Startup Guide for Greenpreneurs

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How successful 'greenpreneurs' get started, find funding, and achieve green market domination.

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GREENPRENEURS
How Successful Greenpreneurs

Startup Guide for

Startup Guide for Greenpreneurs

get STARTED, find FUNDING, and achieve

DOMINATION
JD Carr, Greenergy2030.com
© 2009 Greenergy2030 Business Alliance, LLC. All rights reserved. 0

GREEN MARKET

Startup Guide for Greenpreneurs

LEGAL NOTICE
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. © 2009 Greenergy2030, LLC Published by Greenergy2030.com a division of Greenergy2030 Business Alliance, LLC

All rights reserved. The text of this publication, or any part thereof, may not be reproduced in any manner without written permission from the publisher. While every precaution has been taken in the preparation of this book, the publisher assumes no responsibility for errors or omissions. Neither is any liability assumed for damages resulting from the use of information contained herein. First Printing Printed in the United States of America

Startup Guide for Greenpreneurs Green Business & Finance Success Series First Edition

Startup Guide for Greenpreneurs

Dedication
This book is dedicated to all of you who are just starting your green odyssey and are working 18-hour days because you have found your true purpose in life. Hopefully this book will help you figure out how to survive while making a REAL difference in the world. ~ J.D. Carr ~

Startup Guide for Greenpreneurs

Table of Contents
Introduction I Want You to Start Thinking Like a Greenpreneur It’s All About PURPOSE The 3 Essential Skills of a Greenpreneur Greenpreneurs Change all of the Rules SUSTAINABILITY = RICH 2.0 Green Startup Basics 101 If You Need Money, This is How You Get It Greepreneur Business Plan Checklist Green Marketing Basics 101 The Final Wrap Up Recommended Greenpreneur Resources About the Author 4 12 14 18 21 34 39 105 142 179 183 184 187

Introduction
© 2009 Greenergy2030 Business Alliance, LLC. All rights reserved. 3

Startup Guide for Greenpreneurs

No doubt about it, green is hot! There is nothing more exciting than the experience of starting a green business. I firmly believe that greenpreneurs’ are going to change our world in unimaginable ways. Those who start now and succeed will impact all of our lives in ways we cannot yet understand. They will create new products and services that are not only better in terms of quality, but better for the planet as well. With all of the problems occurring in the world today, the green movement we’re witnessing in the business world is unprecedented. Some call it a fad or claim that it’s the next Internet bubble. I call the naysayers fools. Green is here to stay. This guide has been written for those of you that agree with me on this point and are ready to start up a green focused organization. Conversely, this guide is written for those that aren’t yet sure what terms like greenpreneur and sustainability mean or how they might apply to your business idea. No matter what stage your green business is currently in, I hope you’ll find this book useful as you work toward becoming one of the successful greenpreneurs of tomorrow.

Startup Guide for Greenpreneurs

Why Start a Green Business? Why should you consider making such a bold leap into what was once a fringe market? There are quite a few sound economic reasons to do so in addition to the ever-growing list of moral reasons. You can save money, look good and be good, all in one fell swoop.

Reducing Operational Costs At the heart of every move toward sustainability is conservation. Using less energy and fewer materials will save you money in the short and long term. As the price of oil goes up and up over the course of time, the cost of transported goods, yours and the ones you purchase, will go up accordingly. Historically, every time the cost of energy has increased, no matter what the source of energy has been, economies have struggled. It happened in ancient Egypt and it happens today. By using fewer of those resources, you insulate yourself against rising costs and put yourself in a position to become the low-price option when the operational costs of your competitors go up more sharply than yours.

Competing in Global Markets If you do choose to ship your products to other countries, you may find rules and regulations pertaining to manufacturing and distributing are changing. For example, many countries are now forcing the manufacturers of electronic devices to take them back for recycling when
© 2009 Greenergy2030 Business Alliance, LLC. All rights reserved. 5

Startup Guide for Greenpreneurs

consumers are done with them. If you want to do business in the EU, for example, you may need to provide some proof of your environmental stewardship.

It is also useful to note that even if you live somewhere in the United States that does not subscribe to the global nature of environmental health, other places feel differently. Even within the United States, there are plenty of places that require different labeling for products that are deemed perfectly safe by other states. California is a good example. If you market anything with a cord that came from China, it almost certainly contains trace amounts of lead in the cord’s insulation. When electrical current is drawn through it, the heat may cause microscopic lead particles to aerosolize. As a result, your product must contain a lead warning label on the cord to be sold in the state. Some states and cities are outlawing products that contain trans-fats or even certain agricultural products such as foie gras or veal.

Your business may also be at risk if you continue to do business with countries and companies that pollute or have poor human rights records. Successful boycotts of South African products during the Apartheid-era that came to a head in the 1980s are widely regarded as being part of the reason the government finally collapsed.

Startup Guide for Greenpreneurs

Decrease Liability This is especially important for companies that provide services for or manufacture durable goods. Companies proven to value money above the health and well being of their customers can be taken to court and sued under certain circumstances. Cigarette manufacturers are good example. It has been shown in court that as a class they blocked information regarding the deleterious effects of using their products. Whether people should have been able to figure out they were being lied to is not the point – they were found liable and eventually settled for billions of dollars. The lawsuits were unthinkable 40 years earlier, but when the political climate changed, companies still in business were held accountable. Avoid having to worry about whether people could hurt themselves or suffer some sort of health consequences from your product or service. Conduct your business on the up-and-up from the start and that is one less potential headache you or your successor will have to deal with.

Employee Morale People like working or companies they can believe in. Your sales people will find it that much easier to sell products they themselves can truthfully endorse without having to choose between their moral principles and a paycheck. The newspaper drives the boy-scouts held in the 1970s and 80s were a good example of people getting excited to
© 2009 Greenergy2030 Business Alliance, LLC. All rights reserved. 7

Startup Guide for Greenpreneurs

recycle. Your company’s new ―Green Mission‖ can be something to rally around and get excited about. Considering that over half the people in most recent polls consider environmental issues to be ―important‖ to them, it stands to reason that many of those people would feel good to be part of a business that made it a priority to support causes they personally felt were important.

Doing the Right Thing At the end of the day, you need to feel good about your business, too. Otherwise, why do it? If there were a way to make more money and be environmentally friendly without a huge amount of bother, most people would do it. By successfully marketing your product or service as environmentally friendly, or even making the changes in your operations public, you can achieve both! For most greenpreneurs, it is simply a matter of not having time to educate them on how to successfully leap into the green unknown. While there’s more involved than changing the color of your label, it probably isn’t nearly as hard as you might think to start a green-focused business. In fact, this is the easiest time in history to start a well-conceived green startup with a minimum of financial investment. The leverage available today is due to a new generation of business-management tools, many of which are available online, that can help you in your quest to become a successful greenpreneur.

Startup Guide for Greenpreneurs

In this book I will try to help you out by giving you a few pointers and ideas that will help you figure out how you might make it on your own in your green business. I’m going to cover important stuff like trends, finding money (you don’t need a lot), green business startup, and a host of other things that will hopefully, by the time you’re done reading this, make you say to yourself, ―Hey, I’m going to be a successful greenpreneur!‖ Yes, naturally I’m shamelessly promoting our company www.Greenergy2030.com with this book. That’s marketing 1.0 for a greenpreneur. You’ve got to market your green business…at all times! But I digress. First, let’s figure out what in the hell a greenpreneur is. If you don’t agree with me by the end of this first section that you can be a successful greenpreneur, burn this book (or delete it if you have a digital copy) and send me an email to jcarr[AT]greenergy2030.com and tell me how much I suck. However, if you think that there might be something to my madness, continue reading this entire book front to back. You’ll likely find something in here that will help you in your quest for green market domination. So let’s continue on!

Startup Guide for Greenpreneurs

According to the Pocket English Dictionary, an entrepreneur is defined as:
“One who organizes, manages and assumes the risks of a business or enterprise.”

So, what is a Greenpreneur? I’m not a big fan of definitions or even labels but people seem to like them so I’m including my definition for the benefit of those that do. In a nutshell, a greenpreneur is someone who figures out how to innovatively solve one or more problems experienced by a group of people (preferably a very large group of people) and make money from it while simultaneously doing so in a sustainable manner. Take for example Ben Cohen and Jerry Greenfield who founded Ben & Jerry’s ice cream in 1978. Their mission from day one was to create the best possible ice cream in the best possible way. This resulted in successfully becoming one of the largest ice cream companies in the U.S. and today Ben & Jerry’s is known for sustainability, activism, and environmentally friendly business practices.

Startup Guide for Greenpreneurs

A greenpreneur is also a visionary that sometimes recognizes an opportunity before others do. For example, when Michael Dell founded Dell Computers, it wasn't the computers that were new and different; his innovation was cutting out the middleman and selling directly to consumers. Hewlett-Packard and Compaq could have done the same thing, but they were too tied to the brick and mortar distribution network to compete with him in the beginning. This of course made Dell the success it has become. Today Dell is aspiring to become the greenest technology company on the planet as evidenced by the Dell Earth initiatives implemented by the company. The successful greenpreneur should strive to be the next Dell. I don’t mean necessarily a technology company but rather, one that is innovative, solves a problem that customers are willing to pay for, and benefits the planet at the same time. If you can achieve these three things, you’re well on your way to becoming a successful greenpreneur.

My question to you is not whether you can be the founder of the next Ben & Jerry’s or Dell. My question to you is why haven’t you started already?

Startup Guide for Greenpreneurs

I Want You to Start Thinking Like a Greenpreneur
Starting a green company is not about putting a website up with a few green graphics on it. It’s not about creating a product, sticking a leaf on it, and calling it green either. Starting a green company is about creating something that is useful to others in a meaningful way that doesn’t harm our planet – or even better something that helps the planet. This means that you’ve got to take what you are passionate about and what you know (everyone knows something) and use that knowledge and passion to benefit others while always taking into account the impact of your decisions.

Every single decision you make, no matter how large or small, should take into account:  Intrinsic Environmental Impact  Operational Impact  End-of-Life Impact

I know a lot of people that have great ideas for green startups. Why they haven’t started yet is beyond me. A few of the smarter ones are but not nearly enough. If you’re the type of person that doesn’t mind hard work and has a great idea that benefits others and the planet, I ask you again, what are you waiting for?

Startup Guide for Greenpreneurs

The key to becoming a greenpreneur therefore is to do the following: 1. Identify a problem or opportunity, using what you know and are passionate about, that can be leveraged to make money (lots of it) in a sustainable manner. 2. Refer to number one and repeat. That’s it folks! You now have a definition of what a greenpreneur is. I’ll give you many more examples of how to recognize opportunities as well as pointing out a few individuals that have the art of using leverage, their knowledge, and passions down to a science as we progress throughout the rest of this book. What I want you to start thinking about right this second is how you can use turn what you know and are passionate about into a successful green business. If you still aren’t sure, keep reading. You’re bound to find something in this book that will give that brain of yours the jump-start needed to figure it out. If you don’t, you’d better go ahead and start getting your resume prepared so you can make some other greenpreneur money from your efforts. I certainly don’t want that for you, and neither do you, or you wouldn’t still be reading this. So let’s continue on.

Startup Guide for Greenpreneurs

It’s all about having a PURPOSE
Finding Your Purpose – Let’s Discuss Money First ―I want to make money‖. Surprisingly, this is the main reason most people give for starting their own company. This is the wrong attitude folks and the reason that so many start-ups fail each year. Having a PURPOSE is the main reason for starting a company. What I mean is that you need to define what your company is about/stands for, what you offer, who you serve, and why others will buy it.

I would be full of baloney if I said we started Greenergy2030.com without money being considered but the truth is that there is much more to the company than just the money. We truly care about the environment and our clients/supporters. Our daily actions and operations reflect this. I believe making money is not a strong enough reason to start a business (especially a green-focused one). Your business should fulfill the customers’ need from an environmental standpoint, regardless of the niche, first and foremost. In other words, if you’re going to be successful as a greenpreneur, you’d better be able to back up your claims of being a green-focused business in the first place. As stated above, it’s okay to start a business because you want to make money. Just remember that money goes to those who first have the desire
© 2009 Greenergy2030 Business Alliance, LLC. All rights reserved. 14

Startup Guide for Greenpreneurs

to serve our planet and others; give before receiving; and prove their worth. I have learned over the last 15 years as a business owner that those who have a genuine and defined purpose tend to stay in business longer than those who are only looking to make a quick buck. Be aware of your own company’s purpose because even though you may or may not state your purpose or mission on your website, people can tell if you are genuinely trying to solve their problem or just trying to sell something. This is especially true in the green business world where greenwashing abounds. You already have enough obstacles to overcome as a startup without making things more difficult for yourself. You’ve heard the saying, ―Keepin’ it real‖. This applies to you as a greenpreneur.

Most beginning greenpreneurs give up when tough times come (and tough times will come I can assure you). This happens because they haven’t really focused on creating a meaningful purpose for their business. Simply saying that you want to make money won’t cut it in today’s marketplace. Whether you are an experienced greenpreneur or

just starting out, this book will help you. It will provide you with ideas and answers that many people who are supposedly ―in the know‖ are unaware. Remember, it takes just one good idea to make a fortune. No matter what your level of experience, absorb and learn from everything in this book. Many of the biggest successes in business have come from the smallest and simplest ideas.
© 2009 Greenergy2030 Business Alliance, LLC. All rights reserved. 15

Startup Guide for Greenpreneurs

Create a Genuine Mission Statement and Stay Focused A genuine mission statement will help you to maintain your focus as you launch and grow your business. This is especially true in the infancy stages of your green company. A genuine mission statement can also keep you going when the going gets tough. There are a million advertisements, business opportunities, money-making programs, scams and hypes, etc. that you see every day. Being focused is more important than ever. Successful greenpreneurs realize this and are able to maintain focus and remain on-track at all times.

Leverage, Leverage, Leverage! A greenpreneur, in contrary to traditional small business owners, is one who uses the efforts of their business associates, partners, and software to grow their own business. This practice is known as leverage. I want you to focus on nothing short of green domination within your niche. This is only accomplished by using leverage! While many traditional entrepreneurs have learned to use traditional networking and marketing to a certain degree, the distinctions between a greenpreneur and most small business owners can be seen in the sophisticated network of business associates and affiliates that the greenpreneur utilizes on a daily basis.

Startup Guide for Greenpreneurs

The good news is that today, technologies exist that make daily tasks easier in the pursuit of growing your green business. That said, using these technologies does not mean you can call yourself a greenpreneur just yet. The fact is that you can only achieve so much and do only so much by yourself. You only have 24 hours a day available to yourself just as everyone else and the goal here is for you to spend as few of those available hours working and more of them enjoying your life! If you are planning to succeed with your business, (if you’re not stop reading this book now) you will need to assemble a team of people with the required expertise or resources needed to help you in your quest for green domination in your niche. You will also need to utilize available technologies that maximize your productivity with as little personal effort as possible. This is what leverage is all about! The statement ―time is money‖ may be true amongst small business owners but that is not the case with the greenpreneur. The applicable greenpreneur philosophy is actually time over money because a greenpreneur thinks in terms of time rather than money, enabling him/her to make more money with less effort. Again, this is the concept of leverage.

Startup Guide for Greenpreneurs

The 3 Essential Skills of a Greenpreneur
Your journey to becoming a greenpreneur is made up of knowledge and skills from the following areas of expertise:

Skill #1: Leadership It is okay if you are not a leader when you are working for someone else, but it definitely NOT okay when you start your own business.
Tip: You are now finally given a golden chance to be financially independent and free by starting your own green business. However, if you have been spending most of your life taking orders from someone else, running your own business is going to be a challenge. But the good news is that leaders are made, not born. I believe that just as one can learn to be an employee, one can learn to be a greenpreneur as well. Therefore, I urge you invest in a few self-help books on leadership & entrepreneurship at the nearest bookstore, college, or online.

In the world of business, leadership is not an option but rather a necessary trait required to survive. This applies to the greenpreneur as well. Just because you work from home or for yourself does not mean you do not need to be a leader of some kind.

In fact, it does not matter whether you work alone or you have a 10,000 people working for you, being a leader is important and this is especially crucial when you make a decision that impacts yourself, your company, and others that you work with.
© 2009 Greenergy2030 Business Alliance, LLC. All rights reserved. 18

Startup Guide for Greenpreneurs

Skill #2: Communication A very important skill you need to develop is the ability to communicate with other greenpreneurs, experts, and specialists who are already successful green-focused business owners.

This is one of the most important skills you can develop when just starting out. What I mean is that you need to reach out to other successful greenpreneurs, ask questions, seek advice, etc. All too often, many beginning entrepreneurs are scared to approach other successful business owners, for whatever reason, to ask for help.

The early stage is probably the toughest of all stages in any business and this is when most businesses fail. Most budding greenpreneurs fail because they failed to communicate with others who are already successful. Don’t fall into this trap!

Remember, the established and successful greenpreneurs, like everyone else, also started with virtually nothing when they launched their businesses. One of the reasons these individuals became successful is because they sought help from other successful business people.

Startup Guide for Greenpreneurs

Skill #3: Problem Solving
The ability to fix things when they go wrong is imperative for the greenpreneur.

Owning your own business means you are in full control. This certainly demands more discipline and control on your part than a regular 9-5 job. When you work in a company and make a mistake, the company pays for it. When you make a mistake in your own business, you have to be able to bear the consequence.

When things go wrong, you had better know how to fix it fast. Putting out fires is part of business ownership and you need to learn now how to respond quickly and correctly or your business will perish.

Startup Guide for Greenpreneurs

Greenpreneurs Change All the Rules
Rule #1: No Risk Means No Success! Dr. C. E. Welch, the Founder of Welch's Grape Juice was once quoted as saying:
“Many men fail because they quit too soon. They lose faith when the signs are against them. They do not have the courage to hold on, to keep fighting in spite of that which seems insurmountable. If more of us would strike out and attempt the "impossible”, we very soon would find the truth of that old saying that nothing is impossible…abolish fear and you can accomplish anything you wish.”

To really get ahead in business and in life for that matter, you have got to take some risks. No successful business or career was ever built without some risk taking. This doesn't mean you should blindly walk off a cliff; instead you need to take calculated risks after you have carefully collected and weighed all the information you can gather.

It is no coincidence that most of the spectacularly successful business people have also had some spectacular failures and near failures. Take Henry Ford or Thomas Edison, for example; they didn't let their failures hold them back. Remember, even when you have some failures...some really big successes are likely just around the corner!

Startup Guide for Greenpreneurs

Rule #2: Greenpreneurship is a Journey The entrepreneurial experience is a process, a journey. It is not about business, but rather passion and creativity. Business is to the executive what the

kitchen is to the chef, a canvas to a painter, or an orchestra to a conductor. The creative comparisons are endless.

As a creator, the greenpreneur embarks on a voyage to the culmination of his or her vision. The creative instrument used by the greenpreneur is merely a tool, the means to an end. Fulfillment and environmental significance are the goal. Money is the fuel. The method used to accomplish this goal is a function of the individual persons’ gifts and creative preferences. Essentially, we succeed when we attain the goals inspired by our dreams and achieve fulfillment.

This explains how successful greenpreneurs can excel in a variety of mediums or situations. As we grow and mature, our gifts and skills change. Our entrepreneurial aptitude can grow, diminish, or be awakened. That is why entrepreneurship is not limited by age, gender, race, etc. Colonel Harlan Sanders, the founder of Kentucky Fried Chicken, one of the most recognized faces in the world, did not attain the

Startup Guide for Greenpreneurs

pinnacle of success until his mid 60s. It is never too soon or too late to reach for the stars; there is a greenpreneur in all of us.

We are greenpreneurs when we use our creative gifts to develop, to produce, or to distribute a service or product that fulfills or satisfies the need of others while benefitting the planet in some way. It is the use of these gifts that marks you as a greenpreneur.

Starting a green business is not just about business plans and corporate structures—it is about entrepreneurship. It is about the core concepts that determine how you and your investor partners can overcome the fear of risk. It is about turning dreams into reality. Greenpreneurs have faith and faith is spelled R - I - S - K. I believe that faith is going to the edge with everything you have and taking one more step. It is the last step that is success.

