Amity School of Economics

Amity University

BUSINESS PLAN

Submitted By:
Aditi Singh (A6018216024)
Simran Agarwal (A6018216102)
Kamayani Mittal (A6018216127)
Chandranshu Singh (A6018216051)
Kriti Suri (A6018216031)
TABLE OF CONTENTS

1. Executive Summary
2. Company Overview
3. Concept
4. Market Opportunity
5. Competition Survey
6. Marketing Plan
7. Management
8. Financials
9. Appendix

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ACKNOWLEDGEMENT
We take this opportunity to express our profound gratitude and deep regards to our
mentors and guides for their exemplary guidance, monitoring and constant encouragement throughout
the course of this business plan. We also take this opportunity to thank them for their
cordial support, valuable information provided, which helped us in completing this
task.

We are obliged to Amity University for providing us with the resources required
to help us complete the research project.

We would also like to thank the team of Earth 5R for their mentorship.

Lastly, we thank the respondents for taking out time to fill our surveys without which
this assignment would not have been possible.

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EXECUTIVE SUMMARY

BUSINESS OVERVIEW

Textile recycling is the method of reusing or reprocessing used clothing, fibrous

material and clothing scraps from the manufacturing process. Textiles in municipal
solid waste are found mainly in discarded clothing, although other sources include
furniture, carpets, tires, footwear, and nondurable goods such as sheets and towels.

For consumers the most common way of recycling textiles is reuse through reselling
or donating to charity. This can change, people do not get anything in return, and if
an offer is made to them that will benefit them, everyone is bound to take it up. This
is our organization’s role, inviting people to give over their old used clothes, shoes
etc in exchange for coupons/vouchers and we then send this over to factories who
further recycle this.

SCRAP IT OUT will launch its services in many cities by associating with
agents to coordinate & guide the recycling business. SCRAP IT OUT will
market its services through these agents & sub-partners by various sources
including Internet. Our firm will also have its own website that will provide
complete information about the company, our various plans and how a person
can contact us and give his/her personal details, so that we can contact him.

MARKET OPPORTUNITY

The EPA estimates that the average person throws away 70 lbs of clothing per year.
That adds up to 3.8 billion pounds of unnecessary waste added to our landfills. India

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is becoming a hot spot for scrap business due to various advantages associated with it.
The Indian government is also taking steps to address infrastructure issues that hinder
the country's growth in scrap business. Our firm therefore, has a great market
opportunity to tap the target customers domestically.

Up to 15% of all the worn clothing collected in the UK has no reuse value, and is
sold for fiber recycling. Much of this is sold to recycling factories in India.

The town of Panipat, in Haryana, north India, is the center of the global shoddy
industry, which recycles worn clothing by reclaiming their fibers and spinning them
into regenerated yarn. Over 300 mills in Panipat import about 100,000 tonnes of used
clothing each year, cast off by consumers from the US to the UK, Germany and the
Far East. Slashed, sliced and shredded, the mills destroy the garments completely,
reducing them to a tangled mess of fibers that can be transformed into yarns and
woven into millions of blankets, shawls and fabric. Usually of poor quality and
lasting just a season or two, merchants sell these recycled yarns and textiles to the
poor across south Asia and parts of Africa. In addition, international aid agencies
comprise one of the largest buyers, ordering millions of emergency relief blankets for
disasters worldwide.

This is where our firm comes in. Since the organizations in Panipat are importing
from outside, obviously we can provide the same at a much cheaper rate. The market
is small right now but the opportunity to grow is humongous. The whole population
can form a consumer base for us since everyone uses clothes and something is better
than nothing, this would work as an incentive to our customers for them to come and
avail our firm’s services

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MARKET ANALYSIS

The question is why recycle? Why will everyone go for our firm? Will the
Government support it?

Recycling is good for the environment – It takes less energy to create new items
from recycled materials than it does to create new products from raw materials.
Mining minerals and milling trees into lumber requires vast amounts of energy.
Recycling allows us to reuse materials many times to conserve natural resources
while creating the products we use in our everyday lives.

Recycling is good for communities – Extracting materials from mines or forests is

done far from the place where goods are consumed; however recycling starts in your
own home. Gathering recyclables and reprocessing them into feedstock for future
products is done locally by people who live, work, and spend money in their own
communities.

Recycling reduces pollution – Burning garbage or throwing waste into landfills

produces byproducts that pollute the environment. Runoff from landfills and metals
like mercury find their way into streams, rivers and oceans, fish, and eventually into
human beings, harming our health.

The market currently isn't that developed and organized in India. There aren't many
factories who recycle clothes and rags in India yet. However this is popular in other
countries and we can't see a reason why it won't work here. The initiative isn't all that
new but we plan to expand to more cities eventually and to more products as well.

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COMPANY OVERVIEW

TEAM DESCRIPTION

Post Business Financial Marketing Operations Administration

Development Head Head Head Head
Head

Heads Gunisha Sejal Ashwin Ashutosh Damyant Gupta

Chopra Kucheria Agarwal Parliwala

Mentor Team – Earth 5R – Mr. Saurabh Gupta – saurabh@earth5r.com

Contact - +91-9920045587

Financial Summary
The initial capital required for starting the firm will be brought in by the
partners equally. The major expenditure in the initial year will be
concentrated on advertisement and marketing in order to have a wide reach
and attract the potential customers. Therefore, the profits in the initial years
are less but will increase constantly.

