SMART WASTE MANAGEMENT

Project Report

MGT 1022
LEAN START UP MANAGEMENT

Project Supervisor

Prof: SUDHAKARA PANDIAN

Submitted By

ADITHYA PRATHAP 17BEC0624

ADVAITH MENON 17BEC0694

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 CERTIFICATE

This is to certify that the project work entitled “SMART WASTE MANAGEMENT” that is being
submitted for the course of “Lean Start-up Management (MGT1022)” is a record of bonafide work
done under my supervision. The contents of the project work, in-full or in- parts, have neither been
taken from any other sources nor have been submitted for any other CAL course.

Place: Vellore
Date: 04/06/2020

Signature of Students:

ADITHYA PRATHAP 17BEC0624

ADVAITH MENON 17BEC0694

Signature of Faculty:

PROF. SUDHAKARA PANDIAN

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 TABLE OF CONTENTS

CHAPTER NO TITLE PAGE NO

1 EXCECUTIVE SUMMARY 5
1.1 Aim and Objective
1.2 Mission and Vision
1.3 Keys to Success
1.4 Start-up Costs
1.5 Company Ownership
1.6 Products and Services
1.7 Market
1.8 Strategy
1.9 Management
1.10 Financials
1.11 Investor Considerations
2 COMPANY SUMMARY 9
2.1 Start-up Summary
2.2 Start-up Funding
3 PRODUCT AND SERVICES 13
3.1 Business Model
3.1.1 Competitive Landscape
4 MARKET ANALYSIS SUMMARY 16
4.1 Market Segmentation
4.2 Target Market Segment Strategy
5 STRATEGY AND IMPLIMENTATION SUMMARY 18
5.1 SWOT Analysis
5.1.1 Strengths
5.1.2 Weaknesses
5.1.3 Opportunities
5.1.4 Threats
5.2 Competitive Edge

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 5.3 Sales Strategy
5.3.1 Sales Forecast
5.4 Milestones
5.5 Marketing Strategy
5.6 Pricing Strategy
5.7 Location and Facilities
6 MANAGEMENT SUMMARY 22
6.1 Personal Plan
7 FINANCIAL PLAN 25
7.1 Break-Even Analysis
7.2 Projected Profit and Loss
7.3 Projected Cash Flow
7.4 Projected Balance Sheet
7.5 Business Ratio
7.6 Long term plan
7.7 Important Assumptions
7.7.1 Risks
7.7.2 Entry Strategy
7.7.3 Investor Interest
7.7.4 Exit Strategy

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1.0 EXECUTIVE SUMMARY

1.1 AIM AND OBJECTIVES


The main objective is to create a smart waste management system through which we can provide
an efficient solution to the problem of waste accumulation and over flooding of garbage bins.
The project is aimed to generate alerts and assist the waste dumping authorities for regular and
proper waste collection from garbage bins through our proposed technological product.
Our project also proposes a trash bin locator which could help the garbage collectors by
providing efficient routes to the garbage collection sites. This functionality can fulfill our objective to
reduce fuel costs and prevent time wastage.
Our aim is also to create a new start up business by providing a unique and smart garbage
collection system. Our objective is to utilize this unique garbage collection mechanism for creating a
service- based business.


1.2 MISSION AND VISION

There are certain basic needs for every consumer irrespective of his/her nationality and lifestyle. We
specifically wanted to focus on those needs as it would provide large amount of consumers to our
product or service. In India, waste management is a major issue. Our country is ranked 23rd in global
pollution rankings. Among the top 15 polluted cities in the world, 14 are in India. These are the facts
that drew our attention towards this problem.
Our mission is to make India clean again by efficient management of waste with the use of
technology. We tried to find out the existing waste management solutions currently being
implemented, but we found that manual waste collection without any technological aid is the only
way of garbage collection in our country. Therefore, we decided to take inefficient garbage collection
and urgent need for cleanliness as our opportunity to build a product and service to address this issue.

1.3 KEYS TO SUCCESS

We have designed our product such that it will satisfy the current immediate needs of the
customer with ease and efficiency. It will make the waste management process much easier. 
Our products our built with materials having excellent quality which makes them durable. Each
and every product goes through a testing and development process which makes the chance for error
minimal.
We have assigned well educated people to handle our finances with perfection. Money is an
important part of any business and hence we have taken extensive care to see that there is no fishy
business as far as our finances are concerned.
We have laid out our marketing strategies keeping in mind the complications and ideologies of
our customers. This will help us to gain more and more customers and hence our company will
grow.

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
1.4 START-UP COSTS

The initial expenditure includes the cost of commodities and the raw materials used by the company
for the product development. The raw materials can either be purchased from outside or
manufactured in the house. The estimated hardware device component cost is Rs. 2,510.
Considering the set – up costs required for assembly machinery, hardware tools, infrastructural
needs, device hardware component cost, we have estimated our intial expenditure to be around Rs.
4,70,000 per month.

