Renewable energy business plan for starting your own business
Do you aspire to keep both your bank account and the environment happy? A renewable business may be the best choice for you, then. By launching it, you can generate profits while doing your bit for the planet.
A renewable energy enterprise supplies green and clean energy produced by solar, wind, or water resources. The business has immense potential especially due to the launch of B3W in near future.
To commence this business, you require a business plan for renewable energy that covers every aspect. For an insight into how to start an alternative energy company and how to document a perfect operational plan, you can read this article. In this blog, we have given a sample business plan for Clean Power, a startup based in Phoenix. Before entering the business world, it will be helpful to also read a business plan for investors.
2.1 The Business
Clean Power is a renewable energy startup based in Phoenix. The company aims at offering clean and green energy solutions to households, institutes, companies, and manufacturing plants.
2.2 Management of renewable energy business
After you have developed an operational plan for starting a renewable energy business, you need to devise a strategy to manage it. Your management strategy should include planning about where to procure the equipment from, where to launch your plant, and how to manage the transitions from raw product to successful installation while remaining within your finances.
In this business plan for renewable energy projects we are documenting how to start a renewable company. We will include segments from business plan for banks to help you with the financial part.
Moreover, in this renewable energy business plan pdf, we’ll also jot down the staff and other requirements to run the company.
2.3 Customers of the renewable energy business
Customer groups may be diverse, based on your preferences. Those of Clean Power are:
- Industrial Complex
- Manufacturing Hubs
2.4 Business Target
The business targets of Clean Power are centered around environmental protection and customer satisfaction. They will be mentioned in the later sections. However, monetary goals are partially demonstrated here:
3.1 Company Owner
Clean Power will be owned by Martha Ben. Martha is an Electrical Engineer. She has specialized in Energy Systems Engineering at the prestigious Massachusetts Institute in Amherst.
3.2 Why the renewable energy business is being started
Martha always wished to start a business in the engineering niche. Due to immense renewable energy business opportunities, she decided to go for it.
3.3 How the renewable energy business will be started
If you are worried about how to start a career in renewable energy, just follow these simple steps.
Step1: Create Business Plan for Renewable Energy Company
To initiate the launch, you need to make business plan renewable energy. For reference, you may use this renewable energy business plan template or solar energy business plan.
Step2: Acquire Resources
Subsequently, you are required to procure all the equipment that may be needed to generate renewable energy. You will need to hire the personnel and staff that can help you operate.
Step3: Make you Known
The next step is to advertise your venture and competitive advantage. You should be clear and concise about how you are different and better than your competitors. A good practice these days is to exploit online media, Google Ads, and websites to make you known to the public.
Step4: Manage Finances
As you are finished with devising a business plan, you need to start operating and managing the financial flows.
|Research and Development||$10,000|
|TOTAL START-UP EXPENSES||$219,000|
|Other Current Assets||$238,000|
|Start-up Expenses to Fund||$219,000|
|Start-up Assets to Fund||$922,600|
|TOTAL FUNDING REQUIRED||$1,141,600|
|Non-cash Assets from Start-up||$1,207,600|
|Cash Requirements from Start-up||$296,500|
|Additional Cash Raised||$48,000|
|Cash Balance on Starting Date||$36,000|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$54,000|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$1,141,600|
|Loss at Start-up (Start-up Expenses)||$373,500|
|TOTAL CAPITAL AND LIABILITIES||$1,588,100|
Services of renewable energy business
Services for startup renewable energy business must be decided as you explore how to get into renewable energy industry. Due to diverse business opportunities in renewable energy, you are fortunate to provide services in any niche. To decide on the services, you should study several renewable energy business plans and explore renewable energy business ideas from online companies.
Whatever services you decide for renewable energy for business, make sure to include all its aspects in your business plan template for renewable energy.
The services of Clean Power are:
- Manufacturing & Setting Up Solar Cells
Our basic service will be to manufacture solar panels, solar tiles, and solar cells to be installed in small and large spaces.
