Emerald Grow Business Plan
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Emerald Grow Business Plan Emerald Grow Business Plan Document Transcript

  • FUEL THE FUTURE A Digital Safari Greenbizz CompanyBusiness Plan Competition EMERALD GROW Abegail Chelsea Angelique Devron Cariaso Latteri Dawkins Grays
  • Over time the world has used up a significant portion of its oil supply with one third of it already depleted.America alone uses 20 million barrels of oil per day compared to other countries which use 1.5 millionbarrels of oil a day on average, exploiting third world countries such as Iraq in order to obtain theseresources. Our dependency in foreign oils has become detrimental to our country, using a significantamount of tax money to fund the war in the Middle East. The use of fossil fuels has caused expedientdeterioration of earth, causing drastic temperature changes due to its unhealthy emissions and damagingour ecosystems when an oil spill occurs. Another issue we face is the development of dead zones, areasin the ocean that have low oxygen levels due to algae blooms that cause damage to marine life along thecoast.Emerald Grow is a company located in Louisiana that dedicates its efforts to decrease our dependencyon oil and increase the earth’s sustainability. Our team consists of highly educated individuals who aredetermined to provide our nation with the cleaner fuel it deserves.The biodiesel Emerald Grow produces is made from selectively bred algae grown in fertilizer runoffs. Theserunoffs lead to the ocean and cause large algae blooms. During its decomposition stage, these algaeblooms take up a large percentage of the ocean’s oxygen that marine life need in order to survive. Becauseof the oxygen displacement, over 240,000 square feet along the coast have become dead zones which haveharmed markets dependent on seafood. The selectively bred algae we grow makes an excellent biodieselbecause it grows rapidly and abundantly, consumes chemicals that are harmful to the environment as itgrows, yields more oil than its other biodiesel competitors, and takes up a small amount of space to grow.Essentially, Emerald Fuel will be the most efficient biofuel financially and environmentally.Supporting trends show that there is a market for Emerald Grow. In his 2008 campaign, Obama proposedto use 63 billion gallons of biofuels by the year 2013. Major fuel companies such as Exxon Mobile hasinvested $600 million in research and production of algae fuel.There are thousands of construction sites who’s machinery runs on diesel that are our potential customers.Our biodiesel would be beneficial to construction companies because during the planning phases of theirprojects, they would have a more accurate estimation of what percentage of their expenses will be fromfuel. This is because biodiesel is a renewable energy source and its price doesn’t fluctuate like regular dieseldoes. Not only does our company provide better predictability, but it also offers construction companiesand distributers tax incentives because the biodiesel is sustainable.Emerald Grow is requesting funds for the initial costs mainly consisting of research and development fora total of $10 million. Profit for investors will be tremendous as shown by the financial projections. As ournation makes the switch to biodiesel, our company will become one of the main producers and revenueExecutive Summary
  • Company ProfileHow it StartedDuring a vacation to the East Coast, Abegail Cariaso noticed that the once astonishing Gulf of Mexico was nowan underwater jungle of green sludge. Disappointed by the lack of marine life, she researched the cause of theirdeparture and learned that the agricultural fertilizer run offs created algae blooms which caused these “deadzones”. When she arrived back home, she discussed the devastating sight with her friend Chelsea Latteri. Chel-sea suggested that there had to be a way in which those algae blooms could be controlled. Still, the questionremained: “What would we do with all that algae if it was contained?” Another friend, Angelique Dawkins, toldthem that she had read online that algae could be turned into a biodiesel. Devron Grays, a former classmate ofAbegail, took a class on “sustainable living” and offered to help with the technical aspects of this product devel-opment. Upon countless hours of research, networking, and pure determination, these ambitious individualsdeveloped a process for growing algae and turning it into biodiesel, giving birth to a new company, EmeraldGrow.
