Do you want to start a paper mill company and need to write a business plan? If YES, here is a sample paper mill business plan template & feasibility report. If you are interested in the thriving paper industry in the United States, there are loads of businesses you can start in the value chain of the industry and one of them is a paper mill.
A paper mill business is one of the many businesses that can be started in any part of the world and the owner of the business can still penetrate the global market by simply exporting his or her products to other countries of the world. If you are interested in starting a paper mill, then you would find this sample paper mill business plan template highly useful.
A Sample Paper Mill Business Plan Template
Table of Content
- 2. Executive Summary
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 13. Startup Expenditure (Budget)
1. Industry Overview
Players in the Paper Mill industry manufacture paper from pulp, a fibrous material derived from wood. Mill operators may manufacture their own pulp or purchase it. Industry products include paper rolls and reams, including printing and writing paper, newsprint, packaging materials and household papers.
These products are sold in bulk to individual consumers, businesses and downstream manufacturers who may further convert the industry’s products into specialty paper products.
The Paper Mills industry, which produces a range of communication papers and personal care products, has contended with roadblocks over the five years to 2019 due to competition from foreign paper manufacturers and persistently declining demand for paper products.
Industry operators have toiled with concerns surrounding the increasing popularity of online communication, which has significantly reduced demand for traditional paper products. Industry decline will be offset slightly by growth in the personal care product segment, which includes incontinence products like adult diapers; as baby boomers in the united states have entered their senior years, demand for these products has grown.
Statistics has it that in the United States of America alone, the Paper Mills industry generates over $40 billion annually from more than 238 registered and licensed paper manufacturing companies. The industry is responsible for the employment of over 54,446 people.
Experts project the industry to grow at a -4.6 percent annual rate. The establishment in this industry that has a dominant market share in the United States of America are Domtar Corporation and Verso Corporation.
The paper mills industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale or you can choose to start on a large scale with standard paper mills with robust distribution networks both in the United States of America and in countries in Asia where you can get cheaper labor and raw materials.
2. Executive Summary
Malcom Robinson® Paper Mill, Inc. is a US registered paper mill that will be located in Fort Smith – Arkansas; in an ideal location that is highly suitable for the kind of business we want to establish.
We have been able to lease a facility that is big enough (a 25 thousand square foot facility) to fit into the kind of company that we intend establishing. Besides, forestry remains strong in the Arkansas Timberlands, and the state ranks fourth nationally and first in the South in softwood lumber production.
Malcom Robinson® Paper Mill, Inc. will be involved in the manufacturing of paper from pulp. Our products include paper rolls and reams, including printing and writing paper, newsprint, packaging material and household papers. We will sell these products in bulk to individual consumers, businesses and downstream manufacturers who may further convert the industry’s products into specialty paper products.
We are set to service a wide range of clientele not just in the United States of America, but also all parts of the world. We are aware that there are several paper mills companies all around the United States of America, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to compete in the industry.
Malcom Robinson® Paper Mill, Inc. will ensure that all the paper related materials that leaves our mills are of the highest quality and are highly durable and affordable. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large their numbers may grow to.
Malcom Robinson® Paper Mill, 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 customers’ needs precisely and completely whenever they patronize our products. Malcom Robinson® Paper Mill, Inc. owned by Malcom Robinson. Mr. Robinson has a Degree in Production Engineering and over 18 years hands on experience in related industries prior to starting the business.
3. Our Products and Services
Malcom Robinson® Paper Mill, Inc. is in the paper mills industry to manufacture a wide range of paper, including printing and writing paper, newsprint, packaging materials and household paper for both corporate and individual clients.
We are set to service a wide range of clientele not just in the United States of America but also in all parts of the world and of course to make profits. Our product offerings are listed below;
- Coated groundwood
- Super calendared paper
- Coated and uncoated freesheet
- Construction paper
- Personal care products
- Printing paper, writing paper, packaging paper and industrial paper
- Clay-coated paper
- Absorbent sanitary and tissue paper
4. Our Mission and Vision Statement
- Our vision is to become the number one brand in the paper mills industry in Arkansas and to establish a distribution network that spreads across the United States of America and other countries of the world.
- Our mission is to establish a world – class paper mill whose products will not only be used by both small and big corporations in the United States of America, but which can also be exported to other countries of the world.
- We want to build a business that will have active presence in all the continents of the world.
Our Business Structure
Our intention of starting a paper mill company is to build a standard paper mill in Fort Smith – Arkansas. Although our paper mill company might just be a startup, but 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 will make sure that we employ 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;
- Chief Executive Officer (Owner)
- Paper Mill Manager
- Human Resources and Admin Manager
- Merchandize Manager
- Sales and Marketing Manager
- Paper Mills Machine Operators
- Customer Services Executive
5. 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
- Creating, communicating, and implementing 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.
- Defining job positions for recruitment and managing interviewing process
- Carrying out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversee the smooth running of the daily office activities.
Paper Mills Manager:
- Responsible for managing the daily activities in the paper mill
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Ensures that proper records of materials are kept and warehouse does not run out of finished products
- Ensure that the paper mill is in tip top shape and easy to locate
- Control printing and writing paper, newsprint, packaging material and household papers distribution and supply inventory
- Supervise the workforce in the factory.
