Do you want to start a biomass power plant and need to write a plan? If YES, here is a sample biomass power plant business plan template & feasibility report.
Biomass is a renewable energy source from living or recently living plant and animal materials which can be used as fuel. Biomass is a plant material that produces electricity with steam. An example of biomass is animal fossil fuel. It is a renewable fuel that doesn’t pollute the environment (i.e. clean burning). It can be used for heating, electricity, and many other operations that use a reciprocating internal combustion engine.
A Sample Biomass Power Plant Business Plan Template
Table of Content
- Industry Overview
- Executive Summary
- Our Products and Services Offering
- Our Mission and Vision Statement
- Job Roles and Responsibilities
- SWOT Analysis
- MARKET ANALYSIS
- Our Target Market
- SALES AND MARKETING STRATEGY
- Sales Forecast
- Publicity and Advertising Strategy
- Startup Expenditure (Budget)
- Sustainability and Expansion Strategy
Biomass is plant or animal material used for energy production (electricity or heat), or in various industrial processes as raw material for a range of products. The Biomass Power industry consists of Direct-fired production, cofiring production and gasification production.
Companies in this industry operate electricity-generating facilities using biomass (e.g. agricultural byproducts, landfill gas and biogenic municipal waste). Establishments primarily engage in operating trash disposal incinerators that also generate electricity.
If you are a close observer of happenings in this industry, you will notice that the Biomass Power industry has grown slowly over the five years to 2019 as published by IBISWorld. The industry’s expansion has been propelled in part by several federal renewable energy tax credits that encouraged the use of biomass power.
Furthermore, the majority of states have enacted renewable portfolio standards (RPSs), which require local utilities to generate electricity from renewable power as a percentage of their total energy portfolio.
Increased campaigning for green technology also influenced industry performance by sparking interest in technologies that replace pollutant-generating energy sources, such as coal and gas. As a result of these trends, industry revenue is expected to increase at an annualized rate of 0.8 percent over the five years to 2019 to a total $907.9 million.
The Biomass Power industry is a thriving sector of the economy of countries like Brazil, Germany, Argentina, China, South Korea, France, The United Kingdom and the united states of America. In the U.S., the industry generates over $908 million annually from more than 122 registered and licensed biomass power plants.
The industry is responsible for the employment of over 1,397 people. Experts project the industry to grow at a 0.8 percent annual rate between 2014 and 2019. Progress Energy is the company with the lion market share of the Biomass Power industry in the United States of America.
We use four types of biomass today—wood and agricultural products, solid waste, landfill gas and biogas, and alcohol fuels (like Ethanol or Biodiesel). Most biomass used today is home grown energy. Wood—logs, chips, bark, and sawdust—accounts for about 44 percent of biomass energy.
Some of the factors that encourage aspiring entrepreneurs and investors to venture into starting a biomass power plant business is that biogas usage is growing rapidly in the United States. Entrepreneur who are interested in the business can come into the industry at any time they desire; the entry barriers might be high but any serious-minded entrepreneur can comfortably raise the startup capital even if it means collecting loans from the bank.
You can choose to start on a small scale producing and supplying power at a community level or you can choose to start on a large scale with distribution networks spread across key cities all around the United States of America.
Green Energy® Biomass Power Plant Company, Inc. is a licensed biomass power plant company that will be involved in the production and distribution of biofuel to retailers, industries, and households. We have been able to lease a production facility that is a perfect fit for what we want to build and the facility is located in the outskirts of Sioux City’s forest in the state of Iowa.
Green Energy® Biomass Power Plant Company, Inc. will be involved direct-fired production, cofiring production and gasification production and other biofuels.
There is a growing interest when it comes to biomass power and new enterprises are springing up, which is why we spent time and resources to conduct our feasibility studies and market survey so as to offer much more than our competitors will be offering. We have robust distribution network and strong online presence.
Beyond the distribution and supply of biofuel to factories and end users in the United States, our customer care is going to be second to none in the whole of Sioux City – Iowa and our deliveries will be timely and highly reliable. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they patronize our products.
We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may grow to. We will ensure that we get our customers involved when making some business decisions that directly affect them.
Green Energy® Biomass Power Plant Company, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
Green Energy® Biomass Power Plant Company, Inc. is owned by Sutton Jones. Mr. Jones has a B.Sc. in Microbiology and MSc. In Biotechnology, with over 15 years of hands on experience in the biomass power industry, working for some of the leading brands in the United States. Although the business is launching out with just one location in Sioux City – Iowa, but there is a plan to expand our distribution network all across the state of Iowa.
