Marketing Plan

Table of Contents

SECTION HEADING PAGE NUMBER

1.0 - Executive Summary 4

2.0 - Situation Analysis 5

2.1 - Market Summary 5

2.1.1 - Market Demographics 5-6

2.1.2 - Market Needs 6

2.1.3 - Market Trends 6

2.1.4 - Market Growth 6

2.2 - S.W.O.T 7

2.2.1 - Strengths 7

2.2.2 - Weaknesses 7

2.2.3 - Opportunities 8

2.2.4 - Threats 8

2.3 - Competitive Analysis 8-10

2.4 - Service Offering 10

2.5 - Keys to Success 10-11

2.6 - Critical Issues 11

2.7 - Porters Five Forces 11-13

2.8 - External Environment 13-14

2.9 - Macro Environment 14

3.0 - Market Strategy 15

3.1 - Mission Statement 15

3.2 - Value Proposition 15

3.3 - Customer Experience 15

3.4 - Marketing Objective 16

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3.5 - Financial Objective 16

3.6 - Target Market 16

3.7 - Positioning (Past and Present) 17

3.8 - Strategic Pyramids 18

3.9 - Marketing Mix 18

3.9.1 - Service Strategy 19

3.9.2 - Price Strategy 19

3.9.3 - Promotion Strategy 19

3.9.4 - Place Strategy 19-20

3.10 - Customer Strategy 20

3.11 - Competition 20

3.12 - Complementary Business 20

3.13 - Customer Value 21

3.14 - The PSSP Hierarchy of Needs 22

4.0 - Financials 23

4.1- Sales & Expenses Forecasting 23

4.1.1 - 2015-2017 Sales Forecasting 23

4.1.2 - 2015-2017 Expenses Forecasting 24

4.2 - Monthly Sales and Expenses Forecasting 24

4.2.1 - 2015-2017 Monthly Sales Forecasting 25

4.2.2 - 2015-2017 Monthly Expenses Forecasting 26-27

4.3 - Break Even Analysis 28-29

4.4 - Profit Analysis 30-31

5.0 - Controls 32

5.1 - Implementation 32

5.1.1 - Project Implementation Milestones 32-34

5.2 - Marketing Organization 35

5.3 - What If? 35

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5.3.1 - Revenues Exceed Projections 35

5.3.2 - Revenues Miss Projections 35-36

5.3.3 - Fire 36

5.3.4 - Tornado 36

5.3.5 - Construction 36

5.3.6 - Severe Weather 37

5.3.7 - Increased Competition 37

5.3.8 - Mechanical Issues with the Pickup trucks 37

5.3.9 - Economic Recession 37

5.3.10 - Workers Strike 38

5.3.11 - Higher Gas Prices 38

Works Cited 39

Power Point

Research

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1.0 Executive Summary Simply Compost is a new composting company in the Ann Arbor area. We want to inform as many people that we can about the importance of composting and how it can benefit the environment. Simply Compost will have a pickup and drop off service so that customers can choose whatever option is more convenient for them. Composting is not a big thing yet and that is why we wanted to start our own company dedicated to it. The marketing strategy for Simply Compost includes how we will operate the market of waste disposal. In the market strategy we have our mission statement of how we have a goal of creating a more sustainable city in the Ann Arbor and create a more sustainable environment. Simply Compost wants our customers to have a great experience while working with our company. As a company we would like our customers to be informed about composting so that they will take part in it, continue to compost, and hopefully inform others to compost as well. As a company we want to make composting as easy as possible for our customers.

In the rest of the marketing plan Simply Compost looks at our marketing objectives and how we want to have growth in our revenue and our amount of customers that we have. It also includes the many financial and financial objectives that we have. As a company we are also looking at how we will survive as a company and how we plan to act if competition develops with another composting company.

With our situation analysis we look at the market of our company. This includes the market summary, needs, demographics, trends, and growth. We also take a look at the opportunities of how we will grow as a company. We also look at the threats that we will have as a company and our critical issues. Within the situational analysis is a look at our service and the keys on how we plan to be successful.

Our main focus as a company will be to inform the Ann Arbor area of composting and trying to make the area more sustainable and make the environment a better place. Simply Compost will want have a great relationship with our customers and our target market. The target market that Simply Compost is working with is 18-35 year olds.

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2.0 Situation AnalysisSimply Compost is a new and innovative company. We offer a service that has not been

seen in many areas. We are a residential compost service in Ann Arbor. We offer both a pick-up service and a drop-off service for the residents of Ann Arbor. Our current target market is the residents of Ann Arbor. As a relatively new service, we are trying to meet the needs of the residents who wish to find a more environmental friendly way to dispose of their household waste. We also have many unique strengths, but also have some weaknesses due to being such a new company. Within our market, we are presented with many opportunities, but also many threats. There is currently not a lot of competition in the composting market, aside from trash collection services and seasonal yard waste collection. Simply Compost has the potential to be able to grow as a company and help the environment along the way as each resident takes a step toward sustainability.

2.1 Market SummarySimply Compost has a target market of all residents of Ann Arbor, though we expect the

market to be a majority of those residents between the ages of 18 and 35 years old. This market needs a pick-up service for composting, as well as, a place in which composting can be dropped off. There are currently services available to pick up trash and recycling, but composting is not currently a year round option for those residing in Ann Arbor. Our market can be compared with the market for current trash and recycling pick up and drop off services. Over the years we have seen substantial growth in the number of residents that recycle and we expect to see similar trends over the years with composting.

