Terra Engineering Sample Business Plan


Executive Summary

Terra Engineering will be wholly owned and operated by Mr. Norm Johnson. Terra Engineering is a proposed Ontario based company which will provide a wide array of environmental consulting services to its market which includes: Site Specific Environmental Services; Permitting; Strategic Planning; Project Design and Management; Technical Third Party Review Services; Environmental Policy Development and Liaison Services. This company will be located in Harthsville, Ontario. Terra Engineering has identified its target market as Territory Governments, organizations and businesses located within Eastern, Southern, and Northern Ontario.

The primary function of Terra Engineering is to contract with Territory governments, organizations and businesses in which the company's environmental consulting services will be delivered to ensure, enhance and protect the environmental affairs of its' target market. The company's principal, Mr. Norm Johnson, will establish an alliance with TAC Associates Limited which is his current employer. TAC is a highly reputable international engineering consulting firm which offers a wide range of technical environmental services to a large number of clients. In establishing this healthy working relationship, Terra Engineering and TAC will realize great business goals which will be key to each one' performance and success. In Canada, the environmental industry is an evolving sector which is comprised of companies and organizations that provide environmental technologies or goods and services which:

•  Reduce human health risks and ecological damage;

•  Improve eco-efficiencies and cost-effective in processes; and

•  Address environmental issues and problems

In total, the Canadian environment industry is represented by over 9,500 firms which range from one person operations like Terra Engineering to large multi-national firms like TAC Associates Limited. Presently, Canadian environment firms average over 26 employees, with a total of average revenues over $3.9 million. This industry is a large employer of a highly skilled and productive workforce. It is estimated that approximately 221,000 workers are employed within this industry which is 1.6% of total national employment. The environment market in Canada is valued at an approximate $25.8 billion which represents 2.2% of the Canadian Gross Domestic Product. Key leading sectors within the environmental industry include environmental consulting/engineering like Terra Engineering; waste management; water supply and purification and waste water treatment. Overall, the environmental industry in Canada is certainly a high growth sector.

Market drivers in the environmental industry include such pressures as: pollution prevention and eco-efficiency; performance in managing complex environmental issues and human health. Today citizens, governments, businesses, lenders, investors and organizations are becoming more aware of and placing more pressure on the importance of a healthy environment. As a result, there is a growing demand for environmentally sound processes and solutions to possible present and future problems.

Due to the location of the company, Terra Engineering has an opportunity to service large portion of Ontario's Eastern, Southern and Northern Territory governments. In Ontario, there are 126 Territory governments and of these five are among the twenty largest in Canada. Today, Territory governments, organizations, and businesses are now realizing the importance of environmental due diligence and everything it entails. Moreover, the entire Territorial market has identified the increasing demand for environmental services since similar driving forces as the mainstream market have taken effect.

This is due to a number of key factors such as:

•  Increasing number of businesses start-ups and expansions in all industry sectors including primary industry;

•  Territory government memberships that are more aware and demand tightened environmentally safe policies and procedures for their governments, businesses and organizations;

•  Increasing number of Territory partnerships being established which often require Territorial liaison services and or prefer Territory environmental assistance and expertise of a company like Terra Engineering;

•  Major funding programs in Ontario require environmental assessments and or third party reviews in order to meet federal/provincial legal requirements and program criteria before funding is disbursed to Territory members and Communities;

•  Territory projects as well as independent businesses which are active or are entering the resource industry understand the cost value of hiring someone full time to fulfill these duties. In short, it is cheaper to hire than to employ as the present time;

•  Regulatory gaps between provincial and federal environmental legislation for Territory lands. These gaps need to be addressed properly in order to protect and to abide by these governing legislations.

The company's knowledge and awareness of the driving forces behind the increasing demand for the environmental services like Terra Engineering by its' primary markets will remain invaluable. Presently, the need for environmentally specialized people and businesses to fulfill this need is apparent and has become increasingly large.

