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Starting Green: An Ecopreneur's Toolkit for Starting a Green Business--From Business Plan to Profits

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Starting Green: An Ecopreneur's Toolkit for Starting a Green Business--From Business Plan to Profits Powered By Docstoc
					CHAPTER

12
Starting a Direct Sales Business
Small, Green, and Beautiful

W

hile many people are seeking green opportunities,

some budding entrepreneurs don’t see how they can start something themselves. Some have limited time, while others have limited money, and some have little of either. They might be seeking a second income, working nights and weekends. They might be interested in furthering the green cause with their own business, but are put off by the prospect of
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setting up the infrastructure to run it. What these people are not lacking is motivation and commitment to positive change. If you are one of these people, there are a variety of possibilities for small green businesses that can be started at home, without a great deal of experience and with minimal cost. Direct sales provides such an opportunity. Direct sales are a proven business model, as demonstrated by the success of businesses like Avon, Mary Kay, and Tupperware over the years, either as a one-on-one interaction between a representative and a customer in their home (like Avon), or a party plan, with the representative meeting with a group of people to demonstrate and sell products (like Tupperware parties). In addition, organizations can be flat in structure, or they can introduce multiple levels of hierarchy between sellers in a structure called multilevel marketing (MLM). In an MLM-based organization, a seller (or distributor, or associate) recruits others into the hierarchy and can earn income based both on what they sell themselves and a percentage of what their recruits sell. Amway is a well-known example of an MLM-based organization. There is an ongoing debate about the relative merits of MLM-based sales vs. the flat organizational structure, and this debate is not restricted to the green world. I’m not going to say that there is one correct answer. Each opportunity should be judged based on its own merits. There are legitimate MLM-based opportunities which present real opportunities, including many green ones that have been around for many years, or that are newly emerging. One that deserves special mention is Shaklee, an MLM opportunity that has been around for many years with many nutritional supplement and cleaning products, including Green Seal-certified products and awards for their environmental contribution through reduced packaging. There are a few ways to help distinguish whether you want to work with an MLM-based opportunity. Be wary of an MLM-based

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opportunity that talks about making easy money if you act now. Do not pay to become a member of an organization—this step takes you into pyramiding, which is a definite no-no. If it’s legitimate, the organization should be interested in selling products, not making money off of bringing people into the system. And don’t buy a garage full of soap because you are told it is necessary or to boost sales numbers—this is probably not a good idea, and can be indicative again of pyramiding. There are some real opportunities today to work with direct sales organizations like those described in this chapter providing products that promote a sustainable lifestyle. The personal interaction between seller and purchaser can be a real advantage in the green world, particularly in this early stage of its development. The reason for this gets back to information. The interaction helps to dispel concerns, highlights the environmental benefits, customizes purchases for each unique situation, educates consumers about the use of each item, and provides the opportunity to talk about behavioral changes that go beyond buying products. The bottom line is that if you’re looking for a green business opportunity that you can start today, that allows you to work at home with a flexible schedule, that requires a minimum of time and money to start, and can allow for a good income, I suggest taking a look at these three to see if they are a good match for you.

Case Study

ZOLA GOODS COORDINATORS
One key that opens the door into the green business world is information. While a growing number of consumers have their hearts on board with going green, their heads are often less certain

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about how to go about it in a way that fits in with the rest of their lives. Business models that combine great eco-friendly products for the home with information that makes the products relevant to daily life will help bring green to the masses. Zola Goods is working to do just this with Coordinators who arrange parties bringing green products to people in homes. I often get asked, “What kind of green business can I start with very little money?” Zola Goods is one such opportunity. Founded by Beth Remmes, Zola Goods works through coordinators who organize parties for groups interested in going green in their homes. “There are many people who are interested in the environmental movement, but they don’t really know where to start or how they can make a difference,” says Remmes. With a mix of education and products that green the home, coordinators of Zola parties help to meet this need. Think of Tupperware parties, but for green products instead. As a mother of two young children, Remmes has worked hard herself to balance her home life with her desire to earn a living and make a positive difference in the world. After considering a retail storefront providing green goods and information, she decided against it. “All of a sudden it occurred to me that if women were willing to gather to talk about and buy kitchen products or make-up, then I thought they would also be interested in learning how to help the environment and save money in the process. Also, this model allows people who are passionate about the environment to help spread the message in their community and earn a supplemental income.”

