Biodiesel Company Business Plan Report

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Description of the product

Biodiesel can be defined as the mono-alkyl esters of fatty acids which are got from vegetable oils or even got from animal fats. These products are then chemically combined with other chemicals like alcohol so that they can produce a chemical product which is known as fatty acids alkyl ester. The production of this compound also requires a catalyst which can either be potassium or even sodium hydroxide. The by-product of the reaction is glycerin which can be renewable in this case. The reaction, in this case, requires the following chemical reactions.

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100lbs of oil+ 10 lbs of methanol =100 lbs of biodiesel + 10 lbs of glycerol.

Biodiesel is produced from locally available vegetable and oil products hence meaning that the costs for these products are usually cheap. They also need less technology to produce them hence meaning that the expenses are a bit too little. (Bouche, 2000).

History of the development of bio Diesel Company

Biodiesel is a company that deals with alternative fuels for diesel engines and it is one of the companies which are getting high attention from all over the world. The company name is RJMM bio Diesel Company whose ownership includes three individuals who have contributed each 25% towards the start of the company. It has received so much attention simply because it is renewable. You find that its products can be renewable hence it has participated a lot towards the protection of the environment since this is one of the basic factors which are needed by a company, the protection and the preservation of the environment. The biodiesel company in this case is also important in that it can be used either in blends with the diesel fuels mostly in unmodified engines or can be used in its pure form. It also reduces the exhaust pollutants hence not polluting the environment just like other diesel engines. (Bouche, 2000).

Ownership/ founders of the company

The ownership of the company in this case involves the real investors to the company plus those who are involved in the daily activities of our company. The real founders of the company, in this case, involve four individuals who are Rose, Jane, Martin, and Mike. The four of us contributed each 25% towards the start of the company but we are not fully involved in the activities of the company but we are just investors to the company. The other owners of the company involve those employees who work in the company and consist of one general manager. The company has five departments and in each department, there are five supervisors whose work is to ensure that the activities of the company are done appropriately. This is a company which has employed so many people since we have twenty employees who work in our company hence forming part of the ownership of the company. (Callahan, 2000).

The current size of the industry?

Our company is one of the market leaders in the United States since we have been in a position to compete with other competitors hence leading to the realization of our competitive advantage. It has given a great challenge to the petroleum fuel in the United States hence our company is one of the greatest diesel companies in the US. This is because we have been in a position to cut down the high imports of petroleum fuels from those countries that export petroleum hence meaning that most of the customers usually use our diesel since it’s also cheap as when compared with other petroleum fuels. Our market supply is high and almost represents 25% of the market share of the fuel in the market hence meaning that our biodiesel oil is high in demand. (Marshall, 2004).

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Factors that are important for the company to succeed

There are so many factors which have led to the success of our industry. One is that we deal with cheap and available products. Soya bean dominates the vegetable oil market in the United States and comprises of 75% share of the vegetable oil volume. Animal fats on the other hand contribute 50% of the market share hence meaning that these products are widely available in the US. As a result, we have been in a position to recycle these products into the yellow grease hence coming up with our diesel fuel. Another factor that has contributed to our success is that bio-diesel is renewable hence meaning that we have contributed less to global warming. This is one of the initiatives which has made our company so much famous and know simply because our products don’t pollute the environment and also we renew the products of the fatty acid which would otherwise be thrown away when destroyed. Our prices for our fuel are also cheap as when compared with other competitors hence meaning that we have received so many customers purchasing our fuel hence leading to huge profits in return. (McCormick, 2001).

The future growth of your industry

Our company is increasing at an exponential rate as a result of the many processing plants which are coming online. It is as a result of the increased demand for our fuel that it has led to the demand for highly qualified technicians, engineers, chemists so that they can help in the production of high-quality products hence leading to the intensive growth of the company. We are also giving stiff competition to our competitors meaning that in the future, we will take the largest share of the fuel market in the United States. (McCormick, 2001).

Why our products/services are preferable to those of our competitors?

Our products are so much preferred more to those of our competitors in that our prices are usually cheaper and we have tried to differentiate our products to those of our competitors hence leading to the competitive advantage. You find that most of the imported petroleum fuels are usually more expensive since those companies which import the fuel have to compensate for the import duties which were charged. But with our biodiesel fuel, you find that it is locally produced hence meaning that we sell at a lower price hence can compete with our competitors more effectively. Also, the United States clean Air Act which requires clear air has also led to our improvement since you find that most of the petroleum fuels have sulfur emissions which lead to global warming, unlike our biodiesel which is renewable and does not lead to global warming. So due to this, most people have been encouraged to make use of biodiesel of which is locally produced so that we can help in the preservation of the environment. (Peterson, 2001).

What “trends” affect our industry?

The financial margins from producing the biodiesel products are so great hence meaning that in order to cut down all these expenses, you only need to produce it yourself. Also until the general members of the public change their mentality towards the environmental concern it is the only time that the market for biodiesel will increase since most of the people are not aware of environmental conservation. They like using the prestigious products only forgetting the environmental effects they have. Also since our company is a small scale producer, you find that most of the large scale producers and petrol diesel producers lower the price of the products hence the market for our product is becoming a bit difficult. (Peterson, 2001).

Financial consideration

The pricing strategy for our product is that we usually sell the product at a low price as a way of differentiating our product from those of the competitors. So we tend to lower the price so that we can realize our competitive advantage. Over the last few years, our company has recorded huge profits despite the competitive market in which we face. For example in last year, our company recorded a profit margin of 35% and this was as a result of differentiating our products different from our competitors. (Peterson, 2001).

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Advantages

Biodiesel has so many advantages. One is that it provides a market for the excess vegetable and animal oils which are produced by the farmers hence meaning that we have been in a position to make a ready market for these farmers hence leading to the economic growth of our country. It also decreases the economic dependence on the imported petroleum fuels. As a result, you find that the many expenses which are used in importing the petroleum product can be used in other economic activities leading to the economic growth of the country. Another advantage is that bio-diesel is renewable hence it does not lead to global warming. So it has led to environmental protection. (Peterson, 2001).

Conclusion

Biodiesel has led to great concern in most countries. This is due to the many advantages it has over other petroleum products. It is out of this that we have been in a position to record huge profits.

Reference

Bouche, T. (2000): Optimizing tractor CI engines for bio diesel operations. SAE paper No. 21.

Callahan, T. (2000): Evaluation of methyl soyate/diesel fuel blends as a fuel for diesel Engines. Southwest Research Institute.

Marshall, W. (2004): Engine exhausts emissions evaluation of Cummins L10E when Fueled with a bio diesel blend. University of Missouri.

McCormick, R. (2001): NOx solutions for bio diesel. Colorado school of mines.

Peterson, C. (2001): development of bio diesel for use in high speed diesel engines. University of Idaho, Presentation of sixth national bioeneregy conference.

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IvyPanda. 2022. "Biodiesel Company Business Plan." May 12, 2022. https://ivypanda.com/essays/bio-diesel-business-plan/.

1. IvyPanda. "Biodiesel Company Business Plan." May 12, 2022. https://ivypanda.com/essays/bio-diesel-business-plan/.


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IvyPanda. "Biodiesel Company Business Plan." May 12, 2022. https://ivypanda.com/essays/bio-diesel-business-plan/.

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