Terra Engineering will differentiate its company in the marketplace in 3 specific ways; the principle, Norm Johnson has been employed within the environmental industry for many years and has unmatchable skills and knowledge of the industry; centralized location to the company's target market allows for full market reach and serviceability and a vision of growth for the company's primary markets in keeping with the Territory government mindset will enable the application of the contemporary tools to determine solutions from a traditional mindset.

Terra Engineering's sales strategy is three tiered. First the company will plan on achieving first year direct sales of $82,000 in its primary market. Secondly, the company will plan to achieve a more profitable level of sales equal to or better than $92,500 in year two and $102,500 in year three. Thirdly, the company plans to more aggressively promote its services with higher profit margins to allow for maximized profits. As indicated in the sales projections of Terra Engineering, the company intends to breakeven the first year. In years two and three the company will become more profitable as contracts and clientele increase and as the company learns to become more efficient in operations.

The initial start-up expense for Terra Engineering include: capital $68,000; marketing $20,000; and business support $2,000. Capital funds will be used to purchase building improvements, specialized office equipment software and technical field equipment. Marketing funds will be used for trade show booth design, trade show attendance, company apparel and various print materials and advertisements. Business support funds will be used to hire a management consulting firm to help with financial management.

In order to properly fund the start-up of Terra Engineering, Mr. Johnson has designed a financing package that consists of personal equity, federal assistance and traditional borrowing. Mr. Johnson will invest $10,500 or 15% of the project's total capital costs. ADCP will be approached to invest $40,800 or 60% of the project's total capital costs and the remaining balance of $17,000 or 25% will be financed by a commercial bank or Territory Capital Corporation over a four year term. Bridge financing will be sought from the same institution to ensure cashflow is manageable. ADCP will be asked to contribute 60% and 75% towards the business' marketing and business support costs respectively. The remaining funds will come from revenue generated by the business.

Projected Costs

Financing

Capital & Operating $ Capital & Operating Amount %
         
Working capital $20,000 Cash equity $10,200 10%
Office renovations $5,000 SPA funding $40,800 60%
Office equipment/furniture $6,000 Commercial financing $17,000 40%
Specialized field equipment $27,000      
Specialized Software $10,000      
Sub total $68,000 Sub total $68,000 100%
         
Marketing
$
Marketing
$
%
         
Start up/on-going activities $20,000 Cash from operations $8,000 40%
Marketing   SPA funding $12,000 60%
Sub total $20,000 Sub total $20,000 100%
         
Business support
$
Business support
$
%
         
Business management costs $2,000 Cash from operations $500 25%
    SPA funding $1,500 75%
Sub total $10,000 Sub total $10,000 100%
         
Total project costs
$
Total project financing
$
%
         
Capital & operating $68,000 Cash equity $10,200 11%
Marketing $20,000 Cash from operations $8,500 9%
Business support $2,000 Commercial financing $17,000 20%
    SPA $54,300 60%
         
Grand Total $90,000 Grand Total $90,000 100%


Table of Contents

EXECUTIVE SUMMARY

SECTION 1.0 INTRODUCTION

SECTIONS 2.0 MANAGEMENT PLAN
2.1 Ownership Structure
2.2 Management Profile

SECTION 3.0 INDUSTRY AND MARKET ASSESSMENT
3.1 Defining the Industry and Industry Classification
3.2 Overview of the Canadian Environment Industry
3.3 Evolving Market Drivers in the Environment Industry
3.4 Industry Challenges
3.5 Industry and Market Growth
3.6 Territorial Governments and Their Environmental Needs
3.7 Potential Clients
3.8 Competitive Environment

SECTION 4.0 MARKETING PLAN
4.1 Key Consulting Services
4.2 Pricing Strategies
4.3 Distribution Strategy
4.4 Promotional Strategy
4.5 Survival Strategy