The running cost basically includes the labour cost and the salary of all the employees of the
organisation. We have come up with the salary analysis for the different employee posts for a month
assuming a total production of 150 models per month. According to our evaluation, the total salary
cost sums up to Rs. 10,00,000 per month.

Maintenance Expenses includes all the costs for the maintaining all the products and keep them in a
proper working mode for 24x7 hours. This process may include time to time servicing of the all the
products as well as the software and keep them up to date. It may also include the dummies and the
extra products for the emergency. We have estimated our maintenance cost to be around Rs. 400,000
per month.

Therefore, the total start- up cost rounds up to around Rs. 18,70,000


1.5 COMPANY OWNERSHIP

We will be operating our company under the Limited Liability Company (LLC) business structure. It
is a business structure that can combine the pass-through taxation of a partnership or sole
proprietorship with the limited liability of a corporation. We have chosen the LLC structure since it
provides a lot of flexibility to us, the business owners.
What sets the corporation apart from all other types of businesses is that our corporation will be an
independent legal and tax entity, separate from the people who own, control and manage it. Because
of this separate status, we won't use our personal tax returns to pay tax on corporate profits - our
corporation itself will pay these taxes. We will pay personal income tax only on money we draw
from the corporation in the form of salaries, bonuses, and the like. Like corporations, LLCs provide
limited personal liability for business debts and claims. But when it comes to taxes, LLCs are more
like partnerships: we, as the owners of an LLC will pay taxes on our shares of the business income
based on our personal tax returns.

1.6 PRODUCTS AND SERVICES

The name of our company is “Garb-Tech” and we have designed a „Smart Garbage Collection
System‟ which has the ability to alert the dumping trucks about the over flooding garbage bins. We
have created a technologically sound garbage collection system by utilising technological concepts
involving networking and IoT (Internet of Things) and aim to use this proposed technological
product for creating a service-providing business. Our proposed product addresses the problem of
waste management especially in countries like India where a lot of waste is generated daily. Our
project is proposed to provide an efficient way of avoiding over flooding of garbage bins. 6

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Apart from the product, our proposed business also provides waste collection service which will
enable us to operate as an independent waste management company. The provision of service would
include garbage collection service, garbage dumping service and product maintenance service. Our
services are also expected to generate revenue for the business by selling collected garbage to
recycling plants.

1.7 MARKET

Our primary targeted customer is the government itself. The government faces innumerable problems
while collecting the garbage off the streets. Despite significant development in social, economic and
environmental areas, solid waste management systems in India have remained relatively unchanged.
With the help of our idea, the government will be able to collect garbage and trash efficiently as well
as effectively. There will be less pollution created and the streets will be cleaner too.
Other potential markets can include large multinational companies having their own independent
garbage disposal systems and universities (like VIT and IITs). However we will need to start from a
smaller scale, i.e. the local municipalities and other such community Care-taking authorities. We
shall be targeting the aforementioned organisations of densely populated urban areas such as Smart
cities especially those that employ smart housing systems. Such customers are well versed with using
the related gadgets and would readily adapt to the new system of disposal.

1.8 STRATEGY

The strategy we will be following is plain and simple. Initially we will carry out Just-In- Time
production process. Just in Time (JIT), as the name suggests, is a management philosophy that calls
for the production of what the customer wants, when they want it, in the quantities requested, where
they want it, without it being delayed in inventory.
Since at first we‟ll be just starting out our business, we‟ll take this approach so since it is cost
effective and we can deliver and produce only the amount which has been ordered. This will reduce
the amount of production and side by side, the wastage generated and also will prevent the buying of
excessive cargo and raw materials.
Once our business takes off and the local municipalities approve of it, we can go for mass
production.
As we have discussed earlier, once we are set, we will be targeting the government. Hence it is
comparatively much less risky and efficient as well to go for mass production since the orders will
not be small after the government gives us the contract.

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1.9 MANAGEMENT

The above figure depicts our Employee hierarchy. Our management is expected to establish a
cooperative environment by efficient resource usage, profitable operation and working under the
limits of laws and regulation, thus maintaining the discipline in operations. Team work and discipline
are the two main pillars of our management philosophy. Our business is expected to adapt and
optimize its operations in changing business environment due to inclusion of competitors and market
saturation situations. For successful execution of our management strategy, the CEO is expected to
possess a vivid balance between creativity and discipline in management. Therefore selection of
CEO for the company is also an important factor over which our success depends.

1.10 FINANCIALS

According to our predictive analysis, our business is expected to maintain a profitable position over
the next two years. Through break – even analysis, we have estimated that our company is expected
to start generate profit after the sale of around 1500 units.
Considering the high requirement of garbage bins by government, we are expected to sell 1500 units
within two months after which our business is expected to generate profit.