2.1.1 Market DemographicsThe target market of Simply Compost is residents of Ann Arbor. This target

market includes those in housing units, residential homes and apartments, who would like a pick-up service, as well as those who would prefer to drop off their composting at a free public drop off location. A majority of our market is residents between the ages of 18 and

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35 years old, but our market does include those older than 35 as well. Simply Compost has a market that serves the consumers who prefer pick up services, but we also serve those who prefer to drop off their composting.

2.1.2 Market NeedsOur market currently has the ability to remove household waste through the trash

and recycling services in Ann Arbor, but they are in need of a more sustainable way to remove this waste through an additional composting service each week throughout the year. There is also a need for convenience, through a consistent residential pick up service. As is often the case, this market needs this service to be cost efficient.

2.1.3 Market TrendsCurrently, there are not any year round composting services in the Ann Arbor

area, but our market is comparable to the recycling market. Trends can be measured in reference to said market. Ann Arbor sees a huge number of residents recycling. In a survey conducted in 2007, it was found that 94% of households recycled. This is one of the most successful programs in the US for recycling.(tipsforrecycling.com)Another market trend that we can look at are trends seen in other cities for composting. For example, in Grand Rapids the amount of composting has increased substantially over the years. The residents of Grand Rapids have the ability to pay for curbside composting and that company has been very successful in their efforts. Composting has also been popular among businesses within the Grand Rapids community. Many businesses use New Soil as a way to remove their composting and New Soil has continued to grow over the years as the number of businesses interested in composting has increased.

2.1.4 Market GrowthWith an increase in education about the importance of becoming a more

sustainable community being readily available to the public, Ann Arbor residents have become conscious of their own waste. Not only is the population of Ann Arbor growing, but so is the market of Ann Arbor residents who would want to compost. With all of the current recycling programs and sustainability initiatives that are growing and developing, the residents’ knowledge of their own environmental impact is expanding as well. This leads these residents to find ways in which they can help the environment and reduce their waste. At the same time they are also able to reduce their own cost for waste removal, which aids in the market growth as well.

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2.2 S.W.O.T AnalysisEvery company experiences strengths, weaknesses, opportunities, and threats. For Simply

Compost, there are many unique strengths that we bring that keep us competitive with other companies, but as a new business we are also faced with some weaknesses. Breaking into a new market, we have a lot of opportunities in which we can grow and expand Simply Compost. Threats that are posed to Simply Compost are very similar to the threats that are seen with many new startups and other residential waste removal companies.

2.2.1 StrengthsAs a new company, Simply Compost has many strengths which set it apart from

any competitor's. These strengths include:● We offer a free composting bin when customers sign up for a contract with our

services.● We have a very friendly staff.● We offer a free drop off service at different locations throughout the city for those

who would like to compost but do not need or want a pick up service.● Our compost pick up services are offered consistently year round.● Simply Compost provides a more earth friendly way to remove household waste

compared to current services.

2.2.2 WeaknessesGiven that we are a new company and are just now beginning to offer our services

in a growing market, there are some weaknesses that we have found in our company and our services. We are aiming to develop these weaknesses as our company grows. The current weaknesses that Simply Compost faces are:

● We are just starting up, so we are still very small and we do not know exact numbers for our market or profits and costs, but we are able to make rough estimates.

● Not everyone knows about composting or how to compost. This is a weakness for Simply Compost because in order to increase our market we need to inform the public about the benefits of composting and about what can be composted and what can’t be.

● It can be inconvenient to separate the composting from the trash and the recycling. Though it is not difficult, some residents may find it to be a burden to separate their household waste. This is why it is important to educated the public on all of the benefits of composting.

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2.2.3 OpportunitiesAs a new company we have many opportunities within our market to be able to

grow and expand Simply Compost. Some of the main opportunities that we have are:● Promoting our company and offering our services at festivals throughout the city,

such as the Ann Arbor Art Fair and Top of the Park.● Expanding our services to the University of Michigan. This expansion would

include offering composting in the dorm buildings, as well as, in the other campus housing units and other buildings on campus. Composting services would also be offered at U of M sporting events.

● Expanding Simply Compost to communities outside of Ann Arbor. As we grow as a company and increase our profits and our market demand, we will have the opportunity to expand to the suburbs outside of Ann Arbor, such as Chelsea and Saline.

2.2.4 ThreatsDeveloping in a relatively new market, we are faced with certain threats

including:● New compost companies coming into the market as competition to Simply

Compost.● There not being a high enough demand for composting in the Ann Arbor area.

Without a year round residential compost pick up existing in Ann Arbor currently, it is hard to be sure that there will be a high enough demand for a composting service.

2.3 Competitive AnalysisComposting is a relatively new trend in our society. We, as a society, are becoming more

earth conscious and for that reason, ways to be more sustainable are in high demand. In Ann Arbor, there are currently no other year-round residential composting companies. Therefore, the only competition that we currently have are recycling collection, trash collection, and the seasonal yard waste collection services. The way that we remain competitive in this market is through keeping our costs competitive and emphasizing the positive environmental impact that composting has compared to the alternative methods of waste removal.

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Past Positioning Map

Present Positioning Map

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Our competitors each have unique strengths and weaknesses that set them apart from each other and from Simply Compost.

The main strength of trash collection is that the consumers do not need to sort their household waste. The main weakness of trash collection is that there is a high, negative environmental impact. This is very different from Simply Compost because our consumers do need to separate what is and is not compostable, but there is a high, positive environmental impact when they compost.

