Green Business – A Passive Income Opportunity?

I have often wondered if starting a green business could ever be profitable enough to survive? Furthermore, what if this type of business could be translated into a passive income opportunity? Combining environmentally friendly business practices with automation and outsourcing could provide a nice income stream that generates positive cash flow.

Whether it be the aluminum soda cans I see co-workers throwing away at work or the piles of grass clippings my neighbors dump in their trash every week – I have always been convinced there must be a way to capitalize on going green. There are actually several start up companies across the country that are doing just that. They are capitalizing on recent trends and opportunities surrounding the green revolution. Understanding the need to help protect our planet is turning out to be a profitable business model for some of these companies.

Breaking Down a Green Recycling Service

I recently read an article highlighting a green business that was started by a husband and wife a few years ago. This couple had moved to a town that did not provide any curb side recycle programs. The only option was to take their recyclables to the county run location that took these materials.

While there was no cost to recycle their materials at the county site, it was inconvenient and time consuming. In fact, they had several neighbors tell them that it just wasn’t worth the effort to recycle their household goods because of this inconvenience. That is when the idea and business was formed. This couple proceeded to start a recycling pick up service in their neighborhood charging a small monthly fee.

Fast forward two years later and the couple has over 700 clients and is bringing in over $4,000 per month in revenue from their service. The original start up was intended to be a part time job for this family to promote recycling and a clean environment, while earning some extra income along the way. They had found a green business opportunity that was interesting and fun to them.

The recycling company currently requires about 40 hours per week to run and service 700 customers. This includes bi-weekly pickups from their current customer base, dropping off loads of materials at the county recycle station, promoting and marketing to new customers, as well as any other administrative tasks. The husband and wife currently operate the company as a part time venture.

Passive Income Opportunity

Can this business model be turned into a passive income opportunity? I believe it can – or at least very close. The key is to identify tasks and opportunities that can be automated or outsourced. Spending money on these types of resources allows the business owner to free up more of their time to concentrate on growing the business or building an entirely new stream of income.

The company currently staffs one part time employee (outside of the couple) that assists in picking up the materials each week. The combined hours of this part time employee, as well as the husband and wife make up the 40+ hours required to run the business. Expanding the number of resources outside of the current staff is crucial to turning this into a passive income stream.

Here are a few thoughts on how to turn this green business idea into a passive income stream.

• Supervisor – Look into hiring a supervisor or someone to manage the day to day operations. Because of the poor economy and several people out of work, it shouldn’t be that difficult finding a qualified employee. The position would be responsible for attracting new clients as well managing the day to day operations.
• Crew – There are a ton of high school and college students looking for work these days. It wouldn’t take much to hire a few of these students part time to go around and pick up the recycled materials.
• Bookkeeper – A separate part time bookkeeper could be hired to be responsible for the financial aspects of the company. This position could also be combined with the supervisor position if the appropriate candidate was found.
• Automation – The company could automate it’s customers payments through a website instead of processing monthly checks. Collecting and cashing checks and payments from 700 customers takes some time each month and opens up the possibility of human error. An investment could be made to automate this process as much as possible by allowing for online payments which saves time and costs.
• Other Ideas – There are probably a ton of other ideas that could be used to increase the passive nature of this business. Overtime, a smart business owner should be able to identify these opportunities and capitalize. The important point is to keep thinking creatively on ways to outsource and expand the business instead of spending the time running or working for the business!

All of the points listed above cost money. However, by spending the money on the appropriate resources, it frees up the business owners time to focus on other aspects of the business. Provided the company is bringing in positive cash flow, hiring a staff and automating a business makes sense.

Final Thoughts

While starting a green business that is geared towards picking up recyclables is not going to pave the way for an early retirement – the business model does show promise. It has been proven in the case study above that it can be profitable and successful just by devoting 40+ hours per week to the venture. If the owner has the creativity and desire to free up more time, then hiring a staff as well as automating parts of the business can help!

What other green business ideas can be turned into passive income opportunities?

Tagged as: Green Living