Venture Screening Guide of Phoenix Solar Energy Systems

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Introduction

Proposed Venture

Phoenix Solar Energy Systems – Unlimited Energy for Life.

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Propose to manufacture, assemble and market solar energy systems for household purposes in the Indian market. A Solar energy unit capable for powering the entire house without any dependence on external power forms our chief product. There will be 3 divisions- ‘Product manufacturing division’ which assembles the device , ‘Installation and Maintenance division’ which installs the device at the customer premises and performs periodic maintenance of the equipment and the ‘Customer Service & marketing division’ to cater to customer needs and marketing the product. Solar Water heaters, Solar Water pumps, Inverters, Battery Chargers are other electronic devices which revolve around the same concept. These products can be added into the manufacturing at a later time to ensure that the company does not stick to a single product.

Opportunity Conditions

Power is one of the basic necessities in human life. It is also one of the key factors for development and growth. These are two of the many reasons why designing and installing a system that would guarantee free unlimited power for lifetime is a dream for any common man. In a country like India, where the power produced does not meet the demands of the general public, the vast population of the country experiences power outages for considerable hours during a normal day.

There is a huge gap between demand and supply in the industrial market as well. This very condition is what drives the opportunity for our product. And its this opportunity that we wish to exploit. Without doubt, a solar powered electric system for the household would prove to be an optimum solution to this scenario. One of the key factors influencing this solution is the high costs associated with the other forms of power. Many Indian families cannot simply afford the fees they have to pay with the main electrical power companies. These companies produce power mainly from hydrical sources.

The key factors that driving the opportunity conditions are:-

Heavy Demand for Power in India

As mentioned earlier, the demand for power in India is quite overwhelming and the present power grids are unable to meet the huge demands. As a result, the general public experiences considerable power outages throughout a normal day. As Shirish Garud, Fellow and Area Convenor, TERI, ASSOCHAM mentioned in the South Asian Renewable Energy conference, July 2009, the country experiences an average power shortage of 11.6%. It is this gap between the supply and demand of power that we wish to close. Uninterrupted power is a necessity that every individual looks forward to and our product is going to make that possible.

Solar energy proves to be a reasonable solution to this crisis. Its unlimited energy harnessed from the Sun without prying into the limited non renewable energy sources. A product which can convert the sun’s energy and use it to close this gap once and for all is whats needed in the country right now and that’s what we propose to do. And its very evident that the current power scenario itself would be the greatest opportunity for the product.

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Geographic Advantage

The geographic position of the country in terms of the amounts of sunshine received proves to be highly advantageous for our product. The country lies just above the equator and receives huge solar insolation. With over 300 sunny days in a year and 8 to 8.5 hours of sunshine in a day, the conditions are ideal for effective functioning of solar panels to derive maximum efficiency. Also at such high rates of solar insolation, low power solar panels with lesser surface area would be enough to harness enough energy to power the entire house. The cost of panels being directly proportional to its power and area, the conditions helps to bring down the cost for the customer. The solar insolation received by the country is depected in the figure below.

The solar insolation

The city of Chennai where we intend to kick start our venture falls at the south eastern coast of the country and recives 5.4 KWh/sq m. This is ideal for adequate working of the device. The north western regions receives the maximum solar insolation and we find that presently large power generation companies have set up their solar power generation farms there. Once again, these prevailing conditions proves be highly advantageous for a product like ours.

Huge market to be exploited

The population of India as per 2008 stood at 1,139,964,932. Considering that 4 members constitute a household, we can equate the number of household to less than 285 million. As the number sounds itself, this is a very huge market and without doubt all households have a need for the specific product and we plan to exploit the same.

Better Economics – One time Investment

For a consumer who has to invest one time and reap the benefits for life, the product makes better economic sense. This in turn makes the product easily marketable.

No Dominant Market Player

As per research, a lot of solar firms exist across the country but 95% of them cater to a different market. Certain firms have large solar farms and are involved in solar power generation which they sell to government and customer. Other firms exists which cater to large scale manufacturing plants and firms which require their own power units. Our target market is the common man and there does not exist any dominant player catering to them presently.

