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Free VC Directory

With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Business Plan Writer
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2018

Business Startup Guides
Checkout our new sister site!

Free Solar Energy Farm Business Plan
For Raising Capital from Investors, Banks, or Grant Companies!

Please note that the financials in this complete free business plan are completely fictitious and may not match the text of the business plan below. This free business plan demonstration purposes only. If you are interested in purchasing the completed editable MS Word and Excel documents for this business plan, please click the button below! Also, the text of the business plan is formatted with a fully automated table of contents.



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It should be noted that there is no special software required to use these templates. All business plans come in Microsoft Word and Microsoft Excel format. Each business plan features:

  • Excecutive Summary
  • Company and Financing Summary
  • Products and Services Overview
  • Strategic Analysis with current research!
  • Marketing Plan
  • Personnel Plan
  • 3 Year Advanced Financial Plan
  • Expanded Financial Plan with Monthly Financials
  • FREE 30 Page Sample Private Placement Memorandum
  • FREE PowerPoint Presentation for Banks, Investors, or Grant Companies!

1.0 Executive Summary

The purpose of this business plan is to raise $5,000,000 for the development of an alternative energy business that produces electricity from photovoltaic cells while showcasing the expected financials and operations over the next three years. Solar Energy Farm, Inc. (“the Company”) is a New York based corporation that will sell electricity into the power grid from the power produced from its photovoltaic cell structures. The Company was founded in 2008 by John Doe.

1.1 Products and Services

As the prices of traditional fuels has skyrocketed (oil, natural gas, and coal), the demand among consumers for ecologically friendly and economically viable alternatives has increased. As of mid 2008, the prices of crude oil and its related energy products have almost doubled. As such, companies like Solar Energy Farm, Inc. have recognized a tremendous opportunity to develop facilities that produce electricity from renewable and infinite sources of energy like solar power. The Company intends to develop approximately 700 individual solar energy producing structures that will sit on approximately 4 acres of land. The Company anticipates that this field will produce approximately 1MW of electricity to be sold into the power grid. The third section of the business plan will further describe the production of the Solar Energy Farm.

1.2 The Financing

Mr. Doe is seeking to raise $5,000,000 from an investor. The preliminary terms of this agreement call for an investor to receive a 45% ownership interest in the business coupled with a recurring stream of dividends starting in the first year of operations. The investor will also receive a seat on the board of directors.

1.3 Mission Statement

Management’s mission is to develop the Solar Energy Farm into a profitable and ecologically friendly venture that will provide the Company and its owners with a steady stream of income from the sale of environmentally friendly energy productions services.

1.4 Mangement Team

The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the alternative energy industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.

1.5 Sales Forecasts

Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.

1.6 Expansion Plan

The Founder expects that the business will aggressively expand during the first three years of operation. Mr. Doe intends to aggressively solicit additional rounds of capital will concurrently reinvesting a significant portion of the Company’s after tax income into the acquisition of new photovoltaic cell structures.

2.0 Company and Financing Summary

2.1 Registered Name and Corporate Structure

Solar Energy Farm, Inc. The Company is registered as a corporation in the State of New York.

2.2 Required Funds

At this time, the Solar Energy Farm requires $5,000,000 of investor funds. Below is a breakdown of how these funds will be used:

2.3 Investor Equity

At this time, Mr. Doe is seeking to sell a 45% interest in the business in exchange for the capital sought in this business plan. The investor will also receive a seat on the board of directors as well as a recurring stream of dividends starting in the first year of operations.

2.4 Management Equity

John Doe owns 100% of the Solar Energy Farm, Inc. Once the requisite capital is raised, he will retain a 55% ownership interest in the business.

2.5 Exit Strategy

If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of the Solar Energy Farm. Based on historical numbers, the business could fetch a sales premium of up to 4 to 6 times the previous year’s net earnings.

3.0 Products and Services

As stated in the executive summary, the Company intends to acquire/lease 4 acres of property which will house 700 photovoltaic cell structures for the production of electricity harnessed through the sun. These photovoltaic cells capture solar energy (photons) and then convert them to electricity. This process is known as the photovoltaic effect and it was first discovered by Albert Einstein in the early 20th century. The retail energy price of electricity is $.09-14 KWh, which is what residential customers pay on average within the United States. Wholesale pricing is lower than that based on the utilities expenses and profits. Management believes $.045 - $.06 per KWh is possible price that the Company can sell its energy to the local utilities and municipalities

 

 

 

 

4.0 Strategic and Market Analysis

4.1 Economic Outlook

This section of the analysis will detail the economic climate, the alternative energy industry, the customer profile, and the competition that the business will face as it progresses through its business operations. The current geopolitical environment has led Management to believe that energy prices will continue to increase in the near future. The war in Iraq, faltering nuclear production talks with Iran, and general Middle Eastern instability has led many economists to believe that there is a fifteen to twenty percent risk premium now associated with the price of crude oil and related energy products. While these issues bring worry to the general economy, Management sees a significant opportunity to enter the market with a source of alternative energy. Many politicians and special interest groups have promoted the development of alterative energy solutions to combat the continually increasing energy prices in the United States. Additionally, the fast growth of Asian nations (namely India and China) has prompted further increases in the global demand for energy. This trend is expected to continue in perpetuity.

