Tolu Omideyi makes the case for more people setting up their own business in the green technologies and services sector, drawing on the experiences of three Greater Manchester start-ups.
The market for low carbon and environmental goods and services in the UK, otherwise known as the green economy, is now worth more than £200 billion. That’s already four times the size of the UK’s manufacturing sector, but it’s still only in its infancy.
As we ramp up action on the climate and ecological crisis facing society, there are ever more opportunities to provide new goods and services, from renewable energy and building technologies to recycling, waste management and beyond. Many of the solutions we need do not even exist yet, leaving an ‘innovation gap’ that needs to be plugged by people with bright ideas.
This is where start-ups come in. Not everything will be solved by the organisations and institutions that already exist, so green start-ups that innovate or disrupt business as usual are crucial. However, while we have a huge amount of sustainability knowledge coming out of schools and universities, I’m concerned that not enough people are being encouraged to go down this route.
There’s a dangerous assumption that entrepreneurialism is for ‘business-types’, not those passionate or dedicated to environmental causes. But those are exactly the sort of people we need leading businesses. The route to consultancy or a professional sustainability career is well-worn, but we also need people with good ideas from all backgrounds to innovate and develop their own solutions. Otherwise, there’s a real risk that the growing gaps in the market for green technologies and services will be exploited by people with the ‘business skills’ but not the knowledge, ability or passion to make a real difference.
So what can we learn by those who made the jump themselves? I caught up with three green start-ups who have been supported by our Green Technologies and Services Sector Team in Greater Manchester.
From an education standpoint, I felt that it was really important to get people up to speed with why this all matters
One of the most obvious drivers for setting up your own business in the green economy is that it allows those passionate about tackling environmental problems the freedom to put that passion in the driving seat.
Tom Schofield, Managing Director of Stockport-based renewable energy installer Cactus Energy, started out working for a larger company in the solar sector but wasn’t happy and decided to set up his own business from his bedroom in 2019:
"Prior to Cactus, I was working for a company where, in my opinion, business ethics were questionable at times. They weren’t really coming at it from an environmental point of view; it was very much about financial gain first. Personally, when talking to customers, it was the environmental message of solar that I was leaning on.
"From an educational standpoint, I felt that it was really important to get people up to speed with why this all matters. So I set up Cactus with the idea of being a lot more environmentally-focused. That comes through in the way we act – we actually do things that make a difference, for example by planting trees here in the UK to offset the lifetime of each install we do."
Similarly, Trust Renewables, set up by Andy Barrow in 2019, is driven by purpose. The Rochdale start-up is a social enterprise, with over 50 per cent of profits put back into supporting local skills and causes.
Having also worked in the solar industry in the UK and Australia, Andy and his fellow directors set up Trust Renewables partly to create local employment and bring in apprentices into the sector to help fill the massive skills shortage in the green economy:
"One of Trust Renewables’ now-directors convinced me that there was an opportunity to use renewables to improve the lives of people and the environment in Greater Manchester. I was never going to make a significant difference in the same way working for somebody else."
"We spent a long time trying to find a company who provided the right solution. But they just didn’t exist"
The green technologies and services sector is still maturing and doesn’t yet have all the answers to the environmental problems we face. This is where start-ups have the upper hand over incumbents in the market, providing the space for those with the next bright idea to flourish and develop their own solutions.
Dsposal, a tech start-up launched in Manchester by ‘self-confessed waste data geeks’ Sophie Walker and Tom Passmore in 2018 after two years of development, is a great example. Through an innovative online platform, Dsposal aims to reduce waste crime by giving waste producers and carriers real-time transparency of their compliance status.
As Sophie explains, it was a problem that no one in the industry had quite got a handle on:
"Tom had worked in the waste sector for six years and spent a lot of time trying to think about how he could solve the problems he’d been dealing with through technology. He had an idea for what this might look like, and we spent a long time trying to find a company who provided the right solution. But they just didn’t exist.
"Everyone we spoke to in the industry thought it was a great idea, so we started looking into how we could run a business together. We certainly weren’t people who were looking to run a business and be our own boss for the sake of it. Tom wanted to solve a problem, and nobody else was doing it. Fast-forward to today and we are known across the industry for our problem solving and now employ six people."
"We had absolutely no business management experience whatsoever"
There is a common-held assumption that start-ups are for natural entrepreneurs. In my experience, those in environmental roles rarely relate to this description and will therefore assume running their own business isn’t for them. That’s a stigma we should be working to break.
In truth, a lack of traditional business skills doesn’t have to hold you back, and having environmental knowledge instead can actually give you an edge, Sophie says:
"We are 100 per cent not your normal stereotypical entrepreneurs. We had absolutely no business management experience whatsoever and have never been driven by an aim to make a lot of profit. Yes, businesses need to make money to keep going, but if you want to get into this space, what you really need is to understand the problem you’re trying to solve.
"The industry knowledge we had was really useful, especially in terms of credibility. The typical entrepreneur types do not necessarily understand the problem they’re trying to solve, so they end up coming up with a shiny solution that’s not as good as it looks.
"It’s business as usual that has got us into the situation society is in. I don’t think we’re going to solve the climate and environmental crisis by relying on the large incumbent organisations to fix the problems we’re facing. We need people to come in with different thinking, fresh perspectives and new ideas that tackle the challenges we face."