Startup Guide for Greenpreneurs

Greenpreneurs may fail, but they are not afraid of failure. They know that success is failure turned inside out. Society has conditioned us into the

illusion that we must be perfect. Unfortunately, we will never be perfect. We must make mistakes; we must experience failure in order to succeed. When you overcome your fear of failure or being judged by others because you do not measure up to some false standard, the greenpreneur in you will emerge. You will take risks, you will fail, and eventually you will succeed! Nothing is guaranteed. Not every project you embark upon will be a success.

Greenpreneurs do not always make money on their deals. While there is always risk in any new venture, this book will hopefully help to minimize the potential for loss and maximize the possible gain for you and your clients, investors, and mentors. Don’t let anybody fool you; it takes money to make money. Bunker Hunt, the silver magnate, was once one of the richest men in the world. He lost his wealth virtually overnight due to federal intervention into the silver market. In a recent interview, Bunker said, “I never really knew how much money I had, but I know that it is harder to make money now without money.”

Startup Guide for Greenpreneurs

Rule #3: Selling is Not Optional If you cannot sell, you cannot make money. One common characteristic shared by all successful greenpreneurs is the ability to sell. If you hate the idea of selling and are attracted to programs touted by so-called gurus that require no selling, becoming a green-focused business owner is probably not for you. This is because no matter what ideas or

resources you have, without the ability to sell you cannot turn them into assets. If you have not yet mastered this skill, now is the time for you to learn. It’s not an easy skill to learn but it can be learned and you’d be well served to learn now.

Make Selling Your Forte Without exception, in order to become a greenpreneur, you must have the ability to sell. When you write sales copy for marketing materials,

websites, etc. you are selling. When you negotiate a deal, you are selling. When you propose a joint venture with a potential partner, you are selling. When you endorse a product or service to your mailing list, you are selling. When you send email, you are still selling. Selling is a fundamental part of business ownership in today’s competitive marketplace.

Startup Guide for Greenpreneurs

Without the ability to sell, you cannot make money, regardless of what great ideas or fantastic products you may have. There are several people who sell their products/services for peanuts and still fail to make the amount of money they desire simply because they do not know how to sell the ―perceived value‖ of their company.

Selling the Perceived Value Before you put a price on your product/service, digital or tangible, it is imperative that the perceived value of your offering(s) by prospects is high enough to sustain your business.

Sell a Solution or Opportunity, Not a Product When you put a product or service offer up for sale, do not sell features to your prospects. Consider when you make a purchase. You aren’t interested in hearing the features. What YOU – or anyone else – is interested in is one or more of the following:

    

What is in it for me (WIFM)? What can I get out of this? How does this product or service benefit me and the planet? How does this product or service solve my problems? How do I make money from this?

Startup Guide for Greenpreneurs

Rule #4: Plan for Tomorrow You have learned several important facets of becoming a greenpreneur. In fact, you now know more than many entrepreneurs that have been operating for years. That said your education shouldn’t stop here. You must commit yourself to a lifetime of learning. Even the most successful greenpreneurs continue to buy every business related book they can find and attend as many courses as their schedule will allow every year. You should scour industry publications and websites. You never know where you might find a single idea that will make you a ton of money. You shouldn’t just limit yourself to your own industry’s materials either. Commit to, and constantly work to improve your knowledge of business topics such as marketing, salesmanship, business management, and other areas that will allow you to be more successful.

Your business education starts from day one and will continue until your retirement. Never stop searching for ways to improve your knowledge of business. You will be far more successful and wealthy as a result.

Startup Guide for Greenpreneurs

Protect Your Loved Ones Entrepreneurship is exciting. It allows you to be

involved in one of the most important aspects of our society. Too often however, it’s easy to become so involved in building your business and completing deals that you leave little or no time for anything else in your life. Consequently, your relationships and

health can suffer. This section is included because I feel that if you have a happy home life you are in a much better position to handle the problems that will undoubtedly occur in your business. When things go badly on a deal or in your company, being able to retreat to the comfort of a loving and warm home makes all the difference in the world when it’s time to get up the next day to jump back into the fray. Please understand that this section is not meant to be a platform for marriage, parent, or relationship counseling. Therefore I will make it short. When you neglect your friends and family, you will eventually come to the realization that you have made the wrong choice. Having the love and support of others is going to be very important as you embark on your new business venture. When times are tough, it helps a great deal to have others to lean on. This is a two-way street however. You must ensure that you

are doing your part as well.

Startup Guide for Greenpreneurs

The following is a short list of ways that you can ensure that you are not ruining your personal relationships.
    

Spend quality time together on a REGULAR basis Develop the skill of listening – truly listening Minimize expectations on those around you – avoid nagging Avoid being selfish Avoid bringing your work home (or away from your desk if you work from home)

  

Develop happy and positive memories Try to establish traditions Give unconditional love and understanding

Continued efforts to take care of and protect your loved ones leads me to the final entry of this section. This means that you should work with your attorney and CPA to devise legal ways to protect your accumulated assets from being taken by creditors or the government. You should consider the following:
  

Plan for your eventual death Setup an estate plan Place your home and other key assets in your spouse’s name or in another family member’s name Establish a trust fund for your children’s education in their name(s) Place all other assets in similar trusts with other family members Have savings set aside for a rainy day Develop an understanding of tax strategy and how the tax codes work.
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   

Startup Guide for Greenpreneurs

Checklist of Estate Planning Tools To Discuss with Your Professional Advisors
      

      

Create a Will A-B trusts Family limited partnerships Life insurance trusts Gifting programs Re-titling assets or inter-spousal gifts Liability evaluation, assessment, mitigation with appropriate insurance coverage Asset protection Buy-sell agreements Term life insurance for estate liquidity Generation-skipping trusts Foreign trusts Charitable remainder trusts Private foundations

Startup Guide for Greenpreneurs

Rule #5: You Must Look for Deals, Not Work Most of us have been employees or followers at some point in our lives before we even thought of starting our own business. As employees, we learn to work for other people. We are paid more for more work done (just never enough). However, the exact opposite applies when we start our own companies.

You Are Paid More for Less Work Done This may sound absurd and contradictory but please give me a moment to explain. In fact, this vary fact is the reason that many greenpreneurs fail today…they do not understand this point.

Consider the following: You work for someone else. Your employer pays you more money (sometimes) for taking on more work. If you work in an office, your dayto-day job may involve picking up phone calls, offering customer service and support, handling paperwork, and more. Your employer pays you to do all of these tasks. If you are not working for your employer, who else will pay you for answering phone calls and doing paper work? No one! The same applies even if you are a business owner. You are not paid to read and answer email, create your business website (in fact you might be paying someone else to do this if you are not HTML literate), or create content.

Startup Guide for Greenpreneurs

As a greenpreneur, you are paid only when someone is satisfied enough to give you money. These of course are your customers. Therefore it is imperative that you offer superior customer service and realize that you will be working for free until you start to profit from your business venture. For some reason, most people just do not consider these points when starting their business. They just jump right in without ever knowing how they’re going to actually make money with their business.

Deals vs. Work Work such as creating and building a better website, handling customer service issues, setting things up, and updating the blog are unavoidable yet important tasks when starting a green business. But the bottom line is that you are not getting paid to do these things. Many people don’t understand that they need to be looking for more deals, not more work. If you are not making enough money with your business, it is because you are not looking for enough deals. You are in fact looking for more work to do; work that does not make you money.

Startup Guide for Greenpreneurs

What I’m telling you here is to look for opportunities that make you money. A job will not make you rich. Many entrepreneurs understand this fact which is what leads them to start their own companies but after startup, they still run their business with the same mind-set: look for more work to do. This is the WRONG approach! Remember what you learned earlier, the greenpreneur uses leverage to succeed…not more work. The day-to-day work on your business operation is important but it is successful deals you find and complete that earns you money. Consider why you want to own your own green company. Isn’t it to have more time and money while doing some good for the planet? Why then would you jump from a job into another job (that you just call a business)? Look for deals and not more work. Deals and opportunities make you rich. You already know how little a job can give you.
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Startup Guide for Greenpreneurs

Web 2.0 is a term describing the trend in the use of World Wide Web technology and web design that aims to enhance creativity, information sharing, and, most notably, collaboration among users. These concepts have led to the development and evolution of web-based communities and hosted services, such as social-networking sites, wikis, blogs, and folksonomies. The term became notable after the first O'Reilly Media Web 2.0 conference in 2004. Although the term suggests a new version of the World Wide Web, it does not refer to an update to any technical specifications, but to changes in the ways software developers and end-users use the Web.

SUSTAINABILITY = RICH 2.0
Obviously the whole 2.0 thing has become a catch-phrase but nonetheless, Web 2.0 has changed the entire way that companies are started and operated online. Let’s discuss online business for a bit because I suspect many green-focused Internet companies will emerge in coming years. Early in this book I suggested that operating any business in a sustainable manner has become the new paradigm for succeeding and being more competitive. Corporations such a Starbucks and Wal-Mart have embraced sustainability and are focused on utilizing their companies to benefit the planet. This phenomenon has led to several success stories (i.e. Ben & Jerry’s, Dell, etc.) but we have also learned that the process can be painful (greenwashing has become a serious problem worldwide). If you can develop a product or service that is adopted by a large number of users very quickly while doing so in a sustainable manner, you will likely find doors open to you in terms of investors and/or potential acquirers for your company. One way to accomplish this is by giving away something for
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Startup Guide for Greenpreneurs

―free‖ – something that is easily accomplished in the Internet world. Recent investment activity in company’s like Twitter has proven this point. The key is to develop a monetization plan early on once you have developed a significant user base. The problem we have seen with many companies however is that they do not have a viable monetization strategy which makes no sense to me. In other words, sustainability wasn’t factored into the equation at the outset. Nonetheless, the term free should become part of your vocabulary which I’ll explain further below.

Startup Guide for Greenpreneurs

The Wonders of Giving Something Away For Free Let’s face it – shoppers on the web love getting something for nothing. So do not disappoint them. Give them what they want. Still do not see the point?




The number of investments in Web 2.0 companies (namely, websites that emphasize social tools like social networks and blogging) increased 25 percent in 2007, from 143 deals to 178 totaling $1.32 billion. Mergers and Acquisitions within the Web 2.0 space are growing. At the time of this writing, Q1, 2008 saw the average deal worth $215.9 million with assets acquired valued at $4.75 billion.

Translation: You can make a boat-load of money if you launch the right type of green company today and use the ―freebie‖ strategy. More and more online companies are being started due to the ready availability of seed money and low startup costs (open source, cheap

computing, etc.) - but the end game is the same. To raise money successfully (something we’re about to discuss in detail shortly) you need either strong exponential user growth or solid revenue traction. The benefit of giving something away for free is that you develop a relationship with your customers. This means that they will be open to follow-up contact from your company related to your products and services.

Startup Guide for Greenpreneurs

Alternatively, if you have a community of followers/users, advertisers and others are willing to pay you to reach those followers/users. The bottom line here is that free is a viable strategy as long as you have a sustainable monetization strategy planned down the line. Case Study – The Supermarket Near You I am sure that you have seen people giving out free samples of their products such as chocolates, drinks, etc. at the supermarket. You have probably sampled them, too. You see, the companies selling those

products are first proving their worth to potential customers shopping at the supermarket. If the individuals trying the samples like the product, they will surely want more. Voila, they become buying customers!

Applying this Concept to Your Green ONLINE Business This brings us to point # 2 – giving something away for free allows you to prove your worth. The advantage of an online business is that unlike conventional businesses, you do not have to spend a lot of money on giving out sample products. In fact, it can be done at zero cost!

Sharing your expertise freely in your newsletters for example or enabling people to try out your services proves your value to them. As you learned
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earlier, the perceived value is extremely important to the success of your green company. If done correctly, the freebie you give away can be viral. That means the person who downloaded your free e-book that discusses a green topic (as an example) will send to a friend who will in turn send to another. This is called viral marketing. This is will indirectly increase your credibility and increase your chances of success.

For example, if you a write a free report on a green subject, you can include your product sales letters at the back of the report. With many visitors downloading your free report and passing it on to others, this will raise your chances of making sales. Just make sure that whatever you give away is perceived as valuable.

Startup Guide for Greenpreneurs

Green Startup Basics 101
There are a myriad of governmental regulations that you must follow to legally establish your green business. You should decide on the best legal structure for your business with your accountant and/or attorney. You will also decide on a name for your business (if you haven’t already done so), learn how to select a bank for your business, and register your business with the IRS for tax and other business purposes. Technology is playing an increasingly larger role to businesses and this is especially true for greenpreneurs. Utilizing technology can assist you in becoming more

successful and more productive. You will learn about some of the best tools available to you at affordable prices such as accounting software and personal productivity software. Additionally, many beginning

greenpreneurs fail to realize how important it is to buy adequate insurance coverage for their business. In this section you will learn about the most important policies available to you and how to select an insurance agent for your business. Finally, if you are like most beginning greenpreneurs, you will establish a home office (recommended) in the beginning. You will learn some important things that you should consider when setting up your home office. This is an exciting time for you as it should be. It is easy to overlook critical areas of setting up your company. The purpose of this book is to help you to avoid these oversights. Best of luck to you with your new venture! Enjoy yourself during this exciting time.

Startup Guide for Greenpreneurs

Greenpreneurs Startup Worksheet
Undertaking an entrepreneurial venture, such as starting your own green business, involves many obvious and some hidden costs. Filling out the following worksheet of common business start-up costs can help you estimate what your costs might be. This list is not exhaustive; do not forget to consider other costs that apply to your particular venture. You are encouraged to utilize this sheet as you progress through this book. Rent $__________ Improvements/build-out $__________ Salaries/wages $__________ Payroll expenses $__________ Equipment (copiers, fax machines, telephone system, computer) $__________ Furniture $__________ Supplies $__________ Printing $__________ Advertising $__________ Website/Hosting $__________ Utilities $__________ Licenses/Permits/Certifications $__________ Insurance $__________ Accountant's fees $__________ Attorney's fees $__________ Other expenses $__________

Startup Guide for Greenpreneurs

Greenpreneurs Checklist for Starting a New Business
Background Work  Assess your strengths and weaknesses  Establish business and personal goals  Assess your financial resources  Identify the financial risks  Determine the start-up costs  Decide on your business location  Complete market research  Identify your customers  Identify your competitors  Develop a marketing plan  Develop a sustainability plan Business Transactions  Select a lawyer  Choose a form of organization (proprietorship, partnership, or corporation, for example)  Create your business (register your name, incorporate the business, etc.)  Select an accountant  Prepare a business plan  Select a banker  Set up a business checking account  Apply for business loans (if applicable)  Establish a line of credit  Select an insurance agent  Obtain business insurance  Obtain Green Certification

First Steps  Get business cards  Review local business codes  Obtain a lease  Line up suppliers (if applicable)  Get furniture and equipment  Obtain a business license or permit (if applicable)  Get a federal employer identification number (if applicable)  Get a state employer ID number (if applicable)  Send for federal and state tax forms  Join a professional investor organization  Set a starting date

Startup Guide for Greenpreneurs

Choosing a Legal Structure When starting your green company, you will have to make a decision regarding the legal structure for your business. This decision will affect how much you pay in taxes, the amount of paperwork you will be required to file with government agencies, the personal liability you will face, and your ability to raise money for your company. There are several business forms to choose from when starting your business. The following section covers the options available to you along with a discussion of the basic aspects of each. You are highly encouraged to speak with your legal and/or accounting professional before making a final selection. They will be able to assist you in selecting the best option for you based on your individual investment goals and longterm financial goals. Name Selection You will need to decide on a name for your business regardless of the legal structure that you choose. As a business owner, your name should convey professionalism and be memorable to others. Choosing a name to operate under is an important undertaking because it is often the first thing others learn about your business. You must choose a name that is not being used by other business owners in the areas that you operate in. You will learn more about registering your name with your state and county later in this section.
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Startup Guide for Greenpreneurs
BUSINESS NAME SELECTION WORKSHEET This worksheet is designed to assist you in selecting a name for your green business. Your answers on this worksheet will give you a selection of adjectives and nouns that you can use to select a professional name. Your goal is to come up with 3-5 name options to choose from. 1. List three adjectives that describe your online strategy (like Smart or Aggressive): A. __________________________________________ B. __________________________________________ C. __________________________________________ 2. List three things you want people to think of when they see your business name (like Sustainable or Green): A. __________________________________________ B. __________________________________________ C. __________________________________________ 3. What other green businesses reflect your business concept: ___________________________________________ 4. List three possible business names utilizing your own name (like SmithGreen.com): A. _________________________________________ B. _________________________________________ C. _________________________________________ 5. List three fictional names (like Starbucks) that appeal to you: A. _________________________________________ B. _________________________________________ C. _________________________________________ 6. List three names that include the types of customers you are targeting A. _________________________________________ B. _________________________________________ C. _________________________________________ 7. List three business names that appeal to you personally: A. _________________________________________ B. _________________________________________ C. _________________________________________

Startup Guide for Greenpreneurs

Limited Liability Companies (LLCs) LLCs are increasingly popular for entrepreneurs because they combine the best legal and tax characteristics of corporations and partnerships, while avoiding many of their disadvantages. Specifically, an LLC can offer limited liability protection to all its owners (referred to as ―members‖) while being classified as a partnership for federal income tax purposes.

Legal Considerations LLCs are unincorporated legal entities created under state law. Even though LLCs are unincorporated vehicles, the fundamental intent of LLC statutes is to allow the formation of entities that legally are more similar to corporations than partnerships. Nevertheless, LLCs can be taxed as

partnerships. The critical point to remember is that, legally, LLCs are not corporations; nor are they partnerships. While the personal assets of LLC members and managers are protected from ―general‖ LLC debts and obligations (often referred to as ―contract liabilities‖), these persons generally remain exposed to LLC liabilities resulting from their own illegal acts and their own professional errors and omissions. (Illegal acts are defined as wrongful acts leading to civil actions, other than those involving breach of contract.) The issue of members’ and managers’ exposure to liabilities related to illegal acts and professional errors and omissions is a matter of state law. If you have specific questions, I recommend that you consult with your attorney. Like corporate shareholders, LLC members
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Startup Guide for Greenpreneurs

may be required on occasion to personally guarantee certain of the entity’s debts as a condition of obtaining financing or for other reasons. Members are personally obligated with respect to LLC debts that are specifically guaranteed.

Tax Treatment of LLCs The key tax attribute of LLCs is that they can be treated as partnerships for federal income tax purposes. The tax advantages of partnership status are covered later in this letter in the discussion of general partnerships.

Conclusion on LLCs Because LLC laws are somewhat new, inevitably there are legal uncertainties associated with making the choice to operate as an LLC rather than as a partnership or a C or S corporation. There are also some unanswered questions regarding how certain federal tax law provisions apply to LLCs. These uncertainties are the major disadvantage of LLCs.

However, only LLCs offer both the legal advantage of limited liability for all owners and the tax advantage of partnership taxation—which combines pass-through treatment with maximum flexibility. This unique combination of legal and tax benefits are the driving force behind the growing use of LLCs.

