Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Download for free

Recycling icon Recycling Energy Conversion Business Plan

Start your plan

Good Earth Resources

Market Analysis Summary

Barton landfill will be in a positive cash flow condition at close of escrow.  During the first month of operations, GER road tractors will haul waste from transfer stations in the cities of St. Louis and St. Charles to the landfill at the rate of 690 tons per day. This will supplement the local waste stream of 250 tons per day to bring the total to over 940 tons per day.  An additional 600 tons per day is available from sources near Martin Creek landfill and until Martin Creek construction is complete, GER intends to haul this waste to Barton as well.

With commitments from St. Louis waste collection firms and local hauling firms, GER expects to attain the break-even mark within the first 60 to 90 days after assuming ownership. Once this benchmark is passed, primary focus will be on generating more customers both in the local St. Louis, Washington, Jefferson, and St. Francis Counties.

Martin Creek landfill will require a period of seven to twelve months of construction to become operational.   By that time, GER will be able to direct sufficient waste from St. Louis and other municipalities to Martin Creek to create a positive cash flow in the first month of operation.

4.1 Market Segmentation

GER personnel plan to contact waste generators, such as food processing plants, breweries (Anheuser Busch), pet food manufacturers (Purina Dog Chow), restaurants, and financial institutions. Marketing personnel will contact each waste hauler in this part of Missouri and Illinois, alerting them to GER locations, hours and rates.

The most important market trend, landfill closures, favors GER. There are fewer and fewer landfills, while more and more families are moving to suburban locations, discouraging new landfills from opening and expediting the closure of those currently in use. The “nimby” (not in my back yard) cry prevents new landfills from being permitted or significantly slowing the process. State governments refuse to override citizens who adamantly fight landfill construction near their homes even at the prospect of even higher waste collection charges.  Neither Martin Creek nor Barton landfills have to experience a public hearing phase.  Public opposition to landfills and transfer stations serves to push waste disposal costs higher with transportation to more distant landfills.

Of the companies focused on the profitable business of waste removal, only a minor number have developed an efficient method to remove the gas generated from buried waste. Ninety-eight percent of landfills use earth as a cover (“cut and fill”) rather than PVC covering. This reduces gas purity and volume. Older waste burial practices cause gas retrieval to be difficult and expensive, while the bale cell system GER intends to use will capture the majority of the gas. Sealed cells reduce leachate leakage and water table contamination. Gas production will provide revenues for many years to come.

The U.S. Environmental Protection Agency’s Office of Solid Waste identifies by name and location Non-Hazardous Waste landfills throughout the United States and U.S. territories every several years. 1986 was the first year this census was taken and there were 7,683 landfills identified. In 1992 the document was updated and showed a decline to 5,345 landfills. In 1995, the document was updated once again and showed a further decline in landfills to 3,581. (Source U.S. Environmental Protection Agency website http://www.epa.gov/epaoswer/non-hw/muncpl/landfilVtflist). This report substantiates the increasing value of a landfill permit and the increasing difficulty to obtain a permit to dispose of municipal waste. The trend is obviously favorable for owners of landfills that are available to accept waste. It will not be many years before rates increase substantially and even local waste fees will skyrocket.

4.1.2 Value Enhancing Factors

As mentioned, landfills are becoming more and more scarce, especially on the eastern seaboard. Those possessing permitted landfills own virtual gold mines as values continue to rise. Martin Creek landfill has 284 acres with 42 acres currently permitted by the Missouri Department of Natural Resources.  Barton Sanitary landfill has 300 acres and a permitted area of 65 acres and is permitted by the State of Illinois Environmental Protection Agency.

Martin Creek will treble in valuation when construction is complete.  A typical landfill with final permits ready for operation carries a price tag from $6-7 million, and, in some cases, more.

Over the past decade, recycling has reached every household in the United States. Many municipalities have mandatory recycling laws. It makes economic sense for people to remove recyclables from the waste stream. This is a practice that can help preserve the earth’s resources. Even when citizens remove the majority of recyclables, an operation such as is proposed in this plan will remove an additional 25% of the volume in white paper, cardboard, glass, plastic, ferrous, and aluminum. GER is performing the ultimate “recycling” by enclosing the baled waste and capturing the gas to be used for productive, profitable means. By using this often-wasted energy, our national dependency on fossil fuels may diminish, albeit slightly. Each bale cell generates methane for years after closure.

Several factors, then, accrue to the benefit of GER. Owning landfills with rail access in the heartland of the USA, landfill closures, population growth, rising waste removal costs, technology advances, and continued fossil fuel dependency adds up to excellent market growth and exemplary value in return for each invested dollar and hour of effort. Landfill gas capture will provide income long after the waste operation ceases.

4.2 Target Market Segment Strategy

There are two large national players operating in practically every major city in the United States, Associated Waste and USA Waste Technologies. Both are NYSE listed and both exceed $1 billion per year in revenues. Their operations include collecting waste, both business and residential, operating transfer stations and landfills. 

