Recycling Waste Materials Business Plan
Mid-Atlantic Recycling, LLC’s business will collect, recycle/compost, and market waste from municipality waste processing plants for use as a consumer good. This recycled product will meet two critical needs:
1. It will provide municipalities with a cost-effective alternative to landfilling the waste.
2. It will meet the growing demand for organic soil enhancers and fertilizers. The material that will be recycled is human waste sludge.
Market
Customers at both ends of our supply chain 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: waste treatment facilities and consumers.
The Worldwatch Institute reports that landfills are overflowing and the costs of disposing of sewage and garbage are rising. City leaders can relieve overextended 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 landfilled. This is of great value to customers.
At the other end of our process are the users of our compost. According to Cornell University, composting is experiencing a resurgence of activity driven by increased understanding of the agronomic benefits of compost utilization and rising disposal costs for municipal wastes. Also, according to Purdue University, consumption of compost in the commercial market is growing due to people seeking more organic or natural substitutes for traditional chemical fertilizers. Recycling is at the forefront of responding to this growth trend in the Mid-Atlantic USA. We will 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 (food and nonfood crops and sod farms), Landscapers (industrial and commercial properties; golf courses, cemeteries, and athletic fields; landfill covers; and damaged soils), Nurseries (plant and forest seedling crops and reforestation projects), Public agencies (highway median strips, parks, recreational areas, and other public property), and Residents (home landscaping and gardening).
Competition
Our service offers a 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 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 in the form of a loan from the Regional Council of Governments Revolving Loan Fund, 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
Financing Needed
We will be receiving nearly $1,000,000 from two sources: an $850,000 loan based on our assets and $150,000 from the owners.
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 they may benefit from compost’s good properties and organic elements. We also hope to build in the consumer a positive feeling about the feasibility of using recycled human sludge as a fertilizer.
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 multibillion-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 an 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 a competitive advantage. The following explains our product’s advantages. Our product is:
– Organic: Our organic product allows us to be responsive to the market trend. We offer all the advantages that organic products have over chemical competitors.
– Comparable application times: Based on West Virginia University laboratory analysis, our product is comparable in potency to chemical fertilizer. Thus, the application time is also comparable, saving money and labor.
– Recycled: This part of our product relates to marketing. We are a company that cares about the consumer and the environment. We offer a valuable product at a low cost, saving landfill space.
As noted earlier, direct competitors are essentially nonexistent 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 to deal with waste disposal issues. Their method involves placing sludge on the ground in windrows, which are turned periodically for aeration. This is an inefficient method primarily because it is slow, taking 90 or more days, which means availability is uncertain for consumers. Furthermore, this method does not achieve high enough temperatures to kill harmful bacteria and weed seeds. Additionally, municipalities have limited marketing capabilities, primarily consisting of local homeowners and businesses, which ignores the greater market. This method also requires a lot of ground space, restricting the operation. Finally, odor can be a problem for municipalities due to proximity to local residents or businesses. For these reasons, municipality composting efforts are not considered a competitive threat.
Our advantages
The competitive edges we have are as follows:
– Cost: Our compost product is much less expensive than chemical fertilizers.
– Organic product: We offer an organic product that is responsive to current market trends, including all the advantages offered by organic products over chemicals.
– Recycled: Recycled products characterize a "caring company" and are more appealing to customers’ changing attitudes toward organic fertilizer.
– Elimination of disposal issues: Our service recycles waste, saving valuable landfill space.
– More effective application times: Our product lasts for many months, saving customers time and money.
– HUBZone location: Provides an advantage in selling to the government.
– SDB and 8(a) certifications: Provide additional advantages in selling to the government.
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.
– Obtain investment.
Execution
Marketing & Sales
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.
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 statewide and across the Mid-Atlantic region.
First Phase Promotions
– Publicity: We will send news releases to major newspapers in West Virginia and seek publicity through local radio and television stations.
– Advertising: We will utilize direct mail and face-to-face promotional strategies. Newspaper advertising may also be used, and the effectiveness of radio and television ads will be evaluated.
– Internet: We will have a content-heavy website to educate potential customers about the benefits of our products and services.
– Alliances: We plan to form alliances with fertilizer manufacturers to use our product in their fertilizer or distribute our product for us.
Second Phase Promotions
– Publicity: We will continue to seek publicity through news media to promote our successes.
– Advertising: We will continue to make face-to-face contact with customers, send periodic mailouts, and evaluate advertising on websites.
– Internet: We will maintain a comprehensive website and explore advertising possibilities with target clients.
– Alliances: We will continue to seek mutually beneficial alliances with manufacturers.
Our sales strategy is straightforward. Get the word out about our products and services to potential customers, educate them about the value added by our products and services, and let the product/service sell itself.
Our present management team will become the main sales force, and as business demand permits, we will expand the sales team. In the first six to twelve months, our sales team will focus on municipalities, fertilizer manufacturers, farmers, small nurseries, and related companies. We will promote the products based on their environmental strengths and extended duration. After the first year, we will use other channels of selling, including face-to-face contact and direct mail.
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. This site provides access to local municipalities and Interstates 77 and 81. It also allows for future expansion.
Technology
Composting is the biological decomposition of organic materials. Our process will greatly speed up the natural composting process. Human waste sludge will be picked up from municipalities and placed into organic in-vessel digesters. The composting process involves controlled temperature, moisture, and aeration to ensure efficient composting. Our method offers advantages such as rapid recycling, isolation of waste materials, precise control of composting conditions, and year-round decomposition.
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