The main strength of recycling is that it has a positive environmental impact. The main weakness for recycling services is that they need to sort and clean the recyclables. This compares to Simply Compost in that we have similar strengths, and our weaknesses are somewhat similar, but compostable items do not need to be cleaned out as much or as often as recyclable items do. As far as how competitive Simply Compost is with recycling services is different from the other competitive services. In most cases, products that can be recycled are not able to be composted, but if these companies were to begin a composting sector within their company they could become a larger competitor in this industry.

For the seasonal yard waste collection service, the main strength is that they are relatively inexpensive. The main weakness is that they only offer their services from April to December and they mostly just take yard waste. Though Simply Compost is a little more expensive, we offer a more consistent service all year long and we take not only yard waste, but any compostable products.

Overall, Simply Compost offers a more environmentally friendly service and at comparable prices to other alternatives. Our services are also offered consistently and there is a focus on informing the public and creating a friendly relationship between our company and our consumers.

2.4 Service OfferingWe are offering a way for the residents of Ann Arbor to compost their household waste.

The services that we provide for composting are a year-round pick-up service that runs through the city of Ann Arbor and is available for purchase, as well as, free drop-off stations throughout the city. This allows for the residents to lessen the negative environmental impact that they have and allows them to do so at a lower cost than traditional waste removal services. When signing up for a contract with our services, consumers also receive a free compost bin. We also offer an education service to the public so that they are able to learn about composting.

2.5 Keys to SuccessSome of the keys to success for Simply Compost and companies alike include route

destiny, education, and face-to-face conversations. For any residential pick-up service or delivery service, route destiny is a key part of turning a profit. It is necessary to have trucks that make frequent stops in a short distance. Because we are a new business, education is a main key to our success in the Ann Arbor area. In order to increase our market, Simply Compost must educate

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the residents on the importance of composting and the economic advantages as well as the positive environmental impacts that come from composting. Along the same lines as education, face-to-face conversations are a key to success in this industry. It is necessary to have face-to-face conversations in order to be able to answer any questions that consumers may have and to build the friendly relationship that sets us apart from our competitors.

2.6 Critical IssuesAs is the case with many businesses, there are critical issues that we may run into as we

are starting up as well as in the future of the company. These are worries that we may have while we begin to offer our services. We may also run into issues later on in the development of the company. They are issues and concerns that will have to be dealt with as we come to them and may not be a worry that we actually come to at all. These concerns include:

● Will there be enough demand?● Will there be too severe of weather to do pick-ups?● Can we keep up with increased demand?● Will we make a profit?● Will our services satisfy our customer needs?

2.7 Porter’s Five ForcesFor this organization barriers to entry may be difficult because the organization will need

access to land in which they can compost after pick up. We would inform customers in order to empower them, therefore increasing our competitive edge. There would not be much bargaining power from buyers because there are currently no other year-round residential composting companies. There would be very little bargaining power from suppliers because it is a service, so there are not a lot of suppliers necessary in the success of this business.

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● Rivalry Among Existing Competitors- low

There is little to no competition currently, so the rivalry among existing competitors is low.● Bargaining Power of Suppliers- low

Simply Compost does not have many items being supplied and those that are, such as trucks and compost bins are not specialty items, so the suppliers would not have very much bargaining power over us.

● Threat of New Entrants- moderateThere is potential for competition to enter the composting industry and there is currently not a high enough demand to have two composting companies in Ann Arbor for both companies to survive making a profit.

● Bargaining Power of Buyers- moderateGiven that we are the only residential composting company in Ann Arbor, the consumers do not have another option if they would like to compost. They do have the ability to not compost and can just use trash services if they do not agree with our prices or practices.

● Threat of Substitutes- highTrash services are a substitute to Simply Compost. Though we are the only compost company, consumers do not have to compost, so the threat of substitutes is very high.

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2.8 External Environment

The elements of the external market are prioritized as such for Simply Compost:1. Social-Cultural2. Economic3. Technological4. Political-Legal5. Competitive

First, the social-cultural market is the most important for Simply Compost because sustainability is viewed as a social environment issue. Also, with our target market reaching the mainly young adults, we are moving into a market with a high interest in sustainability weaved into its culture.

Second, the economic environment is vital for the existence of our company, thereafter, reaching into the social culture. Understanding the demand of our target market as well as the future of the economic standings for sustainability is what will aid Simply Compost to success.

Third, with the rapid growth of technology, Simply Compost must stay on top of the technological trends in order to stay ahead of possible, future competitors.

Fourth, political and legal aspects of the business world are necessary in ensuring Simply Compost retains a positive image.

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Lastly, being that the compost pick-up market is barely in existence, competition is low on the scale of initial priorities. However, once demand shows a significant increase, the market will expand and entice future competitors that Simply Compost will be prepared to endure.

2.9 Macro EnvironmentSimply Compost is a member of the Services Industry. As the awareness for composting

increases its popularity, the market will grow along with it. Within the next 5 to 10 years, the compost disposal market will have infiltrated highly populated cities around the nation. This increase in popularity will pose the threat of competition moving in to our desired target market. However, Simply Compost will have firm roots within the Ann Arbor area and create a difficult sell for the new competitors within our marketplace.

