BUSINESS CASE ANALYSIS OF

WASTE RECYCLE
PRT 551: PROJECT MANAGEMENT RISK & RELIABILITY

, 2019

CHARLES DARWIN UNIVERSITY

Mathias Ojiah –s314293

Table of contents

Executive Summary.........................................................................................................................3

Overview..........................................................................................................................................3

Expected Benefits............................................................................................................................6

Costs................................................................................................................................................8

Major Risks....................................................................................................................................12

Timescale.......................................................................................................................................13

Conclusion.....................................................................................................................................16

Reference list and bibliography.....................................................................................................17

BUSINESS CASE ANALYSIS

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Executive Summary

In this study, it has been identified that a new project idea on recycling waste will be introduced.

Based on the traditional project development method, the project idea has been defined by

highlighting the five stages. Understanding thee benefits and the risk factors of the project plan,

the study has mentioned about different solutions. Based on the solutions it can be assumed that

if the project plan can be effectively implemented it will be beneficial for achieving its target.

Overview

a.     Purpose or objectives of this proposal

The purpose of this proposal is to shed light on the small entrepreneurial behavior. By

analyzing both the opportunities as well as risk factors, the new business idea will be developed
BUSINESS CASE ANALYSIS
in this analysis. Based on the study area chemical engineering, the new business on recycling

waste, will be introduced through this proposal. Analyzing the entrepreneurial risk in every

business, it cannot be denied that it is a complex factor in which not only the economic risk

arouses, but also social cultural aspects denote the strong impact on the entrepreneurial business

initiatives. The study will propose a business plan and understanding the expectation of the

community, justification against the project plan will be provided.

 To introduce a business on recycling waste for gaining maximum profit within coming 5

years

 To introduce strategic initiatives by critically analyzing the business idea

 To understand both strength and weakness of the business idea and its impact on

satisfying community expectations

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i.     Identify  the  problem to be solved or need to be filled.

By understanding the chemical engineering industry, it can be said that based on the

current challenges, it can be said that due to changing demands of the customers, business

environment has become highly competitive. In this situation, with the limited budget, it is tough

for the entrepreneur to develop new business idea. Due to the rapid environmental regulatory

changes in the chemical trade sectors, it has become challenging for the entrepreneurs to develop

new business effectively in this sector (Rana, Kalla and Csetenyi 2017). In order to understand

the situation, proper strategic initiative is required so that emerging problems can be solved.

ii. Definition of iterative and traditional method and those importance in project development.

Process for conducting the project.

Interactive development method is being considered as the process in which the lifecycle
BUSINESS CASE ANALYSIS
of the software development planning. In this process, the ultimate decision has been reached

based on the analytical operation cycle (Bendell 2017). Therefore, it can be said that the purpose

of the interactive process is to bring the desired result by discovering repetition of each activities.

It cannot be denied that in case of interactive method of project development, mathematical

implications are being highlighted. On the other hand, traditional project management is being

considered as the universal method in which estimating, planning, controlling and operating

activities are being performed by the entrepreneur. By continuing this it can be said that the

traditional project development is the important process of business in which five stages of

lifecycle is being followed by the project developers (Ramazani and Jergeas 2015). The five

stages of lifecycle cover initiating, planning, executing, controlling and closing.

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 In order to conduct this project, the traditional method of project development will be

followed by the entrepreneur. In the stage of initiation, the ultimate goal for gaining profitability

and developing a sustainable position in the market will be developed (Bendell 2017). The

planning stage will define the activities, which will be done while conducting the project. By

estimating the time duration for the process, necessary resources such as raw materials, human

resource and machinery equipment are being planned. In the planning process, the distribution

channel for the project will be critically analyzed. Documentation of the project plan is

necessary. At the stage of execution, legal formalities regarding the project development plan

will be done. In this stage, based on the efficiency of individuals and requirement for the

particular job, recruitment and selection process will be done. Information regarding the project

will be transferred with the individuals so that the project objectives can be clarified properly. In

monitoring stage, scope for change as well as different cost initiatives are being highlighted. In
BUSINESS CASE ANALYSIS
this stage, monitoring is being done so that the improvements can be properly analyzed. By

continuing this, it can be said that in order to monitor the growth of this business, activities of

individuals will be recorded, so that the required growth areas can be easily identified. In the last

stage of closing, final report with the design, budget and time will be developed. Based on the

issues, identified while conducting the research, proper recommendations will be provided.

b.     Describe how you believe is the best way to measure the success of the project

Not only the project development, but also it is important for the entrepreneur to identify

the best way for measuring the success of the project. The aim of project development is reach at

the end of project success. In order to analyze the project success, effective evaluation plan is

being introduced. As per my understanding, in the first stage it is very important to understand, if

the project has followed its planned time duration (Bendell 2017). Quality review is must for

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understanding the success rate of the project. Good time and quality review needed to be

collected from the customers. Based on the feedbacks from the customers, it can be easily

understood that if the project has brought any benefit or not. Stakeholder satisfaction is very

important for maintaining uninterrupted supply chain. As per my understanding, developing

strong relation with the stakeholders, it will be easier for the entrepreneur to understand their

needs and demands.