- Generating Hydra Power
We will develop optimized solutions to generate clean energy by exploiting water resources.
- Wind-Powered Projects
We will also establish and install wind power plants in the city outskirts.
- Installing Power Protection Systems
We will also set up power protection systems with relaying networks wherever we install the renewable energy setup.
Marketing Analysis of renewable energy business
There are many factors to be considered before establishing a business in renewable energy. First, you need to explore how to start a renewable energy business in a specific location. You need to check out for average income of people in your vicinity to know whether they would avail of renewable energy solutions or not.
All of this information can be summarized in the marketing analysis segment of your renewable energy business plan. You can further make sections for customer segments, market trends, and prevalent pricing strategies to have a clearer idea of renewable energy business opportunity in your area.
For developing a marketing analysis that considers all business opportunities renewable energy, an expert person who knows how to gather statistical data for secondary analysis is required. You may consider hiring a professional or if you want to do the task yourself, you should thoroughly study a renewable energy business plan sample. A good practice would be to also go through biotech startup business plans to have in-depth knowledge of the field.
5.1 Market Trends
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All the graphs related to renewable energy are seeing an upward trajectory. At present, the market size is $17 billion according to IBISWorld and the figure is expected to rise in the near future. Most of the solar, hydro, and wind power projects are expected to be assigned by the U.S. government in the wake of clean energy programs sought after by B3W countries.
5.2 Marketing Segmentation
In this renewable energy company business plan the market segments identified by Clean Power are given below. Since some of the segments also do overlap with those in gas station business plan and business plan for a biodiesel, you can take guidance from them as well.
Business Plan for Investors
This segment is expected to make small purchases for mainly solar panels at us.
5.2.2 Industrial Complex
This segment will be making large purchases and they are expected to avail of all of our services including the installation of protection systems.
Government and non-government institutions are expected to avail of our hydro, wind, and solar energy services. They might also hire us for installing power system installation systems for generation grids.
5.2.4 Manufacturing Hubs
This segment will form most of our customers. It is because manufacturers look for ways to optimize their operations even when the initial setup costs are high. They are also expected to avail of our power system protection services.
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
5.3 Business Target
- Maintaining a CSAT score above 90% throughout the service years.
- Capturing 25% of the market share within three years of operation.
5.4 Product Pricing
As per this solar farm business plan, Clean Power will keep its prices in the same range as the market average. However, certain discounts will be provided at the start to attract customers.
Marketing Strategy of renewable energy business
Though there are immense business opportunities in renewable energy, they can yield you profits only when you reach out to a maximum of customers.
A major challenge in renewable energy entrepreneurship is to convince people how renewable energy is ultimately going to save them money as the initial installation costs are high. Therefore, while you learn how to get into the renewable energy industry, you should also explore how to market renewable energy for businesses’ success.
In this blog on how to make a renewable energy project, we are providing the sales strategy developed by Clean Power.
6.1 Competitive Analysis
- Our employees are highly specialized and experts in their domains.
- We are offering several discounts, in the beginning, to get known.
- Customers are our topmost priority, we are willing to go to all lengths to facilitate them.
6.2 Sales Strategy
- We’ll offer a 50% discount to our first 50 customers.
- We’ll offer a 20% discount on all our services in the months of June and July.
- We’ll advertise our startup on social media, in local newspapers, and in magazines.