- Manage vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
- Help to ensure consistent quality raw materials are purchased and used
- Responsible for the purchase of raw material 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
- Manage external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Model demographic information and analyze the volumes of transactional data generated by customer purchases
- Identify, prioritize, and reach 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
- Document all customer contact and information
- Represent the company in strategic meetings
- Help increase sales and growth for the company
Paper Mill Machine Operators
- Responsible for operating machines used in the productions of paper rolls and reams, including printing and writing paper, newsprint, packaging materials and household papers.
- Responsible for producing paper in paper mills from pulp
- Responsible for operating machines used in the production of different kinds of paper
- Assist in loading and unloading or raw materials and finished products
- Handles any other duty as assigned by the paper mill manager
- 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
- Ensuring 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
6. SWOT Analysis
Malcom Robinson® Paper Mill, Inc. is in business to become one of the leading paper mills in the United States of America and we are fully aware that it will take the right business concept, management and organizational structure to achieve our goal.
We know that there are several paper mill in the United States of America and even 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.
Malcom Robinson® Paper Mill, Inc. employed the services of an expert HR and Business Analyst with bias in the manufacturing industry 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 Malcom Robinson® Paper Mill, Inc.;
Our main strength lies in the quality of our finished products, the power of our team and the location of our paper mill. We are located in Fort Smith, Arkansas and interestingly, forestry remains strong in the Arkansas Timberlands, and the state ranks fourth nationally and first in the South in softwood lumber production.
A major weakness that may count against us is the fact that we are a new paper mill and we don’t own our timberland; we source our raw materials from others. So also, we may not have enough cash reserve to promote our business the way we would want to do.
The fact that we are going to be operating our paper mill company in Fort Smith – Arkansas provides us with unlimited opportunities to sell our products. Plus, purchases of paper products can vary depending on the level of activity in key downstream markets, such as finance, advertising and publishing industries.
Corporate profit growth typically improves business sentiment, encourages business expansion and increases demand for the industry’s products. Corporate profit is expected to increase in the coming year, representing a potential opportunity for the industry.
The widespread use of online media has resulted in a net reduction in stationery, letters, business forms, envelopes and other paper products. This trend has reduced downstream demand for paper mills, adversely affecting revenue. The percentage of services conducted online is expected to increase in 2019, posing a potential threat to the industry. So also, unfavorable government policies as it relates to deforestation may also pose a threat for businesses such as ours.
7. MARKET ANALYSIS
- Market Trends
The trends in this industry are in two folds. First, it is to the advantage of players in this industry because of the biodegradable nature of paper products and secondly, it is against them because of the need to prevent deforestation which has become a major concern for people who are advocating for global warming.
Technology is also not helping this industry because people and industries are shifting towards electronic copies as against hard printed copies when it comes to books, publications and the likes.
One major trend in the paper mills industry is that most players are leveraging on the fact that states in the US and even countries of the world are passing legislation that will put a limit to the use of materials like nylon and polythene bags et al because of environmental hazard hence paper bags, paper cups, paper crafts and cardboard packing materials have become a good substitute.
Lastly, players in the paper mill industry have started cultivating their own woods in their own timberland. This will give them economies of scale and help to maximize profits in their business.
8. Our Target Market
When it comes to mapping out strategies for a paper mill business, there is indeed a straightforward market. There is hardly any printing press, corporate organization, schools, paper crafts companies, pharmaceutical stores, departmental stores, groceries stores, electronic stores, supermarkets and boutique et al that do not make use of paper products.
In view of that, we have positioned our paper mills company to service a wide range of clientele in the United States of America and other parts of the world. We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us. We in the paper mills industry to supply our products to the following organizations;
- Paper bags manufacturing companies
- Paper cups manufacturing companies
- Cardboard and boxes manufacturing companies
- Books manufacturing companies
- Printing press
- Departmental Stores
- Grocery Stores
- Pharmaceutical Stores
- Electronic Stores
- Shoe manufacturing companies
- Fast food restaurants/Pizza restaurants
Our Competitive Advantage
A close examination of the paper mills industry reveals that the market has become much more intensely competitive over the last decade. We are aware of the competition and we are prepared to compete favorably with other leading paper mills in the United States.
Our paper mill company is located in an ideal property highly suitable for the kind of manufacturing company we want to run. One thing is certain, we will ensure that we manufacture high quality and durable paper products in our factory at all times.
One of our business goals is to make Malcom Robinson® Paper Mill, Inc. a one stop paper manufacturing company. Our excellent customer service culture, various payment options and highly secured facility 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.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Malcom Robinson® Paper Mill, Inc. is in business to manufacture and supply paper related products in the United States of America. We are in the paper mills industry to maximize profits and we are going to ensure that we achieve our business goals and objectives.
