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Starting an Eco-Friendly Business

Woman working at eco friendly green business

While large corporations have the most responsibility towards alleviating the environmental problems brought by climate change, small businesses can also make a significant impact.

Small business owners are "greening up" their endeavors. Many are turning toward sustainable business models as they start new businesses.

At the same time, customers are changing their buying habits and looking to sustainable companies for their products. In general, eco-friendly businesses succeed by aligning with environmentally friendly principles and making those alignments known to an eco-minded customer base.

This brief overview covers how to start a small business with environmentally friendly economic principles. It will give you ideas on creating an eco-conscious business and inviting like-minded individuals to do business with you.

FindLaw's Starting a Business section provides various articles and other resources to help you get started.

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The Importance of Environmental Regulations and Incentives

Industries deemed essential to environmental initiatives, like solar and wind power, can often receive financial aid to drive growth. This aid can be through direct investments by the federal or state government. It can also be from rebates provided directly to customers. This has been the case with rooftop solar power installations.

Businesses in renewable energy and other earth-friendly fields need incentives to thrive. Lawmakers hostile to green enterprises may be less willing to extend rebates and incentives, which can have a chilling effect on the industry.

Alternatively, air quality and carbon emissions regulations may bring the cost of high-polluting energy sources like coal up to par with renewable energy sources. As a result, regulations like carbon taxes and stricter pollution standards can help earth-friendly businesses compete.

What Makes a Business Green?

A green business combines economic sustainability with social justice principles of family-supporting wages, benefits, and inclusivity. It's not enough to merely operate a green business. You must also be able to explain the measures you're taking to reduce your carbon footprint.

Customers want to make informed decisions about where they spend their money. The best way to inform potential customers about your green efforts is by documenting them and sharing that information on your company website or through other marketing channels.

Reduce Your Carbon Footprint

A carbon footprint is the total amount of greenhouse gases (gases that trap heat in the atmosphere) generated (directly or indirectly) by any given activity of a person or enterprise. Experts consider these gases a primary driver of human-caused global warming.

Whether a business is green or not is measured by that business's carbon footprint. Certain activities reduce a carbon footprint while others increase it. A green business has a smaller carbon footprint than a similar business that does not adopt sustainability.

The average annual carbon footprint of an American is 16 tons. The average for the rest of the planet is four tons. The Environmental Protection Agency (EPA) has a helpful carbon footprint calculator to determine a specific business's footprint.

Work With Other Green Companies

One way to reduce your startup's carbon footprint is through a green procurement policy. This is when a business transacts with other companies also engaging in green practices. These can be your suppliers, the people who provide transportation, or even the retail outfits where you will make purchases.

Research potential partners' sustainability practices and carbon footprints. Use this research to inform whom you conduct business and transact with.

Here are some other ways to connect with other like-minded business owners who share your values:

  • Shop and network locally. This creates community and cuts down on expensive energy costs.
  • Once you establish your business, create or join a local group with other green entrepreneurs.
  • Form social media groups, advertise, hold social events, and sponsor community events.

More opportunities to make an impact may arise once you start making connections.

How To Write a Green Business Plan

business plan tells potential funders and others your business idea will work in real life. A green business plan accomplishes this by showing the reader how the owners intend to turn a profit using green methods and principles. All worthwhile business plans have the same essential components:

  • Cover page
  • Executive summary
  • Mission statement with business objectives
  • Company description and overview
  • List of products and services
  • Market information and a marketing plan
  • Operations plan
  • List of required personnel and management
  • Financial plan

Your Plan Should Address the Triple Bottom Line

A green business plan should use every section as an opportunity to inform the reader how your new business will distinguish itself in sustainability. This is your chance to show that your business isn't “greenwashing." Greenwashing is making exaggerated claims about the sustainability or safety of your business operations or product.

Your business plan should follow the "Triple Bottom Line" approach:

  • Profit
  • People (social responsibility)
  • The planet

Use real-world examples to prove the viability of your business. For example, you could point out that in 2023, sustainable U.S. equities outperformed non-sustainable equities by 8%.

Ensure the plan's reader knows that sustainability principles inspire your business model. Be able to explain how your business will contribute to the green economy.

If you're manufacturing a product, describe how it's sustainably manufactured.

  • If it's a service, will the mission include education or participation by the community?
  • How will the business impact the local and greater community?
  • How will internal operations (the office) be as green as possible?
  • Analyze all the stakeholders through a sustainability lens.

In the executive summary, lay out the environmental needs the business addresses. The mission statement should include environmental stewardship goals, which should be at the core of your mission.

The company description should also contain your business's projected economic and environmental impact on the local community. Start with something like "We are an environmentally conscious company that…." Next, list any green third-party endorsements of the business or certifications of the principles.

