Raising Money For A Green Business
What is 'capital'?
Capital is, well let's define what money is. Money is currency, it relates to the valuation of time and labor. Money does two things; it buys goods and services. It does not buy credibility. So capital you can have different types of capital; you can have monetary capital, which is how much money have you invested into your company. You can have what I call intellectual capital how much smarts do you have in this business and that could be applied to patents or proprietary information. And you also have what I call marketing capital. Now I would much rather have marketing capital at my disposal than money because money can only buy goods and services marketing capital, which is branding investing in your brand and communicating it and honing the message to where people really get it quickly that's worth a lot of money. Why is that? Because when you have branding and marketing capital customers you're touching them you're making an impact and they buy your products and service. Whereas then you generate monetary capital. So you have to have a very good understanding that an in the green business phase you have green backs money to operate your business, you have intellectual capital you have some proprietary patentable unique trademarked product or service or formula. And then the last is you have the marketing or branding capital. Between all three of those, that creates a baseline of your capital. So you know for me as a green entrepreneur and a environmentalist I also look at environmental capital. You know does it make a difference that I have a ton of money but I've absolutely squandered her finite resources and just expanded the landfills? Well that's a question you have to ask yourself that would affect me my whole idea is to detox the landfills and to deliver environmental consciousness in a box and environmental capital to me is worth a lot.
How do I raise capital for my green business?
Most people have business plans that are written, that have projections and great PowerPoint presentations; take all that and toss it. Green businesses don't work on that model. It's a new business, and when you're looking to raise capital first you have to have a great idea and a great product, and you have to test it and you have to get about a year, a year and a half of definable data, specific data, showing the mechanisms of your product. Then you can go out and you can shop for capital. Typically you, in the green business, like all businesses, you need to prove that the product is on market.
Is a green business more expensive to operate?
What we have found in running a green business from the beginning is that we're profitable because we are green. Why are we generating profit from being a green business. For example, we don't have a fax number. Did you know that this year we'll save $1300 dollars in copy paper, because we won't get junk faxes. We don't take faxes. We request people to send us e-mails. If we like the email we keep it, if not, we just delete it. Another aspect of being green is that we run our entire fleet on biofuel and used vegetable oil. It's half the cost of regular fuel. That's actually cheaper. We spent money to retrofit the cars and we have a little bit more maintenance, but when you start running the numbers, our break even is in 7 months and then the payback is in three years.
Are there any financial resources specifically designed for green businesses?
Today we're found in recycling materials from municipal landfills. There appears to be a substantial amount of money for grants for alternative uses for trash. There are a number of green venture capitalists that are just starting to communicate to the industry what they're looking for, what they'd like to find. You can just put in 'green venture funding' on Google and you'll find a number of different firms looking to invest in a combination of ideas and people. But, like all venture capitalists, like all people with investment money, they want to see a product, so you actually have to have a product that you can touch and feel and see before you get to that stage.