Recycling Waste Materials Business Plan

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Strategy and Implementation Summary

We have clearly defined our target markets and have differentiated ourselves by offering a unique solution to our customers' needs. The primary focus of our marketing strategy must be to increase sales and profitability business quickly. This can be achieved by face-to-face contact, and an effective publicity and promotion campaign.

5.1 Value Proposition

Our value proposition is two-fold.

  • Value proposition for municipalities: We offer a service that is a cost effective, budget saving means to addressing a growing waste disposal problem.
  • Value proposition for end users of compost material:  Compost is a valuable soil amendment that improves many soil properties, such as porosity, structural and thermal stability, water retention, resistance to wind and water erosion, and tillage. Compost also decreases soil crusting, regulates storage and release of nutrients, enhances the development of beneficial microorganisms, builds up plant resistance to parasites and disease, and promotes faster root development. Plants and crops treated properly with compost may produce higher yields and have less weed growth. Chemical fertilizers do not offer this value.

5.2 Competitive Edge

The competitive edges we have are summarized as follows.

  • Cost: The price of our compost product is much less than chemical fertilizers.
  • Organic product: We offer an organic product which is responsive to current market trends. This includes all of the advantages organics offer over chemicals.
  • Recycled: Recycled products characterize a "caring company" and are more appealing to the customer's changing attitude toward organic fertilizer as opposed to chemical fertilizer.
  • Elimination of disposal issues: Municipalities now have a waste that takes up landfill space. Our service recycles the waste which saves valuable landfill space.
  • More effective between application times: Normal times between applications can range from two to four weeks. Our product lasts for many months, thereby saving the customer time and money (no additional expenditure for more product).
  • HUBZone location: Provides advantage in selling to the government.
  • SDB and 8(a) certifications: Provide additional advantages in selling to the government.

5.3 Marketing Strategy

The marketing strategy is the core of the main strategy:

  1. Emphasize high value, high quality products and services.
  2. Build a relationship oriented business.
  3. Focus on municipalities, fertilizer manufacturers, landscapers, nurseries, and the federal government as key initial markets.

5.3.1 Promotion Strategy

Our promotional strategy will be two-fold: first phase promotion will focus on before, during, and six months following our opening; the second phase of promotion will deal with the long term. The purpose of the first phase is to assist with rapid market entry to ensure early and sustained profitability. The purpose of the second phase is to ensure long-term growth and help propel us toward achieving our goal of expanding state wide and across the Mid-Atlantic region.

First Phase Promotions

  • Publicity: We will send news releases to all of the major newspapers in West Virginia. Publication of news articles about Mid-Atlantic Recycling will lend great credibility and be an excellent way to let all target markets know about this new, innovative business and the solutions it provides for municipalities and users of compost or fertilizers. We will similarly seek publicity in the form of news stories from local (eastern West Virginia) radio and television stations.
  • Advertising: We will utilize direct mail and face-to-face promotional strategies to raise awareness about our products and services in the target markets. Newspaper advertising may also be used. Radio and television ads are not certain, we will evaluate their effectiveness before further implementation.
  • Internet: We will have a content heavy website geared toward educating potential customers about the benefits of our products and services. All literature, business cards, etc. will include our website and e-mail address information.
  • Alliances: We intend to form alliances with fertilizer manufacturers to use our product in their fertilizer and/or distribute our product for us.

Second Phase Promotions

  • Publicity: As the business grows and expands we will continue to seek publicity through news media to tout our successes.
  • Advertising: We will continue to make face-to-face contact with customers and potential customers. Mail-outs will be done again within a few months of start up. The second round of mail outs will be updated to reflect the benefits provided to customers thus far. Such mail-outs will be sent periodically.
  • Internet: We will continue to have a comprehensive website. The website will be updated to provide responses to frequently asked questions. After the first six months, and certainly after the first year, we will evaluate the viability of having target clients advertise on our site, and conversely, we will evaluate viability of advertising on our target clients websites (if applicable).
  • Alliances: We will continue to seek mutually beneficial and complementary alliances with manufacturers where applicable.

5.3.2 Positioning Statement

For municipalities seeking an answer to their waste disposal problems, Mid-Atlantic Recycling is the service of choice and trusted strategic ally who gives them a cost effective solution.

