In recent times, especially in the United States, the awareness and use of biodiesel is rapidly increasing simply because it has been proven to be environmentally friendly and efficient when used in any machine that runs on diesel as it has lower emission rates compared to diesel produced from petroleum. Starting a biodiesel production company is capital intensive and it also requires serious business planning and hard work but the fact remains that it is indeed a profitable business to go into and it is very much open for more investors to come in.
Biodiesel Business Plan
Biodiesel, which happens to be a good substitute for conventional diesel, is a renewable fuel that doesn’t pollute the environment and it can comfortably work on any diesel powered machine. Biodiesel is produced from vegetable oil, animal fats, soybean oil and any other reliable source of fats and oil. This part of the business plan describes the business model for the biodiesel company and its key elements.
This section of the business plan formulates strategies that will help to effectively market the biodiesel company, ensuring it stands out from its competition. The selling point will be anchored on the fact that biodiesel is safer than petroleum diesel and that it has lower emission rates when compared to other fuels. It is important to state that the market for biodiesel is on an upward trend and positioning the company properly will bring major profits to the business.
Because of the nature and hazards involved in biodiesel production, the company is required to meet up with certain environmental protection standards before it can receive a license and permission to start the biodiesel production company. As a matter of fact, the facility would be inspected to ensure that it has spill prevention procedures and checks along with counter measures well-established, making sure it meets expected safety standards. In this section of the business plan you will find all the operational aspects and logistics for the company.
This chapter of the Biodiesel business plan intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business within its targeted market. Here, there is an overview of the marketing strategies and objectives for the Biodiesel Business.
This section of the plan, describes the type of customer the biodiesel company is seeking to acquire. The business will usually serve other intermediary businesses or it could opt for direct sales. In any of these cases, the plan will outline the characteristics of the target market and how it should be reached.
Currently, there are a number of organizations that are pushing initiatives, lobbying legislatures, and informing the general public about the benefits of alternative biofuels. The biodiesel company will invest in these public relations campaigns because in the future, the company may develop distribution networks that provide biodiesel directly to end consumers. In this section of the plan there is a list of the promotional strategies the company should follow to stand out.
Financial projections include sales forecasts, expenses and capital requirements for the business. By outlining the financial development of the business for the next three to five years the company can make sure it remains profitable and sustainable over time.
The Biodiesel company’s revenues are moderately sensitive to changes in the general economy. Biodiesel products are comparatively priced with their petroleum based counterparts, and in the event that oil prices decline, the company may have issues divesting its inventory of Biodiesel products. The main source of revenue comes from selling biodiesel in different presentations along with its by-products or waste.
This section of the plan outlines the major regular expenses for the biodiesel company and the strategy to keep the expenses in line in order to maintain the profitability of the business. These expenses include staff, safety compliance expenses, advertising, office supplies and others.