Are you about starting a biogas company? If YES, here is a detailed sample biogas production business plan template & feasibility report you can use for FREE.
If you are looking for a green energy business to start, a business that can easily get support and even funding from the government, then one of your options is to start a biogas production company.
Biogas is a good substitute for the conventional gas. It is a renewable fuel that doesn’t pollute the environment. This renewable energy can be used for heating, electricity, and many other operations that use a reciprocating internal combustion engine.
Starting a biogas production company is capital intensive and it also requires serious planning and hard work but the fact remains that it is indeed a profitable business to go into and it is still very much open for more investors to come in. Below is a sample biogas production business plan template that will help you successfully launch your own business.
A Sample Biogas Production Business Plan Template
1. Industry Overview
Biogas is the combination of gases produced by the breakdown of organic matter in the absence of oxygen. Biogas can be produced from raw materials such as agricultural waste, manure, municipal waste, plant material, sewage, green waste or food waste. Biogas is a renewable energy source. Compressed biogas is becoming widely used in Sweden, Switzerland, and Germany.
Biogas can be used 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. If compressed, it can replace compressed natural gas for use in vehicles, where it can fuel an internal combustion engine or fuel cells and it is a much more effective displacer of carbon dioxide than the normal use in on-site CHP plants.
Biogas production business is a subset of the Biomass Power industry and businesses in this industry operate electricity – generating facilities using biomass (e.g. agricultural byproducts, landfill gas and biogenic municipal waste). Establishments engaged in operating trash disposal incinerators that also generate electricity are classified in the Waste Treatment and Disposal Services industry.
The Biomass Power industry is a thriving sector of the economy of countries like Germany, Japan, 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 biotechnology companies (biogas production companies inclusive.
The industry is responsible for the employment of over 1,397 people. Experts project the Biomass Power industry to grow at a 0.8 percent annual rate between 2014 and 2019. Progress Energy is one company with the a market share of the market in the United States of America.
A recent report published by IBISWorld shows that the Biomass Power industry has grown slowly over the five years to 2019. 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.
Some of the factors that encourage aspiring entrepreneurs and investors to start a biogas production business is the fact that the market is growing rapidly in the United States and it is not seasonal. That makes it easier for entrepreneurs who are interested in the business to 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.
The Biomass Power industry is a green and highly profitable industry and it is open for entrepreneurs to come in; you can choose to start on a small scale by producing and supplying at a community level or you can start on a large scale with distribution networks spread across key cities all around the United States of America.
2. Executive Summary
Green Gas® Biogas Production Company, Inc. is a licensed biogas production company that will be involved in the production and distribution of biogas to retailers, industries, and households. We have been able to lease a production facility that is a perfect fit and the facility is centrally located in North Platte – Nebraska.
Green Gas® Biogas Production Company, Inc. will produce and supply biogas and other biofuels to end users at affordable prices.
There is growing interest in biomass power especially biogas 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; strong online presence and our distributors are armed with the various payments of options available in the United States.
Beyond the distribution and supply of biogas, our customer care is going to be second to none in the whole of North Platte – Nebraska 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.
Green Gas® Biogas Production Company, Inc. will ensure that all our customers are given first class treatment whenever they order biogas and other biofuel from us. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large our customer base and distribution network may grow to.
Green Gas® Biogas Production 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 Gas® Biogas Production Company, Inc. is a family business that is owned by Sutton Jones and his immediate family members. Sutton Jones has a B.Sc. in Microbiology and MSc. in Biotechnology, with over 15 years’ hands on experience in the biomass power industry, working for some of the leading brands in the United States.
3. Our Products and Services
Green Gas® Biogas Production Company, Inc. is in the Biomass Power industry and we will be 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.
4. Our Mission and Vision Statement
- Our vision is to be listed amongst the top 5 biogas production companies in the whole of the United States of America.
- Our mission is to establish a biogas production plant and supply business that will distribute quality and safe biogas at affordable prices to retailers, and industries in North Platte and other cities in and around Nebraska where we intend marketing our biogas and other biofuel.
Our Business Structure
Green Gas® Biogas Production Company, Inc. does not intend to compete at the local level; our intention of starting a biogas production company is to build a standard company in North Platte – Nebraska. 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 Gas® Biogas Production Company, Inc.;
- Chief Executive Officer (Owner)
- Production Manager
- Human Resources and Amin Manager
- Merchandize Manager
- Sales and Marketing Manager
- Accountants / Cashiers
- Customer Services Executive
- Drivers / Distributors
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;
- 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.
- 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.
Production Plant Manager
- Responsible for overseeing the smooth running of the biogas production plant
- Part of the team that determines the quantity and quality of biogas and biofuels that are to be produced
- Maps out strategies that will lead to efficiency amongst workers in the plant
- Responsible for training, evaluation and assessment of plant workers
- Ensures the steady flow of raw materials to the plant and easy flow of finished products through wholesale distributors to the market
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Ensures that the plant meets 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
- In charge of using and coordinating automated and computerized systems where necessary
- Accountable for 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
- Controls biogas supply inventory
- Supervises the workforce in the production floor.
- Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
- Responsible for the purchase of biogas and other biofuel products for the organizations
- Ensures that the organization operates within stipulated budget.