The estimated cash flows for 5 years are as follows:

Year 2015-16 2016-17 2017-18 2018-19 2019-20

Cash Flows Rs 5670664 Rs 8326638 Rs 11996266 Rs 16773035 Rs 22943380

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GENERAL COMPANY DESCRIPTION
Living in the 21st century, the scenario being like- depleting natural resources
because of over consumption and no major source of replenishing the resources back
for the coming generations. Here, we come up with an idea to encourage the society
and the corporates for contributing their bit to the environment.

Creating awareness for REWAE and UPCYCLING is important at this point of time,
for a better environment and for our business to flourish.

REWEAR means what is still wearable is worn again. This ensures that the energy
which once went into making the product is respected and optimally used.

UPCYCLING means that a discarded textile or shoe is used to create a new product
of equal or better quality. Items that can no longer be worn go into an UPCYCLING
process and are thus retained in the loop and are not considered waste– so that a pair
of jeans today can be turned into a new pair of jeans in the future.

To make this possible we have come up with the following programs:

 Drop and drive
 Clean your closet
 FabRicle

VISION

Collecting, grading and brokering waste to organize the recycling industry in

India. Building an inclusive community where everyone belongs and participates to
help the world sustain the natural resources

MISSION

To ensure the financial well-being of our business. To provide municipalities with an

economical, alternative for the disposal of waste. In addition, we hope to build in the
consumer a positive feeling about the feasibility of using recycled waste.

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COMPANY GOALS AND OBJECTIVES

 To establish and maintain a profitable recycling program on a permanent basis in

those geographical areas.
 To raise personal and public awareness of environmental issues, including the
benefit of reducing, re-using and recycling of textile materials that would
otherwise be sent to landfill sites.
 To examine and implement such other business or programs that conform to our
Mission Statement.
 To be a company that a customer can trust us and be a mutual benefit scheme for
both of us.

BUSINESS PHILOSOPHY

We aim at customer satisfaction and maintaining a good relationship with our

supplier while achieving profitability.

TARGET MARKET

Our target market encompasses people of all age group and all income groups who
are willing to dispose of their used clothes and accessories for a better tomorrow

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INDUSTRY OVERVIEW

RECYCLED MATERIALS SUPPLY 40% OF THE GLOBAL RAW

MATERIAL NEEDS

Approximately 1.6 million people worldwide are active in the recycling industry.
Together, they handle more than 600 million tonnes of recyclables every year. With
an annual turnover of more than $200 billion, similar to the GDP of countries such as
Portugal, Colombia and Malaysia, the sector has already become a key driver for
tomorrow’s sustainable development. About 10% of this amount is spent on new
technologies, research and development that contribute to creating high-skilled jobs
and making recycling more efficient and environmentally sound.

The recycling industry has become an integral part of modern society not only due to
its social and economic impact but also because it plays a vital role for the future of
our planet. The use of recycled materials directly translates into fewer natural
resources being used and considerably less energy being consumed when compared
to production processes using virgin materials.

Of all collected textiles, approximately 50% are reused and 50% are recycled.

Fleece, flannel, corduroy, cotton, nylon, denim, wool, and linen. What can you do
with these fibers when you’re finished wearing them, sleeping on them, or draping
them over your windows? One way to benefit both you and the environment is to
give these to organizations, such as ours. You benefit by getting returns and you help
the community by reducing the waste.

GLOBAL TRADE

In recent years, many developed and developing countries have introduced specific
recycling and environmental performance targets aimed at encouraging people to
recycle. The industrial demand for recycled commodities is truly global. International
trade in recycled materials plays a pivotal role in supplying the world’s mills and
factories and is instrumental in increasing the benefits offered by the industry.

INDIA ON TEXTILE RECYCLING

The business of textile waste recycling is less known. Hand-downs that arrive in
India are pulped to make everything from low- and mid-range doormats and prayer
rugs to blankets and bed linen. Leftover garments are cut into square pieces to be sold
as industrial wipers for the paints, chemicals and construction industries, for both
local and international buyers in Japan and Australia. Waste is used to stuff pillows
and mattresses.

But in the recent years the booming demand has seen imports zoom despite
government moves to restrict their entry. In 2008-09, imports jumped 489% to Rs409
crore, over the previous year. Around 219,000 tonnes of old clothes were shipped in

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fiscal 2009, against 37,000 tonnes the year before. In the last fiscal, between April
and November, 100,000 tonnes of goods worth Rs48 crore arrived.

Why should I recycle used clothing and household textiles?

You can reduce the amount of textile products going into landfills. Clothing and
household textiles currently make up 5.2% of the waste stream. The used clothing
industry provides lower income people around the world with affordable clothing.
Clothing that is damaged, is recycled into wiping rags, paper, yarn, insulation and
padding for carpets.

Here are some more textile recycling facts:

 Reduces the need to create more landfill space.