3.0 Market StrategyThere are several crucial components to every successful company. One, indisputably

being the company’s market strategy. Below, is Simply Compost’s detailed plan regarding the market of waste disposal. Included in the plan, are elements such as the marketing and financial objectives, target market, market mix (which gets subdivided into four categories), and our positioning in both the present and the future. Those are merely a few, but there is even more that also go in-depth and play pivotal roles when considering a market strategy. Another key aspect to not just the market strategy but also the company as a whole, is the mission statement, which is declared below.

3.1 Mission StatementThe purpose of Simply Compost is to educate, encourage, and implement environmental

prosperity. By informing the public on the importance of composting and what can be composted, Simply Compost’s mission is to advocate composting and provide a residential composting service to the Ann Arbor area. The goal of this service is to create a more sustainable city and reduce the ecological footprint it leaves for future generations.

3.2 Value PropositionSimply Compost makes a world difference in our environment, community, and future.

We value the importance of having a sustainable community for our present and future generations. It’s about the community, the customer, and the environment that is why composting is important for us because what we consider to be wastes are truly our future’s soils that are capable to produce higher quantities of food. The average American family produces 500 pounds of leftover organic material. Simply Compost will help lower the output of trash per family thus reducing the pollution which results from the fossil fuel-powered trip to a landfill. We produce rich nutrient soil for the benefit of much higher yields of healthy fruits, vegetables, etc. In addition, Simply Compost is about education, food security, and job creation all in a step towards sustainability.

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3.3 Customer ExperienceWe want our customers to be informed and therefore, engage their desire to take actions

towards composting their organic leftovers and helping our environment by creating nutrient soil. This organization is a medium of which residents can rely on in making their composting easier, convenient, and productive. Our organization provides both pick-up and drop-off services weekly, with bins provided and which a clean one replaces the one picked up every week. We want to work with our customers to make composting accessible to save their time and hassle by exceeding their expectations. Our customers are part of our team therefore they are our focus in order to accomplish our mission.3.4 Marketing Objective

1. Raise resident knowledge and awareness about composting every month by 10% through marketing strategies

2. Experience growth in customers by at least 5% each quarter for the first year3. Increase the percentage of 36-64 year olds by 2% biannually

3.5 Financial Objective1. In 2016 we will make enough profit to cover the loss we will have incurred in 2015.2. For the 2016 fiscal year, we will have a revenue increase to put us at a break even

operating point.3. In 2017, our objective is that we increase our revenue by 7% compared to 2016.

3.6 Target MarketSimply Compost hopes to attract citizens of all ages; composting is something everyone

can do, and every participant matters in helping the environment become waste free. However, we want to specifically target 18-35 year olds with housing units for private pick up and public drop off. Our hope is that in educating young to middle aged adults they will begin the process of saving our environment. In doing so, they will set the example for future generations that will continue the process until composting is a household normality. As mentioned above though, we encourage everyone to take the initiative in helping reduce the ecological footprint left behind for Ann Arbor.

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3.7 Positioning (Present and Future)Simply Compost is entering a very new market where competition is not necessarily

between other composting organization. Our competition includes: trash collectors, recycle collectors, and yard waste collectors. Due to the new market we are part of, we are not necessarily at our best positioning in the present in regards to size and profits but we do have the capability of have a much larger environmental impact in comparison to our competitors. Further in the future we are better off positioned with both our size and profits as well as our environmental impact, in which the trash collector is no longer our biggest competitor.

Future:

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3.8 Strategic PyramidThe strategic pyramid for any company is layered and organized by how they will try to

get consumers to invest in their product or service. The strategic pyramid for Simply Compost consists of three layers. The bottom/ first is education, followed by expense on the next level, and is topped with self-actualization. This can clearly be seen in the model below.

1. Simply Compost is planning to gain customers through holding events that will allow people to be cultured about composting and its effects. Through carefully held seminars, presentations, and interactive discussions we will teach the public and embolden them to be passionate about preserving the world.

2. After educating them, we will appeal to them monetarily with our low cost option to compost. Financially, the service we offer is cheaper than trash or recycling. Thus, we are imploring to residents not only through environmental responsibility after they are educated, but also fiscally.

3. The last strategy is perhaps even more effective than our low cost. Our hope is that after residents are aware of the positive effects and results of composting, they will do it because it also brings positive effects to them. Self-actualization is our final strategic pyramid. We want our customers to engage in our service for its ecological value, but also because it adds value to their lives.

3.9 Marketing MixThe marketing mix for Simply Compost is divided into four strategy subsections, as

previously mentioned. They are as follows: Service, Price, Promotion, and Place. For all of the subsections, rationale behind the decision for them is given and explained. The first to be analyzed is Service Strategy.

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3.9.1 Service StrategyOne of our goals is to provide exceptional services for our customers so we can develop

long-term relationships with each of them. We want to attain the customer’s fullest satisfaction whenever we interact with each other. Our service is meant to help save the customer’s time and assist them with composting by being there on time in an efficient manner. Not only do we offer to pick up their compost but we also have a drop off site for those who would prefer that method. Within both our services of drop-off and pick-up our customer service is key, we want our customers to trust us and feel comfortable with our services. Our service is fast, efficient, clean, and dependable. A Simply Compost representative will always be available for any questions or duties we can assist with in regards to the customer’s compost.

3.9.2 Price StrategyTo both compete and cooperate with trash and recycling services, Simply Compost is

charging customers $25 to have their compost picked up. It is cheaper than the trash and recycling, but in order to make financial projections, a price was chosen that was close in range to the other two. For those who choose to drop off, we are offering that option free of charge as an incentive to save money and still live green.

