Innovation proposal. Making money out of garbage

 Assignment 1 – Innovation Proposal

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Contents:

1.0        Introduction

2.0        Main body

2.1        The calculation of the initial investment

2.2        The problems which could arise in developing the concept

3.0        Conclusion

3.1 Personal reflection

Making money out of garbage

1.0 Introduction

The purpose of this report is to identify the usefulness of garbage and how to make money of it. Innovation is not just about opening up new markets – it can also offer new ways of serving established and mature ones. (John Bessant and Joe Tidd, 2011) Currently, there are thousands of different trading enterprises in the world-market, for instance, markets, shops, cafes, ect., that use products in the package, which then goes to trash (plastic bottles, waste paper, boxes). The major parts of these wastes are simply thrown into the container. Such business idea, as recycling of plastics should be taken seriously into the consideration. Persons discharge tons of such trash daily. It can be pressed and sold to the factories that will recycle it again, thus, making non-waste production. More and more businesses are turning their attention to the environmental business projects that will not only produce goods and provide services, but also solve the world’s environmental problems.

2.0 Main body

It is believed, that one usual resident throws out approximately 300 kg of rubbish per year and one-third of this amount is plastic products. These utilized plastic bottles can be used as raw material for the production of plastic bottles once again; in consequence it is possible to get a non-waste production, as it was mentioned above. This is a very profitable business because it needs more than 200 years to decompose one plastic bottle.

It is also interesting to notice, that raw material can be a use for other things like bristle brushes for cleaning machines, paving tiles, various accessories, even clothes and many other things, that people use every day. The advantages of such business for the environment are obvious. Used product comes from the consumer for free and then it is processed in a completely new product and sold to the consumer at a reasonable and profitable price. In this case, both sides are completely satisfied – consumers are able to get cheap goods, and manufacturers – plenty of willing buyers and free raw materials. It is also possible to make a deal with a local dump and organise the direct delivery of raw material to the factory. Portable mini-processing factory will be convenient for those who want to organise this business in quite a lot of cities. The cost of such mini-factory is about £120 000. Clearly, there is a strong possibility to collect more than one ton of plastic bottles different size and colours in a rubbish dump per month.

2.1       The calculation of the initial investment

It is required to purchase special equipment or a mini-factory which needs substantial initial investment but if it had a short payback period, then it would be worth taking risks to open this kind of business. “You can’t make an omelette without breaking eggs” – and it is hardly possible to innovate without taking risks. (John Bessant and Joe Tidd, 2011) Fully staffed equipment costs approximately £80,000. The efficiency of this factory stands for around 1 ton per hour, that amounts approximately 24 000 plastic bottles. What is more, every business definitely needs certain numbers of employees. There should be at least 9 skilled workers to serve this line, who will also process on different stages of manufacturing of raw material (primary processing, sorting and selection of spilled material). The one worker’s average salary can be at about £800 per month. It is obvious, that there also are expenses such as utility bills – about 25% of gross profit.

2.2       The problems which could arise in developing the concept

Successful innovation requires good management, appropriate finance, skills and a supportive overall climate. (UK Government White paper on Competitiveness, 1994)  However, it is not easy! Any enterprise or factory may face the problems of different characters – financial, technical, employment, transport or even communication. The trouble with innovation is that it is by its nature a risky business. It is impossible to predict whether what is planned to achieve is going to work out or even that it will run at all. (John Bessant and Joe Tidd, 2011) The main challenges of the garbage manufacturing business are the followings:

v  Poor management; Insufficient Capital; The problem with paying taxes and wages timely; Bank loans.

v  Obtaining of a license (usually requires 3-5 months to get it).

v  Location (safety, accessibility, parking).

v  No website (advertising and marketing problems).

v  Poor quality of the equipment; electricity and water problems.

v  Employment (lack of well-qualified employees, working hours).

v  Vehicles problems to collect garbage in various cities / villages / rubbish dumps.

v  Communication (misunderstanding with staff, disagreement, complaints).

3.0 Conclusion

It is true, that to make money out of the garbage is much easier than it seems. John Bessant and Joe Tidd (2011) state that anyone can get lucky once with innovation – just by being in the right place at the right time.  In fact, it is a good idea of environmental business in large cities, where loads of garbage is thrown day by day.

3.1   Personal reflection

In general, the recycling garbage process can build up quite a beneficial business in different industries. The main advantage is the absence of special competitors. By recycling trash, the humanity keeps clean their houses, streets, cities, forests, rivers and seas. Today, people doubtlessly need to review and reorganize the collection and disposal of garbage. Doing such type of business, not only the most important world’s ecology problem will be solved but someone’s own financial problems as well.

References:

John Bessant and Joe Tidd, (2007) Innovation and Entrepreneurship ,

John Bessant and Joe Tidd, (2011) Innovation and Entrepreneurship. 2nd ed.

John Legge & Kevin Hindle, (2004) Entrepreneurship Context, vision and planning

John W. Mullins, (2003) The new business road test: what entrepreneurs and executives should do before writing a business plan. 3rd ed.

Michael A. West & James L. Farr, (1990) Innovation and creativity at work. Psychological and Organisational Strategies.

Nigel King & Neil Anderson, (1995) Innovation and Change in Organisations

Stuart Read, Saras Sarasvathy, Nick Dew, Robert Wiltbank, Anne-Valerie Ohisson, (2011) Effectual Entrepreneurship

 

http://www.fairfieldcity.nsw.gov.au/upload/images/Recycle_Bin_big.jpg

http://www.eforearth.com/wp-content/uploads/2009/04/recyclingearth.jpg

http://onlineinvestmentincome.com/wp-content/uploads/2012/06/investment-income.jpg

Bibliography:

John Bessant and Joe Tidd, (2007) Innovation and Entrepreneurship ,

John Bessant and Joe Tidd, (2011) Innovation and Entrepreneurship. 2nd ed.

John Legge & Kevin Hindle, (2004) Entrepreneurship Context, vision and planning

John W. Mullins, (2003) The new business road test: what entrepreneurs and executives should do before writing a business plan. 3rd ed.

Michael A. West & James L. Farr, (1990) Innovation and creativity at work. Psychological and Organisational Strategies.

Nigel King & Neil Anderson, (1995) Innovation and Change in Organisations

Roes Jay, (2003) How to Write Proposals & Reports that Get Results

Stuart Read, Saras Sarasvathy, Nick Dew, Robert Wiltbank, Anne-Valerie Ohisson, (2011) Effectual Entrepreneurship

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