Product Design and Development Plan for solar panel

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RUNNINGHEAD: MILESTONE THREE – BUSINESS PLAN FIRST FIVE 1

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MILESTONE THREE – BUSINESS PLAN FIRST FIVE

Daylight Energy Consulting

101 Boylston Street Suite 5, Boston MA, 02108

www.daylightconsulting.com / 617-555-1234

General Inquiries: [email protected]

– President & CEO:

617-555-1234 x1

The following information is considered personal & confidential, intended solely for the use of potential investors and business partners. All information is of the author’s formulations unless otherwise referenced.

Table of Contents

I. Executive Summary

II. Company Description

a. General Description

b. Mission and Goals

c. Strategy

i. Products and services

ii. Target market (customers, geographic scope)

iii. Basis for differentiation and competitive advantage

d. Current Status

e. Funding Sought

f. Legal Status and Ownership

III. Industry Analysis

a. Industry Size, Growth Rate, and Sales Projection

b. Industry Structure

c. Name of Participants

d. Key Success Factors

e. Industry Trends

f. Long-Term Prospects

IV. Market Analysis

a. Market Segmentation and Target Market Selection

b. Buyer Behavior

c. Competitor Analysis

d. Estimate of Annual Sales and Market Share

V. Marketing Plan

a. Overall Marketing Strategy

b. Pricing Strategy

c. Sales Process (or Cycle)

VI. Management Team and Company Structure

a. Management Team

b. Other Professionals

VII. Operations Plan

a. Operations Model and Procedures

b. Business Location

c. Facilities and Equipment

d. Operations Strategy and Plans

VIII. Product (or Service) Design and Development Plan

a. Development Status and Tasks

b. Challenges and Risks

c. Costs

d. Intellectual Property

IX. Financial Projections

a. Sources and Uses of Funds Statement

b. Assumptions Sheet

c. Pro Forma Income Statements

d. Pro Forma Balance Sheets

e. Pro Forma Cash Flows

f. Ratio Analysis

Appendices

I. Executive Summary

Introduction

Demand for solar panel installation continues to rise. Solar energy was up 17% in 2015 from 2014 and surpassed natural gas installations for the first time in the history of the market. This is due to competitive pricing with gas as the installation costs of solar panels continues to drop (Martin, 2016). This promising rise will lead to increased demand for consulting services, as converting a business or organization to renewable energy can be a long and confusing process. We plan to address this trend and fill a gap in the marketplace in the Boston, MA area for a small and dedicated consulting firm that will act as an effective middle man for the process of switching to renewable energy through the use of solar panels.

Company Description

Daylight Energy Consulting, located in Boston Massachusetts, is a solar power energy consulting firm that provides onsite energy improvement strategies, and solar power system installation, for local businesses looking to save money and meet sustainability goals. We will conduct onsite energy audits to evaluate a business’s renewable energy potential, and then work with our clients to design a solar installation project that fits best their needs. Our service provides resources to reduce long-term energy overhead costs, improves public image, and allow greater energy independence for businesses. Daylight Energy Consulting works to ensure our clients receive the best return on their investment, and the best service from introduction to project completion.

We realize the process to transitioning to solar energy can be perplexing, and somewhat overwhelming. Keeping this in mind, our firm plans to provide friendly, professional, and detail oriented service to our clients all at times.

Industry Analysis

Daylight Savings Consulting will complete in the Renewable Energy industry. In 2007 the solar power industry generated 42.8 million dollars and in 2016 it jumped to 195.9 million dollars (Mei-Pochtler, 2016). The popularity of alternative energy sources has caused many larger consulting firms to open and operate across the United States. The competition in our target area is low, which is a major advantage for our firm. We plan to keep our business small, which will provide our firm with an industry advantage as we will be able to run a leaner business.

Market Analysis

Daylight Energy Consulting’s target market is the citizens of Boston aged between twenty-five and fifty. This age group is the most dynamic and active in the state. It comprises of the working groups, business owners, professional and other active people in the state. This group of citizens has been seen to be serious about eco friendliness and sustainability. The neighborhood is highly eco-friendly as the residents in this area aim at minimizing their carbon footprint, and this organization has collaborated with several firms in sustaining their resources and as a result has enabled their clients to save their money on their energy expenses. Boston area has a total population of 589,141 people. The largest age groups is the people aged between 25 and 34 with 124, 762 people. 35-44years age group is made up of 86, 420 people (City Data, 2013). Boston also has the highest estimated household income in Massachusetts which is $53, 583(Info Please, 2013). The estimated per capita income in the city is $34, 139. These figures are also estimated to increase over time.

