While most start-ups set modest goals for their first year in business, NuGreen Solutions is on course for a lofty target – a whopping $10 million in revenue.
The Melbourne-based business only launched in November 2011 but already has 65 clients, including all of Victoria’s major universities, Grand Hyatt, Chadstone Shopping Centre, Caltex and Metro. A further 80 prospective clients are expected to sign up in the near future.
NuGreen provides energy cost savings to energy intensive businesses through consultancy and the installation of green technology such as LED lighting, solar power and HVAC systems – which combine heating, ventilation and air conditioning.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
Founded by a team of six entrepreneurs, NuGreen faced initial struggles for cash, requiring the founders to pitch in extra investment.
But through a process of pilot projects, effective client targeting and market differentiation, NuGreen is on track for its $10 million debut year.
Above: Geoff Gourley.
Geoff Gourley, one of the founders, tells StartupSmart about the business’ stunning opening salvo and passes on his gems of advice to other budding entrepreneurs:
How did you all end up coming together and working on this business?
We all came together through relationships, friends of friends, of people who were interested in this area and had relevant experience.
I’ve got property, start-up and green retrofitting experience. One partner owns an electrical contractor company, others have been involved in energy efficiency consulting and maintenance and so on.
In November last year we decided it was time for a new entity to really ramp up in the energy efficiency space so we all agreed to put in capital – the funding comes to a couple of million dollars.
We saw that there was a way for businesses to operate more efficiently and that they were moving towards that; carbon price or not.
Did it take a lot of persuasion to come on board?
Paul McMurtrie (co-founder) was the main ringleader to get everyone together. It didn’t take much persuasion as I’ve been on the periphery of this space and thought it was a great idea at a perfect time.
Some of the others took a little more convincing to part with the cash, but they see it as a great value-add for businesses in the energy space.
Above: Paul McMurtie.
So would you say the introduction of the carbon tax has been the main driver of growth for you guys?
Not really – it’s more about how businesses deal with rising energy costs year on year, even if there was no carbon tax. Even if you repeal carbon pricing, businesses are still conscious about saving money.
This business isn’t based on government subsidy or the carbon tax in any way – it’s all about sound business principles of cutting operational costs.
There are a few different energy efficiency firms out there now. What point of difference do you have?
We act as an end-to-end consultancy, from electricity delivery, water, waste, all the government regulations, rebates and so on. Other companies may do solar or lighting but a lot of them don’t understand rebates or other aspects.
We project manage the whole thing from start to finish in a holistic way to find the right solution. We deliver a product that isn’t linked to just one type of product. We aren’t just trying to flog solar panels, for example.
Often, businesses will have a contractor who comes in to install something and once they finish, they wipe their hands of it and move on. We offer 10-year maintenance, along with the whole consultancy process.
We also have advanced modelling to show energy efficiency savings; whereas other businesses tie themselves into saying they guarantee a 20% saving, say, over a certain period of time and take the risk to deliver that.
We don’t make that kind of guarantee, but we can show that there will be savings over a five-year period. We are conservative and then we over-deliver.
Above: Campbell Walker.
So how on Earth can a start-up make $10 million in its first year? I imagine you’ve leveraged past clients like crazy?
We’ve all been in business for up to 20 years each and built up good client bases in that time. We took a decision to look up the top 500 clients worth approaching and target them.
Story continues on page 2. Please click below.