Your section on products and services should have a green emphasis, focusing on why the green aspects give your company a competitive advantage. Your marketing section should emphasize your green target market, customer trends, green marketing tools, and potential collaborators.

You can write the plan for your business's operations to make the office green—recycling programs, energy savings, going paperless, and other initiatives. Do the same for the manufacturing facility, personnel environmental training, and transportation. List your suppliers—local and green, when possible.

Be sure to relay how you will train and certify your management team and advisory board. Finally, show in the financial plan how going green will positively affect your bottom line.

Eco-Friendly Business Ideas

There are business opportunities across many industries to start an eco-friendly company. But starting a successful green business takes more than just a passion for sustainability and environmental conservation.

You will want to consider various factors when choosing the right type of green business to open. If you have several sustainable business ideas, you'll need to narrow them down to find your best shot at a successful business that can sustain in the market. Identify the specific needs in your community and look for gaps in the market. Conduct market research to find the demand for eco-friendly products or services in your area.

Some sustainable business ideas to consider for your startup include:

  • Eco-friendly products for pets, like shampoos, grooming products, and pet waste bags
  • Green landscaping (you can make an even bigger impact by providing services with more outdoor space, like commercial buildings and homeowners associations, to customers)
  • Clean beauty product lines and salons
  • Sustainable event planning
  • Energy-efficient home restoration, home improvements, and refurbishing
  • Green courier and delivery services
  • Composting and recycling pick-up services
  • Green cleaning and housekeeping services (you can target homes, commercial spaces, or both)
  • Electric charging vehicle stations

Differentiate your business from the competition with a unique value proposition. For example, you could combine multiple green business ideas into a single company. It could be an organic coffee shop that is also a composting drop-off site.

Check with your local small business development center to see if your environmentally friendly business idea qualifies for any tax credits, grants, or subsidized financing.

How To Maintain a Green Office

Your business may need a physical office space. Regardless of their goods or services, every company maintaining a brick-and-mortar presence has a measurable carbon footprint.

There are other ways to reduce your company office's carbon footprint besides manufacturing a green product. Depending on the extent of your sustainability practices, you may be able to call yourself a green company. Businesses can become greener by implementing some basic practices:

Go paperless. Review all the materials you are printing. Advancements in digital technology have made many large print projects virtually obsolete. You can go even further:

  • Get rid of notebooks and notepads and substitute them with note-taking apps
  • Recycle all paper and only use recycled paper or other sustainable materials
  • Use multifunction printer/scanner/fax machines
  • When you must print, use your printer's eco-mode and print two-sided
  • Use refillable ink and toner
  • Use overhead projectors for meeting agendas
  • Always offer customers a digital receipt instead of a printed one

Create recycling centers. Place them around the office and by the printers. Put a bin for recycled plastics in the kitchen. Train the office staff in recycling. Recycle electronics and batteries, too. This reduces your environmental impact and puts recycled materials back into the marketplace.

Decorate with live plants. Scatter as many as you can around the office. Live plants improve air quality and naturally detoxify indoor spaces. If you lack a green thumb, opt for low-maintenance plants like peace lilies, snake plants, succulents, and bamboo.

Use eco-friendly cleaning products. Practice green procurement policies or hire a green cleaning business.

Purchase and maintain sustainable office supplies. There are numerous ways to use office supplies in more sustainable practices:

  • Use refillable pens and staple-free staplers
  • Use post-consumer recycled goods when possible
  • Cut down or eliminate products with no green alternatives, like rubber bands
  • Recycle your office supplies when possible
  • Use paper or bamboo straws instead of single-use plastic

Establish sustainability protocols for electronics. Computers have their own set of sustainability protocols:

  • Turn computers off at night and leave on standby during the day to decrease energy consumption
  • Keep computers updated—older computers use more power
  • Recycle electronics instead of throwing them away—this keeps reusable resources like metals, plastics, and glass out of landfills

Check for approved recycling facilities in your jurisdiction.

Turn out the lights. Do this whenever a room is not in use. Use energy-efficient light bulbs, light wall colors, and natural light whenever possible.

Moderate the temperature. Maintain a comfortable temp for your employees but be mindful of wasting energy.

Go green in the washrooms. Use eco-friendly soaps, recycled paper, low-flow toilets, and faucets. Fix all water problems as soon as possible.

Consider solar panel installation. Solar energy is a more sustainable source of power and can reduce your office's carbon footprint. Solar panels can also reduce your energy bill and may even earn you tax credits or rebates.

Minimize single-use materials in the breakroom. Provide reusable water bottles, mugs, and utensils for employees.

Encourage green commuting. Provide incentives to employees to bike, carpool, or use public transit to get to work. Offer a hybrid work option to reduce commuting, if possible.

