Paramount Bricolage Consulting Business Plan

Spring 2014

Simona Getova

0 THE AMERICAN COLLEGE OF

THESSALONIKI

Contents Paramount Bricolage Consulting, LLC ..................................................................................................... 3 Company Overview ................................................................................................................................. 4 Introduction ........................................................................................................................................ 4 Location and Facilities ......................................................................................................................... 4 Legally setting up Paramount Bricolage Consulting ....................................................................... 5 Management Team ............................................................................................................................. 7 Products and Services ........................................................................................................................... 10 Services Provided .......................................................................................................................... 10 PEST Analysis ......................................................................................................................................... 12 PEST analysis of the general business environment ......................................................................... 12 Politics ........................................................................................................................................... 12 Economics ..................................................................................................................................... 14 Socio-cultural ................................................................................................................................ 16 Technology .................................................................................................................................... 17 Industry Analysis ................................................................................................................................... 17 Competitors .......................................................................................................................................... 20 Competitive products ................................................................................................................... 20 Existing competitors...................................................................................................................... 21 Potential competitors ................................................................................................................... 22 Exit strategy .......................................................................................................................................... 22 Corporate Operations ........................................................................................................................... 22 Strategy & Operations ...................................................................................................................... 22 Competitive strategy..................................................................................................................... 23 Steps to providing Paramount Bricolage Consulting’s services .................................................... 23 Future Plans .................................................................................................................................. 25 Quality Management ........................................................................................................................ 26 Total Quality Management (TQM) ................................................................................................ 26 Physical Evidence of a Service....................................................................................................... 27 Opportunity to communicate service ........................................................................................... 27 Customer’s Expectations............................................................................................................... 27 Exceptions Occurred ..................................................................................................................... 28 Supply Chain & Logistics ............................................................................................................... 28 Target Market ....................................................................................................................................... 30 1

Market Overview .............................................................................................................................. 30 Market segmentation ................................................................................................................... 30 Market Trends................................................................................................................................... 35 Market Needs and Key Customers.................................................................................................... 36 Strategy and Implementation ............................................................................................................... 37 Marketing Plan .................................................................................................................................. 37 Positioning..................................................................................................................................... 37 Product .......................................................................................................................................... 37 Promotion ..................................................................................................................................... 40 Distribution ................................................................................................................................... 46 Pricing............................................................................................................................................ 46 Financial Plan ........................................................................................................................................ 47 Cost and Price estimation ................................................................................................................. 47 Appendix ................................................................................................................................................. 1 Bibliography ............................................................................................................................................ 5

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Paramount Bricolage Consulting, LLC Address: Sava Kovachevich no. 1

Entrance 3, floor 4/17 1000 Skopje

Owner/Founder/CEO: Simona Getova

What does PBC do? Paramount Bricolage Consulting will be a consulting firm providing sustainable solutions to companies and institutions. PBC’s experts will advise organizations at each stage of a project or business development. What PBC will offer is a multidisciplinary service aimed at assessing environmental impact, creative design and implementation of environmentally sustainable strategy, gaining regulatory approvals, managing risk and controlling costs. The service will be highly tailored to the customer, and once an environmental strategy will be delivered to the client, PBC will assist the implementation of the strategy by connecting the client with suppliers of devices and equipment needed for the implementation of the strategy. PBC will then follow up by periodical check-ups of the level of implementation of the strategy, and with its creative approach to environmental consulting will enable clients to achieve their sustainable business and organizational responsibility aspirations. Why would it be a success? In today’s ever changing environment with rapidly growing climate uncertainty all over the world, environmental consulting is not only gaining popularity swiftly amongst organizations of all sizes, but it is also becoming a necessity. Humans’ negative impact on the planet from generating energy, to employing dirty energies, to ways of operating, manufacturing, and distributing, etc., have brought about global warming, extreme climate change, destruction and relocation of human and animal habitats, and many more environmental and social problems. Governments all around the world are now awakening and introducing tighter controls on businesses with regards to the way they operate so as to be less harmful towards our physical environment. With this environmental urgency, business as usual is not an option. In addition, the sector of environmental consultancy in Macedonia and the Balkans in general, is in its initial stage. As a frontier, Paramount Bricolage Consulting 3

should be able to establish itself as a quality service provider and grab and hold a substantial market share.

