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TREE Academy

Training Energy Efficiency

“Save energy for better things”

© 2009 TREE Academy LLC. All rights reserved

Business PlanStrategic Management 7002

Hawai’i Pacific UniversitySpring 2009

Eva KennedyRaymond StrideShota Mkheidze

Background Industry Analysis Market Analysis

Competitive Analysis Design & Pricing Model

Marketing Human Resources

Management Operations

Financial Analysis

AGENDA

+“Helping to bridge the gap

between ideas and implementation”

Background

INDUSTRYANALYSIS

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26%

12%

14%18%

30%

Total = $300 billionIndustrial

Transportation

Residential

Commercial

Appliances & Electronics

NOTE: Industry expected to grow $400 billion by 2030

The Size of the U.S. Energy Efficiency Market, ACEEE

Industry Analysis Total energy investment

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1970 1978 1986 1994 2002 20100

50

100

150

200

250

En

erg

y S

erv

ices in

Q

uad

s

Energy Service Demands

Energy Supply

Since 1970, energy efficiency gains have met 75% on new energy service demands in the U.S. through 2008, while new energy supplies will have contributed only 25% of all new energy service demands.

Efficiency Gains VS New Supply 1970-2008

Industry Analysis Industry characteristics

MARKETANALYSIS

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Homeowners

Job seekers

Business Industry (Hotel Industry)

Target Market

Market Analysis Major customer groups

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From 2006, Energy Star rated building increased by 57 in Hawai’i & nationwide by 62,427. It is expected to grow 10 times by 2020

In Hawaii there are total of 460,542 units. 56.5% (227,888) - Owner-occupied units43.5% (175,352) - Renter-occupied units

2007 Energy Bill: $125 million p/year for Green-Job Training

Penetrating Markets

Homeowners

Job seekers

Business Industry (Hotel Industry)

Market Analysis Primary target customer

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General Research

Market Analysis Market test results

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“This is a comprehensive project & Home Depot welcomes opportunity to make its customers lives better”

- Store Manager

Showed strong enthusiasm toward our business idea & felt optimistic about potential to build a significant customer base here in the Hawaiian market.

Will enable TREE to focus on exploring new opportunities in energy efficiency such as job and certification training

Market Analysis Needs & opportunities

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Strategy 1 - Find a NICHE

• Energy Industries

• AEE

Business Industries

• Boots on the Roof

• Florida Solar Energy Center

• Energy Education Institute

Job Seekers

• HECO• Energy Star• University of Hawaii

Homeowners

Strategy 2

Strategy 3

- Strategic Partnerships

- Key Personnel- Customer Inertia

Competitive Analysis

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Home owners

- Energy efficiency

$1000 -1/2 DAY

Job-seekers - Solar PV NABCEP

- Solar Thermal $1000 – 2 DAYS

Businesses- Superior Energy

Managers$1000 – 2 DAYS

Revenue StreamPricing Model

Design & pricing model

MARKETING

The world we live in .. The consumer is in control

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Product

Place

Price

Promotion

Innovation

Marketing Marketing strategy

+Marketing Social media / PR

• Blogs to keep connections with best customers TREE Blog

• High traffi c blogs - New media style PR - Videos, images, slideshows, podcasts

examples follow…

Social Media

Who do customers trust ?

CEO VS a person like me

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- Promotion- Advertising- Public relation- Personal selling- Printed materials (catalogs, brochures, etc.)

Marketing Read VS Read & write

HUMANRESOURCES

+Human Resource CORE VALUES

We are a team of associates at TREE Academy who care about communities and environment, and seek to generate growth through education of our customers and helping them create efficient business environment

We train homeowners ad businesses in energy efficiency practices to create more sustainable bottom line

- R&D most efficient practices- Creating ongoing win-win partnership with our

customers- Build positive team, fun and family spirit- Valuing passion determination and change

WHO WE ARE

WHAT WE DO

HOW WE DO

+Human Resource APPLICANT ATTRACTION

TREE Sources

- Use TREE blog to drive talent- Create effective career site at www.tree.com - Be accessible for instant messaging IM on

www.tree.com

Professional Sources

- U.S. Department of Energy job database- U.S. Department of Labor- AEE- ACEEE- Energyideas.org- NABCEP

(Job announcement)

+Human Resource APPLICANT ATTRACTION

(Job announcement)

Other Sources

- Corporate Facebook page TREE Group

- Start a Linkedin Group

- Create free white papers, eBooks & PPT’s (Scribd, .docstoc, slideshare)

- Host online videp show on YouTube

- Utilize podcasting on Talkshow & Jobs in Pods

- Run referral programs online (Jobster, Zubka, BountyJobs, Hoojano)

- Get Jobs listed in search engines (Jobs2web, indeed, simplybired)

- Build online talent database (Jigsaw, ResumeZapper, Resume Arrow)

- Conduct virtual jobfare (secondlife, unisfair, ejobFairs.net)