 Reduces pollution created by incinerators.
 Provides low cost clothing to low income households all over the world.
 Polyester, the most commonly used manufactured fiber, is made from
petroleum in an energy-intensive process that emits volatile organic
compounds (VOCs) and acid gases into the air. The process also uses a
large amount of water for cooling.
 The manufacturing of nylon emits nitrous oxide, a greenhouse gas with a
carbon footprint 310 times that of carbon dioxide.
 Rayon, derived from wood pulp, often relies on clearing old growth forests
to make way for water-hungry eucalyptus trees, from which the fiber is
derived.
 Cotton, found in most clothing, is the most pesticide-dependent crop in the
world. It takes one-third of a pound of pesticides to make one t-shirt.
 When manufacturing clothes, dyeing requires a hefty amount of water, and
its fixatives often flow into rivers and sewers. Also, all "easy care" and
"permanent press" cottons are treated with formaldehyde. Recycling
textiles does much more than this. It saves the environment from tons of
harsh chemicals, waste products and waste water used in the
manufacturing of clothing as well.

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TEXTILES

Recovering and recycling textiles provides both environmental and economic

benefits by:
 Reducing the need for landfill space: Certain synthetic fiber products do not
decompose, while natural fiber such as wool does decompose but produces
methane which contributes to global warming.
 Reducing pressure on virgin resources. This includes materials traditionally used
in textiles such as cotton or wool, as well as oil and other chemicals employed to
produce synthetic fibers
 Reducing pollution as well as water and energy consumption.
 Reducing the demand for dyes and fixing agents. This, in turn, lowers the number
of problems caused by their use and manufacture.

RECYCLING PROCESS

Textile materials for recycling can be classified either as:

 Post-industrial
 A by-product from yarn and fabric manufacture for the garment-making and retail
industry
 As post-consumer, originating from discarded garments, household items, vehicles,
etc.

APPLICATIONS – RECYCLED MATERIAL IS NOT A WASTE

 Knitted or woven woolen and similar materials are reused by the textile industry in
applications such as car insulation, roofing felt, loudspeaker cones, panel linings
and furniture padding.
 Cotton and silk is used to manufacture paper and to wiping and polishing cloths
for a range of industries from the automotive to the mining sector.
 Other types of textiles can be reprocessed into fibers for upholstery, insulation,
and even building materials.

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COMPANY STRENGTHS AND CORE
COMPETENCIES
 Cost Efficiencies
 We are a one stop shop for getting rid of your old clothes and purchasing new, by
getting discount coupons of leading brands for disposing off old clothes.

LEGAL FORM OF OWNERSHIP

The legal form of ownership for our company is Partnership. The reasons for
choosing the same are:
 Milder creation and winding up laws- No state filing is required for a partnership
firm. We can start our business activities immediately after signing the partnership
deed and the hassles of getting a certificate of incorporation as in a company can
be eliminated reducing our start-up expenses substantially.
 Low cost of operation-Because general partnerships are not formed by means of a
state filing, they are not required to pay a formation filing fee, ongoing state fees
or franchise taxes. Also unlike a company whereby it has to compulsorily pay a
Minimum Alternate Tax (MAT) on the book profit irrespective of the taxable
profit being lower, as a partnership firm we are not obliged to do so, enabling
greater tax savings.
 Operational ease-Unlike corporations, general partnerships are not required to hold
annual meetings of the owners, issue partnership interest, and keep personal asset
separate from business assets. Having a partnership agreement that outlines how
the partnership would be managed, the roles of each partner and what events
would cause the partnership to cease operations comes to the aid of the partners in
case of any disputes.
 Tax profit withdrawal provisions – As a partnership firm, partners are entitled to
benefits like remuneration or partner’s salary, interest on capital employed (up to a
permissible limit of 12% pa)

SERVICE

We plan to collect the scrap in different ways:

 Clean your closet (Carbon Credit Rating): The concept of carbon credits came
into existence as a result of increasing awareness of the need for controlling
emissions. Carbon credits are a key component of national and international
emissions trading schemes that have been implemented to mitigate global
warming.
 Keeping in mind this and the need of CSR activities for the corporate houses in the
country, we have formulated a program in association with Earth5R wherein we
would have tie up with corporate such as HUL, Parle, Procter & Gamble etc.
where they would be in a deal with us to collect 5 tons of clothes per month for us
with the help of contributions from all their employees and in return, Earth5R
would issue a Carbon Credit Rating Certificate for them.
 Drop and Drive (Campaign with volunteers): It is very important to connect to
the community at large for the long term success of any organization. Being a new

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 venture and trying to enter a new market, we have decided to start a campaign
wherein we would hire volunteers who would be either Raddiwalas or scrap
collectors. We would form a team of 40 members would be then assigned different
parts of the city and their role would be too go door to door and collect the to be
thrown off clothes in exchange of discount coupons form different brands that we
would be associated with. In return of their work, we would give them a
commission cut of Rs 4 per kg clothes that they would collect. We will come up
with an online valuation system, where the customer will fill in the details of the
clothes he/she wants to dispose of and the same will be valued and collected by
our employee and coupons will be delivered to the customer, which he/she can use
later.
Website- www.scrapitout.in
 FabRicles: it is the most important way to get clothes for us in the beginning of
our business. For this we have contacted few suppliers in Kurla who are ready to
supply us with clothes at a minimal rate. We will contact them monthly and collect
clothes from them which we will transport directly to Panipat. the rate and the
quality of clothes will be fixed in the beginning

The collected clothes will be sent to Panipat, Sunrise Woolen Mills for recycling and
the collected clothes will be recycled to make threads and carpets.

