EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Prepared By:
Dawn Gibbons
Wayne Jiang
Rui Wen
Mathew Ralph
Carolina Martinez
EnviroWood Business Plan
1.0.
MBA 841. Entrepreneurship & Business Planning
Executive Summary
'There's gold in there hills', was the cry in the mid 1800's that drove many to Dawson City.
Today there is gold in Saskatoon in the form of woodchips. One of the largest growing sectors is
the recycling business. There have been large developments in the recycling of paper, metal and
even animal waste (City of Saskatoon, Interview). This business case will outline a profitable
venture that will recycle scrap wood into woodchips or shavings. This business plan provides a
viable and effective solution to businesses for the disposal of their wood and offers a unique
product in an established market for the agriculture, landscaping, ener-fuels and large and small
animal care. The revenue stream is based on payment to dispose of scrap wood and recycling the
scrap into marketable products.
There is ample supply of scrap wood in Saskatoon. Many local businesses are experiencing
difficulty in disposing of the wood. Currently the main option is the local landfill site, which
costs $55 per tonne. Our service will take scrap wood at a ceiling of $50 per tonne in year one.
This will not only be a cost benefit to clients but our location on Quebec Avenue is more central.
The process will take wood pallets chop them into pieces then recycle the pieces into either wood
chips or shavings. The initial project production volume is 100 tonnes per week, which is a 1shift operation. Maximum capacity is 300 tonnes per week over a 3-shift operation. Increasing
manufacturing capacity to 300 tonnes per week will require no additional capital and variable
costs will be minimal. After year one, manufacturing costs are 18% of revenues, therefore, with
a higher fixed cost base increased volumes will net higher profits. Staffing will consist of four
direct operators and two salary employees: one operations supervisor and business development
officer.
The use of woodchips is spread across many different markets. In year one the majority of the
revenue will be sold in bulk, starting at $55 per tonne for landscaping, agriculture and ener-fuels.
Sales in year two will begin in the packaging segment increasing to $944 per tonne. Prices are set
by current market prices with discounting to entice buyers.
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Distribution will be based on direct sales, shipping direct from the factory to either the end user
or retailers. Bulk products will be offered to the end consumer only in agriculture and ener-fuels.
All other product will be sold only to retailers for uses such as landscaping and packaged wood
products. Promotion includes agricultural trade shows, industry trade shows and direct contact
with suppliers. We will use a push strategy through the supply chain. Target markets are
customers who require lower quality woodchips and shavings, both bulk and packaged, where
price is a factor as well as the green appeal of our recycled product.
EnviroWood projects an internal rate of return of 280%. This is a very high return, however,
there is a high risk associated with a new business in a unproven industry. The business case
effectively outlines the critical business variables and presents mitigating strategies.
The
projected net income in year one is $35, 263.00 increasing to $2,384,455.00 by year five.
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MBA 841. Entrepreneurship & Business Planning
Contents
1.0.
EXECUTIVE SUMMARY ............................................................................................................................ 7
2.0.
BUSINESS OVERVIEW ........................................................................................................................... 12
2.1.
PRODUCT OVERVIEW ........................................................................................................................... 12
2.2. COMPANY OVERVIEW ............................................................................................................................... 12
2.3. INDUSTRY OVERVIEW: THE PROBLEM OF EXCESS WASTE ......................................................... 13
2.4. MISSION.......................................................................................................................................................... 16
2.5. GOALS AND OBJECTIVES .......................................................................................................................... 16
3.0. OPERATIONS PLAN .................................................................................................................................... 17
3.1. PROCESS FLOW............................................................................................................................................ 17
3.2 INVENTORY LEVELS .................................................................................................................................. 19
3.3. LOCATION ...................................................................................................................................................... 19
3.4. FLOOR LAYOUT ........................................................................................................................................... 20
3.5. QUALITY CONTROL PROGRAM .............................................................................................................. 21
3.6. AVERAGE BUSINESS DAYS ....................................................................................................................... 21
3.7. SAFETY PROGRAM...................................................................................................................................... 22
3.8. CAPITAL BUDGET ....................................................................................................................................... 22
4.0. THE HUMAN RESOURCES PLAN ............................................................................................................. 23
4.1. NUMBER OF EMPLOYEES ......................................................................................................................... 23
4.2. LABOUR COST .............................................................................................................................................. 24
4.3. RECRUITING EMPLOYEES ........................................................................................................................ 24
4.4. JOB DESCRIPTIONS .................................................................................................................................... 25
4.5. TRAINING PROGRAM................................................................................................................................. 26
4.6. HUMAN RESOURCES STRATEGIES ........................................................................................................ 26
4.7. TOTAL PLANNED - HOURS AND FIVE YEAR LABOUR COST.......................................................... 27
5.0 MARKETING PLAN ....................................................................................................................................... 28
5.1. PRODUCT ....................................................................................................................................................... 28
5.2. SEGMENTATION & TARGETING ............................................................................................................. 29
5.2.1. INDUSTRIAL WOOD DISPOSAL SERVICES .............................................................................................................. 29
5.2.2 RECYCLED WOOD PRODUCTS ................................................................................................................................ 30
5.2.3 POSITIONING STATEMENTS .................................................................................................................................... 31
5.3 MARKETING STRATEGY ......................................................................................................................... 31
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MBA 841. Entrepreneurship & Business Planning
5.3.1.INDUSTRIAL WOOD DISPOSAL SERVICE ................................................................................................................. 31
5.3.2. RECYCLED WOOD PRODUCTS .................................................................................................................................. 31
5.4. MARKETING MIX: INDUSTRIAL WOOD DISPOSAL SERVICE ........................................................ 32
5.4.1. PRICING ....................................................................................................................................................................... 33
5.4.2. DISTRIBUTION ............................................................................................................................................................ 34
5.4.3. PROMOTION ................................................................................................................................................................ 34
5.4.4. COMPETITION ............................................................................................................................................................. 34
5.5. MARKETING MIX: RECYCLED WOOD PRODUCTS ............................................................................ 36
5.6. MARKETING SUMMARY ............................................................................................................................ 38
6.0 FINANCIAL PLAN .......................................................................................................................................... 39
6.1. FINANCIAL STRUCTURE ........................................................................................................................... 39
6.2. CAPITAL BUDGET ....................................................................................................................................... 39
6.3. FINANCIAL ANALYSIS ................................................................................................................................ 39
6.3.1. REVENUE ESTIMATES ................................................................................................................................................ 39
6.3.2. COST OF GOODS SOLD AND EXPENSES ESTIMATES.............................................................................................. 41
6.4. RISK ANALYSIS ............................................................................................................................................ 42
6.4.1. BASE SCENARIO .......................................................................................................................................................... 42
6.4.2. BEST SCENARIO .......................................................................................................................................................... 43
6.4.3. WORST SCENARIO ...................................................................................................................................................... 44
6.5. BREAK-EVEN ANALYSIS ............................................................................................................................ 45
6.6. RISK ANALYSIS CONCLUSIONS ............................................................................................................... 48
7.0. REFERENCES ................................................................................................................................................. 49
Figure 1. Excess Scrap Wood ..................................................................................................................... 13
Figure 2. 2006 Landfill Content -Saskatoon ............................................................................................... 14