Taking these points in account, we believe we have an excellent opportunity at hand.

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  • Opportunity window: The opportunity exists now with no dominant player in the market. The gap between demand and supply of power in the country is expected to grow owing to increasing population and limited resources to cater to them. The only setback to this opportunity would be the rise of a competitor but with the enormous population to be catered to, it does not entirely form a problem.
  • Strategy & Harvest: The entry strategy would be to setup an office and development centre in the city of Chennai, India. The city has a population of 4.34 million and experiences power outages every day. This would be the primary market for our product. After getting established in the city of Chennai, we plan to expand into the surrounding cities as well and eventually the whole country. Additional products like solar water heaters, lanterns, inverters, regulators, voltage stablilizers etc which have a market in the country are possible future prospects. These products already form part of the solar unit being developed and is quite easy to manufacture them. A long term future harvest is to set up a Solar Power Grid to generate electricity and supply. It would require large investments and needs considerable research.

SWOT Analysis

The SWOT for the opportunity is :-

Strength – Individual / Family power consumption demand

This is the crucial factor in our investment. Market demand has been never matched in this sector. In fact, the growth rate of market demand for power consumption has been rising dramatically during the last two decades. Meanwhile, the market offers have not kept up with this demand. Electrical power companies have tried to invest in expanding their capabilities but this was insignificant in comparison to the demand for consumption. As i mentioned above, the number of households in India today is around 285 million. A considerable part of them are ‘hungry’ for energy consumption but the existing power companies simply do not have the capabilities to supply them. The supplying of these households would be the major strength for our company.

Weakness: Purchasing Power of Market

It is true that the demand for power consumption is rising but it is also true that the majority of the families that are ‘thirsty’ of power consumption simply cannot afford it. The dividion of wealth in India has been, and still is, a major problem. Millions of families do not have the necessary income for power consumption. Since we shall base our growth strategy upon the individual / family market demand for power consumption, the large number of these families may not be the same as the number of potential customers. We should take into consideration the categories that do not meet our price requirements. Nevertheless, the company can adjust its strategy to comprise as many households as it can and turn them into potential customers.

Opportunity: Large market to exploit

There is another factor that relates to market demand and whom expands the opportunities for us. It is true that the number of households in itself is quite big, but the market demand is even larger. Another growing form of demad is that for industrial consumption of power. India is one of the rising powers in the world economy. The manufacturing and service industry have been booming during the last decade.

Thus, they have increased their power consumption since power is one of the crucial factors influencing economic growth. Our products may not be related directly to the demand for power for industrial purposes, but this demand certainly affects the operations of our company. In fact, existing power companies tend to be oriented in furnishing manufacturing businesses with power since their consumption is equivalent to tens of thousand of households. Nevertheless, our company can benefit since this will leave a vacuum in the family demand for consumption. We can offer our services to the service idnsutry as well.

As mentioned above, the household consummator will be our primary target. But the service industry shall be our second one. The company can adjust pricing strategies for both targetgroups in order to offer tothe service industry the required power options and to the low income families also the opportunity to have power consumption via solar panel within their financial capabilities.

Threat: New Player entering market

This is the greatest threat that we face. As mentioned above there is no major player in the power market in India. This does offer the ooportunity for new companies like ours to enter the market but it is also a sign that no one before hsa managed to become a major player regardless the time and efforts put to achieve this result. This condition means that companies cna enter the market easily but can also that easy get out of it. Furthermore, there are a significant number of companies competing in the Indian power market for customers. Most of them do have strategies targeting low income households and service businesses as we have.

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They do have a competitive advantage on us since theyalready have an established brand name and market share. Nevertheless, the increase in market demand has been overcoming all the offerings these companies have made. And a final consideration shall be made on the fact that we are offering a genuine, innovative product which has no similar in the market. This fact can be crucial in attracting customer’s attention toward our company.