3.9.3 Promotion StrategySimply Compost has four main promotional strategies to gain customers. The first is

social media; online advertising is crucial in gaining customers from the millennial generation. They were raised in a progressive era and the most effective way to reach their market is with a medium to which they are accustomed to: online advertising. Such outlets include, a company website, Facebook, Twitter, Instagram, where Simply Compost would have ads, as well as accounts that would promote and instruct the public about composting.

Ads via radio and newspaper is another strategy Simply Compost plans execute to attract residents. This form of advertising is expected to reach a significant amount of families, the workforce, and seniors. Accommodating to their lifestyle, will hopefully help the organization to be in higher contact and communication to the market.

The last promotional strategy is of the highest importance. Educational programs at schools and community centers will be held for all ages. The goal of the programs are to provide enlightenment and insight to the residents of Ann Arbor about the positive impact composting has on the environment.

3.9.4 Place StrategyOriginally, Simply Compost planned to have headquarters and serve the greater Grand

Rapids Area. Due to complications, we adapted and made the executive decision to relocate our operations to Ann Arbor. We want to ensure that the city we work in, has a population with a relatively young age but there is a stable community, in which people are settled. Ann Arbor was more suited in this department because of The University of Michigan’s graduate program.

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Students are more likely to settle down and look for a job and start a family in the area of their graduate programs. This is promising to Simply Compost because we want to establish long term loyal customers and that is only possible if there is a low turnover rate of residents.

The location of our compost drop off bins will be strategically placed in several highly populated areas within Ann Arbor to maximize usage and encourage proactive residents to take advantage of free composting removal. For our headquarters, we will be stationed in nearby Dexter. We chose this, because there is more land space and economically, it is more affordable.

3.10 Customer StrategyThe need to produce a zero waste environment is why we are here to assist our customers

with composting pick-ups and drop offs. Their need to make our surroundings into a waste free sustainable environment is our need as well. It is a method of teamwork among Simply Compost and our customers. Therefore, they are our main importance, we want them to trust us and know that we are reliable to make composting easy, fast, and convenient for them. Furthermore, they will recommend our service to their friends and families who have not been aware of our mission and acquire more customers to help achieve our goal and work as a team. We want to expand our boundaries beyond Ann Arbor, but first we have to focus on Ann Arbor and our customers there to gain their unconditional loyalty by giving them our unconditional service. With our strong customer relations, we will be known for our concern for the environment.

3.11 Marketing Research: CompetitionEven though the market is not big there still is competition in the area of Grand Rapids.

There was a company that did residential compost pick up. That showed us that there is demand, and there are people who are interested in our business. After knowing there was already a company in the Grand Rapids area we decided to move to Ann Arbor. It is not a big enough market to have two businesses with relatively the same service.

3.12 Marketing Research: Complementary BusinessSimply Compost not only does residential pick up, but we found a way to take care of the

compost we collect. New Soil is a company that takes compostable waste and turns into reusable soil for farmers. We are planning on potentially partnering with them in the future to work together hand in hand to make the world a better and more sustainable place for future generations.

3.13 Customer ValueSimply Compost is an organization which highly values our customers. We want to give

them the best so that in return we get their unconditional loyalty. We want to attract our customers, satisfy our customers, retain customers, increase sales to customers, and build

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profitable relationships with customers. In order to make this possible Simply Compost as a whole makes the effort and offers superior customer value.

3.14 The PSSP Hierarchy of NeedsSimply Compost hopes to help fulfill our customer’s various needs. However one of our main needs of our customers is to have someone they can work with in making everyone compost. Our customers who are aware of the importance and benefits of composting need someone (Simply Compost) to help make composting easier and efficient in a larger scale. We are present to help with our customer’s needs of accomplishment, sociability, satisfaction, knowledge, etc. We are all in this together as a whole to accomplish our goal of making our world sustainable, working as a community-spreading the word, having the satisfaction of taking action, and learning along the process!

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4.0 FinancialsSimply Compost offers a new and unique way at taking care of household waste while

still being environmentally friendly. In order to achieve the goals that we have stated in this marketing plan, we have a detailed idea, forecast, and a breakdown from all of the expenses acquired in the process of opening a company in a relatively new market, operating, and maintaining the company as well as our drop-off stations. Not only do we need to know where we will gain our profit, but also recognize the expenses that will come along with operating the company, include the projected revenues and financials for three years. One of the most vital keys to have a successful marketing plan is to have a financial budget. For the first year after opening, prediction will be difficult, since we have the statistics based on the recycling and composting market. Therefore, we will create the predictions without previous operating statistics. After Simply Compost’s first year in operation, we will reevaluate our predictions based on the expenses and revenues that we gained from operating.

4.1 2015-2017 Sales & Expenses ForecastingThe composting market is a relatively new business, therefore we predict to have a slow

progression into the daily lives of our target market. We understand some of our market will be unaware of our services, but we predict that in the future as they become more aware there will be more people interested and involved with our service. That would cause an increase to our company for future sales and expenses.

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4.1.1 2015-2017 Sales ForecastingThe Simply Compost sales forecasting are based upon combined for our Households

Revenue and Drop off revenue. Households Revenue will make a large portion every year. Since we are new company, the first year sales will be lower. Once knowledge of our company spreads, through the advertising and education course, the sales in 2016 and 2017 will increase by percentage. With increasing the amount of households, the revenue for dropping off also increase as same percentage.

