Since the beginning of the industrial revolution, the world has found itself with more waste material from production than in any other time since time in memorial. The need to conserve the environment and ensure that these waste products do not deter the quality of resources, like air and soil has grown in the last two decades a great deal. More companies have come up with green initiatives to ensure that the waste material that is realised from consumer markets and producers are recycled. Recycling can be defined as the act of converting waste and otherwise harmful by-products to usable, functional products. Through recycling, the overall health of the planet is improved, and the continued waste and degradation of certain resources can be curbed (Hubbe, 2014).
Global warming has brought the world’s attention to the importance of environmental conservation. While the western world and Europe have taken many measures to try and implement eco-friendly forms of energy and production of goods, some parts of the world still have a long way to go (Hubbe, 2014). One measure that has proved to be very effective when it comes to environmental conservation is the need to cultivate a culture of recycling. In China, the population and the amount of industries that are operational have created a high-risk pollution society. There is a surplus in waste, and the dense population makes the country very prime for developing and implementing an environmentally sensitive culture.
In 2002, China set out to establish a concept for the recycling industry. At the time the recycling companies only worked on demand. There were also no policy changes from the government that favoured the industry. In 2006, the government looked into the recycling industry and begun a formulating policy that would govern how the industry was to be run. This move would ensure that pollution management was a function that the government controlled as opposed to factories running the industry unregulated by government. With regulations of the industry, the government can direct the industry towards a holistic perspective of the on how to best manage the waste management programs that it runs (Shu, 2016).
With the post Government entry in to the industry, China has grown the waste management industry to become the world’s leading. With over 7.4 million tonnes of discarded plastic imported by the country, the government has inspired a commercial approach towards improving the environment (Shu, 2016). The country has realised a positive and exponentially growing economic benefit from the industry. In fact, while importing, companies working in recycling have been known to offer their clients up £140 per tonne of plastic waste. This is a direct reflection of the economic success that these companies enjoy ("China leads the waste recycling league", 2013).
There also social benefits that come with the recycling industry. For one, employment opportunities have increased a great deal due to the establishment of these companies. Job creations is a great benefit to any society. This is one of the primal benefits of having such an industry in the society. Also by investing in the infrastructure for recycling, companies are able to inspire people in society actively to improve their environmental conservation practices collectively. This is a social impact that further pushes the economic and functional agendas of the recycling industry. Give this background; there are several different forms of the company.
Better Earth is a company that aims to dive into the recycling industry of China. Given the vast market and competitive environment in the industry, the company can be able to apply different strategies and inspire newer recycling techniques within the country. The following is the company’s business plan (Vidal, 2004).
Better Earth Business Plan
Mission/Vision Statement
Mission Statement: Better Earth is committed to providing efficient recycling facilitation, while at the same time, maintain a level of affordability.
The firm seeks to provide its customers with plastic and cardboard product of the highest quality produced from recycled waste. To achieve this goal, Better Earth will link up with partners, who can deliver raw materials (waste products) and invest in the vision of the company to improve environmental conservation. Such partners may include the EU.
These partnerships will be strategic, and have to support the company’s mission for success to be possible. The scouts will be chosen based on their experience in the industry, their achievements and compliance with the Better Earth philosophy; improving the earth at all costs. The firm’s target markets are packaging companies and water manufacturers. In addition to the desire to take part in public sensitization on the importance of recycling. The company will organise and host workshops and seminars. This is a method that the company will use to ensure that the locals both cooperate and develop a recycling culture of their own.
Vision Statement
The company strives to become the leading recycling company in China, over the next ten years. Better Earth management has adopted a high-growth strategy that will ensure this is achieved within the adopted timeframe. This will be achieved through various steps. Firstly, the organisation will focus on client service. Salespeople will receive training on customer service skills. This will ensure good relations with clients and that their queries are served appropriately. Through this, client retention and growth will be possible. Good service will ensure long-term relationships in the business, which is critical for the recycling business, as well as growth. It is important to note that recycling is not a one-time activity. It is, therefore, important to firm relations with them as early as possible. Satisfied clients will also inform their relations and friends about the business and its importance. To achieve number one status, an expansion of the stock and sales is required. For stocking purposes, the business should move to premises that will allow additional storage, over the next few months. The organisation also seeks to partner with more scouts within the United Kingdom, and other important markets.
This will enable faster sourcing of raw materials that have been requested by customers. A good online presence will also be useful in sourcing new clients and exploration of new markets. The organisation currently serves customers in the United States and Europe as its key markets. For strong growth in the future, an expansion to other markets is fundamental. Through a good online presence, the company will be able to expand its reach to Asian and African markets such as South Africa and the home country which is Japan. A lot of the raw materials and consumers of the products from the company are all based in the United Kingdom and the United States of America. The rising incomes in nations such as China, Singapore, Korea and Taiwan may result in an increase for the collection of plastic waste. Better Earth should anticipate these changes by developing a presence there. Partnerships may also be formed with local packaging companies and bottling organisations.
Start-up Summary
Most of the organisation’s startup costs went to purchase of assets. These costs were funded through a mix of the owner’s initial investment, some short term loans from banks as well as long-term borrowing.