Sales and Marketing Manager
- Manages external research and coordinate 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 are supplied to customers when they make enquiries.
Distribution Truck Drivers
- Assists in loading and unloading biogas and other biofuel products
- Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the 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 items 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
- Reports defects, accidents or violations
6. SWOT Analysis
Our goal of starting out in North Platte is to test run the business for a period of 3 to 5 years to know if we will invest more money, expand the business and then start our biogas production and supply all around the state of Nebraska.
We are quite aware that there are several biogas production companies and contractors all over North Platte 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.
Green Gas® Biogas Production 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 Gas® Biogas Production 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 us. So also, our management team are people who have what it takes to grow a business from startup to profitability in record time.
A major weakness that may count against us is the fact that we are a new biogas production company and we don’t have the financial capacity to compete with leaders in the industry especially as it relates to leveraging on economy of scales.
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.
7. MARKET ANALYSIS
In recent time, particularly in the United States, the awareness and use of biogas 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 liquefied 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.
Many investors are now going into the production of biogas because it has been proven to be a better substitute for gas and that is why it is now produced in commercial quantities in the US thereby reducing the importation and dependence on natural gas.
8. 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.
In view of that, we have positioned our biogas production company to service businesses in North Platte – Nebraska and every other location we will cover in Nebraska. 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 Gas® Biogas Production Company, Inc. is launching a standard biogas production company that will indeed become the preferred choice for gas – powered machine owners and biogas distributors et al in North Platte – Nebraska.
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.
One thing is certain; we will ensure that we have biogas and other biofuel products available in our distribution network at all times. One of our business goals is to make Green Gas® Biogas Production Company, Inc. a one stop biogas production company. 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 achieve all our aims 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
Green Gas® Biogas Production Company, Inc. will generate income by producing and supplying biogas and other biofuel products within the scope of the Biomass Power industry in the United States of America.
10. Sales Forecast
One thing is certain, when it comes to biogas production, if your business is centrally positioned coupled with effective and reliable tankers/trucks and distribution network, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.
Green Gas® Biogas Production Company, Inc. is well positioned to take on the available market in North Platte – Nebraska 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. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in North Platte – Nebraska.
Below are the sales projections for Green Gas® Biogas Production Company, Inc., it is based on the location of our business, and other factors as it relates to biogas and other biofuel products start – ups in the United States;
- First Fiscal Year: $335,000
- Second Fiscal Year: $650,000
- Third Fiscal Year: $1.1 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 offering 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 to launch Green Gas® Biogas Production 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 retailers of biogas and other biofuel in North Platte – Nebraska. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.
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 North Platte – Nebraska.
In summary, Green Gas® Biogas Production 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 products retailers, factories, facility managers, hotels, households and key stake holders in and around North Platte – Nebraska
- Ensure that we have a biogas and other biofuel products in our distribution network at all times.
- Make use of attractive hand bills to create awareness business
- Position our signage / flexi banners at strategic places around North Platte – Nebraska
11. Publicity and Advertising Strategy
Even though our biogas production company is well structured and well located, we will still go ahead to intensify publicity for the business.
Green Gas® Biogas Production Company, Inc. has a long-term plan of opening distribution channels all around the state of Nebraska which is why we will deliberately build our brand to be well accepted in North Platte before venturing out.
As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Green Gas® Biogas Production 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, Google+ and other platforms to promote our business.
- Ensure that our we position our banners and billboards in strategic positions all around North Platte – Nebraska
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Advertise our biogas production 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.
12. Our Pricing Strategy
Pricing is one of the key factors that give leverage to distribution companies and retailers, it is normal for retailers to purchase products from distribution companies that they 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.
The payment policy adopted by Green Gas® Biogas Production 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 Gas® Biogas Production Company, Inc. will make available to her clients;
- Payment via bank transfer
- Payment via credit cards/Point of Sale Machines (POS Machines)
- Payment via POS machines
- 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 biogas and other biofuel products purchase without any stress on their part.
13. 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 will cost us to set up Green Gas® Biogas Production 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.
- Production 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 cum mini depot in the total amount of $250,000.
- The total cost for production facility remodeling (construction of mini depot / tank far) – $100,000.
- 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 (stocking with biogas and other biofuel products raw materials et al) – $200,000
- 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 biogas production company in North Platte – Nebraska.
Generating Funds/Startup Capital for Green Gas® Biogas Production Company, Inc.
Green Gas® Biogas Production Company, Inc. is a private business that is owned and financed by Sutton Jones and his immediate family members. They do 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.
14. Sustainability and Expansion Strategy
Part of the plans we have in place to sustain Green Gas® Biogas Production Company, Inc. is to ensure that we continue to deliver quality services, improvise on how to do things faster and cheaper. We are not going to relent in providing conducive environment for our workers and also the required trainings that will help them deliver excellent services at all times.
From our findings, another factor that kills new business is financial leakages. In order to plug financial leakages, the management of Green Gas® Biogas Production Company, Inc. will adopt the use of payment machine and accounting software to run the business.
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.
Our key sustainability and expansion strategy as a business is to ensure that we only hire competent and technically sound employees, create a conducive working environment and employee benefits for all our staff members. We know that if we implement our business strategies, we will grow our biogas production business beyond North Platte – Nebraska 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 production 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
- Printing of 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