Starting an eco-friendly business

Ever thought about starting your own business, but not sure where to start? How to go about putting your ideas into play? You know, to get that ball rolling. Do you even have a business idea yet? If not, where do you find inspiration? What problems can you solve in this world?  All these thoughts and questions can be a bit overwhelming, in this blog post we will be discussing how to start an eco-friendly business. How we, here at Earthly, went about starting this business. We will cover where to start and how to get that process in motion, inspiration, the dreaded financing, tax, qualities an eco-business owner should possess, problems you may encounter, and a couple of other things.


So, where do we start?


So the first question is, where does one even start? How can you get the green ball rolling? A great place to start is to find a problem that needs to be solved. After you have thought about this problem and have stumbled upon a solution to this problem, then look at whether you will have to be making a product or supplying a service to solve this problem? Once this has been decided on, you will need to create a Minimum Viable Product or service which you are able to sell. What comes next? Well, then you need to make your first ever sale of the product/ service. A strategic way to go about this is by a simple To-do list, checking off all the things you need to do in order to make that first sale, starting with what tools or products/ ingredients you require as well as the procedures that you may have to undergo to make that first sale.


What if you do not have a business idea yet? Where can you find inspiration? The answer to this question, as simple as it may be, is to look around you. What do you see in your daily life as a problem that could be damaging to your environment? Ask yourself, are there perhaps eco-friendly solutions to this problem that are just too expensive? Once you have picked an issue you feel can be improved on, turn to more developed countries, have they managed to solve the issue you have found? Can you improve on their solution? Basically beating them at their own game. Most things in our current way of living are not eco-friendly, the real issue is finding affordable solutions. That’s where YOU come in.


Let’s talk business


So you’ve found a problem and decided on a solution, but what now? 

Well, now you need to ask yourself a few questions:

  1. Are you up for the challenge of starting your own business?
  2. Will your current lifestyle permit it?
  3. Are you willing to give up a lot for quite a while to make this business work?
  4. Are you a motivated person?
  5. Are you self-disciplined enough for when your motivation fails you?

 Answered yes to all those questions, then let’s move on to the business plan. The business plan will be the mission and vision of the company. The problem you have as well as the solution and how you are going to implement the solution as well as what finances you will need to make your business idea into, well, an actual business. When trying to figure out how much capital you’re going to need you will have to look at your financial planning, where to start with financial planning is to look at how much money goes into the making of about 100 products or services delivered. If that works out, you can move on to planning financially for 1000. Keep in mind that a lot of things can change. There are always risks involved when starting a business, so for a rough estimate of how much money you need to start your business, honestly, you need to look at how much money you’re willing to lose. Your first business might not necessarily be the business you make money with, you might have to be open to pivoting your business to increase your chances of making money.


If you require finances when starting your business, there are a few options you can look at. A personal loan is an option but be wary of high interest rates, if you have family or friends that see potential in your business, they might be willing to help you out. You can also go with kick-starters where you pitch your idea and people make donations to fund it. Angel investors is another option but this requires you to give away part of your business, we don’t recommend this as you could lose a lot of money. Remember, start small and grow systematically.


With regards to Tax, here in South Africa, you don’t necessarily have to worry about tax in the first year of business, depending on how quickly it grows. It is, however, essential to have a bank account registered with SARS. When it comes to laws and regulations of starting a business, you only need to consider these once you get up to 100 or so sales, only once your business starts showing growth and potential is it now necessary to look into laws and regulations such as registering your business with CIPC, once you registered your business you have to open a bank account, we recommend a Capitec savings account, in the businesses name. Make sure you visit SARS website to see what necessary documents are needed to register that bank account and company at SARS, the whole registration process should cost you under R500.


So you’ve registered your business and you’re making money now, how do you know when the right time is to hire your first employee? When you realise your workload is too much and that this is in fact capping your income, that is the time you need to start looking at hiring your first employee. Keep in mind that it is important to minimize risks as an employer by making sure you have good cash flow predictions as well as a safety net of money to still pay salaries even if the business is closed for around 3 - 6 months.


Getting your business out there


When it comes to making sales, advertising is important. We recommend that you start small. Start with family and friends. Go to markets and interact with people, this will give you a good idea of how well your product or service might sell. Once you have done enough research this way and have gotten as much feedback as possible, then you should move onto social media and reach out to more people there, it also helps to follow like minded individuals and businesses on any social media platform.


With regard to advertising, you need to establish a target market you wish to target on social media. A way you can go about this is by creating a fictitious person you want to sell your product or service too, your ideal target market. Once you have that ideal person, start targeting people around that.


Another question you might be thinking is, how long will it take to go to market with my business? This can depend on whether you are actually making the product or simply just buying and selling it, within a month, you should try and make your first sale. Creating a product from scratch can take about 3 - 6 months depending on whether you have another job or not.


Going online


To get your growing business online you will firstly need to buy a domain name. This can be purchased on “GoDaddy” for less than R300. As a South African ‘.co.za’ is fine to start with. If you have no programming knowledge or experience then Shopify is a great option to consider for your business, Shopify also has great analytics you can view to keep an eye on how your business is doing. If you do however have knowledge in programming WordPress might be a more viable option for you.


So now, you have an established online business, if you're selling products and want to reach as many people as possible, you will have to look at shipping options. How do you decide on a local courier? Honestly, we called them all for rates and we have found the best options for us were, Fastway, they are the cheapest option as well as The Courier Guy. The Courier Guy however, we found more reliable, but we use both. If you have cheaper products being delivered, you can opt for Fastway, if the products you wish to courier have a higher value or they are being delivered to more rural areas, we would recommend Uafrica (i.e The Courier Guy and Dawn Wing), also with The Courier Guy you can use Mielie mailer plastic-free bags to anywhere local.


Somethings to remember when it comes to starting your own eco-friendly business


It is important to keep in mind some of the qualities an eco-business owner should possess. Obviously, problem-solving skills are rather important, but also to actually care for the environment, do business in something you actually care about. Find a business you will actually be interested in, you need to want to make a difference, that will keep you motivated.


When it comes to vertical integration, look at your own business, how eco-friendly are you? Start with small local businesses like your own, this way it will be easier to do research as to how eco-friendly they are in their manufacturing process. Once your business grows large enough, your opinion will matter to your suppliers and when you have roughly over R100 000 turnover, you can start pressuring your suppliers to be more eco-friendly.


Remember, there are going to be problems you will have to face, some of the biggest ones for us have been changing a consumer’s daily habit with a new product, convincing people that what they have been doing daily, for years, is actually damaging to the environment, you will face many financial challenges in the first year and we actually recommend you start your new business as a side hustle in the first year or so. Keep in mind that the amount of physical work that goes into running a business is always underestimated, but also everything takes time, so be patient young padawan. 


In summary, make your first sale as quickly as possible, with the least amount of money as possible. You don’t have to reinvent the wheel, but if you can do something better than the way other companies are, you’re on the right track. It is important to get as much feedback as possible. Then actually apply the feedback you are receiving to improve your business, a great product with bad customer service is worse than an average product with great customer service. Lastly, you don’t have to understand cash flow in the beginning, but you have to learn to understand it in order to have a successful business. 


As well know as this quote may be I’m leaving it as a reminder, “Be the change you want to see in the world” - Mahatma Gandhi.

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