Thus, in overall, the Management team considers the opportunity to be positive. With a heavy demand, large market and no dominant market player, the opportunity looks quite successful.

CHECK POINT: Looks Promising to take the opportunity forward.

The Product

Description of Product

High Power Solar Energy Systems capable of powering the households is the product we intend to manufacture and market. The sole functionality of the product is to harness solar energy and convert it into electricity for powering households.

The product comprises of the following parts:-

Solar Panels

These form the prime component of the solar energy unit. The panels are the ones that convert the solar energy into direct current which can be used to charge the battery. The solar panel forms the most costliest of the all the components. The price of the panel is directly proportional to its surface area. The more power required, the more larger panel required which turns out to be more costly. A regular 200-240W panel is sufficient to cater to medium scale household power requirements. We plan to order the required solar panels from solar panel vendors like Sharp or Kyocera. Solar panels are generally given 20-25 years warranty by supplier at 90% power output. Manufacturing solar panels requires heavy investment for machinery and plant and we don’t plan to move in that direction presently.

Lead Acid Batteries

A complete solar unit comprises of one or more batteries depending on the power required for the house and backup time required by the customer. The current generated by the solar panels are used to charge the batteries to full power. The household power requirements are supplied by the batteries. The required set of batteries will be orderd from manufacturers.

Charger

The charger unit is responsible for charging the battery from the energy generated from the solar panels. Our unit has the required expertise for the design and development of charger circuitry.

Regulator

The regulator is a safety component to keep a check on the battery’s charge limit. Once the battery is fully charged, it cuts off the connection to prevent over charging of batteries which reduces battery life. Our unit has the required expertise for the design and development of regulator unit.

Inverter

The inverter is used to convert the direct current from the battery to alternating current required to power the household appliances. Our unit has the required expertise for the design and development of Inverter circuit.

Description of business

The business we intend to involve ourselves in is the manufacturing, assembling and marketing of solar energy systems for household purposes. For this purpose, we propose to break down our firm into 3 divisions – Manufacturing & Assembling, Installation and Maintenance, and Marketing & Customer Service.

Business process

The complete solar unit as mentioned in previous section comprises of 5 major units. 3 of these namely Inverter, charger and regulator would be assembled at our premises from basic electronic components. The circuit for the Inverter, regulator and charger need to be designed and provided to PCB manufacturers. The PCB manufacturers supply the circuit board based on specifications and design provided by us.

The manufacturing team would manufacture the 3 devices using basic electronic components onto the circuit board. Once developed and tested, it is placed into cases to form the completely manufactured unit. Parallel to this process, the other 2 units – solar panels and batteries would not be manufactured at our premises by rather ordered from 3rd party vendors. Placing all the 5 units together forms the assembling process which gives the complete solar system. This is tested and ready to be installed at customer premises.

Our Marketing and Customer Service division forms a separate standalone section altogether responsible for marketing the product and customer service queries.

Development status

The strategy we are looking at is to manufacture upto 30-50 units of solar energy systems for immediate demands parallel to marketing activity. The subsequent set of units would be manufactured depending on the movement of the first set of unit. A buffer of 20 units would be maintained at all times.

Primary Customers

The entire population of city of Chennai is accounted as customers as all experience power outages on daily baisis. The price of the product being quite high, the middle and upper income groups would be the primary customers. Tieing up with Financial Institutions and providing instalment options are part of our strategy. This would help to open the market to lower income groups and make it easier for upper income groups as well.

SWOT of the product

  • Strength: Provides uninterrupted power for life
  • Weakness: Price
  • Opportunity: Present power crisis
  • Threat:

Market and Customer Issues

Internal & External

Total market size and trends

The Indian market is quite huge and promising for the product. An estimate of 285 million households exist in India and each of these household forms a potential customer. The power shortage in India is quite overwhelming with average shortage of 11.6%. As per Shirish Garud, an estimate of 78 million households do not have access to electricity and about 1,125,000 villages are un-electrified in July 2009. This very numbers are quite huge and even catering to half the numbers forms highly profitability for the firm.