4.2 Industry Analysis

There are approximately 400 companies that provide non-nuclear and non-fossil fuel power generation to the general public. Each year, these businesses aggregately provide more than $18 billion dollars of energy to the open market. The trend among these alternative energy sources is expected to grow significantly as the need for alternative fuels and power grows. Currently, the price of oil and other fossil fuels has skyrocketed to the point where many consumers are looking for alternative methods of power. Collectively, the industry employs more than 18,000 people. Aggregate payrolls exceed $4 billion dollars per year.

4.3 Customer Profile

For the Company’s solar electricity production capabilities, Management expects two core groups of purchasers: government agencies and electricity wholesalers. Among the first group, Management expects that agencies such as counties, state governments, and the US federal government will acquire large scale electricity delivery contracts from the Company with the intent to use the energy within their large scale applications. At the onset of operations, the Company will immediately begin developing relationships with local county governments as well as the state government for ongoing divestiture and purchase agreements.

4.4 Competitive Analysis

Energy production is one of the freest markets in the economy. These markets operate on a global scale, and as such, it is difficult to determine the exact competitors that the Company will face as it progresses through its business operations. Any business that produces electricity is a potential competitor for the business. However, solar energy is becoming an increasingly popular method of producing electricity, and the Company’s primary competitive advantage will be its low cost operating infrastructure, its completely renewable input (solar), and the demand among consumers for cleaner alternatives to traditional oil, natural gas, coal, and nuclear energy power plants.

5.0 Marketing Plan

As the Solar Energy Farm intends to sell its produced energy directly into the electrical grid, the marketing required by the business will be minimal. However, Management is committed to increasing the awareness of solar energy usage. Below is a brief overview of the ways that the Solar Energy Farm will market its operations and alternative energy production.

5.1 Marketing Objectives

  • • Develop an online presence by developing a website and placing the Company’s name and contact information with online directories to further increase awareness of solar energy.

  • • Establish relationships with energy wholesalers and government agencies within the Company’s targeted market.

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5.2 Marketing Strategies

Currently, there are a number of organizations, including the Solar Energy Industries Association that are pushing initiatives, lobbying legislatures, and informing the general public about the benefits about alternative energy products. Management feels that it is important to invest in these public relations campaigns (even though they will not affect direct sales). Additionally, the increased awareness of solar produced electricity, its zero emissions, and ability to wean the United States off of foreign energy sources may prompt consumers and lawmakers to further expand the rebates, tax credits, and other incentive programs available for making solar produced electricity an economy viable energy product now and in the future. Approximately $10,000 to $20,000 per year will be spent to support these causes.

5.3 Pricing

In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.

6.0 Organizational Plan and Personnel Summary

6.1 Corporate Organization

6.2 Organizational Budget



6.3 Management Biographies

In this section of the business plan, you should write a two to four paragraph biography about your work experience, your education, and your skill set. For each owner or key employee, you should provide a brief biography in this section.

7.0 Financial Plan

7.1 Underlying Assumptions

  • • Solar Energy Farm, Inc. will have an annual revenue growth rate of 5% per year.

  • • The Owner will solicit $5,000,000 of equity funds to develop the business.

  • • The Company will invest 25% of its after-tax profits back into the Company’s operating infrastructure.

7.2 Sensitivity Analysis

The Company’s revenues are moderately sensitive to changes in the general economy. Solar produced electricity is comparatively priced with their petroleum/coal based counterparts, and in the event that prices decline, the Company may see a reduction in its revenues. Only in the event of a steep drop in the price of petrol based energy products does Management anticipate that the Company will have issues regarding top line income.

7.3 Source of Funds


7.4 General Assumptions

7.5 Profit and Loss Statements 

7.6 Cash Flow Analysis

 

7.7 Balance Sheet

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7.8 General Assumptions

7.9 Business Ratios

Expanded Profit and Loss Statements

Expanded Cash Flow Analysis

How to Start a Solar Energy Farm

Solar energy farms are rapidly becoming one of the most important types of businesses on a worldwide basis. This is due to the fact that there are a number of significant concerns as it relates to the health of the environment, and as such – the demand for clean forms of renewable energy has skyrocketed over the past 10 years. In fact, many more countries are beginning to introduce legislation and regulation that would eliminate the usage of natural gas, coal, and oil as it relates to their energy production operations. Recently, countries like France, Great Britain, Australia, and several others within Europe have announced plans to completely wean themselves off of fossil fuels within the coming ten to fifteen years. This trend is expected to continue not only throughout Europe but also through North America and Asia as well. It should be noted that countries like China have already begun the rapid production of photovoltaic cells that are used in conjunction with large-scale solar energy developments.

