Waste Management Plant Financial Model-Case Study

Background

The case study exemplifies how Oak Business Consultants comprehend client needs and the methodologies and approaches employed to address those issues, all aimed at optimizing client contentment. Our client’s company operates within the mobility sector in South Africa, offering waste management services to its clients.

The company is scheduled to begin operations in the concluding quarter of 2023. Hence, the company wanted a pricing strategy for the waste management plant and valuation to know the investment required. The waste management plant financial model aimed to get a clear and profitable pricing strategy for the waste management plant and to know the business’s investment loan/equity requirement.

Requirements

1. Pricing strategy for waste management plant to have a profitable business.
2. Prepare the waste management plant Financial model to know the valuation of the company and investment requirements.

Solutions

1. It was really important for us to truly grasp what the client needed so we could give them the best possible result that perfectly matched the client’s unique needs. To make this happen, we arranged meetings with the client to dig deep into what they were hoping for and what goals they had in mind. After grasping the client’s requirements, we initiated the project. We also had meetings with the client during the project to understand the client’s views and expectations and updated the model accordingly.
2. We conducted market research for a waste management plant in Africa. This involved understanding how waste management operates in the region and analyzing the expenses of running such a service. With the insights gathered from our research and inputs from our clients, we developed a pricing strategy for the waste management plant. The client aimed to set a price that would ensure profitability. Therefore, we carefully calculated the costs involved and incorporated the profit margins specified by the client.

Financials

Revenue Analysis-Waste management

Our Experts created an input sheet for waste management plant revenue. All the inputs were highlighted with peach fill, which the client can alter. We mentioned all the revenue categories for waste management in the assumption tab and forecasted the revenue for the next five years. The price per customer was calculated by applying the margin to the cost per customer.

Income Statement

We used interconnected formulas to compute the income statement. Our calculations projected that by the conclusion of the fifth year, the net profit margin would reach 9%.

Balance Sheet

The balance sheet illustrates the company’s standing. According to the forecasts, the company is anticipated to maintain a favorable financial position over the upcoming five-year period.

Project Evaluation

We calculated the NPV of the company, i.e., around $22 million, showing that it has a solid financial position with an IRR of 132%

Conclusion

The client wanted to set a clear and smart price for waste management plant to make good profits. At the same time, they wanted to have the valuation for the company to know if they needed to borrow money or bring in outside investors to fund the business. As required, we created a waste management pricing strategy and a financial model that met the client’s requirements. As per the projections, the company will reach profitability of 9% at the end of the fifth year. 

Oak Business Consultant provides financial business consulting services, including Accountancy, Bookkeeping, Financial Planning, and more, for SMEs and Small Business Owners so they can more easily raise startup funds, develop budgets, and track performance on an easy-to-use financial Model with a Dashboard.

Our primary objective is to offer optimal solutions to all our clients. Once a project gets approved, we establish a timeline and share it with the client, giving them a clear idea of when they can expect results. We keep the client updated on the project’s advancement to ensure we stay on the same page. Moreover, upon project completion, we gather feedback from the client to make our services even better in the future.