  • Company ProfileMeet the ExecutivesMs. Cariaso has had an alpha dog mentality since gradeschool. She always took initiative when given tasks andmade sure her group members worked diligently in orderto meet deadlines. In high school, Abegail attended twoprestigious academies – the Digital Safari Academy, and theHealth and Bioscience Academy where she studied in thefield of digital arts as well as biotechnology. Upon gradua-tion, Abegail started an organization in Zimbabwe, provid-ing sanitary restrooms as well as health education in orderto aide the victims of the cholera epidemic. She also studiedthe issues of multiculturalism and produced a documentarycalled “Parental Dilemma” which focused on a student’s pur-suit to become an artist despite her parent’s wishes for her tobe in the medical field. Ms. Cariaso is highly involved in hercommunity, volunteering at soup kitchens, running fundrais- Abegail Cariasoers, and ministering to the youth at her church. These experi- Chief Executive Officerences helped develop Abegail’s strong leadership skills, mak-ing her the most qualified candidate to hold this position.Devron Grays is a prodigal music producer, who grew uplandscaping. Working with power tools and learning whatreally goes into establishing substantial amounts of beautifulscenery has helped him develop a logical mindset. As a HighSchool Student, he attended the Digital Safari Academy inorder to study music production and multimedia. Because ofGrays’ prior experiences through landscaping and music pro-duction, he qualified for the Chief Technical Officer position.Grays has also achieved a student of the year award for hismathematical genius in advanced calculus his freshman yearin high school. Because of his great amount of prior experi-ences, Grays is a wonderful asset to our company. Devron Grays Chief Technical Officer
  • Ms. Latteri is a buoyant and creative business woman who works diligently in order to maximize production. In high school, she attended the Digital Safari Academy to study multimedia and excelled in personal finance. Upon gradu- ation, Chelsea started an organization called Needles on Wheels in order to help AIDS victims in Uganda. Her organi- zation received first place during the Legacy of Imperialism fair. She also studied the issues of multiculturalism and cre- ated a documentary focusing on stereotypes. During the summer, she worked at a theater in Martinez California as a stage assistant. On her free time, Chelsea likes to be out- doors and playing sports. The experiences she’s gained haveChelsea Latteri helped her become the right person to take on the financialChief Financial Officer responsibilities of this company. Angelique Dawkins is always the collected and practical person in the group. Whenever a dispute breaks out within a group, she sits the members down in order to work out the situation. In her last year of high school, Angelique Dawkins transferred to the Digital Safari Academy to study multimedia where she created several design templates as well as advertisement posters. A sweet personality like Ms. Dawkins’ is essential to any business.Angelique DawkinsMarketing Director
  • Product DataHarvesting Site Layout Thermoregulator Piping system Overflow area Algae river Fertilizer Filtration Drainage pump site The Machinery The innovative machinery Emerald Grow uses is the Features key to productivity. The Emerald Fuel Harvesting site • Grows fast is a unit similar to a storage unit. A pipeline allows • Takes little space to grow the river water to enter the unit by the pressure exerted from the ruler current. The unit is then • Takes little maintenance filled with fertilizer enriched water, where the algae begins to grow. A thermoregulator installed into the unit, monitors the temperature so that the algae Environmental Benefits maintains the ideal environment in which to grow. • Reduces Green House Gasses by 15% Once the unit reaches maximum capacity the algae • Safe to handle, store and transport is pumped into one of our trucks where it is sent to • Offsets Carbon Dioxide during life cycle our refinery for processing. • Reduces fertilizer run offThe FuelEmerald fuel is the most sustainable biodiesel. It Consumer Benefitsoffers more miles per gallon than regular diesel and • Offered at fixed priceis a lot healthier for your engine. Using biodiesel also • Better for enginesreduces green house gas emissions Carbon Dioxide • More miles-per-gallonreleased from combustion is offset by the carbon • Tax subsidies from governmentdioxide used when growing the algae, reducinggreen house gas emissions by 15%. Emeraldfuel is nontoxic so it causes far less damage thanpetroleum diesel if spilled or otherwise releasedinto the environment. It is safe to handle, store, andtransport.