Company Overview Introduction

Paramount Bricolage Consulting (PBC) will be based in Skopje, in the Former Yugoslav Republic of Macedonia. The firm will be providing environmentally sustainable strategies for startups set up and environmentally sound practices to existing firms and institutions. “Startup is a company that is in the first stage of its operations. These companies are often initially bank rolled by their entrepreneurial founders as they attempt to capitalize on developing a product or service for which they believe there is a demand.” *Definition by Investopedia As stated, PBC will focus not only on providing environmental solutions to existing businesses but also to newly established startups for our philosophy is that a startup set up in an eco-friendly manner will maintain itself and grow without being harmful to our physical environment. In addition, once PBC provides environmental assessment to an entity, an environmental strategy will be generated for that entity, and support in the implementation of that strategy will be delivered by PBC. Seasonal follow-ups will be conducted by PBC experts in regards with the strategy implementation of the firm/institution. Therefore, PBC’s mission and vision statements are as follows: Mission Statement

Preserve the environment through providing environmentally sustainable solutions to legal entities. Vision Statement

Become the Balkan leader in providing environmentally sound solutions to legal entities within the region.

Location and Facilities

Paramount Bricolage Consulting’s working space will be located in Kisela Voda, an area ten minutes away on foot from central Skopje, the capital of Macedonia (see Map 1 below). The central positioning of PBC is of immense importance for it is a great way to stay in the loop with all the happenings in the center of the capital. That is, PBC will be within a walking distance from offices of many other firms that work in various sectors. Our team members (employees) will be also able to easily utilize the public transportation no matter which part of the city they are coming from or going to, for most buses are passing by this central area. With this we will be able to easily reach 4

potential customers. Moreover, the fact that PBC’s team members can either walk, bike or take public transportation to and from PBC’s office will be in line with the company’s suggestions for team members with low carbon footprint.

The premises of Paramount Bricolage Consulting will be situated in a 65 m2 working space already owned by the founder. The fact that the space is already under founder’s ownership is of great assistance to PBC for there will be no rent costs. The size and the setup of the premises are well established to support excellent working conditions for 8 team members. There is a hallway, restroom, conference room, breakroom, and working space. All of the office supplies will be organic and the interior arrangement will allow for each team member to have his/her own work station. Eightperson conference table has already been set up in the conference room, and the small breakroom will be designed and decorated so as to awaken creativity. Paramount Bricolage Consulting’s premises will be arranged in an ultimately environmentally friendly manner, and will be a pleasant break from the fast paced life in the city.

Map 1: positioning Skopje, and PBCs office location

Legally setting up Paramount Bricolage Consulting 5

As Business 101 confirms, since March 2011 onwards in Macedonia, it is possible that a company is legally formed by e-registration at the Commercial Register. The procedure has been over simplified and all fees regarding registration have been removed (Rafajlovski, 2014).

The most appropriate form of enterprise for Paramount Bricolage Consulting to be registered as is a Limited Liability Company (DOO in Macedonian). According to the 2012 publication of KPMG Macedonia DOO on investment methods in Macedonia, the DOO is “a commercial company in which one or more individuals or legal entities each subscribe to the pre-determined core capital of the company with a contribution. The shareholders shall not be liable for the company’s liabilities. A DOO is liable to its creditors only to the extent of its own assets,” (Investment in Macedonia, 2012). It is evident that this form of enterprise is convenient for small- and medium-sized business activities, for the advantages that it offers over other types of business associations are the following: •

Rather low minimum capital required - EUR 5,000;

• Personal assets of shareholders are protected from business debt for they are not liable for the company’s liabilities. On the contrary, unlimited partnership partners are liable to creditors with their entire property; • DOO circumvents the higher publicity requirements and the complex incorporation procedures pertinent to an AD company; • DOO is administratively easier to manage than the procedures applicable for an AD company.

Business statistics show that the advantages stated above allow for the majority of foreign-owned companies in Macedonia to operate in this legal form.

Relevant to Paramount Bricolage Consulting, the particular formation rules applicable to DOO are as following: •

Total statutory capital must be subscribed on incorporation;

• Manager(s) for the company must be appointed by the founders. It is not necessary that the manager is a DOO member, Macedonian citizen or resident of the country;

• As mentioned above, the company has to be registered in the Commercial Register (http://www.crm.com.mk/DS/Default.aspx) of the Republic of Macedonia. The information with regards to the amount of the capital, the members’ interests, as well as the names of the manager(s), and their management and representation rights included in the Articles of Association are published on the official web site of the Commercial Register (http://e-submit.crm.com.mk/eFiling/ReDefault.aspx). 6

Following this Doing Business 2014; Economy Profile: Macedonia, FYR guide prepared by The International Bank for Reconstruction and Development, PBC will be able to go through the process of registration and incorporation with ease (Doing Business, 2014). In its formation stage, however, in order to even further ease the process, Paramount Bricolage Consulting will firstly and foremostly hire a registered accountant – Financial Director - to take over the registration and legal formation procedure of the consulting firm. The accountant will be appointed by the founder/CEO of PBC and will be reimbursed for his services with an hourly salary. The formalities that will be addressed at this stage of the consultancy along with company formation will include: registration of office location, registration with tax authorities and VAT, registration of internet domain name, establishment of PBC’s bank account, and creation and registration of PBC’s trademark.