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Zola offers a wide range of affordable eco-friendly alternatives to everyday products. Items include those that reduce usage of some good (such as water and energy savers); items that are reusable (such as Wrap-n-Mats, shopping bags, to-go ware, stainless steel water bottles); and items that are made from recycled material (such as foil wrapper bags, or recycled paper note cards and journals). Zola also provides ecofriendly candles, fun family games, and other green gift ideas. Coordinators are often moms seeking income and flexible hours, people who want to get involved in the green business revolution without turning their lives upside down. “This will be an ongoing process as I work to get the word out to anyone who may be interested in helping to bring about change in their communities. The only requirement is that someone wants to make a positive difference,” says Remmes. “The most successful coordinators find a way to be of service in their community and become the hub for green information beyond Zola products.” Coordinators also let people know about local recycling information, farmers’ markets, or green festivals. The startup cost for becoming a coordinator is only $149 for a kit containing a number of items that can be used in daily life and for demonstrations at parties. The kit also includes all of the training materials needed. “Most coordinators have parties for their friends and neighbors and then expand outward to include co-workers, parents/teachers from the local schools or other organizations,” says Remmes. “Being green is something that so many people hear about, but they don’t really know exactly what it means. So, when they have the chance to learn more

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about it in a fun evening with others, people are happy to host or attend parties. From Tupperware to cosmetics—this is a model that has been successful for many years.” It’s worth noting that while Zola is a direct sales company, it is not a multilevel marketing system and is transparent in its operations. Coordinators earn a commission directly of 20 percent on products sold, with no recruiting or sales requirements, no quotas, and no hierarchical pyramid. “The emphasis is on education and by offering the products for sale, the parties bridge the gap between hearing the information and then acting on it by purchasing eco-friendly alternatives,” says Remmes. The market for green is still wide open, barely scratching the mainstream. Zola’s model may be one key to bringing green to more mainstream consumers and helping entrepreneurial individuals join the green business world as well.

Case Study

BE A GREEN IRENE ECO-CONSULTANT
Green Irene is a direct sales company, working through EcoConsultants to bring green solutions directly into homes and offices across the country. People love saving money, but as more people seek ways to green their homes and businesses, they sometimes

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need help. The wide range of green products available and the lack of clear information about them can make going green a challenge for those who don’t want to make a full-time job out of it, which is most of us. If you want to change your light bulbs to compact fluorescent bulbs, which ones will you buy? Which ones will work the best and provide the best value? They are not all the same, and some have more pleasing colors and warm up more rapidly. To bridge the gap between growing interest in greening our homes and businesses, and the lack of knowledge of how to get there, Green Irene is creating a network of Eco-Consultants across the country who, for a modest fee ($99 as of this writing), go to people’s homes and suggest a variety of green changes in a one-to-two-hour Green Home Makeover. There are (in mid-2009) over 400 Eco-Consultants in 45 states. Helping people green their homes is also an opportunity for the EcoConsultants. Green Irene founders P. J. Stafford and Rosamaria Caballero Stafford provide the training and tools Eco-Consultants need, and Eco-Consultants find their clients. Working as an EcoConsultant involves minimal startup costs (about $450) and does not require a great deal of prior knowledge. It also allows people to have a flexible schedule. People with full-time jobs can do eco-consulting in evenings and weekends. Stay-at-home moms can work around family commitments. Others can add eco-consulting to their complementary green business (green cleaning, interior design, professional organizing, energy auditing, and construction). Working as an Eco-Consultant does require the ability to be entrepreneurial, to get out in your community, make connections, and to learn.

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Green Office Makeover

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The Green Office Makeover with a Green Irene Eco-Consultant can help entrepreneurs to reduce the environmental impact of their business and to save money. The Green Office Makeover costs from $250 to $450 for small businesses with 10 to 50 employees and requires two hours to a half day of consultation. This investment includes: • A consultation and evaluation at your office • Presentation of the Green Irene findings and recommendations during the visit • Phone and e-mail follow-up with your local Eco-Consultant • Three-month membership to “Ask Green Irene,” which gives you access to the private green office database and free e-mail support from the central Green Irene Research Team The founders of Green Irene started it in 2007, motivated by their values and their experiences in greening their own home, finding that even changing their lights to compact fluorescent bulbs was not trivial. “The ‘lightbulb’ lit up when we realized how difficult it could be to do something as simple as swap out the bulbs in our apartment to CFLs,” says Rosamaria Stafford. “After all the visits to Home Depot and the buzzing and flickering results, we realized we would have gladly paid a green expert to come in and tell us what to do and how to do it! Even though they want to go green, most people don’t have enough time to make ‘going green’ another time-consuming hobby.” In addition to helping people to green their homes, Green Irene is also providing opportunities to individuals to start their own small business

