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Starting a Green Business: Distinguish Yourself

Surace said that distinguishing one's self means making a good product, not just a green product. "I would never start a 'green' company without a hard payback," Surace said. "The term is somewhat outdated, I think. And if all you have is green and it costs one penny more than something else, you'll sell none." Surace said that green companies make themselves viable when they tap into an existing budget line item, whether that is an energy cost or a heating bill. "If you think the market is that you can bring a company a greener tablecloth, it's just not going to matter enough to customers to build a big company," Surace said. "It might matter to nine percent of the country, but that does not a large market make."

Entrepreneurs who aspire to local markets, however, may have more time to educate their consumers in the value of buying green. Mark Callaghan is an entrepreneur who bought up the San Francisco-based toxin-free dry cleaners Blue Sky Cleaners in 2007. Blue Sky uses C02 to clean clothes instead of perc, an environmentally hazardous material that was the long-time industry standard, or hydrocarbon, which is also petroleum based.

Because Blue Sky's competitors will often use perc or hydrocarbon materials and still claim to be green, Callaghan said educating the public about their product has been one of the company's biggest hurdles. When Callaghan moved the company to Seattle, he knew they could service the city as well as existing dry cleaning companies, but penetrating the market proved difficult. "There was one business that was very entrenched," Callaghan said. "Every building, every condo, they were providing delivery of dry cleaning."

In August of 2008, Callaghan approached his competitor and offered to buy them out. Blue Sky acquired their rival in November, and picked up their clients. They retained the old dry cleaner's business because at first Callaghan didn't tell them that some new guy was washing their clothes. After a little while, he let them in on the secret. "We sent out an e-mail saying, 'We've been cleaning your clothes. Did you notice?'" Callaghan said. "Then we really pushed that and did a pretty big PR blitz." Now that his company has established itself, Callaghan is willing to take the time to attract customers singly. "You almost have to educate people one person at a time. And once they hear the story, most people say they had no idea. It is such a business of convenience, location."

Dig Deeper: How to Build a Values-Driven Business

Starting a Green Business: Make Green a Core Value

As any green company grows, it may have to face questions about how to retain their emphasis on sustainability and environmentally-friendly practices. Leading companies approach the problem in different ways. Hsu said that RecycleBank, which regularly partners with companies like Coca-Cola and SC Johnson and Company, tries to remind their partners of the importance of green practices. "We do have a sustainability advisory council that is composed of leading thinkers within the sustainability movement," Hsu said. "No one has figured it out. We're actually helping to guide that overall conversation. We act as both a guide and a conscience."

Interface, a company that produces green carpet tiles, is willing to lose money in the short term if it means they'll become more green, said Maria Davlantes, vice president of marketing for the company. "We're the kind of company where it is such a part of our DNA at this point that if there is a new technology out there that is going to help us reach our sustainability goals, then we're going to use that even if it doesn't pencil in the short term," Davlantes said.

 Dig Deeper: How to Build Sustainability Into Your Supply Chain

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