Figure 3. Process Flow ............................................................................................................................... 18
Figure 4. Tub Grinder ................................................................................................................................. 18
Figure 5. Aerial View of Location .............................................................................................................. 19
Figure 6. Floor Layout ................................................................................................................................ 20
Figure 7. Organizational Structure .............................................................................................................. 24
Figure 8. Segmentation by attitude ............................................................................................................. 30
Figure 9. Composition of Sales Volume ..................................................................................................... 38
Figure 10. Trend Analysis Revenue Vs. COGS, Expenses and Taxes ....................................................... 40
Figure 11. Allocation of Industrial Wood Waste...................................................................................... 41
Figure 12. Comparison Economic and Accounting Break-even vs Projected sales for Bulk product ........ 47
Figure 13. Comparison Economic and Accounting Break-even vs Projected sales for Package product .. 47
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MBA 841. Entrepreneurship & Business Planning
Appendix 1. EnviroWood Projected Income Statement ............................................................................. 50
Appendix 2. EnviroWood Projected Balance Sheet ................................................................................... 51
Appendix 3. EnviroWood Projected Statement of Cash Flow ................................................................... 52
Appendix 4. EnviroWood Revenue Estimates and Economic Variables................................................... 53
Appendix 5. EnviroWood COGS and Expenses Estimates ........................................................................ 54
Appendix 6. EnviroWood Personnel and CCA Estimates .......................................................................... 55
Appendix 7. EnviroWood Capital Budget ................................................................................................. 56
Appendix 8. EnviroWood Financing budget and Amortization Schedule .................................................. 57
Appendix 9. EnviroWood Working Capital Estimates ............................................................................... 58
Appendix 10. Letter of intent from New Holland Case .............................................................................. 59
Table 1. Inventory level per product ........................................................................................................... 19
Table 2. Shift Configuration ....................................................................................................................... 21
Table 3. Capital Budget .............................................................................................................................. 22
Table 4. Employee Headcount .................................................................................................................... 23
Table 5. Total Hours of Work ..................................................................................................................... 27
Table 6. Direct Labour Cost........................................................................................................................ 28
Table 7. Industrial Wood Disposal Services Segmentation ........................................................................ 29
Table 8. Value spread between disposal service, bulk product and packaged product ............................... 32
Table 9. The EnviroWood Industrial Wood Disposal Experience .............................................................. 33
Table 10. Competitor Analysis ................................................................................................................... 35
Table 11. Natural Wood Animal Care ....................................................................................................... 36
Table 12. Landscaping chips ....................................................................................................................... 37
Table 13. Financial Projections ................................................................................................................ 40
Table 14. COGS, Expenses and Taxes Estimates ..................................................................................... 42
Table 15. Base Scenario Information ...................................................................................................... 42
Table 16. Income Statement Results ........................................................................................................ 43
Table 17. Best Scenario Information ....................................................................................................... 43
Table 18. Income Statement Results ........................................................................................................ 44
Table 19. Worst Scenario Information .................................................................................................... 44
Table 20. Income Statement Results ........................................................................................................ 45
Table 21. Scenarios Results Comparison................................................................................................. 45
Table 22. Economic and Accounting Break-even vs. Base Scenario...................................................... 46
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
2.0. Business Overview
2.1. Product Overview
EnviroWood Recycling is a two product formula:
Industrial Wood Disposal Service + Recycled Wood Products = $ Profits
EnviroWood’s primary business is the transformation of industrial wood waste from its disposal
service into woodchips and wood shavings. Our value for waste disposal clients is superior
service, competitive prices and a convenient location. Our value for retailers selling our products
is green image offered through a local company at competitive prices.
EnviroWoods Recycled Products
Uses for Woodchips
 for landscaping and gardening
 for fuelling industrial ener- heating systems such as green houses
Uses for Wood- shavings
 for agriculture such as horse bedding
 for bedding mid-large pets
2.2. Company Overview
EnviroWood is a new environmental processing company. EnviroWood is an ideal solution and
alternative for companies needing to dispose of wood waste efficiently. It is also ideal for those
businesses that see a market for recycled processed woodchips or require the use of a low cost
wood product for their own inputs. Simultaneously, Envirowood will help to create a cleaner
environment in the city. According to Metro Vancouver, when wood is buried in the landfill; it
decomposes slowly in an oxygen-starved environment and generates methane gas, which is a
greenhouse gas about 20 times more powerful than carbon dioxide (Kurucz, J. 2009).
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
2.3. Industry Overview: The problem of Excess Waste
In Saskatoon, unlike the residential sector, the industrial, commercial and institutional (ICI)
sector is responsible for disposing their own waste. The ICI sector is comprised of businesses,
industries and institutions (hospitals, schools, government buildings and the University of
Saskatchewan) operating within the city of Saskatoon.
This business plan has been created in response to the need of manufacturing companies
primarily located in the north end of the city of Saskatoon, to find a more efficient alternative for
disposing their industrial wood waste.
It has been common practice for manufacturing companies to accumulate their industrial wood
waste and then contract other companies to collect, transport and dispose of the industrial wood
waste to a landfill (See figure .1 below). As of March 15, 2010 the Saskatoon Landfill, which is
operated by the municipal government, charges an entrance fee of $10.00 for each dump plus
$55 per tonne for solid waste (City of Saskatoon, 2010).
Figure 1. Excess Scrap Wood
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Last year, one of our recent customers located in the north end of the city of Saskatoon, disposed
of approximately 41 tonnes of wood per week for a yearly total 2,132 tonnes. The cost paid for
disposing their industrial wood waste was approximately $150,000. This cost includes the
transportation and handling costs.
For the municipal government managing the Saskatoon landfill has become one of its most
costly services.
In 2006, the City conducted a waste characterization study to assess the
components of garbage being sent to the landfill. This study indicated that 38% (40,000 tonnes)
was produced by the ICI sector (industrial/commercial/institutional sector).
Moreover,
approximately 20% of the total ICI waste was wood (City of Saskatoon, 2007). See figure 2 for
breakdown of landfill contents in 2006.
Figure 2. 2006 Landfill Content -Saskatoon
Composition of ICI Waste in
Dry
Saskatoon
(2006)
Wall
3%
Food Waste
12%
Insolation
1%
Wood
20%
Fabric
8%
Aluminum
Metal
1%
7%
Rubber
2%
All paper
34%
Plastics
12%
In 2008, over 13,449 metric tonnes of used wood pallets and crates were land-filled in our city
according to Environmental Service, City of Saskatoon. An interview with a city employee
indicated that businesses must wait in the same line-ups as residential clients which causes major
delays (City of Saskatoon, 2010).
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
In the near future, the municipal government is planning to increase the penalty charges for
illegal waste dumping. Currently, in the city’s website, under The Waste Bylaw of 2004, the
penalty charge for the first offence is $100.00; for a second offence $200.00; and for a third or
subsequent offence, not less than $200.00 and not more than $10,000.00 in the case of an
individual or $25,000.00 in the case of a corporation.
Moreover, the City has been progressive in tracking demolitions. For instance, when a building
within the city of Saskatoon is planned to be demolish, the owner of the building has to give
notice to the City estimating the amount and type of waste and how this is going to be disposed
and where. Furthermore, the Saskatoon landfill has projected a price increase of 30% over the
five subsequent years, starting on 2010.
There is a trend into the future where penalties for illegal waste dumping and fees for disposal
services at the landfill will increase over time. Moreover, The Waste Bylaw, which regulates the
City collections of commercial, industrial and institutional waste will be more restrictive. Based
on this, we believe the cost paid by manufacturing companies for disposing their industrial wood
waste will increase over the years, unless a new entity like EnviroWood enters the market with
an innovative idea related to recycling wood waste at a competitive price.
These wastes pose a hazard to our environment in the long term. Meanwhile, an established
market for wood chips and shavings can be entered with an innovative product that can compete
on price with a local/provincial green appeal.
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
2.4. Mission
EnviroWood will be a leading business in the new green economy: providing a solution to the
environmental challenge of waste management and recycling waste into marketable products.
Our bottom-line is to create profits while creating a greener world.
2.5. Goals and Objectives
Short term goals
Goals to be met within the first 3 years of operations include:

To reach 30% of plant capacity by year 2

To become the first choice for raw wood disposal for large manufacturers and
construction companies in Saskatoon through:
o Competitive pricing
o Efficient service beyond what the competition offers

To penetrate the landscaping markets, garden markets, livestock and small animal
bedding markets, by being recognized as a green, local and competitive priced alternative
in local and provincial markets through:
o Ensuring quality control in the production of recycled products through our
manufacturing process of no less than 2% of foreign material found in total
production

To remain competitive by repaying capital debt within the first two years to dissuade
competitors from moving into waste disposal and allowing EnviroWood to stay ahead
of the competition through lower overheads.

Increase by 200% target sales of packaged and refined product by year 2
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Long term goals
Goals to be met beyond the third year of operations include:

To reach sales volume of 10,400 tons by year 4

To become a total service provider with on-site processing of scrap wood after year 5 and
to move beyond Saskatoon with our wood disposal business

To move into highly refined wood chip/shaving products suitable for vet uses, high end
pet markets and higher end landscaping needs by conducting on-going market research
3.0. Operations Plan
EnviroWood will take old pallets that are delivered to our location and chop the pallets down to
pieces then grind the pieces into wood chips or shavings. The wood required for recycling will
be free of containments such as oil and paint. The wood chips or shavings will be bagged in 5kg
bags or stocked piled in bulk. The process, which is detailed below, involves direct operators
and a operations supervisor. The direct operators are paid hourly and the operations supervisor
along with a business development person is compensated based on an annual salary.
3.1. Process Flow

The wood skids and crates are hand fed into the tub grinder.

The grinder breaks down the skids into wood pieces along a conveyer, which is fed into
chipper. See Figure 4 for Tub Grinder picture.

The chipper can either cut down the pieces into wood chips or shavings. See Figure 3 for
Process Flow. The operators has an understanding of what type of finished wood product
is required based on a visual predetermined min/ max inventory levels.