Startup Guide for Greenpreneurs

Single-Member LLCs Single-member LLCs are now available in all but a few states. The unique attribute of single-member LLCs is that they are ignored for federal tax purposes. Thus, when a single-member LLC owned by an individual is used to conduct a trade or business activity, it is treated as a sole proprietorship for federal income tax purposes. Accordingly, the owner reports the business income and deductions on Schedule C and computes the SE tax on Schedule SE. Both Schedules are filed with the owner’s Form 1040. Even though the single-member LLC is ―invisible‖ for federal tax purposes, it still exists for state law purposes and thus protects the owner’s personal assets from most business-related liabilities. Generally, the

single-member LLC is the preferred choice when pass-through taxation is desired for a single-owner business. The only other pass-through alternative for a single-owner business is the S corporation, which has strict qualification rules, as I’ll explain shortly. Because it offers liability

protection advantages, the single-member LLC is almost always preferred to sole proprietorship status. The only exceptions would be when singlemember LLCs are treated disadvantageously for under state income tax rules or when LLC status is unavailable under state law or professional standards. For example, Texas single-member LLCs must pay the state’s corporate franchise tax, while sole proprietors are exempt. By law, some
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Startup Guide for Greenpreneurs

professionals are unable to operate as single-member LLCs in some states, and some states also prohibit using LLCs in certain lines of business, such as agriculture or banking. When single-member LLC status is available, the LLC can generally be formed quickly and inexpensively by filing a registration statement with the appropriate state authority and paying the required fee. After the initial year, ongoing annual fee payments may be required to maintain the LLC’s registration. Series LLCs What is a Series LLC? A Series LLC is a Limited Liability Company with more than one series of members, managers, or LLC interests having separate rights, powers, or duties with respect to specified property or obligations of the LLC (or profits and losses associated with specified property or obligations). Any such series may have a separate business purpose or investment objective. For years, Delaware law has permitted an LLC to register separate series, but use of this structure remains uncommon due to uncertainty over federal income tax consequences. Other states which have enacted statutes

permitting formation and qualification of Series LLC include Illinois, Iowa, Nevada, Oklahoma, Tennessee and Utah. In general, the separate series are not required to be named in the formation document filed with the state, but the formation document must contain a notice of limitation of liabilities of series.
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Startup Guide for Greenpreneurs

Series LLC Benefits The Series LLC permits separate liability-insulated divisions within a single entity. A Series LLC could be used as a holding company owning intangible assets, or tangible assets such as real estate, or as an operating company conducting different lines of business. The Series LLC reduces costs associated with separate entity formation and maintenance.

How is a Series LLC Taxed? Since the federal tax consequences of Series LLC are uncertain, a tax professional familiar with this type of entity should be consulted. It is possible that a Series LLC may be taxed either as a single entity or as multiple organizations. Because the state of Delaware considers a Series LLC only one entity for tax purposes, only one annual franchise tax of $200.00 is required prior to June 1 of each year. The California Franchise Tax Board, on the other hand, taxes each series as a separate entity if the Series LLC is registered or doing business in California.

Startup Guide for Greenpreneurs

A Word of Caution Because the Series LLC is a relatively new entity, its benefits are still largely theoretical. Protecting assets by separating them into LLC series is an approach that has not yet been tested and proven by case law. Because case law on the Series LLC is uncertain, this entity type should be established under the guidance of a legal professional familiar with its requirements.

Startup Guide for Greenpreneurs

Limited Liability Partnerships (LLPs) LLPs are a relatively new type of entity that can be particularly useful for the operation of real estate ownership. LLPs are formed and operated pursuant to state LLP statutes. These won’t apply to most green companies but for the sake of thoroughness I’ll discuss them.

Liability of LLP Partners Like the partners of a general partnership, LLP partners in some states remain personally liable for the general debts and obligations (so-called ―contract liabilities‖) of the LLP. Contract liabilities include, but are not limited to, bank loans, lease obligations, and vendor accounts payable. In most states, LLP partners are not personally liable for the LLP’s contract liabilities unless the liabilities are expressly guaranteed by the partners. In other words, these states offer ―LLC-like‖ liability protection to LLP partners. In all states, LLP partners generally remain personally liable for their own illegal acts and their own professional errors and omissions. However, LLP partners are generally not liable for the professional errors and omissions of the other LLP partners and employees. In other words, LLPs offer much greater liability protection than general partnerships, and in many states they offer LLC-like protection.

Startup Guide for Greenpreneurs

LLP Advantages and Disadvantages LLPs are partnerships (both for state law and for federal income tax purposes), and they are therefore subject to the legal and tax implications that generally apply to partnerships. Thus, the major advantage of LLPs is the ability to benefit from pass-through taxation without being affected by the various restrictions applying to S corporations (such as the one-classof-stock rule and the other limitations discussed later in this letter). In addition, LLPs enjoy the other tax advantages that partnerships have over S corporations.

The primary disadvantage of LLPs in some states is the personal liability of the partners for the contract liabilities of the entity. In these states, LLC status is more attractive than LLP status. However, under some state laws and under certain professional standards, the use of LLCs may be prohibited. In such situations, LLPs offer better liability protection than general partnerships and are not burdened with the double taxation problems of C corporations. In the majority of states that offer LLP partners LLC-like liability protection, LLPs and LLCs are equally attractive.

Startup Guide for Greenpreneurs

General Partnerships The partners of a general partnership are personally liable (without limitation) for all debts and obligations of the partnership. The liability of general partners is ―joint and several‖ in nature. This means that any one of the general partners can be forced to make good on all partnership liabilities. That partner may be able to seek reimbursement from the partnership for payments in excess of his or her share of liabilities. But this depends on the ability of the other partners to contribute funds to allow the partnership to make such reimbursement. Note also that general partners are jointly and severally liable for partnership liabilities related to illegal acts and professional errors and omissions of the other general partners and the partnership’s employees. In addition, general partners are personally liable for their own illegal acts, errors, and omissions. Finally, each

general partner usually has the power to act as an agent of the partnership and enter into contracts that are legally binding on the partnership (and ultimately on the other partners). For example, a partner can enter into a lease arrangement that is legally binding on the partnership. It is critical therefore if a general partnership is to be formed, for co-owners to have high levels of trust in each other.

Startup Guide for Greenpreneurs

Advantages of Pass-Through Taxation The major advantage of general partnerships is the ability to benefit from pass-through taxation without being affected by the various restrictions that apply to S corporations.

The major features of pass-through taxation are as follows: • Partnerships are not tax-paying entities. Instead, the partnership’s items of income, gain, deduction, loss, and credit are passed through to the partners, who then take those items into account in their own tax returns. • Adjustments to basis in ownership interests. When the partnership’s income and losses are passed through, the partner’s basis in his or her partnership interest is adjusted accordingly. Specifically, that basis is increased by the partner’s passed-through share of income and gains and decreased by his or her share of losses and deductions. This procedure ensures that income is subject to only a single level of taxation, at the partner level. • Cash distributions. Distributions reduce the partner’s basis in his or her interest. Only distributions in excess of basis trigger taxable gain to the partner.

Startup Guide for Greenpreneurs

Multi-Year Impact of Pass-Through Taxation The avoidance of double taxation of entity income makes a big (and favorable) difference when an entity earns substantial amounts of taxable income over a period of several years. However, it must be remembered that the C corporation tax rates on the first $75,000 of annual income are considerably lower than the maximum individual tax rates that apply if the same income is passed through by a partnership (or an S corporation). Even at higher income levels, the C corporation rates are still lower than the maximum individual rates. If all income is expected to be retained in the business indefinitely (for example, to finance growing receivable and inventory levels), the more favorable C corporation rates can partially or wholly offset the negative effects of double taxation. In such cases, operating as a C corporation may be preferable to pass-through entity status.

Startup Guide for Greenpreneurs

Differences between Partnership and S Corporation Taxation The above discussion of pass-through taxation applies to partnerships and S corporations equally. (For S corporations, simply substitute corporation and shareholder for partnership and partner, respectively.) However, there are also significant differences between partnership taxation and S corporation taxation, most of them in favor of partnerships. They include the following: • Partners can receive additional tax basis (for loss deduction purposes) from entity-level liabilities, while S corporation shareholders can receive additional tax basis only from loans they make to the corporation. (Shareholder guarantees of corporate debt have no effect on shareholder basis.) • Partners who purchase a partnership interest from another partner can step up the tax basis of their shares of partnership assets. • Partners and partnerships have much greater flexibility to transfer appreciated property tax-free than do S corporations and their shareholders. • Partnerships can make disproportionate allocations of tax losses and other tax items among the partners. In contrast, all S corporation passthrough items must be allocated among the shareholders strictly in proportion to stock ownership.

Startup Guide for Greenpreneurs

There are also several disadvantageous tax rules that apply to partnerships but not S corporations. However, most tax advisors believe that partnership taxation is more favorable, overall, than S corporation taxation.

Conclusion on General Partnerships The critical disadvantage of general partnerships is the unlimited personal liability of all partners for all liabilities of the entity. Thus, general partnerships offer less protection to the owners’ personal assets than do LLCs, LLPs, limited partnerships, S corporations, or C corporations.

Limited Partnerships A limited partnership is a separate legal entity (apart from its limited partners) that owns its assets and is liable for its debts. Therefore, the personal assets of the limited partners generally are beyond the reach of partnership creditors. This is the non-tax selling point of limited partnerships. Limited partners are, however, still personally responsible for partnership liabilities resulting from their own illegal acts. The key

negative factor associated with limited partnerships is that they must have at least one general partner with unlimited personal exposure to partnership liabilities. Usually this problem can be addressed by forming a corporate general partner. This is often an S corporation. With this strategy, the amount the general partner can lose is effectively limited to the value of the assets held by the corporation. Another potentially significant negative
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Startup Guide for Greenpreneurs

factor is that limited partners can lose their limited liability protection by becoming too actively involved in managing the limited partnership. As a result, limited partnerships may be unsuitable for activities where all partners are heavily involved in the business (for example, professional practices). The key tax advantage of limited partnerships is that they can be treated as partnerships for federal income tax purposes. (See the above discussion of the partnership tax rules.)

Startup Guide for Greenpreneurs

S Corporations Legally, S corporations and C corporations (covered below) are identical. Arguably, corporations offer the greatest certainty in terms of protecting the personal assets of owners from the risks of the business. A corporation is treated as a legal entity separate and distinct from its shareholders. Therefore, the corporation owns its own assets and is liable for its own debts. As a result, the personal assets of shareholders (including shareholder-employees) generally are beyond the reach of corporate creditors. Shareholders generally remain exposed to liabilities resulting from their own illegal acts and their own professional errors and omissions. Shareholders may be required on occasion to personally guarantee certain of the corporation’s debts as a condition of obtaining financing or for other reasons. Shareholders are personally obligated with respect to corporate debts that are specifically guaranteed.

Election of S Status The election of S corporation status is made by filing Form 2553 (Election by a Small Business Corporation). The form can be filed during the preceding tax year for an election to become effective for the following tax year. For an S election to be effective for the current tax year, it must be filed by the fifteenth day of the third month of that year. Newly formed corporations generally intend for the election of S status be effective for the initial tax year. The election must be filed by the fifteenth day of the third
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month after the ―activation date‖ of the corporation. This is the earliest date the corporation has shareholders, acquires assets, or begins conducting business.

Special Restrictions on S Corporations To qualify for the benefits of pass-through taxation, S corporations must meet a number of strict eligibility rules. Unfortunately, these rules greatly restrict stock ownership and capital structure possibilities and can therefore make operating as an S corporation much less attractive than it first appears. If the eligibility rules are not met at any time during the tax year, the S status of the corporation is immediately terminated and the corporation falls under the C corporation taxation rules.

To qualify for S status, a corporation must: • Be a domestic corporation; • Have no more than 75 shareholders; • Have no shareholders other than individuals who are U.S. citizens or resident aliens, estates, or certain types of trusts and tax-exempt entities; and • Have only one class of stock (issuing voting and nonvoting shares is permitted, but there can be no preferred stock or common stock classes with differing economic characteristics). You must be very careful with this stipulation because some companies can inadvertently result in violation of the one class of stock rule.

Startup Guide for Greenpreneurs

These restrictions can hamper attempts to raise capital, and they may frustrate plans to transfer stock for income tax planning, estate planning, and business succession reasons.

Ineligible Corporations The following types of corporations are ineligible for S status by definition: • Financial institutions allowed to deduct bad debt reserves; • Domestic international sales corporations (DISCs) or former DISCs; • Insurance companies other than certain casualty companies; and • Certain corporations electing to take the possessions tax credit. Conclusion on S Corporations Assessing the attractiveness of S corporations involves balancing the advantages of arguably superior liability protection for owners and passthrough taxation against the negative implications of the restrictive eligibility rules. Additionally, you are hampered by the inability to pass through losses, something that is common in the early years of a business startup.

Startup Guide for Greenpreneurs

Regular Corporations (“C Corporations”) The principal advantage of C corporations is their proven ability to protect owners from liabilities related to the business. As discussed earlier, the liability-limiting attributes of C and S corporations are identical.

Federal Income Tax Treatment of C Corporations The key disadvantage of C corporations is that they are subject to double taxation. The double taxation issue appears in several different ways, described briefly here: • Dividend distributions. If the corporation has earnings and profits, nonliquidating distributions to shareholders are treated as dividends. These are taxed as ordinary income to the recipient shareholders, but the payments are not deductible by the corporation. In some situations, the corporation may be forced to make dividend distributions to avoid being hit with corporate-level penalty taxes on ―excessive‖ retained earnings. • Double taxation on sale of stock. When a C corporation earns taxable income, there is no upward adjustment in the tax basis of the shareholders’ stock. The retained income increases the value of the stock, which creates a bigger capital gain when shares are eventually sold. As a result, the retained income is in effect taxed again when shares are sold.

Startup Guide for Greenpreneurs

• Double taxation on liquidation. If the corporation holds appreciated property and eventually liquidates, the property to be distributed in liquidation is treated as sold by the corporation for its fair market value (FMV). The corporation must then pay the resulting taxes. When the corporate assets (net of corporate-level taxes) are distributed to shareholders in liquidation, shareholders must also recognize taxable gain to the extent the FMV of the liquidating distributions exceeds the tax basis of their shares. • Double taxation of appreciating assets. If the corporation holds appreciating assets, the resulting gains will be subject to double taxation if the corporation sells them, if the corporation is liquidated, or if the corporate stock is sold.

Most experts recommend that assets expected to appreciate significantly (such as real estate, patents, and copyrights) be owned by a pass-through entity, such as an LLC or limited partnership (which is in turn owned by the C corporations’ shareholders). The passthrough entity can then lease the assets to the C Corporation. With this arrangement, the C Corporation can reduce its taxable income by making deductible rental payments, which benefit its shareholders. Any gains upon the eventual sale of the appreciated assets owned by the pass-through entity will not be subject to
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Startup Guide for Greenpreneurs

double taxation. Other negative aspects of C corporation taxation apply in the following circumstances: • When the corporation has significant tax losses; and • When the corporation has significant long-term capital gains, capital losses, or tax-exempt income.

When Are the Corporate Tax Rules Harmless or Even Favorable? Often, corporations can solve the double taxation problem by ―zeroing out‖ corporate income with deductible payments to or for the benefit of shareholder-employees. Such payments can be for salary, fringe benefits, interest on shareholder loans, and rent for property owned by shareholders. When corporate income can be zeroed out, the issue of double taxation is not applicable. Even when zeroing out income is not possible, the

favorable graduated corporate tax rates can make C corporations attractive compared to pass-through entities. This is the case when businesses earn relatively small amounts and intend to retain all earnings indefinitely in order to internally finance their growth. A pass-through entity might have to distribute up to 38.6% of the taxable income earned by the business to enable the owners to pay their personal taxes, whereas the average tax rate on the first $75,000 of corporate income is only 18.33%. Even at taxable income levels above $75,000, the tax rates for C corporations are significantly lower than the maximum rates for individuals.
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As a result, the use of a C corporation can maximize the current cash flow of the business. It must be remembered, however, that the cost of this current benefit is the double taxation that may apply in later years.

Conclusion on C Corporations Current evidence shows that businesses that need to retain earnings to finance growth most often operate as C corporations. This allows them to maximize current cash flow by minimizing current outlays for taxes. Generally, businesses that distribute their income to owners should be operated via one of the pass-through entities to avoid double taxation.

Startup Guide for Greenpreneurs
Sample Articles of Incorporation
The form below is a standardized form designed to meet minimal statutory filing requirements pursuant to the relevant statutory provisions of most states. This form and the information provided are not substitutes for the advice and services of an attorney and tax specialist.

Article 1 – Corporate Name The name of the corporation is as set forth below:

The name must contain the word ―corporation,‖ ―company,‖ ―incorporated,‖ or an abbreviation of one of these terms. The name must not be the same as, deceptively similar to or similar to that of an existing corporate, limited liability company, or limited partnership name on file with the secretary of state. A preliminary check for ―name availability‖ is recommended. Article 2 – Registered Agent and Registered Office (Select and complete either A or B and complete C) A. The initial registered agent is a corporation (cannot be corporation named above) by the name of: O R B. The initial registered agent is an individual resident of the state whose name is set forth below: First Name M.I. Last Name Suffix

C. The business address of the registered agent and the registered office address is: Street Address City Article 3 – Directors The number of directors constituting the initial board of directors and the names and addresses of the person or persons who are to serve as directors until the first annual meeting of shareholders or until their successors are elected and qualified are set forth below: Director 1: First Name M.I. Last Name Suffix State Zip Code

Street Address

City

State

Zip Code

Director 2: First Name

M.I.

Last Name

Suffix

Street Address

City

State

Zip Code

Director 3: First Name

M.I.

Last Name

Suffix

Street Address

City

State

Zip Code

Article 4 – Authorized Shares

A. The total number of shares the corporation is authorized to issue is and the par value of each of the authorized shares is $ OR (You must select and complete either option A or option B, do not select both.)

Startup Guide for Greenpreneurs
Incorporator The name and address of the incorporator is set forth below. Name: Street Address City State Zip Code

Effective Date of Filing This document will become effective when the secretary of state files the document. OR This document will become effective at a later date, which is not more than ninety (90) days from the date of its filing by the secretary of state. The delayed effective date is B. The total number of shares the corporation is authorized to issue is and the shares shall have no par value. If the shares are to be divided into classes, you must set forth the designation of each class, the number of shares of each class, the par value (or statement of no par value), and the preferences, limitations, and relative rights of each class in the space provided for supplemental information on this form. Article 5 – Initial Capitalization The corporation will not commence business until it has received for the issuance of its shares consideration of the value of one thousand dollars $ .

Execution The undersigned incorporator signs these articles of incorporation subject to the penalties imposed by law for the submission of a false or fraudulent document.

Signature of incorporator Article 6 – Duration The period of duration is . Article 7 – Purpose The purpose for which the corporation is organized is for the transaction of any and all lawful business for which corporations may be incorporated under the Business Corporation Act. Supplemental Provisions/Information Text Area [The attached addendum are incorporated herein by reference.]

Startup Guide for Greenpreneurs


Article 1—Corporate Name: Provide a corporate name and organizational ending. If the name chosen is the same as or deceptively similar to, or similar to the name of an existing corporation, limited partnership, or limited liability company, the document cannot be filed. Most secretary of state offices in each state can provide a preliminary determination on ―name availability,‖ for you prior to filing your Articles of Incorporation. A final determination cannot be made until the document is received and processed by the secretary of state. Do not make financial expenditures or execute documents utilizing the name ―pre-cleared.‖ Also note that the pre-clearance of a name or the issuance of a certificate of incorporation under a name does not authorize the use of a name in violation of another person’s rights to the name. Article 2—Registered Agent and Registered Office: The registered agent can be either an individual resident of the state that you are filing your business (Option B) or a state corporation or foreign corporation with a certificate of authority to transact business in the state that you are filing your business (Option A). The corporation however may not be designated to serve as its own registered agent. A post office box is not sufficient as a registered office address unless the registered office is located in a town with a population of less than 5,000. Article 3—Directors: A minimum of one director is required in most states and some states require two or more. A director must be a natural person; there are no residency requirements for directors. Please note that this form should not be used if you wish to form a close corporation or to form a corporation that is managed by a shareholders’ agreement. Article 4—Authorized Shares: Shares represent ownership interest in the corporation. The total number of shares that the corporation will have authority to issue must be provided in the space provided in option A or option B of Article 4. Select and complete option A if your shares are to have a stated par value, or select and complete option B if the shares are without a stated par value. Option A—Par Value: ―Par value‖ means the stated dollar amount assigned to a share. In general terms, it represents the minimum stated amount for which each share shall be issued. For example: If the corporation has authorized a total of 1,000 shares of common stock of $1.00 par value, and if payment for the share is to be made in cash, the corporation must receive at least $1.00 for each share issued. Do not state that the shares have $0 par value when you mean to indicate that the shares are to be without a stated par value (i.e., option B). Option B—No Par Value: Shares that are designated as having no par value may be issued for an amount of consideration determined by the board of directors. Article 7—Purpose: This form creates a corporation with the general purpose of conducting any lawful business. If you wish to operate a non-profit organization, or to engage in a licensed activity when such license cannot be issued to a corporation, then you cannot utilize this form. Supplemental Provisions: Additional space has been provided for additional text to an article within this form or to provide for additional articles to contain optional provisions.
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Startup Guide for Greenpreneurs


Incorporator: Only one incorporator is required for the formation of a corporation. An incorporator may be a natural person 18 years of age or older, or any corporation, partnership, or other entity; there are no residency requirements for an incorporator.