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SECONDARY RESEARCH

Our organization focuses more on manufacturers, thus it proved to be a barrier for

conducting primary research for them. To gather more information about this
segment, we did secondary research. This type of research included the cost
comparison for various manufacturers of different recycled clothes

We also did secondary research to back our primary research on certain contents like
the different age group interest in our business idea, manufacturing industry of
clothes who are ready to supply us clothes, and government support to us to find the
CAGR and annual growth of this sector and to gather information about competitors.

PROMOTION
Newspaper: One of the most widely used and effective way of advertising, for a long
time has been Print ads in newspapers. Although a very expensive form of
advertising when compared to a few others, it is supposedly to be a very effective
form of advertising technique.

Since we would be entering fresh in the market, we have decided to invest in it

initially because of the wide reach of it.

Having our business base set in Mumbai, we decided to go ahead with:

 The Times of India: - It is one of the largest English-language newspapers based

in Mumbai. According to the Indian Readership Survey (IRS) 2012, it is the most
widely read English newspaper in India with a readership of 76.43 lakhs with a
circulation of 31.4 lakhs on a daily basis. This newspaper tops the list in terms of
reader retention, faithful readers, growth, and popularity and of course circulation
and popularity. The cost and ad plan would be:
 We would be buying Ad space for 2 colored prints within a short span of time
of 15 sq.cm each on the Left hand page of the newspaper (barring Page 2 or the
last page).
 The cost per sq. cm for this is Rs 3400.
 Therefore, total cost = (3400*15*2) = Rs 1, 02,000.
 To add to it, we would be receiving an incentive of 25% for using the left hand
page and thus our final cost would come down to Rs 76,500.
 Maharashtra Times: - When trying to capture a larger market, it is necessary to
reach to as much customer’s problem. The most suitable technique for this is to
advertise through regional newspapers and so we would also be printing our ads in
the Marathi newspaper.
 Maharashtra Times is the ninth largest selling daily regional newspaper in the
country. It is a Marathi newspaper based in Mumbai and is the sister
publication of Times of India. It enjoys the second largest readership in
Mumbai among Marathi newspapers, only next to Lokmat and has a daily
circulation of 10 lakhs.
 We would be buying Ad space for 2 colored prints within a short span of time
of 15 sq.cm each on the Left hand page of the newspaper (barring Page 2 or the
last page). Though the time of prints of the ads would be at different times in

15
 both the papers so as to utilize our source to the maximum. This would help us
have our brand name recall a little higher.
 The cost per sq. cm for this is Rs 1350. Therefore, total cost = (1350*15*2) =
Rs 40,500.
 To add to it, we would be receiving an incentive of 25% for using the left hand
page and thus our final cost would come down to Rs 30,375.
 Social Media: It has become as important as the existence of any organization to
have its presence felt on the Social media platforms. It is just not possible to not be
there on these various platforms to be constantly promoting oneself and making
own be there at all times. Realizing the importance of it, we have hired Shining
Armor as Social Media handling partner who would be majorly using all our
activities in this space in accordance to our proposed plans.
 We would be there on Facebook, Twitter and Instagram to being with which
would all be linked to our website : www.scrapitout.in
 The major focus of our through this would be to: -
 Get personal with our customers and engage with them continuously. We would
try and keep them connected to us by having stories and insights related to our
industry.
 It is evident that the selling power of a #(Hashtag) is very high now days and
we would focus on the same. We would constantly power hashtags such as
#recycle #scrap #clothes etc to keep the customers aware all the time.

Also, other than this, Shining Armor would be engaging the customers in various
different forms so that our brand recall value is high as well people feel connected to
the brand which would in turn lead them to be associated with us.

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ECONOMICS
The economics of recycling is compelling. Recycling textile may play a very
significant role in making India a major player and support Panipat’s Rs10, 000 crore
industry.The facilities and services offered by India and the brand equity of Indian
recycling industry leads the nation to experience a major chunk of global recycler in
the coming years.

CURRENT DEMAND IN TARGET MARKET

Panipat revels in its “shoddy” existence, the local slang for recycled yarn. Bathroom
mats that use recycled cotton yarn is an Rs2, 000 crore industry. The business of
using recycled acrylic and woolen threads for blanket manufacturing has annual
revenues of Rs700-1,000 crore in Panipat alone. Recycling industry in India is
expected to experience an annual growth rate of 10% which shows a great
opportunity and an immense potential for our organization to tap the customer of all
age group. According to industry stakeholders, India has been ranked among the top
textile industry.

TRENDS IN TARGET MARKET

With a more focused approach, to promote recycling of clothes in country, we first

have to make people aware about reusing and recycling of textile. As we have seen
most of the used clothes in Panipat industry is imported, so there is scope of getting
them clothes from domestic market only as many Indians just throw away their
clothes. If they are provided with coupons for their old clothes, it can turn out to be a
great market.