- We’ll hold seminars to elucidate the importance of climate conservation by turning to renewable energy.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|Manufacturing & Setting Up Solar Cells||4,000||4,240||4,494|
|Generating Hydra Power||1,400||1,484||1,573|
|Installing Power Protection Systems||3,400||3,604||3,820|
|TOTAL UNIT SALES||9,800||10,388||11,011|
|Unit Prices||Year 1||Year 2||Year 3|
|Manufacturing & Setting Up Solar Cells||$985.00||$1,142.60||$1,325.42|
|Generating Hydra Power||$1,540.00||$1,786.40||$2,072.22|
|Installing Power Protection Systems||$800.00||$928.00||$1,076.48|
|Manufacturing & Setting Up Solar Cells||$3,940,000.00||$4,844,624.00||$5,956,949.67|
|Generating Hydra Power||$2,156,000.00||$2,651,017.60||$3,259,691.24|
|Installing Power Protection Systems||$2,720,000.00||$3,344,512.00||$4,112,411.96|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Manufacturing & Setting Up Solar Cells||$974.00||$1,071.40||$1,124.97|
|Generating Hydra Power||$1,490.00||$1,639.00||$1,720.95|
|Installing Power Protection Systems||$795.00||$874.50||$918.23|
|Direct Cost of Sales|
|Manufacturing & Setting Up Solar Cells||$3,896,000.00||$4,542,736.00||$5,056,065.17|
|Generating Hydra Power||$2,086,000.00||$2,432,276.00||$2,707,123.19|
|Installing Power Protection Systems||$2,703,000.00||$3,151,698.00||$3,507,839.87|
|Subtotal Direct Cost of Sales||$10,675,000.00||$12,447,050.00||$13,853,566.65|
Personnel plan of renewable energy business
If you have decided to build your own renewable energy source and help others in doing the same, you should go for planning about staffing requirements. The business renewable energy cannot be run without an expert, dedicated, and talented bunch of workers. You need to devise a criterion for employment and a policy to assign weightage to candidates’ test or interview scores, educational qualifications, experience, etc. to find the ideal one.
7.1 Company Staff
In this renewable energy business plan pdf, we are providing the list of company staff developed for Clean Power.
- 1 CEO to oversee all operations
- 1 Financial Manager
- 3 Electrical Engineers
- 1 Software Engineer
- 5 Electricians & Technical Assistants
- 1 Legal Expert
- 2 Drivers
- 1 Web Developer & Graphic Designer
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
|Electrical Engineers & Software Engineer||$135,000||$148,500||$163,350|
|Electricians & Technical Assistants||$100,000||$110,000||$121,000|
|Web Developer & Graphic Designer||$15,000||$16,500||$18,150|
Financial Plan of renewable energy business
The costs incurred in running a renewable energy business are high. At the customer end as well, getting renewable energy setup installed is an expensive venture. The renewable energy suppliers must, therefore, develop a long-term financial plan. Individual financial strategies for each project will also be needed to demonstrate to the consumer how renewable energy is going to save them their dollars in the long run.
It is recommended to hire a professional financial analyst for developing an accurate financial plan. The professional expert in the field will ask you for your fundamental policies and monetary goals and develop a plan with accurate profit margins and loss assessment tables. In case you are looking for a renewable energy business for sale you may get a pre-developed financial plan for that business.
The financial plan of Clean Power is given below.