When starting a solar energy farm it is important to note how the capital will be raised for this type of venture. Given that solar energy farms are now much more mainstream than they were 10 to 15 years ago – both private investors as well as financial institutions are willing to put up the needed capital in order to launch a large-scale energy form. While the per kilowatt hour and per megawatt hour rates for electrical production are declining slightly given the rapid expansion of alternative energy – these still are very strong investments as it relates to producing a ROI on the underlying equity. Generally, any entrepreneur that is looking to get into the field of solar energy is going to need to have a equity base of 10% to 20% of the total amount of capital needed in order to commence operations. Most financial institutions are going to willing to put up the remaining capital which will be secured as the collateral. The terms associated with a loan for a solar energy farm can vary greatly. However, most financial institutions will provide a 15 year to 20 year loan with an interest rate that is about one percentage point to two percentage points over the primary. The gross margins that are generated from the production and sale of solar energy are extremely high and allow these businesses to appropriately manage their underlying financial obligations.

As it relates to the number of employees that are needed for a solar energy farm, this is done somewhat a limited basis. Usually, there are usually 5 to 10 technicians on staff for a moderate size solar energy farm so that repairs can be made as needed. The underlying employee costs associated with these types of businesses is generally low compared to their fossil fuel counterparts. This is primarily due to the fact that there are no moving parts as relates to a solar energy farms to breakdowns in the system are few and far between. However, there still does need to be a staff that completely understands the inner workings of the connections and electrical points associated with a solar energy farm. As such, it can be expected that about 5% to 10% of the revenue generated is going to be allocated towards payroll and related contracting expenses. As it relates to whether employees or independent contractor should be hired, a CPA should be consulted in regard to this matter in order to ensure that the business is conforming with all applicable employment laws.

As it relates to the corporate structure of the business, this is another issue that needs to be discussed with a an appropriately licensed accountant or tax attorney. If capital is going to be raised in the most likely scenario is that a limited liability company structure is used given the tremendous amount of flexibility that is associated with this type of entity. While these corporate entities do have a substantial amount of protection they also provide the entrepreneur with a significant amount of flexibility as it relates to equity division, profit division, and appropriately showcasing the roles responsibilities of the managers and investors. However, if the business intends to go public at some point within its life then it may be better to use a for-profit corporation given that only stock corporations can be listed among major stock markets. However, the complexities of taking a company public are extremely high. As such, appropriate advice from both a CPA as well as a tax attorney is imperative especially for a large-scale development project like a solar energy farm.

One of the most important things to note when developing a solar energy farm is at the needs to be a substantial amount of work put into energy pricing models that will ensure that the business is able to sell its electricity profitably into the electrical grid at all times. Many larger scale solar energy farms will contract with an investment bank that will use spots, options, forwards, and floors in order to protect the value of the electricity produced from the solar energy farm on a day-to-day basis. They're both upsides and downsides with using these types of strategies given that if there is a large spike in the price of electricity then the solar energy farm will still be required to sell its produced energy at a lower rate. However, and conversely – if there is a drastic decline in the price of electricity then the solar energy farm will be allowed to continue to make substantial profits given that a spot contract was sold previously in order to lock in future profits. An energy focused investment bank can work with a solar energy farm to determine what type of risk profile the entrepreneur and investors are willing to take on in order to have a profitable operation that can still profit from spikes in electrical pricing. The costs that are associated with retaining an investment bank specific for solar energy sales is relatively low as compared to the overall revenue generated by these businesses. It can be expected that about 2% to 3% of aggregate revenues can be allocated towards hiring an energy trader or an energy focused investment bank in order to carry out these types of operations.

As it relates to raising capital from an investor, it can be expected that you are going to need to sell a significant portion of the business in order to get to the down payment needed to commence operations. Generally speaking, most investors do want to have a near majority or slight majority interest in the business if they are putting up 100% of the capital. However, like most things in life everything is negotiable. If the entrepreneur  has a highly established track record and extensive experience in the field of solar energy production then they will be able to negotiate for a much better sale of the equity needed in order to launch operations. Most investors that are looking to place money with specialized alternative energy projects like solar energy farms are looking to receive ongoing dividends once the project turns profitable. There is usually only a moderate amount of capital appreciation that is associated with an alternative energy business. As such, within the solar energy form business plan that needs to be developed a chart showcasing reinvestment and other matters should be included as well. Approximately 80% of the after-tax profits are usually distributed to investors and owners of the solar energy business.

As it relates to the future outlook of this industry, there is going to be a substantial need an ongoing demand for solar energy as time moves forward. Issues like climate change, low inventories of fossil fuels, low inventories of natural gas, and other issues make solar energy a highly economically viable investment. Additionally, the usage of alternative energy like solar allows countries to not rely on each other for their sources of energy. As such, more and more countries – especially those in Asia – have found that the usage of solar is extremely beneficial. It is expected that countries within North America will begin aggressive ramp-up of operations within the next 10 years as well. Already many states have begun using solar energy panels within their municipal and state infrastructure. This is no longer a nascent industry and there is the potential to generate huge amounts of profit over the next 10 to 20 years as major industrialized nations revamp their energy grids.