1. PRAIRIE VIEW A & M UNIVERSITY
Feasibility Plan
Waste and Recycling Company
Ashley Filer and Michael Long
FM 1098 Rd & University Dr,
Prairie View, TX 77446
This confidential feasibility plan is being furnished by our partnership to a limited number of investors
for use in considering their interest in making an investment in our business. This plan is not to be
reproduced or used, in whole or in part, for any other purpose or made available to anyone not directly
concerned with the decision to invest in our business.

2. INTRODUCTION
Venture Description
A&M Waste and Recycling is a newly launched company established in October 2011 to fill a
void in the waste management and recycling market locally in Prairie View. A&M Waste and
Recycling employs a fundamentally different approach than the tradition industry model in
developing the product and service line. A&M Waste and Recycling is committed to collecting
local businesses’ garbage at a time that is convenient to those particular businesses. That garbage
collected will then be used in our recycling process and sold as resources back into the business
sector.
The plan is to open a waste and recycling company that collects garbage from local businesses
for a fee. We, in turn, process the collection into reusable resources or fertilizer, which is then
sold back into the marketplace. The initial design is to base our operations in the
Hempstead/Prairie View area, then expanding to other parts of the state and, potentially, other
parts of the country. If we acquire enough funding, we will buy our own recycling equipment. If
that funding is not readily available, we will take our collection to existing recycling facilities
until we have funding to recycle independently.
Garbage collection is always a necessary service, as people are always consuming. Because of
this, there is always a market for this industry. Offering competitive rates, coupled with recycling
technologies, will attract clients searching for cost-efficient, eco-friendly services. Companies
are trying to project a “green” image, so dealing with us would make them look favorably in the
public’s eye.
An advantage we have over some existing waste companies is that we have multiple
opportunities to make a profit. Collecting garbage for a competitive fee and selling recycled
materials to businesses allows our company to make a profit twice off of items that others
produced and were willing to pay to rid themselves of. Our fleet of garbage collectors will be
flexible, therefore being able to cater to our clients’ wishes and needs. Initially, we plan to use
collectors that have vehicles that are equipped to handle the garbage collection. This will keeps
initial costs down. As our capital increases, we will then be able to invest in a line of larger,
heavier duty garbage trucks. As previously mentioned, there is always a need for garbage
collection, so the company can be a sustainable entity.
The opportunity for a sustainable waste and recycling company is readily apparent due to the
convergence of two significant market-driving trends: the green movement and lower the bottom
line cost. Driving the convergence of these trends is a group of businesses and consumers who
are becoming more socially and environmentally-conscious—from their activities and
consumption to their commitment to environmental and social causes.
This group is seeking out products and services that are aligned with their values. However, the
current market offerings are forcing them to compromise, choosing between their environmental
and social values and product performance. This market gap represents a highly profitable
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3. business opportunity. Conservatively, the green movement trend looks to continue, creating more
opportunities as more companies adopt green practices.
PRODUCT AND SERVICE
Performance
Convenient, reliable, effective
Cost
$20/week for garbage collection
$10 for additional pick-up days
Market competitive rates for resale of reusable materials and fertilizers
$10 resource delivery charge or free pick-up
Discounts on large-quantity purchases
Availability
Hempstead/Prairie View area (Year 1)
Same-day delivery if ordered by 1:00 PM
Social
Eco-friendly reputation
Service
Scheduled pick-ups
Guaranteed arrival at scheduled time or weekly pick-up is free
Employee training to operate waste and recycling equipment
Level of inventory of reusable materials and fertilizer dependant on the amount and
quality of waste collected
Environment
Location to be approved by local authorities
Location appropriate to handle waste materials
Our major service would be garbage collection for local businesses. A rate of $20 per week
would be charged, unless the business requested pick-up multiple times a week. Each additional
pick-up request would cost $10. After collection, our company would process the garbage
through different recycling equipment, thus creating reusable materials or fertilizer. These
materials and fertilizer would then be sold at market competitive prices. This would meet our
target customer’s needs for a low-cost garbage collection service that also benefits the
community. We will also be providing businesses with another source of materials or fertilizer
used in their production processes.