Marketing Plan

Management Team and Company Structure

Daylight Energy Consulting’s management team is comprised of people with many years of experience in the renewal energy sector. Our objective is to create plans that will best suit our customer’s needs. We have a Chief Financial Officer and three directors reporting to the President and CEO. The C.E.O of the organization must have prior knowledge of the industry and excellent management skills. Katherine Barreto’s family has been in renewal energy industry for decades giving her first-hand experience. The three directors of the company are highly experienced and are able to make decisions quickly which is extremely important due to the small size of the management team.

Operations and Development Plan

Financial Projections

Funding Sought

Daylight Energy Consultants currently has no debt, and has been financed equally by each partner. We are seeking a $122,000 line of credit for the first four months expenses while initial customers are being acquired. The following is the breakdown of start up monthly expenses.

· Professional monthly payroll: $12,500

· Management monthly Salary: $14,500

· Warehouse Rent: $2,300

· Monthly Advertising: $1,200

II. Company Description

General Description

Mission and Goals

The mission of Daylight Energy Consulting is to gain our clients trust by providing the most energy efficient, and cost-effective solar solutions in the Boston area.

Our goal is to help clients in the Boston area better understand the benefits of incorporating solar powered energy to improve their businesses as well as preserve the environment.

Products and Services

Daylight Energy Consulting will offer one-on-one solar energy optimization consulting services to small businesses in the Boston area. Services will be provided by our field experts both in our home office and on site with business owners and professionals. We will offer various different solutions to meet the needs of our clients based on each individual’s need for solar energy optimization. We will set clients up with installation firms and follow along through every step of the process of the rooftop solar panel installations to ensure both success and complete satisfaction with the product. Additionally, we will stay with clients through the life of their investment in said solar panels and work closely with them should any questions or problems arise.

target market (customers, geographic scope)

In order to avoid head-to-head competition within the industry we have decided to specialize in one specific area. Our target market will be businesses, located within the Boston area, which could benefits from the cost saving provided by solar energy. In May 2015, Boston was voted the top city in the country for saving energy (Harvey, 2015). The city requires that all businesses report their energy use, along with an energy assessment, every five years. This requirement is called the “Building Energy Reporting Disclosure Ordinance.” The report states that all buildings are required to improve their efficiency if they’re not ENERGY STAR certified or showing improvements (Harvey, 2015). I also came across a program within Boston called “Renew Boston Solar.” This program encourages the widespread adoption of solar technology throughout the city. With this information I believe more business, within the Boston area, will be attracted to the consulting services our business will have to offer.

Basis for Differentiation and Competitive Advantage

We at Daylight Energy Consulting plan to differentiate ourselves from the competition and use it to a competitive advantage by keeping our business small and personable. We plan to work directly, face-to-face with clients in an environment which is comfortable for them – be it in our office, in their office, at a designated meeting place, or even in the comfort of their own home. Our experts are professional and kind – we will never act as “pushy” salespeople. We aim to be considered a neutral and knowledgeable 3rd party in the situation, a mediator of sorts. We will very closely with clients, taking the time to ensure each understands what solar panel installation will mean for their business, addressing all possible details to help find the best long-term money saving solution.

Current status

Daylight Energy Consulting is a new partnership, and will begin serving the Boston area in June 2016. To date, the following milestones have been completed.

Milestones Completed:

· Feasibility analysis completed

· Management team in place

· Company name registered.

· Potential warehouse locations selected

· Installation team candidates interviewed

The following milestones are either in progress, or have yet to be completed.

Milestones Remaining to Be Completed:

· Purchase inventory.

· Business plan completion

· Collect data on potential clients

· Hire installation team members

· Sign lease on warehouse

Funding Sought

· Professional monthly payroll: $12,500

· Management monthly Salary: $14,500

· Warehouse Rent: $2,300

· Monthly Advertising: $1,200

Legal Status and Ownership

Daylight Energy Consultants is a general partnership owned by its management team, and each of the four partners owns 25% equity in the company.