BARRIERS IN ENTERING THE MARKET

We found a few barriers that we would face while entering into this industry. The
barriers are as follows:
 People might still not want to accept the change of wanting to throw off their
clothes in return of some monetary benefits and would want to continue with by
donating it and giving it off to either NGO's or other house maids

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OVERCOMING THE BARRIERS

Following are the ways in which we are going to overcome the above barriers:
 Brand Recognition - Specialized coupons provided by our organization for all
groups of people from those who wants coupons of different stores, get coupons
according to their needs.
 Acceptance - It is imperative for our firm to establish customer trust in the initial
years of operation which we plan to do by investing significantly in quality
maintenance.

CUSTOMERS

We currently have a single customer located in Panipat. For future we are trying to
contact industries located nearby Mumbai and other cities where we are planning to
take our business

SUNRISE WOLLEN MILLS- +918950314081

COMPETITION

In India, our main competition will include all the organizations/people who collect
or take used clothes from people, which basically are NGO’s, Raddi wallas, servants,
etc.

Our basic aim will be to attract people towards our organization so that we beat the
competition, this we can do by giving them a fair deal which other competitors
cannot provide.

We will be using coupons as an incentive, to attract people, will be paying the

manufacturing units at a fair rate for the waste we take from them, which otherwise
they used to discard as waste and we will be giving carbon credits to the corporates
which undoubtedly is of a very high value for them.

Another competition can be the suppliers of recyclable material to the Panipat

recycling plant. To see that the other suppliers are not a threat to us, we maintain our
relation with the recycling plant by providing a regular supply of material to them.
Some years down the line we aim at increasing the amount we supply to them
tremendously so that they don’t have to rely at import of material or supply from any
other source.

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STRATEGY

Having a business plan to enter into a new industry and our firm being the first mover,
it becomes imperative for our firm to follow conventional marketing strategies in
order to stand out and create a new market. Following are some of the strategies that
we have embraced to differentiate ourselves:
 Immense Advertising: From the market research administered by us, it was
observed that there are many potential customers who are unaware about the same
and are not being enticed to benefit from these services as they are not available in
local market.
In order to seek this opportunity to disseminate our services among the potential
clients, we have allocated a large part of our expenses in the initial years for
advertising through various means such as social media, newspaper, advertisement
in popular public areas such as cafes, etc. in order to have a wide reach among the
potential customers.
 Supplier Referrals: Word-of-mouth is believed to be a significant factor in
influencing the reputation and the sales of the firm. By appealing the existing
suppliers with incentives for recommending us to other suppliers, our firm will
attract more clients and develop goodwill in the market.
 High Commission to member: Our business model predominantly depends on
the already existing contacts and associations with Earth 5r and manufacturing
units and to get more participation from members we are giving them higher rate
than manufacturers.

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PORTER’S 5 FORCES

Bargaining power of supplier

The corporate organizations, clothes manufacturer, general public, garbage collectors

will mainly constitute of our suppliers and since they are large in number, their
bargaining power is low. Also since this is not a traditional buyer-supplier
relationship where they will actually bargain with us

Bargaining power of buyers

Since currently there aren't many organizations involved in clothes recycling in India,
the no. of buyers is low and that gives them the power. However, the no. of suppliers
for them is very less, in fact they import scrap and used clothes from abroad and
since we will provide the same at a lower cost, they will only be benefited by
associating with us.

Threat of Substitutes

The threat of substitutes is low in our case, since we are acting as agents who will
deliver the raw material to recycling industries, where the other possibility being, that
the general public themselves going and giving their old scraps to these firms- which
is very impractical and unfeasible for both the parties. Another possibility being, the
stores that we tie up with for coupons try to incorporate our model of giving coupons
in exchange for old clothes and scrap and then sell this to the firms for recycling.
Even the chances of this actually happening are low to moderate.

Rivalry among existing competitors

Since our current competitors are from US and other European countries, who export
to firms in India, we found out some facts about the scenario there.

The US government estimates that about 85% of the textiles that are discarded every
year wind up in landfills. As for the rest, the competition for used clothing, linens and
towels is intense – and it’s only getting worse. Long-established nonprofits like
Goodwill Industries and the Salvation Army are facing competitive threats from
retailers – not to mention a slew of for-profit recyclers.

Threat from potential entrants

The potential entrants are either the factories involved in recycling, who may want to
integrate forward or retails stores who would want to collect and supply to the
factories. If they do so they might eat up our market share and they could easily make
better profit since they already are in the industry

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 SWOT ANALYSIS

In order to analyze the opportunities and threats that our firm will face from the
external factors, we put together various factors and prepares SWOT analysis of our
firm

STRENGTHS
 Entering a fast growing market-with a
first mover advantage
 Tie-up with a transport and logistics
agency.
 Highly motivated and enthusiasm team.
 No existing competitor as such.
 Government support as our firm
promotes recycling.
WEAKNESSES
 Limited financial resources
 Heavy marketing required to make
people aware of our organization.
 Factories located in Panipat, far from for
our base Mumbai.
 Difficulty in getting the stores to collect
for us free of cost.

OPPORTUNITIES THREATS
 Focus on Advertising to have a wide  International organizations are already
reach. well established and have a huge amount
of resources at the disposal.
 Tie up with more stores and NGOs to
expand collecting activities.  Increase in cost of fuel will increase our
transportation costs.
 Forward integration - recycling plant
 Backward integration by the recycling
 Diverse from clothes collection to other
organizations.
recyclable products.
 Big corporates/stores with huge funds
 Collaborate with govt. under the Swachh
and resources coming into the business.
Bharat scheme.
 Expand in all Indian cities.

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TOWS ANALYSIS

SO (Advancement Strategy)

Considering the growth possibilities in the industry, if we focus our advertising on

the correct segment and target the right customers, we can grow at an even higher
rate than expected.

Government support will help us in breaking more deals with NGOs, Government
schemes in the future, that we may consider for our business expansion.

Because of lack of competition, we would be able to cover more cities in India easily
and in lesser time.

ST (Avoid Threats)

Even though the international competitors are well established, there is hardly any
competitors in India, so we can expand here at as fast rate and later on tackle the
international competitors.

Increasing fuel costs is a threat, but the tie-up with the transport firm will help us in
keeping the costs low.

OW (Overcome Weakness)

Expanding to more cities like Delhi and other northern cities, will decrease the cost
of transportation to Panipat.

Tie-ups with NGOs and government will help us to expand, despite the limited
financial resources.

WT (Avoid and Overcome)

Focusing on collaboration with more and more stores, will decrease the risk of them
entering the industry as our competitors.

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PESTLE ANALYSIS

Political – Political factors as such won't work against our firm because our
organization is something which is promoting recycling and helping the economy at
the same time. The government with its Swachh Bharat Abhiyaan will want to
support us, if we decide to tie up with them in future.

Economical - Changes in an economy can have a two way impact on our

organization depending on the type of change. An increase in general public's income,
i.e. a boom in economy might make people lazy and less motivated to actually give
their old clothes in exchange for some coupons, and vice versa.

Social – The social factors are the most important of the all, because what the society
thinks is very important and crucial. The change in the lifestyle of people affects the
growing requirement of the coupons for daily shopping and needs in different
demographic also affect the demands of the customer

Technology - Changes in technology can be in the form of technology up gradation

or technology shift. Technology up gradation can be advantageous to our company as
we can offer better services. And shift in technology can be disadvantageous to us as
other under developed countries would get the infrastructure thus reducing our
customer base.

Environment – The external factors affecting our firm can be competitors,

government policies, agents, hospitals, hotels, etc.

23
7P’S MARKETING MIX

PRODUCT

Our organization is acting as an agent, and will be providing the service of collecting
old and used cloth scraps from the general public and deliver it to the recycling firms
in the northern region.
 The quality of the service will be highly depended on the personnel in contact both
the parties and thus training would be provided for such purposes.
 We want to brand our firm as an environment friendly organization, which will
help us to gain the trust of the public and attract & motivate them to actually come
and deal with us.
 We will provide the public, with the option of receiving coupons in exchange for
their old clothes. They can do so by either submitting their rags at our centers,
which we soon wish to set up at different locations in Mumbai, or they can just go
to the stores that we tie up with and drop off their rags there, and on doing so they
shall receive the coupons on the basis of the quality, weight and the condition of
the clothes.
 There aren’t any variants available right now, but soon we plan on expanding to
more products and more centers/stores.
 For the customer support and service, we plan to keep a facility where they can
just call on the given number and ask for any doubts they have. This will be
manned by our personnel, most preferably from morning to evening. Further we
will have our email id, Facebook page, and Instagram page if anyone wishes to
contact us there.
 The service will be provided throughout the year, without any exceptions and
especially on Sundays because that’s when most people get the time to do these
extra chores.
 The coupons provided will have all the terms and condition written on the back to
avoid any misleading. The value, expiry date etc. will be conveyed to the customer
before they receive it, so that they can use it within the acceptable period.

PROMOTION

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For our organization, since it’s a startup will have to heavily depend on its promotion
strategies.

Since our inception, we need to focus on how we will make people aware of our
existence, that’s the main goal here. We need to use all kinds of marketing
instruments here, Personal selling, Sales Promotion, PR, Advertising & Direct
marketing. A balanced mix of all of these is crucial.
 The focus will be more on mass marketing, as we need to approach the masses.
 Newspapers, magazines, radio ads solve the problem here.
 Brochures, hoardings, tie-ups with the stores and marketing with them will get us
the attention we need.

PRICE

Our pricing strategy will be pretty simple. We have the quotes from the recycling
factory, which will take our collections, and we will base our prices on that basis.
 The first step would be making a cost sheet for all our expenses, to get the fixed
costs, so as to make sure that even if in the initial years we don’t make profits we
are not making losses.
 Secondly, we aren’t actually paying the people for the scrap clothes, we are giving
them the coupons to different stores, so we have to discuss with the stores about
what they will be receiving out of this.
 The profit margin will be very low in the beginning, just to cover the additional
variable costs.
 No cash will be given to the public in exchange for the scrap.
 If we are dealing with the NGOs, we plan on giving them the necessities required
by them in exchange for the clothes they collect.
 No bargaining/ discounts/ additional vouchers will be given, unless already pre-
decided for some promotional offer.
 Price will be positioned in such a way that is attractive to both the parties.