Management Team

The organizational structure of Paramount Bricolage Consulting will be horizontal and every team member will be part of the decision making process. Transparency in operations and information sharing will be of great importance so that every team member is familiar with all areas of PBC’s work and is able to identify oneself with PBC’s vision and ideals. Company’s team will be guided by the founder/CEO who will be responsible to empower and keep the team members motivated. Continuous learning will be enhanced and creativity and innovation in the firm will be encouraged. Team members will be stimulated to find ways to improve their job positions in a way that would make their tasks and responsibilities more enriching and communicate these ideas to the CEO and the rest of the team.

Every Friday, weekly gatherings will be held where team members’ activities of the past week will be verified and feedback will be asked. Moreover, the agenda of the upcoming week will be discussed at these team gatherings, just as the delegation of roles and goal setting for the following working days will be agreed upon.

PBC’s team members will be strongly advised to have environmentally friendly lifestyles; keep their individual carbon footprint low and be environmental and social justice advocates. For every company’s work reflects the productivity and satisfaction of its employees, in PBC, we will be very open to integrating every team member’s life into our work environment. Team members will be encouraged to share their hobbies with the rest of the team and take days off in order to spent more quality time with their families, to volunteer, or else. PBC’s team members will be assisted when/if they would like to change careers, and they will be trusted in referring and training someone to take over their job at Paramount Bricolage Consulting.

PBC will aim to play a rather proactive role in the community by raising awareness about local and global environmental issues and creating interaction on this topic among the citizens and the authorities. For that reason, PBC will publish blog posts and opinion articles closely related to the topic of environmental protection. Moreover, we will create an ECO-Education program through which almost everyone from PBC’s 7

team will deliver at least ten lectures throughout the academic year in the universities/colleges, firstly in Skopje, and later on across the country. The goal of this program will be for PBC’s team members to become real environmental justice advocates by educating the youth on such issues. The outcomes of ECO-Edu will be manifold; however, the delivery of these lectures will eventually affect PBC’s team members’ ability to speak about environmental issues in front of crowds, and thus, increase their self-esteem and determination to be involved in the field of environmental protection. This will contribute to their self-actualization and overall satisfaction from their work, for educating the youth will enable them to bring about broader positive impact on the environment. As mentioned, the results of ECO-Edu will be multiple and the program will particularly add on to the successfulness of PBC’s Marketing Plan described later on. The management team of Paramount Bricolage Consulting will initially consist of eight team members. The responsibilities of each one are described below. Team

*Founder/CEO (one full time position – 40 hours weekly): Simona Getova -

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Creating and maintaining positive attitude in PBC and a rewarding work environment; Communicating the mission and long term vision of PBC;

Empowering and keeping PBC’s team members motivated; Managing the overall operations of the consultancy;

Creating synergies with suppliers of devices that assist reduction of resource usage;

Preparing draft agenda for weekly gatherings in order to get feedback by team members; Assisting in project planning;

Representing PBC, its operation and projects management to potential clients, on business competitions, in the media, etc.; Creating and consulting ECO-Edu working plan with team members;

Writing weekly blogs and opinion articles for PBC’s web page on the topics of environmental sustainability on a global and national level; success stories from communities that employ their own energy systems; solidarity with communities affected by climate change around the globe; most recent compliances of Macedonian environmental laws with the EU environmental acquis and the impacts and/or benefits from it, etc.; 8

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Developing a platform for dialogue with decision makers (municipalities);

Delivering ten lectures on national and global environmental issues at universities in Skopje.

*Creative Director (one full time position – 40 hours weekly): Juliana Nicha -

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Creating PBC’s trademark; Ensuring PBC’s social branding; Ensuring PBC’s presence on the social media; Creating Marketing Mix; Acting as a liaison between PBC and research institutions and researchers at universities in order to follow newest practices, devices and trends in energy and cost savings; Working closely with the PBC R&D intern and the Tech Whiz on a daily basis and assisting each other in day to day operations; Delivering ten lectures on national and global environmental issues at universities in Skopje.