III. Industry Analysis

IV. Market Analysis

In the Boston area, Daylight Savings Consulting potential customer base is the individuals and also business owners from ages between averages of twenty-five to fifty. Due to the diversity of the cultural backgrounds of most of the people in this area, the organization will focus on providing efficient customer services to African Americans, Caucasians and also Latin Americans. This process will increase the ability of the company to gain more clients and also help other potential customers become aware of our products. The targeted income earners are mainly middle-income earners. Due to the growing gas and fuel prices, renewable energy products such as out solar panels serve as an adequate alternative for both businesses and also people that may feel the pinch of the high fuel prices (White, 2013). The best way to determine all these elements within our target group is through hiring external qualified research experts that mainly focus on the evaluation of the metrics and the prevalent trends in the renewable energy sector. They will adequately evaluate the necessary frameworks and strategies the firm needs to influence most of the potential customers.

Why the Target Market was picked

Daylight Savings Consulting target market is the citizens of Boston aged between twenty-five and fifty. This age group is the most dynamic and active in the state. It comprises of the working groups, business owners, professional and other active people in the state. This group of citizens has been seen to be serious about eco friendliness and sustainability. They own electric cars and this has made the electric car charging point in the city very business. This age group has also embraced the Bike system in the city and most of them will rent bikes to use in the movements. It is therefore the best target market for the renewable energy products

Breaking down the segments

The population in this area is highly motivated in their actions of green purchasing. Their behavior towards renewable energy has been remarkable. The ‘Renew Boston through Solar’ has made enterprises and also people to acknowledge the importance of green living than the current trend. The neighborhood is highly eco-friendly as the residents in this area aim at minimizing their carbon footprint, and this organization has collaborated with several firms in sustaining their resources and as a result has enabled their clients to save their money on their energy expenses. The consumers in this area have gained access to reliable and relevant information concerning the environmental elements of the products. This aspect has influenced the purchasing behavior of the consumers as they lean towards buying products such as the solar panels of the company that will promote the overall green objectives of Boston as a community (Harvey, 2015).

Segments worth targeting

The middle aged and also adults are the most critical people that will be targeted by this company. Since the products offered will serve various needs, the segments will be distinct since most individuals in their twenties will be looking for products that can sustain their use of their various gadgets without using electrical power. Through the integration of out solar panels into numerous homes, the panels will serve as the best energy sources to cater for their needs. This strategy is also applicable to the middle-aged individuals. As for companies, they can use our products to generate natural energy for their machines. When installing effectively, these panels will be highly critical in consumption of energy and the expenses of conventional energy sources. The organization will conduct numerous television advertisements to make potential clients aware of our products. We will collaborate with radio stations and media houses to reveal to consumers about our sustainability efforts and also show them the importance of our products and how it will change their lives.

Ranking the segments

The ranks will involve the demographic, psychographic, geographic and behavioral segments of the area. Through the demographic segments, the company will group individuals together based on their ages, income and also their social class. Boston area has a total population of 589,141 people. The largest age groups is the people aged between 25 and 34 with 124, 762 people. 35-44years age group is made up of 86, 420 people (City Data, 2013). These are the most active age groups and they make up Daylight Savings Consulting target market. Having the highest number of people, Daylight Savings Consulting product has a good ready market. Boston also has the highest estimated household income in Massachusetts which is $53, 583(Info Please, 2013). The estimated per capita income in the city is $34, 139. These figures are also estimated to increase over time.

The geographic segment will involve the marketers of the company segmenting the clients according to their towns and also their postal codes. In general, the Boston geographic segment values sustainability and they create a ready market for our products. In psychographic the company will gather customers together based on their interests, attributes and their lifestyles (Rosenbloom, 2012). The behavioral segments will divide consumers into groups by their knowledge towards green purchasing and eco-friendly practices of Boston. In the craft of solar panels for this area in Boston, there are around six hundred thousand people between the ages of twenty-one and fifty-five years of age. In this total market, there may be around three hundred thousand people between the age of twenty-one and forty-five. These numbers have been concluded from the research of the age range for the potential and current clients of green products nationwide. Within this group, there may be one hundred and fifty individuals with incomes above fifty thousand dollars and these working professionals with at least a college degree. Narrowing the market segment enhances the ability of the company to target the potential clients and also gain a competitive advantage in discovering opportunities in this segment to sell solar panels.

V. Marketing Plan

VI. Management Team and Company Structure

Management Team

The Renewal Energy management team consists of the President and CEO and three directors:

Chief Executive Officer and Marketing, Age 26

The CEO has been working with Renewable energy in different industry for over ten years. She joined her family's energy business part time at an early age. Her expertise is in the energy and particularly the renewable energy has enabled the company to have the plans and objective to maintain its competitive advantage. She has a master’s in the renewable energy engineering from the University. Her knowledge and expertise are key assets to the firm. Katherine owns the company and therefore has 50% of the company’s shares. This is her personal investment and the success of the company means that there is returns in her investment. The CEO’s basic salary is $40,000. Katherine also handles the market researcher, creative services personnel and public relation personnel. She is responsible for designing the best strategies for marketing the business’s products for Daylight Energy Consulting. One of her responsibility of carrying out market research for the organization and identify new business opportunities in the area She understands dynamics of the industry giving her the leading edge.