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earning a part-time income while working as a force for change in their community. “Our Eco-Consultants not only earn money through consulting and product sales,” says Stafford, “but they also can be the person pushing for the new school to have green, toxic-free, and energy-saving features built in, or the person at the city council meeting making a case to tax plastic bags so people finally carry reusable bags to the store.” They see a broad demand for the services of Eco-Consultants. “Anyone who doesn’t think we are entering a time where we have to change our wasteful living habits and adopt more sustainable ways to live is in denial,” says Stafford. “As more people begin to adopt green practices at home, they want to see those values adopted in their workspace, too, so we have recently added our Green Office Makeover service for small businesses.” When the Eco-Consultants perform a Green Home Makeover or Green Office Makeover, they will often suggest products or improvements that can improve energy efficiency, improve indoor air, and reduce water use. To provide the best products, Green Irene does a great deal of work researching products before recommending them. “We research the product, seek out reviews, editorials and commentaries, and then we talk to the manufacturer and get clear answers to questions about specifications and ingredients to ensure that the products will meet our Eco-Consultants’ and our customers’ critical green eye,” says Stafford. “On many products such as the CFLs, low-flow showerheads, toxic-free cleaners and detergents, we try and use the products ourselves at home to make sure that we believe in and can honestly recommend the

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products.” The products can then be purchased through each EcoConsultant’s individual Green Irene website or in person during their appointments and workshops. Simplifying choices is another way Green Irene helps clients. Left on our own, the number of choices for even simple items like shower heads can be daunting, but Green Irene generally offers only one product in a category. “We offer two low-flow showerheads because the aerating and laminar technologies have such different feels to achieve a full shower feeling,” says Stafford. “We feel people have enough choices to make and don’t need the stress of 10 choices across 30 or more categories of products. We also are looking for products with good value, though not necessarily the least expensive.” In addition to helping with product selection, Green Irene EcoConsultants can help identify contractors that can do any work required in the home or office. “Most contractors are local businesspeople, so we count on and encourage our local Eco-Consultants to develop relationships with local contractors that they can refer clients to,” says Stafford. “Toxicity-free home cleaning companies, landscapers who use native plants that use less water and few chemicals, certified energy auditors, etc. Initially, most of the folks are handymen, electricians, plumbers, etc., who may help with installation of thermostats, new low-flow toilets, and similar items since we don’t sell installation services.” Though some might worry they don’t know enough about eco-friendly choices to work as an Eco-Consultant, Green Irene helps Eco-Consultants get started with extensive training and ongoing support. “I would say

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that research and communication are at the heart of our business,” says Stafford. “We provide online training that is designed to initially take about 20 hours, complete with quizzes and additional reference materials including videos. The training covers topics including energy efficient lighting, water conservation, energy conservation, toxic-free living, indoor air quality, reduced waste and recycling, and emergency preparedness.” Another resource that can help is a database called “The Ask Green Irene Greenbase.” “This is an incredibly comprehensive and growing resource of information to help our clients green their lives as well as for our Eco-Consultants to grow and manage their local Eco-Consulting practice,” says Stafford. “Researchers are adding content to the Greenbase daily, and we encourage our Eco-Consultants to e-mail material to us as well.”

The Eco-Consultant’s Perspective on Direct Sales with Green Irene
For the Eco-Consultant’s perspective on this direct sales opportunity, I spoke with Ophelia Ramirez, a Green Irene Eco-Consultant in San Diego. Ramirez got started in Green Irene after moving to San Diego from San Francisco and realizing that working as an Eco-Consultant would allow her to reinvent herself by working to help the environment. “The more I read about global warming, the more I believe that even if we make small changes in our lives they can add up to a meaningful difference for our planet,” says Ramirez. “So looking around for opportunities I

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Googled ‘green jobs’ and saw an ad from Green Irene. Working as an eco-consultant is not a nine-to-five job. I work as an independent contractor, in control of my own time, which I like. And after e-mailing and talking with the co-founders and getting to know each other, I found that they have the same mentality as me, that small changes can make a big difference.” Green Irene takes care of many aspects of the business for each EcoConsultant, but they must still connect with clients and identify contractors in their community. “Green Irene provides the foundation for the Eco-Consultants, but it’s up to the consultant to build a network of vendors and clients,” says Ramirez. “I’ve identified a handyman, a landscaper, and an energy efficiency auditor who I met and interviewed. With time people in this network can help each other with our businesses.” The clients they work with are typically just starting to adopt more eco-friendly habits, but need help to succeed. “The Eco-Consultant gets the process started, and from there it can go in many different

Resource Guide
To find out more about Green Irene and the potential for being an EcoConsultant, you can check out GreenIrene.com and BeAGreenIrene.com.

directions,” says Ramirez. “If they want a deeper level of work on energy efficiency in their home, for example, they can work with the energy efficiency auditor in my network who gets more technical, doing the blower test, for example, to look for leaks in the building envelope.”

