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Recycling icon Recycling Waste Materials Business Plan

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Mid Atlantic Recycling

Executive Summary

Opportunity

Solution

Mid-Atlantic Recycling, LLC’s area of business will be to collect, recycle/compost, and market waste from municipality waste processing plants for use use as a consumer good. This recycled product will meet two critical needs:

  1. It will give municipalities a feasible and cost effective alternative to landfilling the waste, and
  2. It will help meet the growing demand for organic soil enhancers and fertilizers. The material that will be recycled is human waste sludge.

Market

There are customers at both ends of our supply chain that will benefit from our services and products. Municipalities will benefit from our service by having an alternative means of waste disposal. Other potential customers who will benefit from our compost product include turf farms, fertilizer manufacturers, nurseries, landscapers, golf courses, homeowners, and even the federal government for use in highway construction reseeding. Therefore, we have two basic market segments; those waste treatment facilities which will benefit from our services and consumers who will benefit from our product.

The Worldwatch Institute reports that landfills are overflowing and the costs of disposing of sewage and garbage is rising. City leaders can relieve over extended municipal budgets, prevent the contamination of drinking water, and help farmers build healthier soils by recycling garbage and human waste back to farms. At least 13 U.S. states have 6 years or less before all of their landfills are completely full. (Paper 135: Recycling Organic Waste: From Urban Pollutant to Farm Resource.)  We offer a service by which municipalities can dispose of their waste without it having to be land filled anywhere. This is of great value to this customer.

At the other end of our process are the users of our compost. According to Cornell University (www.cals.cornell.edu/dept/compost.feas.study.html) composting is experiencing a resurgence of activity which is driven by increased understanding of the agronomic benefits of compost utilization, and rising disposal costs for municipal wastes. Also, according to Purdue University (www.ctic.purdue.edu/Core4/Nutrient/ManureMgt/Paper35.html) consumption of compost in the commercial market is growing due to people looking for a more organic or natural substitute for traditional chemical fertilizers. Recycling is at the forefront of responding to this growth trend in the Mid-Atlantic USA. We will initially focus on selling compost to fertilizer manufacturers, nurseries, and landscapers. We already have commitments from a fertilizer manufacturer and a landscaper to purchase 600 tons per year or more of our compost material.

Five major market segments for compost have been identified:

  • Agriculture (for food and nonfood crops and sod farms).
  • Landscapers (for industrial and commercial properties; golf courses, cemeteries, and athletic fields; landfill covers; and damaged soils).
  • Nurseries (for plant and forest seedling crops and reforestation projects).
  • Public agencies (for highway median strips, parks, recreational areas, and other public property).
  • Residents (for home landscaping and gardening).

Competition

Our service offers a feasible, even desirable, alternative to traditional means of disposing of human waste. Our product is a value added, soil enhancer that appeals to the growing environmental conscientiousness among consumers. Direct competition is almost nonexistent. We intend to position ourselves as the logical, economical choice for human waste disposal and compost production in West Virginia and the Mid-Atlantic region.

Expectations

Forecast

The start-up funding will be provided as follows: Owner equity investment of in the form of a loan from the Regional Council of Governments Revolving Loan Fund; this loan is secured by the owner’s real estate assets. The  Regional Revolving Loan Fund is an economic development fund sponsored by three West Virginia counties:  Mercer, Greenbrier, and Monroe.

Financial Highlights by Year

Chart visualizing the data for Financial Highlights by Year

Financing Needed

We will be getting nearly $1,000,000 from two sources $850,000 dollar loan based on our assets and $150,000 from the owners. 

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Opportunity

Problem & Solution

Our solution

Mid-Atlantic Recycling’s mission is threefold. Our first responsibility is to ensure the financial well being of the business. Second, is to provide municipalities with an economical, alternative for the disposal of human waste sludge. Third, is to provide a top quality, recycled material to the consumer so that they may benefit from compost’s many good properties and organic elements. In addition, we hope to build in the consumer a positive feeling about the feasibility of using recycled human sludge as a fertilizer.

Target Market

Market Size & Segments

The following table shows information regarding the number of potential customers in our target markets. This data is based on information taken from superpages.com.

As reflected in the table, there are approximately 34 waste treatment plants in West Virginia. These are all potential customers for our collection service and sources of material for compost processing. Additionally, there are a total of 1,779 potential customers in the initial target market for our compost product. This includes 11 fertilizer manufacturers, approximately 30 sod/turf farms, 324 nurseries, 483 golf courses, and 931 landscapers.

Target Market Segment Strategy

To target our customers, we examined the market trends. Mid-Atlantic Recycling’s products target buyers of organic fertilizers and soil enhancers. This market has grown significantly in recent years and we expect to capture a quarter of this multi billion-dollar market.

