From photovoltaic solar panels to kinetic energy adapters that generate electricity from pedaling stationary bicycles, entrepreneurs are taking advantage of the green revolution by finding and marketing renewable energy solutions.
Since we use energy for almost everything, the recent trend towards greener, more sustainable technology is creating many opportunities for entrepreneurial-minded individuals.
But is this just a fad? Or are there viable business opportunities for the long term?
- Not every entrepreneur is an investor. Consider opportunities for green services.
- Focus on the industries you're most familiar with.
- Consider government financing sources.
Renewables Are Here to Stay
As the global population rises, the reality of finite resources is sinking in. Our energy requirements cannot depend on fossil fuels forever. Advances in technology have allowed us to tap into reserves that were inaccessible in the past, but that only delays the inevitable.
These concerns, along with the negative impacts of burning fossil fuels, have created an environmentally and socially conscious mindset among different sets of economic actors, including consumers, investors, corporations, and governments. Companies and investors looking for profits have taken advantage of consumer interest in cleaner energy alternatives and government-incentivized green business initiatives.
With all these factors driving the shift towards renewable energy, now is the time to start looking for opportunities to help solve the world’s energy problems and, perhaps, make money doing it.
Recognizing the Opportunity
There are innumerable opportunities for implementing an innovative renewable energy solution. However, the best place to start looking is in your own area of expertise. Think about the industries you’ve worked in and how renewable energy could benefit them.
Also, remember that becoming a renewable energy entrepreneur doesn’t mean you have to build your own wind farm or hydroelectric dam. Renewable energy is about more than just electricity generation. It is also about storage, conservation, and distribution.
Product or Service?
You also don’t need to invent a new product or technology. You can get involved in installation, repair and maintenance, or consulting.
Think broadly, and focus on your areas of expertise.
Finally, brainstorm with friends, family, and colleagues about things that people want or need.
Some people build a business around an idea and then try to sell that idea rather than building the business around something people already want to buy. Green consumers are no different.
Green Consumer Challenge
Despite all the hype about environmental sustainability, the evidence suggests that green consumers look for the same things most consumers want: individual benefit at a low cost.
Although the environmentally conscientious market, labeled LOHAS (Lifestyles of Health and Sustainability), is growing, the green market is still relatively niche. Marketing to everyone else means educating consumers on the advantages of renewable energy, including showing them how it can add value to their lives at a lower cost.
Beyond the LOHAS
Consumers are not the only group that one needs to consider when looking for the right opportunity. Think about how the product or service will affect or be affected by others, such as suppliers, the government, the competition, and financing organizations like banks.
All of these actors could have an impact on the success of your business, so it is helpful to think about the role they will play while you’re in the development stage.
Developing a Business Plan
In devising a business plan, it is helpful to determine if there are other businesses in other regions of the world that are already offering a similar product or service. Look at the fundamentals of those businesses and use them as models for developing your own plan.
The percentage of entrepreneurs who invest some personal savings in the early stages.
Regardless of how extensive you decide to make your business plan, you definitely need to do some initial market research and summarize a business concept. You will want to analyze costs, make revenue projections, and set out some key milestones for developing and launching your business.
Talk to Potential Customers
Remember to conduct interviews with potential customers in order to get a sense of the demand for your product or service and how best to introduce it to the market.
Also, contact suppliers to get price quotes on materials and services that you will need to manufacture your product or deliver your service.
Once you’ve completed your business plan, it is time to figure out how you are going to finance your business.
Financing Your Business
Every business succeeds or fails on the basis of its ability to sustain itself financially, but it could take some time before revenues are large enough to cover costs.
Although there are a number of financing options for new businesses and startups, the research shows that almost 90% of entrepreneurs invest some personal savings at the early stages of their business. And more than 74% said that personal savings were the primary source of initial financing. Using your own savings may also show other potential investors that you are serious about the future of your new venture.
The Options for Financing
Some entrepreneurs obtain financing from banks, venture capital, angel investors, or the government. The first two options may be harder to obtain in the early stages as they tend to demand to see an existing company with strong growth potential before forking over the money. Angel investors, those who offer new and fledgling businesses capital in exchange for equity, are also possible funding options, but tend to offer smaller amounts.
While it can take some time to receive approval and not all businesses are eligible, government funding could be a good way to go given the numerous incentives for cleaner, more sustainable technologies and services.
Visit the U.S. Department of Energy site for current energy efficiency and renewable energy funding opportunities and the National Renewable Energy Laboratory (NREL) site for renewable energy project financing information.
The Bottom Line
Once you’ve had an idea, made a plan, and figured out how to finance your business, you’re on your way to becoming a renewable energy entrepreneur.
But the work has just begun. Now you’re going to have to convince consumers to spend money on your product or service. This is not easy, but it can be rewarding, especially considering that you're sustaining not only your livelihood but that of people all over the world for generations to come. Renewable energy entrepreneurs may just save the planet yet.