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5 Green Trends for Small Business

August 20, 2008
URL: http://www.entrepreneur.com/article/196590

The examples used in this article have been excerpted from 75 Green Businesses You Can Start to Make Money and Make a Difference by Glenn Croston, available from Entrepreneurpress.com.

Going green is not going away, but the various trends within the green business movement will change direction, creating opportunities for new products and new businesses. Looking forward, here are five green trends that entrepreneurs can capitalize on to make money while making a difference.

Green Car Dealership
The Market Need: More efficient cars are in high demand
The Mission: Sell fuel-efficient cars that pollute less
Knowledge to Start: Autos, sales
Capital Required: $10,000 (for an alternative model) to $1,000,000-plus (cars on a lot)
Timing to Start: Months to years
Special Challenges: Many new, competing technologies are coming to the market

The Prius is only the start. A variety of green cars are coming to the market from different manufacturers, large and small. While sales of cars overall will not grow quickly in a mature market like the United States, sales of green cars are rising as rapidly as the price of oil.

Who is going to sell all these green cars? One option is to work with the big, established auto manufacturers, but there already are many dealerships, and as a dealer you sell a full range of cars--not just green cars. An alternative is to work with the smaller, upstart, green auto producers. As the technology continues to improve, more and more cars will become available to fit a range of needs and markets.

Some car brokers deal in used cars one at a time, building deals between private buyers and sellers, as well as helping with financing, if necessary. An online green-car dealership provides access to a variety of cars, while avoiding the investment and risk of a car lot with brick, mortar, and asphalt.

Opportunities in green cars include:

Low-Carbon Groceries
The Market Need: Consumers are starting to think about the impact of their food and groceries on the environment, but have scant information to guide their shopping
The Mission: Build and provide systems for tracking food's journey and its carbon footprint
Knowledge to Start: Carbon auditing, supply chains, marketing
Capital Required: $10,000 to $99,000
Timing to Start: Years
Special Challenges: Carbon labeling is not yet broadly adopted

When it comes to being green, food is so simple and yet so complicated. How green is your food? The answer depends on what green means to you. Does green food have to be grown using organic methods? What about the impact of our food on climate change? The greenest food includes consideration of how it is grown, and the environmental impact of its journey to the local market and your plate.

To make smart, green shopping decisions, consumers need information right on the label. Already in the United Kingdom, products are starting to have transportation labeling, with a picture of a plane or a boat. The trend is likely to spread to the United States and improve by labeling products with their actual carbon footprint.

Opportunities for low-carbon groceries include:

Green Shopping Bags
The Market Need: Billions of plastic shopping bags are thrown away each year
The Mission: Replace disposable plastic shopping bags with renewable, reusable bags
Knowledge to Start: Materials, manufacturing
Capital Required: Under $10,000 (for homemade bags)
Timing to Start: Weeks to months
Special Challenges: Finding a niche among competition

Consumers and governments are driving a rapidly growing movement away from disposable plastic bags to more eco-friendly alternatives. Reusable bags that don't get thrown away probably are the greenest option for shopping bags. If you already own a store, selling bags with your logo on the side might be a savvy green business move, and giving them away might even pay off. With that bag, you buy increased brand recognition for your company, you associate your brand with being green, and you may create increased loyalty.

At first, people might worry about how they look carrying their own bags. Cool designer bags will help overcome this concern. One of the neat things about bags is that they are so simple and yet people are endlessly creative with them. The opportunity is to create not just bags, but green fashion statements. Some bags even are made from recycled material, for an extra boost of greenness. Maybe that's another use for old T-shirts. What if, from the start, green grocery bags were made to be returned in some other form, a cradle-to-cradle shopping bag?

Opportunities for green shopping bags include:

Environmental Microfinance
The Market Need: Microenterprises in the developing world can have a significant environmental impact
The Mission: Support development of environmentally sound microenterprises
Knowledge to Start: Finance, sustainability
Capital Required: $10,000 to $99,000
Timing to Start: Months to years
Special Challenges: Influencing the direction of large numbers of microenterprises

Surprisingly small amounts of money can make a substantial difference in people's lives. With loans as small as $100, people in the developing world can start their own business and move out of poverty. By supporting environmentally sound microbusinesses, green microfinance is mobilizing a grassroots green revolution in the developing world while also spurring green business in the developed world.

Microfinance works, and the rate of repayment on microfinance loans is high. Grameen Bank in Bangladesh and its founder Professor Muhammad Yunus received the Nobel Prize in 2006 for work with microfinance, validating that it can change the lives of the entrepreneurial poor.

Opportunities for green microfinance include:

Green Building Certification
The Market Need: As the number of "green" buildings grows, their true effect on the environment needs to be measured
The Mission: Rate green homes and buildings
Knowledge to Start: LEED professional accreditation, or knowledge of other green rating systems
Capital Required: Under $10,000
Timing to Start: Months to years
Special Challenges: There are still relatively few green buildings, although the number is growing quickly

What makes a building green? Green is a big word these days and sometimes green is in the eye of the beholder. What seems green to one person can appear downright gray to someone else. To ensure buildings are as green as people say they are, independent verification and certification of homes and buildings are needed.

To provide this independent certification green-building groups have developed rating systems. LEED (Leadership in Energy and Environmental Design) is the leading system for the certification of green buildings in the United States, broadly adopted as the standard by the burgeoning green-building community.

Opportunities in green building certification include: