Feasibility Study

TABLE OF CONTENT
1. EXECUTIVE SUMMARY 1
2. INTRODUCTION 1
3. SERVICE FEASIBILITY 2
3.1 Concept Statement 2
3.2 Concept Test 2
3.2.1 Authenticating the Fundemental Principles of the Service/Product 3
4. MARKET FEASIBILITY ANALYSIS 3
4.1 Market Timeliness Considerations 3
4.2 Market attractiveness 3
4.2.1 Growing Industry 3
4.3 The Porters Five Forces Model 4
5. ORGANISATIONAL FEASIBILITY STUDY 4
5.1 Management Expertise 4
5.1.1 Networks 4
6. FINANCIAL ASSESSMENT 4
6.1 Capital Requirements 4
6.1.1 Administrative Fees 4
6.1.2 Long Term Assets 4
6.1.2.1 Equipment 4
6.1.2.2 Cash reserves 5
6.2 Start Up Costs 5
6.3 Availability of Exit Opportunity 5
7. CONCLUSION 5
8. APPENDIX 6
9. REFERENCE LIST 11

1. Executive Summary
LivingGoing Green is a company based in Stellenbosch, Western Cape. The goal of this business will be to provide services and products that affectively increases the recycling activity in Stellenbosch. Going Green aims to create a partnership with the municipality in order to maximize productivity. The recycled items are sold mainly in bulk to companies that may require them in the production methods used for their respective products. A place where recyclable waste can be dropped off will be provided will be located conveniently on Dorp Street.
To found out the attractiveness of the product and services provided by LivingGoing Green, residents received questionnaires, as well as corporations in Stellenbosch and in Cape Town to make an informed estimate of the levels of interest. A positve feedback indicated that the likelihood of a large response and in that a large portential client base.
Recycling falls in an industry that is growing rapidly. Thich increases the attractiveness of the industry and in turn the likelihood to enter it. There are no other businesses that recycle in Stellenbosch and thus faces little threats. The environmont has been the focal point of Global Awareness which created a secure growing industry with a lot of potential.
The founder along with his management team, will run the business. Together, they share the aim to create a sustainable future by promoting and encouraging recycling. The team have the necessary information to effectively establish and operate their business by means of the business’s networks. According to the research completed, there is a clear indication that the business has adequate resources available to them that will assist in the managing and running of Going Green.
The financial feasibility assessment of LivingGoing Green specifies the viability of the business from a financial and economic stance, after the various start-up costs have been assessed. The assessment shows the way in which the business will be financed. Unfortunately however, the business may not necessarily be financialy feasible – this is because of the machine-intensive labour experienced in such an industry which requires high capital costs.
As mentioned earlier, the business may not necessarily be financially viable. Contrasting the uncertainty around the business’ financial viability, the products and service feasibility aswell as the organizational and industry feasibility assessments have found that the business vould be viable.
2. Introduction
The average person is responsible for over 1.8kgs of trash every day and around 1360kgs of solid waste every year, 75% of which is recyclable, unfortunately, only 30% of this waste is actually recycled (11 Facts About Recycling, 2012). Due to the scarce recycling services provided, that are efficient, accessible and convenient, the rate of participation is significanty too low. The inconvience discourages members of the community to pursue a greener Stellenbosch. This sparked the core business idea, with a Going Green theme, and that is to encourage recycling in Stellenbosch, in search of a more environmentally conscience and friendly community with a sustainable future, through innovative strategies.
The business will be named LivingGoing Green. Linked with the garbage collecting and disposing service already in action, Going Green and the Municipality of Stellenbosch work together to conveniently collect recyclable waste. In addition to the provided service, aLiving shop, which will be easily accessible to the Stellenbosch community, will be established. At this location the public are able to drop off their respective recyclable waste. After the collection and sorting has taken place, the waste will proceedingly be transported to our factory to finally be recycled. The business’ foremost source of income will be throug the redistribution of recycled waste sold to various manufacturers for use in their production processes.
An assessment will be conducted, which determines the feasibility of the business idea of LivingGoing Green in order to determine whether it is wise to invest in the venture and the ability of successfully completing the venture will be analysed. This will protect entrepreneurs from worthlessly spending valuable time and money (Feasibility Study, 2014).
3. Service/Product Feasibility
3.1 Concept Statement:
Product: All items that are in a fit condition, after recycling, will be sold to manufacturers who can use them in their respective production methods of their products. Information informing potential customer as to what can be bought here, in what quantities and other relevant information will be provided on a monthly basis as the recyclable material collected is subject to change.
Service: Linked with Stellenbosch’s waste removal service, LivingGoing Green strives to convenience the residents of the community by collecting the waste, and delivering it straight to the factory where it is taken care of accordingly. Target Market: Our main target market is the people of Stellenbosch inconvenienced by the current recycling procedures, or the lack thereof. Parallel to this target market are the various manufacturing companies who are able to use the recycled waste.
3.2 Concept Test
3.2.1 Authenticating the fundemental principles of the service/product:
Questionares were distributed (See Questionare 3.1) to 1500 residents of the community aswell as fiting companies to give us an informed idea of the clientelle intest.
The returned questionares informed us that the clientelle interest of the service is positive, and that they potential client-base is very supportive of our model. The companies informed of our service/products raised a common concern that the quantity of recycled material needs to be consistent in order to fully include it into their production processes.

4. Market Feasibility Analysis
4.1 Market Timeliness Considerations
A window of opportunity has been recognized by LivingGoing Green and arose due to the ever-increasing pressure for households to play a role in conserving the environment partnered with the lack of recycling industries present aswell as the demand for the lacking industry. The high demand was discovered through or primary research questionare distributed and returned (Urban South Africans Do Not Recycle, 2012).
LivingRecycling methods and the technology needed, has already been established in South Africa. Eliminating the cost related to research and development (R&D), the already established information from various third part sources with insighful knowledge, will play in the favour of Going Green. (The Recycling Process After Collection -What Happens to Materials When You Recycle, 2001).
Figure 1.1 and 1.2 represent a financial overlook of a plastic and paper packaging corporation, called Mpact, with regard to their operating assests, profits and recevenue (About Us, 2014). The graphs portray a distinct increase in the above mentioned aspects for both the recycling plastics aswell as paper. Other areas of the recycling industry are congruent with the increasing figures on the graphs (Recycle, 2014), (Plastic Recycling in South Africa, 2011). Other areas of the recycling industry, such as glass and metals are congruent with the increasing figures on the graphs (Recycle, 2014), (Plastic Recycling in South Africa, 2011) After the completed research, we can make an informed decision that it is timely for a entrant to come into the recycling marker.
4.2 Market attractiveness
4.2.1 Growing Industry
According to Maia et all, who carried out a investigative report on the Environmentant Goods and Services sector of South Africa, Waste Management is report that was conducted on the Environmental Goods and Services sector of South Africa reported that waste management (which includes recycling) is substantially the biggest sub-sector of our economy (Maia, et al, 2011). In 2007, The Department of Trade and Industry in South Africa carried out a study regarding the potential of recycling in South Africa, the results from this study indicated that in 2015 the recycling industry, at full capacity could provide 190 000 job opportunities, which is a significant increase from the 131 130 job opportunities that were provided in 2007 (Maia, Et Al 2011). The increase in employment opportunities within the recycling industry, from 131 130 in 2007 to 190 000 in 2015, is clear sign that the recycling industry is growing (Why Is Recycling Important?, 2014).
4.3 The Porters Five Forces Model
We used and applied Porters Five Forces Model in Figure 1.4, to clearly understand the type of industry entered, its structure aswell as a the current state of the various factors included.
5. Organisational Feasibility Study
5.1 Management Expertise
The management of LivingGoing Green must include passion and expertise in order to successfully commence the propsesd business idea. The passion behind the theme of the business by the management and the knowledge they possess of the market we are to enter, will be analysed and used to determine the extent of their individual and combined expertise.
5.1.2 Networks
The management team has an instituted a professional network with the marketing director, and his team, of Green Frog, who promote products produced in an environmentally conscious manner. Green Frog’s marketing and management team have agreed to act as mentors in our venture.
6. Financial Assessment
6.1 Capital Requirements
The initial capital source are the owner of Going Green, by means of capital contribution, aswell as an initial bank loan. In the long-run, investers will be sort after in order for the business to expand.
6.1.1 Administrative Fees
The main fees are registering the company with CIPRO, with a fee of R 80,00 (Fees and Costs, 2011), and registration for tax purposes with SARS. The cost of tax is dependable on the turnover that the Going Green will make in a year. (Small Business Start Ups In South Africa, 2011).

6.1.2 Long Term Assets
6.1.2.1 Equipment
The long term assets for the factory is heavy machinery. For both the factory and the shop fitting furniture will be purchased.
6.1.2.1 Cash reserves
Cash reserves will be required to sustain the business until a profit is generated.
6.2 Start Up Costs
Table 2.1 provides the basic estimated start up costs for LivingGoing Green.
6.3 Availability of Exit Opportunity
As an exit strategy, management buyout seems to be the most applicable as it allows for instant liquidation to the owners and various shareholders. Additionally, the company is able to continue its business as a private enterprise under the current managerial team. (How to Choose an Exit Strategy, 2011).
7. Conclusion
It is feasible for the recycing business, Going Green, to be established, according to the completed feasibility study. Research supports that there is a potential target market, that the industry is timely and attractive for new entrants like Going Green, that the industry is profitable, and signs of potential growth is evident. The main dilemma faced by Going Green is that financial funding used towards its resources. Monetary sources are potentially available in the form of capital contributions and loans but do pose a challenge and thus our business may not be financially feasible.

9. Reference List
11 Facts About Recycling. 2012. [Online]. Available: https://www.dosomething.org/actnow/tipsandtools/11-facts-about-recycling [2014, April 2].
About Mr Recycle. 2014. [Online]. Available: http://www.mrrecycle.co.za/about-mr-recycle [2014, April 2].
About Us. 2014. [Online]. Available: http://www.mpact.co.za/about-us [2014, April 3].
Annual Report. 2013. [Online]. Available: http://www.Stellenbosch.gov.za/about-us/documents/reports/annual-report/20122013/1345-annual-report-201213-final/file [2014, April 1].
Bernst, A. 2013. Growing a Business. The Standard, 3 Febuary:10.
Björnsdóttir, A.R. 2010. Financial Feasibility Assessments. [Online]. Available: http://skemman.is/stream/get/1946/4452/12991/1/Assessments_fixed.pdf. [2014, April 10].
Clearer Conscious. 2014. [Online]. Available: http://www.clearer.co.za/whyrecycle.php [2014, April 5].
Commercial Property to Rent in Stellenbosch Central. 2014. [Online]. Available: http://www.property24.com/to-rent/Stellenbosch-central/Stellenbosch/western-cape/8566/101670387?Branded=false [2014, April 2].
Feasibility Study. 2014. [Online]. Available: http://www.investopedia.com/terms/f/feasibility-study.asp [2014, April 2].
Fees and Costs. 2011. [Online]. Available: http://www.cipro.gov.za/fees_costs/fees_costs.asp. [2014, April 10].
How to choose an exit strategy. 2010. [Online]. Available: http://www.inc.com/guides/2010/10/how-to-choose-an-exit-strategy.html [2014, April 10].
Makau, M.E. 2005. A Household Solid Waste Recycling Programme in Stellenbosch: Householders’ Attitudes And Willingness To Participate. Unpublished PhD thesis. University of Cape Town.
McGone, M. 2011. Recycle Brevard Turns Plastic Spoons In to Sculptures. Hometown News, 23 September:15
Plastic Recycling in South Africa. 2011. [Online]. Available: http://urbanearth.co.za/articles/plastics-recycling-south-africa [2014, March 30].
Smit, H. 2010. Excess Waste Becoming a Problem. Weekly, 14 June:7
Stellenbosch Recycling Services. 2012. [Online]. Available: http://www.Stellenbosch-unlimited.co.za/services_recycling.php [2014, April 2].
The Innovation Capital of South Africa. 2014. [Online]. Available: http://www.Stellenbosch.gov.za/ [2014, April 10].
The Recycling Process After Collection -What Happens to Materials When You Recycle. 2001. [Online]. Available: http://pages.uoregon.edu/recycle/after_collection.html [2014, April 01].
Urban South Africans Do Not Recycle. 2012. [Online]. Available: http://www.csir.co.za/enews/2012_nov/01.html [2014, April 9].
Why Is Recycling Important?. 2014. [Online]. Available: http://www.benefits-of-recycling.com/whyisrecyclingimportant/ [2014, April 4].
Why Recycle?. 2013. [Online]. Available: http://www.grownyc.org/recycling/whyrecycle [2014, April 4].
Window of Opportunity. 2014. [Online]. Available: http://www.investopedia.com/terms/w/window-of-opportunity.asp [2014, April 01].

Question 2.1
Going Green is a recycling company which is to be based in the vivacious city, Stellenbosch. We provide convenient and efficient ways in which to improve all aspects of recycling in Stellenbosch in aid of environmental conservation. Our impact on society is not only restricted to the environment but also on a social-level by creating jobs and reducing unemployment. Our theme is going green and has been established through innovative strategies to encourage recycling and create a society that is greener, more sustainable and ultimately a society that creates zero waste.
The average person is responsible for over 1.8 kilograms of garbage every day and as much as 1.5 tonnes of solid waste every year, 75% of which is recyclable, unfortunately, only 30% of this waste is actually recycled (11 Facts About Recycling, 2012). The exceedingly low rate of participation in recycling can be partially blamed on the lack of available services that are reliable, efficient and convenient, and on the lack of awareness that emphasizes the impact and importance of recycling.
Recycling to the average person in Stellenbosch, is widely seen as an activity that they are more than willing to do, however, the lack of convenient ways to do so discourages the people living in the community – we sent out questionares and have already received a positive response from the community. Linked with Stellenbosch’s efficient waste removal service conveniently removes the key hindering cause to the lack of recycling participation in this community. The waste collected is then brought to our factory, sorted and then recycled.
However, we do not only provide an efficient and convenient service, we also provide a product. We sell our 100% recycled materials to manufacturers who can use this environmentally friendly product and use it accordingly in their production methods. We provide information compiled by Going Green, which will inform our potential customers with sufficient information as to; what can be bought here; in what quantities; and the relevant information as to what is available as this is subject to change.

The management team of Going Green is 100% dedicated to the pursuit for a cleaner, greener, and more sustainable community – wherever we will be situated. We believe that with our leadership in recycling we have the power to strive towards a community that generates no waste.
Question 2.2:
Managers key characteristic is to posses the ability to magange people and direct the efforts of others (http://www.hr.com/en/app/blog/2008/10/managers-self-assessment-questionnaire_fm49e5ez.html 2008). It is important that managers take a step back and look refelctively at their abilities and consider the working environment from a different angle by analysing their strengths and weaknesses.
I’ve identified and narrowed down the key characteristics of a good manager. I am going to analyse the characteristics and introspectively look if these characteristics apply to me.
Good communication is key in order to have a healthy relationship with employees, customers and other business related relations. A successful manager should be abe to speak to individuals and groups alike. I have a good personality and am confident. These two traits play an imporant role in one’s ability to communicate well with one’s colleagues.
Time management however, is a characteristic of a manger that I do not possess. Many deadlines need to be met and can be stressfull. I can handle stress well, but I can not manage time. If I would be able to complete my assigned tasks in a timely manner, I would be under less stress. I biggest downfall of this characteristic is that I do not keep record of the tasks that I have been assigned and their respective information in a diary of any sort. I need to routinely keep record of my specific deadlines so that I can complete them accordingly in the manner that is most efficient.
Organizational skills, like time managent, is a weakness of mine. I believe they are similar in many regards and I need to improve on this. Organization is important to improve efficiency in the workplace.
A manager is also a leader. They lead their respective workplaces and have often been in a leadership position. I believe I possess the essential traits of a leader and I have experience with a leadership-role in many aspects of life. I look up to well respected leaders and observe and learn from their mistakes and their successes.
Experience is a trait often looked at when a manager is hired. I unfortunately have not been in an official workplace managerial position before. Luckily I do enjoy to set goals for myself, and the environment I work in. One of my constant goals is to gain experience as a manager and to improve myself as a manager.
The above mention traits of a manager are they fundamental characteristics of a manager, and these need to be improved first. Further you can focus on smaller, more detailed strenghts and weakness, but even though they are detailed, they should not be overlooked or underestimated. A weakness that I possess that could be detrimental to my job is that I trust others too easily and that I tend to overlook the negatives and focus on the positives of anyone or any situation. Even though these are not the first and fundamental defining characteristics of a manager, they are as important
I think it is important for a manger to introspectively look at their personal strengths and weakness and if acknowledged and worked on, can lead to personal growth. Being aware of your strengths also provides insightful information in the business world, as you are able to ‘play to your strenght’ and have a favourable situation.
Question 3:
To: jsmith@jsconsultants.com
From: groeninxg@mweb.co.za

Subject: Financial Advise Regarding Going Green 13/5/2014
Dear Ms. Smith,
I am writing to you to request your professional financial assistance. My company, Going Green, is a recycling company that provides a service to the Stellenbosch community of collecting and recycling waste, and provides recycled material as products to supply manufacturers as a source of input to their production methods.
I specifically seek advice regarding an in-depth analysis financial plan. Our start up expenses are summarized as follows:
Legal R 5, 000
Factory R 3, 000, 000
Shop R 200, 000
Fixed Costs R 500, 000
Cash Reserves R 750, 000
_____________________________
Total R 4, 455, 000
This is as mentioned before, are our summarized start-up expenses. If you require additional information, please do not hesitate to ask me. You may contact me between 08:30 a.m. and 08:00 p.m on my mobile or work phone, otherwise I kindly ask you to email me. Lastly I request that we stay in close contact due to the start-up phase we are currently in. I look forward to hearing your insightful information and reccommendations soon. Respectfully,

Floris Groeninx
Managing Director
Going Green http://www.ggrecycling.co.za (021) 456 7888
079 182 3883