PLACE

We will be starting with our operations in Mumbai, Maharashtra and for this we want
to tie up with stores that have their presence throughout this big city. Also we will set
up collection centers of our own in the future, once the ball starts moving.
 We will have one head office, where we’ll operate from 6, Parmar Industrial
Estate, Bail Bazar, Kale Marg, Kurla (W) Mumbai.
 The stores that we plan to tie up with are Shoppers stop, Lifestyle, Central etc.
who have a lot of stored located evenly in Mumbai.
 The destination of all our collections is Panipat, Haryana ( approximately 1500
kms from Mumbai)
 The next place we plan to expand to is Delhi, since it’s a metropolitan city like
Mumbai and plus the added advantage of closeness to Panipat.

PEOPLE

25
Our core will consist of five heads i.e. the business development head, finance head,
marketing head, operations head, and administration head.

We will be employing people who will be available at our collection centers, which
we plan to set up soon. Other than that for the time being, the core will be handling
the major chunk of our activities until we plan on expanding.
 Our customer touch points are when we contact the recycling firms and that will
be done by our operations head.
 Marketing and other business development activities will be looked upon by the
respective heads.
 For now, there is no fixed salary for the core, we are a team and currently our goal
is to establish our firm and breakeven after which we will decide on the
remunerations.
 Training on how to interact with the public, and on valuation of scrap will be
provided to the hired help.

PROCESS

Being a service oriented firm, process should be our strongest point. The process is
what will pull our idea through.
 The process of collecting clothes isn’t as easy it would seem. First we need to have
the correct valuation method to value the clothes and scrap provided to us.
 We have to make sure there are different coupons/vouchers available for different
denominations at all points.
 The focus here is to attract the public, and engage them.
 Weekly collections will be made from the stores and centers and transported to
Panipat as soon we reach one particular limit.
 We will have different options for the public to drop off their scraps,
 Collaborations with stores
 Our own collection centers
 Online form submission for collection from their homes.

26
PHYSICAL EVIDENCE

Since we are acting as agents between two parties, we have to make sure both the
parties are satisfied. We don’t have much of physical evidence, just to name a few:
 The Advertisements
 The Coupons/Vouchers
 The collection stalls
 Our website
 Our admin office
 The weighing machines
 Employee’s appearance

27
FINANCIAL ANALYSIS

28
PRICING

COST

We will be paying the members at a fixed rate i.e. 4 Rupees per kg. We will purchase
the material from the manufacturing units at Rupees 3.5 per kg.

REVENUE

After segregating and transporting the material collected as per quality “A” or
quality “B” , we will get Rupees 30 for quality “A” and Rupees 20 for quality “B”
per kg.

PROPOSED LOCATION

 We intend to rent our office space at 6, Parmar Industrial Estate, Bail Bazar, Kale
Marg, Kurla (W), Mumbai – 400070.The rent is 30000 p.m. To rent our
warehouse space at Indian corporation building no 207, mankoli naka, bhiwandi.
The rent is 10000 this place was provided to us by 99acres.com.It is situated as per
the required location and is of quality standards. We intend to enter into an
agreement for the same.
 This place is useful and cost effective as it is in center of the city,
 3 Kms from the Airport
 1 km from the Railway station.

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DISTRIBUTION CHANNEL

Suppliers

Members

SCRAP IT OUT

Transportation Agency

Recycling Plants
The Distribution Channel that we would be using is a very basic and a simple model.
 Suppliers: The list of our suppliers include all the households, corporate houses
and manufacturing organizations that we would have a tie up with. They would all
be providing us with all the used clothes that we need to collect.
 Members: They will collect used clothes from different localities in Mumbai and
will contact us once they collect 30 kgs. We will be collecting it form their place.
 Scrap it out: After collecting used clothes from various localities and corporate
we will be sending it to our warehouse in Bhiwandi.
 Transportation agency: We have tied up with Kush enterprises, they will be
loading material from the warehouse and will be transporting it to the recycling
industry, Sunrise Woolen Mills in Panipat.
 Recycling plant: Sunrise Woolen Mills in Panipat, will be recycling the material
collected by us and will be making threads and carpets from it.

COLLECTION AND TRANSPORTATION:

We will collect clothes from manufacturing units and corporates with whom we have
tied up on a monthly basis. From the members we will take the used clothes as and
when they are able to collect 30 kgs. The collected material will be transferred to the
warehouse in Bhiwandi from where it will be sent to the recycling plant in Panipat.

30
OPERATIONAL PLAN
We are an organization in the service industry, thus it does not involve the production
of any product but exclusively accents on rendering high quality services and
customer satisfaction.

The Service Delivery which has been made completely customer-centric and
encompasses a very easy step-by-step procedure to be followed.

Daily
Collection

Sorting at
Recycling
Warehouse

Monthly
Transfer to
Panipat

 Daily Collection – Our Mini Truck will have daily scheduled rounds in Mumbai
based on the pickup date and time decided with vendor
 Sorting at Warehouse – The daily clothes collected will be sorted in category
Type A and Type B, based on the quality of cloth (parameters for the same will be
availed from Recycling Firm) at Bhiwandi Warehouse
 Monthly Transfer to Panipat – The collected and sorted old clothes will be
transferred to Panipat Recycling plant on a monthly basis. The cost of
transportation from Mumbai – Panipat is very high, so to minimize the cost only
one round per month
 Recycling – The cloth received at Panipat pant will be recycled into new fiber,
which will be used for further new textile production

LEGAL ENVIRONMENT (REFER TO APPENDIX)

 Partnership Deed: Document showcasing the partners and the split of stake among
them.
 Registration of Firm: Though it is an optional process, by registering a firm
partners can avail legal facilities as and when required. Also an authentication is
created amongst our partnering companies. Registering also procures various
benefits.
 Leave and License agreement: Rent Agreement with the office space
provider.