Weekly output is projected at producing 100 pallets per week. Based on a one shift
operation, current capacity is 33%, therefore, there is flexibility in increasing output with
no capital and incurring a minimum cost.
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Figure 3. Process Flow
Figure 4. Tub Grinder
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
3.2 Inventory Levels
Table 1. Inventory level per product
Type
Unit on Hand
Day's Supply
(maximum levels)
Raw- wood pallets
Shortage Space
(square footage)
120
6
600
500 tons
14
1200
50 -- 5kg bags
5
500
and crates
Wood Chips
Wood Shavings
3.3. Location
The location chosen was 1503 Quebec Avenue, Saskatoon. This location is central and has easy
accessibility for both the north and south end of the city for which majority of the manufacturing
facilities are located. The industrial unit is 5,664 square feet, which will be used to store
inventory along with the manufacturing process (See figure 5).
Figure 5. Aerial View of Location
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
3.4. Floor Layout
The floor plan, seen in Figure 6, will accommodate storage of both raw and finished inventory
along with the equipment. The floor layout will include an office along with a rest area and a
washroom. The plan shown below is not to scale.
Figure 6. Floor Layout
Office
Wood Skid
Storage
incoming
200 s
600 s
Wood
chipper
1000’
Incoming
Wood chip
Wood
Storage
Chipper
Outgoing
Bagging
Bag Storage
Rest Area
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Washroom
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
3.5. Quality Control Program
The most critical function of the process is to ensure that the nails and staples are removed from
the finished product. The tub chopper does have the capability to remove the nails and staples,
however, further in-process checks are required. The quality insurance plan to address this issue
will include:
1. Every hour wood pieces are removed from the conveyor after the skids (wood) have been
chopped into pieces and checked for any foreign debris. This process will be conducted
by the operations supervisor and the results recorded.
2. Each bag will be checked with a hand held metal detector. This will be conducted after
the product has been bagged. The inspection will be conducted by the operator. Each
bag will have a quality tag attached that has the clock number of the employee. This tag
gives the consumer the assurance that an inspection has been conducted.
3. For bulk finished goods, the operations supervisor will perform an hourly check with the
hand held metal detector. Results will be recorded.
For steps 1 and 3 the results will be reviewed daily by the operations supervisor revealing
process capability.
3.6. Average Business Days
The workweek, 8-hour shift, five days a week, Monday to Friday. Shift configuration as follows:
Table 2. Shift Configuration
Time
Activity
7:00am
Shift Starts
9:00am
Break (paid)
9:15am
Shift Continues
11:30am
Lunch (unpaid)
12:00pm
Shift Continues
1:45pm
Break(paid)
2:00pm
Shift Continues
3:30pm
Shift End
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Both the operators and the shift operations supervisor will follow the shift pattern. The business
development person will work a 40-hour week, Monday to Friday, beginning at 8:00 and
finishing at 4:30pm. If overtime is required, direct operators will be paid time and half after 10
hours each day or after 40 hours cumulative time in a week. Salary personal will not be paid
overtime but will be awarded time in lue.
3.7. Safety Program
Both the manufacturing equipment and material handling can cause serve injury. The operators
will be required to complete Safety, Lubrication, Inspection and Clean (SLIC) forms. The
objective of completing the form is to ensure that all safety devices are working properly. An
additional purpose is to maintain the equipment in basic operating condition, which will reduce
breakdowns and extend the length of the equipment.
A comprehensive safety program will
reduce WSB claims and thereby receive an annual credit.
3.8. Capital Budget
All capital will be purchased since the equipment cost is reasonable and the type of equipment
required is not available for lease purposes. The chopper will be purchase used with only
minimum amount of run type all other capital will be new.
Table 3. Capital Budget
Year
Outside Storage
1
2
3
4
5
$25,000
Equipment
Chipper
$20,000
Chopper
$90,000
Bagging
$11,000
Detector
$5,000
Total Equipment
$126,000
Building renovations
$40,000
Total Capital
$191,00
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
4.0. The Human Resources Plan
4.1. Number of employees
Based on the company working process, five full time employees will be hired for the first three
years. One manger will operate the entire company and will require a rich management
experience with at least three years experience. One employee will be using the grinder to grind
wood waste. Another employee is mainly responsible for chipping the wood and needs to learn
how to use the chopper; the third will put the chipped wood chips into bags, and seal the bags.
All direct operations will be cross trained on all manufacturing processes to ensure flexibility and
reduce downtime due to absentness. See table 4. for headcount breakdown. The forth employee
will charge the business development and responsible for marketing sales. Due to the employees
have not specific experience in working on these machines, all employees will be trained. Three
years later, the company will reach its volume capacity on one shift, 10400 tones of bulks and
chips will be produced. Three more employees will be recruited, and night shift will be added.
Table 4. Employee Headcount
2010
2011
2012
Directed Employees
3
7
7
Operations Supervisor
1
1
1
Business Development
1
1
1
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Figure 7. Organizational Structure
Owner
Book keeper
Operations
Supervisor (1)
Business
Development
(1)
Direct
Operators (3)
4.2. Labour cost
The salary for the manager will be $35000.00 per year, and the wages for each of four employees
will be $10 per hour and work for 40 hours per week. The benefit ratio will be 25% that includes
2.42% of EI, 4.95% of CPP, 5.77% of Holiday Pay, and 12% WC and the total benefit will be
25% of all employees’ revenue. The inflation rate is 2% per year and the labour cost for the
projected five years (See Appendix 4. Revenue Estimates and Economic Variables)
4.3. Recruiting Employees
Under current labour market, sufficient local labour is available. It seems to be easy to find a
qualified manager and four other employees. Enough candidates make it feasible to select the
best qualified person for our company.
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
4.4. Job Descriptions
Manager: the manger will involve in the planning, coordination and control all of production
process; ensure the quality, quantity and cost of the products; manage other employees. The
typical work activities include:
Day: 8am-5pm (one-hour lunch)

Oversee the production process

Make sure the production is effective

Meet with potential customers

Supervise and motivate other employees

Resolve the conflicts between employees
Month:

Monitor the production process and adjust the schedule

Analyze the cost and set up new standard for the next month

Meet with other employees

Evaluate the employees’ work performance
Year:

Evaluate himself and employees’ work performance

Complete the financial statements

Analyze the strategy and set up new strategy for next year

Make sure the tax and the employee benefit are paid
Employees:

Operate and troubleshoot production machinery

Be responsible for product quality

Operate within standard operating procedures

Complete daily production logs

Communicate with operators from other shifts
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning

Clean and maintain work area

Turn off and lock out equipment when not in use
4.5. Training Program
In our company, three machines grinder, chopper and bag sealer will be used. Because the
employees we recruited have no experience to operate these machines, it is necessary to train
these employees before using them. All directed employees and the manager will be trained each
year.
When the machines were purchased from the manufacturer, a technician will be sent to set up the
machine, and the technician will train all the employees in our company. Thus all persons in our
company will be crossed trained to operate all the machines in case one employee is absent
during the working day. In addition, when the machine goes is not working correctly, the
employees can work together to solve the problem.
The manager and the business developer will be sent out to learn the new knowledge, new ideas
and new strategies to make our company more profitable. |For the first years, the manager and
the business developer can submit his/ or application for training programs which are tightly
related their work, in their application, they need to describe why they are choosing the program
and why they will benefit the training program.
4.6. Human Resources Strategies
Creating a workplace that is both a comfortable and friendly work environment. The manager
will have monthly meetings with other employees and one-on-one performance evaluations will
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
also be held with them. The performance of the manager will also be evaluated by the shareholders.
4.7. Total Planned - Hours and five year labour cost
The breakdown of all labour working hours at EnviroWood is shown table 5 and five year labour
cost over the projected period is shown on table 6.
Table 5. Total Hours of Work
Total Hours of Work
Manager
Direct Full
Business
Time
Development
Daily Total
Monday
8
24
8
40
Tuesday
8
24
8
40
Wednesday
8
24
8
40
Thursday
8
24
8
40
Friday
8
24
8
40
40
120
40
Saturday
Sunday
Total Hours
Shift( )
(1)=7am-3pm (2)=3pm-11pm
Total Full Time Hours
Total Manage Hours
The first three year:
Fourth and fifth year:
120h/per week
160h/per week
40
40
Note: Full time 2 starts at the fourth year
Gibbons, Jiang, Wen, Ralph, Martinez
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Table 6. Direct Labour Cost
5.0 Marketing Plan
5.1. Product
EnviroWood Recycling is a two product formula:
Industrial Wood Disposal Service + Recycled Wood Products = $ Profits
Industrial Wood Disposal Service
The industrial wood disposal service meets a demand for a convenient, efficient, and
competitively priced disposal for industry wood waste specifically palettes and construction
wood. This demand is created by increased pressure on landfill use and increasing government
environmental regulations. (City of Saskatoon, 2010)
Recycled Wood Products
The by-products of the wood disposal service will be refined to create recycled wood products
which will be sold in existing markets. Products are categorized as 1) bulk wood and 2)
packaged wood products.
 Bulk wood products: wood chips and wood shavings