Effective Date: Articles of incorporation become effective as of the date of filing by the secretary of state. Please note that upon the filing of a document with a delayed effective date, the computer records of the secretary of state will be changed to show the filing of the document, the date of the filing, and the future date on which the document will be effective. In addition, at the time of such filing, the status of the entity will be shown as active on the records of the secretary of state.

Execution: The incorporator must sign the articles of incorporation. Prior to signing, please read the statements on this form carefully. A person commits an offense under most state laws if the person signs a document the person knows is false in any material respect with the intent that the document be delivered to the secretary of state for filing.

Startup Guide for Greenpreneurs Side-by-Side Summary of Legal Structure Options for Greenpreneurs
Issues

General Partnership
None.

Limited Partnership
File Certificate of L.P. with Sec. of State. General partners are jointly and severally liable. Limited partners liable only to extent of contributions.

C Corporation
File Articles of Incorporation with Sec. of State. Shareholders liable only to extent of contributions.

S Corporation
File Articles of Incorporation with Sec. of State. Shareholders liable only to extent of contributions.

Multi-Member LLC
File Articles of Organization with Sec. of State. Members liable only to extent of contributions.

LLP
File application with Sec. of State.

Legal Formalities of Formation Liability of Owners

All partners are jointly and severally liable.

Not liable for professional errors and omissions of other partners or employees unless under direct supervision of partner in question. Same as general partnership for other liabilities in some states. In most states, generally no exposure to other liabilities. At least two, but no maximum.

Number of Owners

At least two, but no maximum.

At least one general partner and one limited partner, but no maximum.

No limits.

No more than 75.

At least two, but no maximum (almost all states permit single-member LLCs which are generally treated as sole proprietorships for federal tax purposes). No limits.

Types of Owners

No limits.

Only individuals, estates, certain trusts, and certain tax-exempt entities may be shareholders. Generally none if control test satisfied. Carryover basis from property contributed. Basis from loans to corporation. No basis from other debt of entity. Taxed directly to shareholders. Some entity taxes on passive income or gains under certain circumstances.

No limits.

Tax on Contributions

Generally none.

Generally none if control test satisfied. Carryover basis from property contributed. No basis from debt of entity.

Generally none.

Basis

Carryover basis from property contributed plus basis from share of liabilities.

Tax on Income

Taxed directly to partners.

Entity level tax. No tax to owners unless cash or property is distributed.

Taxed directly to members.

Taxed directly to partners.

Startup Guide for Greenpreneurs
Tax on Distributions None to extent of basis. None to extent of basis. Distributions taxable to shareholders. No deduction to corporation. Appreciation on any in-kind distributions taxable to corporation. Shareholders elect board of directors. Board of directors elects officers. Officers hold authority to act on behalf of corporation. Formalities on taking corporate action. Transferee takes all rights of transferor, including rights to participate in management. Perpetual existence permitted. Generally can make distributions to extent of shareholder’s basis without tax. Appreciation on any in-kind distributions is taxable at the corporate level. Shareholders elect board of directors. Board of directors elects officers. Officers hold authority to act on behalf of corporation. Formalities on taking corporate action. Transferee takes all rights or transferor, including rights to participate in management. Perpetual existence permitted. None to extent of basis. None to extent of basis.

Management

Each partner has general agency authority.

Each general partner has general agency authority. Limited partners have limited rights to participate in management.

If membermanaged, each member has general agency authority. If manager-managed, only managers have general agency authority.

Depending on state law, each partner may or may not have general agency authority.

Ability to Transfer All Ownership Rights

Transferee cannot become partner without approval of other partners. Legal dissolution on death, disability, etc., of general partner. Substantial flexibility in permitted allocations.

Transferee cannot become member without approval of other members.

Transferee cannot become partner without approval of other partners.

Continuity of Life

Legal dissolution on death, disability, etc., of a member.

Legal dissolution on death, disability, etc., of partner.

Flexibility in Tax Allocations

Some flexibility through use of multiple classes of stock, but not as flexible as a partnership. Wider range of fringe benefits available to shareholderemployees.

Only permitted to have single class of stock. Severely restricts flexibility in allocations.

Substantial flexibility in permitted allocations.

Tax-Advantaged Fringe Benefits for Owners

Generally not available to partners.

Generally not available to shareholderemployees.

Generally not available to members.

Generally not available to partners.

*Including QSBC.

Startup Guide for Greenpreneurs

Conclusion on Legal Structures Establishing your legal structure is one of the most important aspects of starting you your green business. Additional steps you will need to take to keep your business affairs in order include the following:

Doing Business As (DBA) / Assumed Name Certificate In the county that you are operating, you are required to file your business with your local county court building. Available for around $10$25, this Doing Business As (DBA) certificate will allow you to operate under your business’ assumed name. For example, if you will operate your business as Green Winner, you will need to file this name with your local county court building. This prevents others from using your business name in the area that you operate. When you go to your local courthouse, you will be able to do a name search to insure that your chosen business name is not taken. You should file a DBA in every county that you decide to conduct business in. This does not apply to you if you are using your own name, corporations doing business under their corporate name or to those practicing any profession under a partnership name.

Startup Guide for Greenpreneurs

Tax ID Number/Employer Identification Number Available from the IRS by using IRS Form SS-4, this number will be needed before you hire employees, open a business bank account, to file your taxes, on contracts, when setting up supplier accounts, and more. Most important of all, you will need this number to establish the legality of your business venture. An SS-4 form has been included on the

following pages. For a faster alternative, you can obtain an EIN # in realtime online at the IRS website – www.irs.gov.

Business Checking Account Once you have registered your business with the state and county AND obtained a tax ID number, you should visit your local bank to open a Commercial Checking Account. You will need to supply the bank with your DBA certificate, Tax ID number, legal structuring documents filed with your state such as Articles of Incorporation and corporate by-laws. Additionally, each party that will be a signer on the account (allowed to sign checks) will be required to sign a signature card and supply necessary identification to the bank. When you register your legal

structure with your state, you will receive an official certificate showing that your business has been registered. The bank will require this as well. Take your time when selecting a bank. You should visit more than one to determine the best one for your small business. Most banks cater to small business owners and offer a myriad of financial and business services –
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Startup Guide for Greenpreneurs

often at no cost – to entrepreneurs. You should introduce yourself to the bank loan officer and start developing a relationship with your small business representative at the bank. You will need to decide if you want to work with a locally owned bank or one of the many national banks. Each has advantages and disadvantages that you should weigh when deciding on a bank for your business. Talk to your accountant, attorney, and other entrepreneurs in your area as well for recommendations.

Startup Guide for Greenpreneurs

Working from Home One of the greatest advantages of being a greenpreneur today is that you can easily operate your business out of a home office. You have the freedom to choose your work schedule, can often work in your pajamas, and don’t have someone else looking over your shoulder and deciding how much money you should be earning. That’s the beauty of being an entrepreneur in the 21st century.

While working from home is the dream of millions of people everywhere, there are several traps that many home-based entrepreneurs fall into that are easily avoidable with proper planning and knowing which pitfalls to avoid. Because you work for yourself, there are always opportunities to procrastinate and put things off. Abraham Lincoln once said, “You can escape the responsibility of tomorrow by avoiding it today.” It is very easy to spend more time justifying why you can afford to avoid doing something than it would be to just suck it up and do the task at hand. It’s also imperative that you have a designated work area to work in. It’s not an absolute requirement that you have a separate room solely used for an office but you should have at a minimum a desk or table to work at that is located away from everyone else in your household. Having a place to work that is separate from the rest of the home is necessary from both a physical as well as a psychological perspective. Everyone else living in
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the home should be made aware that your work area is strictly off-limits and that when you are in your work area, you are there to work and should be left alone. This leads to a pitfall to avoid while working from home – loved ones. While it’s true that you work at home so that you have more time to spend with your loved ones, it is also true that you are out to make money. It’s impossible to be successful if constantly disrupted during your work time by other members of your household. It is not

uncommon to speak with home-based greenpreneurs on the phone that have children crying in the background or are constantly being interrupted during the call. This is a nuisance for everyone and very unprofessional. You should make it clear to everyone living with you that you are running a business. If background noise is unavoidable, you might be better off finding a traditional office space to rent or share with another professional.

You should always project an image of professionalism - even more so if you are working out of your home. This is especially true when dealing with prospective partners or clients who may be nervous about dealing with a home-based entrepreneur. Having professional looking marketing materials like business cards and a website will go a long way towards putting them at ease about dealing with you. You should have a separate
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Startup Guide for Greenpreneurs

business phone line installed in your home with professional voicemail as well. When you present yourself as a professional, you start to develop the trust that is critical to every successful deal. Finally, it is a good idea for you to develop a support network of other home-based professionals. Because stay at home entrepreneurs are isolated from a traditional peer oriented environment or workplace, it is often difficult for them to remain positive and motivated. You must be internally motivated however it is often very helpful to have a few others to interact with on a regular basis. Greenergy2030.com is an excellent support and networking tool available to you. Becoming actively involved in several industry associations and having a couple of local entrepreneur buddies that you can call on if needed is a tremendous help. You will find that meeting with likeminded professionals will help to keep you motivated, upbeat, and also allow you the opportunity to develop some good friendships as well. As a home-based entrepreneur, you are living the life millions of others can only dream about. Working from home is not always perfect but you can certainly make it more enjoyable by avoiding the pitfalls discussed in this section. You certainly know working from home beats the alternative: working for others while making them richer. So make the best choices when setting up your home office and do it in a professional manner. You will realize more success as a result of your efforts.

Startup Guide for Greenpreneurs

A Note about Office Space The premature office space lease is the single worst expenditure you can make as a beginning greenpreneur. Many new business owners mistakenly believe that if they have a place to work from, everyone will be more productive and they’ll look more like a real business. Office space is never cheap, and the overall benefit rarely outweighs the associated cost. The lease alone is rarely the largest cost, since once you move in you will need extra phone lines, office furniture and services just to maintain the space. More startup greenpreneurs create cash liabilities from office space leases than productivity bonuses that generate real revenue.

Instead of rushing out to get an office, find a free place to gather your team (your living room or a local Starbucks) and hold your meetings there. If you need to meet with a client then consider a neutral meeting location. Your tiny office space is only going to make you look tiny, not professional. And the money you save on not signing a lease can go toward expenses that generate more sales, not additional costs.

Startup Guide for Greenpreneurs

Using Technology for Business Success Technology, when used properly, can assist you in becoming a very productive and successful greenpreneur. You know you need technology to be successful so the next logical step is to decide how much technology you need. This section will cover the most important tools available to you.

Local Technology Consultant One of the most important investments you can make is to ensure you have one or two local technology consultants/resellers who you trust, who know about your business, and who can guide you in your technology growth. You have an accountant (for obvious reasons) and a lawyer (for even more obvious reasons)--having a local technology consultant or solution provider is no different. Get references, see what past work they've done and, like an employee, give the relationship time to mature to be sure they're working in your best interest.

High-Speed Internet Access Every greenpreneur, no matter how big or small, needs high-speed access to the Internet. Having traditional dial-up access is simply too slow and too limiting for a business. High-speed Internet will enable you to take advantage of online backup, VoIP and other technologies you wouldn't be able to do at all or as efficiently with a dial-up connection. You must
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ensure that the vendor providing the service offers very reliable service and support.

Computer Equipment Your computer will be the basis of your entire technology setup. Your choices boil down to two main options: desktop or laptop. Or if your budget and needs allow, you might consider investing in both. Let's start with the desktop. You'll be digging through a mire of megabytes, harddrive sizes, processor speeds and extras, but it's worth the effort-and you won't have to spend a fortune.

You'll also need some basic software. Windows Vista or the newer Windows 7 edition is preferable to the Home edition if you plan to network computers. The Microsoft Office suite will cover the bases for word processing, spreadsheets, e-mail and scheduling. Security software is an absolute must, including anti-virus, anti-spyware and a firewall. McAfee, Norton and ZoneAlarm are some well-known providers.

A printer is another cornerstone of your home office. Once you have a computer to create documents and other business output, you need a way to make hard copies. Lower prices, improved speeds and higher quality are factors in your favor. You're no longer stuck with just an inkjet printer or multifunction. All-in-ones that include a copier, printer, fax, and
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Startup Guide for Greenpreneurs

scanner are still popular choices for home offices that want to save space and maximize the functionality bang for the buck. While a solid inkjet printer/copier/scanner/fax can come in at about a few hundred bucks, it may be worth checking into a laser solution for the lower long-term operating costs. A color laser printer can be picked up for as little as $500 if you plan to print your own color brochures, flyers, etc.

Data Security It's absolutely imperative that your businesses data is secure and backed up. Your local network and each of your computers should have a firewall (a hardware firewall for your network and at least a softwarebased firewall for each computer) and anti-virus software (many come bundled with features to detect phishing and other online threats as well). In addition, ensure your computers and network are configured by a local security consultant (your general knowledge solution provider might not have sufficient expertise to properly harden your computers and network from online attackers). If you have a wireless network make sure it's secured as well. The second phase of your security plan is to ensure all of your data is backed up and that you have a recovery plan in place. If you came to work and found nothing but a hole in the ground, what would you do? What plan would you have in place to recover your data onto other computer systems? That's how you have to think. Since you will be retaining the personal information of your customers, especially financial
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Startup Guide for Greenpreneurs

information, social security information, etc, it's even more important that a professional security consultant work with you to ensure your information is secure. Just as your network must be secure, your online applications must be as well. Hackers can go to your website and use "back door" holes in the online software to access your database if the online application or database isn't properly configured.
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Startup Guide for Greenpreneurs

Website How to Set Up an Online Business on a Budget You have now decided to set up an online business, but your budget is very small, so how can you get going? You could start off by looking for free domain names. Because there are so many companies around who are now selling domain names, the market has become quite competitive. But there are a few sites around that will register a domain for you at no charge. However, there is a catch with some of them in that they will set themselves up as the administrator for your domain and then only transfer ownership to you after a set period of time for free or will charge you a small fee.

If you are going to be setting up and launching a website, but do not want to pay the $20-$40 a month that you can typically charged for hosting, then don’t. There are plenty of places on the web today that will host your site for free. But before you get too excited about this prospect, it is important to remember that there is a drawback to be had from using such places. Most of these free host sites will place a banner at the top of your pages for allowing you to do this. However, there are some web hosts around who do not charge you a fee or force you to have a banner on your site either. While there are others who will remove the banners completely for a small fee each year, which is nothing compared to what you would pay to get someone to host your site for you each month.
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E-Mail One of the worst things a greenpreneur can do is use an AOL, Yahoo! or Hotmail e-mail address. It's unprofessional, and since it's very easy to have an e-mail address with one's business name, there's no excuse. Your web host can set up e-mail accounts for you as part of your web-hosting service. Or, as always, you can work with your local technology consultant. Greenergy2030.com offers a free email service as well for greenpreneurs.

Merchant Account There are many online payment services today which provide you with an alternative way to traditional payment methods. So unlike banks and credit card companies, services such as PayPal and CheckFree no longer require a business to have a merchant account. In fact, using services like this not only provides a quicker way for money to be paid online, but it is more secure than having someone sending you a check or cash. This is because the funds are electronically transferred to your account with them in order to settle any transaction made.

Startup Guide for Greenpreneurs

Such services have become especially popular among those who use online auction sites (such as Ebay), but also many other online businesses are now beginning to see the advantages of these services as well. However, what is important to know is how they work, and how to avoid any potential problems that may arise.

Such services use a relatively simple process in order to transfer money from one person to another. What you need to do is set up an account providing enough information which should include your real name, email address and credit card or bank account details (which are used to verify your identity). Then, in order for someone to pay you, they enter your email address and the amount of the transaction in question. This is then paid into your account, and can either then be transferred to your bank account, or a check can be sent to you.

However, many of the payment services will charge a small fee in order to transfer funds. For example, PayPal charges you up to 2.5% for each transfer that they make (but this all depends on the amount). But what should be remembered is that these fees are probably less than what you would normally pay for a credit card merchant account. Also, such services can be especially helpful when you need to arrange for small repetitive payments to be made to your account, such as affiliate rewards and commissions.
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There are some drawbacks to be had from using a payment service, and these are as follows:1. Many of them impose a daily or weekly limit on the amount of money that you send or receive. So if you want to exceed these limits you may find yourself incurring an additional fee for a ―business account‖ or ―premier account‖. These services are not banks, and therefore are not subject to strict banking regulations or protected by Federal Deposit Insurance. Often these services provide their customers with less protection against fraud and abuse than many credit card companies offer. Also, they are sometimes quick to freeze a customer’s account if they suspect fraudulent or other criminal activities are taking place. They can be so quick sometimes that some customers have found that their account has been frozen for no apparent reason whatsoever.

It is important that before you sign up to any payment service, you read through their terms and conditions thoroughly. Plus, also read through their terms of service agreement carefully. It is important that you fully understand and accept the service’s dispute policy, limits on liability, their fee structure and any other rules or regulations that they may have. It is also important that you do not keep too much money in your account, rather hold in it enough to conduct a few days of business and any unused funds should be transferred over to your regular bank account.

Startup Guide for Greenpreneurs

Below are just a few more payment services that you may want to look at further when setting up an online business account. 1. Authorize.net. This service processes credit card and checking account transactions. BidPay. This allows person to person payments, in which they accept a credit card payment from the payer and then send a money order through to the payee. E-Gold. This allows the payment in gold (silver, platinum or palladium) to be made from one customer to another using an account based system. PayPal. This is probably the most well known of payment services, and it allows user to user payments. This is where a payer uses a credit card to pay money into another user’s account. Or, in fact, they can use money they already have in that account in order to pay for the goods they have purchased. World Pay. This service provides both an internet merchant account, and payment processing service in one package.

Startup Guide for Greenpreneurs

Contact Management Software Contact management software can keep important sales and marketing activities from falling through the cracks. This is very important for greenpreneurs because you deal with so many individuals as your business grows. You can schedule your marketing tactics, record

prospect information, maintain customer files and evaluate your marketing results by setting up databases of customers for your company. Each morning, you can print out your list of contacts for the day, including a complete file and history record on each, so you won't overlook vital follow-up calls. It keeps you organized and lets you view your calendar by day, week or month, and lets you log in calls, meetings, to-do lists, prospect lists, marketing responses, letters, faxes and e-mails. Here are three questions to consider when evaluating contact management software. 1. Is it easy to use? You should be able to start using the basic functions of the program right out of the box. 2. Will it integrate with other applications I use? You need access to your own word processing applications from inside the programs so you don't have to launch them separately. 3. Can the software grow with your company? It should be expandable as you add staff.

Startup Guide for Greenpreneurs

Accounting Software Continual changes in the tax code mean that more and more greenpreneurs will switch to a computerized accounting system in months to come. Additionally, as you raise money from outside funding sources, your accounting records must be flawless. There are well over 100 different accounting and management software packages available in the U.S. for use by investors, and choosing the right one for your business can be difficult. Outlined below are some of the key points you should keep in mind when choosing an accounting software package.

Is the software produced by a reputable company? There's no point in investing money in a product if the company that makes it isn't going to be around in a year. Make sure you investigate the company you are buying from, and find out what services they provide. You need to be sure that they offer good support and training facilities. Find out whether they offer support outside office hours, and what the cost of support will be. Make sure they have people available in your area for training and assistance with setting up, if necessary. Check that they offer regular upgrades to their products - tax requirements can change, and you need to make sure that your software can adapt to these changes.