SECTION 5.0 OPERATIONAL PLANS
5.1 General Operating Procedures
5.2 Human Resource
5.3 Insurance Requirements
5.4 Government Requirements
5.5 Working Capital Requirements
5.6 Office Requirements and Asset Acquisitions
5.7 Operational Workflow

SECTION 6.0 FINANCIAL PLAN
6.1 Costs and Financing
6.2 Financial Projections and Notes

FINANCIAL PROJECTIONS



SECTION 1.0 INTRODUCTION

Terra Engineering will provide its market with environmental and engineering consulting services. More specifically, Terra Engineering will provide the following services to its market:

  1. Site Specific Environmental Services
    1. Environmental Monitoring Services; Landfills, Groundwater monitoring for industrial activity;
    2. Environmental Site Assessments; (Property Transfer Assessments, Phase 1, Phase 2, and Supplemental);
    3. Environmental Remediation Design/Contracting; and
    4. Site Restoration.
  2. Environmental Assessment
    1. Canadian Environmental Assessment Act
    2. Ontario Environmental Assessment Act
  3. Strategic Planning
    1. Assist Territorial Governments and Communities to develop economic opportunities in the resource based industry, electricity and mining
  4. Project Design and Management
  5. Provide Technical Third Party Review Services
  6. Environmental Policy Development for Territorial Governments and Communities
  7. Liaison Services for the Mining Industry in establishing working relationships with Territorial Governments

Terra Engineering will be located in Harthsville, Ontario. The company will provide high quality technical and engineering services to its clients. Terra Engineering will target Territorial governments, organizations and businesses within Ontario. Terra Engineering will also provide services to non-Territorial companies in the area of environmental assessment and liaison services.

In the short term, Terra Engineering will seek Territorial government contracts. Those contracts will be serviced with the assistance of strategic alliances, both with other engineering companies as well as other Territorial professionals. This will give the company the flexibility it needs to successfully secure and complete projects with varying elements. Mr. Norm Johnson is currently employed within the Environmental Division of TAC Associates Limited and has developed a good working relationship that will continue upon his departure from the company. TAC Associates Limited is a highly reputable international engineering consulting firm which offers a broad range of technical services to an equally broad range of clients. TAC provides geo-science and environmental engineering services to a wide range of industries. TAC will assume a mentoring role for the company providing administrative as well as technical support when necessary.

This working relationship is intended to provide long term benefits to both Terra Engineering and TAC Associates Limited. Terra Engineering will gain technical and administrative support from a multi-national industrial firm. TAC will gain to future large scale projects within the Territorial government economy through the development of a repertoire of past experience on Territorial projects through this working relationship with Terra Engineering. Both, Terra Engineering and TAC Associates Limited will work together on projects where Territorial communities are strengthened and improved.

With Mr. Johnson's extensive experience within the environmental industry, he understands the environmental issues which exist for both mainstream and Territorial communities alike. Therefore, Mr. Johnson will establish Terra Engineering to alleviate these problems with viable solutions provided by qualified and experienced Territorial peoples.

To establish Terra Engineering, Mr. Johnson has identified a number of key capital, administrative and marketing investments that are required. They are:

•  Make a minimal investment into time and cost effective administrative equipment;

•  Make a substantial investment into specialized environmental equipment and instrumentation;

•  Make minimal investments into office space improvements;

•  Invest into industry specific computer software; and

•  Devise and implement a large and well targeted promotional campaign to establish a solid client base.

The remainder of this plan will identify the business plan for Terra Engineering. Included is a proposed management plan and analysis of the industry and Territorial marketplace. Also included is a proposed marketing plan, operational plan and detailed financial plan.

SECTION 2.0 MANAGEMENT PLAN

Section 2.1 Ownership Structure

Terra Engineering will be owned and operated as a for profit corporation with Mr. Norm Johnson being the sole shareholder, voter and board member. This management structure is deemed sufficient and best suits the company's needs. Terra Engineering will seek qualified employees as the company begins to succeed in gaining work. As Terra Engineering grows those employees deemed critical to providing technical services to clients will be offered stock options to maintain their continued service. Mr. Johnson will incorporate the company provincially at a cost of $360 in the spring of 2014.