As an entry strategy,we plan to start our venture in the city of Chennai and slowly expand into other cities. Chennai has a population of 4.34 million and the city experiences power outages on a daily basis. This makes it a formidable target city to for our initial market. The city has the second largest purchasing power in the country among the metropolitan cities. The proves advantageous for a high cost product such as ours.

From the 4.34 million population of Chennai, we equate a minimum of 30% of the population to have the purchasing power to buy a product such as ours. This gives us 1.302 million people. Considering 4 members to constitute a household, we come to 325,500 households as the minimum market for our product. This can be said to be the upper income group households in the city.

Cost of the product is quite high which hinders the lower income group people from purchasing the product. In order to open up the market to all income groups, we plan to enter into a tie up with Financial Institutions and provide instalment options to customers so that the huge price doesn’t be a reason for lesser market. With instalment option,we estimate and additional 20% of the population gain the purchasing power for the product. Hence the market stands at 545,500 households.

Customer and market research

The customer for a Solar Energy system would be any person who would want uninterrupted energy for life. In a country with continouos power outages, the entire population would desire for uninterrupted power. This makes the entire nation a market for the product. From this market, the price of the product would be the next filter to acquire the actual market. At high product cost, the upper income group households which equates to 325,500 households forms the immediately available market. Individuals who would like to get themselves independent from the government supplied electricity and generate their own power without having to pay monthly bills at the cost of a one time investment would be another set of customers. But these too would fall in the upper income group set.

Customer survery with the upper income group has shown that the idea of investing one time and reaping benefits for life are quite appealing. It forms better economics to the individuals who had the immediate finance to purchase such a product. Certain customers had a negative reaction to the idea not quite accustomed to the idea of changing from a setup which they had been used for generations.

Prsent household market does not have a dominant solar energy system dealer. Price set by the company wouldn’t have comparison to be checked with but we propose to it set it at a 40% markup over the cost price. The price of the product tends to be high and would suit the upper income group.

There are a large number of Solar Energy firms in the country but they do not cater to the household sector. Majority of the energy firms are involved in large power generation and supply projects.Photon Energy Systems,Titan Energy systems are two large firms involved in large power grid projects. Some of them like USL Photovoltaic Pvt Ltd, Central Electronics Ltd, Maharshi Solar, Surana Ventures, Vikram Group, Waaree Group cater to large plants and factories that require high amounts of power. Another set of companies like PV Power Technologies, Solar Semiconductors, UPV Solar, Moser Baer Photovoltaic are seen to cater to international clients in Europe and US.

The household sector remains untouched and forms our target market. Rashmi Industries, Bangalore and Reliance Solar Group, Mumbai are two known competitors who target similar market. The former targets the exact same market as ours i.e. households whereas the latter is a large scale firm and households don’t form the primary target market. In both cases, the competitiors are located in totally different city and wont be affect the market in Chennai. When expanding into Bangalore and Mumbai, steps need to be taken to gain competitive advantage.

For the Chennai market, there doesn’t exist a Solar System Installation firm other than ours. Hence customers currently have option to buy from us alone. Probable competitor could enter at a later stage and steps need to be taken for adequate competitive effect. The substitute for the product would be the present electricity provided by the grid. The substitute fails to statisfy the customer presently with frequent outages.

A person would stick to the present electricity provider for just 2 reasons – one is he cannot afford the huge investment required for the solar energy system, two is the tradional mind set which discourages him to change his present lifestyle. Our instalment option would bring about a change to the huge investment problem faced by customer. In order to curb the second problem, our marketing team would need to bring out the best ways to reach out to the people clearly showing the advantageous and savings they would make on the system.

