Green Business Planning Flaws

Our company (www.green-businessplans.com; www.solarbusinessplans.com) focuses on green and renewable energy business development, where we have assisted over 20 solar companies with business development as just one example। Over the last several years we have conducted extensive research on green and renewable trends, such as this White Paper
http://green-businessplans.com/wp-content/uploads/2010/03/The_Greening_of_the_American_Economy.pdf that was published at the Go Green Expo in the spring 2010. The great news is that there is a tremendous growth in the sale of green products and services, let alone a more extended growth in the sale of organic and natural foods and the use of renewable energy. Studies have shown a 38-62% growth in solar sales over the last three years. This support for renewable energy is clearly bipartisan as referenced in a Gallop Poll just months ago. As a society we clearly know we must recycle and utilize renewable energy.

This great news is not big news at all to the many green business owners and entrepreneurs that approach us to help with their business plan or seek capital to expand. Personally, in a prior career I owned and operated healthcare facilities and still provide selected consulting in that realm. Green entrepreneurs are very much like most healthcare providers in their attitude and approach, basically feeling that because they are giving back and doing good things that they are entitled to capitalization and success. In principle that does make sense, but in reality we still have a struggling economy and consumers that have daily purchasing decisions based on affordability first and sustainability second.

There is a growth in green consumerism but that growth is in two distinct areas. First, there are the “tree huggers” or those that purchase sustainable products virtually regardless of price, paying more for those products than they would for traditional ones. While they are a growing segment, it is still a small percentage of the population. The second opportunity for green entrepreneurs is consumers that will choose sustainable products over traditional products when prices are at least comparable. Studies have shown that well over 50% of consumers make these types of decisions.

The economy still drives the business, green or not. Over the last few years, investment bankers on our team have used a proprietary database of over 700 institutional and venture capital firms to access capital for our clients. Investment bankers are much more selective and have even higher expectations over the last few years. They prefer technology but will invest in other sectors, including retail/wholesale products. However, they are wary of competition. Unless a company is an industry leader, which means substantial sales, often seven figures rather than six, they will not invest. One VC CEO I spoke to recently advised that his company, not one of the larger VC firms by any standard, received at least 150 inquiries each month. Unless there is a great Business Plan available supporting an Executive Summary to get in the door, the only thing they will pursue further is intellectual property even though they invest in a wide spectrum.

Money is available, and we can access angel investors who are a bit more flexible, but in an economy that is competitive for that money, clearly it takes a transparent and thorough business plan that address factors that concern investors. There are no shortcuts to success and that includes even worthy sustainable missions.

Reach out tim@thebusinessplanconsultants.net if you would like a free consult on your business