wood chips for landscaping and gardening; for fuelling industrial ener-heating
systems such as green houses

wood shavings for agriculture such as horse bedding
 Packaged wood products

bagged chips for gardening

wood shavings for bedding mid-large pets
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MBA 841. Entrepreneurship & Business Planning
5.2. Segmentation & Targeting
5.2.1. Industrial Wood Disposal Services
Based on the following segmentation, the most profitable target for EnviroWood disposal
services are the large manufacturing and large construction businesses within the geographic
region of Saskatoon. EnviroWood requires 5200 tonnes of waste in year one of business.
EnviroWood has a waste disposal contract from New Holland for 2600 tonnes.
Table 7. Industrial Wood Disposal Services Segmentation
Segmentation by industry
Wood type
Large Manufacturing
Palettes
Large Construction
Construction Wood
Small business
Pallettes
Small Construction Business
Residential
Construction Wood
Organic wood, small
Tonnes per year
Over 1000
Over 500
Under 1000
Under 500
Not applicable
construction
Other Business
Under 1000
Segmentation by Geographic
Landfill tonnage of Wood
Location
Waste
Saskatoon Landfill
13,449 metric tonnes 2008
Saskatoon Region
2,689 metric tonnes 2008
Gibbons, Jiang, Wen, Ralph, Martinez
within city limits
Within 60 mile range
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5.2.2 Recycled Wood Products
Figure 8. Segmentation by attitude
The following pie chart illustrates
Market segmentation by attitude.
Although 85% of the population
Enthusiastic
Environmen
talist
41.0%
Armchair
Earth-saver
27.0%
favour environmental action;
59% of the population are unwilling
to pay a premium price for
Frugal Ecofriend
17.0%
Naturalist
Naysayer
15.0%
the environment. Market segmentation shows that prices for recycled products must remain a
factor, but that being green is an important differentiating factor for the majority of the
population.
Further research (Gibbons 2010) has determined that our product is less refined (not colored, not
sterilized, mixed woods) and thus must be at the lowest end of the price range for both bulk sales
and packaged sales unless we expand into more refining equipment. Local retailers however,
were excited to support a product made in Saskatchewan. Retailers asked for updates as the
product came closer to market. There is currently 426 tonnes in market demand for our grade of
product in landscaping, horse retail feed in one feed store, and pet bedding (Rui 2010). Our
contingency plan for sales is to sell to dairy farms at a reduced rate for bedding. There is a high
demand.
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
5.2.3 Positioning Statements
EnerWood Recyling + Good Business = A profitable green economy
EnerWood Industrial Wood disposal service will save our clients money in wood waste costs
through: efficient turn-rounds in our delivery yard, delivery schedules that suit client timelines,
close geographic proximity to client business and competitive waste disposal prices; unlike
traditional landfill disposals we treat our clients and their waste with respect and our efficient
services make the new green economy affordable – a new world is within everyone’s grasp!
Enerwood recycled wood products sell because they are environmentally friendly, they offer the
inherent properties of wood as a superior product for landscaping, caring for large and small
animals, and for ener-fuels; unlike competitors EnerWood products are local, Canadian,
recycled and competitively priced making the new green economy affordable – a new world is
within everyone’s grasp!
5.3 Marketing Strategy
5.3.1.Industrial Wood Disposal Service
Our marketing strategy is to pursue the largest, most lucrative contracts for the wood disposal
service. This will maximize cash inflows from the disposal service and will ensure a steady
stream of inputs for the recycled product side of the business. Differentiation through premium
service will support the wood disposal marketing strategy.
5.3.2. Recycled Wood Products
In the short-term bulk sales in wood chips and wood shavings will be a priority in order to move
more product and create cash flows. This strategy is supported by a competitive pricing model
with product differentiation as a local green product.
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EnviroWood Business Plan
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Long term, the greatest margins will be made on packaged wood chips and wood shavings, but
more units must be sold (see value spread below). To ensure successful entry into these markets
we have allowed a one year lead-up to market entry. During this year a package prototype will
be developed, marketing research will be conducted and sales contracts solicited from retailers
for the packaged product. Here sales will be supported by a differentiation strategy based on a
strong allegiance to green products but with competitive pricing.
Table 8. Value spread between disposal service, bulk product and packaged
product
Industrial Wood Disposal Service
Recycled Wood Products Wood Chips and Shavings
(low grade)
Bulk
$50.00 per tonne disposal fee
Packaged
$926.00 per tonne
$55.00
$4.63 per 5 kg. bag
(200 bags per tonne)
$55.00 & over high grade $926.00 & over for high grade
5.4. Marketing Mix: Industrial Wood Disposal Service
Value for Customer:
EnviroWood Industrial Wood Disposal Services provide the most
convenient disposal location, with pre-scheduled appointments to cut down on delivery times,
with the quickest drop-off services, the friendliest service and competitive rates – it’s a service
experience that saves time, saves money, saves the environment.
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Table 9. The EnviroWood Industrial Wood Disposal Experience
The EnviroWood Service Experience:
The EnviroWood Service Atmosphere

Staff are dressed in green coveralls, printed with the

Client schedules time that suits their needs

Client arrives, is greeted, directed to weigh-in
EnviroWood logo. A common uniform suggests

Unload
professionalism and uniformity. The key to great

Weigh-in
service.