Preliminary market plan for first 5 years

  • Estimated total market: 325,500 households
  • Our estimated share %: < 0.55% in first 5 years
  • Our estimated sales: 30 units/month  1800 units in 5 years
  • Percentage annual growth: INR 838800/year  8.38%

The price of the product is set at a 40% markup over the cost of the unit. Estimating a sales of 30 units in a month, and taking into account the recurring monthly expenditures, the cost comes to INR 58,260. Marking it up by 40%, we get INR 81,560. The price a customer would need to pay for the product would lie around INR 82000 + tax. This again depends on the quality of solar panels selected and power ratings of panels as per household requirements. But it can be roughly be stated that the price would lie between INR 75,000 – 100,000. This price is very high and cannot be afforded considering a normal person. Hence it will eventually be the upper income group in our market radar.

Our market position tends to spread out evenly on the quality vs price graph. We provide range of solar panels from good to excellent quality and price moves proportionally. Hence the customer is given the choice of buying a good solar energy system at nominal rate or an excellent high quality system at very high price.

Marketing the product is of high importance in order to propagate the brand name to the customer ears. TV advertisements during cricket matches would be ideal way of reaching to large public during the initial months. Very high marketing expenditure would be required at this intial stage. Over the subsequent months, adverstisements would be limited to newspapers and magazines. A customer service support line would cater to new orders and queries of existing customers. Possible door to door marketing strategies are being considered but at a target sales as low as 30 units per month, very large scale marketing is not required.

Product sales process would require customer to order the product and our firm would install the product at the customer premises. As we plan to start initially in the city of Chennai, we would cater only to customers within the city. As part of initial investment, we have 3 vechicles which would cater to installation and maintenance needs of customers.

Checkpoint. Market looks perfect for the venture.

Profile of competitors

Presently there does not exist a competitor in the market targeting the same segment as we do. The present set of Solar energy firms that are present across the country can be classified as :-

Large Scale Power Generation Firms: These firms are ones involved in large scale power generation projects. Their business revolves on setting up large solar farms and generating electricity which are supplied either to government or to the general public. They manufacture solar panels and can be made probable supplier for our business. Photon Energy Systems and Titan Energy systems are two firms involved in this classification.

Large Plants & Factory Suppliers: USL Photovoltaic Pvt Ltd, Central Electronics Ltd, Maharshi Solar, Surana Ventures, Vikram Group, Waaree Group etc are firms that cater to large plants and factories that require high amounts of power. They have their own plants for the manufacture of the complete solar energy system similar to ours with additional provisions for manufacturing solar panels. But they do no target clients at household levels but rather undertake projects of larger scale.

International Client Suppliers: PV Power Technologies, Solar Semiconductors, UPV Solar, Moser Baer Photovoltaic are solar energy firms catering to international clients in Europe and US. Similar to above scenario, these firms too target larger projects than sell products at household levels.

Household Suppliers: Not much of solar firms are seen to cater at household levels. Rashmi Industries in Bangalore currently supplies to household sector which forms our same market segment as ours but different city. The city of Chennai does not have any household level solar dealer currently and this is where we come into the picture.

Our product is marked 40% above the cost price and we find that our pricing is similar to that set by Rashmi Industries, Industries. We don’t see a need to reduce the price currently as there exists a large market with no dominant player and our monthly sales targets are not very aggressive. At the present price, we have a net cash inflow of INR 699,000 per month.If a competitor arises in the near future, we would need to bring prices at level with that of our competitor as price is very important factor in the Indian market.

Estimate of:

Product selling price: INR 81,560 + tax

Production cost: INR 58,260

Gross margin: 40%

Fixed costs: INR 7,090,000

Profit before taxes: 23,300/unit sold

Competitive Advantages

The solar energy system comprises of 5 major units of which 3 are manufactured by our firm and 2 would be ordered from the respective vendors. The prices of regulator, charger and inverter units are under our control as these are manufactured by our firm. The cost of raw materials is low with several vendors competing to provide raw components at cheapest rates. We have little control over the prices of Solar panels and batteries being ordered from solar panel vedors and battery manufacturers.

Owing to competition among several firms for supply of battery and panels, we can settle for the optimum price and by bulk ordering the cost can be brought further down. From customer perspective, we can bring down costs for regulator, inverter and charger units but the cost for solar panels and batteries cannot be touched. The costliest unit in the system is the solar panel and we unfortunately do not possess control over its price.