1.11 INVESTOR CONSIDERATIONS

The aim of investing is to make money, but sometimes investments lose value. The principal
considerations for planning an investment strategy are ways to reduce the risk that your investment
portfolio will not perform as you expected. We have looked at our financial situation, the types of
investments available, and the historical performance of various kinds of investment. We have then
chosen investments that combine key characteristics to deliver the performance we want at a risk we
will be able to tolerate.

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We have taken certain pointers like the income, growth, liquidity, risk and taxes into consideration.
We will also be considering options of stocks and bond investments.

2.0 COMPANY SUMMARY

2.1 START –UP SUMMARY

About the company

The Company GARBTECH shall be a product oriented start up that aims to create a smart waste
management system through which we can provide an efficient solution to the problem of waste
accumulation and over flooding of garbage bins. The project is aimed to generate alerts and assist the
waste dumping authorities for regular and proper waste collection from garbage bins through our
proposed technological product with the target locations being urban areas with dense population as
well as rural areas with high population.

Competitors

Our biggest competitor will be the government or some private agencies who collect waste and lead
to their disposal. There is a company called Bigbelly which does similar kind of work which we do
but their dustbin is too costly which is not feasible to be installed in India.

Business type

We have proposed a product based business idea with the functionality of providing services to the
garbage collection authorities. Our Proposed business is unique as there is no available product
implementation as well as any service oriented to it, so in an environment free of any competition,
we can undergo product development and further use the product to create a garbage collection
service as a business.

Operating plan

Operating planning plays a vital role in determining the profits of a company. We propose a
systematic and regular control over the production and supply of our product by implementing
various techniques.

Supply chain

We plan to employ rag pickers to collect the disposed plastics from various parts of the city as we
utilise it for recycling followed by remoulding into a garbage can. Also the various electronic
components will be imported from a specialised vendor on a contract basis.

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Quality control

We will employ an on board inspector who will ensure the quality of the workflow and the final
assembly of the product. We also plan to implement a system to receive regular updates from the
clients on the feedback of our product.

Production process

The operation and production in our plant is determined by the demand from the market. Our
assembly unit will function as and when we receive a contract from a private or a government client.

Service Process

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Inventory

The quantity of all the materials we use will be kept track of in a manual process of logging it after
each product is made or moved from the plant. Our inventory items include: Garbage Detection
Device, Garbage Bins and Garbage Collection Trucks.
Expansion

Our expansion policy also includes opening up several distribution channels for selling the product.
E-commerce websites and door – to – door sales are our next targeted product distribution channels
for the expansion of product into every nook and corner. However, we will also take care of intra-
channel and inter-channel conflicts in our distribution system.
New product scope

Garbage segregation mechanism can be built in the dustbin itself in which with the help of image
processing the waste can be automatically segregated into biodegradable and non- biodegradable.
New service scope

In future we can take care of the disposal part of the waste management as well, like we can tend the
tender of the waste disposal and recycling
.
2.2 START –UP FUNDING

Initial Expenditure: It includes the cost of commodities and the raw materials used by the company
for the product development. The raw materials can either be purchased from outside or
manufactured in the house. The estimated cost per product will be as below:-

Total Hardware device component cost = Rs. 2,510

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The estimated initial expenditure for our product will be Rs.4,70,000 per month based on the
required assembly machinery, hardware tools, infrastructural needs, device hardware component
cost, etc.

Running Cost: It basically includes the labour cost and the salary of all the employees of the
organisation. We have come up with the salary analysis for the differentemployee posts for a month
assuming a total production of 150 models per month.

Sr. No. Employee Post Number Required Salary(in Rs. Per

month) per person
1. CEO 1 150000
2. PRODUCT 1 90000
DEVELOPMENT
HEAD
3. SERVICE 1 90000
MANAGEMENT
HEAD
4. MANUFACTURIN 1 90000
G HEAD
5. FINANCIAL 1 90000
HEAD
6. PRODUCT 10 4500
ASSEMBLERS
7. HARDWARE 8 5000
DEVELOPERS
8. RESEARCHERS 2 10000
9. DATA 3 12500
ANALYSTS
10. SOFTWARE 2 20000
DEVELOPERS
11. PRODUCT 4 10000
DESIGNERS
12. DRIVERS 30 1500
13. MAINTENANCE 5 8000
STAFF
14. FINANCIAL 2 20000
ADVISORS
15. HARDWARE 4 10000
MAINTENANCE
STAFF
16. SOFTWARE 4 10000
MAINTENANCE
STAFF
17. STOCK 4 10000
MANAGEMENT
STAFF

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3.0 PRODUCT AND SERVICES

The proposed business provides an IOT based device to detect the overfilled garbage bins and alert
the garbage collectors when overfilled. The product also allows the business to adapt to service based
model and create an independent garbage management system.

3.0.1 Smart Dustbin

• Once the garbage reaches the threshold level ultrasonic sensor will trigger the WiFi module
which will continuously alert the required authority until the garbage in the dustbin is
cleaned.