Startup Guide for Greenpreneurs

Speak to other users of the products and find out their experiences in dealing with the company.

Is the software appropriate to your needs? With so many products available, you can usually find one that meets your specific needs. Before you begin looking at different software packages, decide exactly what you want the product to do for you, and don't forget to plan for the future. Many packages offer extra modules that you can add on as your business grows, for example a payroll system for when you start hiring extra employees.

Is the software tax compliant? The very nature of business ownership requires keeping track of expenses and tracking all of your profits/purchases. Your accounting software should have reporting facilities that will easily provide you with all the information you need to prepare your monthly, quarterly, and annual financial statements. Check with your accountant to make sure you cover all the necessary tax codes. The IRS also has many resources to assist you. Contact them online at www.irs.gov.

Startup Guide for Greenpreneurs Controlling Your Expenses – Only Spend On Things That Make You $

If you want a simple way to determine what to spend money on, ensure every expense directly relates to income - for example, marketing and sales. If you can complete your deals without an expense, then it’s not essential. Then, when the cash starts tumbling in on the profit side of the equation, you can put a little in your pocket. Every dollar of income goes straight to the bottom line when you've learned how to cut out all of the expenses. For this reason, it's best to think of expenses as the last luxury that your new business can afford. The only line item that matters right now is income, and hopefully profit. Everything else doesn't fit in the equation.
Notes: _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________

Startup Guide for Greenpreneurs

Office Supplies On your quest to create a real business, you've probably also thought about buying all of the usual staples that you generally see in offices such as computers, post-it notes, furniture and the like. Together, they make for the kind of office you worked in at the big company that paid you a salary before you started this venture. But startup greenpreneurs don't need office supplies. You need a barebones computer (eBay for $100), a cell phone (your company's new main number), and a $1.00 notepad from your local dollar store. Anything else is a frivolous expense. While your trip to the local office supply store may remind you of the fun you had when back-to-school shopping, there's no room for that little adventure on the trip you're taking. You may be learning to live like a college student again, but you have to do it without the spending spree that Mom took you on.

Employees Another mistake beginning greenpreneurs often make is hiring employees. Greenpreneurs tend to think that businesses are only real if they employ other people to help spread the workload. Another myth. Hiring staff in startup mode is generally a horrible idea. First, you have no income. That means what little money you do generate is going to go to everyone but you. To some degree that is to be expected as every business starts paying more people than the founder when it launches.
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But it's also an enormous liability. Instead of taking on staff, consider nothing but paid project assignments with contractors and work-forequity or stock options arrangements. The only asset you don’t have right now is cash, and that's the one asset staff is going to eat up quickly. Look at outsourcing your phone answering if needed or utilize an affordable telecommunications system that you learned about earlier. In order to keep the income flowing to the right places (like your pocket) you will need to hold off on hiring as long as possible. This may mean more nights and weekends at your personal expense but that’s the price all new greenpreneurs pay. It's the one expense you can afford to pay.
Notes: _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________

Startup Guide for Greenpreneurs

Creating Your Company’s Green Identity Once you’ve figured out your green marketing approach, you need to design the basic identity elements that will be the initial foundation for the company’s brand. Here is a short checklist of things to create:

Must-haves
      Logo Positioning statement Web site Business cards Digital letterhead/document templates PowerPoint/Keynote templates and sales presentation

Nice-to-haves  Printed letterhead  Return address stickers  Sales/product sheets Only for the well-heeled  Printed brochure  Printed envelopes  Logo folders

People will make judgments on the perceived quality of your company, products and services based on the quality of your identity and collateral materials. Take these seriously. Get them right.

Startup Guide for Greenpreneurs

Choosing Your Insurance Agent & Policies Many beginning greenpreneurs fail to realize how important it is to buy adequate insurance coverage for their businesses. Insurance is a necessary evil – you have to have it but hope you never have to use it. The main reason most beginning business owners fail to buy adequate insurance is because money is so tight. You may think that you can do without it but then when disaster strikes, you can lose everything in a blink of an eye. Someone could slip and fall on your own doorstep, sue you, and wipe out everything you have worked so hard to achieve. Like selecting an attorney or accountant, you should conduct due diligence when selecting an insurance agent. Your best bet is to choose an agent that can handle all of your policy needs. One payment each month to one agent saves you time and headaches. You can use the Insurance Agent Checklist provided but first you should understand some of the most common insurance policies you should obtain.

Startup Guide for Greenpreneurs

Property/Casualty Insurance You should buy a policy that has replacement cost included. If you don’t, you may not be able to recover all of your losses if your place of business burns down. Check all of your policies carefully. For example, if you don’t have a replacement cost policy, your policy may only cover a portion of the actual value of your properties. Additionally, when your business is damaged by natural disasters like hurricanes, earthquakes, tornados, etc., your property/casualty insurance policy will cover your costs to rebuild. There are separate policies that should be obtained for hazards such as fire and floods. Make sure that you have the necessary coverage to protect yourself from each. And don’t assume that your homeowners insurance will cover your business if you work from home…make sure!

Business Interruption Coverage An add-on to your property/casualty policy, this policy can cover your lost income and business expenses while your property or business is being rebuilt or repaired. Premiums for these policies are typically based on your business income.

Startup Guide for Greenpreneurs

General Liability Insurance If someone sues you, the general liability policy will protect you if they file a claim against you. You should ensure that you

understand your policy thoroughly and select adequate coverage in the $2-3 million range depending on the value of your business holdings. You may need directors’ and officers’ (D&O) insurance as well. This protects your top executives (including yourself) against personal financial responsibility for actions taken by your company serving as an added layer of protection (outside your legal structure selected before) for you and your personal assets. D&O may be required by money sources that invest in your company as equity investors.

Life Insurance Many of your money sources may require you to obtain a life insurance policy before they lend you money. This policy is

typically very affordable and covers the cost of any money lent in the event of your death. You should consider buying a policy for yourself as well that ensures your loved ones are taken care of financially after you are gone.

Startup Guide for Greenpreneurs

Umbrella Coverage This type of policy is another layer of protection for your business. This policy will cover any additional expenses that you may be liable for that are not covered by your other existing policies.

Disability Insurance This policy will replace up to 60% of your average earned income that you might lose should you experience a serious accident or long-term illness.

Workers’ Compensation Insurance Workers’ compensation insurance will cover the medical, rehabilitation, and lost wage costs if one of your employees is injured on the job. Typically, workers’ compensation rates and minimum coverage requirements are determined by each state and you contract with a private insurer. Your rate will be determined by your payroll and average cost of insurance in your particular industry segment. Your rate will be adjusted after a few years. While you don’t have to cover yourself (if you don’t have any employees), it may be unwise to not do so because your health insurance provider will not cover your medical expenses if you are injured on the job. Don’t take chances with your business or future.
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Health Insurance Health insurance is getting to be more and more expensive for small business owners. It is often hard to obtain reasonable rates so your best bet is to check with any trade associations that might offer discounted health insurance to their members. The larger associations have negotiated favorable rates for their members by pooling together each individual small business into a large buying co-op. This is likely your best bet however your insurance agent may be able to offer you a sound policy with reasonable rates in select cases.

Selecting an Insurance Agent As mentioned previously, the selection of your insurance agent is very important. You will need to decide if you will hire a direct writer (someone who represents a single company), or a broker (someone who represents several companies). Most greenpreneurs work with a broker because the broker is able to obtain the most affordable policies from the necessary companies for you. An insurance broker will be around even if an insurance company drops your coverage. If you have a direct writer and this happens, you lose the policies and the agent. This results in wasted time developing a relationship with the direct writer and educating him

Startup Guide for Greenpreneurs

or her on your business. You don’t have this concern with a broker.

Regardless if you choose a direct writer or a broker, do your research. Find out how claims are handled in the event something goes wrong. Make sure you feel comfortable with the agent and that he/she has a good understanding of your business. Your agent must know your business to assist you in selecting the best policies for your needs and to ensure you are adequately covered. You should also ensure that the insurance company you choose to work with is highly rated. Insurance companies are graded on their financial stability and ability to pay claims by the industry ratings agency A.M. Best. You want to ensure that your insurance company is rated B+ or higher. Insurance agents, like real estate brokers, are required to be licensed. To ensure that yours is, you can call the National Insurance Consumer Helpline at (800) 9424242. Use the form on the following page to select the best agent(s) and policies for your business.

Startup Guide for Greenpreneurs

Insurance Agent Checklist
AGENCY NAME ___________________________________ CONTACT ___________________________________ ADDRESS ___________________________________ _____________________________________________________ TEL. NO. ( ) ______________________________ SPECIALTY/EXPERIENCE: CURRENTLY WORKING WITH ENTREPRENEURS? YES / NO COMMENTS:________________________________ _____________________________________________ _____________________________________________ _____________________________________________ _____________________________________________ TYPE PROPERTY RENT LOSS FLOOD LIFE HEALTH AUTO BUSINESS INT. DISABILITY GEN. LIABILITY UMBRELLA WORKERS’ COMP. OTHER: ______________ ______________ ______________ ______________ ______________ REFERENCES:
BUSINESS: BUSINESS: BUSINESS: DATE ___________ DATE ___________ DATE ___________ BUSINESS NAME ___________________ BUSINESS NAME ___________________ BUSINESS NAME ___________________ CONTACT __________________________ CONTACT __________________________ CONTACT __________________________ ADDRESS __________________________ ADDRESS __________________________ ADDRESS __________________________ ____________________________________ ____________________________________ ____________________________________ TEL. NO ( ) _______________________ TEL. NO ( ) _______________________ TEL. NO ( ) _______________________ COMMENTS ________________________ COMMENTS ________________________ COMMENTS ________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________ ____________________________________

PREPARED BY _________________________ YEARS IN BUSINESS __________

TERM _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____ _____

COVERAGE $__________ $__________ $__________ $__________ $__________ $__________ $__________ $__________ $__________ $__________ $__________ $__________ $__________ $__________ $__________ $__________

DEDUCTIBLE $____________ $____________ $____________ $____________ $____________ $____________ $____________ $____________ $____________ $____________ $____________ $____________ $____________ $____________ $____________ $____________

PREMIUM $________ $________ $________ $________ $________ $________ $________ $________ $________ $________ $________ $________ $________ $________ $________ $________

MONTHLY $_________ $_________ $_________ $_________ $_________ $_________ $_________ $_________ $_________ $_________ $_________ $_________ $_________ $_________ $_________ $_________

NOTES __________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ FINAL DECISION: _____________________________ DATE: ______________

Startup Guide for Greenpreneurs

If You Need Money, This is How to Get It
It takes little money to start a business today. You can start your green business from home without the expense of office space or a store-front. And since there is no need to hire employees, your overhead is significantly reduced.

Considering that you can spend less than a hundred dollars to get a domain name, web hosting and other tools necessary and pay less than a dinner for two a month in maintenance, the online business model is attractive. Alternatively, you can spend tens, maybe hundreds of thousands of dollars in setting up a conventional business and pay 4 to 5 figures in monthly expenses, renting office space, hiring staff and funding your business ventures.

Another point is that you can learn to run and operate an online business for a few hundred bucks vs. spending $20,000+ for a college education that takes 4 years to complete so that you can graduate and apply for a job that pays $50,000 a year. Don’t get me wrong. I completely believe in a college education however I also believe that putting off starting a business until one finishes school is not always the best option. Many of the richest people in the world didn’t finish college before starting their businesses. If you have a winning green business idea, start now rather than later!
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You Can Still Succeed Even If You Don’t Have Much Money Money is available to you for your green business. You just need to know how to position your company so that it is attractive to money sources and you need to know where to look. This is the topic of the next section of this book. First Things to Know… The Competition for Capital is Tremendous New businesses are springing up every day all across the country. The startup market is competitive. Whether these new ventures are inspired by women re-entering the job market, young people starting their careers with a home-based business, previously employed middle managers, or just regular people who want to earn some extra cash on the side, everyone is finding themselves caught up in the entrepreneurial spirit. And many of these individuals have discovered that green business is the way to go.

A Side Note about Grants While there is money available to some green companies via government grants, I am intentionally going to forego discussing them in this guide. While I believe they have their place, the reality is that most of you won’t qualify for them. Therefore I’ll save that discussion for another book.
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Several factors have caused this entrepreneurial explosion:



A sharp increase in downsizing at both large corporations and medium-sized businesses.



Changes in government financing programs and tax benefits for minority-owned businesses.



Emerging

technological

advances

have

opened

new

opportunities for the physically challenged.
 

The concept of the home office continues to rise in popularity. Many entrepreneurs have even been able to start new ventures while still employed at another firm, thus increasing their capital and minimizing their day-to-day financial risk.



Baby boomers are retiring with capital and the desire to be their own boss.

All of these cultural and demographic changes working together have created an atmosphere of opportunity in the entrepreneurial environment.

Startup Guide for Greenpreneurs

Greenpreneurs and Small Business The entrepreneurs behind new small businesses have a tremendous impact on the American economy. According to a recent study by Dun & Bradstreet, more than 90% of American businesses employ 50 or fewer employees. In fact, over half of those businesses employ from one to four employees. Small companies are one of the U.S.

economy's most powerful producing forces. After growing steadily since the 1950’s, the nation's 500 biggest manufacturers began cutting their payrolls. From 16.2 million workers in 1979 they shrank to 11.5 million in 1993. The 500 biggest service companies increased their employment, but only marginally. Most of the 20 million new jobs created during the past 15 years have not come from the companies that had led America's growth up until then; they came from companies that were smaller, newer-or both. They came from that "independent entrepreneurial sector" that many thought would disappear.

Why did the long-term drift toward ever-larger companies suddenly reverse itself? Economists often point to three key factors, none of which seems likely to disappear. First is stiffer competition. In an ever-changing global marketplace, even the largest companies can no longer dominate their industries. They must cut costs (often by outsourcing) and focus their
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resources (often by selling off extraneous operations). That's why their payrolls have been shrinking. A second factor is technology. The rapidly dropping price of computing power and the Internet provides not only new industrial opportunities, but also new methods of producing and delivering products and services. Unlike technological revolutions of the past, this one is accessible to companies of all sizes. The third factor is the production of a kind of entrepreneurial snowball effect at work. Let’s say a few enterprising individuals take advantage of new technology or new market niches and start up new companies. Some are wildly successful. As a result, larger established companies find themselves faced with even more competition. The giants have to cut costs, so they slash their payrolls, throwing seasoned, savvy businesspeople out of work. A few of the newly unemployed individuals start companies on their own. Every new company needs office supplies and furniture, computers and programming services, advertising and marketing, accounting and payroll, janitorial and temporary help, and so on and desires to get these services from independent suppliers. A 1,000-employee

corporation has an internal cafeteria and legal department. Ten 100employee companies support a lot of lunchrooms and law offices. Result? An entrepreneurial explosion!

Startup Guide for Greenpreneurs

Now consider these facts: In 1992, the United States had 5.7 million companies, up from 4.7 million a decade earlier. Of the 5.7 million, more than 50% employed fewer than five people. Ninety percent have fewer than 20 employees. Only 70,000 companies have more than 100 people on the payroll, and only 14,000 have more than 500. Researchers often try to distinguish between "real"

businesses, the ones with employees, and "casual" businesses, meaning all those Schedule C filers who run some kind of moneymaking operation on the side. That's a valid distinction in principle, but in this electronically networked age, it's hard to separate the two categories. The reason: people who seem to be sole proprietors may in fact be at the heart of a virtual company, and may be responsible for as much wealth creation (and as many tax dollars) as any old-style, small business.

Franchising is also growing, both in numbers of franchises and in complexity. Franchised units now account for almost 40% of retail trade, up from 26% in 1975. "Conversion" franchises, acquisition or affiliation of existing businesses by a national chain, turned the conventional franchise relationship on its ear. Nor is "franchisee" synonymous with "small business." The SBA reports that about 40% of franchise owners own more than one unit. This includes corporations like Marriott, which owns 78 franchises.

Startup Guide for Greenpreneurs

The change in the companies-to-people ratio, another measure of the explosion in entrepreneurship, has at least three sources:

Economic and technological factors. The long-term shift from a manufacturing to a service based economy is significant.

Additionally, the aging of the baby boomers is a large factor: when you have more people in prime company-starting age, you have more companies. Every year more than 750,000 new companies begin paying payroll taxes to their state governments and therefore show up as new businesses in Labor Department statistics. Another 150,000 or so ―successor‖ companies, meaning new firms that take over existing businesses, supplement their ranks. The bottom line: between 800,000 and 900,000 new companies with employees come into being every year. On average, there is a net gain of about 75,000 more companies created in a year than terminating business in the same year.

But what about people who are in the early stages of company creation? People who aren't close to incorporating or hiring an employee and indeed may never do so? Thanks to D r . Paul Reynolds and other researchers, we know a little about these fledgling entrepreneurs.

Startup Guide for Greenpreneurs

Dr. Reynolds, coordinator of the Entrepreneurial Research Consortium (ERC), an international collaboration of 31 university units, government agencies and foundations implementing national longitudinal studies of business start-ups in the U.S. and eight other countries has been studying entrepreneurs for decades. In one of Dr. Reynolds’ former studies, he found astonishing facts: 4% of the population, one in every 25 adult Americans, says that they are in the process of starting a company. Moreover, nearly one third are contemplating the start of a new business. If the findings hold true throughout the country, they put the number of incipient entrepreneurs at more than seven million. Since many are working together, the number of new companies in formation may be well over three million.

One-third

those

would-be

business

creators, says D r . Reynolds, are women. The number of female entrepreneurs is considerably higher today than it was in the past. Between 1979 and 1990, the number of proprietorships owned by women rose twice as fast as the number owned by men; in 1990, women owned 32.2% of all proprietorships. According to estimates compiled by the National Women's Business Council, women start-ups are now about 50%.

Startup Guide for Greenpreneurs

Dispelling the Failure Rate Myth The myth persists. The "fact" that "four out-of-five start-ups fail" continues to turn up in any number of pronouncements about the precarious state of small businesses. Advocates say it shows that small businesses need governmental assistance. Critics retort it shows that small businesses can't be depended on for stable economic growth. Researchers have discovered in the past few years that this ―fact‖ is wrong. In 1989 Bruce Phillips of the Small Business Administration and Bruce Kirchhoff of the New Jersey Institute of Technology analyzed business records from the government's Small Business Data Base (SBDB). Their first finding: nearly 40% of new companies in the file survived six years. It was already twice as many survivors as the myth predicted. Even after eight years, the survival rate was close to 30%. Rates varied by industry; manufacturing companies, for example, typically had a higher survival rate than retailers. Size has also had an effect on survival. The smaller companies, and those that never added even one employee, were more likely to fail than others.

Kirchhoff scrutinized the data still further. Companies are terminated for all kinds of reasons. The owner sells out or decides to get a regular job. He or she closes one company to start another, maybe in a different industry or location. Those discontinuances are different from what we
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usually think of as business failures, meaning a closing in which creditors lose their money. Kirchhoff found that discontinuances where creditors don't lose money account for the vast majority of all terminations. Only about 18% of all new businesses, he discovered, end in real failure. The rest survive or are closed voluntarily.

So is that the whole story? Not quite; but most investigations bear out Kirchhoff's conclusions. Small businesses in the United States, more than 20 million strong, create two out of every three new jobs and are twice as innovative as large companies. Small businesses also account for more than half of the sales of all goods and services.

Startup Guide for Greenpreneurs

The Impact of the Internet The impact of the Internet on greenpreneurs and their plans will be tremendous. From a preparatory standpoint, the Internet allows entrepreneurs to tap into a wealth of knowledge and experience. A short list of these resources includes:
    

Private and public libraries Nonprofit and for-profit business oriented websites Governmental agencies Trade associations Direct resource sites such as www.Greenergy2030.com, Dun & Bradstreet, or the Wall Street Journal to name a few.