Client drives truck off scale

Pays for disposal service at truck window using


The building interior and grounds are clean for a
professional look and to avoid fire hazards
plastic, cash or check

Rest rooms are clean
Client receives logo printed thermos cup of coffee

Coffee bar is clean and free of wood dust
while paying

Cup is our commitment to reusable’s and is an
ongoing advertisement

Client is thanked and sent on their way
5.4.1. Pricing
City of Saskatoon: $55.00 per tonne
EnerWood: $50.00 per tonne unprocessed; $30.00 per tonne partially processed chips
Prices are set by market rates, which are established by City of Saskatoon Landfill -the current
leader in disposal services - at $55.00 per tonne. To ensure a reliable stream from disposal
service income EnerWood has set its price at $50.00 per tonne.
Private landfills are not
interested in charging less for wood, instead they believe the city prices are subsized and below
market rates.
Price will drop for delivery of wood chips by contractors who do the primary chipping process
on site and deliver to EnerWood for disposal and secondary chipping (see operations). The
suggested price for partially processed chips is $30.00 per tonne.
Pricing Forecast: City Landfill will increase disposal costs by 30% over next 5 years (City of
Saskatoon, 2010)
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EnviroWood Business Plan
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5.4.2. Distribution
Site Location: the north quadrant in the City of Saskatoon is the most convenient access for the
largest industrial clients to access EnerWood’s Wood Disposal site.
Direct Sales to primary market: the marketing strategy is to obtain 1- 3 year contracts from large
local manufacturers, construction, and waste disposal contractors. Access to this market will be
done through targeted personal sales.
Indirect Sales to secondary market: personalized solicitation packages will be sent to small
businesses targeted as likely to require wood waste disposal.
5.4.3. Promotion
Promotion will be intimate and low-key. There is no reason to alert possible competitors or
encourage new entrants. Market research indicates that there is enough demand for palette
disposal services in particular and wood disposal services in general that we should be able to
reach 33% capacity within the first year using direct sales to large companies.
Promotions supporting sales to the primary market will be personalized consisting of client and
prospective client entertainment with salespeople including activities such as: lunches, dinners
and special event participation.
Secondary market promotions include personalized packages to small manufacturing businesses
and construction companies.
5.4.4. Competition
Our primary competitors are landfill owners; our secondary competitors are other recyclers who
require wood. Our competitive strength is the service and the competitive prices we offer to our
primary market of large industrial clients and disposal contractors with bulk disposal
requirements. In our secondary markets we will face greater competition, but we still offer
convenience and a competitive disposal rates.
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Table 10. Competitor Analysis
Competitor
Product
Strength
Weakness
City of Saskatoon
Landfill disposal
service
-Well known
-Underpriced and
subsidized by
taxpayer, even with
expected price
increases
Well known
Non-profit financing
 Poor service
 Long line ups
1.45 hour delivery time;
3.5 hour round trip
 30% price increase
over next 5 years
 Small orders, not a
volume processor
 Cannot meet
industrial needs for
palette disposal
 Palettes must be in
reasonable condition
 Distance to haul to
by products to USA
 Not interested in
wood unless they
can find a market
 Clients are those
willing to use city
dump
 Usually use byproducts only from
garden waste
 Not set up for large
disposal
 Illegal
 Fines
 Law require
declaration for waste
estimates and
disposal plans
(2004)
 Difficult to find
drivers willing to
break the law
 Fire control
 Illegal
 Still need to dispose
of chips
 Require waste
disposal
Habitat for
Humanity
Palette recycler
Private landfills
Recycled inputs
hauled to factories
(USA) for
conversion to
products
Composting for
Garden mulch
City
recycling/Cosmo
Illegal Dumping
Aggressive
competitors if they
decide to compete
Can work with city
as a competitor
cheap
Burning
Cheap
Salvage
Companies
Will pick up on-site
Most do primary
chipping on site
Gibbons, Jiang, Wen, Ralph, Martinez
Price


$55.00 per
tonne
$10.00 per
entry

Free service

Want to
charge higher
landfill fees
$55.00 +

$55.00 per
tonne
$10.00 per
entry



Environmental
fines
Company
reputation

Fines

$35.00 but
salvage
company must
pay an
additional
landfill charge
for disposal,
burn product
or find a buyer
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EnviroWood Business Plan
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5.5. Marketing Mix: Recycled Wood Products
Value for customer:
EnerWood landscaping chips and shavings are a recycled locally
(provincially, Canadian) product,
an environmentally friendly choice that help to reduce
landfills but are also competitively priced to meet needs for landscaping, for caring for livestock
and pets, and for ener-fuels.
Table 11. Natural Wood Animal Care
Products
Natural Wood Animal Care

Wood is the most absorbent bedding available for all animal care.

Purchasing recycled wood bedding allows you and your animals to keep landfills empty, avoids clearing
more forests, and our wood has been kiln dried in a former life so it is very absorbent

