Business Plan for: Reclamation. Materials, People, Community
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1 Business Plan for: Reclamation Materials, People, Community A Collaboration Between WasteCap and MCSC
2 Business Plan Prepared By: Kevin Fogle, WasteCap Mike Consiglio, MCSC Executive Summary Waste Cap Resource Solutions, Inc. (Waste Cap) and Milwaukee Community Service Corps Inc. (MCSC), two Milwaukee based nonprofits, together are joining forces to create Reclamation: a business that puts unemployed people to work making handcrafted items for the home or business from salvaged materials. Waste Cap s mission is to provide waste reduction and recycling assistance for the benefit of business and the environment and toward that end, salvages useable materials that would unnecessarily go to the landfill from demolished Milwaukee homes. MCSC s mission is to provide Milwaukee s at risk young adults with education, life skills and job training opportunities that allow them to earn wages while improving the community and the environment. Reclamation joins these missions by utilizing trainees from the MCSC program and materials from Waste Cap. Reclamation s unique success factors include an access to labor and material that is more cost effective than that that of its competitors, an upward-trending brand that emphasizes sustainability and social welfare, and the business is currently located in an area poised for economic growth: the Near West Side. WasteCap relocated its architectural warehouse to the Near West Side because of the rich history and bright future in its development. We also see it as a crossroads for the City of Milwaukee. One importance of keeping Reclamation in the Near West Side is its accessibility to the unemployed who receive their paid training here. WasteCap and MCSC are committed to keeping Reclamation in the Near West Side neighborhood. PERSONAL BACKGROUND INFORMATION WasteCap has operated since 1998 focusing on a variety of waste management issues, mostly in the construction industry, but the vision of turning waste into a resources has led the organization to other industries and initiatives as well. In the last 6 years, WasteCap focused in on saving resources from Milwaukee houses that are being demolished and utilizes MCSC paid trainees for this work. Kevin Fogle is WasteCap s expert in deconstruction, salvage and repurposing materials and works with MCSC trainees. Since its inception in 1991, MCSC has played a central role in Milwaukee s efforts to improve the economic self-sufficiency of disadvantaged youth by working to meet the needs of the community through visible and measurable community service. MCSC traces its roots back to the Civilian Conservation Corps (CCC) of the 1930s and is one of only ten urban youth corps in the nation providing at-risk youth the opportunity to learn new skills, earn a wage, acquire a driver s license, serve their community, obtain a high school equivalency diploma, and prepare themselves for post-corps college or
3 trade apprenticeships. MCSC s trainees with WasteCap are coordinated by Executive Director, Mike Consiglio. Company Overview Reclamation combines the expertise of partnering agencies to create handcrafted items for home or business. WasteCap specializes in deconstruction and salvage and has contracts to salvage materials from foreclosed City of Milwaukee homes as well as privately owned homes and buildings around Milwaukee. WasteCap has reliable supply of and access to beautiful old growth lumber, salvaged floors and other materials, giving Reclamation an advantage over other businesses in the same industry. MCSC are experts in providing training and opportunities to unemployed and underemployed individuals in the community. The training they provide allows for these individuals to learn job skills while at the same time earn a wage for their work. No legal structure will be created. Instead, a memo of understanding between Waste Cap and MCSC for expenses and the split of excess over cost will be developed. Management and Organization Production will occur in an existing work space at WasteCap s location. The space is 800 square feet and can support as many as six individuals working in the space at one time. Kevin Fogle will be responsible for coordinating the space and production with MCSC. MCSC will fund the training initially thru existing programs with the expectation that as sales begin the expenses will be recouped. MCSC has available funding thru Wisconsin Fresh Start and FSET. As sales increase, more trainees or more days will be added to the production schedule to maintain inventory levels. One training supervisor will be present during production; this supervisor will provide guidance and insure quality of the end product. The design, retail and ecommerce operation of Reclamation will be coordinated by WasteCap s Ben Sherwyn who has 15 years experience with merchandising, marketing and e-commerce. A dedicated showroom space will be created in WasteCap s existing Salvage Warehouse. MCSC will provide workmen s compensation insurance and carries liability insurance for its operations. Waste Cap will provide workmen s compensation and carries liability insurance for its operations also. The lease and utilities will be the responsibility of Waste Cap as will the financial management of Reclamation. Growth of the Business The first year Q1: Research and product development commences. Tools are purchased. Training curriculum and production workflow is developed and tested. E-commerce website is built. Q2: Training commences with first MCSC cohort. First product comes to market locally and online. Q3: Training commences with second MCSC cohort who will be in part, trained by first cohort. Manufacturing procedures are reviewed and refined. Market research conducted to understand the reception of first product. Begin protyping second product. Robust effort to generate publicity in print,