3.0.2 Algorithm for waste collection

• Assumptions
• (1)Each demand node is only serviced by one vehicle
• (2)The vehicles will start from the depot, go to the disposal site when filled, and start again if
there is time.
• (3)The carrying capacity for each vehicle is limited.
• (4)The vehicles will return to the depot at the end of their trip.
• (5)Each vehicle may have multiple trips, first one from the depot to the disposal site, and
their other trips will start from the disposal site and again, end at the disposal site.
• (6)The time and cost of a route is the same for all vehicles.

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3.1 BUSINESS MODEL

The proposed business provides both product - based as well as service - based business model.
Product – Based Business Model: In Product based business model, the main source of revenue is the
product, which is a garbage level detection device. This business model comprises of following
steps:-

1. Manufacture of the product. The product production process is shown in the figure below:-

2. Identifying the garbage bins and the installation points where the device can be installed.
3. Selling device to government and households for use.
Service – Based Model: In service based model, the main source of revenue is the garbage, which is
collected from the garbage bins having our device installed in it. This business model comprises of
following steps:-
1. Collect Garbage from Garbage bins.
2. Sell the garbage to the recycling plants.
3. Buy the recycled plastic to make garbage bins for the product.

3.1.1 COMPETITIVE LANDSCAPE

Our biggest competitor will be the government or some private agencies who collect waste and lead
to their disposal. There is a company called Bigbelly which does similar kind of work which we do
but their dustbin is too costly which is not feasible to be installed in India.
Bigbelly was originally a solar powered, rubbish-compacting bin, manufactured by U.S. Bigbelly
Solar is for use in public spaces such as parks, beaches, amusement parks, universities, retail
properties, grocery industry and food service operators. The bin wasdesigned and originally
manufactured in Needham, Massachusetts by Seahorse Power, a company set up in 2003 with the
aim of reducing fossil fuel consumption. Due to the bin's commercial success, Seahorse Power
changed its name to BigBelly Solar.

15
Although solar power is still an important feature, the company has since created self- powered
stations for use where sun may not be available such as under a convenience store's dispenser canopy
and AC powered stations for applications such as corporate cafeterias. We do not require this
facilities in India currently so we can easily compete with this company if they enter India with their
product. There are some major reasons why we will emerge as the supreme company and the only
company to deliver this product and related services. Some of them are mentioned below:
 Not only we are providing the product but also the service associated with it which will be in
easy public engagement of the product.
 The product can be installed on the existing infrastructure without any additional cost.
 It is cheaper and durable compared to its competitor products
 It tackles the most difficult problem of waste management.

4.0 MARKET ANALYSIS SUMMARY

The number of garbage bins installed is increasing as per the “SwacchtaAbhiyaan” policy. Garbage
bins are already installed in major cities like Mumbai and New Delhi. The parks and other public
places often have private or public dustbins.

Our potential market is all those areas where the garbage bins are installed or yet to be installed.
Thus, our market is quite large and every person who uses garbage bin is our potential customer. In
the current state of our nation, the people living in urban areas have more usage of garbage bins than
people living in rural areas but due to nationwide “SwacchBharataAbhiyaan”, the number of users of
garbage bins is expected to increase in the coming years.

We estimate that about 60% of our total units would be purchased by households and 40% by the
private colony owners, NGOs, local businesses and government for installation in public places. This
observation of the market by us would decide the marketing as well as the pricing strategy for our
product and services.

4.1 MARKET SEGMENTATION

We have focussed on identifying market segments for our product by the application of Demographic
Segmentation and Geographic Segmentation.

As per the above description, the main market segments are:-

(I) Households (Individuals).
(II) Private Colonies and local businesses.
(III) Government bodies and organisations.
(IV) Non – Government Organisations

Households are estimated to comprise around 60% of our total targeted market. Private colonies and
local business are estimated to comprise around 10% of our total targeted market. Government
bodies and organisations are expected to cover 25% of our total targeted market and NGOs around
5%.

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Based on the figures extracted from market analysis, we have represented our market segment and
their shares in our total targeted market in the form of a pie chart shown in the figure given below

4.2 TARGET MARKET SEGMENT STRATEGY

Our business will primarily focus on the major market segments that are identified above. We have
focussed on Geographic and Demographic segmentation strategy of our market to extract the best
suitable market segments for our product and services.

The prime market segment for our product comprises of individuals or households where our device
could be installed in the garage bins. Therefore, the demand for our product is directly proportional
to the number of individuals in an area. Thus, highly populated cities like Kanpur, Kolkata, etc. are
our targeted markets.

Government is our second most promising market segment. Based on the recent policies of
government regarding installation of garbage bins on roadside, we estimate that at each five hundred
meters interval, a dustbin needs to be deployed for less travelled roads and at each two hundred
meters interval, a dustbin needs to be deployed for highly travelled and busy roads. Based on the
number of less travelled and busy roads, the government becomes our second largest market
segment.