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||8.11%||8.16%||8.19%|
|Long-term Interest Rate||8.35%||8.41%||8.44%|
8.2 Break-even Analysis
|Monthly Units Break-even||5339|
|Monthly Revenue Break-even||$131,850|
|Average Per-Unit Revenue||$233.00|
|Average Per-Unit Variable Cost||$0.68|
|Estimated Monthly Fixed Cost||$166,200|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$10,675,000||$12,447,050||$13,853,567|
|TOTAL COST OF SALES||$10,675,000||$12,447,050||$13,853,567|
|Gross Margin %||1.30%||6.41%||15.28%|
|Sales and Marketing and Other Expenses||$133,000||$136,000||$138,000|
|Total Operating Expenses||$548,400||$591,000||$636,530|
|Profit Before Interest and Taxes||($407,400)||$261,304||$1,862,789|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$24,000||$25,920||$27,994|
|SUBTOTAL CASH FROM OPERATIONS||$79,000||$86,110||$92,999|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$0||$0|
|New Other Liabilities (interest-free)||$0||$0||$0|
|New Long-term Liabilities||$0||$0||$0|
|Sales of Other Current Assets||$0||$0||$0|
|Sales of Long-term Assets||$0||$0||$0|
|New Investment Received||$0||$0||$0|
|SUBTOTAL CASH RECEIVED||$79,000||$87,000||$93,000|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$63,000||$67,000||$70,000|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$0|
|Other Liabilities Principal Repayment||$0||$0||$0|
|Long-term Liabilities Principal Repayment||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$63,000||$68,040||$73,483|
|Net Cash Flow||$22,000||$24,000||$25,000|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$287,000||$321,440||$361,299|
|TOTAL LONG-TERM ASSETS||$25,000||$28,000||$31,500|
|Liabilities and Capital||Year 4||Year 5||Year 6|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$19,000||$21,280||$23,919|
|TOTAL LIABILITIES AND CAPITAL||$305,000||$332,640||$374,220|
8.6 Business Ratios
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||2.14%||2.37%||2.63%||2.40%|
|Total Current Assets||150.30%||151.00%||152.00%||158.00%|
|Percent of Sales|
|Selling, General & Administrative Expenses||94.80%||97.36%||100.09%||97.80%|
|Profit Before Interest and Taxes||40.90%||42.00%||43.18%||33.90%|
|Total Debt to Total Assets||0.18%||0.18%||0.17%||0.40%|
|Pre-tax Return on Net Worth||73.68%||74.24%||75.00%||75.00%|
|Pre-tax Return on Assets||97.88%||102.77%||107.91%||111.30%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||34.51%||35.58%||36.68%||N.A.|
|Return on Equity||56.20%||57.94%||59.74%||N.A.|
|Accounts Receivable Turnover||7.7||7.7||7.8||N.A.|
|Accounts Payable Turnover||15.9||16||16.3||N.A.|
|Total Asset Turnover||2.5||2.5||2.6||N.A.|
|Debt to Net Worth||-0.04||-0.03||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$238,000||$251,328||$265,402||N.A.|
|Assets to Sales||0.85||0.87||0.89||N.A.|
|Current Debt/Total Assets||1%||0%||0%||N.A.|
- How do I start a renewable energy business?
To offer renewable energy service, you need to make renewable energy plan. If your business plan renewable energy covers all the aspects of your business, you are only left with the task of executing it. You need to procure the machinery, rent the space, and hire some engineers, technical assistants, and managers and you are good to go!
- Which renewable energy is profitable?
If you compare renewable energy sources, you can figure out that solar is the most profitable. It is because its scale can be minimized and extended without many constraints. In this business plan for renewable energy projects we have provided the unit sales and income generated from the solar products.
- How can I start a small energy company?
You can read the complete guide on starting a small energy company in this renewable energy company business plan. The steps would be the same except that your sphere of activity will be confined to a smaller area and your manufacturing scale may be lower than others.
- What is renewable energy in business?
In business, renewable energy is offering those resources to generate power that are never prone to depletion. As elucidated in this renewable energy business plan sample, the business includes designing customized solutions according to your consumer needs on a small and large scale.
- What are the 7 types of renewable resources?
The seven types of renewable resources are:
- Who is the largest renewable energy company?
Tesla is the largest and most renowned renewable energy company in the United States.
- Is renewable energy profitable?
Yes! In the financial part of this renewable energy company business plan, you can see how much profits can be generated as per investment by launching this business. To ensure your business never runs into loss, you just need to make an accurate renewable energy business plan template.
- How do renewable energy companies make money?
Renewable energy companies make money by offering clean, green, and sustainable energy solutions to their customers. In this renewable energy business plan pdf, we have provided all stats for Clean Power for you to gauge how much revenue can be earned through it.
- How can I invest in renewable energy?
You can launch a franchise, start your own company, as well as invest in other startups by buying their shares or stocks. In this renewable energy business plan, you can see a stepwise guide for if you want to launch your own business.
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