GER intends to work with both USA Waste and Associated Waste. It may appear that GER will be in competition with these companies, however, in the St. Louis area, the landfills owned by USA Waste are in Illinois, some 30 miles (60 miles round trip) and 40 miles (80 miles round trip) from the city. Associated Waste manages a landfill in St. Louis owned by the Catholic Church due to close in less than eighteen months.  Associated also owns a landfill in Roxana, Illinois somewhat more distant than the USA Waste landfills.

USA Waste has offered to provide GER with nearly 700 tons/day of waste in the vicinity of Martin Creek. It has also inquired about purchasing Martin Creek landfill at a future date.  As mentioned previously, USA Waste approached the present owners of Barton to accept overflow waste as it attempts to reduce the waste flow to its Milan, Illinois landfill.

GER has contacted local hauling companies for some or all of their business. For these companies, a favorable location with more favorable hours of operation will be of benefit to the owners who realize a closer landfill and longer hours will help increase their profitability.

Currently there is a proposal for several small municipalities in Eastern Missouri to join in an effort to develop a landfill property to meet their collective needs for the next twenty five years. With a projected cost of $37,250,000 there is staunch opposition to the project. The fact that local government would consider such a high cost project underscores the value of Martin Creek and Barton.

Landfills or transfer stations are selected, if dumping fees are the same, solely due to the proximity of the waste hauler’s route to their facility. Most likely, Martin Creek or Barton will not capture the business from hauling firms whose facilities are more than 100 miles distant, unless they need to dump their load after the closing hours of the other facilities. On the other hand, the hauling firms whose routes are close to the landfill will find these locations a boon to their business.

Both Martin Creek and Barton will accept waste on Saturdays. Small trucks and local residents will utilize the facility during this time. Rates for this type of waste are generally higher than for commercial waste hauling firms.

Recycling energy conversion business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Small Haulers 15% 700 805 926 1,065 1,225 15.02%
Big Three Haulers 10% 1,280 1,408 1,549 1,704 1,874 10.00%
Private 25% 100 125 156 195 244 24.98%
Total 12.59% 2,080 2,338 2,631 2,964 3,343 12.59%

4.2.2 Market Growth

As mentioned in preceding sections, Associated Waste and USA Waste Technologies are the two major firms in the waste business nationwide. Both are NYSE listed. Their operations include collecting residential and commercial waste, operating transfer stations, and operating landfills.

Total daily waste collected in the metropolitan St. Louis area, that includes St. Louis city and County, St. Charles County, and Jefferson County, is estimated at between 12,000 and 16,000 yards per day. GER can immediately take 10% of this waste stream daily without competitive concern. In time GER expects to obtain a greater percentage of this waste stream.

Local counties include: Washington; St. Francois; Jefferson; St. Genevieve; Iron; and Madison. Each of these counties has waste collection services.

Washington County trucks drive a round trip distance of 104 miles to a transfer station in St. Genevieve City, St.Genevieve county, Missouri where it is then trucked to DeSoto, Illinois, a round trip distance of 146 miles.

St. Francois trucks drive a round trip distance of 92 miles to a transfer station in St. Genevieve city, St. Genevieve County, Missouri where it is then trucked to DeSoto, Illinois. St. Genevieve trucks drive to a nearby transfer station in St. Genevieve city St. Genevieve County, Missouri where it is then trucked to DeSoto, Illinois.

Jefferson County trucks drive to a transfer station in Barnhart, Jefferson County, where it is trucked to Weber Landfill in St. Louis, a round trip of 70 miles or across the Mississippi to East St. Louis, Illinois, a round trip of 90 miles.

Iron County waste trucks pickup waste and drive to Fredericktown Transfer Station, a round trip of 56 miles, where it is trucked to Butler County Landfill, Poplar Bluff, Missouri, a round trip of 80 miles.

Madison trucks pickup waste and drive to Fredericktown, Madison County Transfer Station where it is trucked to Butler County Landfill, Poplar Bluff, Missouri.

The distance Washington County trucks would travel to Martin Creek is 18 miles round trip vs. 104 miles. The distance St. Francois County trucks would travel to Martin Creek is 36 miles round trip vs. 92 miles. The distance St. Genevieve County trucks would travel to Martin Creek is 72 miles round trip vs. 144 miles. The distance Jefferson County trucks would travel to Martin Creek is 22 to 75 miles round trip vs. 90 miles. The distance Iron County trucks would travel to Martin Creek is 44 miles round trip vs. 56 miles. The distance Madison County trucks would travel to Martin Creek is 68 miles round trip vs. 80 miles.

In every case these county trucks would save time and mileage by using Martin Creek. This translates into money saved for the each county or hauling company. At present there are no long-term contracts that would prevent a change to Martin Creek.

These counties produce the following amounts of waste daily:

  • Washington: 80-120 yards.
  • St. Francois: 250-300 yards.
  • Jefferson: 2,000 yards.
  • St. Genevieve:250 yards.
  • Iron: 60 yards.
  • Madison: 60-80 yards.
  • Total: 2,700 to 2,800 yards per day from local counties.