) Look at Business-to-Business Options


If you are planning on selling a consumer product, Tansey suggests selling products to larger companies to meet their procurement needs. “A lot of entrepreneurs think they have to sell directly to customers, but providing a business to business solution is easier,” he says. “Building up customers on a one-to-one basis can take forever.” Oliver Madison, founder and CEO of Me to We Style Inc. , a clothing company that sells eco-friendly, made-in-Canada apparel did just that. Incorporated in 2005, Me to We Style sells clothing items to businesses as well as directly to customers. “We knew that there were countless companies that used clothing to convey their brand and their message,” says Madison, explaining his decision to sell their custom screen-printed T-shirts, scarves, hoodies and other apparel. “But we felt the values that these products embodied had been overlooked.”

Not only does Me to We make products that are eco-friendly, but also 50 percent of proceeds go to the charity Free the Children, so companies (and Me to We customers) like Aveda and RIM can feel that they are giving back. What’s more, says Madison, “Big businesses have ongoing needs for certain types of products, so if you can meet their requirements, they will order larger amounts than consumers.” And they tend to be repeat customers. “Big businesses tend to be more loyal because there is a larger opportunity cost to finding a new supplier.”

7) Don’t Listen to the Nay-Sayers


“We heard it all,” says Trish. “‘Ninety-five percent of all businesses fail. What do you know about hair products? All-natural hair products cannot be made…’ Don’t listen to [those] people. If you know you have a good idea, and feel passionate and committed to making it happen, just keep going, you’ll find a way.”

Are you an eco-preneur? Share your story with Green Living readers using the comments field below.

Comments

Thanks for the helpful article - I think, though, that it might be the "Sauder School of Business" at UBC (not Saunder).
Submitted by Anonymous (guest) on Thu, 08/06/2009 - 00:55.
I enjoyed this read because I can relate. I believe the "if only" part is the real reason many of us take the entrepreneurial leap...with the hope that success will follow! Ongoing research is key since the green market is so dynamic. I started GREEN SCHOOL this past winter because there was no viable solution in the marketplace. My goal was to create a practical, environmmentally responsible product to replace single use plastic baggies and envelopes when sending money, permission slips and order forms to elementary school with my children. We now send our green school totes to and from school for pizza day, milk orders, field trips, hot lunches, snack days, scholastic book orders and more. The concept is working great for teachers, students, parents and of course the environment benefits also. Thanks Leah! www.green-school.ca
Submitted by Roslyn Kavanagh (guest) on Fri, 07/24/2009 - 12:34.
Thanks for the great article! I now run my own home business through an eco-friendly direct selling company. When I first started I didn't really know what to expect but it just the same as running an actual business. I can relate to everything in this article - research, and more research, business plan, and financial backing (on a smaller scale). This article will be very helpful to prospective eco-preneurs. Amanda Kloster Independent EcoAdvisor, Only Green www.onlygreencanada.com
Submitted by Amanda Kloster (guest) on Wed, 07/22/2009 - 16:55.
Hey Leah, Thanks for the great article/pep-talk. Approaching our 2nd anniversary at ECO Building Resource and still clawing away at the traditional un-green and toxic products being used in the construction/renovation business. However we are still here as the access to GREEN/ECO building materials for those who are aware. And we will continue to promote and educate the ease to those who are un-aware. Being GREEN IS easy it just takes the occasional thought. Kevin Royce ECO Building Resource
Submitted by ECO Building Resource (guest) on Wed, 07/22/2009 - 12:49.

Post new comment

The content of this field is kept private and will not be shown publicly.

Copyright © 2010 of Green Living Enterprises, a division of Key Publishers Company Ltd. All rights reserved.

Reproduction in whole or in part without permission is prohibited. GREEN LIVING is a trade-mark of Key Publishers Company Ltd.