Our Products and Services Offering
Green Energy® Biomass Power Plant Company, Inc. will ensure that we are involved in the production and distribution of quality and safe biogas and other biofuel products. We are in the Biomass Power industry to make profits and we will ensure that we do all that is permitted by the law in the United States to achieve our business aim and objectives.
We will be involved in;
- Generating biomass-fueled power
- Generating power from wood and wood waste powered facilities
- Generating power from liquid biofuel powered facilities
- Generating power from waste powered facilities
Our Mission and Vision Statement
- Our vision is to be listed amongst the top 3 biomass power plants in the whole of the United States of America.
- Our mission is to establish a biomass power plant that will distribute quality and safe biofuel at affordable prices to retailers, and industries in Sioux City and other cities in and around Iowa where we intend marketing our product.
Our Business Structure
Our intention of starting a biomass power plant company is to build a standard power plant in Sioux City – Iowa. We will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.
We want to put modalities in place that will guide us in hiring people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders. As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more.
In view of that, we have decided to hire qualified and competent hands to occupy the following positions that will be made available at Green Energy® Biomass Power Plant Company, Inc.;
- Chief Executive Officer (Owner)
- Power Plant Manager
- Biomass Power Plant Engineers/Operators
- Human Resources and Admin Manager
- Merchandize Manager
- Sales and Marketing Manager
- Customer Services Executive
Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Reports to the board
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
- Defines job positions for recruitment and managing interviewing process
- Carries out induction for new team members
- Accountable for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities.
Power Plant Manager
- Responsible for overseeing the smooth running of the biomass power plant
- Maps out strategies that will lead to efficiency amongst workers in the plant
- Responsible for training, evaluation and assessment of plant workers
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Ensures that the plant meets the expected safety and health standard at all times.
- Responsible for using space and mechanical handling equipment efficiently and making sure quality, budgetary targets and environmental objectives are met
- Coordinating the use of automated and computerized systems where necessary
- Producing regular reports and statistics on a daily, weekly and monthly basis
- Ensures that proper records of biogas and other biofuel products are kept and warehouse does not run out of products
- Ensures that the production facility is in tip top shape and biogas and other biofuel products are properly arranged and easy to locate
- Interfaces with third – party suppliers (vendors)
- Controls biofuel supply inventory
Biomass Power Plant Engineers/Operators
- Responsible for operating machines used in generating biomass-fueled power
- Responsible for operating machines used in generating power from wood
- Responsible for operating machines used in generating power from liquid biofuel
- Responsible for operating machines used in generating power from waste
- Responsible for the purchase of raw materials such as wood and agricultural products, solid waste, landfill gas and biogas, and alcohol fuels (like Ethanol or Biodiesel). Wood—logs, chips, bark, and sawdust for the organizations
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
- Ensures that the organization operates within stipulated budget.
Sales and Marketing Manager
- Manages external research and coordinates all the internal sources of information to retain the organizations’ best customers and attract new ones
- Models demographic information and analyze the volumes of transactional data generated by customer purchases
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Identifies development opportunities; follows up on development leads and contacts
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization
Client Service Executive
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries.
Distribution Truck Drivers
- Maintains a logbook of their driving activities to ensure compliance with federal regulations governing rest and work periods for operators.
- Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment
- Assists the transport and logistics manager in planning their route according to a distribution schedule.
- Inspects vehicles for mechanical and safety issues and perform preventative maintenance
- Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
- Collects and verifies delivery instructions
- Reports defects, accidents or violations
Our goal of starting out in Sioux City and produce and distribute our biogas and other biofuel products only within Sioux City – Iowa is to test run the business for a period of 3 to 5 years to know if we will invest more money and expand the business all around the state of Iowa.
We are quite aware that there are several biomass power plants in the same location where we intend locating ours, which is why we are following the due process of establishing a business. We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.
Green Energy® Biomass Power Plant Company, Inc. employed the services of an expert HR and Business Analyst with bias in retailing and distribution to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.
This is the summary of the SWOT analysis that was conducted for Green Energy® Biomass Power Plant Company, Inc.;
Our location, the business model we will be operating on (robust distribution network), reliable distribution tankers, varieties of payment options, quality and safe biogas and other biofuel products and our excellent customer service culture will definitely count as a strong strength for Green Energy® Biomass Power Plant Company, Inc.