*PBC R&D intern (one intern, full time position; rotatable every six months so as to keep the flow of fresh ideas in PBC – 40 hours weekly): Marko Toshanov -

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Creating and maintaining of database of companies providing devices that assist the implementation of environmental strategies; Following the trends of new and existing equipment that assists in cost and energy savings; Posting successful stories of companies/institutions/projects that have implemented PBC’s environmentally sustainable strategies on behalf of PBC on PBC’s web page and social media profiles; Working closely with the Creative Director and the Tech Whiz and assisting one another in daily operations; Delivering ten lectures on national and global environmental issues at universities in Skopje.

*Technical Whiz - web developer (one part time position – 20 hours weekly): Stojanco Stamkov -

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Creating and maintaining of the web page of Paramount Bricolage Consulting; Working closely with the Creative Director and the PBC R&D intern on a daily basis; (In the second year of PBC operation)*Creating and maintaining of a PBC mobile phone application with best environmentally sound practices tailored to the user; (In the third year of PBC operation)*Creating and maintaining of an app that would advise individual users/households on ways to lead more 9

environmentally sustainable lives including practices and devices that would assist them in making their homes more environmentally sustainable;

*Lawyer/Policy specialist (one part time position – 15 hours weekly): Hristina Ristova -

Keeping up with the laws being established by the Macedonian Ministry of Environmental and Physical Planning; Ensuring legal operation of the consultancy; Keeping up with the most recent laws on environmental conservation by the European Union; Delivering ten lectures on national and global environmental issues at universities in Skopje.

*Financial Director (one part time position – 15 hours weekly): Robert Markov – registered freelancer -

Ensuring the legitimate formation of Paramount Bricolage Consulting; Maintaining the accounting books/financials of PBC; Ensuring frequent tax payment;

*PBC’s Mastermind–expert consultants -environmental sustainability consultants (two initial full time positions; another two in the second year of operation – 40 hours weekly): Ana Raichevich (certified Professional Surveyor) and Viktorija Stojceva (certified Professional Engineer) -

Eco-mapping firms; Conducting environmental assessments; Suggesting environmentally sustainable solutions; Preparing strategic plan of action; Project management; Connecting firms in need of environmentally sustainable strategies with suppliers of devices assisting environmental strategies implementation; Quarterly, semi-annual, and annual follow-ups with the companies / institutions the PBC Mastermind has consulted. Delivering ten lectures on national and global environmental issues at universities in Skopje.

Products and Services Services Provided

For part of the solution to the issues of climate change and environmental preservation is altering the way today’s businesses are established and the way they 10

operate, Paramount Bricolage Consulting will be striving to lead the change towards environmentally conscious and sustainable business sector in Macedonia. This will be achieved by implementing the requirements of Article 24, 65 and 67 of the Law on Environment (See: Appendix 1, 2, 3 and 4) for newly set up and existing businesses as decided by the Macedonian Ministry of Environment and Physical Planning (MoEPP). For a startup to legally deliver its particular projects and in the end be able to officially operate within the country in the following sectors: agriculture, forestry, fisheries, energy, industry, mining, transport, regional development, telecommunications, waste management, water management, tourism, spatial and urban planning and land use; environmental assessments by experts need to be conducted, submitted to, revised, and approved by the local/national authorities. PBC’s Masterminds will be experts on environmentally sustainable practices that will consult firms on energy, water usage and waste reduction, optimal management of current and employment of alternative resources, and carbon footprint reduction. Following are the major assessments that Paramount Bricolage Consulting will be conducting for startups, existing companies and institutions needing to fulfill the Government legal requirements for operating within the country, and individuals. Additionally, a description of the environmental strategy specifically tailored to the customer (startup/company/institution) follows. *Elaborate for environmental safety – Governmental requirement

-Law on Environment (Official Gazette no. 53 / 05 dated 05.07.2005 yr.) obliges all legal entities who perform activities for which they must have prepared an elaborate according to the Regulation on activities (Official Gazette of RM no. 80 / 09) and get it approved by the municipality they perform those activities in. These entities are obliged to prepare reports or modify existing elaborates in order to align their operations with the prescribed standards for environmental quality and the prescribed emission limit values. -Will be conducted by the certified Professional Surveyor.

* Strategic Environmental Assessment (SEA) – Governmental requirement (See Appendix 4)

- It is an organized process of identifying, describing and evaluating the likely effects on the environment and human health of implementing the planning document, and providing reasonable alternatives taking into account the objectives and the geographical scope of the planning document. -Will be conducted by the certified Professional Surveyor. * Environmental Impact Assessment (EIA)

-It is a planning and management tool for sustainable development that seeks to identify the type, magnitude and probability of environmental and social changes likely to occur as direct or indirect result of a project or policy and to design the possible mitigation procedure (Vanclay and Bronstein, 1995; Harvey, 1998; Momtaz et al., 1998; Thomas, 1998). the EIA process is conducted for all major investment projects. -Will be conducted by the certified Professional Surveyor. 11

*Waste management assessment – Governmental requirement (See Appendix 6)

- Evaluation of company/institution’s waste management practices and/or creation of strategic waste management plan. -Will be conducted by the certified Professional Surveyor.