This market growth is fueled by a more health conscious consumer. People are better informed about the potential side effects associated with chemical fertilizer products both to their health and to the environment.

The growth of a more organic approach to gardening comes at a time when chemical options are diminishing. In 2000, the federal Environmental Protection Agency reached agreement with the makers of two widely used pesticides — Diazinon and Chlorpyrifos — to phase them out because of health problems associated with overexposure. Popular brands of Diazinon include Ortho and Spectracide; Chlorpyrifos is marketed under the trade name Dursban and is included in numerous familiar products, including Ortho Lawn Insect Spray (Washington Post, Thursday, May 10, 2001).

According to an executive with the Scotts Co. in Marysville, Ohio, the pace of research into organic products continues feverishly, and their use is bound to increase.

Sales of organic foods have risen sharply. Organic food sales at the retail level totaled $10.4 billion, according to Katherine DiMatteo, executive director of the Organic Trade Association. This year, retail sales of organic foods are expected to exceed $15 billion — with more than $32 billion projected by 2009 (CNBC, Dec. 3, 2004).

Findings from a 15-year study at the Kamlath Institute, Newton, Pa., might lead to a solution that could help reduce emissions of greenhouse gases. The researchers suggest that regenerative agricultural management systems based on organic fertilizer can preserve carbon and nitrogen in the soil, thus reducing emissions. Moreover, they maintain that organic methods can produce the same yields as conventional systems that use synthetic fertilizer. If the major corn/soybean growing region of the U.S. were to adopt these organic practices, they say, the percentage of estimated annual carbon dioxide released into the atmosphere from fossil fuel combustion in the nation could be reduced by one to two percent (USA Today, June 1999).

Mid-Atlantic’s products will help fill the growing need for organic fertilizers, and soil amendments, while helping to solve the problem of dwindling landfill space.

Competition

Current alternatives

To be a player in the organic fertilizer and soil produce market, Mid-Atlantic Recycling identified market needs to gain an overall competitive advantage. The following explains our product’s competitive advantages. Our product is: 

  • Organic: Our organic product allows us to be responsive to the dominant market trend. We offer all of the advantages that organic products have over chemical competitors.
  • Comparable application times:  Based on the West Virginia University laboratory analysis, our product is comparable in potency to chemical fertilizer. Thus the application time is also comparable, which saves money and labor since there is no need to purchase and apply additional products.
  • Recycled: This part of our product has to do with marketing. We are a company that cares about the consumer and the environment. We offer a valuable product, at low cost, that saves landfill space.

Main Competitors

As noted earlier, direct competitors are essentially non-existent in the Mid-Atlantic region. Our major indirect competitors are chemical fertilizer manufacturers. However, their products are more costly and do not address the market’s trend toward organic, natural soil enhancers.

Some municipalities have begun composting operations in an attempt to deal with waste disposal issues. They typically use a method in which sludge is placed on the ground in windrows which are turned periodically for aeration. This is an inefficient method of composting primarily because it is slow, taking 90 or more days, which means that availability is uncertain for consumers. Also, in this composting method high enough temperatures are not achieved to kill harmful bacteria and seeds that may sprout into weeds. Additionally, municipalities are not businesses, which means their marketing capabilities are limited. Their market primarily consists of local homeowners and businesses, which ignores the greater market. Also, this composting method requires a lot of ground space which restricts the operation. Finally, odor can be a problem for municipalities due to nearness of local residents or businesses. For these reasons, municipality composting efforts are not considered a competitive threat

Our advantages

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.

Keys To Success

Keys to Success

The keys to success in our business are:

  • Overcome perception issues that may exist with using compost made from human waste sludge.
  • Establish and build relationships and trust with customers to help shield from future competition.
  • Expand rapidly to control the market.
  • Offer reasonable prices.
  • Get investment.
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Execution

Marketing & Sales

Marketing Plan

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.

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.

Sales Plan

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.

Operations

Locations & Facilities

Mid-Atlantic Recycling will operate in Monroe County, WV, near the community of Lindside, WV. The Lindside location is approximately 10 miles from Peterstown, WV. The recycling facilities will be located on a 58+ acre property owned by company president, Oliver Pyne; 5 acres will be set aside for the recycling facility set up and operation. This site is ideal as it provides access to local municipalities and to Interstates 77 and 81. Also there is room for expansion as the business grows.

Additionally, Mid-Atlantic Recycling’s business location is located in a federally designated "historically underutilized business zone" or HUBZone. As discussed under the Competitive Comparison section below, this designation gives Mid-Atlantic Recycling certain advantages in selling to the government.