Expected Benefits

Based on the analysis, it can be assumed that the business project can play an influential

role in case of achieving its profit target. If the project plan can be effectively implemented, in

that case, it can be expected that within coming 5 years, the business revenue will reach $89

million. On the other hand, it will also play a beneficial role for bringing sustainability in the
BUSINESS CASE ANALYSIS
environment. By reducing amount of pollution in the environment, the project idea can increase

the community engagement towards sustainability process.

a.     Context and  analysis

Waste has huge negative impact on the natural environment. With the increasing

environmental pollution as well as water contamination, both the natural and anthropogenic

resources are getting affected (Ramazani and Jergeas 2015). In this situation, it has become

necessary for introducing an effective way so that the products can be effectively recycled. In

this situation thee idea of recycling the waste can be highly appreciated by the customers.

i.     Organizational strategy and community expectation

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In order to enter in the market, cost effective strategy will be adopted by the entrepreneur. As per

the business strategy, waste will be collected from individuals’ houses and by making useful

products, it will be send to the retail market through distribution channel. In order to gain

marketing advantage, social media marketing will be done so that target customers can be easily

identified. Basically the people who are aware of increasing environment pollution will be

targeted by the company (Ramazani and Jergeas 2015). Analyzing the strategy, it can be

assumed that by introducing the waste recycling idea, it will be easier for the company to grab

community attention.

ii.    SWOT analysis of the project

Strength
 It is an creative idea and can be
appreciated by the community
 Employees are efficient
BUSINESS CASE ANALYSIS
 The project plan can be achievable as
contribution of individuals raw
material can be easily collected
Opportunities
 Increasing concern regarding the
environmental sustainability is the
major opportunity for the project
 Government has introduced various
waste management regulations, that
can be beneficial for the project
development
Weakness
 Lack of public awareness regarding
the product recycling process
 Increasing numbers of competitors in
thee market
Threats
 Increasing taxation policies and
supply chain issue are major
weaknesses for the project
 Climate can create important barrier
for collecting the waste

iii. Quantitative Analysis

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 The ROI of Return on Investment technique is employed in order to analyze the viability

of the new business project. The projected ROI for the project will be compared with the

benchmark set for projects such as recycling in Australia.

Return on Investment (ROI) = Net Profit / Total Investment * 100

= $ 100000 / $ 50000 * 100

= 200 %

It is gathered from the above calculation that by making an investment of $ 50000, the new

business will be able to attain ROI of 200% over a 1 year span. From analyzing the benchmark

for the Australian apparel industry, it has been observed that the recycling generally have the

benchmark trends of attaining an average ROI of 150 to 220 % in their first year of business.

Considering same, the projected ROI is viable for this new business.
BUSINESS CASE ANALYSIS

Costs

a) Estimation of Costs

The estimated total investment for the new business project of recycling is considered to

be $ 50000. Other estimated costs related with successful business project launch are explained

below:

Sources of Capital
   

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 Owners' Investment (name & %
ownership)  
$
Mathias & 50% ownership 40,000

Other Investor 5,000

Other Investor 5,000

Other Investor -
$
Total Investment 50,000
   
Bank Loans  
$
Bank 1 2,500

Bank 2 2,500

Bank 3 -

Bank 4 -
$
BUSINESS CASE ANALYSIS
Total Bank Loans 5,000
   
Other Loans  
$
Source 1 40,000

Source 2 10,000
$
Total Other Loans 50,000

Summary Statement

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Sources of Capital  
$
Mathias' and Other Investments 40,000

Bank Loans 5,000

Other Loans 5,000

$
Total Source of Funds 50,000
   
Startup Expenses  
$
Bldgs / Real Estate 5,000

Leasehold Improvements 2,000

Capital Equipment 4,000

Location / Admin Expenses 4,000

Opening Inventory -
BUSINESS CASE ANALYSIS
Advertising / Promo Expenses 1,200

Other Expenses 1,000

$
Total Startup Expenses 117,200

Startup Expenses
   
Buildings / Real Estate  
$
Purchase 40,000

Construction 10,000

Remodeling -

Other 500
$
Total Buildings and R / E 50,500
   
Leasehold Improvements  

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 $
Installation of fixtures 5,500
$
Shop fit out 5,500
$
Computer equipments 5,500
$
Stationary and office supplies 5,500
$
Total L / H Improvements 22,000
   
Capital Equipment List  
$
Furniture 55,000
$
Equipment 1,500
$
Fixtures 1,500
$
Machinery 6,500
$
Other 2,500
$
BUSINESS CASE ANALYSIS
Total Capital Equipment 67,000
   