31
 Memorandum of Understanding: Document of terms and conditions
between hospital and us.
 TAN Number: Required as we are responsible for deducting or collecting
tax.
 PAN Number: PAN is mandatory , key to track financial transactions that
might have a taxable component to prevent tax evasion
 Terms & Conditions: Set of agreements between us and our clients
ensuring us risk free service.
 Service Tax: It is assumed that the tax is paid before the due date.

PERSONNEL

1. Number of employees- 13
2. Type of labor- Skilled, unskilled and professional.
3. All the partners will be working as employees as it will provide the requisite
knowledge and expertise. Apart from that we need 8 other employees namely
financial personnel, an agent, call attendant, a peon and 4 unskilled labors for the
pickup van. Skilled labor will be all 5 co-founders. Whereas professionals will
be people who have done MBA from marketing or finance depending on the job
profile. Students can even apply for internship with our company. We need
unskilled for miscellaneous petty jobs like maintenance and cleaning of the shop.
4. Quality of existing staff- There are many ingredients in a mix that leads to
competent staff who have knowledge and skills. Our company is being started by
five partners who are graduates from NMIMS University.

PAID TO PERSONNEL AMOUNT (Rs/month)

Rs 10000
Call attendant
Rs 20000
Professional
Rs 20000
Agent
Rs 6000
Unskilled Labour

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 Business Financial Head Marketing Operations Head Administration
Development Head Head
Head and
Creatives

Managing clients, Preparation of Managing firm Management of Overall

Job Description getting leads and financial image and collection management of
follow ups with statements, Daily preparation of processes and the
customers, mange Money promotional office. administrative
calls of inquiry, Management budget functions.
Online chatting

SUPPLIERS

The following are the list of suppliers:

We will be having tie ups with multiple suppliers this is because our business is
solely dependent on it and we plan to offer our clients assortment of various options
to choose from.

 Manufacturing Units
Shreeji Exim Samir@shreejiexim.com

Cinnamon Cuts Falguni@shreejiexim.com

 NGO’s
Swadesh hansbadwal@gmail.com

 Members
 Corporates

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PAYMENT POLICY

Our firm has a policy of paying the

1. Manufacturing Firms – in the next month

2. Members – within the same month
3. NGO’s – Grants within the same month

MANAGEMENT AND ORGANIZATION

Employees are company’s key to success. Having the right kind of employees will
make sure that the company thrives in a dwindling economy. Jobs will be allotted by
carefully analyzing the potential employees based on experience level and specific
skills.

Our company will be managed by the five partners. All the partners are pursuing
graduation from NMIMS University. The lists of partners are as follows:
 Sejal Kucheria- Finance Head
 Ashutosh Palriwala - Operations Head
 Gunisha Chopra - Business Development Head
 Ashwin Agarwal - Marketing Head
 Damyant Gupta- Administration Head

34
EXPANSION STRATEGY
Being a startup we have certain capital and skill limitations due to which we were not
able to tap all the aspects and markets available in the beginning itself. But as we
grow and gain experience/knowledge about the industry we will tap those as well.
Some of these aspects where we have an opportunity to expand are as follows:

1. Cover more cities - As soon as we establish ourselves in Mumbai, we plan on

starting our operations in New Delhi, and this is because of two major reasons
 Delhi being a metropolitan city will wouldn't need more research as such and
our business model wouldn't need much changes here.
 Delhi is very close to our main buyers in Panipat, which will lower our cost
further.
After covering Mumbai and Delhi, we wish to expand to even more cities and
eventually cover all the regions in future.

2. Government tie-up - Since ours is an environment friendly organization, the

GOI will not mind helping and supporting our organization. In future we plan to
contact the government regarding the collection of such recyclables.
3. Setting up offices in other locations- Offices will be set up in other locations
such as Chennai, Bangalore, and Ahmadabad in India apart from just expanding
our operations.
4. Expanding the scope of operations- After establishing ourselves, we plan to
include more and recyclable items and collaborate with more and more stores so
as to provide more options to the public.
5. Forward integration - In future, if successful with our venture and if we are
able to collect the required amount of scrap, we plan to open our own recycling
factory someday instead of just selling the scrap to already existing ones. After
opening our own factories, we can further sell the recycled products in the
markets, promoting recycling and Eco friendly products at even a bigger scale.

EXIT STRATEGY
Over the years with consistent hard work and growth our firm will its brand in the
industry, and if required we plan to exit by selling the Company to an already
existing recycling firm or a competitor in the future. They would get an already
established collection process in place, plus the reduced hassle of contacting all the
stores for the coupons and vouchers. However, if all goes well we intend on
expanding to actually set up those recycling units ourselves in the future.

35
ANNEXURE – II

LEGAL FORMS

SERVICE TAX REGISTRATION

41
TAN CARD

42
PAN CARD

43
LEAVE AND LICENSE AGREEMENT

44
REGISTRATION OF FIRM

45
PARTNERSHIP DEED

46
47
ANNEXURE – III (FINANCIAL STATEMENTS)

48