Wood is even more absorbent and costs less than straw, so it keeps animals - especially livestock more
comfortable and healthier.
Bulk Purchases: per tonne
Packaged: 5 kg bags – Chippee’s for Pets
Pricing
$55.00 per tonne
Pricing
$4.63 per kg
Distribution
Factory pick-up
Distribution
Promotion
Farm shows, sales offers through horse
Promotions
Wholesale to retailers
Direct sales approach to independents,
individual franchisers such as Canadian
Tire, Home Hardware, and district
offices of larger chains: Loblaw’s, WalMart etc.
Buyer Events;
Cute packaging and name “Chippee’s”
on the bag to appeal to children and pet
owners.
and 4 H clubs as fundraiser for clubs,
advertisements in producer
publications, direct sales to agricultural
fairs and other major events:
Agribitions etc.
Competition
-Straw is the main competition. Wood
is a better product and cheaper.
-Straw: $67.00 per tonne/$1.00 per bale
Wood shaving: $55.00 per tonne
Competition
-Pet bedding is shipped in from USA
- Local, provincial, Canadian
-Recycled
-Strong appeal to animal consumers and
owners of pets – children who are
decision makes (environ research 2009)
-Wood bedding is not made locally in
Saskatchewan and must be shipped in,
so price of competition is higher.
Gibbons, Jiang, Wen, Ralph, Martinez
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Table 12. Landscaping chips
Products
Landscaping Chips
EnerWood Landscaping Chips are a local, affordable product
EnerWood Landscaping Chips leave a greener footprint on this earth than other wood chips
because they are made locally, provincially, Canadian. They are not imported.
Landscaping Mulch Chips
EnerWood Landscaping Chips: the greener
wood chip
Price:
$55.00 per tonne
Price
$4.63 per bag
Distribution
-Wholesale to landscapers,
Distribution
Wholesale to retail outlets
Saskatoon region
including: landscapers, home
-direct sales
gardening centers, big box
outlets, grocery chains,
-local, provincial, national zones
-independents first, franchise
owners, national stores, multinationals
Promotion
-tradeshows, brochures, mailouts,
Promotion
Buyer shows, attractive
packaging appealing to target
market for shelf appeal
Competition -other bulk landscaping
Competition Most chips are imported in
suppliers, most from out of
generic bags by American
province, their advantage is
companies
variety of chip woods
-our advantage:
-our advantage is local,
-local, provincial,
recycled, and reduced shipping
Canadian,
costs.
-price competitive
-recycled
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
5.6. Marketing Summary
The critical variable to the success of both the service and recycled product sides of
EnviroWood is the supply of wood to the disposal side of the business, which also provides
the inputs for the recycled wood products. There is a demand for wood disposal services
with large contracts available; however, without these large contracts it would be difficult to
sustain this business because constant wood supply would be at risk. A critical success factor
is to establish longer term contracts with the largest players to ensure supply inputs.
There are markets current markets available for the recycled products. Our advantage is
environmental differentiation and our ability to price competitively due to low input costs
from the disposal side of the business. These factors will allow us to penetrate the chip
markets and cut costs if necessary to increase market penetration. Our success in these
current markets is dependent upon a consistent level of quality for lower grade wood chip
and shavings. This is mainly dependent upon eliminating metal contamination.
Figure 9. Composition of Sales Volume
EnviroWood. Composition of Sales Volume (metric
tonnes)
12,000
10,000
2,900
2,900
8,000
Package (5Kg)
6,000
800
1,200
4,000
2,000
Bulk (Ton)
1,500
4,400
4,000
3,700
1
2
3
7,500
7,500
4
5
-
Gibbons, Jiang, Wen, Ralph, Martinez
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
6.0 Financial Plan
6.1. Financial structure
Envirowood will be financed 50% with equity and 50% with equity. In this way, there will be an
equity cash injection of $110,000. The remaining $110,000 will be a short-term loan, which will
be paid in 3 years at a rate of 9% APR. No additional debt will be required during the following
years (See appendix 8 Financing budget and Amortization schedule).
6.2. Capital budget
The factory will operate in a leased building located in the north end of the city of Saskatoon.
Some building renovations will be required in order to accommodate the equipment. The
renovations have been estimated in $40,000. Regarding the plant equipment, the major part will
be purchased brand new; this is the chipper and chopper machine, the metal detector along with
the bagging machine. Only one machine will be leased, the weighing machine, which will cost
$100/per month. An outside storage facility will be purchased and the cost is estimated on
$25,000. In total, our initial capital budget is about $ 191,000 (See appendix 7 – Capital budget).
6.3. Financial Analysis
6.3.1. Revenue estimates
EnviroWood has 3 sources of revenue: 1) the disposal service, 2) the woodchips and wood
shavings sold in 5 Kg packages and 3) the woodchips and wood shavings sold in bulk. It is
important to highlight the unique relationship among the revenue sources, since finish goods are
produced at the same time as the raw material is received through the disposal service (See
appendix 4 - Revenue estimates).
In year 1, we considered there would not be package sales. This does not mean woodchips will
not be produced. On the contrary, all raw materials will be processed and approximately 800
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
tonnes or 160,000 bags of 5Kg of woodchips will be packaged. The package product will be
used for marketing purposes, such as product testing, trade shows presentations and in general
promotion to establish contracts with customers. EnviroWood marketing strategy is conservative.
Our business is to sell large volumes of woodchips and woodshaving while doing our best effort
to maintain a steady market share in the high margin product, woodchips and wood shavings sold
in package. Table 13. shows our financial projections and Figure 10. illustrates the trend among
revenues, COGS, expenses, and taxes.
Table 13. Financial Projections
Figure 10. Trend Analysis Revenue Vs. COGS, Expenses and Taxes
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Figure 11. below shows the allocation of the industrial wood waste received through the disposal
service between the remaining product lines, bulk sales and package sales.
Figure 11. Allocation of Industrial Wood Waste
6.3.2. Cost of Goods Sold and Expenses Estimates
On one hand, in order to calculate the COGS the following assumptions were made (See
Appendix 5 – COGS and Expenses Estimates):
1) Direct labour is comprised of 4 operators, from year 1 to 3. In year 4 and 5, the number of
operators will increase to 7, since a night shift will be implemented.
2) Direct materials includes the number of bags required for packing the woodchips and wood
shavings. The bagging machine has an estimated production error of 0.5%. Accordingly, extra
materials will be ordered to avoid production delays.
3) The manufacturing overhead cost was allocated based on direct labour hours.
4) In order to project costs, the prices of the following variables were affected by inflation, cost
of labour per hour, price of bag per unit, utilities, maintenance and parts.
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
On the other hand, to calculate project expenses, the prices of the following variables were
affected by inflation, leasing of the building and the weighing machine, staff salaries, marketing
costs, insurance and other expenses.
Table 14. COGS, Expenses and Taxes Estimates
6.4. Risk analysis
6.4.1. Base scenario
Our base scenario is the same we have projected in the financial statements. We will receive
5,200 tonnes of industrial waste wood through the disposal service at a price of $50/tonne. In
year 1, we will wholesale 4,400 tonnes at a price of $55/tonne and produce 800 tonnes of
woodchips and wood shaving that will be packaged in 5Kg bags, this is 160,000 bags.
Table 15. Base Scenario Information
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
In this scenario, the present value of the net cash flows is $3,382,008, minus the initial
investment of $110,000, this is an NPV of $3,272,008 at a 20% discount rate. Our internal rate