  • Marketing Analysis OpportunityThe human race needs to shift from its dependency on Several investors include Bill Gates, along with histhe scarce supply of fossil fuels and at the same time, partners, who have funded Sapphire Energy Inckeep an eye on the hazardous wastes and pollutions with $100 million, U.K. government-funded Carbonthey are emitting into the environment . Research- Trust which has donated $11.7 million to nine uni-ers have conducted countless jaw dropping statistics, versities, and Exxon Mobil which donated the larg-investors have put in an enormous amount of money est amount of $600 million in order to make thisto fund research on alternative resources, even world fuel the new petroleum commercial product. Evenleaders are making propositions in order to save the the Navy has signed a contract with Solazyme toplanet we call home. That’s why Emerald Grow is also produce 150,000 gallons of fuel to run their ships.joining this fight for our future by providing algae bi-odiesel while cleaning our waterways. Dead zones are areas of low-oxygen water in the aquatic environment, often caused by decomposi-Scientists have found a way to use algae, a single celled tion of vast algal blooms. According to a new studybacteria, to create a cleaner, more efficient biofuel. in science, there are now 405 identified dead zonesAlgae consumes carbon dioxide in order to grow and worldwide, up from 49 in the 1960s. This is no smalldoubles its size every six hours. The algae is dried to ex- economic matter. In 1976, hypoxia (low-oxygen) oc-tract the oil, and is made into diesel fuel that according curred off the coasts of New York and New Jersey,to CEO Jonathan Wolfson of Solazyme Inc is “chemically covering a mere 385 square miles. This cost commer-indistinguishable from its petroleum-based equivalent cial and recreational fisheries more than $500 million.and has already powered a Jeep Liberty and a Merce- About 83,000 tons of fish and other ocean life are lostdez Benz sedan.” Algae can yield thirty times more oil to the Chesapeake Bay dead zone each year. This isthan crops such as soy, doesn’t compete for land with a enough to feed half the commercial crab catch for acrop that  feeds people and animals (corn), and doesn’t year. Robert Diaz of The College of William & Mary saystake much processing before it can power a diesel run- “More than 235,000 tons of food is lost to hypoxia inning vehicle. the Gulf of Mexico.” “That’s enough to feed 75 percent of the average brown shrimp harvest from the Louisi-Obama proposed in his campaign while running for of- ana gulf. If there was no hypoxia and there was thatfice that he demands that the US consumes 63 billion much more food, don’t you think the shrimp and crabsgallons of alternative fuels by 2030 in order to recog- would be happier? They would certainly be fatter.”nize that our country does not need to be dependenton foreign fuels. Investors have seen the potential in The biofuel we are producing solves both the deadthis up and coming biofuel and have invested large zone and oil shortage issues within the Unitedamounts of money to fund research as well. States. Our patented technology allows us to grow selectively bred algae using a filtering process that will allow the chemicals in the fertilizer runoffs to enter the harvesting site in which the algae grows.