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4. Initially, we would like our collectors to own a vehicle capable of collecting and hauling away
garbage (with a valid driver’s license) to keep start-up costs low. We are also looking for
collectors that are amendable in terms of scheduling to meet the needs of our clients. They must
be proficient in following directions and have the ability to adapt to unexpected changes. Our
collectors will be dressed in: black or brown shoes/boots, company-issued collared shirt, and
dark-colored pants.
We will reach out to potential clients and devise agreements with them. Our company will then
come to those businesses and collect the garbage at the scheduled time. The garbage will be
taken and processed at local facilities or our own facility. After the reusable materials and
fertilizer is produced, our company will again reach out to potential customers that are in need of
those resources. The reusable materials will be available at market competitive rates. The
resources will be made available for pick-up or delivery, with a local delivery charge of $10. We
will be operating on a subscription-based model and offer a competitive pricing strategy.
TARGET MARKET
Our target market is a business market rather than consumer based. Our waste removal and
recycling services will be offered to organizations that are interested in finding a feasible and
green alternative to traditional waste removal. Because we have a dual business model
consisting of both waste removal and recycling which will be sold for waste-fertilizer, we have
distinctive target markets for both dimensions of the company.
1. Organizations that will be taking advantage of our service will be local profit or non-
profit organizations. This includes but is not limited to schools, restaurants, state
government offices, etc. This service is not industry specific which allows us to
attract and appeal to a broad target market. We will initially be offering our waste
removal services to any business within a fifty mile radius of Houston, TX. Our
main focus will be to target corporations and state or community offices that are
interested in not only an efficient service but want to show their reduction of a carbon
footprint. These will be essentially those companies looking to opt for a more
“Green” business practice. Initially we want to focus on large corporations or state
contracts where we can build our name and business. Because our start-up business
doesn’t have a large staffed labor we want to make sure we target businesses where
we can use the least amount of human resources but still make an impact. We can
effectively remove waste from the location sites with a minimal of one employees
and one transporting truck. This will help to keep overhead costs to a minimal while
making profit.
The second segment of our target market will be companies who will be purchasing
our product. The product will be a recycled waste that will be targeted toward
nurseries, landscapers, farmers, fertilizer manufactories, local farmers, golf courses
and others. The target market will consist of both private and public sector entities.
The industry largely targeted will be government agencies, local farmers, and
fertilizer manufactories. Because shipping costs will be charged based on location,
this product will be available for anyone without a geographic constraint.
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5. 2. Both the products/services we are offering are already existent in the marketplace.
The service of waste removal is a largely standardized service and many companies
offering this service have very similar features and pricing structures. There is a large
amount of companies who offer this service in our service range with the exception of
those that do not reach out to the Waller County area. The business’ purchasing the
service of waste removal may be slightly reluctant to changing their supplier as they
may have been conducting business together for a number of years. Our service will
have to compete on both a convenience and price standard to gain that local business.
But with the increasing amount of waste and increasing need of space to store the
waste as landfills are beginning to fill, it will be an advantage we have for offering an
alternative. This will also give us an opportunity to contract with existing waste
companies to take excessive waste since we will have the infrastructure set in place
for recycling and reselling.
For the resell product, this is a fairly new commercial product. Not a large amount of
companies are investing in research to recycle its waste to be resold for fertilizing.
There are an exceptional amount of companies that are selling fertilizer but not many
have the same business model of our company. Businesses purchasing this product
will be highly susceptible to change suppliers as there is a high demand for the
product with limited supply.
3. Buying decisions in this sector are made mainly on price, convenience, and legal
standards. Because we will be servicing both small business and larger companies,
we will have to devise strategies that will be work effectively with both centralized
and decentralized organizational structures. Dealing with governmental agencies and
subsidiaries will require a high level of involvement from management and require
multiple levels of approvals for expenditures. For most of our clients the ultimate
responsibility for approving expenditures will be of the owner’s and won’t require
multiple levels of approval. The budgeting or billing cycle will be monthly. From
initial contact between the business and our company, the receipt of an order will be
instantaneous. We will have the option of ordering, scheduling pick-up-dates, and
confirmation via internet to make it very convenient for our consumers. If it is more
comfortable to place an order via phone we will have the option available as well by
either automated phone service or customer service technicians. They will always be
available during work hours to thoroughly explain our services in depth for those who
need more information.