4.1.2 2015-2017 Expenses ForecastingThe Simply Compost expenses forecasting will provide both fixed and variable expenses. Due to the research and quotes are from different service companies, our fixed expenses predictions are more precise and acceptable. Our fixed cost will driver’s salaries, rent expenses, insurance expenses, utilities and advertising expenses. However, variable costs such as car maintenance with washing will be changed due to the variety of reasons, for example, weather and miles be driven. Thus, we put a basic percentage change by quarters. As well, some variable costs like trucks expenses and drop off expenses will only have a month. Therefore, these variable expenses are reflected to the sales forecasting’s. If our sales forecasting has been changed, then we need to recalculate our new variable expenses.

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4.2 2015-2017 Monthly Sales and Expenses ForecastingOur sales prediction for the first year is quite conservative. The composting market is a

relatively new business, therefore we predict to have a slow progression into the daily lives of our target market. We don’t have any specific detail references for prediction.

4.2.1 2015-2017 Monthly Sales ForecastingWhen predicting sales break down to the months for first three years, we are

oblige to consider the aspect of busy and slow seasons. Also, since we just start the business, our first couple monthly sales won’t be very high. However, it will be keeping increase quite significantly. Our focus will be households in Ann Arbor, as well as university of Michigan. In summer, our sales will be much higher than in winter due to the cleaning. Sales will slow down a bit in winter.

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4.2.2 2015-2017 Monthly Expenses ForecastingEach month, the simply compost will have an amount of expenses that are

changed by seasons. We will have the fixed expenses during the years, but the variable expenses will depend on weather and seasons. We have a close prediction as to how our expenses will look like, but there will be still some space for flexibility.

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4.3 Break Even AnalysisThe simply compost, a relatively new business, is going to reach a breakeven point as a challenge. As trucks are not expenses, these are long-term assets. So we take out the truck expenses from the expenses forecasting to get yearly break-even point. It is total fixed cost divided by which sales per unit subtract variable cost per unit.

2015Sales per unit: $416,987.58/1279=$326.10

Variable cost per unit: $87,420/1279=$68.37Break-even point: $256,018.40/($326.10-$68.37)=993 units

2016Sales per unit: $460,881/1413=$326.10


2017Sales per unit: $474,049.03/1454=$326.10


As our expenses differ every year, our break even points are different every year. Because of the first year of business, we will have a higher break-even point due to the large expenses.

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4.4 Profit Analysis

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As our predictions of 2015 to 2017 sales and expenses, our profit will be computed by them. As we start business from 2015, the first year we won’t have profit. But the second year, our profit will increase and cover the loss of first year. Until the third year, we will really start to gain our profit, and continue to grow as a company as the years go by.

2015 Profit Analysis

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5.0 Controls

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In controls we looked at the way that Simply Compost will implement its company. We also looked at the revenue that we hope that we make for each month for the years 2015-2017. Also, we looked at the different type of scenarios that could potentially hurt our company.

5.1 Implementation/Milestones The way we plan on implementing this new composting pickup/drop off is by showing

residents of the Ann Arbor area the benefits of composting. If we show people the benefits and what composting will do and how it helps the environment then hopefully they will compost.

5.1.1 Project Implementation/MilestonesSimply Compost plans to have many projects to help the community of Ann

Arbor learn about composting. These projects include having talks at schools to inform students so they can go home and inform their parents about composting. Also, we will different events in the community throughout the year to teach and inform citizens on how to compost and how it is sustainable. Simply Compost will also be at Ann Arbor events such as Top of the Park and the Ann Arbor Street Fair informing citizens on composting. Two other big projects that Simply Compost has is expanding to communities outside of Ann Arbor and implementing our composting company and combining with the University of Michigan.

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5.2 Marketing Organization

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Simply Compost is a business made up of 8 passionate college students majoring in some form of business. Each one of us is taking the lead for a section of the business including administrative work, marketing/promotion, sales and etc. Also, each one of us has a different background in the business field.

5.3 What If? Simply Compost’s contingency plan is a list of different scenarios that we looked at as company that could potentially hurt us in the future. The list includes Revenues Exceeding Projections and Revenues Missing Projections along with weather and economic challenges that may hurt us.

5.3.1 Revenues Exceed Projections Simply Compost is a business that will eat up every ounce of cash that we will

receive for the first year or two. Because of this we can only hope that we exceed our projections. If we do Exceed projections, there are many different areas that we could reinvest the money into. This money could go to areas such as buying an extra dump truck, or putting this money into more advertising. For the first year we plan on spending every dollar we can on advertising. The reason for this being that we are a new business with new ideas. People don't know what to expect from a business like us so we must inform them. One advertising event we would like to have is a fair in the middle of Ann Arbor. This event would be very informative to the public and have a lot of free giveaways available that way as many people as possible show up. We plan on giving away devices such as IPad, and gift cards. The reason for this being that we want the city of Ann Arbor to associate Simply Compost with caring, kind, and giving. One other advertising area we would like to reach with extra capital would be school days for the younger children. We want to go into a classroom and educate the youth. After these class days we hope that the kids go to their parents and inform their parents of what they have learned. Also these children are our future clientele so it is great getting them the knowledge now rather than later.