of return (IRR) is 280%. Moreover, EnviroWood generates net income during all 5 years (See
appendix 1 – Income Statement).
Table 16. Income Statement Results
6.4.2. Best scenario
In our best scenario, we have projected an increase of 200% in our target package sales starting
in year 2. It is important to note that in year 1, there are no changes in the quantity sold per
product line. We considered this approach because we believed that without the marketing
strategy, which will be executed in year 1, the chance of doubling our target package sales in
year 2 is remote. Another key point in this analysis is that the sales volume will remain constant.
As a result, bulk sales will decrease as package sale is increasing.
Table 17. Best Scenario Information
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
In this scenario, NPV is $5,861,867 at a 20% discount rate and our IRR is 375%. Moreover, net
income after year 1 increases in average by 78% per year.
Table 18. Income Statement Results
6.4.3. Worst scenario
For our worst scenario, we have projected that EnviroWood will receive the industrial waste
wood for-free and our bulk sales will decrease by 50%. In this way, the cost structure remains
the same, because the cost of raw material is zero. In contrast, our revenue projection will be
affected, since one revenue source disappears.
Table 19. Worst Scenario Information
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
In this scenario, NPV is $ 2,142,849 at a 20% discount rate and IRR is 144%. However,
EnviroWood would experience a net loss of $339,269 in year 1 only.
Table 20. Income Statement Results
The following table summarizes the results obtained in the three scenarios.
Table 21. Scenarios Results Comparison
Scenario
analysis
Base scenario
Worst scenario
IRR
NPV @ 20%
280%
$3,272,008
144%
$ 2,142,849
Net income
Net profit, all 5 Net loss only in year 1
years
of $339,269.
Best scenario
375%
$5,861,867
Net profit all 5 years. From
year 2 to 5, it increases in
average by 78% per year
6.5. Break-even Analysis
We have compared the economic and the accounting break-even with our base scenario, which is
the sales volume stated in our financial projections. The table shows the results obtained in this
analysis. This is also illustrated in figure 12. and 13.
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Table 22. Economic and Accounting Break-even vs. Base Scenario
Regarding the accounting break-even analysis, evidently this is much higher than the economic
break-even. This means that in order to have a net income equal to zero, the minimum sales
volume required to be sold in year 2 is 1,025 tonnes of bulk and 307 tonnes of package product..
In this way, at least 1,332 tonnes of raw material should be received through the disposal service.
Regarding the economic break-even, this is much lower level than the accounting break-even. In
this way, lower sales volume levels are required to reach this break-even, which is reached when
NPV is equal to zero.
In sum, EnviroWood has comfortable sales volume levels required to avoid then generation of
net losses and the destruction of value for its shareholders.
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Figure 12. Comparison Economic and Accounting Break-even vs
Projected sales for Bulk product
Figure 13. Comparison Economic and Accounting Break-even vs
Projected sales for Package product
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
6.6. Risk analysis Conclusions
The major risk for this business is supply of wood from the wood disposal service side.
Currently we are in possession of a 2600 tonne contract. This is 45% of our need for raw
material for the first three years. If we cannot obtain enough large suppliers as customers, we
can mitigate this problem by approaching manufacturers within the region of Saskatoon going as
far as 500 km for wood. However, we believe that with Mathew Ralph on our team, we have an
inside access to other companies in Saskatoon by virtue of his current executive position with
New Holland manufacturing (appendix 10). If we are required to buy our wood, this could also
be a critical factor, but in the short term (5 years) we do not believe this will be a problem given
the current supply of waste wood. We can turn a profit even if we earn only $0.00 from our
disposal business. To avoid competition by others for wood our payback period of 2 years
allows us to compete at $0.00 return for our disposal business, which makes entry by other
competitors difficult.
The second critical area is quality control of the product to ensure marketing success in the long
run, especially if we move into the higher end products (see goals). We believe Mathew with his
manufacturing experience will also be a benefit in this area. The markets exist for wood
products and our research indicates that there is a demand for our green product at a competitive
price. We believe we can meet our sales forecasts.
This is a high-risk venture, which has potential to pay a high IRR. We recommend this business
for the investor who enjoys a challenge and believe we can make a success within 5 years.
Gibbons, Jiang, Wen, Ralph, Martinez
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
7.0. References
Kurucz, J. (2009, August 14). Wood recycling proves popular. The Now.
Rudder, W., Keane, M., Ng, L., and Prime, M., 2007. City of Saskatoon Waste and Recycling
Plan. Prepared for the City of Saskatoon, Saskatchewan by Earth Tech (Canada) Inc.
Interviews with employees of the Environmental Services Branch. City of Saskatoon. March
2010.
Interviews with employees of the Saskatoon Landfill. City of Saskatoon. March 2010.
Interviews with Saskatoon Landscaping Retailers. March 2010.
Interviews with Loraas Disposal. Saskatoon Landscaping. March 2010.
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Appendix 1. EnviroWood Projected Income Statement
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Appendix 2. EnviroWood Projected Balance Sheet
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Appendix 3. EnviroWood Projected Statement of Cash Flow
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Appendix 4. EnviroWood Revenue Estimates and Economic Variables
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Appendix 5. EnviroWood COGS and Expenses Estimates
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Appendix 6. EnviroWood Personnel and CCA Estimates
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EnviroWood Business Plan
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Appendix 7. EnviroWood Capital Budget
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MBA 841. Entrepreneurship & Business Planning
Appendix 8. EnviroWood Financing budget and Amortization Schedule
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Appendix 9. EnviroWood Working Capital Estimates
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EnviroWood Business Plan
MBA 841. Entrepreneurship & Business Planning
Appendix 10. Letter of intent from New Holland Case
Saskatoon Plant Operations
1000- 71st Street East
Saskatoon, SK S7K 3S5
Canada
March 16, 2010
TO:
EnviroWood
Re:
Letter of Intent
Disposal of Wood Products
This is a letter of intent for which CNH Saskatoon will sell scrap wood products to EnviroWood paying
$50 per tonne. CNH will ensure all scrap product is free of plastic, however will not be responsible for
sorting out any stained contamination found on or in the scrap wood. CNH assumes the freight costs and
shipments will be set on a weekly frequency. EnviroWood has accepted delivery schedule and will have
the capacity to process projected supply. Currently, CNH is producing 100 tonnes of wood scrap per
month, this number may be reduced with ongoing continuous improvement activities to reduce the
amount of wood packaging be supplied from the supplier base.
CNH holds EnviroWood responsible to ensure wood is disposed in accordance to government regulation,
failure to adhere to such policies will result in termination of any such forward agreed contracts.
If CNH locates a source to dispose of the scrap wood for a lesser cost, it is agreed that CNH will provide
the opportunity for EnviroWood to match the proposed cost, if the cost is not matched, CNH will
conclude such contact given 30 days notice.
CNH looks forward to building a partnership with EnviroWood.
Thank you,
Rick Pearson
Health and Safety Manager
Gibbons, Jiang, Wen, Ralph, Martinez
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