For the product side of our business (fertilizer sells), the decisions are primarily made
on the same characteristics. Convenience, availability and delivery will largely
influence purchasing decision in this sector. Most businesses purchasing fertilizer
will operate on a centralized operational structure. If the company purchasing the
fertilizer is not a farmer or localized business then they will most likely be operating a
decentralized organizational structure. There is typically one individual responsible
for purchasing the supplies or product but requires approval from top management.
There is no defined budgeting cycle unless for contracted production. The same
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6. practices will be used with ordering service as it is for product, instantaneous through
internet services.
4. As previously mentioned there are different characteristics for purchasing decisions,
rather it is service or products. The main criteria for purchase of service will be
convenience, price and quality of services. For those companies we will be supplying
with our recycled products or fertilizer, the criteria that will have the most bearing on
purchasing decisions will be price, availability or inventory, product processes, and
delivery structure.
5. The payment policy will be standard. We accept cash, credit card, and checks. Our
reasoning for this structure is because if we will be exchanging business with small
business and farmers, they still operate using cash and or checks. We will also set up
PayPal accounts for E-Pay or automatic payment from a bank account. For services
such as waste/trash removal, we will require a down payment for services and require
them to enter into a contract if expected to have re-occurring scheduled pick-ups.
The business will pay a month in advance paying monthly with the collection
deadline being two weeks ahead of first scheduled monthly pick up date.
i.e.) if your scheduled pick up date is October 1st, payment is required by
September 17th.
There will be discounts given to contracted customers for both our services and
products. Price of fertilizer or contracted price will be based on estimated market
prices for future demand. But these prices will be negotiable, while waste removal
services will be standardized.
Purchases of our services will be directly from us the supplier. Although our target market
consists of fertilizer manufacturers and government agencies and farmers for our fertilizers, this
recycled product can typically be made through distributors. This will help to guarantee a good
flow of product from supplier to consumer but our business model will not be reliant upon
retailers and distributors. By having distributors for fertilizing purposes it will help with
inventory and storage overhead costs. This is a necessity as we will not have infrastructure to
hold a large capacity of product when we initially start up our business.
UNIQUE BENEFITS
There are two unique benefits, one existing in our product, the other in our service. When
providing an already existent service such as waste/trash removal we have to provide knowledge
to the consumer of general and specific benefits that will help our business to grow.
1. The major benefits of our waste removal services are:
Convenience is a necessity amongst small and large business we will be
servicing. Our business customers will never have to go out of their way
to order or receive our services. Some features we have set in place to
guarantee convenience is our ordering services via the internet. This also
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7. acts as a unique benefit because all (or most) waste removal companies
require actions from the customer to call or visit their offices for a quote.
We will have standardized rates and discounts that will help this process
become easier to administer online.
Our services will be offered to business only. This will help us to offer a
customized experience to our clients. By specializing in businesses
waste removal, we can offer expertise in solid waste removal, medical
waste removal, and recycling services that are unique to businesses. By
concentrating our target market and excluding residential services we can
focus on how to improve our services while adhering to constant changing
regulations that business are required to adhere to.
Waste Removal Consulting will also be a feature that we will offer to our
business clients. The benefit from this feature will be peace of mind and
reduced bottom line. This benefit will help our customers’ bottom line as
well as new solutions to better remove their waste and reduce their carbon
footprint. This will help to grow their company economically and be more
efficient and environment friendly. Not to mention this will also better
their image amongst their consumers.
Waste removal alternative will be a major benefit our customers will
take advantage of. Because we offer a recycling service that converts all
recyclable wastes into fertilizers we will be able to offer an alternative to
companies and governmental agencies that want their waste not to be
contributing to landfills and such.