As the business expands to additional counties in subsequent years, we will need to lease property on which to site our facilities.

Technology

Composting is biological decomposition of organic materials. Bacteria, fungi, protozoans, insects, worms and other organisms typically play a part in the decomposition process. Composting is nature’s means of recycling. It will turn grass clipping, leaves, vegetables, fruit and other organic materials into a very beneficial soil amendment. Composting is also an effective means of reducing the amount of solid wastes going into our nation’s landfills. Mid-Atlantic Recycling’s process will greatly speed up the natural composting process. 

As briefly described above, the human waste sludge used in Mid-Atlantic Recycling’s process will be picked up from municipalities in skid boxes provided by Mid-Atlantic Recycling. Accepting the waste, rental of the boxes, and transportation will all be sold as a service to the municipalities. 

Upon arrival at our recycling facility, the sludge will be placed into one of six organic in-vessel digesters. These vessels are proven for composting various types of animal manure. In addition, Mid-Atlantic Recycling’s president, Oliver Pyne, has tested the unit’ ability to successfully compost human waste. The material compost produced was tested by the equipment manufacturer (CV Organics, Inc. of White Springs, TN) and found to be a high quality compost. Additionally, the compost material was recently tested by West Virginia University Agricultural Service Laboratory and found to be an exceptional soil amendment. 

These recycling/composting units work as follows. The unit is 50 feet long. The sludge is placed into one end of the unit. To make compost, additional dry fibrous material such as sawdust, wood chips,  or bark must be added. We will acquire a steady supply of these from International Paper Company.

The unit turns slowly, making four revolutions per hour, to ensure that adequate oxygen gets to all of the composting material. Also, the unit is set on a very slight, 2 degree, angle so that as the unit turns, the material slowly migrates toward the opposite end of the unit. During the composting process, the material heats up (due to the natural reaction) to temperatures of approximately 140 degrees Farenheit; this kills any harmful bacteria in the composting material. Temperature can be controlled to ensure optimum composting environment. Also, the moisture levels can be controlled to ensure optimum composting. After three days, the material has reached the opposite end of the unit where it is removed. 

Advantages of this recycling/composting method are as follows:

  • Recycling is completed rapidly in three days. Other methods take 90 plus days.
  • Waste materials in the unit are isolated from the environment.
  • The manager has precise control of moisture, temperature, and aeration during the process to ensure the most efficient composting possible.
  • In-vessel composting can maintain a rapid decomposition process year-round regardless of external ambient conditions.  The material can be used for improvement of organic matter content and fertility of soil. 

Milestones & Metrics

Milestones Table

Milestone Due Date
Complete Business Plan
Nov 14, 2017
Get Funding
Nov 27, 2017
Site Preparation
Dec 04, 2017
Form LLC
Dec 18, 2017
Computer Set up
Jan 08, 2018
Order / Fabricate Composters
Jan 22, 2018
Hire Staff
Mar 05, 2018
Begin Production
Mar 12, 2018
Q1 Review
June 05, 2018
Q2 Review
Sept 10, 2018
Q3 Review
Dec 06, 2018

Key metrics

Key Metrics: 

  • Facebook likes and twitter retweets and social media shares regarding articles about composting and why it is beneficial 
  • get reviews and comments from our customers 
  • customize inventory for needs 

 

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Company

Overview

Ownership & Structure

Mid-Atlantic Recycling is owned by its founder and president, Oliver Pyne. Mr. Pyne will be an active participant in management decisions. 

Team

Management team

The responsibilities involved in the company Mid-Atlantic Recycling are great and abundant. Mid-Atlantic Recycling’s main purpose is to appeal to municipalities by offering a human waste disposal alternative, and to environmentally conscious minded consumers by developing products that include recycled human waste. Each executive member will have several responsibilities that are imperative to fulfill the duties in producing such unique products.

As founder and president of Mid-Atlantic Recycling, Mr. Oliver Pyne will be responsible for the entire operation. Some of his duties will include overseeing the areas held by the other company executives, as well as the output produced by other employees. He will be in charge of the company’s public relations. He will also have the job of hiring dedicated people and ensuring employees put their best efforts into the production of Mid-Atlantic Recycling’s products. He will have the lead role in making decisions that concern the well being of Mid-Atlantic Recycling.

Mr. Sam Cole has an important job as operations manager. His job will be crucial in the growth of Mid-Atlantic Recycling. He will ensure that day-to-day operations are conducted such that materials are received, methods and processes are standardized, and production is maximized to ensure uniform production of compost materials. This duty will entail establishing a good working relationship with production line employees because without them Mid-Atlantic Recycling’s products will not be produced.

