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Start a green cleaning products business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your green cleaning products business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a green cleaning products business?
Launching your business from home is a great way to minimize costs and stick to your overall mission. While this will significantly reduce start-up costs, there are a few investments you will need to budget for:
- Brand development
- Raw materials for mixing your products - some start-ups choose to leave the mixing to those with more experience, partnering with a manufacturer.
- Packaging and labeling
- Marketing materials and advertisement costs
- Business insurance
What are the ongoing expenses for a green cleaning products business?
The bulk of your ongoing expense budget will go towards manufacturing costs and payroll. When setting your monthly budget, you will need to factor in the following expenses:
- Shipping and handling
- Marketing and advertising
- Website maintenance
- Travel expenses, education, and market research associated with continuing your eco mission
- Staff training
- Ongoing certification
Who is the target market?
The modern consumer is more educated and conscious of the myriad of ways we can help preserve our environment. In addition to the green consumer, your marketing efforts should also target consumers who require organic cleaning products for their health.
Success in this industry comes from identifying current market needs and shaping your business around those needs. Once you have perfected your products for that niche, you can expand and target other industry needs.
How does a green cleaning products business make money?
A green cleaning products business generates revenue from the sale of each item. Depending upon your business model, these sales will come from an online store, a brick and mortar establishment, and/or wholesale clients.
How much can you charge customers?
When setting your prices, be sure to factor in overhead expenses, manufacturing costs, and packaging expenses. Additionally, prices will vary depending upon the product and size. If you aren’t confident in this part of the process, the manufacturer that you have partnered with should be able to offer guidance
How much profit can a green cleaning products business make?
While most eco-friendly cleaning product businesses turn a profit in the first year, it generally takes three years to build a well-established business. Business owners who are committed to their cause and maintain a pulse on the latest trends report a six-figure profit after the third year.
How can you make your business more profitable?
To help boost your company’s profits, industry leaders recommend considering selling through major retailers such as Amazon. The most effective way to increase visibility is to BE visible - host workshops and educational events, attend conventions and sponsor local and national events. Immerse yourself in the movement.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your green cleaning products business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a 3D printing design business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a green cleaning products business
Once you have defined your target audience, strive to build partnerships with others in the community that cater to those consumers. Are there any eco-friendly cleaning companies, dry cleaner, or laundromats in your area? If so, consider offering them a discount for using your products or offer rewards for each referral.
The key to consumer confidence is to offer total transparency, sharing your mission and product ingredients on your website and labels.
How to keep customers coming back
As the face of your company, you must show the public you aren’t just talking the talk. Be active in the community and help educate others regarding eco-friendly alternatives, not just in your industry but in every aspect of our lives. This will increase visibility and consumer confidence.
Your biggest contribution, however, is the products you manufacture and sell, so make sure you consistently deliver quality products that the public can count on.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Green Cleaning Products Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Entrepreneurs who are dedicated to reducing our carbon footprint and ensuring a safe future are finding unique ways to do their part. Those who are right for this business venture have made it their life’s mission to educate consumers, igniting their passion in others along the way.
What happens during a typical day at a green cleaning products business?
When first starting your business, much of your day will be centered on product and brand development. Once your “house” is in order, your focus will shift to generating sales, fulfilling orders, and remaining abreast of the latest trends and legislation. As mentioned, most entrepreneurs in this industry are dedicated to doing their part for the environment. Therefore, any free time is generally spent furthering their cause and increasing awareness.
What are some skills and experiences that will help you build a successful green cleaning products business?
While mixing safe cleaning products isn’t a new concept, consumer awareness is. To realize success in this industry, one must have a firm knowledge of what mixtures are safe for each household/office surface and be able to confidently educate others regarding the benefits of going green. The National Institutes of Health Household Products database offers a wealth of information to help get you started.
As with any investment, strong business sense and leadership skills are essential to your organization’s short and long-term success. Fueled by the desire to help preserve Mother Earth, entrepreneurs should use their interpersonal skills to gain clients and educate the public as to how their products perform compared to the competition.
What is the growth potential for a green cleaning products business?
Recent research forecasts a compound annual growth rate (CAGR) of 6.5% growth, with the household eco-friendly cleaning products market reaching over $27 million by 2024. This expected growth offers significant opportunities for those looking to enter the industry. Some eco-friendly business owners choose to remain small, selling on a state and local level, while others partner with national retailers, reporting revenue of over $100 million.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a green cleaning products business?
The most important piece of advice offered by industry leaders is to become green seal certified. This not only increases customer loyalty and access to niche markets, but it also maximizes your green efforts.
How and when to build a team
How and when you build your team is dependent upon how you structure your business. Many entrepreneurs choose to start small, completing all the work themselves. While this offers significant savings on start-up and ongoing costs, it will also require you to wear many hats. Consider your weaknesses, such as marketing or administrative duties, and hire accordingly.
During the hiring and training process, be sure to add staff members that share your same passion for protecting the environment and offering families and businesses safe alternatives to the standard cleaning products used today.