Price is always a major benefit for customers. We will be able to provide
a low cost service of the best quality. Our prices will be standardized but
we will offer incentives for our customers that pay early or contract our
services.
2. These benefits are unique as described above. These benefits may be offered in some
capacity by our competitors but we guarantee and elevated quality of service through
these benefits. Waste Management is one of the largest national companies
responsible for waste removal services. WM would be considered as one of the
benchmark companies and have built some of our standardized services around their
service/product offerings.
3. The benefits will be well explained to our target market. These benefits will coincide
with the message conveyed in all our marketing communications. Our target market
will maintain a positive perception of these features and the benefits they offer as
long as they stand not to compromise their business practices and costs.
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8. COMPETITIVE ADVANTAGE
Understanding and analyzing the market will help us to determine what competitive advantages
we have and what can sustain our company within this market.
Competitive Analysis
1. The major competitors to our waste/removal service would be large companies such
as Waste Management because of their brand name and recognition as well as mass
amounts of capital. Other competitors include local competitors such as AAA Cheap
Trash Hauling, WCA Waste Corporation, Nation Waste, Inc. and USA Waste
Management Services. There is a definite opportunity for future competitors, but not
many people look at waste removal and recycling as a profitable business venture.
Although most business within this sector is large companies, there is plenty of room
for small scale companies to earn exceptional profit and even have an advantage. The
amount of recyclable material available is unlimited and has minimal cost of
investment required.
For the production and fertilizing manufacturing part of our company, there isn’t a lot
of existing competition locally. Fertilizer manufacturing is a lucrative venture as it is
a compound that is in big demand for farming practices as well as landscaping. With
the increase in land development and communities as well as increasing need for crop
nutrients, fertilizing manufacturing is on the rise. While the industry may be seeing
growth, the amount of producers is not steady with demand. Some indirect
competitors could possibly be but not limited to companies such as Stoller USA. A
major competitor that is making headway at selling a similar product is TerryCycle.
The major difference between their products and ours is that they sell recycled
products that are made into resalable products. We will continue to focus our
products as being fertilizing based. By adding additional products to the mix we will
have to worry about finding the demand in that small niche market.
The strengths for competitors in both areas include exposure and quality service.
These companies have built relationships with their customers, whereas we would be
new entrants in the market. The weakness with the waste/removal service industry is
their lack of innovative ways to establish a waste removal alternative. This will
hinder them in future business success.
2. The major companies within this industry compete on a few different levels. The
major components that affect the marketplace and how companies compete are price,
service, and customer support. Service includes both convenience and different
levels of service (i.e. curbside pickups, scheduled pickups, same-day delivery, and
varied trash hauling options).
3. Brand loyalty is not very strong but may be substituted with contracts guaranteeing
continued business. The target market is highly likely to switch services if we can
offer a service that will ultimately help their bottom line and company image. The
switching costs applicable would be low unless otherwise under contract.
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9. 4. Our competitors conceive themselves to be the “best” at what they do as well as the
“cheapest”. In advertisements they all claim to offer the most efficient, price
sensitive service possible.
Sustainable Competitive Advantage
1. We don’t have a dominant control over prices. Prices are established widely by
demand, but with our new product offering and alternative service we can charge a
premium because of these values added. Customers do hold some level of bargaining
power because of the amount of competitors in the market. But price is not highly
negotiable as it is a service that is required by law and has to meet certain regulations
and standards. Business’ have to strictly adhere to these standards to remain in
business.
We have an advantage when it comes to costs in the area of technology and process
design as well as overhead. Because we are a local company and only servicing a
local area, the amount of employees we need is low. This will help to keep our labor
costs to a minimum versus large competitors. Also if we integrate the latest
technology into our business operations we can train our employees and customers
how to use it in an efficient and effective manner. This is an advantage over new
existing competitors who have to spend money to redesign their business operations
and spend money for training to keep their business current with customer demands.
We don’t have any suppliers because we are providing a service in which we become
the suppliers. So the bargaining strength of the suppliers is non-existent. Our
suppliers will be our suppliers of equipment such as trucks and necessary machinery
for recycling purposes.
