Business Plan On Abc Recycling Company

 

Business Plan

San Francisco, California

1. Introduction
ABC Recycling is a new company to be set up in San Francisco, California. It shall be located in the outskirts of the city. The ownership shall be completely private. Although the company is a ‘for-profit’ organization, the nature of the industry and the aspects of the service to community cannot be undermined. The company seeks the support of municipal authorities in the city to help build an affordable, efficient and sustainable model for garbage collection and recycling.

1.1 The Definition: Recycling can be defined as the processing of waste materials into new productsso as to prevent or reduce the consumption of fresh raw materials. Recycling also reduces energy usage, brings down air and water pollution and lowers greenhouse gases (Murphy, Mueller and Gowda, 1993). It is a key component of modern day waste reduction cycle and the third process of the “Reduce, Reuse and Recycle” waste hierarchy.
Recycling is an ancient practice that has been around for centuries. The waste being collected in America has tripled since 1960 to more than 245m tons in 2005 (The Economist, 2005). In 2008, the city of San Francisco generated 2.14m tons of waste (GreenBiz, 2010). It has thus made the activity of recycling all the more important.

1.2 Mission Statement: “To provide the residents of San Francisco, California with an affordable, effective and efficient system of recycling waste produced in homes or industries”. Along with this the company shall pursue the following objectives:
1. Build a positive relationship with city municipality
2. develop a business around sound business practice
3. ensure that recycling is sustainable
4. create jobs
5. minimize landfilling
6. explore new technologies in recycling and create awareness among the residents in the city towards its advantages
2. Operational Plan
The operation plan is currently tentative and can undergo changes as and when the project takes off. The plan is to have a sorting centre near the existing municipal dump site. The company shall have its own trucks and crew and demarcate routes for garbagemen to do the rounds and collect the waste around the residential neighborhoods and industrial sites.
2.1 Human Resource Requirements.
The size of the company has been tentatively been kept at 10 members comprising of following members. The list of possible jobs and employee breakup is given below:

Managing Director

LDV Driver

Forklift/ Tractor Driver

Administration Clerks

General labour/cleaners

Total human resources

2.2 Infrastructure Requirements

The following infrastructural requirements have been identified to start the operations of ABC Recycling

1. One light delivery vehicle
2. One conveyor belt
3. One forklift
4. One Tractor
5. One Shed
6. One Office
7. One Computer
8. 2 Balers
2.3 Product
There are many types of products that are recycled around the world including San Francisco. The types of wastes that we intend to collect and the volumes based on the estimated capacity that we can handle per month are given below.

Paper and cardboard

1500 tons
Tin
300 tons

Plastic

500 tons

Glass

1000 tons

Rubber

1200 tons

3. Financial Plan
3.1 Capital Expenses

The capital expenses are estimated figures and might vary.

Conveyer Belt Setup

Office Construction

Other Misc Expenses

The Initial capital expense is intended to be raised through a bank loan.
3.2 Cash Flow

The Cash Flow is being broken into figures of monthly income and expenditures.

Monthly Income
The source of income is the collection of industrial waste products that shall be recycled and sold. Also the fee collected from municipality for residential garbage collection is a major source of income.

The figures are tabulated below

Paper and Cardboard

Rubber

Fee collected from municipality

Monthly Expenditure
The major monthly expenses shall be in the form of salary and loan repayment. The breakup of estimated expenses is presented below.

Managing Director

$6000
2 Drivers
$5000

Administrative Clerk

$3000
9 Laborers

Loan Repayment

$1500

Insurance, Maintenance etc.

$ 31,500

The operating margin has been estimated at $2500 at the start of the operations.

4. Marketing Plan
ABC Company shall focus its marketing activities to build its presence in San Francisco as a provider of affordable and high quality recycled products. The methods we acquire the waste are the key to the success of the operation. Association with the municipality is the principle method to establish itself in the marketplace and reach the waste generators with relative ease.
4.1 Promotion
The promotion of ABC Company shall be primarily through the bureaucratic channels. Reach to the household shall be facilitated with partnerships with municipal corporations and local area officials shall designate us residential regions to collect garbage from. The industrial waste generating clients shall be acquired through personal meeting and seminars with managing director.
4.2 Price
The city of San Francisco is huge and there exists a lot of potential for recycling of wastes. As per the findings of Business & The Environment magazine (2012), California is currently raked very low in terms of waste recycling as it is found to be far too expensive. Thus a cheap alternative that the Company seeks through the partnership with the municipality is all the more needed. The price of the sale of recycled products can thus be kept lower than the competition which shall also enable us to create a presence for ourselves.
4.3 Place
San Francisco has a very high percentage of landfill diversion as compared to other states. In 2008, the landfill diversion was as much as 77% of the waste generated in the year (Fickes, 2011). Thus the culture of recycling is well established. However the cost of recycling is high and this has led to many companies moving their headquarters to the East Coast (Business & The Environment 2012).
4.4 Competition
The competition in the San Francisco city, when it comes to recycling is not very intense, owing to it being expensive (Business & The Environment 2012). The main competitors are companies operating in the state of California. Few of them are AERC Recycling Solutions, Allied Technology Group, Clean Harbors, D/K Environmental, Earth Protection Services and Recology (Index of U.S. Commercial Recycling Facilities by Company Name 2004).
The competition is also in the form of unorganized rag picking from non state designated scavengers, which account for a loss of almost $5m a year to organized collection (Carus 2011).

References

Carus, F 2011, ‘San Francisco’s scavengers: a story of gangs, poverty and recycling’, Ecologist, 40, 28, pp. 20-22
Fickes, M 2011, ‘The Un-Trash Company’, Waste Age, 42, 10, pp. 26-29
GreenBiz, 2010. SF Hits Waste-Reduction Target Two Years Early. [online] Available at:[Accessed 28 October, 2012]‘Index of U.S. Commercial Recycling Facilities by Company Name’ 2004, Hazardous Waste Consultant, 22, 3, pp. 4.35-4.40
‘Has California Priced Itself Out of Waste and Recycling Companies?’ 2012, Business & The Environment, 23, 3, pp. 11-1
Murphy, P., Mueller, C.R. and Gowda, M. 1993. The Garbage Primer. New York: Lyons & Burford.
The Economist, 2007. The truth about recycling. [online]. Available at:[Accessed 28 October 2012].