Going Green in the Food Industry

The food business will always beckon certain customers. No matter where your business is on the food chain—growing, delivering, retail grocery stores, or restaurants—green principles can help save money. They also have a positive impact on the community and the environment.

Below are two brief examples of green food businesses to explore.

Growing Certified Organic Food for Commercial Sale

Organic food is the heart of the green food business. This food has been produced through approved processes, using organic fertilizers and farming practices promoting qualities like recycling and biodiversity.

Certified organic food can be sold at a premium. The United States Department of Agriculture (USDA) provides a portal of resources and programs for the organic sector. They designate local agencies as agents to administer the certification process. Here are the USDA's five steps to organic food certification:

Develop an organic system plan. Commit this plan to a document. This is like an organic food producer business plan. It outlines how the producer will conform to organic standards and includes all aspects of farming, food handling, history of the land used, growing substances (fertilizer, etc.), monitoring processes, and more.

  1. Implement your system plan. Bring the inspecting agency in as early as possible in the process. Start with reading and approving the system plan. Once approved, begin implementing the plan.
  2. Receive an inspection. You will need an inspection once the system is in place on the ground. An inspector must conduct a top-to-bottom, detailed review of the entire system. This inspection will vary depending on which products or services you offer.
  3. Allow time for review. The inspector then sends the inspection results to the certification agent for review and comparison with the system plan.
  4. Receive certification. If you pass, you will receive your organic certification for whatever products pass the test. The process then becomes ongoing as you run the business, with inspections at least once a year.

Running Green Restaurants

If you're opening an organic food store or restaurant, your commitment to green practices will be obvious. Your eco-friendly philosophies should be the headline of your business plan and the core of what your business presents to the public.

Still, you don't have to be an organic or vegan restaurant to employ and profit from sustainability principles. Almost all restaurants—especially new ones—operate on a very slim margin. Most new restaurants fail in the first three years. But sustainability principles can help with the overhead costs that can lead to business failure.

Here are some tips for making any restaurant more sustainable:

  • Revisit your approach to lighting. Switch to energy-saving light bulbs and turn off the lights when closed.
  • Save water. Install low-flow faucets and toilets. Only run the dishwasher when it's full.
  • Buy energy-efficient appliances. With various tax breaks and energy savings, they pay for themselves quickly. Look at energy-efficient ventilation.
  • Shorten up your menu. Emphasize the foods that sell. This will save money on food waste and energy costs.
  • Get rid of plastic. Use paper or glass instead. Explore compostable hemp or bamboo substitutes.
  • Train the staff. Educate in greening the restaurant and reward behaviors that promote sustainability.
  • Buy locally when possible. Source organic, pesticide-free produce, meat, and other goods from local farmers markets.

Finally, check out the Green Restaurant Association. They have helpful tips, certification information, and a network of members to help you.

Eco-Friendly Businesses and the Certification Process

Several governmental agencies and non-governmental groups certify green businesses in various ways. You may want to become certified as a green or environmentally friendly business. Or you can look at other companies' certifications to see who you want to do business with.

In addition to the USDA, here are some other domestic certification programs to look out for, depending on your business model:

Green Seal offers comprehensive green certification services for products, services, and businesses that meet specific standards. Green Seal certifies various products, services, and business processes.

  • LEED Certification (Leadership in Energy and Environmental Design) evaluates and certifies the sustainability, energy efficiency, and environmental performance of buildings. The U.S. Green Building Council developed the LEED Certification program.
  • Scientific Certification Systems and Smartwood certify materials and processes that adhere to sustainable forestry standards developed by the Forest Stewardship Council.
  • Green-e certifies products using renewable energy and carbon-reduction practices.
  • Energy Star certifies products, buildings, and business facilities that meet energy efficiency standards. The U.S. Environmental Protection Agency and the U.S. Department of Energy manage this certification.
  • Green Business Bureau certifies green businesses.
  • The Safer Choice program through the U.S. Environmental Protection Agency certifies safe cleaning products that perform well.
  • The Green C™ Certification from the American Consumer Council promotes environmentally responsible practices.
  • Green America awards the Green America Seal to companies using business as a tool for positive social change and employing environmentally responsible processes.

These certifications show consumers and business partners your business and products meet the criteria set out by the certifying body. For example, you can't legally advertise your canned tomatoes in the U.S. as "organic" without USDA certification.

Get Legal Help With Your Eco-Friendly Business

No matter the kind of business you start, you may encounter situations requiring legal know-how. Earth-friendly enterprises, particularly heavily regulated or subsidized, often need even more legal expertise.

Consider meeting with a business and commercial attorney familiar with environmental regulations and green businesses. An experienced attorney in your area can guide you through your business formation and help you avoid potential legal issues.

Looking to start your own business? Use FindLaw's DIY forms to set up a legal business entity in minutes.

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