The channels of distribution that exist for the waste removal side of our company are
direct. We don’t have any suppliers and will act as the manufacturers. The end user
or consumer will be the business’ that are in need of waste removal. For our waste
recycling for organic fertilizer will have a channel of distribution. We will remain the
manufacturer and in turn sell through manufacturer agents or distributors. We will
also sell our product to other fertilizer manufacturers or the direct end user or
customer. By selling directly from the manufacturer to the end user, we are exploring
an existing but rarely used channel. There aren’t any new channels that are foreseen
to add an advantage to our business operations. The channel distributors have a lot of
bargaining power as they can choose not sell your product. But we also contain a lot
of bargaining power as it can strengthen their competitive advantage to sell an
organic fertilizer alternative to the popular chemical fertilizers.
2. As a new entrant to the marketplace, we face many barriers. We don’t have
experience with a large amount of resources such as assets or experience working
with governmental agencies. Waste removal is highly regulated in how it is disposed
of and will require significant knowledge of state and local policies to stay in
business. Also customer loyalty or existent business relationships with other
companies can act as a barrier. Local companies may feel threatened by our entrance
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10. into the market. Contracts existing to between companies and local businesses will
act as a barrier to our entry in the market.
3. A large share of the local market is dominated by few companies but they control
less than 60% of the market share. A lot of existing companies don’t have a unique
business offering that can compete with our services on a local level so our
competitive business strategy will be unique to the traditional companies.
Resources and Capabilities
1. We have limited financial resources as we have limited access to capital and cash
reserves. We do have access to grant money awarded to states to disperse for small
business development. As a startup we do not have access to any cash reserves but
will seek an exceptional investment from private investors. Some of our resources
include:
Experienced management and scientists of waste management, solid waste
recycling and soil and fertilizing.
Sample and analysis of all composts for fertilizing and engineering processes
conducted by Prairie View A & M Agricultural Laboratory.
Skilled and educated workforce in areas of Business Management,
Engineering, Sciences, and Waste Management and Environmental Services
Developed core competencies that will apply to all employees and act as
shared values within organizational culture.
Partnerships with government organizations and private consultants to
improve future operation systems and design to benefit environment.
2. Capabilities include:
Unique product/ service design
Localized business concentration
Sales and Marketing Experience
Top management functional diversity
Top management experience
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11. RISKS
To succeed our company must effectively market our service to local businesses. All integrated
marketing communication efforts should coincide with our core competencies and mission.
There are many generic risks that all small businesses face in their opening year(s) but there are
some risks that could really hurt our business venture. If there is a change in regulations that we
do not make ourselves aware of, it can compromise our services and business relationships. Our
product offering of recycled compost or fertilizer is under regulations of Environmental
Protection Agency (EPA) and if they change any standards or regulations causing us to have a
big operational change, we could suffer from an increase of costs. The biggest risks we face are
correlated to any change in governmental regulations or state laws affecting our services and or
products. Also, the sale of our recycled organic waste product will not have a geographical
limitation; we could suffer from any changes in the transport of international goods and waste.
Also a harsh negative response from big waste management giants could be major risk. One of
the top ten waste/management companies is headquartered in Houston. If they establish a way to
lock in all existing or vast majority of possible clientele, we can risk being losing profit and
obtaining stagnant growth. Lastly a risk that can negatively affect our company is to have a high
demand that we cannot fulfill with our infrastructure and staffed capabilities. This can
potentially cost us future business which is critical to a new entrant in the market.