Reliance Group has a solar energy division which caters to power generation and installation for large scale projects. They enjoy very high advertising and marketing advantage being part of a very high class organization. They have their own manufacturing unit and tend to dominate in production as well. But again they do not cater to the household sector and do not form a direct competitor for us.

Our prospects are to tread on with installation for household sector till we get ourselves properly established in the market. Additional cities and products are part of future prospects. In order to become low cost producer, we would need to establish our own solar panel manufacturing plant which required high investment and time. We do not plan to proceed into that arena at this time.

As there exists no competitior fori us, we do have the advantage of being the first ones to exploit the market. Our intial marketing strategy should enable us to propagate the brand name and capture the market for ourselves. Any competitor arriving into the market after us would have to cater to lower share of market. This very aspect proves to be a strategic advantage for us.

Economics and Harvest Issues

In the initial stage of setting of the firm, expecting a humpty amount of gross margin is quite ambitious. At the same time, increase of profit is certain with marketing strategis and stuff. To be real, gross margin of about 50 percent of each unit is anticipated.

As the process of completing a single unit includes a number of tasks from purchase of components to installation of the unit, cost price of a single unit amounts to Rs.58260. With 40 percent markup, the selling price of a single unit is Rs.81560. This yields a profit of Rs.23330 exclusive of the taxes. With this profit, the time required to make 10 million and breakeven will take about an year and a half i.e. 15-18 months.

With the greater demand for electricity with increasing population, decreasing hydro electric power and other resources, device like the solar panels will surely be a hit in the market in near future. This in turn will lead to increased cash flow after the establishment of the firm. With better marketing strategies by capturing the market and customer satisfaction profit stream can be foreseen effectively.

Considering the establishment investments, marketing and distribution costs and a buffer amount to sustain in the initial periods, a best estimate of capital required is around INR 8 million.

Preliminary Start-up capital requirements or venture spin off, estimate:

  • Legal costs: establishment / contracts & agreements / leases, Lease deposit or other payments Plant and monthly rent- INR 0.3 Million + 30,000/month
  • Equipment, facilities- INR.0.5 million
  • Funds needed to complete product development, build prototype, complete documentation etc.- INR.0.4 million
  • Market research, Establish sales and distribution-Rs.1 million
  • Initial inventory: INR.0.7 million
  • Salaries, rent, phone, insurance for key persons, and other overheads which must be committed before firm achieves positive cash flow- INR.2.3million

Total INR 8 Million

The capital spent can be regained to an extent by leasing the company, selling equipments, real estate and vehicles. This will amount to about 6.5 million.

Checkpoint: At this point, the cash flow should be positive for the firm

Marketing, Customer Service, Installation & Maintenance, Manufacturing & Assembling will be a team of 14 employees. The marketing people will be involved in customer service and the installation and maintenance team will take care of the onsite customer service.

Few difficulties like delay in receiving the ordered goods from the component manufacturers, environmental factors and labour issues cannot to be neglected. Also, if product has to supplied to more than 3 customers on a particular day, it is quite tedious with available employees. Requesting for extension for product delivery may lead to negative impression from the customers.

The difficulties can be overcome by proper planning and estimation, purchasing the components and stocking well in advance and providing details to the customer regarding product delivery and installation.

Checkpoint: Of course there are some problems, but we have the solution and strategy to overcome the problems.

Venture Vehicle

  • Proposed venture structure?
  • What is the ownership of the host and that proposed for the new venture?
  • Corporate structure to support the venture?
  • How does the proposed venture fit the corporate strategy?
  • Strategy – Organisational context?

Venture significance?

Empowerment.

Political elements of organisation: Where does the power lie, are the venturers empowered to achieve the goals?

How does this relate to core business?

Synergy: between venture and existing operations.

Complementarity of venture with other operations.

Is venture simply a cash cow or synergistic and adding value to the overall operations?

Corporate culture

What changes will be necessary to support the venture?