TARGET MARKET SHARE: Due to the absence of any sort of competition, we expected 100%
market share for our product in the identified market segments given absolute acceptance level of
public. But we also consider the areas, where we are expected to provide services to some market
segments only. In such case, our market share would be decreased due to competition by traditional
garbage collection system. In this case, we estimate to capture around 50% of the market share in
those segments due to uniqueness of our product.

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5.0 STRATEGY AND IMPLEMENTATION SUMMARY

5.1 SWOT ANALYSIS

It is one of the most famous tools for strategic planning. This tool identifies the “STRENGTH”,
“WEAKNESS”, “OPPORTUNITY” and “THREATS” of the business in current scenario. Based on
the SWOT analysis on our business, we have identified strengths, weakness, opportunities and
threats for our business.

5.1.1 STRENGTHS

The main strength in our business is that our proposed product is unique in its application.
Existence of a large market for our product is another major strength of our product. Our
potential markets are households and government which are surely available in our country.
Absence of any significant competitors serves as strength to our product. The only competitor is
the existent non – technical garbage collection system which is expected to be weak due to lack of
proper administration and technology utilisation.

5.1.2 WEAKNESSES

The only observed weakness of our business is that there is no traditional buyer for our product
as the product is first in its category (technology based garbage collection). The potential buyers of
our product are individuals and government which are needed to be made aware of the technical
advantage of this product.

5.1.3 OPPORTUNITIES

Our business has several opportunities to become an early bloomer in the market. The most
certain opportunity is to grasp government‟s attention regarding the product‟s ability to avoid land
pollution. Being the first to present this idea would help us to become a trusted partner of the
government.
The second opportunity is to gain financial aid through subsidised loans and taxes from the
government by illustrating the environmental advantages of our product.

5.1.4 THREATS

It is obvious that a unique idea based venture attracts many competitors to enter the market with
the products providing same functionalities. So, new competitors are a threat to our existing product.
Rejection of service is another threat to our business. In case of unawareness about the product
and related services and low quality services, the customers lose trust on the product and company.
So, it is also a threat to our business.

5.2 COMPETITIVE EDGE

Our biggest competitor will be the government or some private agencies who collect waste and lead
to their disposal. There is a company called Bigbelly which does similar kind of work which we do
but their dustbin is too costly which is not feasible to be installed in India.

18
Bigbelly was originally a solar powered, rubbish-compacting bin, manufactured by U.S. Bigbelly
Solar is for use in public spaces such as parks, beaches, amusement parks, universities, retail
properties, grocery industry and food service operators. The bin was designed and originally
manufactured in Needham, Massachusetts by Seahorse Power, a company set up in 2003 with the
aim of reducing fossil fuel consumption. Due to the bin's commercial success, Seahorse Power
changed its name to BigBelly Solar. lthough solar power is still an important feature, the company
has since created self- powered stations for use where sun may not be available such as under a
convenience store's dispenser canopy and AC powered stations for applications such as corporate
cafeterias. We do not require this facilities in India currently so we can easily compete with this
company if they enter India with their product. There are some major reasons why we will emerge as
the supreme company and the only company to deliver this product and related services. Some of
them are mentioned below:
 Not only we are providing the product but also the service associated with it which will be in
easy public engagement of the product.
 The product can be installed on the existing infrastructure without any additional cost.
 It is cheaper and durable compared to its competitor products
 It tackles the most difficult problem of waste management.

5.3 SALES STRATEGY

Many kinds of strategies can be followed to attract customers but the secret always lies in finding the
correct strategy.We will adopt the following methods for marketing our product so that our zeal
reaches to the correct person and he correct organisation.Some of our methods will be as follows:
1. Blog - We will have a blog about our product and service so that we gain a lot of popularity
among the people as nowadays people read blogs a lot and their thinking get based on it .
2. SEO-There‟s no use in having a blog with lots of interesting content for our audience if our
posts are not accessed. This is why we need to apply SEO (Search Engine Optimization)
techniques in our posts, so that your page appears in the top places of search engines such as
Google.
3. Email-Marketing-Creating a newsletter, for example, and send important information via
email to people who leave their email addresses on your page. Also send rich materials, such
as more elaborate e-books.This is a way of maintaining communication with the potential
customers via email and also to keep them engaged with your brand.
4. Video-channel-Having a video channel in youtube or similar kind of websites will help us
gain popularity among the masses and once our videos get starting shared on social networks
we will definitely reach the government officials with our full proof plan.
5. Events-We will conduct events in and around the country demonstrating our product to
common people so that before the launch itself everyone is very much familiar about the
product . We will actually create a craze about our product among the masses.
6. Partnerships and Promotions-We will try partnering with big industrialists so that they
promote our product and will actively participate in their social campaigns related to
environmental issues.