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Ramirez has found working as an Eco-Consultant to be rewarding in more ways than one. “I love being around people and talking to them, and being a part of their education,” says Ramirez. “It’s not about wanting people to feel guilty. It’s about saying ‘Whatever you want to do, let me help you.’ I would recommend it as a wonderful opportunity to be a part of doing something for the planet, while working at your own pace. For the mother who wants to develop her own income stream, on her own schedule, for example, it’s ideal.”

Case Study

GREEN COACHES WITH EMAGINE GREEN
Emagine Green was founded by Tonya Ensign after years of working in corporate America for companies from Honeywell to startups. She knew she wanted to create a business to help the environment, but wasn’t sure what the business should be. “I thought through how I could get the message across,” says Ensign. “For a website alone, I would need to generate a lot of traffic. For manufacturing, there are large upfront costs for new product development and branding. For a retail store, brick and mortar, I would have to deal with inventory expenses, retail space, and so on. If you are a consultant, once you stop consulting you are done. I wanted to create an opportunity where people have low startup costs, low risk, low inventory, and where we would take the hassle out of the business for people.”

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Emagine Green recruits people who join their organization as Green Coaches, doing direct sales with its products at home parties. The organization takes care of all the business basics for the Green Coaches, including getting a license, paying credit card fees, web hosting, and e-commerce setup, letting each Green Coach enjoy being an entrepreneur, setting his or her own calendar, his or her own schedule, without having to ask permission to take the day off. Emagine Green is focused on two missions, to help people go green and to create opportunities for entrepreneurial individuals. To help people go green, it doesn’t just provide information but also gets people to act on this information. “Every product we sell is handpicked to change behavior,” says Ensign. “If you don’t change behavior, there’s no point in buying different products. Why get a programmable thermostat if you don’t program it?” Joining the organization costs only $129 as of this writing. After signing up people for only the last 10 months (as of Feb 2009), it already has Green Coaches in about half of the states, with more signing up all the time. Not everybody will be right for the opportunity, so people are screened to make sure it’s a good fit for both Emagine Green and for the potential Green Coach. To help them get started, Emagine Green provides training to help them learn about the green world. Working with Emagine Green, Green Coaches earn residual income and management training. With a couple of levels in the organization, people can advance and get experience mentoring others. This opportunity has appealed to people from many backgrounds. “One segment is women who are stay-at-home moms, struggling to balance kids and

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career,” says Ensign. Another group joining is women who want out of the corporate America, who are seeking something they can be passionate about, something they care about. “They are very ambitious, and primed to be leaders and managers,” Ensign says. “Another group is people who are entrepreneurial, and perhaps have started their own business before, like working in real estate. They see the potential of the timing for a business in the green world and know how to be a sole proprietor, how to market themselves.” As an executive coach, Ensign realized what it takes to make real behavioral change. Like Jenny Craig and similar organizations, change is not just information, but having a support structure, creating camaraderie. The key to change is meeting people directly, teaching them about the importance of environmental choices, demonstrating options for greener choices, and selling them directly. “Education and demonstration are the key,” says Ensign. The model is a well-known one, like Pampered Chef, one of Warren Buffet’s investments. Other examples are Rubber Stamper or Creative Memories, all of which are now large successful businesses in mature fields. The difference for Emagine Green is that the field of green is still wide open for most people. “Most people still don’t know much about green, so for these products it’s still a big opportunity,” says Ensign. “It will be ten years before it’s really mainstream, and we’re poised to take advantage. “The key is to get into people’s houses,” says Ensign. “People just don’t know that it takes seven bottles’ worth of water to make every water bottle they buy in the store. They’re shocked when they hear we use a

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million plastic bags a minute. We talk for 20 minutes, then they say ‘What can I do?’ They can buy bottles, bags, or other products that fit what they are looking for, for their health, for the environment, or to save money. Which habits do you want to break?” When talking about the products with clients, they tie each product to a behavior to change. To reduce paper towel use, connect it to buying bamboo towels that are reusable. In addition to knowing that Emagine Green is a direct sales party planning company, its also good to know what Emagine Green is not—it’s not a pyramid or MLM (multilevel marketing) company. In MLM organizations, “about 3 percent of people are team leaders, and the rest are customers on auto-ship programs,” says Ensign. “People think they’re going to get rich quick, but very few do.” Emagine Green is ready to grow, says Ensign: “We’re internally funded, no debt, and we’ve invested in the systems, people, and model so we can grow rapidly and take on a lot more people.”

Glenn Croston, Starting Green, © 2009, by Entrepreneur Media, Inc. All rights reserved. Reproduced with permission of Entrepreneur Media, Inc.

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