4 radio, and electronic channels commences. Growing inventory allows product to be stocked in partner stores. Q4: Training commences with third cohort, first cohort begins job placement with MCSC. Scale stays dependent on demand, additional products are protyped if demand is indicated. The second year: a second MCSC training program is launched focused on e-commerce, shipping and receiving, customer service and sales. The third year: continued market research will expose new product lines which can be incorporated into training program. A note on measuring success with a triple bottom line: As a social enterprise, Reclamation has a triple bottom line that measure not only profit but also the impact on people and the planet. Each paid trainee will receive a Certified OSHA10 Certification, a resume and Letter of Recommendation. Additionally, soft skills learned include time management, getting along with coworkers and Supervisor, work-place ethics, punctuality and attendance, financial management, what it takes to be a "valued" employee, and job interview coaching. They would be placed on our work crews for further instruction with our Supervisors with "real work" experience. The success of the business cannot be measured by revenue alone but must also considered the number of paid trainees successfully placed in postprogram employment and the amount of materials diverted from landfills through salvage and repurpose as measures of success. Industry Analysis Reclamation is a business that has a triple industry footprint. On the surface, it is handcrafted home goods business whose products additionally have strong appeal to businesses such as restaurants, interior designers and offices that have conference rooms and lobbies. The industry for these products is large and growing where there is a rising demographic of individuals age who are earning over 75,000 a year. It is essential that Reclamation markets to this segment nationally as Milwaukee lags behind other cities in this demographic. Reclamation is also in the workforce development industry, however, with a strong environmental and sustainability focus, of which there is a strong need for the City of Milwaukee generally and the Near West Side neighborhood specifically. MARKETING PLAN Customer Analysis 2 Customer Segments Interior designers, developers, looking for industrial items. Geographically based in Milwaukee. Segment is growing in Milwaukee , homeowners and renters, interested in unique, handcrafted items (not mass produced), interest in environment and sustainability, segment is growing nationally like cities such as New York, Los Angeles, Chicago, Atlanta, and Seattle to name a few. Competitive Analysis
5 We do not believe a business like this currently exists. There are a number of groups that exist that build furniture or salvage goods but not one that has closed the loop on salvaging, hiring and training local workers to craft the product. Two similar businesses are: Urban Wood Lab W. Bluemound Road Milwaukee, WI Scathain Design 422 South 4th Street Milwaukee, Wisconsin Founded 2005 Both of these organizations specialize in custom built pieces. They do some retail work and also then focus in on design build work for clients. The weakness they each have is the need to source materials and possible have a high cost in getting those materials. The strength is the high quality of the materials matched with the low competition that exists. Pricing Structure Examples of products/services at what price. Product 1: Modern Hanging Wall Unit Cost Breakdown Vintage Wood Stock - Cost $11.43 Vintage Rope Stock $14.40 Hardware $2 Finishing Supplies - $1 Labor - $36 / Unit $9 Shipping / Warehousing Materials Cost - $73.83 Retail Price - $225 Administrative Fees - $ (10% E-commerce commission, 2.2% transaction fees, 15% online advertising, 25% Administrative & Marketing) Profit $34.02 / unit Product 2: Antique Lumber Pet Bowl Antique Beams - $10 Bowls - $2 Finishing Supplies - $1 Labor - $10.80 / Unit
6 $3 Shipping / Warehousing Materials Cost - $26.80 Retail Price - $75 Administrative Fees $39.15 (10% E-commerce commission, 2.2% transaction fees, 15% online advertising, 25% Administrative & Marketing) Profit $9.05 / unit Product 1
7 Product 2 Promotional Strategies Our two organizations already have an extensive list of partners, clients and supporters. The first outreach would be to those who have come to us time and again for our work. We would hopefully be able to expand our service to them through this work. WasteCap operates a salvage warehouse where items will have their own dedicated showcase.
8 Our two organizations are also very adept at doing outreach through press releases, interviews and public outreach at events. We would hope that this new partnership along with the goals to save material and use it as a job training initiative would bring a lot of press coverage. Ben Sherwyn will design and execute an e-commerce website and marketing plan. Customer Service and Sales Ben Sherwyn has over 15 years of experience in merchandising, sales and e-commerce. The second year of the program, Reclamation will design and launch a training program for individuals to learn competency in entry-level job requirement for this industry role. THE FINANCIAL PLAN Start-up costs and needs Miter Saw $650 Random Orbital Sander $70 Table Saw $1,000 Planer $600 Jointer $500 Router $220 Drill Press $200 Band Saw $600 Clamps $250 Chisels $100 Misc Hand Tools $500 Misc finishings $500 Electrician $1,500 Dust Collection $250 Material/Tool Total: $6,940 Prototype Design/Creation $2,500 Website/E Commerce Development $4,000 Total: $13,440
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