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5.3.1 SALES FORECAST

In the beginning we expect our sales to be a bit slow, because we will have released a product that is
unprecedented in the Indian market. We expect that it will take time for people to get acquainted with
our product. Taking all this into consideration we expect our sales for a year to be as follows. 17
For the first quarter the sales we expect to sell 5000 units. During this time we expect to obtain a
government or private contract which will let us mass produce our product and hence will help our
sales grow exponentially. In the second quarter we expect to sell at least 20000 products because we
will have theoretically obtained a contract to place our products in a city. Assuming the success of
our product we can now put up sales and shipping to various cities and thus we expect the sales in the
third quarter to sell 50000 units. In the fourth quarter, we expect to sell 1 lakh units due to
widespread use of our product.

5.4 MILESTONES

Potential clients can include large multinational companies having their own independent
garbage disposal systems and universities (like VIT and IITs). However we will need to start from a
smaller scale, i.e. the local municipalities and other such community Caretaking authorities.
We shall be targeting the aforementioned organisations of densely populated urban areas such as
Smart cities especially those that employ smart housing systems. Such customers are well versed
with using the related gadgets and would readily adapt to the new system of disposal.
Once we have established our product in these smaller areas we can focus on making our
product large scale by targetting cities where garbage disposal is a problem.
Once our product has been in the market for some, we can talk to government agencies to obtain
contracts for our products and they can be installed in the areas that are most affected.
The acceptance of the product by the government and public is the major milestone that our
company needs to achieve.

5.5 MARKETING STRATEGY

The marketing strategy can be prepared on the basis of the observed Strengths, Weaknesses,
Opportunities and Threats from SWOT analysis. From the observed data, we can draw following
inferences regarding marketing strategy:-
1) There is need to capture government‟s attention to gain financial help and promotion to prevent
economical losses in early phase of business.
2) Due to absence of competitors, the “SKIMMING PRICING” can be done in which the price of a
new product is set high to establish itself as a premium or high – quality product.
3) As this product can control land pollution, promotional advertisement can be used by linking the
product to “SWACCH BAHARAT ABHIYAN” in order to capture government‟s attention for aid
and promotion.

In order to prepare a marketing strategy with respect to our product and market, the Ansoff‟s
Product/Market Matrix can be used.

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ANSOFF’S PRODUCT/MARKET MATRIX:-

This tool helps guides us the path that should be taken by the company in the given situation of
product and market as “NEW” or “PRESENT”.

Our product is “NEW” and the market is already “PRESENT” (our potential market is public using
garbage bins), therefore, we should opt for “PRODUCT DEVELOPMENT” as our marketing
strategy.
In product development, the market share of the product can be high as the product is unique and
market for the product is already present. Therefore, the whole concentration should be on
developing high quality product and providing informational promotion to make potential users
accustomed to the product use.
Our product is doesn’t require any change in use of dustbin by public, therefore, there is huge chance
of product being successful.

5.6 PRICING STRATEGY

Due to absence of competitors we can establish the price in the market. Therefore the most
favourable pricing strategy would be “skimming pricing” where we will sell our products initially at
a high profit margin in order to stage our product as a quality product in the market. This would help
us to break- even quite earlier and establish company reputation as a high quality company. This
would also help us to fight competition by using our established image in the market.

The cost of production of a single unit is Rs.2510. We plan to sell at a price of Rs.3900. At this price
we need to sell 1500 products before we can start making a profit according to our break even
analysis. After 1500 units we will start to make a profit of Rs.1390 per product sold.

5.7 SOURCING STRATEGY

For our product, we need a strong sourcing strategy as our device components are electronic and thus
they need to reliable and resistant to changing environmental conditions. Secondly, our services also
require some resources which need to be acquired at low rate and reliable source. We have identified

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 our potential resource providers based on their reliability and price comparisons. The required
resources and their favourable sources are as follows:-
(i) Electronic equipment:-
 Ultrasonic Sensor - from Amazon
 Arduino - from Amazon
 Wires – from Havells
(ii) Waterproofing material – From pedilite company
(iii) Fuel – In the form of petroleum, diesel or most preferably CNG.
(iv) Plastic – From recycling plants

5.8 LOCATION AND FACILITIES

As our product is a smart garbage bin which is placed in public places, our target locations are
public places with dense population like parks, malls, theatres, etc.
• Therefore, our target location can be urban areas with dense population as well as rural areas with
high population.
• For product manufacture perspective, the outer areas of the city are most favourable for setting
product manufacturing plant. Our raw materials are technological hardware components which can
be easily imported to the industry.
Location for the factory should be near the outskirts with a low population where the noise, waste
generated will affect as few people as possible.

6.0 MANAGEMENT SUMMARY

As our proposed business structure has the capability to product based as well as service based, we
need a management model having high discipline and concentrated supervision on company‟s
activities. Therefore, we have decided to adopt tall (centralised) organisation structure.
To implement product development and provide service, we need a skilled team of employees to
perform the tasks involved in the business.