- Be visible “locally” with “meetup” & activity events

+Human Resource APPLICANT ATTRACTION

We participate in a number of companywide social activities to provide

opportunities for people to get

together outside of work &

to interact with employees

Our culture is characterized as collegial, supportive & fun that rewards challenge & high performance

We are concerned with giving back & helping the community at large. Our company sponsors number of energy efficiency community events. These events will help bring associates together, create fun place to work while contributing to the greater good

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TYPES OF TESTS

TEST SELECTING CONCEPT

Cognitive

Reliability

Content Validity

Personality

Criterion Validity

Interview

FILTER

SUITABLEcandidates

NOTE: AVOID!!!-People with big egos-Reluctant players-Snakes

Human Resource EMPLOYEE SELECTION

(MODEL)

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• NEW HIRE

- Environmentally-conscious- Knowledgeable in energy efficiency- Great presentation skills- Talent, motivation, and customer service oriented

• INSTRUCTORS

- Dr. Stephen Allen- Part-time instructor- Assist with Interviews and requirements- Use consultants to outsource immediate needs

Human Resource EMPLOYEE SELECTION

+Human Resource MANAGEMENT STRUCTURE

Team Leader-Contracts-Partnerships

SHOTAFin. Specialist -Finance -Accounting -Reporting

RAY

Op. Specialist -Operations -Human Res. EVA

Balanced Matrix & Flat Organizational Structure

Marketing -Sales -Website -Company IS BINITA

+Human Resource STRATEGY

• TRAINING

- Professional Development Program- Re-Training- In-house Training

• RETENTION

- Flexible Schedule- Telecommute- Scheduled Merit Increases- Open Door Policy- Ohana Work Environment- Clean and Safe Environment

• EMPLOYEE BENEFITS

- Medical Insurance- Dental & Vision Ins.- 401 (k) / future plans- Personal Time Off (Vacation &

Sick)- Holiday / Floating Holiday- Flex-time- Tuition Reimbursement Program

MANAGEMENT

+Management Practices

Secondary management practice

Primarymanagement practice

We maintain strategy through:

Strategy

Management Practices (PRIMARY management practice)

TREE strategy is based on providing QUALITY education & training to the community

Management Practices (PRIMARY management practice)

Execution

We inspire associates do their best by rewarding their achievements with pay based on performance, while

continue raising the performance bar annually

TREE culture is characterized as:

(doing well by doing right)

Management Practices (PRIMARY management practice)

Culture

Balanced Matrix & Flat Organizational Structure

More effective

Simpler communicationMinimal bureaucracy

Increased flexibility to cope with change

Improved customer relations mgmt. (more personal contacts & quicker decision-making)

Allows decision making authority to frontline mgrs.

Specialization & segregation of duties

BENEFITS

Flat executive mgmt. team

Centralized franchise model

Single franchise

Master regional franchise

ORGANIZATION

Mark. Specialist-Sales-Company IS

Op. Specialist-Operations-HR operation

Fin. Specialist-Finance-Accounting-Reporting

Team Leader-Management-Contracts-Partnerships

Structure

Management Practices (PRIMARY management

practice)

Management Practices (SECONDARY management

practice)

Partnerships

WEBSITE

CUSTOMER TRACKING

ENTERPRISE WIDE ACCOUNTING AND REPORTING SYSTEM

CONTINUOUS IMPROVEMENT TO FRANCHISE MODEL

NEW GREEN TECHNOLOGIES

UNIVERSITIES

GOVERNMENT

PRIVATE SECTOR

BIG BOX RETAILERS

MASTER REGIONAL FRANCHISEES

Management Practices (SECONDARY management

practice)

Talent

Mergers

&

OPPERATIONS

Operations (Stage of Development)

System

Operations (Business model)

Cost Structure FINANCE Revenue Stream

INFRASTRUCTURE

- Core Capabilities- Partnership alliance- Value Configuration

OFFER

- Value Proposition

CUSTOMER

- CRM Customer Relation Management- Target Customer

TREE BUSINESS MODEL

Operations (Evaluation & Control /

Risk )

Risks Solutions

Develop sustainable competitive advantage through SE, follow path of efficient exploration or exploitation – depending on situation

Innovate, become more market-focused, establish relationship with key customers, create superior customer value, look for new market space

Increase differentiation by using combination tactics, offer more benefits, overtime restructure company to reduce price

Evaluate performance

Control measures

• Performance within tolerance range- Can continue business & possible

expansion• Performance falls below tolerance

range- Action must be taken to correct

the deviation- Business strategy must be re-

evaluated

Operations (Production process)

Space & Equipment Required

- Startup expenses

- Operating expenses

Inventory control

- Computer based inventory system

- Follow-up with regular manual checks

Time frame

- 7 days For home owners (every week)

- 1-2 days from the time customer makes an order (Business industries & Job seekers)

Contingency plan

- Introduce value-added service offer and establish strategic alliances

TASKS COMPLETED

  Developed Business Idea/Concept

  Developed Startup Cost Plan

  Obtained commitment from members $12,500 each

Developed TREE website

  Developed tentative organizational chart

  Assigned responsibilities to members

  Conducted Market Analysis

  Talked to First Potential Instructor/Trainer (Dr. Stephen Allen)