All of these sources are available to the greenpreneur when they are researching their market, industry, or competition. Perhaps more importantly, these and other web resources are available once the new business is established. They allow the greenpreneur to solicit advice from other business resources in a cost effective and timely manner. Indeed, the Internet opens new markets to greenpreneurs and their new ventures as never before. Prior to the Internet, business owners were often limited to properties of their target market located within a general geographic area. The Internet allows greenpreneurs to focus their marketing and find deals on relatively small market niches all over the world. With a relatively small investment in both time and money,
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greenpreneurs now have access to both national and international markets. Moreover, the Internet has the potential to lower costs. You can access competitive prices on the supplies and services they utilize. Again, the time and cost involved are negligible, but the gains can be substantial. Similarly, you can offer your own customers cost and time savings.

Finding Capital for Your Startup is a Numbers Game George Carlin who was perhaps one of America's most cynical comedians once said that if you manufactured a left nostril inhaler and showed it to enough people, some idiot would buy one. This is the truth and it pertains not only to nasal inhalers but also to your quest for capital. It's the law of the numbers game. If you show your deal to enough people, somebody will invest in it for some reason.

The basis of raising money for any green startup is selling. Selling you, selling your vision, selling your idea, selling your ability to perform, and selling the potential of all your selling to your investors. At this point, you may be shuddering and saying to yourself, "But what if I can't sell?" The answer is...everyone can sell. It's a numbers game. You just have to know how to play.
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The biggest deterrent to greenpreneurs needing to raise capital is the fear of rejection in the sales process. We are afraid that if we ask for money we will be turned down. Of course, we know that we cannot be rejected if we don't ask. So, the price of safety is poverty. If we predetermine all the reasons someone will turn us down, then we don't need to ask. We will have the joy of experiencing our own self-fulfilling prophecy. We will also not get any capital. What you will achieve through practice and effort is the elimination of fear through the reduction of factors that would normally cause rejection in the funding process.

But before we proceed, let's get back to the numbers game as it pertains to your quest for capital. Here's the brutal truth. Less than 2% of the business plans prepared by greenpreneurs and their advisors will ever get funded. When you couple this with the statistics for business failure rates, you may be tempted to quit before you begin. But once again, it's a numbers game. It's like the 80/20 rule. You know, 20 percent of people make 80 percent of the money etc. I'm convinced that by applying the principles taught in this book, you'll be on the right side of the numbers game. Remember, if you have a competitive advantage, the numbers game can work to your benefit.

Startup Guide for Greenpreneurs

Here’s a secret that successful greenpreneurs already know: the entire funding process should be By

approached from a sales-directed perspective.

understanding this, you will have an advantage over most of the competition and programs that actually bore potential investor partners. Because of the

competitive capital market, it's necessary to stimulate investors and improve your numbers by adding the key ingredient...excitement. And let’s be honest – GREEN is exciting! So, our focus will be on accentuating the positive and eliminating the negative while providing you with the personal skills and financial tools to enhance your competitiveness in the green marketplace.

Keep your sales hat on as you grow through the learning process. Keep in mind that every question can be a positive selling point if approached from the right perspective. By addressing issues positively before

questions are asked, you can reduce or eliminate negative perceptions.

Startup Guide for Greenpreneurs

The Vision, the Plan, the Passion, the Persistence, and the Perseverance
"Be sure you’re right and then go ahead"

American pioneer Davey Crockett said this. It was true then and it’s true now.

The foundation of your quest for capital must be a vision that fills a need coupled with the burning desire to make your dream a reality. If you develop a good plan for promoting your vision and present it aggressively enough, you will succeed at being an investor and getting the capital you need. Let's see how you can integrate these principles

into the capital acquisition process.

Validating Your Purpose Your purpose, your dream, your inspired gift, is the primary building block for your success in your green business and your quest for capital. Your commitment to your purpose must be strong because those who seek to discourage you will test it continually. Between you and your pot of gold at the end of the rainbow lies a path full of obstacles that will test your conviction and measure your strength of purpose. Challenges are opportunities if you are prepared and approach them with the right attitude. The first step is to validate your purpose. This means that you must decide on the purpose of your green business. This of course is something I told you earlier.
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You must have a purpose with your business. It will enable you to be right about your vision. It is your opportunity to test your theories and the marketability and potential profitability of your green product or service. It is your chance to test the water before you get in over your head. The purpose validation phase gives you a chance to ask and answer all the tough questions, consider the possibilities and options, and make the go or no go decisions before you put your own resources and those of others at risk.

The purpose validation questions and checklists are your reality check. You will be rewarded ten-fold for every ounce of time and energy you invest in this process. You will be able to address most questions that your investors will ask, before they are asked. By utilizing the purpose checklist that follows and being totally honest with your responses, you will be able to evaluate your vision and decide whether it is just another idea or a dream that demands your consuming commitment. Because there is often no turning back, it is a good idea to be sure how you feel before you get started, particularly when others are involved. Keep in mind that these questions you ask yourself will be asked many times over by potential investors and your own most fervent devil’s advocate. Consequently, you would be well served to develop extensive written answers to each and every question concerning your deals. All the following information will be useful when developing your documents and sales material.
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Validating Your Purpose Is the need real? Do people really need what you are offering and why will they buy from you rather than someone else? Where did your vision come from? Was it based upon a real need that you perceived in the green marketplace? Was it a divine inspiration or was it something that you just thought would be a good idea? Have others expressed a need for your types of goods/services? Is it one of those things that people say "somebody ought to do this"? Have you considered all the advantages or benefits of what you’re planning to offer? Make a list of all the advantages or benefits of each and how you can distinguish your company in the green marketplace. Are there other

competitors that provide the same benefits or advantages in a different way?

Have you identified the problems your company will solve? If some of the benefits that you have described include solutions to problems that affect many people, groups or businesses you should make an extensive list with verifiable documentation. What impact will your company have on the environment?

Startup Guide for Greenpreneurs

Is this an original concept, a new combination or adaptation? Be honest. Is your purpose brand new or it is an adaptation or combination of other things you have seen. It doesn't have to be new or original to be successful, but the way you present it, both to customers and investors, is dependent upon the unique selling proposition you bring to the marketplace. This is a good place to list the sources or references you may have utilized in the development of your purpose.

What immediate short-range benefits can be anticipated? We live in a quick-fix society where everyone is looking for immediate gratification. Short-range benefits and returns are attractive to both consumers and investors. Everyone wants to see results now. You should make a list both from the consumer’s perspective and the investor’s perspective. This will help you target markets for consumers and your affinity investor groups. In other words, if your products will serve a large need for consumers due to a rapidly growing economic or demographic shift, show how your deals can be completed quickly to take advantage of these needs quickly.

Startup Guide for Greenpreneurs

Are the projected returns adequate? There are a lot of good deals that don't make money. Making money is what

entrepreneurship is all about, particularly as it pertains to getting capital. It is great to be a visionary of incandescent brilliance, but you will be unable to secure investors or survive in the marketplace without profits. This is where you ask yourself the question, ―Is it worth it, or what percentage of the market do I have to achieve to stay in business and more importantly provide a return to investors?‖

Are the risk factors acceptable? This is the big one. Can you; are you, willing to take whatever risks are required to see your vision through to fruition or failure? A common question is “How much must I risk and how long will it take?” The answers are, “Everything and as long as it takes.” If those are not your answers, get a job and forget about this greenpreneur thing or find a purpose that will excite you enough to make the total commitment required.

What are the expected long-range benefits? You have already answered the short-term benefit questions. The value of your concept, company focus, or vision is enhanced significantly if it provides long-term benefits and solutions as well. The more benefits you
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can enumerate, the more ammunition you will have for consumers and your investor partners. This is particularly important to the green-focused business.

Have you checked the idea for faults or limitations? It’s a certainty that your potential investors will be able to provide you with extensive lists regarding the faults and limitations of your business and ideas. Be prepared for this, nothing and no one is perfect. However, if you are prepared to address these issues, you will be able to satisfy some of the reservations of investors who really like you and your idea. When life hands you a lemon rather than lemonade, ask for a bottle of tequila and a saltshaker. Always be prepared to turn things around.

Are there problems the idea might create... what changes might be involved? The laws of physics tell us that for every action there is an equal and opposite reaction. What are the actions and reactions of your idea? A good attorney will tell you that it is not wise to ask any question that you don't know the answer to. This holds true with your concept or product. Look at what you are creating from every possible angle and remember that no matter how thorough you are, someone will see what you are doing a different way. Their perception could impair your progress or

Startup Guide for Greenpreneurs

provide you with valuable input. Make sure you are ready for all questions before they are asked.

How simple or complex will execution/implementation be? One of Mr. Murphy's laws says, ―Everything always takes longer than it's supposed to‖. You can count on that. It is not a good idea to make anything sound too simple even if it may be simple for you. Be realistic, be thorough and always try to error on the conservative side. Late results and failed expectations never meet with as much appreciation as producing something on schedule. Don't trap yourself in an unrealistic time schedule. When you're making the rules, make them work for you. Take the time you need and get the capital you need to do it right.

Can you work out variations? Can you compromise your purpose or your plans? At some point during the development of your purpose, or the implementation of your funding plan, your associates or investors may ask you if your concept, deal, or service can be varied or changed. Additionally, financial advisors or investors may want you to alter your funding requirements or financial policies. The ultimate compromise or variation occurs when a major
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investor or venture capital source seeks to acquire control of your business. Be prepared for this and be ready with a response that you’re willing to stick with.

Can you offer alternatives? If you feel that you might have to compromise, you should be prepared to offer alternatives. However, even if you know the answers, you should take your time in responding to requests for alternatives. Quick decisions and immediate responses today can get you into trouble later on. Seek counseling from trusted advisors.

Does your deal or idea have sales appeal? This is really the No. 1 question. If it doesn't…forget it. If you cannot sell it, or your investors perceive that it cannot be sold, you're out of business. Remember, raising capital successfully for an online business is all about integrating sales concepts into the capital acquisition process. So, the salability of your deal or idea is of primary importance.

Is the market ready for it? Sometimes it's hard to believe that any idea would come before its time. But the fact is, a television set won't work without electricity. Leonardo da Vinci had many ideas that were far ahead of the marketplace. It's always easier to fulfill a need than to create one. Creating a market for
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the best mousetrap in the world when people don't know anything about mousetraps is a long, hard, expensive process. In order for the laws of economics to work, there must be both supply and demand. Be realistic about the market for your properties. Far too many greenpreneurs start companies today with no clue about how they’re going to make money. This is bad business, especially when you are using somebody else’s money to start your company.

Can customers afford it? In order to evaluate the affordability of your offering, you must first identify who your customers are. This is another area where you will suffer greatly if you presume or assume anything. Take the time to do the research. The best product or service in the world cannot be sold if your customers cannot afford it.

Will customers buy from you? This is where the rubber meets the road. Business plans and financial projections are built upon sales. A sale depends upon a consumer actually purchasing from you. If there is a need, and the product is priced right, it should sell. The question is...will it? Many of the issues in
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the vision validation process pertaining to salability and marketability may be obvious to you. If they're not obvious to others, it may be wise to rethink the validity of your vision.

What is the competition doing? A few years ago I launched a small healthcare IT company. We created what we believed was an exclusive way of making medical records available to doctors via a portable electronic medical record. Doctors could actually view a patients’ medical history in seconds. Great idea right? Unfortunately, technology, physician resistance, the Internet, and companies like Web MD and GE made it possible for others to do it bigger, more affordably and better. Be realistic about your competitors. Don't be naive or ignorant as I was.

Can you be competitive? Once you know who or what the competition is, then you can determine whether you can be a player. The better your idea, the more competition you can expect. If you base your ability to be competitive on the status quo, you may be unable to be competitive when your competitors enter the market. Do not assume a huge profit margin in a market that you know will attract major competitors.

Startup Guide for Greenpreneurs

Have you considered resistance or difficulties? Many beginning entrepreneurs are surprised by the fact that everyone may not love their idea. Additionally, it is hard for them to believe they would encounter any resistance or difficulty in the marketing process. You will always encounter resistance and problems when it comes to selling new ideas. Be prepared by evaluating and considering the potential negatives.

Does your idea fill a need? This is always my No. 1 question. The successful greenpreneur

recognizes a need and has a vision for fulfilling it. Does your idea really fill a need? Are there other similar companies that fill the same need? How does your purpose compare with others? The potential for your purpose in the marketplace is directly proportional to your potential for success if you can fill that need.

Startup Guide for Greenpreneurs

Does the need have to be created through advertising? If you must create a need for your purpose through advertising, you have a problem. Business propositions that require large amounts of

advertising to create consumer demand are capital intensive. Start-up ventures requiring large capital infusions to create consumer demand are not usually attractive to investors. It's always better to solve a problem rather than to create one. Look for existing needs rather than creating new ones.

How soon will your idea be put into operation? No matter what you guesstimate, you will usually under estimate the time and capital necessary to turn your vision into action. Always assume the worst-case

scenario and multiply that by a factor of two or three. Other people and their schedules will always delay yours. It's OK to expect the best, but be prepared for the worst.

Startup Guide for Greenpreneurs

Putting Together Your Business Plan There are multiple objectives to keep in mind as you and your team prepares your business plan. The first, and perhaps most obvious, is obtaining capital for your deals. This means that you must write your plan with your primary audience in mind: potential investors. Most investors are not overly concerned with five and ten year financial projections. They want to see that a deal has the potential to make profits at some time in the near future. They want to know that you have given sufficient thought to their market and competition. They want to know that you have the right management or support team in place to effectively run the new company. Though long-term financial projections are not crucial per se, your investors will want to be assured that the assumptions behind the numbers are reasonable. All in all, investors want the business plan to address those areas that they, not you, desire be addressed. From this perspective, the business plan is a test; investors are testing you for preparedness and critical thinking. Though written with investors in mind, a good business plan fulfills another objective: it provides a foundation for your new green business. It contains the raw structure that any business needs, including staffing, technology, marketing, pricing and other business operations. Though lacking some detail, a good business plan is a steppingstone towards eventual success. Similarly, a good business plan provides
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for future growth; it has a measure of fluidity. All the research in the world on a particular market and a particular product for that market is potentially worthless under the right (wrong?) circumstances (which risks, not coincidentally, should be clearly detailed in any good business plan). Given this possibility, a good business plan must be fluid enough to provide for growth into new markets and new opportunities. Investors realize this need for fluidity; you are wise to build it into your plans. As you write your business plan, be prepared to spend significantly more time and effort than your worst-case imaginings on its preparation. With revisions and additions, the plan can take months to complete. Working in a team means relying on other people for production, analysis, and effort – this adds to possible difficulties in coordination. You can use whatever form you like for the plan itself. A search on ―business plans‖ through the Internet will turn up a number of different formats and valuable advice. Palo Alto Software’s Business Plan Pro is an excellent starting point in the writing process. Business Plan Pro is the number 1 rated business plan software package. Reviewed as the market leader in every major magazine, it is no wonder they have quickly become the choice of business planners and entrepreneurs worldwide. You can hire a professional to write the plan for you; however, as a warning, if you choose a consultant to aid you in the writing process, you and your team still need to be integrally involved. For those taking this route, it is typical for consultants to charge anywhere from $5,000 to $100,000, and
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the process may still take months. In any event, the Business Plan Pro software is recommended so that you can utilize the LivePlan.com to post your plan online. Naturally I encourage you to post an Executive Summary or plan on Greenergy2030.com to reach prospective investors.

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Startup Guide for Greenpreneurs

New greenpreneurs face a number of difficulties in starting a green-focused business. In this segment, I will discuss a number of the most common entrepreneurial hurdles. This of course will help you during the

development of your business plan.

Assessing Opportunities Greenpreneurs, by their very nature, are attracted to new ideas and new ways of doing business. By constantly thinking in terms of business improvement, greenpreneurs are capable of producing large numbers of innovative ideas that positively impact the world. Unfortunately for most, a great many of these ideas are not worthy of additional focus, and, in fact, are often the source of distraction. Once you have decided on a particular opportunity, it is incumbent that you perform detailed research. This information should include:
    

Industry analysis; Competitive analysis; Pricing analysis; Marketing costs; Customer profile.

This research provides the basis for the business plan. Ideally, you will choose to pursue opportunities that lie within the scope of your life experiences. These are opportunities you are able to assess best. You may
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not have any experience launching a green company but if you have been buying green products/services for years as a consumer, you likely have identified a need for something that applies to your background/passion. Regardless of the opportunity involved, those of you who are unwilling to take risk should not form a business venture. While this may seem obvious, it nevertheless prevents many would-be greenpreneurs from realizing their dreams. Beginning a new company is, by any definition, a risky proposition. You should be prepared to spend a great deal of time, money, and effort. Without a total commitment, your green business is likely to fail.

The Action Business Plan There is an abundance of information, computer programs and opinions regarding the form of the most effective business plan. that most savvy investors The fact is and financial

professionals want to go right to the bottom-line. Most plans are overkill. Many people spend a great deal of time creating exotic business plans that produce zero cash. A short form business plan presented with passion and realistic profit potential will generate more money for you than the most elaborate multimedia presentation you could ever produce. It can be frustrating when the financial types go right for the numbers while you are trying to sell them the sizzle. It's a waste of
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time talking to bankers about the fantastic potential of your green company when they are really interested in the assets you have to secure the loan you're seeking. By the same token, a super sales job will not generate any investment from someone who is not interested in what you have to offer. Getting someone to share your purpose is the key to getting the money. Essentially, bankers are always looking for collateral and investors are looking for profits and excitement. Most investors make decisions based upon fear or greed…fear of losing their money or greed for more. Keep that in mind at all times when dealing with potential investors for your company. The Action Business Plan

described in this segment is a short effective presentation that gets results. It’s the ―Cliff Notes‖ version of your business plan. Short is good and many successful greenpreneurs have raised more money by sharing their vision on a napkin at lunch than most people have with elaborate 100 page proposals. Don't ever forget that people are investing in you and not in a pile of paper. If they don't believe in you, they won't believe anything you have to tell or show them. If they believe in you, what you show them will seal the deal and not make or break it. The key is to be professional, concise and truthful. Accentuate the positive but don't eliminate the negative. Opportunities that look too good to be true usually are and scare away the savvy investor.

Startup Guide for Greenpreneurs

Let's talk about the basics of your Green Business Plan The Executive Summary or Overview This is a short summary of your action plan. It should contain a sentence or two about your purpose, product and structure. For example: John Jones is forming Green Banking Company, LLC to develop a paperless document management system for the banking industry. Funding will be established through the formation of a limited partnership with investors.

Short, sweet, and to the point. You're ready to move on to your product description.

The Product Describe your product and its unique or marketable features; do a little selling. For example: The product has exclusive, environmentally friendly features, and has been endorsed by the International Green Bankers Association and hundreds of bankers and industry professionals. Price and performance are its key attributes.

If you were interested in green banking technologies, wouldn't that impress you? Anytime you can relate quality, credibility and substance to your deals, don't hold back. You don't need to say a lot when you have

Startup Guide for Greenpreneurs

good things to say. If your potential investors think you've got a good deal, they will be interested in the market potential for the product.

The Market Get right to the point. Here you can talk about the company’s background history, competition and value-add. Again, you don't have to be wordy.

Marketing Strategies The marketing strategies section of your action business plan is an extension or elaboration of your market description. It's the "how you’re going to make it happen" part of your action plan. For example: "Our

Internet marketing will be accomplished through our Website via the placement of 30,000 banner ad impressions on local Internet search engines.”

Startup Guide for Greenpreneurs

Sales Volume and Profit Projections This is the bottom-line. This is what your investors want to see; the WIFM or "what's in it for me" part of the plan for the investor. Remember, this is a short form plan or presentation not a certified audit or annual report from a Fortune 500 company. A simple table

showing projected income by number of units/services sold as applicable for each of five years; or for the investment return period appropriate for your investor; or the entity you created is sufficient. Know your numbers well because this part of your presentation will produce the most questions. These are the questions that will give you an opportunity to determine your investor’s hot buttons and concerns. The financial assumptions contained in many business plans provide a lot of superfluous information which dazzles people with information, but can often intimidate or confuse them. It is never wise to create a situation where someone may think they are asking a "stupid question". Many potential investors have blown away by overzealous accountants and financial types trying to impress folks with their mathematical and presentation skills. You can always provide more information when requested and there are loan situations and public offerings that require more detailed projections and assumptions. You should be prepared for those instances. However, everyone knows that
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computers can bury you with numbers and minutia. Keep it simple, make it personal, and focus on specific questions. When somebody asks what time is, don't build them a watch.