6.1 PERSONNEL PLAN

The number of employees required along with their qualification and role in the company is given as
follows:-

Sl. No. Employee post Qualification Number required

1 CEO EMBA with 10 years 1
experience
2 PRODUCT Sales and Marketing 1
DEVELOPMENT MBA with 3 years
HEAD plus experience
3 SERVICE Bachelor Degree in 1
MANAGEMENT Management

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 HEAD
4 MANUFACTURING Graduate with two 1
HEAD plus years experience
5 FINANCIAL HEAD MS in Economics / 1
MBA
6 PRODUCT Bachelor in 10
ASSEMBLERS Mechanical
Engineering /
Industrial Engineering
7 HARDWARE Bachelor in 8
DEVELOPERS Engineering
8 RESEARCHERS Phd in Data Science 2
with 0 + experience
9 DATA ANALYSTS M.tech with 3
specialisation in Data
Science
10 SOFTWARE Bachelor Degree in 2
DEVELOPERS Computer Science /
Information
Technology
11 PRODUCT Bachelor Degree in 4
DESIGNERS Design Engineering
12 DRIVERS Vocational Driver 30
Training
13 MAINTENANCE Graduate 5
STAFF
14 FINANCIAL Bachelor Degree in 2
ADVISORS Finance
15 HARDWARE Bachelors in 4
MAINTENANCE Mechanical
STAFF Engineering
16 SOFTWARE Bachelor in Software 4
MAINTENANCE Engineering
STAFF

17 STOCK Bachelors in 4
MANAGEMENT Management
STAFF

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The data given above describes about the empolyees required in order to create a fullt operational
business. The roles are divided to avoid any ambiguity and work load on the employees. The
organisational hierarchy under which the employees are expected to work is given below:-

LEVEL 1: HIGHEST LEVEL:

CEO – Supervise whole business.

LEVEL 2: HEAD OF DIFFERENT DEPARTMENTS:

PRODUCT DEVELOPMENT HEAD- To supervise product development and scope for
improvements.
SERVICE MANAGEMENT HEAD- To supervise garbage collection service related activities
like garbage disposal, transportation, etc.
MANUFACTURING HEAD– To supervise manufacturing process and number of products
produced and stock management.
FINANCIAL HEAD- To look over the revenues and financial state of the business.

LEVEL 3: EMPLOYEES WORKING IN PARTICULAR DEPARTMENT UNDER DEPARTMENT

HEADS:
PRODUCT ASSEMBLERS– Responsible for packaging of product.

HARDWARE DEVELOPERS– Produce hardware from raw hardware components.

RESEARCHERS– To conduct researches for product improvements.

SOFTWARE DEVELOPERS- To develop efficient softwares for proper functioning of the

system.

PRODUCT DESIGNERS– To develop mare attractive and efficient hardware designs.

DRIVERS - To collect and dispose waste via garbage trucks.

MAINTENANCE STAFF– To supervise maintenance activities.

FINANCIAL ADVISORS- - To handle financial records.

LEVEL 4: SUBORDINATES OF LEVEL 3 EMPLOYEES. (FIELD WORKERS AND LABOURS):

STOCK MANAGEMENT STAFF– To check and manage the amount of inventory.

HARDWARE MAINTENANCE STAFF– To rectify hardware failures like garbage bin damage,
etc.

SOFTWARE MAINTENANCE STAFF- To rectify software failures like data corruption, data
security, etc.

DATA ANALYST- To collect software data like sensor data and provide it to researchers for
product development researches.

STOCK MANAGEMENT STAFF – To check and manage the amount of inventory.

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ROLES OF EMPLOYEES BASED ON HIERARCHY LEVEL:-
LEVEL 1- Supervision of whole business.
LEVEL 2- Supervision and management of different departments (PRODUCT, SERVICE,
MANUFACTURING and FINANCIAL).
LEVEL3- Perform various department based activities and work under department heads.
LEVEL 4- Perform field work like driving, hardware error detection, repair, installation, etc.

7.0 FINANCIAL PLAN

7.1 BREAK EVEN ANALYSIS

Break- even analysis is an effective evaluation technique for new product.Through this analysis, we
calculate the number of products to be sold to break even, i.e, reach no profit – no loss state.
To identify the break –even point, we need to know our total incurred cost and total revenue
generated in a fixed amount of time.

Let n=number of products sold.

TOTAL COST =FIXED COST + (VARIABLE COST)*n
Where,
FIXED COST= Rs. 56,40,000 ( estimated as initial expenditure above)
VARIABLE COST – This is the money spent in activitives which occur without any prior planning
and add to the product value. In our product, the product replacement, product repair costs and
frequent garbage collection can be considered as variable cost. We have estimated our variable cost
to be Rs. 200 per product. This estimation has been done considering the fuel requirements and
money required for repairs.