*Environmentally Sustainable Home - consulting services for building and equipping environmentally friendly housing

-Will be conducted by the certified Professional Surveyor and the Professional Engineer in partnership with Eko Inzenering.

* Tailored Environmental Strategy - It is an all-inclusive strategy customized towards the startup/firm/institution’s needs in becoming more resource efficient (reduction of energy consumption, waste management, reduction of water usage, lowering overall carbon footprint, becoming more efficient). This strategy will also include recommendations on use of devices that assist achieving the above mentioned goals and successful implementation of the proposed strategy. Thus, the service-product mix described below: *Service-product mix: consultation and communication - Full-service consultancy provided by PBC will include: expert environmental assessment, environmental strategy design, connecting customers with suppliers of devices for environmental efficiency, full strategy implementation, communications, media relations and follow up.

-Will be conducted by both the Professional Surveyor and the Professional Engineeer and customers will be referred to appropriate suppliers of the devices they need in order to successfully implement the recommended strategy.

Periodical follow up with a PBC Mastermind will be ensured as it will be part of every service package. The included periods will be the following: quarterly check-ups in the first year of environmental strategy implementation, semi-annual check-ups in the second and third year of strategy implementation, and annual check-ups after the third year of environmental strategy implementation.

PEST Analysis

PEST analysis of the general business environment Politics The Former Yugoslav Republic of Macedonia gained its independence on the 8th of September 1991. It held its first multiparty elections that year and the current constitution was adopted on 17th November 1991. The unicameral Parliament – its 12

national legislative body - includes 120 member seats elected by popular vote and serve a four-year term. The President is the Head of State and Commander-in-chief of the army. Executive power, however, rests with the Government comprised of 15 Ministries, which is headed by a Prime Minister appointed by the parliamentary majority. Macedonia has 84 municipalities headed by mayors elected every four years. Municipal Councils, acting local legislative bodies, determine the mayors’ executive functions (Investment in Macedonia, 2012). As stated in the “2011 Survey of resource efficiency policies in EEA member and cooperating countries” published by the European Environment Agency and profiling Macedonia, there is an institutional setup for the development and implementation of

resource efficiency policies in the country. When it comes to final formulation and plans on implementation of environmental policies for sustainable development to be reached, the Government as well as several Ministries have jurisdiction and responsibilities and are part of the decision making process. Those are the following: - Government, www.vlada.mk; - Ministry of Economy, www.economy.gov.mk; - Ministry of Finance, www.finance.gov.mk; - Ministry of Environment and Physical Planning, www.moepp.gov.mk; - Ministry of Agriculture, Forestry and Water Management, www.mzsv.gov.mk; - Ministry of Transport and Communications, www.mtc.gov.mk; - Ministry of Local Self Governance, www.mls.gov.mk;

Additionally, a shared responsibility and jurisdiction exists between the Ministry of Economy and Ministry of Environment and Physical Planning.

Resulting from the process of decentralization in the country, however, as affirmed by the European Environment Agency, number of responsibilities, obligations and authority with regards to sustainable development have been delegated to the municipalities. Other institutional actors in the process of sustainable development and efficient use of resources are: the Community of Units of Local Self Governance, The Alliance of Economic Chambers, as well as the Macedonian Energy Agency with its role in promoting energy efficiency and use of renewable energy sources. The Energy Regulatory Commission is also involved in the same process (European Environment Agency, 2011). The current political leadership in the country has been scarcely supportive towards the reinforcement of the laws and policies for environmentally sustainable development. The reason this has been the case was primarily the different priorities of the country that have been justified by the need to boost our economy, create more job opportunities and enhance nationalism. The top leaders have been failing to realize the importance of successful reinforcement of these policies for environmental preservation which is an unfortunate circumstance for PBC. However, because the legislative environmental framework does exist, PBC will aim to be as proactive as possible and try to lobby the authorities in arranging required frequent and effective environmental audits. Companies and institutions are already legally required to comply with environmental policies just as they comply with all the rest, thus, the 13

requirement of going through an impartial environmental audit will urge them to conduct at least all the necessary environmental assessments.