There were various expenses involved during the setup. They include:
Legal fees incurred during the establishment of the business. Expenses were involved in compliance with State regulations, as well as the attorney service. For example, the business had to deposit a $100,000 sum in accordance with state regulations on consumer protection.
Other paperwork costs such as accounting.
Purchase of office supplies
Marketing costs through Ebay and other online platforms
Rent for the identified premises
Development of a website, for advertising and sales purposes
A 6-month initial start-up investment in the vehicles
Service Interface
Better Earth strives to provide its clients with quality products, complemented by excellent service. Its product concept is focused on affordability, client experience and subsequent retention. In effect, the organisation will strive to inspire the desire to conserve one's environment among its clients. Despite the emphasis on quality, the organisation will strive to maintain affordability on its end products. This does not imply a compromise to the aforementioned quality statement. Better Earth will ensure that customers feel valued for their input in seeing the vision of an environmentally sensitive society, and not ripped off, unlike various organisations in the industry. This is a fundamental aspect of fostering good relations with our customers. In essence, the company is focused on developing a memorable experience for the customers seeking to recycle and those seeking to purchase their recycled product. Therefore, the company will be able to maintain excellent relations with its customers. This will ensure that sales volumes constantly grow over the future. As part of excellent customer relations, the firm will provide eco-forward training and campaigns.
The company will focus its sales efforts on the local premises. Ebay listings will mainly be used to spur interest in the bottling companies, polyethene manufacturers and packaging firms all within China (Hawkins, 1987). However, some customers may demand online purchases. This is important for extending sales to regions such as Europe and Australasia, should the company export its products to other countries. The firm will, therefore, provide online sales services to some customers following communication and examination of their recycling and re-engineering process. Following the agreement, customers will be required to complete payment for the desired products to the provided bank account. After confirmation of payments, various products shall be shipped to the desired destination. Transport shall mainly be carried out by cargo aircraft. For local customers, the dealership staff will strive to bring them to the factory, to experience the available range of products and services. By observing the product and development process in person, buyers will be able to experience and develop an attachment to the quality of Better Earth products. This is beneficial to Better Earth sales strategy, as it improves the firm’s bargaining position. Sales executives will be able to communicate quality and affordability in this way. Through interpersonal sales, the firm will also be able to improve its client retention rates. This is important for future growth, as the company has placed a strong bet on customer experience and affordability.
Financial Plan
Startup Funding
Better Earth Auto Sales requires $5,000,000 for effective operation. This sum will be sourced from various sources. The first is shareholder contributions. The board will organise for the collection of funds from shareholders, interested sponsors and most importantly the government. Various shareholders have been granted different levels of control in the form of percentages. The starting capital will be raised by the allotted share percentages held by each stakeholder. This will be done in compliance with national and state commerce regulations. The shareholders are expected to contribute the entirety of the startup funding costs. This activity will be carried during the next three months of business. If unable to contribute, shareholders may partner with outsiders to contribute by proxy. By providing half of the startup funding, the shareholders will be able to maintain control over the organisation, in the case of any eventualities. Following breaking-even, shareholders shall receive dividends in accordance with their contribution ratios in the business.
Debt is an important instrument for raising capital. It enables access to funds when shareholders and cash flow has been disappointing. However, the firm does not need any funding at the moment. In the case of any eventualities, the firm will adopt a long-term view towards its debt. It hopes to secure a 10-year financing facility from a local bank.
Better Earth will be obligated to pay the debt balance over each quarter. It is projected that the firm will be required to offset around 4.5% of the debt over each quarter, considering long-term interest rates. The payments will be collected from the existing cash flow. This will require the firm to maintain strong sales over each quarter, to meet this debt obligation. In the event of inability to contribute to its debt obligations, Better Earth may opt for two alternatives. Firstly, the organisation may opt to refinance its debt. If the first option is unavailable, the board may have to source other financing options. For example, they may raise the balance from their sources. In the next ten years, the firm may be sold off if it grows too large for the current management. In line with that, the board may opt to sell the organisation to interested investors, alongside the debt obligation. With this strategy, living up to the company dream will be an achievable feat.
References
China leads the waste recycling league. (2013). the Guardian. Retrieved 24 August 2016, from https://www.theguardian.com/environment/2013/jun/14/waste-trade-china-recycling-rubbish
Hawkins, W. (1987). Recycling of polymers. Conservation & Recycling, 10(1), 15-19. http://dx.doi.org/10.1016/0361-3658(87)90003-8
Hubbe, M. (2014). Recycling Paper Recycling. Bioresources, 9(2). http://dx.doi.org/10.15376/biores.9.2.1828-1829
Shu, S. (2016). Recycling Industry in China. Grontpunkt.no. Retrieved 24 August 2016, from https://www.grontpunkt.no/files/dmfile/RecyclingIndustryinChina.pdf
Vidal, J. (2004). The UK's new rubbish dump: China. the Guardian. Retrieved 24 August 2016, from https://www.theguardian.com/society/2004/sep/20/environment.china