Benefits and Risks to Investors Rule No. 1…nothing is guaranteed, nobody is perfect and investors could lose everything. Don't kid yourself or your potential investors…particularly if they are family or friends. There is no such thing as a sure thing. That being said put your emphasis on the

potential and positive aspects of your opportunity. A good way to start this section of your action plan is to say: "While there is always risk in any new venture, Green Banking Company has worked very diligently to minimize the potential for loss and maximize the possible gain." Follow this statement with: "Based upon our projected sales income an investment of X dollars would yield Y dollars over a period of Z”.
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Make sure you tell your potential investors how they're going to get paid… monthly, quarterly, annually. This is a good time to mention any potential tax write-offs or

advantages. In doing this, always clearly indicate that investors should seek the

council of a qualified tax professional in evaluating this opportunity as it pertains to their situation. Astute investors look at two things: downside risk, how much they can lose, or how much are they willing to lose, and upside potential… how much can they gain. The decision then becomes, is the potential gain worth the potential loss? The point at which an investor is not unwilling to take the risk based on these factors is his ―risk threshold‖. Knowing your investors’ threshold makes it much easier to succeed in raising the capital you need.

Accountability and Reporting Let your investors know how and when they are going to receive information from you. Simply say: “Monthly progress reports and quarterly financial statements will be provided by our CPA firm, Madison and Associates. Questions regarding sales and marketing should be directed to John Doe at 555 -555 -1212.”

Startup Guide for Greenpreneurs

GREENPRENEUR BUSINESS PLAN CHECKLIST The Market
Describe the Opportunity
    What stage is your business in - e.g. concept, development, later stages? What is the market's total size? Annual growth rate? What are the market segments?

Customers
Who Are They and What's in it for Them?
     Why do customers need your product or service? Why will they change their present buying habits to use your product or service? What is the value proposition of your product or service to your customers? How will you retain your customers and encourage repeat and multiple purchases? What is your plan for Customer Service?

Competition
Companies and Regulatory Issues
     Who are your competitors? Describe your competitive advantages. Do you have first mover advantage? Are the regulatory issues affecting your business? Are there international trade and globalization considerations?

Management Team
Leaders, Managers, Workers
      Who is on the Management Team? Describe their experience, successes and failures in the industry How much equity does Management have invested in the company? Does Management display motivated and enthusiastic leadership? What degree of confidence do you, as CEO, have that the business will be successful? How will you communicate that confidence to investors, employees, stakeholders and the media?

Startup Guide for Greenpreneurs
GREENPRENEUR BUSINESS PLAN CHECKLIST Intellectual Property
Unique Assets
    Are there patents awarded or pending? Are these patents defensible? Are competitors infringing on your patent rights? Does your company have breakthrough technology that could change your industry or create a new one?

Financial Plan - First Five Years
Revenue Outlook
    Optimistic & Conservative scenarios Can it be a big company? What are the limiting factors to your company's growth? Show the margin analysis, including: o EBITDA o Gross margin o Operating Cash Flow Projections Explain the use of proceeds showing complete financial projections and milestones.



Financing
    How has the business been financed until now? Who are the investors in the company? How much equity do the investors and managers have? How much money are you seeking in this round?

Cost Management
   Is the business capital intensive? What are the main capital expenditures over the next 5 years? What systems will be used to track and control costs, e.g. IT systems & services, Internet tools, ASPs, etc.?

Staffing and Alliances
   Describe the Organizational plan How many people will be needed? Show ramp-up over 5 years.

Milestones
 What are the measurable benchmarks for success in o Revenue growth o Customer growth o Expense reduction o Organizational expansion

Startup Guide for Greenpreneurs

GET A FRESH START Wally "Famous" Amos, Founder of "Famous Amos Cookies once said, “It doesn't matter how many say it cannot be done or how many people have tried it before; it's important to realize that whatever you're doing, it's your first attempt at it.”

The most important part of implementing a funding program is to get a fresh start to start with a clean slate. Entrepreneurship is so strong in America, because America

encourages the risk taker. It makes it possible for us to start over when our business ventures are unsuccessful. Your attitude is the most important factor in determining how successful you will be in getting funding. If you feel and act like a loser, you will be a loser; and people do not invest money in losers. That is why every new venture’s search for capital must be approached as a new beginning with a clean slate. If you’ve ever seen the Walt Disney movie, ―The Lion King,‖ you might remember when Simba as a young lion returns to the kingdom to assume leadership following his father’s death. During the journey back, his monkey friend, Rafikki, hits Simba with Rafikki’s tribal stick. The young King, astonished, asks, ―Why did you do that?‖ The monkey replies, ―It doesn’t matter… it’s in the past!‖ Like the young Lion King, when we are embarking on a new journey, we must
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ignore previous hits we have taken (whether old or recent) because they are in the past. New beginnings, each day, every meeting…are all opportunities to share our dreams, find significance and pursue the capital to fulfill our visions. The American dream is the standard for entrepreneurship. Nothing epitomizes the dream more than the inscription on the Statute of Liberty:
“Give me your tired, your poor, the wretched refuse of your teaming shores, the huddled masses yearning to breathe free, the hopeless helpless tempest tossed. Send them to me…I lift my lamp beside the golden door.”

For those who have come to America, this inscription signifies a new start. Studies analyzing the successful traits of entrepreneurs found a higher percentage of successful entrepreneurs among first generation Americans than any other single group. Those who come to this country from oppressed nations realize the blessing of a new start and the opportunity to take risks and make dreams a reality. The bankruptcy laws and tax system in this country offer risk takers incentives and forgiveness; incentives for putting capital at risk and forgiveness for risking and failing. When we learn from our mistakes, our failures become building blocks for success. The first thing new entrepreneurs must learn is to put the past and the mistakes behind. As long as you wallow in self pity, or worry about the past and other peoples’ opinion of you or your failures, you will never be able to wipe the slate clean and have a fresh start.
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Starting a green business is like sports. Each deal is a new game. It’s a new season with a chance to win or lose. Every deal you pursue is like going up to bat; you must swing in order to hit the ball. Babe Ruth held a record for home runs, but he also held the record for the greatest number of strikeouts. You must focus on the promise of victory rather than remembering the pain of defeat. Keep in mind; no one builds monuments to critics. Negative thinkers do not win gold medals; neither do they succeed in business. The entrepreneurial experience is a journey. It is a learning experience like riding a horse or a bike. When we fall, we must get up, dust ourselves off, and begin again. It is all about having passion and persistence that enables us to persevere. The successful batter will tell you that with each strikeout he moves closer to a homerun. One of the greatest deterrents human beings have to reaching success is the perception of themselves based on their past failures. Many times this perception is based on the criticism of others. In order to truly give yourself a fresh start, let’s talk about some of the things you must do to clean your slate before we get started. One of the first things you must realize is that you can’t count on others to encourage you. If you have loved ones or associates who have faith in you and encourage you, you are
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very fortunate. Positive reinforcement from others is important, but not a prerequisite. Passion and faith in your cause gives confidence, and confidence is the key to success. Walt Disney, the Founder of Disney Studios once said “Somehow, I can’t believe that there are any heights that can’t be scaled by a man who knows the secrets of making dreams come true. This special secret, it seems to me, can be summarized in four C’s. They are curiosity, confidence, courage, and constancy, and the greatest of all is confidence. When you believe in a thing, believe in it all the way, implicitly and unquestionably.”

When an entrepreneur has a clean slate and confidence, they are ready for to be a greenpreneur!
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Startup Guide for Greenpreneurs

Finding Capital for Your Green Startup The best place to start looking for capital is at home. According to Success magazine, 87% of the funding for new ventures comes from private investors outsmart and personal by acquaintances. failing to Don't

yourself

approach

investors in your own backyard. Always keep in mind that raising capital is a continuous process. There are many names for the various types of financing that occur during the evolution of a business. The continuum ranges from seed capital through mezzanine or mid-level financing and culminates with the sale, merger or IPO of the business. Experience demonstrates that while many entrepreneurs set their sights on the venture capital companies and angel investors, the successful capital raisers acquire their funds closer to home through individuals and organizations that comprise their capital acquisition network. This is especially true in the green startup game. Because the capital acquisition process is a numbers game, it is important to focus your attention on the investors in your network. They offer you the best potential for getting your company funded. Many new greenpreneurs ignore middle-income investors who actually represent a great source of startup capital for new ventures. Friends, family and professional advisors as well as entrepreneurs in your community should not be overlooked.
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In view of the fact that many working people have benefited from increased wealth through the appreciation of their retirement accounts or investments, the availability for qualified investors has increased dramatically. You would be amazed at how many factory workers and delivery people in today's economy have over $1 million in their retirement accounts! Every level of funding you achieve provides another opportunity to increase shares or raise the price of your stock thereby enhancing shareholder value. By building your shareholder base from your initial founders offering and increasing it at every level, you increase the number of people and organizations that share your vision and promote your subsequent funding. Never forget that every time you enhance the value of your shareholders’ equity, you are enhancing the value of your equity.

Your Founders Offering Forming a new corporation with a group of investors who are willing to be involved in the management of the Corporation as shareholders, directors and/or officers allow you to avoid the time and expense involved in conducting a full-fledged securities offering (whether public or private). Such an offering would certainly be required if you first incorporated and then sought to raise money from a second group of shareholders and investors. If you are considering this strategy, you should obtain the advice of local counsel and or discuss the issue with the state securities regulatory authority in the state in which the corporation will be
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created. This will determine whether such incorporation would require other necessary compliance with the state securities laws. Some states may require that initial shareholders have a certain level of sophistication with respect to the business being established. This will determine whether they can be appropriately characterized as active investors. If you fail to find such an active investor, you can shift your attention to the possibility of forming a corporation with several investors identified during the original general solicitation. In other words, the business plan must not pre-commit you to the initial incorporation strategy or the sale of any other security. Utilizing this strategy, you can use a number of methods to start looking for potential financial partners. This can include a mailing campaign as well as local media advertising. You can run a simple ad in your local newspaper to begin your search for financial partners that may eventually lead you to founding shareholders. Make sure you have your presentation material ready to send to respondents who respond to your advertisement. The ad can read as follows:

Financial Partners Wanted Local entrepreneur is forming a new company to take advantage of opportunities in the green industry through the acquisition of currently available web technologies.

Startup Guide for Greenpreneurs

There have been several instances where many greenpreneurs have received funding without going beyond this stage. The good news is…you don't have to go any further to get the initial capital you need. The bad news is…you have prepared for a major long-term funding campaign. Under the circumstances, you will be delighted to get your funding quickly and your preparation for your next level funding is done. Your hard work will always pay off. Create a Founder’s Letter Your founders’ letter can be as simple as the advertisement discussed before. You may want to include your one-page action business plan or an offer to e-mail the action business plan or PowerPoint presentation to prospective founders. The important thing is to keep the letter short and to the point. More importantly, you should follow up each letter with a phone call within a few days of mailing. It always amazes me when new investors say, "I don't know anybody who would be interested in investing in my deals. Can you raise the money for me?" The odds of a new grenpreneur raising capital with this mentality are between slim and none. If you are not willing to approach people who are close to you, what makes you think strangers would be interested?

Startup Guide for Greenpreneurs

Having the Right Attitude Enthusiasm! If you don’t have it, your prospective investors can’t get it. Attitude is the critical link between success and mediocrity. Without a positive attitude, you cannot close a sale and will not get the capital you need. Your attitude is the biggest determining factor in whether you sell yourself and your purpose. Your attitude is a direct result of how you choose to interact with the people and events around you.

You can learn to function with the attitudes you need to be most productive.

A number of years ago, American University conducted a study to determine what factors cause people to be successful on the job. Examination of the data indicated that a person’s success is determined 95% of the time by how the person feels about himself or herself, the organization and the work he or she does—in other words, ATTITUDE. Your attitude is the first impression your prospect gets of you. Whether or not the prospect chooses to talk to you, listen to you or invest in you is deeply rooted in the confidence, pleasantness, intelligence, courtesy and competence conveyed in those first few seconds of your
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presentation. You know you need a positive, upbeat and confident attitude, but how do you get it and keep it? Through the conscious choice to do so. These choices, however, require conscious and constant effort. Your beliefs about your vision are more important to your success than the vision itself. Your attitude toward your own ability has even more impact than your experience. You may need to formulate some new habits. It takes 30 days to form new behaviors. Be patient with this process. Continue to work hard on every new habit for at least that long or you won’t see it evolve.

Your first step is to be completely in touch with your feelings and behavior (the ingredients of attitude) at all times. Remember your attitude comes from your thought process. So, take control and direct them where you want them to go! Your founders’ should come from your networking efforts and database. You will be surprised at the size of your own network when you start putting names next to the categories that are defined in these charts. The founders’ approach gives you the opportunity to share the news of your new venture without asking for a "yes or no" response. This type of approach should alleviate any

anticipated fear of rejection you may have. Remember, it’s a numbers game...sell, sell, sell! Like Dorothy in the Wizard of Oz, y o u ma y discover that being close to home is an attractive alternative to struggle on unknown territories.
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Structuring the Terms of Your Offering WHAT’S YOUR DEAL? The terms of your offering are the conditions, guidelines or rules of your offering. The terms indicate what you are willing to give up in return for the capital that your investors are putting into your venture. The terms must not only take into consideration your current offering but also what you’re planning for the future. It is very important to distinguish between the two concepts of ―liquidity‖ and ―exit‖. Liquidity means that the investor’s ownership (stock certificate or certificates of beneficial interest) is freely tradable. An exit is the event that triggers the end of the investor’s involvement in the Company or project. Investors are looking for an exit strategy that produces both gain and liquidity.

The exit or "cash out" can take the form of the company or individual property being merged or sold or it can result through an initial public offering (IPO) of the company stock. Investor’s benefit from the accumulation and appreciation of stock as the company evolves and
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proceeds to its various rounds of financing. Again, raising capital is a continuous process. The shared goal of both entrepreneurs and their shareholders is that shares of stock continue to increase as the shares in the company become marketable or tradable and the value of the company increases. Shareholder value and exit opportunities increase throughout the process.

Your financing strategy is based upon a process that involves:
   

A new company formation A founder's offering A private placement memorandum (PPM) An exit strategy

The implementation of your financing strategy must be tailored to your capital acquisition network and their investment preferences. A man named Joe Gandolfo, one of America's leading agents developed a unique selling method. He would always ask prospective clients why they bought insurance the first time, why they bought the last time and why would they buy it again. You would be well advised to keep these questions in mind when considering, or meeting with investors. Motivation is the key to uncovering an investor's interest in your project. Doesn't it make sense to ask people what they want and why they would or would not invest in a particular property? You won't know the answers until you ask the
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questions.

Acquiring capital utilizing your acquisition network is a

discipline process. You must work first with those who you feel would be your greatest advocates in communicating your vision to the other members of your network. Ask yourself who believes in you the most, who would benefit most from your project's success, who has the most influence on others, and most importantly, who has the loyalty and persistence to see the funding process through to conclusion. Key people who are willing to share your vision with others can be hired as employees or consultants. You may want to invite these advocates to be on your Board of Directors. Additionally, it may be appropriate to pay a finder's fee or offer some form of reciprocity if they are a vendor or customer. The closest members of your capital acquisition network must be your most prolific cheerleaders. Ideally, they will also want to be original shareholders in your founder’s offering. There's an old adage in selling that says you can't expect others to buy what you don't own yourself. I believe this holds true as it pertains to your capital

acquisition network. Because acquiring capital, like any other marketing or sales process, is a numbers game, the quantity and quality of your investor prospects will determine the closing ratio of those solicited. You will derive a higher percentage of investors by targeting qualified prospects that have a genuine interest in your project. On the other hand, a shotgun approach usually leads to disappointing results.

Startup Guide for Greenpreneurs

One of the biggest mistakes many greenpreneurs make in the capital acquisition process is assuming that they already know why an investor will invest or how much he has to invest. If you make assumptions without asking questions, you may miss many opportunities to obtain capital that are there for you. Some of the most significant startups have produced investors from the most unlikely places for the most significant amounts. This proves another old sales adage that says you should never judge a prospect by the way he looks, what he drives, or the way he speaks. Remember, you're not looking for a model that drives a flashy car. You're looking for someone who believes in you and is willing to put their money where their mouth is! During the development of your founder’s offering, you'll be looking for investors who want to get in on the ground floor. These individuals represent your inner circle. They believe in you and realize that you are the glue that holds things together - the energy source that makes it happen. They are betting on you. They are willing to give you the freedom of control to do your thing and make them rich.

Startup Guide for Greenpreneurs

As your funding program expands, more and different types of investors will be required to complete your capital acquisition network. You can expect the level of your potential investor’s sophistication to increase as your capital requirements and growth increase.

I encourage you to map out a plan for the execution of your funding process. Your task outline and time schedule shows how you intend to allocate the financial and human resources available to you in your organization. The more help you enlist from your capital acquisition network, the stronger your plan will be. By getting your capital acquisition network supporters to take ownership in your plan, they will be confirming their desire to take ownership in your venture and play a significant role in the capital acquisition process. This all may seem very obvious, but it is surprising how many very sophisticated entrepreneurs with extensive business backgrounds and expensive educations fail to acknowledge the basics of selling and group psychology. As entrepreneurs, we sometimes feel the need to guard the knowledge that we have and feel embarrassed to ask questions. We believe others think we already know the answers. This attitude keeps us from sharing with others and also retards our learning. We often end up learning the hard way and sacrificing knowledge for pride. When it comes to raising capital for your green company, you should be open to everything. Reserve your judgments about anything

Startup Guide for Greenpreneurs

until the process is concluded. As Kenny Rogers says in the song The Gambler, "There'll be time enough for counting when the dealing’s done." Your funding process may be much like the typical airliner that is only on course when it takes off and lands. Like the flight, your journey is a process that requires constant adjustments and course corrections. It's the end result that counts. The other thing to remember is that you must see the end in the beginning or you will never actually see the end. This is exemplified by a statement made by Walt Disney's brother upon the dedication of Disney World that occurred after Walt Disney's death. A newspaper reporter remarked that it was a shame that Walt was not alive to see Disney World completed. His brother replied "It's because he saw it that it's here."
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Quality Presentation Tools Sell Investors Your presentation materials are the first impressions of your business, essentially your introduction. Because the decision to pay attention to or ignore you or your presentation is made in less than three seconds, it is essential that your presentation materials visually communicate professionalism, organization and service.

The best way to organize your presentation materials is by utilizing a pocket folder. Pocket folders are generally 9‖ x 12‖ and have either one or two inside pockets to house your materials. Additionally, one of the inside pockets will have slits for inserting your business card. Don't underestimate the value of your presentation materials. They live on, long after the meeting with your potential investor, enhancing and multiplying the impact of your presentation.

Your presentation tools should Included:
    

Startup Guide for Greenpreneurs

If you need assistance in producing a presentation pocket-folder, you should contact your local printer or you can utilize one of the many online printing resources available today.

Internet / Web Site Development Even for startups seeking money to develop a new business, maintaining a presence on the Internet is imperative if nothing more than to educate potential investors early on. A good web site:


Shows investors and customers alike that your firm is technologically savvy.

   

Positions your firm to take advantages of economies of scale. Enhances communication. Increases your sales reach. Communicates your vision.