Economics

There has been a moderate increase in real GDP in the recent years. The KPMG study from 2012 has shown that the Macedonian economy has increased slightly during 2011 and the real GDP annual growth rate has been 3.3%. The expected growth for 2012 has been at 2.4%. The average annual inflation in 2011 was 3.9% whereas in 2010, the same was 1.6%. The inflation rate in 2014 is 3% and the same rate is expected in year 2015. State authorities had announced - gross foreign direct investments in the country for 2011 were around EUR 303 million (Investment in Macedonia, 2012) . The table below is as shown in Trading Economics, and it represents the Macedonian GDP growth rates for the past six years:

The overall demand for goods and services has been slightly increasing throughout the past three years and has been mostly satisfied by imports. Along with the rising international prices of key raw materials, electricity and food, this has contributed to an overall increase in the trade balance deficit (Tradingeconomics.com, 2014).

As represented in the October 2013 “Western Balkans Regional R&D Strategy for Innovation” paper published by the World Bank, the main export products from Macedonia are from the mining and metal industries. Exports of metal industries, ferronickel, and petroleum oils and preparations, apparently represented 27% of the total national value in 2011 (Foreign Trade Statistics 2012). In 2012, the export value of goods was USD 4,001,857,000, whereas imports had the value of USD 6,510,922,000. 14

Many globally recognized brands have been setting up their operations in Macedonia over the past few years (World Bank, 2013). The advantage that this provides PBC with is the fact that FDIs commonly comply with all the requirements a country compels them to fulfill in advance of starting their operations there; thus, the FDIs will most certainly not skip the step of conducting all necessary environmental assessments before starting business in Macedonia. This is, therefore, a potential market for PBC.

As published by the State Statistical Office, the number of active business entities in the Republic of Macedonia in 2013 was 71,290. The sectors with the highest share in the structure of business entities were: Wholesale and retail trade; repair of motor vehicles and motorcycles with 25 429 entities or 35.7% and Manufacturing with 7 918 entities or 11.1%, whereas the least represented were the sectors Mining and quarrying with 164 entities or 0.2% and Electricity, gas, steam and air conditioning supply with 132 entities or 0.2% (Stat.gov.mk, 2013).

The data on the structure of active business entities according to the number of persons employed show that the highest share of 85% belongs to business entities with 1-9 persons employed, followed by business entities with no persons employed or entities with unascertained number of persons employed (no data on persons employed) with 6.2%, and entities with 10-19 persons employed with 4.2%. The share of entities with 20-49 persons employed was 2.5%, those with 50-249 persons employed participated with 1.8%, while entities with 250 or more persons employed had a share of only 0.3%.

The major characteristics of the Macedonian economy in the past years is provided in the table below, as taken from the European Economic Forecast: Spring 2013, produced by the European Commission (European Commission, 2013).

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Little, almost no information is freely provided that would describe the environmental consulting sector in Macedonia as it is just recently becoming an interesting one. Existing consulting companies have been adding environmental services to their existing services so as to satisfy today’s need for eco consultants.

Socio-cultural

For unemployment rates still remain fairly high, reducing unemployment levels in various sectors and geographic locations remains one of Macedonia’s biggest economic and social challenges, states the KPMG 2012 report. Having concerns of not being able to satisfy their very basic needs while struggling to make it at the end of the month, the majority of citizens, including entrepreneurs and business people, tend to be less concerned about environmental sustainability and well-being in the long run. Similarly, the small enterprises and startups prefer to have some short term return secured to be able to support themselves and their families instead of investing it in environmentally sound solutions.

Luckily, there are those environmentally and socially responsibility driven entrepreneurs that can spot the current rise of demand of products and services that are environmentally consciousness in the market and thus, the need of a company to be environmentally sound. These, along with the many MNCs that are establishing their operations in Macedonia are expected to be PBC’s major customers.

KPMG argues: “the average monthly gross wage paid per employee in April 2012 was 30 444 denars (approximately EUR 500), while the average monthly net wage paid per employee in April 2012 was 20 743 denars (approximately EUR 340)” (Investment in Macedonia, 2012). Although this is continuing to be the trend with wages, the young Macedonian that is well educated, has just recently graduated, and considers himself/herself a global citizen, does not seek for just any work opportunities. In contrast, the firm’s reputation where this profile of a young Macedonian would like to work and whose products and services he/she would be most interested in, is of great importance to this individual. It seems that with the lessening of the concerns that the recent financial crises has brought about, the realization of the significance of environmental sustainability is on the rise.