  • gender of contractorsCustomer ProfileThe potential customers of Emerald Grow are constructioncompanies and biodiesel distributers located in Louisiana. Thereare 25,877 building and construction companies and 21biodiesel 46%distributers that we can potentially sell our fuel to. The prices 54%of biodiesel do not fluctuate and remain consistent, allowingconstruction companies to have better predictions of their financialprojections. Also, our sustainable product will give our customerstax deductibles. maleDemographics femaleThe specific individuals we are aiming to sell to are constructionmanagers. Construction managers plan, direct, coordinate, andbudget a wide variety of construction projects, including the level of educationbuilding of all types of residential, commercial, and industrialstructures, roads, bridges, waste water treatment plants, andschools and hospitals. 47% of construction managers have either an 17%associates or bachelors degree in construction science, constructionmanagement, building science, or civil engineering. The other 53%of construction managers have worked their way up from being 50%carpenters, masons, plumbers, or electricians, for example—or 33%after having worked as construction supervisors or as owners ofindependent specialty contracting firms. However, as constructionprocesses become increasingly complex, employers are placingmore importance on specialized education after high school. The high school diplomamajority of construction managers are men and the average salary college degreefor these workers are $60,650, making them part of the middle class. some collegeGeographics IncomeThe ideal environment for Emerald Grow would be areas with sunnyclimates and land used for agricultural purposes. Nitrogen andphosphorus found in fertilizer that runs off into rivers combined 14%with sunshine create the perfect conditions for algae to thrive. 31%States that are primarily agricultural include Tennessee, Kentucky,Kansas, Oaklahoma, and Louisiana; with Louisiana holding the mostpotential because the Mississippi River channels its ends in Louisiana.It is also a state where there are many urban and suburban areas 55%where our target customers dwell. Having Emerald Grow within thisarea of the states would help the growing population by supplyingalternative resources, reducing air pollution, and cleaning up water $20,000-$50,000ways. $51,000-$81,000 $80,000+
  • Competitive Analysis Gallons of pollution Gallons of oil per acre Water used to grow (Gallons) 0 37,500 75,000 112,500 150,000 0 1,250,000 2,500,000 3,750,000 5,000,000 0 25,000 50,000 75,000 100,000 POET Emerald Grow Commercio Pollution Efficiency Comercio is a company in Brazil that grows sugarcane in Sugarcane oil has already replaced 50% of Brazil’s order to produce ethanol. The reason why there is low gasoline, but the rise in the demand of this fuel energy consumption in the production of sugarcane also increases the demand of land used to grow fuel is the result of exploitation of farmers who work sugarcane, threatening plant diversity and upsetting long, physically demanding hours, planting and the natural balance along the Amazon. Producing harvesting sugarcane by hand. Although Comercio is an average amount of fuel requires a vast amount of creating a green product, their methods aren’t exactly land because one acre of sugarcane yields only 500 environmentally friendly because its crops are being gallons of oil. It takes 16 -18 months until sugarcane harvested by tractors running on diesel fuel which can be harvested, and can grow for about 6-7 years emit carbon dioxide and a lot of other green house before a new batch must be grown. At this rate, gases. In addition, importing sugarcane fuel from Comercio can only produce 3,500 gallons of oil South America to the United States requires several within the 6-7 year lifespan of a sugarcane crop per forms of transportation including trucks, boats and acre. planes; all producing an excess amount of pollution. Like Comercio, POET faces the threat of upsetting POET, a company in the United States also uses nature’s balance by cutting down trees to make manual labor in the production of their corn oil, but room for corn. Also, using corn as fuel leaves less because of worker regulations, farmers are treated food for our domestic livestock and increases the more fairly. Tractors and other vehicles that are used price of food for ourselves because of scarcity. One in POET’s harvesting process use ethanol themselves, acre of POET’s corn can yield only 328 gallons of oil. cutting green house gas emissions drastically. Since It also takes about 16-18 months to harvest corn POET plants are already located within the United and can grow about 8 – 10 years before a new batch States, exporting the corn fuels won’t exert as much must be grown. At this rate, POET can produce pollution as Comercio. 3,280 gallons of oil within the lifespan of a corn crop per acre. Our company, Emerald Grow, produces a biofuel from a bacteria known as algae. Algae practically Unlike corn or sugarcane, Emerald Grow uses grows on its own, so manual labor is at a minimum, algae as it’s source for oil, a bacteria that isn’t used requiring only routine check-ups and feeding as primarily as a food source. Algae can grow practically opposed to the long process of farm work. Our algae anywhere and in volumes rather than acres. It also is grown in tubes, so tractors aren’t needed to harvest multiplies in size expediently, almost twice it’s size at all, cutting those possible green house emissions every six hours. Algae can be harvested within completely. Like POET, we are located in the US so just weeks depending on the size of the vessel it exporting our fuel around the nation creates less is grown in. In a closed, sterile environment, our pollution than Comercio would. Our company’s genetically engineered algae can yield 80% oil. With trucks used to distribute also run on the algae fuel it such a high percentage, we can produce 5,000,000 produces. gallons per year.