Malcom Robinson® Paper Mill, Inc. will generate income by selling the following products;
- Coated groundwood
- Super calendared paper
- Coated and uncoated freesheet
- Construction paper
- Personal care products
- Printing paper, writing paper, packaging paper and industrial paper
- Clay-coated paper
- Absorbent sanitary and tissue paper
10. Sales Forecast
The paper mills industry has a wide range of customers that cut across various manufacturing industries especially players in the printing industry and of course the fast-moving consumer goods (FMCG) sector.
We are well positioned to take on the available market in the United States of America and of course the rest of the world 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 paper mills 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 projection for Malcom Robinson® Paper Mill, Inc., it is based on the location of our business and other factors as it relates to paper mill startups in the United States;
- First Fiscal Year (FY1): $350,000
- Second Fiscal Year (FY2): $750,000
- Third Fiscal Year (FY3): $1.5 million
N.B: This projection was 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 manufacturing or supplying same products as we do 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 for Malcom Robinson® Paper Mill, Inc. we conducted a thorough market survey and feasibility studies in order for us to be able to penetrate the available market and become one of the preferred choice for businesses that make use of paper not only in Fort Smith – Arkansas, but also throughout the United States.
We hired experts who have good understanding of the paper mills industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in the United States of America.
In summary, Malcom Robinson® Paper Mill, Inc. will adopt the following sales and marketing approach to win customers over;
- Introduce our paper mill company by sending introductory letters alongside our brochure to printing press, schools, paper crafts companies, paper related manufacturing organizations, stores and key stake holders in Fort Smith – Arkansas
- Ensure that we manufacture a wide range of paper related products that can fit into the needs of a wide range of customers
- Make use of attractive hand bills to create awareness and also to give direction to our paper mill
- Position our signage/flexi banners at strategic places around Fort Smith – Arkansas
- List our business and products on yellow pages ads (local directories)
- Leverage on the internet to promote our products
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
11. Publicity and Advertising Strategy
Even though our paper mill company is well positioned, we will still go ahead to intensify publicity for the business. Malcom Robinson® Paper Mill, Inc. has a long – term plan of opening our mills in key locations in Asia, South America and Africa which is why we will deliberately build our brand to be well accepted in the United States of America before venturing out.
Here are the platforms we intend leveraging on to promote Malcom Robinson® Paper Mill, 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 to promote our business.
- Ensure that our we position our banners and billboards in strategic positions all around Fort Smith – Arkansas
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Advertise our paper mill company in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and trucks and ensure that all our staff wear our branded shirt or cap at regular intervals.
12. Our Pricing Strategy
If you are conversant with the paper mills industry, you will realize that the pricing structure ranges from fixed to per square foot billing and even to the quantity of materials needed for the production of a product. Almost all paper mills adopt all the available pricing system as it applies to the quantity of the job or project they are expected to execute.
At Malcom Robinson® Paper Mill, Inc. we will adopt all the pricing system as is obtainable in the industry but we will ensure that we keep the prices of our products a little below the average market rate by keeping our overhead low and by collecting payment in advance from our customers. In addition, we will also offer special discounted rates to all our customers at regular intervals.
- Payment Options
The payment policy adopted by Malcom Robinson® Paper Mill, 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 Malcom Robinson® Paper Mill, Inc. will make available to her clients;
- Payment via bank transfer
- Payment via Point of Sale Machine (POS)
- 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 client make payment for the purchase of our products without any stress on their part.
13. Startup Expenditure (Budget)
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting/leasing a big facility, then you need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business. The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked.
As for the detailed cost analysis for starting a paper mill business; it might differ in other countries due to the value of their money. These are the key areas where we will spend our startup capital on;
- 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 Malcom Robinson® Paper Mill, 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 total cost for hiring Business Consultant – $2,500.
- The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400.
- The total cost for long – term leasing of a standard paper mill – $250,000
- The total cost for remodeling the paper mill – $20,000.
- 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) – $100,000
- The total cost for start-up inventory (purchase of tools and equipment and the purchase of raw materials inclusive) – $150,000
- The total cost for counter area equipment – $9,500
- The total cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The total cost for the purchase and installation of CCTVs: $10,000
- The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
- The cost for the purchase of delivery trucks: $20,000
- The total cost of launching a Website: $600
- Miscellaneous: $10,000
We would need an estimate of $750,000 to successfully set up our paper mill company in Fort Smith – Arkansas.
Generating Funds/Startup Capital for Malcom Robinson® Paper Mill, Inc.
Malcom Robinson® Paper Mill, Inc. is owned and financed by James Whitney. 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 $250,000 (Personal savings $200,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of the employees, their investment strategy and business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Malcom Robinson® Paper Mill, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to manufacture durable and quality paper related products and to retail them a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Malcom Robinson® Paper Mill, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
- 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 paper mill facility and remodeling the facility: 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
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of machines and equipment in the paper mills: Completed
- Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- 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
- Compilation of the list of products that will be manufacturing in our paper mill: Completed
- Establishing business relationship with vendors – supplier of cardboard packing and paper bag making raw materials, key stakeholders and suppliers of coated groundwood, super calendared paper, coated and uncoated freesheet, construction paper, personal care products, paper rolls and reams, including printing and writing paper, newsprint, packaging material and household papers, absorbent sanitary and tissue paper: In Progress.