  Researched on possible Banks Loans and their rates

  Attended Entrepreneurial Seminars

  Developed Strategies for Service, Marketing, HR, Operations, Financing, Management

Operations (Tasks completed)

FUTURE TASKS

  Develop and Finalize Agreement with Dr. Allen

  Implement TREE website

Hire new employees

  Get commitments from potential consultants

  Get commitments from potential costumers

  Talk to possible partners to advertise and market our service

  Complete paperwork for Grants and Small Business Loans

  Seek contract from government

Operations (Future tasks)

DESCRIPTION OF TASK DATEBusiness Registration Process Oct-09Implement TREE website Oct-09Business Loan Process (Grants or SB Loans Oct-09Start advertise for positions Oct-09Start talking to possible partners Nov-09Develop and Finalize Agreement with Dr. Allen Nov-09Work with Health Insurance Companies and compare prices, then select best plan Dec-09Hire Instructors Dec-09Start Business Jan-10

Operations (Timeline)

FINANCIALANALYSIS

Operating and Startup Costs

Operating Costs (Monthly) Year 1 Year 2 Year 2

Rent $1,200 $1,248 $1,298

Utilities 200 $208 $216

Telephone and Internet 150 $156 $162

Office Supplies 100 $104 $108

Insurance, Liability 100 $104 $108

Marketing Expenses 500 $520 $541

Accountant - Monthly Retainer 300 $312 $324

Classroom Rental 1,800 $1,872 $1,947

Instructors - Payroll 22,400 $23,296 $24,228

Payroll Taxes & Fringe 6,720 $6,989 $7,268

Variable Training Costs 7,083 11,000 12,000

Owner Withdrawals 0 $4,000 $4,400

Monthly Loan Payment 4,055 $4,055 $4,055

Total Operating Costs $44,609 $53,864 $56,656

Startup Costs (One-time)

Office Furniture $6,000

Computer Equipment 10,500

Marketing Expense 10,000

Office SuppliesStationary 2,500

Registration Fees/Legal 3,500

Demo Solar Equipment 7,500

Total Startup Costs $40,000

Income Statement

Year 1 Year 2 Year 3

REVENUES $426,500 $660,000 $720,000

STARTUP EXPENSES

Office Furniture $6,000

Computer Equipment $10,500

Marketing Expense $10,000

Office Supplies/Stationary $2,500

Registration Fees/Legal $3,500

Demo Solar Equipment $7,500

Subtotal $40,000 $0 $0

OPERATING EXPENSES

Rent $14,400 $14,976 $15,575

Utilities $2,400 $2,496 $2,596

Telephone and Internet $1,800 $1,872 $1,947

Office Supplies $1,200 $1,248 $1,298

Insurance, Liability $1,200 $1,248 $1,298

Marketing Expenses $6,000 $6,240 $6,490

Accountant - Monthly Retainer $3,600 $3,744 $3,894

Classroom Rental $21,600 $22,464 $23,363

Instructors - Payroll $268,800 $279,552 $290,734

Payroll Taxes & Fringe $80,640 $83,866 $87,220

Variable Training Costs $85,300 $132,000 $144,000

Monthly Interest Payment $6,498 $6,498 $6,498

Subtotal $493,438 $556,203 $584,911

TOTAL EXPENSES $533,438 $556,203 $584,911

OPERATING PROFIT ($106,938) $103,797 $135,089

Balance Sheet

TREE Academy

Balance Sheet

Assets Yr 1 Yr 2 Yr 3

Cash $63,062 $88,859 $141,148

Furniture and Equipment $24,000 $24,000 $24,000 Accumulated Depreciation -$24,000 -$24,000 -$24,000

Total Assets $63,062 $88,859 $141,148

Liabilities Loan from Bank $120,000 $90,000 $60,000

Equity Shareholder Contribution $50,000 $50,000 $50,000 Shareholder Withdrawal $0 -$48,000 -$52,800

Retained Earnings -$106,938 -$3,141 $83,948 Total Equity -$56,938 -$1,141 $81,148

Total Liabilities and Equity $63,062 $88,859 $141,148

Cash flow and Required Funding

SUMMARY Year 1 Year 2 Year 3

Opening Cash on Hand $200,000 $63,062 $88,859

Total Revenues $426,500 $660,000 $720,000

Total Expenditures $563,438 $634,203 $667,711

Net Cash Flow ($136,938) $25,797 $52,289

Ending Balance $63,062 $88,859 $141,148

Owner Investment $50,000

Small Business Loan 150,000

Total Startup Funds $200,000

Funding Required

Breakeven (9 months)

$(30,000.00)

$(20,000.00)

$(10,000.00)

$-

$10,000.00

$20,000.00

$30,000.00

$40,000.00

$50,000.00

$60,000.00

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Sales VolumeTotal costs Total revenues Net profit (loss)

MAHALO

WE ALL SHARE THE SAME TREE