Biodiesel Business Plan

Biodiesel refers to a non-petroleum-based diesel fuel which can be used in unmodified diesel-engine vehicles. The use of Biodiesel is expected to increase in a grand scale over the next few years due to its environment-friendliness as it finds use in vehicles, railroads, aircrafts and also as heating oil. Hence the Business plan of Biodiesel becomes of great significance.

The Business plans involves full technological cycle of production: cultivation of oil seed (rape), processing them into oil and final production of biodiesel. Purpose of the business plan is mostly to attract investment in the creation of biodiesel production plant and rape cultivation farming. The plan is mostly aimed at satisfying the growing demand for Biodiesel arising due to growing concerns about levels of environmental pollution and limited supply of energy sources. The major positive, from the economic stand point, is the competitive price of the biodiesel, due to high productivity in cultivation (the best soils in the world and favorable climate) and the lowest variable and fixed costs. Biodiesel fuel notably gives the same performance as that of conventional diesel, at competitive price and ecologically safe conditions.

The Marketing Strategy involves usually : 1) Emphasizing inherent qualities of biodiesel and focus on target markets; 2) Produce high quality fuel; 3) Offer competitive price at the level of the conventional diesel fuel; 4) Create strong distribution channels to ensure stability of production; 5) Emphasizing key advantages of the product; 6) Build a relationship business: long-term relationships, not single-transaction deals with customers; 7) Focus on fuel distributors and big consumers as key target markets.

The Biodiesel Business Plan usually covers all aspects of creating and managing the biodiesel production project: organizing, financing, auditing, marketing, promoting business, solving technical and organizational problems. This is where the main plan for producing this wonderful source is laid out and the outcome is practically decided in this planning. Though the whole procedure requires quite a lot of investment sometimes ranging to 2,00,000 dollars. As the profit of the Business Plan is obviously important, a net profit of a certain period of time is also calculated during the planning (depending on the period of the Business plan). The profits of which are highly lucrative which generate a fair return to the investors in the plan and to finance future such ground breaking plans.

Although biodiesel can be marketed as an ordinary fuel it is believed that most perspective customers are farms, in-city transport companies and those who need the lowest possible pollution levels in their technological processes: warehouses, owners of generators, etc. The reasoning is the following: farms are suppliers of raw materials and can receive biodiesel as a payment, in-city transport companies feel constant pressure to reduce their fleets’ pollution levels and will be happy to buy biodiesel, other users may also need non-polluting fuel for such reasons as safety, comfort, ecological concerns. These customers will definitely choose the biodiesel against the conventional diesel, if the product pricing is approximately the same in both cases. That is why planning becomes essential in reaching out to these people.

The Business Plan is overall mostly directed towards developing better energy solutions for benefit of the society by bringing innovative technologies and unlimited supply of energy sources without damaging and polluting the environment which is unique to Biodiesel and the Business Plan is just a necessary medium to make it possible.