What raises the importance of environmental sustainability of business and public institutions are the clear linkages between environmental degradation and public health issues. In Macedonia air pollution affects over 60% of the population, mainly people living in the major cities (e.g. Skopje, Veles, Bitola and Tetovo). As an effect mortality caused by circulatory and chronically respiratory diseases is increasing and children and elderly are particularly at risk. The World Health Organization estimates that, over 200 deaths each year are due to outdoor air pollution. In rural areas, only 81% of the population has access to improved sanitation, compared to 92% among urban population. Most cities have water supply and solid waste management problems that need to be addressed. Inadequate sanitation and discharges of untreated waste water which goes directly into groundwater pose a serious health risks for the population (Macedonia-Environmental and Climate Change Policy Brief, 2009). 16

Leakage of chemicals into to soil and groundwater also poses health risks in terms of chronic toxic effects in humans, livestock and wildlife. Furthermore, lead petrol is still being sold in Macedonia and industrial emissions remain an important source of lead pollution. Analysis show of high levels of lead in children’s blood, where the greatest concern is its effects on central nervous system. The urgency in becoming more environmentally sustainable in each and every aspect of the society is clear. PBC will be calling for action on these issues and thus creating market for providing our services.

Technology

R&D and Innovation Trends

The 2013 World Bank report on innovation in the Balkans has stated that: “since the beginning of the new millennium, science and research in FYR Macedonia has been insufficiently funded, especially by the private sector. The percentage of GDP devoted to R&D in 2010 was only 0.22% of GDP […].” This share is evidently lower even than the EU average of around 2%. Total R&D expenditures have been decreasing and business expenditure on R&D (BERD) was only 0.003% (World Bank, 2013).

The vast majority of R&D activities in the country are mainly carried out by the public sector, through the public universities and other state research institutions. Funding allocated to higher education institutes amounted to 7% of total general government R&D funding in 2009, whereas the private sector represented4%. Government budget outlays on R&D as a share of total general government expenditures were 9 percent. (Budget of the Ministry of Education and Science (2009: most recent available data). The leading scientific institution in the Former Yugoslav Republic of Macedonia is the Macedonian Academy of Science and Arts (MANU), which consisting of five departments and five research centers. The Research Centre for Genetic Engineering and Biotechnology and the Research Centre for Energy, Informatics and Materials are internationally recognized. Macedonia has also five state universities with 60 departments, 18 private universities with 79 departments, and 7 public research institutions, as published by the World Bank (WESTERN BALKANS REGIONAL R&D STRATEGY FOR INNOVATION 2013). “As resources, in particular those from the government have decreased over time, research expenditures have been used primarily to pay researcher salaries. Almost no investment is provided to maintain, let alone modernize, the research infrastructure,” and that is what reflects the realistic picture of technological advances in the country. How this situation might influence Paramount Bricolage Consulting is that it would ultimately affect its suppliers in a way that they would have to continue importing devices and/or machinery if no technical advances are being made in the country.

Industry Analysis Demand

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The consulting sector in Macedonia has been providing meaningful improvements to its customers – other businesses. In the June 2011 ‘Business Advisory Services FYR Macedonia’ publication by the European Bank for Reconstruction and Development it is stated that 69% of client enterprises have reported an increase in turnover after hiring a professional consultant. In addition, 61% have reported an increase in productivity, and 73.8% would hire a consultant again (EBRD, 2011).

As there is no information readily available on the environmental consultancy industry turnover in Macedonia, the turnover of the consultancy industry as a whole is shown in the table below as prepared by Research Center on Management and Human Resource Management for FEACO (Survey of the European Management Consultancy 2011/2012, page 31):

One significant figure is the 35% public sector as a key one that counts for a substantial portion of the demand for consulting services. Another important figure is the 10% key service line labeled as ‘Other Services,’ that allows us to safely presume that at least 5% of the turnover of all consulting services, might be assigned to environmental consulting services. Five percent of the turnover in this industry from the above information available would be 10,275,000 Euros (FEACO, 2012). If there was a breakdown of all the consulting services provided to the public sector, one could make safe assumptions on the portion of how much of the money above would pertain to the environmental consulting services sector. 18

With the recently established national environmental policies and the implementation of the EU environmental and health acquis, all business and public entities in the country are legally obliged to conduct an environmental assessment and gain environmental approvals from the municipality where they are situated (Ecologic.eu, 2008). Although there is quite some work that needs to be done towards the effective implementation of all of these legislatures, the above described situation provides PBC with a good basis for its operations.