Attitudes, Opinions and Beliefs.

Does the company have propensity to innovate?

Management

SWOT of the Organisation

Corporate Skills, Staff, Strategy, Systems, Super ordinate Goals / Shared Values, Structure Style – how do these fit within the proposed venture?

Resource competition – finance, human and physical

Dilution of management: Does this weaken the parent company?

Adequacy of management of human resources?

Other major issues:

Industrial relations issues:

What union(s) are involved, awards, occupational health and safety issues?

Government relations issues?

Legal issues?

Corporate resources

What are available and what are required?

What mechanism is available to enhance and provide complementary resources?

Systems

What systems exist within the organisation? Are they adequate for the new development?

Do they deliver the required elements in timely way?

Physical implications

What are the physical requirements for the venture? Manufacturing plant, Space, locational issues.

What are the current demands on such resources without the new venture?

What additional resources will be required?

Implementation strategy

Who, what, how, why and when?

Management and Organization Plan

Management team

President and Production Manager: Alex Skaria

As President and Technician Manager, Alex will offer the company strategic business and manufacturing planning guidance. He will be responsible for the production of components of solar energy system. He will monitor the examination on the quality of products each day.

Before this project, Mr. Alex is an accomplished engineer with adequate knowledge in the solar field. He knows the right people for guidance for this venture in the city of Chennai. Mr. Alex’s experience and knowledge of strategic business planning will guide the management team.

Chief Financial Officer: Aravind Vishnu Manoharan

Aravind will provide the financial planning guidance. He has been studying on financial issues when he is in university. He has knowledge in starting up a new venture and gives a reliable financial support.

Vice President of Marketing: Talal Mohammad S Alanazi

Talal will establish and implement the strategic marketing plan and maintain an active role in the Indian renewable energy programme. Talal’s most recent project is selling of refugee bags. His experience of promoting products brings us significant advantages at our initial start.

Vice President of Development: Mohan Karthikeyan Manickam

As a Master of engineering of RMIT University, Mohan focuses on innovation of small components of solar energy systems. He also does research on how to make new efficient solar energy panels and cooperates with big panel makers, such as HP and Sharp. His research will fit the Indian people and increase our market reach.

Service Manager: Tae Han Kim

Mr. Kim has been a service provider in electrical fields for 5 years. He will establish the engineer group and recruit experienced expert and engineering assistant. He will lead the team and arrange the installation and maintenance for customers. He will also be responsible for the consultation, including the feasibility of solar energy system and customized design.

Compensation and ownership

Phoenix Solar Energy will be established as a Private Limited company (Pvt. Ltd). The management team and the investor will own the company as follows:

  • Alex Skaria 10%
  • Aravind Vishnu Manoharan 10%
  • Talal Mohammad S Alanazi 10%
  • Mohan Karthikeyan Manickam 10%
  • Tae Han Kim 10%
  • Xin Wan 10%
  • External Investor 40%

Board of Directors/Advisory board

Advisory Council member Company/address Expertise
Balasubramanian.T.V
Accountant
KF Sridhar & Santhanam Chartered Accountants,Chennai
(+91) 44 24711500
Active Management Consultant on Project Feasibility study, business plans , structuring
Gary R. Barnum
Attorney
Stoel Rives, Portland
(503) 294-9114
Primarily focus in the renewable energy area. Represented a power generation company
Represented a power generation company in the development, construction and financing of several waste-to-energy power production facilities.
Mr. REYAD FEZZANI Production Director TATA BP SOLAR INDIA LTD
78, Electronics City Hosur Road Bangalore 560 100, Chennai
(+91) 6660 1300
Technical advice on production of solar energy components
Professor Aliakbar Akbarzadeh
Development Director
RMIT University,
Melbourne, VIC
+(61 3) 9925 6079
Current project leader of Solar Pond Project.
Provide professional suggestions on the development of solar energy systems.
Dr. Farooq Abdullah
Programme Director
Ministry of New and Renewable Energy,
Lodhi Road,New Delhi-110 003, India.
91-11-24361298,24360707
Minister Of New And Renewable Energy

