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How to Start a Green Business in South Africa?

There are many reasons why entrepreneurs opt to start green businesses. Whether they are looking to mitigate the effects of climate change, want to be their own boss, or see a gap in the market – ecopreneurs are finding ways to make money while saving the planet at the same time.

What is a green business?

Green industry businesses produce eco-friendly products and services. Beyond what they produce, they also incorporate a high level of sustainability in their business processes such as water and energy conservation, waste reduction, responsible sourcing of materials, and the use of sustainable packaging, among other measures.

Do you want to start a green business? These are 5 steps that will help you do just that.

1. Find Your Idea

Identify an eco-friendly service or product that nobody in your market currently offers or can deliver like you can. Receptive areas for green businesses are in energy and power, water conservation, waste management, as well as sustainable tourism and fashion.

There is, however, no limit to the kinds of business ideas that can be explored within these fields. Popular options you can consider include handmade all-natural/organic products, composting, upcycling and recycling. Additionally, there are opportunities in sustainable construction, solar panel manufacturing, green architecture and eco-consulting.

2. Know Your Market

There’s never been a better time to launch a green business. Consumer demand for more environmentally friendly options is on the rise, driven by Millennials and Generation Z who are looking to adopt more sustainable lifestyles.

This trend can also be seen locally. The Mckinsey & Company in the article, ‘Stretched South African consumers put health and sustainability on the shopping list’ (https://www.mckinsey.com/za/our-insights/stretched-south-african-consumers-put-health-and-sustainability-on-the-shopping-list) reports that healthy eating and sustainability are becoming increasingly important to South Africans who are willing to pay more for brands that are purpose-driven, are socially responsible and have a better carbon footprint.

Ultimately, to capture this market your business must demonstrate that you care about your customers and the planet, not just profits

3. Have a Business Plan

A business plan is a roadmap for achieving your business goals. It’s also a valuable tool to evaluate the variability of your business plan or secure green financing (note: link to the green financing article) for your new startup.

A traditional business plan includes an executive summary, company profile, market analysis, marketing plan and financial plan.

For green businesses, a business plan not only needs to not only demonstrate the financial viability of your potential enterprise, but must also account for the environmental impacts of your new venture.

4. Get Your Compliance Right

An often overlooked aspect of running a successful business is ensuring that it’s compliant and meets all regulatory and industry requirements.

For most businesses the first step is to register with the Companies and Intellectual Property Commission (CIPC). This ensures your business can do business with the government and the formal sector and can also access government support.

Depending on the nature of your business, it’s advisable that you also register with relevant regulatory bodies overseeing your sector. For example, businesses in green construction can apply for the Green Star Certification which is a voluntary environmental rating system that regulates the environmental sustainability aspects of designing, constructing and operating a building.

Producers of organic products can obtain certification from various bodies such as ECOCERT, which is a recognised service provider for organic, sustainable and fair trade certification in Africa, or Afrisco which provides organic certification for farmers, processing companies, and farm input suppliers.

5. Avoid Greenwashing

Lastly, consumers want to see that you walk the talk. It’s not enough to market your business as eco-friendly or organic, consumers expect brands to live up to these claims.

Greenwashing, which is defined as “the process of conveying a false impression or providing misleading information about how a company’s products are more environmentally sound” is on the rise, globally and in South Africa, with many companies coming under fire for making unsubstantiated claims.

Your strongest protection against greenwashing is to rely on data and embrace credible third-party certification. It’s also important that you avoid exaggerated or false information in your advertising to consumers.

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Lifestyle and Tech is at the forefront of current news and trends covering business, technology, personal finance, Smart energy, fashion and smart living. We aim to deliver quality content that inspires your life and influences the way you decide to live it.

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Lebohang Thulo is a writer and editor with over 15 years journalism experience. Her areas of focus are entrepreneurship and sustainability issues. She is also the founder of Digital Wingwoman, a digital marketing agency that helps small businesses build powerful and profitable online brands.