  • Marketing PlanProductEmerald Fuel is made completely from Algae, a clean and natural energy source for our environment that couldpotentially help deal with the problems of oil scarcity. Unlike other bio-fuel companies thats use up land andrelease harmful chemicals into our water, Emerald Grow uses these harmful toxins to fertilize the Algae. Thiscleans up the environment from hazardous environmental situations like the dead zones along the coast.PriceDiesel fuel is a commodity that sells at a fluctuating price that depends on quantities of supply of the fuel andother factors such as time of year, technical innovations and the overall economy. The overall price for biodieselis also dependent on the vegetable oil market since this is the primary source for mass produced biodiesel.Currently the market price for biodiesel fuel is fluctuating around $82 per barrel. We expect to be able to make asizable profit if prices for diesel stay near this level and since we control all factors of productions, we are able tosell our fuel for $80 per barrel.PlacementEmerald Grow will be storing its fuels in large storage tanks. In our business to business transactions, biodieseldistributers will come to our tanks to fill up their trucks and then divide it amongst their diesel running vehicles.PromotionOur customers will be mainly drivers with diesel-powered vehicles. To get the message across to our customersthat Emerald Fuel is the cleaner option of biofuels, our product will be promoted through large weeklymagazines such as “Time Magazine” and “National Geographic” to catch the eye of those interested politically,economically, and environmentally. We will also promote our fuel on billboards and mobile billboards, providingtruck-side advertising for a more broad range of promotion. The trucks that transport our fuel will display ouradvertisements.
  • Financial ProjectionsSales and Revenue GrowthThe oil industry is receiving significant attention because of different scenarios such as the war in the MiddleEast and the recent BP oil spill. One third of the world’s fossil fuels has already been consumed with US using 20million barrels a day. Research shows that biodiesel will be the only option feasible, and if made mainstream,consumers would purchase our biodiesel because of its convenience and sustainability. Many companies such asconstruction sites and delivery services depend on fuel to operate. It is important for them to be able to predictthe costs of fuel they will use annually as part as their operation budget, and with constantly fluctuating fossilfuel diesel, it will be difficult for them to determine those costs. Because we control our factors of production,we can negotiate a contract with these companies and sell our biodiesel at a constant price. This is essential toany fuel dependent company because while diesel prices change over night, our biodiesel contract lets thempay the same price. Emerald Grow uses selective breeding in order to harvest algae that consumes most ofthe runoffs and yields 80% of fatty oil that can be processed into biodiesel. Because biodiesel is an inelasticcommodity, Emerald Grow depends on the quantity of fuel it produces. With our patented technology, we areable to produce 5 million gallons of oil per site per year. This equates to 71,600 barrels of oil per site per year. Ata fixed price of $80 per barrel, our total revenue would equal $52 million per site per year. Within the first year,we will operate one site in order to test run our technology and fine-tune it so that we can yields as much oilas possible. Once this infrastructure is established, we will be adding to the number of sites in order to provideexponential growth. We are expecting to expand by 75% each year. By year two, we will have 3 sites and produce150,000 barrels of oil. This production level will continue to escalate and by year 5, we will have 16 sites and willproduce 825,000 barrels. Product Projections (barrels) 900000 675000 450000 225000 0 2011 2012 2013 2014 2015
