With the climate crisis getting worse, it’s clear that companies need to start making more active efforts to be more sustainable. Fortunately, the country is starting to keep up. For instance, while it used to be quite difficult to find a job in sustainability, states like Arizona and New York have seen a boom in “green jobs.” Meanwhile, areas such as Vermont are seeing increases in environmental quality and eco-friendly behavior, according to Treehugger’s 10 Eco-Friendliest States in the US list.
Indeed, sustainability has become an essential industry — as further evidenced by the influx of natural clothing labels, organic groceries, and climate-conscious goods. But whether you’re already managing your own green business or are
planning to join the wave, getting capital is an imperative step.
To fund the eco-revolution and help your green venture take off, we’ve put together some tips.
Federal Loans and Grants
The government has various grant and loan options specifically for green businesses, such as the Department of Energy Grants and Loans, Environmental Protection Agency Grants, and National Science Foundation (NSF) Grants. It will depend on where the focus of your business is — from agriculture and energy, to research and conservation. What’s great about this is that they also have separate grants for small business innovations, allowing organizations that are still in the research and development phase to receive government funding too.
Find an Investor
Consumers aren’t the only ones getting serious about sustainability. As noted on CNBC, more investors are backing up green projects too. Aside from having a reliable source of funds, an investor could be another source of creativity. Of course, not all businesses are eligible for investors, and you need to make your company as attractive to them as possible.
If you’re just starting out, you need to choose the right business structure. Compared to sole proprietorship businesses, LLCs tend to have more benefits for investors. Chron reveals that investors can enjoy ownership advantages and tax benefits, making these companies more enticing to fund. Thankfully, it’s become much simpler to put up an LLC, but the requirements and fees can vary per state. To set up an LLC in Connecticut, you’ll need to pay $120 for your state filing fee, and another $80 when you submit your LLC annual report. These can all be filed online relatively easily, and no more business entity taxes are needed. On the other hand, states like Massachusetts and Nevada have much steeper filing fees at $500 and $425, respectively. Make sure you consider your state’s guidelines carefully before finalizing your business and looking for investors. You can also check out sites like AngelList and MicroVentures to find funding.
Thanks to the power of social media, crowdfunding has become a popular strategy for businesses looking for capital. The Balance’s guide to crowdfunding explains that you can choose from donation-based crowdfunding, reward-based crowdfunding, or equity-based crowdfunding. There are also a myriad of platforms like Indiegogo, Fundly, and StartSomeGood, where many thriving businesses today found their footing. However, much of the success of crowdfunding campaigns relies on having loyal supporters and marketability. Nonetheless, it’s an innovative way to grow your business and have your customers be a part of your journey.
Just like other options, crowdfunding comes with considerations too. For one, some platforms have very high fees. Another thing to consider is that some states are less conducive for crowdfunding campaigns, as an article on Business Insider reports. You’ll want to launch in places with thriving startup communities and tech hubs, like San Francisco, Austin, and New York. Be sure to get to know your own market and community before choosing this strategy.