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12. FINANCIAL PROJECTIONS
Data Entry For Financial Forecast Analysis
Four Year
2012 2013 2014 2015 Totals
Sales
Sales* 120,000 500,000 1,500,000 4,300,000 6,420,000
Other 0 0 0 0 0
Total Sales 120,000 500,000 1,500,000 4,300,000 6,420,000
Less Cost of Goods Sold
Materials 320,000 329,600 409,267 573,095 1,631,962
Labor 100,000 220,000 530,450 545,450 1,395,900
Overhead 125,000 128,750 132,613 186,363 572,725
Other 0 0 0 0 0
Total Cost of Goods Sold 545,000 678,350 1,072,330 1,304,908 3,600,587
Gross Profit (425,000) (178,350) 427,671 2,995,093 2,819,413
Operating Expenses
Salaries and wages 190,000 190,000 222,000 220,000 822,000
Employee benefits 50,000 51,500 53,045 54,545 209,090
Rent 5,000 5,150 5,305 5,455 20,909
Utilities 3,000 3,090 3,183 3,273 12,545
Repairs and maintenance 1,000 1,030 1,061 1,061 4,152
Insurance 1,000 1,030 1,061 1,061 4,152
Travel 2,133 2,197 2,263 2,263 8,856
Advertising 500 500 1,061 1,061 3,122
Marketing/promotion 750 975 3,183 3,183 8,090
Training and development 800 800 1,000 1,000 3,600
Bank charges 500 748 976 1,135 3,359
Depreciation 1,000 1,030 1,061 1,300 4,391
Interest Expense 6,000 6,000 6,000 6,000 24,000
Other 0 0 0 0 0
Total Operating Expenses 261,683 264,050 301,197 301,335 1,128,266
Operating Income (686,683) (442,400) 126,473 2,693,757 1,691,147
Interest income (expense) 16,250 16,738 17,240 18,227 68,454
Other income (expense) 0 0 0 0 0
Total Nonoperating Income (Expense) 16,250 16,738 17,240 18,227 68,454
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13. Income (Loss) Before Taxes (670,433) (425,662) 143,713 2,711,984 1,759,601
Income Taxes 148,563 149,144 152,922 162,629 613,258
Net Income (Loss) (818,996) (574,806) (9,209) 2,549,355 1,146,343
Cumulative Net Income (Loss) (818,996) (1,393,802) (1,403,012) 1,146,343 2,292,686
*Sale and service prices based on competitor’s pricing and market trends.
Break Even Analysis
2012: -$73,886.96
2013: -$740,257.9198
2014: $1,056,411.49
2015: $43,261.27
2012-2015: $2,569,140.36
Investment Required
2012 2013 2014 2015
Capital Expenditures $220,000 $500,000 $983,000 $1,154,000
Working Capital $50,000 $200,000 $638,000 $866,000
Other Major Expenditures $50,000 $64,000 $0 $0
Non-recurring $75,000 $35,000 $0 $0
Total $395,000 $799,000 $1,621,000 $2,020,000
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14. CONCLUSION
Garbage collection is a viable plan because of the large quantity of waste produced by consumers
and businesses. There will always be a need anywhere people inhabit. The business trend is for
companies to go “green” and protect the environment, and our organization would help those
companies achieve those standards. Environmentally-conscious companies are looked upon
favorably by the public. Waste and recycling companies are nothing new, but there is not a
strong recycling presence here in the Prairie View/Hempstead area. In addition, most waste
companies do not focus on recycling the collections of the businesses they service. This would
give our organization a unique niche. The ability to be flexible in regards to our clients’ needs
and schedules and to operate at lower costs than the competition will give us a sustainable
competitive advantage. Our projections show that a profit can be achieved in three years and that
profit can continue to grow in the subsequent years. To make that happen, an investment around
$1.2 million over two years is needed to make this plan come to fruition. In this case, a patient
mindset can lead to a successful business venture.
RECOMMENDATIONS
After conducting a feasibility study to analyze the market as well as our company’s capabilities
and resources, my partner and I feel this is a good venture that could be very profitable. The
next steps for this company to take include the following:
Finalizing location
Develop marketing plan succinct with results of the feasibility study.
Present finalized business plan to potential investors
Work with state and county governments to obtain knowledge about all city and business
state ordinances regarding waste removal and recycling for business organizations as well
as regulations for selling recycled waste for commercial or industrial usage.
Begin working with laboratories and engineering departments from Prairie View A & M
University and Texas A & M University to design equipment necessary for operations.
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