How to Establish a Sustainable Real Estate Development Business
Sustainability has become a hot-button issue, with people increasingly committed to eco-friendly practices that preserve the environment. If you're thinking of starting a business in real estate development, embracing sustainability is a savvy move. According to Deloitte, consumers are eager to support eco-conscious companies, giving you a competitive advantage. Sustainable business practices have other benefits for real estate development too. Find out more about the advantages of sustainability and how you can implement sustainable practices in your real estate development company below.
Understand the benefits of sustainability
Sustainable business practices aren't just good for the earth. They're also good for your bottom line. With sustainability, you can reduce overhead costs—for example, by switching to eco-friendly and cheaper office heating and cooling. You'll also be able to attract employees, investors, and customers who share your commitment to sustainability. When it comes to real estate development, implementing sustainable practices can further help you save time and money on building materials and processes. It's a win-win situation for all involved, making the initial investment to set up a sustainable business well worth it.
Address the administrative steps needed to start your business
Before you can start focusing on sustainability, address the administrative elements of your startup. Begin by sketching out a business plan. Then, calculate the overhead costs you'll need to get started and acquire the requisite funding. Finally, formally register your business with your state. A limited liability company, LLC, offers perks like tax advantages and more streamlined paperwork. If you want savings on self-employment taxes and the option of filing tax deductions on company losses, an S corporation may be a better fit. You can file a Delaware LLC or S corporation in Delaware using a business formation service to avoid pricey lawyer's fees.
Educate yourself about what makes a business sustainable
Clearly, sustainability is a good thing. But just what makes a business sustainable? There are many steps you can take to achieve this label. In the real estate sector, you can start by leveraging renewable energy, setting science-based emission targets, and reducing energy consumption and waste production. Also, consider pursuing green building certifications. For example, many developers now adhere to LEED standards set forth by the U.S. Green Building Council. This is just one of many options available. You can also get inspiration from other companies known for their sustainability.
Take steps to market your sustainable business
Once your business is up and running, it's time to attract customers. In the real estate development field, the key to success is defining your difference. Identify what makes you stand out from other developers—such as your commitment to sustainability—and use it to build a strong brand. Green Business Bureau has a guide to sustainable marketing ideas to try. You can try creating a page on your website that's dedicated to sustainability, becoming green business certified, and contributing to environmentally-relevant causes. Partnering with other sustainable businesses is another great way to cross-promote.
Be prepared for the potential pitfalls of sustainable business ownership
Building a sustainable real estate development business has some hurdles to prepare for. You'll have to do your research regarding sustainability implementation, for example, and may need to invest in new procedures, products, and processes to make your eco-conscious vision a reality. If you don't market your sustainability efforts appropriately, customers may not recognize them. Even worse, you could be accused of greenwashing—marketing your business as eco-conscious when it's really not. Follow the tips above to avoid these issues.
If you want to start a real estate development company, incorporating sustainability is a smart move. The above guide provides some pointers on how to get it done.
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