Mr. Alexander Main will be responsible for Mid-Atlantic Recycling’s financial management operations including accounts payable, accounts receivables, and bookkeeping.

Management Team Gaps

To assist in sales and marketing, Mid-Atlantic Recycling plans to utilize the services of Blevins Consulting, LLC, a management consultant firm based in West Virginia. Blevins Consulting specializes in business planning, marketing planning, training, website design and marketing, and marketing to the federal government.

Marketing and sales will play an important role in convincing consumers to switch from their old products to Mid-Atlantic Recycling’s products. Blevins will help create the need for our products and services while at the same time capturing the attention of the consumers’ targeted. Some of Blevins duties will include writing press releases, coordinating print and radio press, monitoring the competition, making presentations to potential clients, and studying the markets to identify customers’ needs and determine how to best appeal to those needs.

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Financial Plan

Forecast

Key assumptions

We assume that: 

  • recycling is necessary for the planet 
  • our customers appreciate options for their needs 
  • there are a lot of products to help process

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of funds

Start-up Expenses

Legal $500

Phone/utilities deposits $500

Licenses/tax deposit $4,000

Insurance $1,000

Brochures/sales literature $500

Advertising $2,500

Employee salaries $16,680

Skid boxes, 15 @ $3,000 ea. $45,000

Welding and cutting torch$ 10,000

Furniture and supplies $5,000

Website development $1,500

Miscellaneous $5,000

TOTAL START-UP EXPENSES $92,180

Our start-up costs will be $1,000,000. The funds will be primarily used for the following:

 

Capital Asset Purchases

Processing Plants  2 x $190,460

$380,920

Processing Plants built in-house  2 x $40,000

$80,000

Sheds 48’x72′  4 x $18,500

$74,000

Skid Truck  2 x $73,000 (avg price)

$146,000

Backhoe

$40,000

Front-end Loader  2 x $50,000

$100,000

Tandem Dump Trailer

$6,000

Total

$826,920

Sources of Funds

We will have angel investors that will give us $850,000 and the owners will provide $150,000 totaling $1,000,000

Statements

Projected Profit and Loss

2018 2019 2020
Gross Margin $1,467,299 $1,710,532 $1,721,322
Operating Expenses
Salaries & Wages $804,000 $820,080 $836,478
Employee Related Expenses $160,800 $164,016 $167,296
Utilities $21,600 $21,600 $21,600
Insurance $24,000 $24,000 $24,000
Marketing $28,359 $33,037 $33,245
Rent $85,078 $99,111 $99,734
Interest Incurred $15,770 $13,051 $10,278
Depreciation and Amortization $51,625 $51,625 $51,625
Gain or Loss from Sale of Assets
Income Taxes $0 $0 $0
Total Expenses $2,559,878 $2,819,689 $2,847,382
Net Profit $276,067 $484,011 $477,068

Projected Balance Sheet

Starting Balances 2018 2019 2020
Cash $92,000 $285,006 $683,238 $1,071,752
Accounts Receivable $0 $0 $0
Inventory
Other Current Assets
Total Current Assets $92,000 $285,006 $683,238 $1,071,752
Long-Term Assets $826,000 $826,000 $826,000 $826,000
Accumulated Depreciation ($51,625) ($103,250) ($154,875)
Total Long-Term Assets $826,000 $774,375 $722,750 $671,125
Accounts Payable $0 $0 $0
Income Taxes Payable $0 $0 $0
Sales Taxes Payable $0 $0 $0
Short-Term Debt $134,686 $137,405 $140,178 $143,008
Prepaid Revenue
Total Current Liabilities $134,686 $137,405 $140,178 $143,008
Long-Term Debt $715,314 $577,909 $437,731 $294,723
Long-Term Liabilities $715,314 $577,909 $437,731 $294,723
Paid-In Capital $150,000 $150,000 $150,000 $150,000
Retained Earnings ($82,000) ($82,000) $194,067 $678,078
Earnings $276,067 $484,012 $477,068

Projected Cash Flow Statement

2018 2019 2020
Net Cash Flow from Operations
Net Profit $276,067 $484,011 $477,068
Depreciation & Amortization $51,625 $51,625 $51,625
Change in Accounts Receivable $0 $0 $0
Change in Inventory
Change in Accounts Payable $0 $0 $0
Change in Income Tax Payable $0 $0 $0
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt $2,719 $2,773 $2,829
Change in Long-Term Debt ($137,405) ($140,178) ($143,008)
Cash at Beginning of Period $92,000 $285,006 $683,238
Net Change in Cash $193,006 $398,232 $388,514
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