Start a green consulting business by following these 10 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 consulting business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 much can you charge customers?
- 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 consulting business?
If you have everything you need to sell yourself as a green consultant – like industry experience, education credentials, and so on – you can start a consulting business with nothing but your laptop and smartphone. But if you are like most people starting out, you will need to get some form of certification or other credentials for clients to take you seriously. There are numerous certification programs out there, ranging from several hundred dollars to tens of thousands of dollars. It all varies based on the quality of the certification, the time it takes to get it, and the industry it applies to. There are also college and university programs where you can get sustainability and/or green-related degrees.
You should expect to invest in your credentials before you can open your doors for business. And if you are planning on building a team at the outset, you will likely need capital investment and/or a loan to initially pay for salaries, office space, and marketing.
What are the ongoing expenses for a green consulting business?
Ongoing expenses for a green consultant business differ from business to business. If you are all by yourself and working from home, your ongoing expenses may be minimal. If you hire a team and work out of an office, you will have to pay salaries, rent, utilities, and so on. Regardless of the size of your operation, if your industry requires certifications, or something similar, your ongoing expenses will need to include maintaining those certifications.
Who is the target market?
Your target market depends on what industry niche you are focused on. Green consultants serve pretty much every type of business – restaurants, manufacturers, tourism, landscaping, construction, etc. The list goes on and on. Once you know what types of businesses you want to work with, you know your target market. Then, you can hone in your marketing efforts to find businesses that benefit from the services you provide.
How does a green consulting business make money?
Your business will make money by charging clients for your services. The amount you charge will be based on the current demand for your services – you’ll charge less when you start out and more as you gain a reputation – and the scale and difficulty of the job increases. For instance, helping an office of 10 people reduce paper waste will cost less than performing the same service for an office of 100 people.
Pricing is a challenge for all consultant businesses because you have to choose what model makes the most sense. Some charge hourly fees while others charge project-based fees. Still, others may charge a recurring fee for regular or on-call services.
How much can you charge customers?
How much your business can charge will vary depending on your services, your industry, and your experience. It will also vary considerably based on the scale of the job. Resource Management Associates, a green consulting firm, charges between $2,000 and $6,000 for an environmental audit. The price range varies based on the project’s size.
A good rule of thumb for starting a consulting business is to take your last salary and triple it – that’s what you need to make as a consultant. You are doing all of the marketing and client interactions, paying significantly more taxes as self-employed, and need to make enough money to sustain your operation.
How much profit can a green consulting business make?
If you can get a few clients and consistent work, your business should be able to earn enough profit to keep you going. But you should expect it to take a while before you start earning significant profit unless your particular industry is in great demand. With enough clients and a great reputation, it is possible to earn substantial profits as a green consultant business.
How can you make your business more profitable?
You have two options for increasing your profits – get more clients or charge more for your services. Both of these are viable, but generally, it is easier to start by getting more clients. Once you have enough clients to demonstrate the desirability of your services, you can increase your prices.
You may also identify more profitable ventures as your business grows. It might be possible to successfully appeal to different industries that are willing to pay more for your services as you get better at what you do.
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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your green consulting business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
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.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a green consulting business
Promoting and marketing your business should be relatively straightforward. Your potential clients are trying to adhere to government regulations, improve their public image, or both. They may also just be passionate about the environment, but avoiding illegal activity and bad press are often the most powerful drivers for businesses. Once you know what your potential clients are trying to achieve, you can let them know that you have the skills and experience to aid them. You may try trade journals, direct mail, content marketing, social media marketing, and so on. Just make sure you know who you are trying to reach before you spend a lot on marketing.
How to keep customers coming back
Success in consultancy is all about delivering results. But there is another aspect of the business that is talked about less: honesty and accountability. You are not a fortune teller, which means sometimes you will get things wrong. If you are honest about what you can accomplish and are accountable for what happens, it will often lead to closer relationships with your clients. Maintain clear communication with clients and avoid overpromising to help clients feel that you are in this together.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Green Consulting 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?
If you are passionate about environmental issues and believe that you have the potential to teach businesses how to improve, you may be a great fit for a green consultant business. Many green consultants already have extensive experience in a particular industry and apply their experience to make green changes for their clients. But you don’t have to be an expert right now – you can get certifications, degrees, and other forms of education. The most important thing is that you have the persistence and desire to push for a better world, even when you run into resistance.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a green consulting business?
A typical day at a green consultant business will vary depending on how well established you are. At first, it will mostly consist of marketing and outreach efforts to find clients and secure contracts. You need customers to have a business. But, once you get a few clients, you will be able to move on to the more exciting parts – like interviewing clients, conducting environmental audits, researching laws and regulations, and presenting reports to your clients. You will spend many of your days identifying issues and developing solutions based on the best data you can find.
What are some skills and experiences that will help you build a successful green consulting business?
Industry expertise is probably the most important skill you can have to appeal to potential clients. That’s why most green consultant businesses focus on specific niches, such as residential building development, commercial building development, aviation, manufacturing, and so on. Virtually every industry is trying to improve its environmental impact. If you already know a lot about a particular industry, you will have an easier time selling your services to that industry.
Another major skill that successful green consultants have is the ability to keep up with changing laws and regulations. You don’t want to misstep and give advice that is no longer applicable because the laws have changed. Staying current ensures that your services adhere to current standards.
What is the growth potential for a green consulting business?
The growth potential for a green consultant business is significant. Environmental Analyst found that the global market for environmental consulting reached $34.1 billion in 2017 and continued to grow from there. While you can’t expect your business to reach the peak at the beginning, if you keep working at it, improve your services, and develop a good reputation, you have strong odds of enjoying a growing market for the foreseeable future.
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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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
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 consulting business?
It is important in the consulting industry to have a firm grasp of your area of expertise before you offer services to clients. Your business will sink or swim based on the quality of your services and the results you get for your clients. If you don’t know the necessary information, it will likely come back to haunt you. Be sure you feel confident in your abilities.
Another major factor in the work you do will be the current information available regarding research, data, laws, and regulations. Stay up-to-date on all the information related to your services so you don’t encourage clients to spend a lot of money on something that they will regret later.
How and when to build a team
There are numerous tasks to juggle in green consulting. You may be able to handle all of them when you have a few clients, but if you are working for more than two or three clients, you are going to struggle to keep up. As your business scales up, try to hire people before you are desperate for them. A good team will allow you to handle significantly more clients and to do a better job.
Look for employees with skill sets that support your own. You probably don’t need five people that all know the same things. Instead, seek diversity and focus particularly on areas where you know you are not strong.