Location and Admin Expenses  
$
Rental -

Utility Deposits 5,500

Legal and Accounting Fees 4,500

Prepaid Insurance 55,000

Pre-opening Salaries 5,500

Other 5,500
$
Total Location and Admin Expenses 76,000
   
Opening Inventory  
$
Business assets 2,560

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 $
Jeans clothing materials 2,560
$
Supplies 2,560
$
Clothing raw materials 2,560
$
Manufacturing equipments 2,560
$
Total Inventory 12,800
   
Advertising and Promotional
Expenses  
$
Advertising 1,500
$
Signage 1,500
$
Printing 1,500
$
Travel & Entertainment 1,500

Other / Additional categories -

BUSINESS CASE ANALYSIS
$
Total Adv and Promo expenses 6,000
   
Payroll and payroll taxes  
$
Expense 1 25,000

Expense 2 25,000
$
Total Payroll and payroll taxes 50,000

b) Viability of Estimated Costs

The estimated costs for all the necessary activities or material needed within the new

projects is deemed to be viable for the reason that it is aligned with the financial feasibility of the

project to attain an estimated ROI of 200%. Certain considerations have also been taken into

account while cost estimation of the project to ensuring its viability to attain the project bet

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profit. These considerations includes variations on shipping and taxes for purchasing raw

materials, employer tax contributions in deciding the salaries and wages, rental or purchasing

sources along with instance and licensing of equipment in deciding equipment costs.

Additionally, the project implementation plan is reviewed to ensure operational efficiency can

impact the costs decided as estimated start-up expenses.

Major Risks

a.     Identify five (5) risks

 Health and safety risks are the major concerns for the waste recycling industry

 Transport can be the major barrier

 Recycling waste business require the huge investment

 Technological
BUSINESS barrier can be an important risk factor
CASE ANALYSIS

 Changing waste management regulations introduced by the government can create

challenges

b. Solution for managing the risk

 In order to manage the risk, social media campaigns can be introduced in which the

public awareness can be increased.

 In order to maintain the uninterrupted supply chain, efficient drivers needs to be

appointed.

 Proper waste management initiative needs to be introduced by following the regulatory

terms

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  Continuous innovation can help to deal with the technological barriers

 Large numbers of investors needs to be convinced towards contributing in the project   

Timescale

a) Estimated Timeframe for Project Completion

BUSINESS CASE ANALYSIS

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 Project Task Information

Estimated
Estimated Task Owner
Project Task Completion
Start Date
Date
       
       
Project Feasibility Study 1-Jun-19 3-Jun-19 Alex Singh
Cost Benefit Analysis 2-Jun-19 4-Jun-19 Jane and John
       
Project Definition 6-Jun-19 8-Jun-19 Jane Doe
Assign Resources 8-Jun-19 9-Jun-19 John Smith
Create Project Plan 9-Jun-19 16-Jun-19 Kim Lee
Create Communications Plan 15-Jun-19 17-Jun-19 Jane Doe
       
Project Kick-Off Meeting 19-Jun-19 19-Jun-19 Jane Doe
       
Create Phase 1 Plan and Definition 22-Jun-19 24-Jun-19 Jane Doe
Phase 1 Execution Kick-Off 24-Jun-19 24-Jun-19 Jane Doe
Communicate Phase 1 Progress 25-Jun-19 1-Jul-19 John Doe
Change Control Processes 1-Jul-19 2-Jul-19 Jane and John
Close Phase 1 2-Jul-19 3-Jul-19 Jane Doe
       
Create Phase 2 Plan and Definition 1-Jul-19 3-Jul-19 Chris Johnson
Phase 2 Execution Kick-Off 6-Jul-19 6-Jul-19 Chris Johnson
Communicate Phase 2 Progress 7-Jul-19 9-Jul-19 Chris Johnson
Change Control Processes 9-Jul-19 10-Jul-19 Chris Johnson
Close Phase 2 13-Jul-19 14-Jul-19 Jane Doe
       
Project Delivery 15-Jul-19 15-Jul-19 Production Team
Project Closure Meeting 16-Jul-19 16-Jul-19 Jane Doe

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Performance Appraisal 16-Jul-19 18-Jul-19 Jane Doe
Project Feedback Form 16-Jul-19 18-Jul-19 Kim Lee
Project Debrief Report 17-Jul-19 20-Jul-19 Jane Doe

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b) List and Description of Major Milestones

The major milestones identified from the timeline above includes feasibility study of the

project, assigning resources for the new business project implementation, communication

regarding project plan and project delivery. Feasibility study for new business project will be

carried out for analyzing consumers feedback on the offerings those will be provided and the

preferred services required by them. Communication plan will consider explaining individuals

related with the project to follow the stages of successful project launch. It will also consider

developing advertising communication channels for making consumers aware of the business

and the offerings. The project delivery stage will consider successful establishment of the

business.

Conclusion

In this study, it can be concluded that the business idea for recycling waste will be

beneficial in terms of bringing environmental sustainability. Understanding the strategic

innovation as well as business plan, it can be assumed, if the project plan can be effectively

implemented it will be beneficial for achieving its target.

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