Section 2.2 Management Profile

Mr. Johnson will draw upon his specialized education and experience to manage the overall operations and direction of the business to ensure its present and future success. For almost a decade, Mr. Johnson has invested time and money into becoming the environmental specialist he is today. Some of the key highlights of Mr. Johnson's employment history, education and relevant experience include:

•  Holds a Masters of Applied Science in Geological Engineering from the University of Minnesota;

•  Holds a Bachelor of Science and Biology from the University of Chicago;

•  Presently employed as a project manager/engineer within the environment division of TAC Associates Limited

•  Managing position with Tiller Environmental Institute as an environmental engineer;

•  Managing position with Barnes and Borland as chief mining geologist;

•  Experienced manager of numerous environmental site assessments;

•  Chief Mining engineer with Rogers Environmental;

•  Vast experience with various specialized environmental software;

•  Certificates in business administration and accounting;

•  Knowledgeable of the proper field techniques required for environmental investigations which includes: borehole installation, logging, soil sampling, quality assurance and quality control, groundwater monitoring well installation and sampling, test pit logging, rock core mapping and rock surficial mapping

•  Has extensive computer skills with expertise in industry based software packages;

•  Developed, reviewed and advised on term of reference and proposals for delineation and remediation of hydrocarbon contaminated sites

As identified, Mr. Johnson has accumulated a number of specialized skills, and managed projects which will assist him in the successful management of the business.

As the owner of the company, Mr. Johnson will be required to fulfill the following key duties and responsibilities:

•  Overall management of Terra Engineering;

•  Establish and maintain client relationships;

•  Maintain the alliances with TAC Associates Limited;

•  Provide accurate and timely quotes/proposals as well as sales presentations to potential clients;

•  Human resource management;

•  Project management and direction;

•  Oversee financial activities of the business;

•  Provide direction and review work completed by the sub-contractors;

•  Deliver and complete all services of the company;

•  Maintain all books;

•  Maintain the business' assets and buildings.

Another key component to the management team is the proposed alliances with TAC Associates Limited. This alliance will bring technical support, administrative systems and processes that the business needs to operate. Currently, TAC doesn't have a large Territorial government client base in Ontario. The services provided by TAC Associates are in line with the technical background of Mr. Johnson. Projects outside the technical realm of Terra Engineering will be sub-contracted to TAC Associates Limited.

All legal expertise will be provided by Ken Major, who is a commercial lawyer.

As the start-up of this company becomes more tangible, additional duties will arise. These duties can be time consuming and may affect the overall viability of the business. It is for these reasons that Mr. Johnson has hired McGraw Management Consulting to perform the following business support duties.

McGraw Management Consulting will ensure that all reporting requirements and accounting systems are completed and understood by Terra Engineering.

Terra Engineering will hire local and experienced chartered accountant to provide and prepare all financial reporting requirements of the company. This will include:

•  Provide updates to lending institutions and government agencies including monthly reports and filing;

•  Management of new marketing and administrative techniques; and

•  Formalization of accounting systems to provide the necessary annual revenue and expense reports.

The estimated cost for this specialized service is $2,000 per year. Once these systems are in place, Mr. Johnson will take over these key functions.

Terra Engineering will determine the administrative, technical and drafting needs on an on-going basis. When sufficient work exists to maintain salaried staff in either realm, the appropriate personnel will be hired.

Overall, the management team is well suited to undertake the initiatives detailed in this plan and will provide Terra Engineering with a solid base from which to grow. The proposed management plan has been carefully developed and will be maintained to ensure weaknesses are overcome and a solid foundation is in place for the company's immediate as well as future success.

SECTION 3.0 INDUSTRY & MARKET ASSESSMENT >>>

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