Tom agrees, adding that the market for renewables is now skewing towards those who have the most knowledge:
"There are people in our industry who have gone into solar just looking to capitalise on what’s hot. But the market has changed significantly. We are no longer a subsidy-driven sector where businesses are putting as much solar on their roof as they can purely for the financial benefit. Now it’s about tailoring and designing the right system for the customer and making sure support is there for future upgrades like vehicle charging or heat pumps. From that point of view, you need the knowledge and passion to do the right thing. That’s who we need more of in this industry."
"The big thing you need in our industry is people skills. You need to know who to speak to and make connections"
So what skills do you need to set up your own green start-up? Trust Renewables benefits from having a number of founding directors with a range of backgrounds, from the energy industry and electrical installations to social enterprises. They still needed to develop different business skills along the way, but soft skills are just as important, Andy explains:
"Between the directors, we had enough general experience to get started. You need to be aware of all the different aspects of running a business – you can’t just be an expert in electrical installations but not know a thing about HR or health and safety. But these are business skills you can learn. As long as you have some base knowledge, the rest you can pick up.
"The big thing you need in our industry is people skills. You need to know who to speak to and make connections. For example, I found Greater Manchester Combined Authority’s Green City Region Challenge Groups, learnt about the city region’s Environment Plan and who was doing what.
"Partnering has been important. We’ve partnered with a mechanical and electrical firm and are able to lean on their experience and resources in return for our knowledge of the renewable energy market."
For Sophie, organisation and research are crucial for running a successful start-up:
"Soft skills are incredibly important. I had the organisational skills to get things set up properly, and we’re also very good at research – finding information, synthesising it and using it to make decisions."
Tom also cites research skills as a key attribute, along with good old-fashioned hard work:
"My advice is to do your research. When writing a business plan, make sure that it’s ironclad in terms of your processes and how you want to manage things. You can look at the businesses out there that have failed and find out why they have.
"Getting to the stage where things are running smoothly takes a lot of commitment and hard work. This is the first business I’ve ever started, and I started it in my bedroom. To gain people’s trust and get those first clients through the door, you’ve got to work hard."
"The need for new services and solutions is only going to keep growing"
The green technologies and services sector is already much more vibrant than it was just a few years ago, but opportunities for new start-ups and innovators are always growing.
Tom believes the start-up community will continue growing long into the future:
"There is plenty of space for more start-ups. The pandemic has shed even more light on the climate movement. There’s going to be legislation that puts pressure on businesses and people to change the way they operate and live. Whether it’s clean energy, sustainable waste services or even things like sustainability life coaches; all of these are opportunities for new businesses to come in and really make a difference."
The size of the opportunity is particularly obvious when you look at the data of what is needed to effectively solve society’s environmental problems, Andy adds:
"The amount of work that should be available in future, considering the 61,000 domestic retrofits we need in Greater Manchester every year to hit our climate targets, means there is potentially huge space for growth if you are ambitious. It’s the right place to be, it’s just a question of that demand being activated in the right way."
However, these opportunities still need to be spread equitably. The environmental sector is currently the second least diverse sector in the UK economy (just behind farming), with just 3.5 per cent of workers identifying as a minority.
There is now more being done to encourage diversity into the sector, according to Sophie, who won an Innovate UK Women in Innovation Award in 2021 – a scheme established to promote diversity and inclusion in innovation:
"The green economy is ripe for disruption and innovation, but we need equity, diversity and inclusion if we’re to come up with the right ideas and solutions. More of the same isn’t going to get us anywhere new; attracting a wider demographic of people into the sector is incredibly important.
"There is lots of work going on to improve representation and make the sector more inclusive. So don’t be put off by the fact that you might not see people that look like you at first glance; you will get a warm welcome and we need you."
"Almost everyone I’ve met has been really supportive and helpful. I’ve found that to be particularly true in Greater Manchester"
If we want to get more people starting green businesses, the right support needs to be available. Here at GC Business Growth Hub, we have a team specialist advisors specifically in place to help green technologies and services businesses, on top of general support services for start-ups. We have supported all three businesses featured here, not just with sector-specific guidance but with a whole range of issues, from HR to leadership coaching.
This support can make all the difference, Sophie says:
"Starting a business is a risk and you have to be comfortable with that, but even more important than that is to be comfortable asking for help. You have to trust your gut and make your own decisions, but it’s important to be open to support that’s out there. We looked for support and spoke to as many people as we could."
"The picture that’s often painted of business is that it’s a ruthless, dog-eat-dog world. Our experience really hasn’t been that at all – almost everyone I’ve met has been really supportive and helpful. I’ve found that to be particularly true in Greater Manchester’s business community."
Our Green Technologies and Services advisors are perfectly placed to help start-ups and young businesses thrive in the green technologies and services sector. Join our virtual Low Carbon Network and get in touch with the team today.
Low Carbon Sector Advisor
Tolu is a Chartered Environmentalist with over seventeen years’ experience in Environmental Management and Sustainability and has recently joined the Business Growth Hub. She has a background working with manufacturing, marine, public and third sector.
Tolu specialises in supporting SMEs around policy drivers that affect the market, business planning and raising clients' company profile. Tolu holds an MSc in Environmental Strategy.