REVENUE= SELLING PRICE*n

Proposed Selling Price = Rs. 3900
At break – even point TOTAL COST = REVENUE

So, n = FIXED COST/(SELLING PRICE – VARIABLE COST) n = 5640000/(3900-200)

n = 1500

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Therefore, through break even analysis, we have estimated that around 1500 units of our product are
needed to cover up the initial investment on product manufacture.
After 1500th unit, our business is expected to generate estimated profit of Rs. 1,390 per item
installation. This is the main result that has been extracted by implementing break even analysis on
out product.

7.2 PROJECTED PROFIT AND LOSS

We expect to be profitable in the first year of operations, with profits increasing over the next four
years, as we establish and increase our customer base.

7.3 PROJECTED CASH FLOW

Many profitable companies go bankrupt because of cash flow deficiencies. That is why our main
concern will be to have sufficient cash on hand to meet our payment obligations, and be prepared for
unexpected needs of cash. Our conservative projections indicate that our business is able to generate
positive cash flows and sufficient cash reserves.
In addition to normal cash inflows and outflows, we will focus on establishing sufficient cash
reserves for contingencies. That includes a possible line of credit with our bank that could be used in
slow sales periods as well. This is a good way to control the cash flow risk.
In addition, excess cash, as projected, should not remain idle, especially during periods of high
interest rates. Management will consider investing idle funds in time deposits or certificates of
deposit at banks, in government securities such as U.S. Treasury notes, or in other trading securities
(cash equivalents).

7.4 PROJECTED BALANCE SHEET

(figures represented in lakhs(inr))

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7.5 BUSINESS RATIOS

Based on the projected balance sheet, we have product an estimate for our various business ratios.
Liquidity Ratios: It indicates about the debt- paying ability, resource collection ability and inventory sales
ability of the company. It is important to have high liquidity ratios for sustainable future growth.
It depends on net working capital and interest coverage. Our net working capital is around 20 lakhs and
the interest coverage rate depends on the rate at which we take loan.
Profitability Ratios: It tells us about the ability of the company to generate profits. Our company is
estimated to start generating profit after selling around 1500 units. Our profit per unit sale is around Rs.
1390. So, our profitability ratio is expected to be high.
Market Strength Ratios: It measures the reach of the company in the market and investors. Due to absence
of any considerable competition, our business is expected to have very high market strength ratio.

7.6 LONG – TERM PLAN

We plan on starting our business from community level and start expanding to local municipalities.
Also, private institutions and firms can be our customers. After successfully establishing our market
here, we then expand it to other states and depending on our net profits, we may consider importing
our technology to other countries as well in the next 10 years.

7.7 IMPORTANT ASSUMPTIONS

7.7.1 RISKS

Every business has some kind of risk involved while implementing in the real market. Here are the
possible risks we could encounter during our operations.
1) Strategic risk: Possibility of duplication; whenever a new product emerges there is always a risk
for copying the product thereby destabilising our business.
2) Financial risk: non-payment by a customer or increased interest charges on a business loan that
we have previously acquired.
3) Operational risk: There is a risk of theft of components and electronics in our product as it is
accessible by everyone and is open in the public.
4) Commercial risks: We might have a risk of not receiving investments from big wig companies
and our contract being cancelled by the government due to some change in their financial policy or
the emergence of a new government.

7.7.2 ENTRY STRATEGY

Our main targeted customer is the government itself. The government faces innumerable problems
while collecting the garbage off the streets. Despite significant development in social, economic and
environmental areas, solid waste management systems in India have remained relatively unchanged.
With the help of our idea, the government will be able to collect garbage and trash efficiently as well
as effectively. There will be less pollution created and the streets will be cleaner too.
Other potential clients can include large multinational companies having their own independent
garbage disposal systems and universities (like VIT and IITs). However we will need to start from a
smaller scale, i.e. the local municipalities and other such community Caretaking authorities.
There are many production processes available for us to chose from namely mass production, batch
production, etc. We will be using two types of production for our model.

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Initially we will carry out Just-In-Time production process. Just in Time (JIT), as the name
suggests, is a management philosophy that calls for the production of what the customer wants, when
they want it, in the quantities requested, where they want it, without it being delayed in inventory.

7.7.3 INVESTOR INTEREST

In order to generate initial investment for the business, the investors can be invited to do an equity
based or a royalty based investment. In case of equity based investment, we evaluate our product
business for around 1,00,00,000 rupees and would request for money based on this evaluation. For
instance, 10% stake for Rs.10,00,000. On case of a royalty deal, we would request for our investment
in exchange for Rs 100 per sale of our product.
Our capital arrangement strategy is quite appealing to the investors due to high profit predictions and
low competition

7.7.4 EXIT STRATEGY

A business exit strategy is an entrepreneur's strategic plan to sell his or her ownership in a company
to investors or another company. An exit strategy gives a business owner a way to reduce or liquidate
his stake in a business and, if the business is successful, make a substantial profit. If the business is
not successful, an exit strategy (or "exit plan") enables the entrepreneur to limit losses.

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