5.3.2 Revenues Miss Projections If Simply Compost misses our original projection we must stop and look at eh

way we are running the company. There has to be ways that the company can cut costs while still upholding our values. One way to cut our cost is to potentially cut certain personnel such as our secretary and take on that work ourselves as the owners. But in some cases that may not be enough. We must realize that we will be in a better situation the second year compared to the first considering that we don't have to buy property, trucks, or office equipment. These assets cost us a lot of money in the first year and are all long term. Therefore we can expect our expenses to go down in the second year dramatically. But to make up for our lost value we may have to take out personal loans as

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owners or consider asking an investor to step up and buy into the company. If we can find a person that shares the same values as us and has enough money to buy in we will gladly accept him. Each member would have to give up around 1% of their stake in the company to accommodate for a bigger projection mishap.

5.3.3 Fire If there was a fire that damaged the drop off center or the Ann Arbor area then

that would hurt our company. If there was a fire that spread throughout areas of Ann Arbor where our company has pickup then we would not be able to pick up the composting bins. People would still be able to compost but their bins would not be picked up. In this case we would tell them that if possible go to the drop off center. If they are not able to do that, then once it is safe to go on the pickup routes again we would do multiple pickups in a week for no charge. If the drop off center is damaged then we will find an alternate location for people to drop off. If they cannot get to that alternate location then they can notify the company and we will add them to the pickup route and will not charge them for pick up.

5.3.4 Tornado If a tornado hits the Ann Arbor area destroying the drop off center or the pickup

routes then the company will find a way to deal with this situation. If people are still able to compost then we encourage them to do so. If they can still make it to the drop off center then we hope that they will. If anyone’s composting bin was damaged during the tornado then the company will compensate them for a new bin free of charge.

5.3.5 Construction Construction is always happening throughout the Ann Arbor area. With

construction always taking place it may be difficult for people to get to the drop off center or for pickup to take place. If customers are unable to get to the drop off center we would ask that they notify the company and if possible we could add them to the pickup route. If the company is not able to get to certain houses on the pickup route we would ask that if possible have them go to the drop off center. If some houses are not able to get to the drop off center or get pick up we ask that they continue to compost and when a new route is found we will pick up their compost.

5.3.6 Severe Weather (flooding, snowstorms) Living in Michigan severe weather is a big issue. In recent years the Ann Arbor

area has experienced some pretty bad snowfall. If either of these two things happen or any other type of severe weather it could hurt our company. With a heavy snowfall or flooding it could keep people from getting to the drop off center and it could also keep

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company truck drivers from getting to the houses that have pick up. Also, the snowfall or flooding could damage the composting bins. If people are unable to get to the drop off center or pickup is unable to happen the company would ask that people continue to compost. Once the severe weather is over we ask that they go to the drop off center and pickup will continue as normal. If a composting bin is damaged during any severe weather we would ask that the customers contact the company and we will compensate them.

5.3.7 Increased Competition As of right now there is very little competition in the composting business. But as

composting becomes more of a things more businesses will start to develop. When this happens it could hurt our company. Our customers may leave and go to another company. When other companies develop our company will develop new ways to show customers why they should stick with us and should not switch companies.

5.3.8 Mechanical Issues with the Pickup trucks In the case that the pickup trucks are having mechanical issues and are not

running properly then the company will either try and rent trucks from someplace so that pickup can still happen. Also, the company will inform those customers who have pickup of the issues and that their pickup will not happen as scheduled and the company will try its best to have a pickup as soon as they can.

5.3.9 Economic Recession In the case that the economy goes into a recession this could hurt Simply

Compost. This could cause customers to leave the company because of financials. This could cause Simply Compost to lose business and potentially go out of business because financially we cannot function in the state of the economy. In the case that this happens, Simply Compost will have reasonable prices that will keep the customers with the company. Simply Compost will also use the fact that we will have a great personal relationship with their customers that they are hoping they will stick with us.

5.3.10 Workers Strike In the case that a worker strike happens and Simply Compost employees do not

want to work than the company will inform our customers of what is happening within the company. We believe that it is good for customer service to let our customers what is happening. Simply Compost will work with our employees to compromise their needs with what the company offers. In the case that the workers will not come back for a period of time, Simply Compost will find workers to fill in.

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5.3.11 Higher Gas Prices In the case that gas prices become higher for a substantial period of time than

Simply Compost may have to raise the price of pickup that they charge their customers. The price of pickup will rise if gas prices increase by a large amount. Simply Compost will have price that they plan on spending for gas. If we see that we will go over that because the gas price rises than we will determine an extra charge that will be added to pick-up services.

Works Cited

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"Community Recycling Success Stories: Ann Arbor, Michigan." Tips For Recycling. N.p., n.d.Web. 14 Oct. 2014. <http://tipsforrecycling.com/2012/01/27/community-recycling-success-stories-ann-arbor-michigan/>.

"CompostNow." CompostNow. N.p., n.d. Web. 14 Oct. 2014. <http://compostnow.org>.

"Getting ready to create a marketing plan?." Energy Recycling Sample Marketing Plan. N.p., n.d.Web. 14 Oct. 2014. <http://www.mplans.com/energy_recycling_

"Recology SF - Recycling, Composting & Trash." Recology SF - Recycling, Composting &Trash. N.p., n.d. Web. 14 Oct. 2014. <http://www.recologysf.com/index.php/for-homes/residential-recycling-compost-trash>.

"Residential Pickup | The Compost Exchange." The Compost Exchange. N.p., n.d. Web. 14 Oct.2014. <http://thecompostexchange.com/residential-pickup/>.

