Environmentally Sound Startup

There's never been a better time to start a green business.

Did you ever dream about saving the environment-but still making a bit of money on the side? Then you might consider starting an environmentally friendly business. This will not only give you the chance to support a cause you believe in, but also appease your desire to build a successful enterprise. And while you'll face certain challenges in going green, you'll also reap some great rewards.

The time could not be better, according to Eric Brown, communications director of the Center for a New American Dream, a Takoma Park, Maryland, nonprofit organization that encourages sustainable lifestyles and businesses. "The need [to produce] things without using as many natural resources and the need [to produce] materials and products without contributing to global climate change will dictate that we buy things differently," he predicts. "And people [will] manufacture and sell things differently." Brown notes that green businesses can be anything from a flooring services company that re-mills old floors to a pest control service that uses nontoxic chemicals to a business that sells all-natural pet care products.

That's where entrepreneurs can enter the fray-by hopping into growth areas for environmentally safe products and services. Brown cites the organic food sector as one example of a prime opportunity. According to the Organic Trade Association, the organic food industry is growing between 20 and 25 percent per year, with sales expected to exceed $20 billion by 2005. Zoe Foods is just one entrepreneurial natural foods company that has done well in the organic food market. The Newton, Massachusetts, company manufactures Zoe Flax & Soy Granola, a natural remedy for the symptoms of menopause.

Green businesses have exploded over the past decade, says Rona Fried, president of SustainableBusiness.com, a consulting firm that helps green businesses grow. But, she notes, there's still room for growth. "I got into the field 10 years ago-right after the Exxon Valdez crashed," she recalls. "Before that, there was no such thing as a green business-now [almost] everybody is producing environmental reports. So it's gone from nonexistent to being a really big field."

Another burgeoning green industry is renewable energy, says Fried. People are looking for planet-friendly sources of energy-and investors are looking for companies with the inside track. "[Many] VC groups are focused on clean energy [companies]," she says. "It's a very good place to be right now." She notes that the first fuel cell cars will be on the road this year and that states are creating incentives to promote renewable energy.

Local and state governments are also excellent places to procure work once you get your business up and running. "State and local governments buy $385 billion dollars worth of goods and services every year," says Brown. "These governments are increasingly looking for green products. [In fact,] many of them have mandates to purchase green products." This can mean anything from nontoxic cleaning supplies to recycled paper products. Even start-ups in the early stages of business can log on to the Center for a New American Dream to view a listing of current procurement opportunities.

Now's probably a good time to start thinking about the marketing challenges you'll likely face when promoting your new green business. It's quite possible that some of your target customers will already hold preconceived ideas, such as that green products are of a lower quality than traditional products. "There can be [a stigma] for sure, and it's certainly smart business and smart marketing for a company to debunk those myths-because most of them are really myths," says Brown. "There are many green products that are cheaper and work better than their less environmentally friendly counterparts." Some business owners get around this by promoting their product or service's high quality alone, without even mentioning its environmental benefits. On the flip side, though, Brown notes that promoting both quality and eco-friendliness can be a great way to set your company apart from the competition. Before you decide, see how others are marketing in your segment.

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This article was originally published in the October 2002 print edition of Entrepreneur with the headline: Environmentally Sound Startup.

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