For users of fertilizer and soil amendment products, Mid-Atlantic Recycling is a dependable provider of low cost and consistent high quality compost products.

5.3.3 Pricing Strategy

The going rate per ton for compost is $50 and up. This price is low enough to ensure rapid growth in the market yet still provide a very healthy profit, given that we have no direct competition and chemical fertilizer is much more expensive. This is possible because we are on the front end of the industry growth in this region.

However, according to the West Virginia University Cooperative Extension Service, we may be able to analyze and register our material as a fertilizer. In that case the price per ton will be in the $100 per ton range — still well below the rate of $250 per ton charged for manufactured chemical fertilizers; given this scenario, the sales figures below are very conservative.

Additionally, we will be priced at market rates for the waste disposal service we offer to municipalities. Tipping fees are generally $15 and up per ton. Additionally, we will charge competitive skid box rental fees and transportation costs.

5.4 Sales Strategy

Mid-Atlantic Recycling's sales strategy is relatively straightforward. Get the word out about our products and services to potential customers, educate them as to the value added by our products and services, and the product/service will sell itself.

Our present management team will become the main sales force when operations begin. Mid-Atlantic Recycling's sales force will increase as business demand permits. In the first six to twelve months of operations, our sales team will focus its efforts on municipalities, fertilizer manufacturers, farmers, small nurseries and other related companies. The team will promote the products based on their environmental strengths and extended duration. Mid-Atlantic Recycling will use other channels of selling after the first year. Face-to-face contact and direct mail selling are part of the selling plan.

5.4.1 Sales Forecast

The table below outlines the sales forecast and cost of goods sold. The forecast is based on reasonable sales projections within this very large market.

An additional revenue stream will be the collection and removal of sawdust, wood chip, and bark from the International Paper Company on a full time basis; the contract for this work has been won. The sawdust materials collected will be used in the composting process.

The high growth is based on our plans to expand by increasing operations in Monroe County and placing similar facilities in other areas of the West Virginia. We anticipate that by 2005 we will have two such facilities and by 2006 we anticipate having four. Thus our sales forecast doubles in each of those years.

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Sawdust collection services in hours 13,440 13,440 13,440
Waste acceptance in tons 10,640 25,920 51,840
Compost sales in tons 14,776 36,000 72,000
Total Unit Sales 38,856 75,360 137,280
Unit Prices Year 1 Year 2 Year 3
Sawdust collection services in hours $14.20 $14.77 $15.36
Waste acceptance in tons $18.00 $18.00 $18.00
Compost sales in tons $50.00 $52.50 $55.13
Sales
Sawdust collection services in hours $190,848 $198,509 $206,438
Waste acceptance in tons $191,520 $466,560 $933,120
Compost sales in tons $738,800 $1,890,000 $3,969,360
Total Sales $1,121,168 $2,555,069 $5,108,918
Direct Unit Costs Year 1 Year 2 Year 3
Sawdust collection services in hours $0.71 $0.74 $0.77
Waste acceptance in tons $0.90 $0.90 $0.90
Compost sales in tons $7.00 $7.35 $7.72
Direct Cost of Sales
Sawdust collection services in hours $9,542 $9,925 $10,322
Waste acceptance in tons $9,576 $23,328 $46,656
Compost sales in tons $103,432 $264,600 $555,710
Subtotal Direct Cost of Sales $122,550 $297,853 $612,688

5.5 Milestones

The following table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation.

Milestones
Milestone Start Date End Date Budget Manager Department
Complete business plan 10/7/2003 12/1/2003 $0 O. Pyne Department
Recieve all funding 11/24/2003 2/29/2004 $0 O. Pyne Department
Site preparation 3/1/2004 3/15/2004 $0 O. Pyne Department
Form LLC 2/15/2004 3/15/2004 $500 O. Pyne Department
Composter set up 3/15/2004 3/30/2004 $0 O. Pyne Department
Order/fabricate composters 2/15/2004 3/30/2004 $480,000 O. Pyne Department
Hire staff 3/1/2004 5/30/2004 $16,680 O. Pyne Department
Begin production 3/15/2004 3/30/2005 $0 O. Pyne Department
Totals $497,180