For Recycling Enterprises: Plastics, Glass - Business Environmental Program

Writing Business Plans

for

Recycling Enterprises: Plastics, Glass

or

Rubber

January 1998 Association of Small Business Development Centers

For Information:

Association of Small Business Development Centers 3108 Columbia Pike #300 Arlington, VA 22204 Tel: (703) 271-8700 FAX: (703) 271-8701

i Writing Business Plans for Recycling Enterprises

Acknowledgments

This guide to writing a business plan required the help of many people from many different fields. The Association of Small Business Development Centers thanks the following:

? the United States Environmental Protection Agency for sponsoring it, and EPA's project officer John Leigh for his patient help -- especially for finding thorough reviewers who included the following: Dawn Amore, National Safety Council; Evadne Gianninni, Delaware Economic Development Office; David Kirkpatrick, Kirkworks; Kivi Leroux, Materials for the Future Foundation; Edgar Miller, National Recycling Coalition; Tom Polk, Maryland Department of Economic Development; Gary Pratt, P&R Environmental Industries; Mary Ann Remolador, Northeast Recycling Council; Larry Rouse, Associated Enterprises; Deanna Ruffer, Georgia Department of Natural Resources; Ken Sandler, United States Environmental Protection Agency; Amy Schock, New York Office of Recycling Market Development.

? Sam Males, then President of the ASBDC, who organized a nationwide search through ASBDC's network for real-world business plans from recycling businesses.

? the recycling businesses from across the country which provided copies of their business plans (under rules of confidentiality).

? Inc. magazine, and Warren Purdy, author of Inc.'s invaluable Service Business Planning Guide, who provided us with the structure and much of the text.

? the trade and industry associations within the recycling industry, who gave us materials and information.

? Four people share credit for the research and writing: Tom Misner, Rex Massey, Warren Purdy and Gary Scrimgeour. Rex Massey was the lead researcher. Gary Scrimgeour did the editing and preliminary design.

? Michelle Casey (of the Nevada SBDC) assembled and updated the Resource Directory.

? Winnie Moore Dowling (of the Nevada SBDC) pulled together the efforts of Karl Lampson, Mike Ross, and the undergraduate interns of the Nevada SBDC for compiling drafts, reviewing, editing, gathering business plans, reviewing and updating the Resource Directory, etc.

And finally, we thank Bradford W. Ketchum III at Inc. magazine for his perseverance in getting this book published.

ii Writing Business Plans for Recycling Enterprises

Association of Small Business Development Centers

(ASBDC)

The Association of Small Business Development Centers (ASBDC) is the preeminent national network for delivering counseling, training and information services to small businesses. It includes 950 subcenters in all 50 states, Guam, Puerto Rico and the Virgin Islands. SBDCs each year service more than 550,000 start-up businesses with a combination of one-on-one counseling and workshops or training sessions. Many SBDCs also provide services in procurement, international trade, debt and equity financing, compliance with environmental regulations, and technology development. Management is local, and the SBDCs serve local needs. The network also acts as a channel between local business-people and national organizations in business or government. For information on the ASBDC, including the location of the SBDC office nearest you, contact the ASBDC at 3108 Columbia Pike #300 Arlington, VA 22204 Tel: (703) 271-8700.

iii Writing Business Plans for Recycling Enterprises

TABLE OF CONTENTS

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

SECTION 1: CREATING A BUSINESS PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . .8

The Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Business Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 The Marketing Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 The Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Determining Market Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 Forms of Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72 Management and Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77 Costs and Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105 Where To Go Next . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108

SECTION 2: SAMPLE BUSINESS PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . .112

Green Wave Recycling Systems, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113 Glassteks, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133 Earthbound Tire Reclamation Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .156

SECTION 3: RESOURCE DIRECTORY FOR CREATING A BUSINESS PLAN . .180

General Reference Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .181 Recycling Reference Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .185 Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .191 Newsletters and Magazines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .200 Financial Resources and Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .204

iv Writing Business Plans for Recycling Enterprises

INTRODUCTION

The Guide's Contents

The goal of this guide is to describe the elements of formal, carefully written business plans specific to recycling post-consumer plastics, glass or rubber. The guide combines:

? information on how to write a business plan (Section One);

? actual business plans that have been used to launch successful enterprises (Section Two); and

? a Resource Directory enabling you to identify the resources you will need to complete your own plan (Section Three)

Who Should Read This Guide?

This guide is for anyone seriously interested in starting or expanding a business that recycles plastics, rubber or glass. This could include:

? Someone new to the recycling industry but interested in the opportunities provided by an expanding industry sector.

? A recycling business currently dealing with other commodities (paper, metals).

? A business already engaged in one phase of the processing of recycled plastic, rubber or glass and now interested in expanding into the other phases.

? Anyone contemplating using recycled instead of virgin materials.

? Someone in local, state or federal government who wishes to understand the industry requirements for recycling these three major feedstocks.

The following generalizations should be kept in mind:

? Recycling is, for the most part, a manufacturing industry but it also contains elements of a service industry. The guide responds to both needs.

? Some recyclers are substantial companies but some are small businesses. All face similar problems, and the guide gives examples from small and large companies.

? The recycling industry contains four basic components: ? Collectors ? Handlers ? Processors ? End-users

Most recycling businesses include only one, two or three of these components.

? An end-user is any business which uses a recycled feedstock, typically in a manufacturing business, producing finished products made of recycled feedstock or using the feedstock in a direct application.

? This guide pays more attention to plastic than to glass or rubber, because for various reasons, it is the most complex of the three. At the end of most chapters, there is a section of comments directed at each feedstock separately.

5 Writing Business Plans for Recycling Enterprises

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