  • Earnings Projection - First Year Q1 2010 Q2 2010 Q3 2010 Q4 2010Operations (fixed $590,000 $930,000 $410,000 $570,000 costs) Cost of Goods $300,000 $600,000 $1,200,000 $2,400,000 (variable costs)Wholesale Price $80 $80 $80 $80 Production 5,000.00 10,000.00 20,000.00 40,000.00 Units (barrels)Revenue (price $400,000 $800,000 $1,600,000 $3,200,000 x units) Profit Margin $490,000 $730,000 $10,000 $230,000 (revenue - costs) Total Earnings $490,000 $1,220,000 $1,230,000 $1,000,000 Earnings Projection - Five Year 2011 2012 2013 2014 2015Revenue (price x $6,000,000 $12,000,000 $24,000,000 $42,000,000 $66,000,000 units)Operations (fixed $18,600,000 $12,200,000 $8,520,000 $7,200,000 $9,600,000 costs) Cost of Goods $600,000 $1,200,000 $2,400,000 $4,200,000 $6,600,000 (variable costs)Wholesale Price $80 $80 $80 $80 $80Production Units 75,000 150,000 300,000 525,000 825,000 (barrels) Profit Margin (revenue - costs) $13,200,000 $1,400,000 $13,080,000 $30,600,000 $49,800,000 Total Earnings $13,200,000 $14,600,000 $1,520,000 $29,080,000 $78,880,000 1 2 4 7 11
  • Operation CostsFor the purpose of this project, it is assumed that the cost of operation for our companycompromises 85% of our revenue and is composed of the following individual items:• Research and development• Refinery• Storage tank lease• Land lease in Louisiana• SalariesCost of Goods For the purpose of this project, it is assumed that the cost of goods for our company’s productcompromises 10% of our revenue and is composed of the following individual items:• Transportation• Harvesting materials• Labor and managementAdvertising & Marketing ExpensesFor the purpose of this project, it is assumed that the cost for advertising and marketingexpenses compromise 30% of our revenue. We will place our ads on our transportationvehicles. It will cost $700 per truck advertisement and the total cost varies depending on howmany transportation vehicles our company will use. In addition to our mobile advertisements,we will place ads on billboards. It will cost $300,000 to place 10 billboards within large citieswhere our target customers reside per year. Magazine ad placement in National Geographiccosts $450,000 per page per year. This will equate to $1 million dollars for the first year. Asthe years go by, revenue spent on advertising will decrease as public recognition increases.
  • Life Cycle Analysis Acquiring Manufacturing Transporting Using & Disposing +Acquiring TransportingThe glass tubes used to harvest Emerald Grow When any thing is transported, whether by truck,algae are made overseas and shipped to the train, plane or ship, an energy source is needed.US. The labor required to work the tubes and The green house gases that are emitted by themachinery isn’t as demanding as other biodiesel burning of the fuels are bad for the environmentcompanies, and our company abides by strict and it does not make a company look good on theworking condition laws. Growing the algae in a environmentally friendly side. In order to ensurecontained environment is a sustainable practice maximum sustainability, our shipping trucks willbecause it saves the oceans from hypoxia and run on the fuel we produce.turns that potential danger into an energy source.Manufacturing Using & DisposingAs do all refineries, the Emerald Grow refinery Emerald Fuel is an all natural energy sourcehas a range of environmental issues including that does not harm the environment with toxicwater and air pollution. However, there are some pollution like regular petroleum does, so there iskey factors that allow Emerald Grow to be more also no harm done to human health when theysustainable. Along with nitrogen and phosphorus, are intact with our diesel. Our bio-diesel whenalgae needs carbon dioxide in order to grow. As in use burns more cleaner and is more efficientit undergoes fermentation, the carbon dioxide in mileage compared to petroleum. The fuel isproducing during this process can be recycled disposed of when in use, and when algae fuelinstead of being emitted into the atmosphere. Our burns, it emits less harmful emissions comparedrefinery also uses a fraction of its diesel to power it, to regular diesel. In the process of producingreducing heat and electrical energy consumption our fuel, the algae consumes carbon dioxide, soby 19-31%. when vehicles burn our fuel, the carbon dioxide is recycled. The carbon dioxide emitted equals the carbon dioxide used to produce.
  • Promotion