Like any other document or communication that will be seen by the general public, web site and Internet strategy development require careful planning and thought. This planning should be clearly demonstrated in your business plan. As you go through the entire business planning process, you and your team should give thought to a domain name suitable to your particular enterprise and easy to recall. Domain names are essentially your street address on the information super-highway. Registering a domain name reserves the name and enables the Internet to correctly route web
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traffic to your site. Each domain name corresponds to a unique IP (Internet Protocol) address – a series of numbers (e.g. 216.91.874.23). The information and coding that make up a web site are generally ―hosted‖ by third parties. These web-hosting companies have the communication and computing infrastructure necessary to make fast, uninterrupted connections. There are a number of companies that offer help in the domain registration process. Most will offer other services like web hosting and web site construction bundled in various forms. Typically, registration by itself will range anywhere from $7 to $25 per year, depending on the company and their individual terms.

Domain Registrars you might try include: www.godaddy.com www.register.com www.networksolutions.com www.domain.com

Startup Guide for Greenpreneurs

As noted before, most companies offering domain registration services will likely offer web site construction assistance as well. Other companies and consultants specialize in web site construction. Prices for site construction will range from free (with the purchase of hosting or other services) to thousands of dollars. Differences in quality will be just as dramatic. Generally, as with most things in life, you get what you pay for. That said, some companies offer credible do-it-yourself templates for as little as $10 per month. Of course, you are always free to build your own web site. Your team may include someone with the time and experience necessary to produce a quality web site.

Letters There are two types of letters that are important tools for you. The first are letters of reference and testimonials. Any letters you can get that establish your experience, expertise, track record, financial capabilities or integrity are important for your toolkit. Any letters or information you can use to enhance your credibility and professionalism will pay big dividends to you.

Startup Guide for Greenpreneurs

Lunch & Dinner As you pursue your dream, always keep the end in mind–raising sufficient capital to bring life to your vision. With this in mind, it is important that you share your purpose with potential investors in a forum that is non-threatening and relaxing. One of the best ways to do this is through a lunch or dinner presentation to your potential investors. The venue and the food should be of sufficient quality to convey the fact that you are not desperate for capital. The atmosphere should be relaxed and open. All of your team members should be present. Immediately after the meal, you and your team should conduct your investor PowerPoint presentation. Attendees should be encouraged to initiate contact if they are interested in knowing more about your potential opportunity.

Mailing Lists You will always know more people with money than you realize. The same is true for every member of your team. Collectively, you and your team need to compile a list of names, addresses, and phone numbers of every person who might have the slightest interest in bringing reality to your venture.

Startup Guide for Greenpreneurs

The following list outlines possible investor groups:
     

Family Friends Business contacts Potential suppliers Potential customers Government agencies

All contacts should be compiled in one master database mailing list.

Newsletters Newsletters are an excellent way to keep investors informed of company performance and upcoming events. If you decide to publish a newsletter, be sure to do one thing: always work with someone who can visually produce a good quality newsletter. Currently available desktop publishing software makes newsletters easier to publish in-house, but even these can be less than desirable if the designer is not experienced and knowledgeable about the distinctive of a good newsletter. Talk with some local graphic designers or advertising firms about assisting you in this project. In addition, the copy you include should be informative, interesting and concise. Whatever your final publishing solution, you need to insure that your message is both clean and clear.

Startup Guide for Greenpreneurs

Public Relations PR, or public relations, is free advertising. Take advantage of every opportunity you have to promote your business. Since PR is not considered advertising, it's a chance for you to talk about your capital raising intentions without violating any laws. Television and radio interviews provide opportunities for putting your message on the Internet as well as enable you to distribute audio and video tapes to your prospective investors and capital acquisition network. When others talk about you and promote you, it has a much greater impact than you hyping your own cause. Do everything you can to take advantage of media opportunities. Remember to sell, sell, and sell!

PowerPoint Presentation Microsoft PowerPoint® is a user-friendly software package for creating presentations. It is an excellent tool which is available as part of Microsoft Office or for purchase separately for around $300. Your team will need to build an effective presentation for investors that encompass both your vision and your pitch. Your PowerPoint

presentation needs to be professional. If you are not familiar with the program, you probably need to find help. If you insist on creating the presentation in-house, there are a number of web sites that offer excellent advice on creating profession PowerPoint presentations such as
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www.presentationpro.com. There are many outside consultants who would be happy to assist you. Typically, they will charge from $50 to $100 per hour. A quality 15 slide PowerPoint could take 10 to 20 hours to complete depending upon graphics utilized. After your presentation is ready, you need to present it to your potential investors. Your team needs to be familiar with the presentation and the hardware that will be used to make its delivery. Overheads are acceptable, but not particularly professional. Ideally, you will make your presentation from a laptop via a projector. New projectors can cost anywhere from $2500 to $8500.
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Startup Guide for Greenpreneurs

Understanding the Investor Mindset Let’s discuss three different investment approaches based on varying risk tolerance. Understanding these different mindsets will enable you to better prepare your presentation to your audience.

Conservative approach: This may be suitable for individuals who are retired or are very near retirement and/or have a low tolerance for market risk based upon limited total financial resources. The primary concern of this investor is protecting principal (initial investment dollars). Investments may include CDs or other low risk options.

Moderate approach: Individuals selecting this approach may have several years before retirement and are willing to assume moderate risk to their principal investment to potentially achieve a more attractive long-term return. Individuals who have recently retired, and are receiving benefits over a long period of time, may also wish to provide some growth for the future by balancing equity and fixed income funds with more conservative investments.

Startup Guide for Greenpreneurs

Aggressive approach: This approach assumes the highest degree of investment risk while seeking the highest potential returns. It is best suited for individuals who have longer time lines during accumulation and periodic withdrawals of benefits. Since equity (stock) funds make up a large portion of this investment plan, individuals using this approach should have other financial resources. Aggressive investors should take a long-term investment approach and not overreact to short-term market fluctuations.

Startup Guide for Greenpreneurs

Controlling Risk Avoiding it, reducing it, or transferring it can control risk. Risk means three things to most people:
  

Frequent and sometimes large changes in values, Unknown investment earnings, or Possible market loss.

Some investments have more risk than others. In general, stocks have more risk than investment grade bonds, and investment grade bonds have more risk than guaranteed or fixed interestbearing accounts. Real estate is traditionally a lower risk investment because the investment is secured by actual real property. Investors must be aware of several different types of investment risk. Some investments present a greater risk of market loss than others. This increased risk is often complemented by the opportunity to realize greater returns. In the past, some investments with greater risk have performed better than investments with lower risks, particularly when the money was invested on a long-term basis for several years. For example, many types of stock held for five to ten years have earned more over that time period than investment grade bonds, which presented less risk than the stock. Investment grade bonds,
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in turn, may earn more than fixed interest accounts in the long run, depending on interest rate fluctuations. Typically an investor takes greater risks with the hope of realizing greater rewards. Of course, there have been times when the risk associated with an investment was realized and investors lost money. Keep in mind, however, that past performance is never an indication of future performance. Securities, including mutual funds, are subject to investment loss, including loss of principal. That is why understanding your level of risk tolerance is critically important. Understanding risk levels or ―tolerance‖ is the key to understanding investors. The factors to take into account include:

Comfort with market risks. If investors are uneasy with risk, they may lose money by changing their risk level at the wrong time. Investment timeline: The longer investors wait to take money out, the better their chances may be of building a larger sum of dollars. Other sources of income. If investors expect substantial income from personal savings and social security, they may prefer to take more risk with investments. On the other hand, if they depend on certain investments as their only means of income, they may want to ensure that part or all of that money is placed in a lower risk investment. Investment risks are only one element in determining an investor's overall suitability for a specific deal. Before making any decision about a
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specific investment, an investor should take several other factors into consideration along with risk tolerance. These factors include: an investor's income, net worth, tax bracket, overall investment objective, goals, timeline, other investments, marital status, occupation, and employment. When you understand your investors risk levels, you have a much better chance of determining whether your deal will work for them or not.

Startup Guide for Greenpreneurs

The 10 Greenpreneur Capital Raising Commandments
As you progress through your quest for capital always keep the following commandments in mind. 1. Don’t Learn the Hard Way. Most people want to learn the hard way. There have been probably been many times in your own life when you have said, "I wish I had listened to..." For some reason, our pride always gets us in trouble. This is particularly true of the fiercely independent greenpreneur. Somehow we need to be pioneers. Unfortunately, the definition of a pioneer is someone with an arrow in his or her back. Doing your homework, listening to others and asking for advice will save you lots of time and money. It is also a prerequisite to the next commandment.

2. Be Rich, Not Right. How many times in our business and personal relationships have we won the battle and lost the war? There are a great many people who have been dead right... literally. Sometimes, you're much better off if you go with the flow and keep your mouth shut. You only learn when you listen. Surprising, as it may seem to some people, asking questions is the best way to learn something about your investors and what they're looking for. Don't write someone off just because they don't agree
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with you. The odds are that others feel or think the way they do. Take advantage of the opportunity to improve your presentation or your offering by listening to the objections, suggestions and opinions of others. Give yourself a chance to be rich by withholding your need to be right.

3. Be Open and Honest. When you're talking to investors try to be open and honest. Avoid being paranoid or skeptical about their intentions to learn about your project. Institutional investors and particularly venture capitalists are skeptical about entrepreneurs who are overly protective of their ideas and information. For the most part, they will not sign nondisclosure agreements and consider you to be a rookie if you are skeptical about their intentions. Sophisticated investors have so many deals thrown at them; they don't have time to steal your ideas. Moreover, at any given time in the marketplace, there are many similar opportunities available. Remember, the odds are not in your favor and you are not the only game in town. Don't be paranoid.

4. Short is Sweet. Keep it short. Keep it simple. You'll have a better chance of success and getting a second audience with investors if you don't bombard
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them with rhetoric. Many times you will have to wait a long time for an audience with a particular investor or institution. By the time you get to the interview, it’s difficult to hold back. Consequently, you will want to unload everything you know on your unsuspecting prospect. Whenever you ―run off at the mouth‖ you always know it when you leave the interview and you feel like an idiot. Your approach to prospective investors, both individuals and institutions, should begin with a brief introduction followed by a short or summary business plan (about 20 pages) and a PowerPoint presentation of 15 slides or less. If you are fortunate enough to get one hour of a potential investor’s time to make a presentation, you're going to have to keep it short and sweet. You can't show 70 slides in 40 minutes and have enough time to talk about your deal. The secret to having presentations with punch is to

accumulate as much information as possible and condense it as much as possible. Statistics show that investors make their decision within the first 14 seconds of your presentation.

5. Look for Smart Money You'll encounter smart money and dumb money. Smart money is connected money that provides you with networking opportunities and chances to raise additional capital from affiliated resources. Smart money is money that comes from individuals and institutions that
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are savvy about your venture and can make synergistic deals for you. Dumb money comes from individuals and institutions that don't have a clue about what you do. Dumb money is looking for quick returns. Without some understanding of your business or your vision, dumb money will haunt you and will provide little opportunity for you to obtain additional capital through networking or associated relationships. Smart money may come to you at a higher cost initially, but it will provide much more value later.

6. Take the Money! It’s hard to believe that some greenpreneurs turn down money that's offered to them. It always makes sense to find a way to take advantage of capital that is made available to you. Many people go through life living a better deal theory. That is, that a "better deal" will always come along. Many people believe this is true in personal as well as business relationships. In the early stages of your capital acquisition process, it is not wise to turn down capital that is offered to you on reasonable terms. If the capital is available and the terms of the deal fit within the structure of your funding plan, take the money! This is a concept that Guy Kawasaki of www.garage.com and others call "eat when served." Things change and you may not look as attractive to investors in the future as you do now. Take the money!
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7. Conserve Your Cash. ―Cash is King‖ and the only constant is change. You may think you have the perfect vision; the best business plan and all the money needed to turn your dreams into reality. If you start spending like there's no tomorrow, there won't be one. No matter how well you plan, you will have to make adjustments and changes that will drain your resources. Every time you go back to investors for capital while your expenses are exceeding your revenues, you will pay a higher price for the money. You'll also be reminded of any extravagances or errors that you made in utilizing the resources made available to you. Investors love frugality. When you're making them a lot of money, buy all the boats and cars you want. If you are living high off the hog and not making money for your investors, you'll get slaughtered when you go back for more capital.

8. More Offerings, More Money. Raising capital is like healthy eating. It's better to eat smaller meals more often. In other words, don't try to raise all the money you think you'll need the first time out. Make each offering a victory by creating more demand than there is supply. Everyone wants to get in on a good thing. If there is an unlimited supply there will be no demand. Structure your funding program so that you can split and increase the
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value of your shares as your capital needs grow. This rewards your investors as your funding progresses and adds value to the original shares and those who take advantage of your earlier offerings. Once again, what's good for your shareholders is good for you. 9. Don’t Presume or Assume. One of the biggest mistakes new greenpreneurs make is judging an individual’s desire or ability to invest in their venture. Some

greenpreneurs new to the capital acquisition game tend to have a "know it all" attitude about how and where to raise capital; particularly if they consider themselves to be knowledgeable or sophisticated investors. Some of the biggest deals ever closed and the largest capital infusions have come from the most unlikely sources. When searching for capital, cover all the bases and look under all the rocks. Remember: if you are so smart, you’d already be rich and you wouldn't need capital. Presumption leads to failure.

10. Keep Playing the Numbers Game. Keep on keeping on. In other words, don't quit! Remember, life is a numbers game and if you share your vision with enough people for enough time you will get enough capital. Your confidence and perseverance will be rewarded. You can count on it.
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Green Marketing Basics 101
Green Marketing is an opportunity for your business to do the right thing and be rewarded for it. Trends suggest that businesses that don’t brand themselves as ―friends of the environment‖ risk extinction. Real and substantial economic rewards await those of you that are willing to implement ecological and sustainable business practices.

WHAT EXACTLY IS GREEN MARKETING? You know what all these words mean by themselves. When put together they spell out a powerful and very 21st century approach to selling products and services. Not only are you selling your wares but also, offering consumers a better deal or better way of doing things that is set apart from the conventional.

First, it helps to know just what people mean when they talk about ―greening‖ up their product or service. Whether you’re a business owner or manager in the marketing department of your company, it helps to have a solid background in what you’re trying to accomplish. It is also helpful to see how history has treated such movements and how they responded. Finally, some places serve as models that you can draw inspiration and ideas from. When looking at what these places have in common, we find a pattern of innovation that you can emulate.
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Definition Sometimes called "green marketing" or "natural branding," among other things, the whole concept is based upon the notion that being environmentally friendly might be part of the successful marketing strategy of a product or service. Most consumers are savvy enough now to realize they have a "vote" with everything they purchase. Though still a minority, there is a sizeable and ever-growing segment of the population that bases much of their consumption decisions on their perceptions of how a product/service will affect the environment and themselves.

Green marketing is also about creating brand awareness where it may not have existed before. There was no modern $4 coffee market until Starbucks created it. There were no Organics until farmers who have always practiced sustainable agriculture decided to market their produce as such. No one cared what sort of light bulbs they had when energy was cheap and plentiful – it took the modification of technology made for RVs and space flight to even bring low power consumption products such as compact fluorescent light bulbs to market. In the end, the idea is to let sound environmental practices be your guide to creating a new marketing plan for your sustainable business!

Startup Guide for Greenpreneurs

Green marketing is also about actually backing up any claims you might make as to the environmentally benign nature of your business. In fact, not only do you have to live up to your claims, but you need to market yourself in such a way that people will assume you're being truthful. People who are already looking for "green" products will avoid yours if it smells like a hypocritical rat. This is your chance to practice what you preach. For once, those who play by the rules will be rewarded.

It is perhaps useful to note here that the environment extends beyond plants, animals, air and water. People are part of the environment as well, since we all live in this world – a very large system but closed for all intents and purposes. People who are taken advantage of and suffer dire economic consequences become desperate. Desperate people will resort to any means just to stay alive. Poaching, deforestation and pollution are very often the ultimate consequences of violating human dignity. Therefore, green marketing necessarily extends to human rights.

Startup Guide for Greenpreneurs

5 Keys to Green Marketing Success
1. Never implement a green marketing plan without a blueprint. Resist the urge to jump onto the green bandwagon without an actual plan. If you don’t carefully create a green marketing strategy for your company, you will fail. 2. Consider your customers first. It’s crucial that you understand if your customers even care that your company is eco-friendly. Today more than ever, customers do care and this trend will continue to grow. If you have determined that it is important to your customers, you must understand what is important to them and then develop a plan to reach them thereby letting them know that your business has met their needs. 3. Implement Green Change Now. Once you’ve made the decision to position your business as a green business, you must implement a plan immediately to bring green change to all aspects of your operation. Your customers will demand this and now is the time to act on these demands. 4. Get Certified. There are several green certifications available to small business owners today that signify to customers that the business actually has implemented sustainable business practices. As mentioned previously, saying you are green is one thing. Proving it to a customer is another matter entirely. 5. Brand. Brand. Brand. Once you’ve determined that your company must be green to survive, you must position your company to capitalize on your efforts. The opportunity to beat your competitors is real. You must brand your business so that your green business practices are well known to your customers.

Startup Guide for Greenpreneurs

The Final Wrap Up
We’ve covered a lot of ground through this book. I want you to remember that you can't succeed without doing the work. You must do the work. You must go through the process from beginning to end. You cannot take shortcuts. Your primary function as

founder of your green venture is to get the capital necessary to fuel completion of your purpose. This is not an activity that you can delegate to others. The only time the delegation of this activity works is if you have partners in your venture who have an equal interest. You are the one with the vision and you are the one who must share with others and get investors to buy into your new venture. If you do the work, you will succeed. By utilizing the tools made available through www.Greenergy2030.com, you will have an edge over competitors in the capital marketplace. The bottom line is that if you have a marketable idea and implement what you have learned in this book, your chances of successfully raising the money you need for your company is increased dramatically. Remember, work the numbers and keep at it. The Greenergy2030.com staff is available to help you succeed. You are embarking on possibly one of the most exciting adventures of your life. Enjoy yourself, apply what you’ve learned, and success will be yours!
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Recommended Greenpreneur Resources
Socially Responsible Business and Global CSR
          

Accountability Business Ethics CSRwire Council on Economic Priorities Ethics & Policy Integration Centre Global Corporate Social Responsibility Good Money Global Reporting Initiative Green Money Journal Instituto Ethos Principles for Global Corporate Responsibility SVN Standards of Corporate Social Responsibility

Business Development/Raising Capital
       

Business Impact Investors' Circle Social Accountability International World Resources Institute "The Hard Numbers on Social Investments" "A Halo for Angel Investors" Global Social Venture Competition William James Foundation

Energy
   

A Global Overview of Renewable Energy Sources Center for Renewable Energy and Sustainability Technology Climate Neutral Network Rocky Mountain Institute

Startup Guide for Greenpreneurs Environment
      

Earthjustice Greenmaps Metafore — Responsible Forest/Paper Products National Council for Science and the Environment National Resource Defense Council Rainforest Action Network Union of Concerned Scientists

Fair Trade
   

Corp Watch Fair Trade Federation TransFair USA Verité

Media and Alternative/Independent Press
            

Conscious Living TV CSRwire Democracy Now! Independent Media Center GreenBiz.com Greenopia Making A Life Newsletter Meet the Planet Mother Jones The Nation Plenty Magazine Utne Reader

Natural/Organic Products
 

Organic Pages Online GreenMarketplace.com

Startup Guide for Greenpreneurs Nonprofits/Philanthropy
  

Council of Foundations Social Enterprise Alliance RSF Social Finance

Public Policy/Social & Economic Justice
    

Global Exchange New Voice of Business Responsible Wealth True Majority United for Peace

Socially Responsible Investing
         

Calvert Group Domini Social Investments Pax World Funds RSF Social Finance ShoreBank Social Investment Forum Social(k) SocialFunds.com Trillium Asset Management Winslow Asset Management

Startup Guide for Greenpreneurs

About the Author
JD Carr is the co-founder of Greenergy2030.com and is an expert on environmental strategy for greenfocused organizations. JD is a Certified Green Broker® and specializes in commercial building sustainability and finance. A vocal advocate for environmental issues, JD writes and lectures frequently on the subject and is committed to helping greenpreneurs realize the positive goals their organizations can achieve through sustainable business practices.

www.Greenergy2030.com

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