• Thomas Enzendorfer

Four Ways To Make Sure Your Green Business Succeeds

In an industry where the mission is to change the world’s source of energy, it can be disheartening to see so many solar startups fail. Unfortunately, this is happening across the country at a higher rate than expected. Companies that were seen as most likely to succeed just a few short years ago are selling parts of their businesses, or even filing for bankruptcy, to survive. Perhaps the most emblematic example of this is Aquion Energy, a business that raised almost $200 million not long ago that ended up declaring bankruptcy after failing to raise additional funding. To avoid falling into this pattern with your green business, focus on the following 4 ways to make sure your green business succeeds.

1. Watch your cash flow, first and foremost. Seems simple enough: Have sufficient money to pay off your debts. however, this point seems to elude a big part of the sustainable businesses. Your cash flow is basically the best measurement of the survival of your company in the short and long-term. This last point needs to be especially emphasized-- You need money now in order to succeed in the future. Be mindful that profitability does not always mean a positive cash flow. A positive cash flow simply means that you have more money coming in than is going out of your business at any given time. Your profit is essentially what you have left after all of your expenses are paid. Related? Yes, but make sure you understand the difference otherwise the cost can be great - Your profitability won’t tell you, for example, if you have enough cash to pay salaries next month, or if you will have enough money to make a purchase of equipment or inventory. Cash flow is more accurate in the short-term and it can help you predict when you will be able to spend, it will make you look trustworthy to creditors and serves as a growing tool for your business.

2. Make sure you have a business model that puts an emphasis on profitability over volume and size: So now that the issue of cash flow versus profitability has been discussed, we can talk more in depth on profit. Many start-up companies make the mistake of thinking that ‘more is better’. And although this can be true for some industries, it might not be the best path for solar or sustainable businesses. You need to make sure you are paying attention to how much profit you are actually turning - it seems pretty obvious, yes, but it’s surprising how many businesses overlook this. Volume may create more revenue, but it also creates higher can’t have one without the other. Therefore, pay attention to the design of your business model to make sure you are not creating an unsustainable future for you and your company.

3. Make sure to develop a strategy and then focus on its execution. Your strategy is perhaps the most important thing for the future of your business. A good idea without good execution will not yield the results you are hoping for. You need to be able to create the bridge that will get you from point A to point B. There are many different ways to create success - once you find what is right for you, you need to focus and execute it. Many businesses fall into the infamous hole that is changing the way you do business. This is especially true with startups.Often times due to inexperience or out of desperation once things start to go a different direction than planned. The result is doing some things well and some things bad. You need to be able to focus on one thing in order to become good at it. This doesn’t mean you need to follow a strict and hard guideline - changes are part of every business’ life - however be mindful of not straying too far from the path, as this can only lead to more confusion.

4. Learn to say ‘no’. Your business could suddenly become very popular, similar to a toy everyone wants to play with. When this happens, opportunities will present from everywhere and everyone will have the best idea that will turn your company into the next big thing. This can be blinding, especially for young startups that feel that “this is it”. It’s important to be able to weed through these opportunities to focus your attention on what is paramount in your business. You don’t want to lose your north by exploring ideas that might not have to do with your business model. With over 10 years in the solar industry, Thomas Enzendorfer mentors other solar-related companies to help them create their own successful business roadmaps whilst formerly actively engaged as a President at Soligent, America's largest solar distribution company and the CEO of American Home Energy, a white label solar company that has been profitable since the first month of business. Consult with him here.

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