So, also our management team are people who have what it takes to grow a business from startup to profitability within a record time.
A major weakness that may count against us is the fact that the industry has only experienced few technological advancements.
An unfortunate disadvantage of biogas today is that the systems used in the production of biogas are not efficient. People are still skeptical because they feel biofuel contains Impurities. Even after refinement and compression, biogas still contains impurities. Lastly is the fact that biofuel is less suitable for dense metropolitan areas.
Regional public utility commissions regulate retail electricity prices. Biomass power plants controlled by regulated utility companies are subject to regulated retail prices.
Industry operators that successfully petition for rate hikes benefit from increased revenue and profitability, while companies that are unable to obtain favorable rulings will have difficulty operating in the industry. In 2019, the price of electric power is expected to increase, representing a potential opportunity for the industry.
Tax credits make biomass-power projects more affordable for biomass-power generation enterprises to execute. With cost savings, operators can more effectively compete based on the price of electricity with other types of energy-generation technologies.
With the expiration of the production tax credit and no renewal planned in 2019, the net value of tax credits directed at biomass power generation are expected to decrease, representing a potential threat to the industry.
- Market Trends
In recent time, particularly in the United States, the awareness and use of biofuel is rapidly increasing because it has been proven to be environmentally friendly and efficient when used in any machine that runs on gas. It has lower to zero emission compared to the liquified natural gas.
Strong growth in the current period is expected to continue, technological advancements spurred demand from downstream industries and the industry is developing new revenue streams from outsourced research and other related bio products. Please note that external factors such as global research and development funding and global investor confidence in the Biomass Power industry will impact industry performance
To sum up, many investors are now establishing biomass power plants because it has been proven to be a better substitute for gas, that is why it has now been produced in commercial quantity in the US thereby reducing the importation and dependence on natural gas. It is indeed good for the economy of the United States of America.
Our Target Market
The Biomass Power industry has a wide range of customers; a good number of manufacturing companies and owners of gas – powered machines make use of biogas and other biofuel products for electricity production on sewage works, in a CHP gas engine, where the waste heat from the engine is conveniently used for heating the digester; cooking; space heating; water heating; and process heating.
In view of that, we have positioned our biomass power plant to service businesses in Sioux City – Iowa and every other location we will cover. We have conducted our market research and we have ideas of what our target market would be expecting from us.
We are in business to retail (distribute) biogas and other biofuel products to the following businesses;
- Manufacturing companies
- Power plants that run on biogas
- Facility managers that make use of biogas
Green Energy® Biomass Power Plant Company, Inc. is launching a standard biomass power plant that will indeed become the preferred choice in Sioux City – Iowa.
Our competitive advantage revolves around our ability to attract local support and patronage, easy compliance with government regulations, ability to quickly adopt new technology, ability to raise financing and our ability to educate the wider community on the need to switch to green energy.
We will ensure that we have biogas and other biofuel products available in our distribution network at all times. Our excellent customer service culture, timely and reliable delivery services, online presence, and various payment options will serve as a competitive advantage for us.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
SALES AND MARKETING STRATEGY
- Sources of Income
Green Energy® Biomass Power Plant Company, Inc. will generate income by producing and supplying biogas and other biofuel products in the United States of America. We will achieve this by;
- Generating biomass-fueled power
- Generating power from wood and wood waste
- Generating power from liquid biofuel
- Generating power from waste
One thing is certain when it comes to biomass power plant company, if your business is centrally positioned coupled with effective and distribution network, you will always attract customers.
Green Energy® Biomass Power Plant Company, Inc. is well positioned to take on the available market in Sioux City – Iowa and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base.
We have been able to examine the Biomass Power industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Green Energy® Biomass Power Plant Company, Inc., it is based on the location of our business, and other factors as it relates to biogas and other biofuel startups in the United States;
- First Fiscal Year (FY1): $335,000
- Second Fiscal Year (FY2): $650,000
- Third Fiscal Year (FY3): $1.1 million
N.B: This projection aws done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products within same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Before choosing a location to launch Green Energy® Biomass Power Plant Company, Inc., we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market and become the preferred choice for factories, and retailers of biogas and other biofuel in Sioux City – Iowa.
We hired experts who have good understanding of the biogas production business to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Sioux City – Iowa.