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Community Recycling Success Stories: Ann Arbor, MichiganBy Tips For Recycling | Published: January 27, 2012

Ann Arbor sits 40 miles west of Detroit on I-94 and is known primarily for being the home of the University of Michigan. The community is affluent and highly educated with an astonishing 79 percent of residents possessing at least a bachelor’s degree(1) . But Ann Arbor is also one of the most progressive Michigan communities when it comes to environmental concerns. Recycling is a big part of this picture. A 2007 citizen survey showed 94% of households were recycling, 69% listed recycling programs as either essential or very important to the quality of life in Ann Arbor, and 76% felt that recycling was an important community investment.Ann Arbor’s recycling program is mandatory and is enforced by leaving materials at the curb when not properly sorted. Recycle and refuse programs are funded entirely through property taxes. The economic incentive for residents to recycle comes in the form of RecycleBank rewards rather than in a pay-as-you-throw pricing system. The fact that the MRF is within city limits helps keep operational costs low and provides additional revenue from sources outside the city which utilize the facility. Ann Arbor has gone to great lengths to make their program as convenient as possible. Both single and multi-family dwellings are included in the weekly single-stream curbside collection program. Bins are provided by the City and side-door service is provided for disabled residents who are unable to transport their carts out to the curb.

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The city also coordinates with Washtenaw County to provide a drop-off center for less common recyclable items such as tires, computers, printer cartridges, small household electronics, brake fluid, motor oil, household and car batteries, antifreeze, transmission oil, oil filters, Styrofoam and packaging peanuts, egg cartons, textiles, plastic shopping bags and hard cover books.Businesses, schools and non-profits are provided the same convenient single-stream curbside service as residences. The City partners with the non-profit Recycle Ann Arbor to provide waste audits and assist organizations in starting up on-site recycling programs. The University of Michigan has also been included in Ann Arbor’s recycling efforts, and the city runs special programs in student housing locations during the school year. Virtually every resident, commercial entity, government entity and business within city limits is served by the program.Much of Ann Arbor’s recycling success can be attributed to a big marketing budget and extensive community outreach. The City puts on multiple workshops and special recycling events throughout the year, run tours of the MRF, hosts the annual Mayor’s Green Fair and has multiple educational resources for schools available on their web site. The City also publishes a comic series called Adventures of the Waste Watchers which provides education on various green topics and appeals to kids of all ages. Other City publications include the A2 Green Guide and the Ann Arbor Green Sheet. Community leadership is heavily involved in recycling and green initiatives as well. The local non-profit Recycle Ann Arbor provides additional education and outreach materials to schools and businesses, including the “Project Recycle” essay contest for 3rd graders, and operates the state’s only non-profit construction recycling program. RAA staffer Stephen Sheldon serves on the executive board of the Michigan Recycling Coalition. Business leaders and citizens also serve on the City Sustainability Board.

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Ann Arbor benefits from strong leadership and community involvement in its recycling initiatives. Presence of a university that is a national leader in education also lends support to a community that emphasizes going green. Ann Arbor is subject to the State of Michigan waste laws, including a ban on yard waste in landfills and the Electronic Buy-Back law requiring electronics manufacturers to take reclaim their products at the end of their useful life.To visit Ann Arbor’s recycling web site click here.1. Demographic data obtained from the 2010 U.S. Census.

Residential Pickup

Residential Food Waste Pick Up ServiceDuring 2013 we plan to start picking up food waste from residents ofAthens, The Plains, and Nelsonville.

Residential Food Waste Pick Up ServiceDuring 2013 we plan to start picking up food waste from residents ofAthens, The Plains, and Nelsonville.

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Option # 1 – Team Membership -$10/month – weekly OR $5.00 – bi weekly*Option # 2 – Individual Membership – $20/month – weekly OR 16/month bi weekly.How It Works1) We supply your household with a clean 5 gallon bucket with an “Easy Off” lid.2) You fill your bucket with food scraps during the week. This is easy! You simply use our bucket instead of your trash can!3) On your scheduled pick up day you set your bucket outside.* That same day we pick up your bucket and leave you with a clean one.4) The Compost Exchange turns your food waste into a valuable locally produced natural resource.5) You help Athens get one bucket closer to Zero Waste.*Our team membership is a great low cost service that encourages recycling your organic materials across entire neighborhoods – let’s get everyone into achieving Zero Waste! A team is defined as having one captain with a minimum of 6 and a maximum of 15 households. Team Captains are responsible for exchanging filled buckets with clean ones from each team member. Team Captains receive the pick up service free as compensation for coordinating pick ups for the entire team.Member Benefits- My Compost Rewards Card- Receive discounts at local Athens business. As a member you can receive discounts from any of our fine Compost Partner members. Over the course of a year, this discount card will pay for the service and more! See Compost Partners- Member Discounts – TCE members receive a 10% discount off the regular price of any of our premium compost, mulch, or specialty soils.- Free Compost – Every six months team members receive a 5 gallon bucket of our healthy compost for your garden or flower beds. If you don’t need the

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compost, we’re always happy to donate it on your behalf to any of our local Garden Partners.- Create Green Jobs – Recycling your food waste with TCE will create 3 – 5 green jobs by 2015.- Keep it Local – Recycle your food waste with TCE to create a locally produced natural resource.- Zero Waste in Athens – Working together with TCE will help achieve Zero Waste in Athens, Ohio• There is no invoicing or paperwork!• To minimize costs, payments are made by checks every 6 months.• There is no fee for using our buckets, but please take a moment to review our Bucket Policy.

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Documents

Marketing Plan