Chief Financial Officer, Age 28

The finance officer graduated with honors from University. Aaron has six years of experience as VP and controller at SolarFlair Energy, Inc. His primary duties of the CFO is to manage the financial risk of the corporation, keep records and plan the company’s budget. He owns 25% of the business and makes $40,000. He has invested in different sectors of the business such as the solar energy. The financial advisors use his accounting knowledge to determine the financial operations of the organizations. Aaron have the responsibility of advising the team on financial issues.

Operations and Program Management, Age 33

The operation department of Renewal Energy is responsible for developing renewable energy products, selling them and shipping them to the clients. In this process, it has to be involved in the procurement, design and quality control. The company has a director of the operation department who is a professor of technology, production and operations management. Amanda is one of the company’s director and owns 10% of the company’s shares and her salary is $40,000. She has worked at SolarCity in New Jersey for over 15 years. Amanda volunteers her talents to the Habitat for Habitat for Humanity. Her expertise in this sector has enabled the company to be efficient in the production of quality products and its operations. Having the best operations manager enables the company to sustain its competitive advantage. Amanda also handles program management and member care. She handles consultation, education and crisis response for Daylight Energy Consulting. Amanda understand the safety measures that are required by law and also know the different types of energy sources available.

HR/Recruiting and Information system, Age 25

This department is concerned with managing the company’s staff and maximize their performance while hiring new members in vacant positions. Lisa graduate of University having done the bachelor of human resource with a minor in information system. She has the experience from different companies of manufacturing in both HR and IT departments therefore she is able to fill both roles at Daylight Energy Consulting. She earns $40,000 and owns 15% of the business. Lisa won Human Resource Management Impact Awards in 2015.

Organizational structure refers to the order in which an organization allocates duties and responsibilities to their staff to ensure that their objectives are met. The Daylight Energy Consulting structure will provide the employees with clear rules on how they can progress with their duties. This structure will clearly indicate the chain of command of an organization which guides the employees on who to report to at their place of work. Furthermore, it will show how work is distributed among employees. It will clearly state the procedures and policies of the company that the employees will follow. The organization structure is critical in an organization because it helps define the direction an organization will take in delivering their services. A C.E.O will head the company. She will have an executive decision-making role in the organization. The board of directors will be the second in hierarchy followed by the managers of the different departments. The organizational chart of the company will be as follows;

VII. Operations Plan

Important facilities and equipment

Central inverters will be needed. They are highly critical as they carry a ten-year warranty and commonly go for almost twelve or fifteen years without renewal of these warranties. If the organization decides not to change their location in another fifteen years, this warranty cold be highly helpful as there would be no expectations of the firm to pay to replace their inverters at some point. Microinverters will also be needed. These pieces of equipment are usually installed right under each solar panel instead of converting the elements of DC to Ac power at a central; designated area. The main benefit of using these inverters is the ability for all solar panels to transmit power to the company. All these systems will be bought since the expenses of buying all these pieces of equipment individually is much cheaper compared to leasing them which might strain the finances of the company in the future when the contract ends (Gevorkian, 2016).

Solar hot water systems would need periodic inspections of the solar panels for damage, leaks and also the accumulation of dirt on the surfaces of the panels. If the organization utilizes these systems in a glycol water mixture, technicians in the team can test the system periodically for appropriate concentration levels of glycol. They should test and inspect the drain down systems of the company before an onset of cold weather that may prevent drainage of the panels

Programs

The organization can use the Existing Renewable Facilities Programs. This framework can be utilized to allocate funds that have been assigned from ratepayers that have investments in the firm on a utility basis through a public goods charge for the sole purpose of increasing competitiveness of the current systems of the company (Itteilag, 2012). Once the corporation employs this program, they can create a self-sustaining market for the currently existing facilities where the facilities can operate without funding from the public. Through the Energy Commission, the ERFP can assist in payment of eligible facilities by their renewable production of electricity and how this program benefits the entire organization.