In summary, Green Energy® Biomass Power Plant Company, Inc. will adopt the following sales and marketing approach to win customers over;
- Introduce our business by sending introductory letters alongside our brochure to biogas and other biofuel retailers, factories, facility managers, hotels, households and key stake holders in and around Sioux City – Iowa
- Ensure that we have a biogas in our distribution network at all times.
- Make use of attractive hand bills to create awareness
- Position our signage/flexi banners at strategic places around Sioux City – Iowa
Publicity and Advertising Strategy
Even though our biomass power plant company is well structured and well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote the business.
Green Energy® Biomass Power Plant Company, Inc. has a long-term plan of opening distribution channels all around the state of Iowa which is why we will deliberately build our brand to be well accepted in Sioux City before venturing out.
Here are the platforms we intend leveraging on to promote and advertise Green Energy® Biomass Power Plant Company, Inc.;
- Place adverts on community – based newspapers, radio and TV stations.
- Encourage the use of word of mouth publicity from our loyal customers
- Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, micro blogs, Google+ and other platforms to promote our business.
- Ensure that our we position our banners and billboards in strategic positions all around Sioux City – Iowa
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Advertise our biomass power plant company in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and distribution vans/trucks and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals.
Our Pricing Strategy
Pricing is one of the key factors that gives leverage to distribution companies and retailers. It is normal for retailers to purchase products from distribution companies that offer cheaper prices. We will work towards ensuring that all our biogas and other biofuel products are distributed at highly competitive prices compared to what is obtainable in the United States of America.
We also have plans in place to discount our biogas and other biofuel products once in a while and also to reward our loyal customers from time to time.
- Payment Options
The payment policy adopted by Green Energy® Biomass Power Plant Company, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Green Energy® Biomass Power Plant Company, Inc. will make available to her clients;
- Payment via bank transfer
- Payment via online bank transfer
- Payment via check
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our clients make payment for biogas and other biofuel products purchased without any stress on their part.
Startup Expenditure (Budget)
From our findings, we were able to come with the areas we will spend our resources on and this is what it would cost us to set up Green Energy® Biomass Power Plant Company, Inc. in the United of America;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
- Marketing promotion expenses for the grand opening of Green Energy® Biomass Power Plant Company, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring business consultant – $2,500.
- The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost for payment of rent for 12 months at $1.76 per square feet tank facility (mini depot) / biomass power plant in the total amount of $250,000.
- The total cost for production facility remodeling (construction of the biomass power plant) – $200,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $150,000
- The cost for Start-up inventory – $200,000
- Storage hardware (bins, rack, shelves) – $3,720
- The cost for counter area equipment – $9,500
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost of purchase and installation of CCTVs – $5,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
- The cost for the purchase of distribution tankers/trucks – $75,000
- The cost of launching a website – $600
- Miscellaneous – $10,000
We would need an estimate of $1.2 million to successfully set up our biomass power plant company in Sioux City – Iowa.
Generating Funds/Startup Capital for Green Energy® Biomass Power Plant Company, Inc.
Green Energy® Biomass Power Plant Company, Inc. is a private business that is solely owned and financed by Sutton Jones. He does not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.
- Generate part of the startup capital from personal savings
- Source for soft loans from family members and friends
- Apply for loan from the bank
N.B: We have been able to generate about $500,000 (Personal savings $450,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $700,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
Sustainability and Expansion Strategy
Part of the plans we have in place to sustain Green Energy® Biomass Power Plant Company, Inc. is to ensure that we continue to deliver quality services, improvise on how to do things faster and cheaper. We are will provide conducive environment for our workers and also the required trainings that will help them deliver excellent services at all times.
We are quite aware that our customers are key component to the growth and survival of our business hence we are going to continuously engage them to give us ideas on how to serve them better. We will not waste time in adopting new technology, best practices and diversifying our services once the need arises.
Our key sustainability and expansion strategy as a business is to ensure that we only hire competent and technically sound employees, and create a conducive working environment for all our staff members. We know that if we implement our business strategies, we will grow our biogas production business beyond Sioux City – Iowa to other states in the U.S in record time.
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of mini depot facility and construction of biomass power plant: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing/Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed machines, technology, furniture, reservoirs, computers, electronic appliances, office appliances and CCTV: In progress
- Purchase of distribution tankers/trucks: Completed
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Establishing business relationship with biogas and other biofuel products distributors all across the United States of America: In Progress