Infrastructure

Infrastructure member Company/address Role
Marcus Powe RMIT University,
239 Bourke Street Melbourne VIC 3000 Australia
(+61) 3 9925 1436
Investor
Alan R. Merkle Stoel Rives,
Seattle, WA
(206) 386-7636
Attorney
Dr. Radhakrishnan Salai PKF Sridhar & Santhanam Chartered Accountants,
98A, IV Floor, Mylapore, Chennai 600004.
(+91) 44 28478701/02
Accountant

Organization

Organization

Salary Forecast

Title Annual Salary
CEO Rs 600,000
CFO Rs 500,000
Senior Vice President of Marketing Rs 500,000
Service Manager Rs 500,000
Vice President of development Rs 500,000
Solar Energy Engineer Rs 180,000
System Installer Rs 180,000
Customer service man Rs 180,000

Personnel Plan

The following personnel plan details Phoenix Solar Energy Solution’s plan for the ramp-up in the first 3 years:

Human Resources Year 1 Year 2 Year 3
President &Production Manager 1 1 1
CFO 1 1 1
Vice President of Marketing 1 1 1
Vice president of Development: 1 1 1
Service Manager 1 1 1
Engineer 3 6 7
Installation Assistants 6 12 14
Customer Service 3 4 5
Total Headcount 18 29 39
Total Costs Rs 4,760,000 Rs 6,650,000 Rs 7,280,000
Scientific Advisory Board Rs 800,000 Rs 1,200,000 Rs 1,400,000
Total Costs Rs 5,560,000 Rs 7,850,000 Rs 8,680,000

Checkpoint: The Venture looks promising owing to deep commitment from the team

Fatal Flaw Issues

Are we aware of any of?

Empowerment problems.

Corporate politics.

Very small market for the product.

Overpowering competition and high cost of entry.

Inability to produce at competitive price.

Lack of influence and control over product development and component prices

Inability to expand beyond a one-product company.

Overwhelming financial requirements

Inability to harvest the opportunity profitably.

Major risks and problems

What are the major risks and problems in the proposed venture?

(Internal and external)

What is the order of their importance?

Corporate dominoes?

What are the significant trade-offs and assumptions that can affect the execution or outcome?

How severe are the downside consequences?

What can be done to minimise the above considerations?

Overall how do we rate the risk of the venture: high, medium or low?

Idiosyncratic Issues

Are there any other vital issues or considerations, unique and situational to the nature of the opportunity and proposed business:

  • locational
  • climatic
  • historic
  • emotive
  • environmental
  • geological
  • political
  • industrial

Financial Analysis

Financial Analysis.

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BusinessEssay. (2021, December 1). Venture Screening Guide of Phoenix Solar Energy Systems. Retrieved from https://business-essay.com/venture-screening-guide-of-phoenix-solar-energy-systems/

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BusinessEssay. (2021, December 1). Venture Screening Guide of Phoenix Solar Energy Systems. https://business-essay.com/venture-screening-guide-of-phoenix-solar-energy-systems/

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"Venture Screening Guide of Phoenix Solar Energy Systems." BusinessEssay, 1 Dec. 2021, business-essay.com/venture-screening-guide-of-phoenix-solar-energy-systems/.

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BusinessEssay. (2021) 'Venture Screening Guide of Phoenix Solar Energy Systems'. 1 December.

References

BusinessEssay. 2021. "Venture Screening Guide of Phoenix Solar Energy Systems." December 1, 2021. https://business-essay.com/venture-screening-guide-of-phoenix-solar-energy-systems/.

1. BusinessEssay. "Venture Screening Guide of Phoenix Solar Energy Systems." December 1, 2021. https://business-essay.com/venture-screening-guide-of-phoenix-solar-energy-systems/.


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BusinessEssay. "Venture Screening Guide of Phoenix Solar Energy Systems." December 1, 2021. https://business-essay.com/venture-screening-guide-of-phoenix-solar-energy-systems/.