Solar panels price comparison

The costs for connecting and permitting solar systems to the grid and having them inspected in Germany are lower compared to the United States. Germany spends only 3 cents a watt on their solar panels and related equipment while United States installations range from twenty cents. The higher rates are because of, the larger instances of paperwork and also because United States installations are subjected to the payment of permitting fees. Also, U.S installations involve high costs on labor during the initial installation process. The installers pay more in sales tax while Germans are usually exempted from such situations. They also pay high overhead costs which are closely connected to economies of scale.

Other installation parts needed

During the installation, the process of mounting the PV panels is highly significant. Initially, the experts must mount these panels where they will receive maximum sunshine for an extended period. However, the most challenging problem is fitting them with enough integrity that they can stay put for more than one year. The tracking mounts equipment will mechanically move the installed PV panels daily so that they can directly face the sun consistently. The dual axis trackers can modify the elevation and azimuth while the single axis trackers can connect to the azimuth directly (Boxwell, 2012). Disconnect switches are also important as they are needed to be mounted quickly. The company must clearly illustrate to their customers on how to turn the PV system off for various safety precautions. If any irregular behavior occurs in the electrical system of the client’s home, they must be advised to shut off the solar system initially.

Steps in selection of the facilities

Once the equipment and programs have been gathered, the company conducted energy audits to evaluate a business’s renewable energy potential and then work with our clients to design a solar installation project that fits best their needs. The steps involving utility have become highly critical in the entire process. In planning any project related to renewable energy components, meeting with the local utility in evaluation of the requirements for grid connection is highly significant (Woodroof, 2009). The company cannot fail at this step since it enables them in incorporating the requirements necessary for the specification of the system and can lead to the denial of permission in connection with the grid, once this process is completed. The managers must address the critical specifications concerning issues involving the renewable energy components that will work and communicate together.

Transportation

The solar panels and related equipment require being packed horizontally or vertically when stacked in a box. Before transportation, the separators will be placed between each module and additional protections will be added to the four corners of all module stacks. In various cases, these modules are packed in different individual carton boxes and then packed into a large master carton box. The managers involved I transportation must confirm with the manufacturing company concerning all the necessary information. This information includes the assessment on the best route of travel, calculation of the insurance and permit costs and also the time it will take for the manufacturing agency to deliver the panels ordered. During the transportation, the delivery company will use interstate highways to avoid traffic and also reduce the shipping time it might take to use a direct route. The managers must ensure that the shipping quotation is not higher than the actual delivery costs. This quote usually includes the price of insurance, tolls and also the permits that would be incurred for the entire trip.

Business Location and Layout of the building;

Since Daylight Energy Consultants is located in Boston, its location makes it highly suitable for customers to gain easy access. A rectangular conservatory style extension was also formed and has a slightly sloping roof. This structures attached to the North West corner of the entire building, and this houses the research and mechanical service area while the offices and reception are just south of the entrance of the building.

The building is highly suitable for expansion due to its irregular shape. This form leads to a complex layout where several features are located between the south and western sides as a person progresses towards the kitchen situated on the east aspect of the building. The design of the building has exhibited promising elements that can be used by design experts for the expansion process. A survey can be conducted to address the issues that might involve the entire expansion and how the firm can approach the costs and impact of the expansion of other businesses in that locality

VIII. Product (or Service) Design and Development Plan

IX. Financial Projections

References

City Data. (2013).Retrieved from: http://www.city-data.com/city/Boston-Massachusetts.html

Info Please (2013). Retrieved from: http://www.infoplease.com/us/census/data/massachusetts/boston/economic.html

Harvey, C. (2015, May 20). Boston was just named the top city in the country for saving energy. Here’s why. Washington Post. Retrieved from https://www.washingtonpost.com/news/energy-environment/wp/2015/05/20/why-boston-is-leading-u-s-cities-when-it-comes-to-saving-energy/

Martin, C. (2016, February 22). U.S. Solar Surged 17% in 2015 Led by Demand for Rooftop Power. Retrieved from http://www.bloomberg.com/news/articles/2016-02-22/u-s-solar-surged-17-in-2015-led-by-demand-for-rooftop-power

Mei-Pochtler, A. (2016). Revenue of the solar power industry in the United States. Retrieved May 1, 2016, from http://www.statista.com/statistics/289149/revenue-solar-power-industry-united-states/

Rosenbloom, B. (2012). Marketing Channels. Cengage Learning

White, K. K. (2013). America Goes Green: The Encyclopedia of Eco-friendly Culture in the United States, Volume 1. ABC-CLIO

CEO

HR and IT

COO

, CFO

Department