Team:KEYSTONE/Entrepreneurship
Business plan
Introduction
As a team seeking for both environmental protection and business opportunities, we have two goals to achieve. First, we are aiming to recycle PET waste in a most efficient way with the genetically modified E. coli we cultivated and the hardware we created. Secondly, we hope that we could apply this recycling technology to practice by creating a company that could run the PET recycling program effectively and sustainably.
The first goal we set has already been achieved by those efforts made in the lab. For the second goal, we outlined the services and products we could provide, the costs we need to consider, and two different business models we could create. They are the direct business model and the franchise business model, which are both applicable but have different advantages.
Products and Costs
As a company, we could offer two kinds of services, one is recycling PET waste by placing our hardware in those scenic spots. The other one is providing spaces for advertisements on the hardware.
In our company, we could provide 6 types of products, which are:
P1. Liquid bacterial growth media containing LCC producing E. coli
P2. Plastic shredding hardware
P3. Filter device for selecting TPA and EG (the two byproducts of PET recycling)
P4. Mechanical components for the maintenance of the hardware
P5. TPA and EG
P6. Advertisement on the surface of the hardware
However, there are also some costs while running the PET recycling program:
C1. R&D cost
C2. Promotion cost
C3. Production cost of the hardware
C4. Production cost of mechanical components
C5. Production cost of liquid bacterial growth media containing LCC producing E coli
C6. Production cost of filter devices
C7. Transportation cost of the machine, mechanical components, fluid and filter devices
C8. Transportation cost of TPA and EG
C9. Cost of human power for TPA and EG collection
C10. Training cost for employees
C11. Wages for employees
C12. Daily costs (such as the electricity bill and cost of changing advertisements)
Operating Model
In the direct business model, we directly place the machine in scenic spots and dispatch employees to take the responsibility of the running of the hardware (including the maintenance of machines and fluid and the replacement of advertisements) and manage the collection and sell of TPA and EG. Normally, in this business model, only P5 and P6 could be the products that we can make profits, while C1-C12 all become costs for us. However, since our program is dedicated to solving a global issue, we can ask management departments of scenic spots to undertake C3-C7 and C12, and we can apply for subsidies from governments on C1 and C2. Besides, we could also ask PET products manufacturers to pay for C8 and C9 because we have better recycling efficiency and the recycling quality of PET with little recycling loss, higher recycling purity and TPA and EG for easier PET raw materials producing procedures. Therefore, our company eventually only need to afford C2, C10 and C11.
In the direct business model, the advantage is that as a company, we can directly control the recycling program so that we can make more profits and solve problems more effectively and rapidly. However, if management departments of scenic spots, governments and products manufacturers are not willing to support the company, we might face a severe deficit. In addition, there are only two products that we can make profits, in which every change on transaction of each product can have huge impact on our business.
In the franchise business model, we look for local partners for collaboration. These partners are in charge of the responsibilities we took in the direct business model. As a company, we can make profits by supplying P1-P4 to our partners. For these partners, they can make profits by utilizing P5 and P6. Correspondingly, the company needs to afford C1-C7 and these partners need to afford C8-C12.
In the franchise business model, as shown, the opportunity of having profits and risks are more equitably distributed to both the firm and the local partners who collaborate depending on the costs they afford. The company and the partners in the franchise business model are in a mutually beneficial and win-win situation. Therefore, the firm and the partners would both have positive attitudes on the recycling program. Second, due to the increase in types of products that could make profits, the business becomes more stable to changes. However, since a lot of important parts of the program depend on these partners, the company would have less control over this recycling program.
In short, it is difficult to decide which business model is more successful because they are both outstanding and have advantages on different factors. The PET recycling program with the direct business model will be more controllable while the franchise business model has a potential in making more profit and is more stable in making profit. The PET recycling program is overall more applicable and promote environmental protection.