The segments that PBC will serve are: * Municipalities – providing the necessary know-how to approve of submitted environmental elaborates. * Any institution, either public or private, that is required to receive environmental approvals, would like to be environmentally sustainable in its operations, lower its costs in the long run, use less energy and be environmentally friendly overall. * Any startup and existing company that require environmental approvals for their operations and/or want to implement environmentally sustainable strategies in order to lower its carbon footprint, lower its environmental impact, lower resource usage, and become more efficient. *Foreign Direct Investment projects that enter the country and are in need of environmental assessments in order to gain governmental approvals for operating within the country. * Any private entity with desire to build an environmentally sustainable housing. Detailed market analysis is provided in the Marketing Plan section below. Suppliers

Leov; http://www.leov.com.mk/bin/leov.php?language=en -

Solar panels production.

Intelen; http://intelen.com/ -

Provide business and people with powerful tools that transform real – time energy data into information that makes sense and drives energy consumption reduction and efficiency through real, long lasting engagement.

Duna; http://www.shop.duna.mk/ -

All technical devices one needs; only that they meet the RoHS standards, are recyclable, have a high economic efficiency i.e. are energy efficient.

Eko-Inzenering;http://www.eko-inzenering.com.mk/

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-

Trisoplast - Innovative mineral barrier for environmental protection and waterproofing.

Electronica Gas: http://www.electronica.gr/root.en.aspx -

One of the the leading companies in air conditioning, heating and solar systems satisfying the needs of its customers with its excellent and brand named products, having at its disposal experienced and expert technical stuff.

Ekocentar97: http://www.ekocentar97.mk/

-

Ekocentar 97 Ltd is an environmentally oriented company involved in a variety of activities to reduce the negative impact of hazardous waste in Macedonia, and ultimately improve living conditions.

Eco//Sun: www.ecosun.gr -

Eco//Sun has more than 17 years of successful course in the field of renewable energy sources. Supply of Whisper wind turbines, spare parts, after sales service & technical support.

OptiEnergy: http://optienergy.com -

Creating a regional energy Solar PV footprint in the sunny Balkans, OptiEnergy has over 120MW of Solar PV under license in prime locations. OptiEnergy is able to deliver over 20% IRR in this emerging market. Provides: photovoltaic systems, photovoltaic module mounting systems, photovoltaic modules.

Eko Klub: http://www.ekoclub.com.mk/eng/ Provider of: -

Waste disposal and waste transport with own motor pool Cleaning ,maintenance and TV inspection of industry pipes, sewage, cleaning of septic reservoirs and tanks Mobile toilet service Cleaning of wild landfills with own construction machinery Winter cleaning service of roads Selling of communal equipment ( waste bins and waste containers) , special communal vehicles , mobile toilets ad accessories Recycling of waste paper, plastic and PET bottles Street lights maintenance and New years decoration

Competitors

Competitive products As far as other industries are concerned, there are no substitutes to environmental consulting services. The regular consulting might pertain to other specific operating 20

areas of the customers (business plan preparation, financial services, tax payments, etc.), but unless performed by registered experts, environmental assessments – especially the ones prepared for a review by the authorities –will not be valid.

Existing competitors

The three main existing competitors of Paramount Bricolage Consulting: #1 Davos Invest Ltd.; http://www.davosinvest.com.mk/about.html

(Taken from Davos Inv. Web page): Founded in 1994, the Skopje-based Davos Invest Ltd. is a Macedonian designing & consulting company with demonstrated knowledge in key sectors of the Macedonian economy. Its main areas of focus are designing, infrastructure - investment project development, supervision on project implementation, audit of investment project designs, development of feasibility studies and preparation of business plans and other consulting services to support and assist the development and implementation of investment projects.

Although not included in its general firm description, Davos Invest has recently introduced a service: environmental impact assessment and project development. The fact that it is an already established consulting firm and well known among consulting services seekers, might lead firms/institutions to prefer Davos Invest over PBC. Their offices though, are situated quite far from the center of the city which makes them not so easily reachable. #2 ABC Consulting; http://www.mkbabc.com.mk/consulting/index.html

(Taken from company’s website): ABC Consulting company is founded in 1995, as a company of trade, manufacturing and services. The consulting activity is developed and applied in the range of environmental planning, management, human resources development, economical and technical analysis, monitoring and construction. The headquarters of the company are situated in Skopje, Republic of Macedonia. The company possesses an exclusive 180m2 office in the city’s downtown area, and a manufacturing and warehouse facility of 800m2 located in the industrial zone of Skopje. The modern work space and sophisticated office equipment enable high efficiency in the execution of tasks, while the installed hardware, software, and modern communication systems ensure extraordinary support towards the completion of every complex project. The exact same reason of clients preferring ABC Consulting over PBC is ABC’s already taken market share and loyal customers. Newly coming clients, however, might rather ask for PBC’s environmental consulting services for its people and office will be warm 21

and exceptionally welcoming, cozy and homey, unlike the extremely modern work space of ABC Consulting. #3 Euromak-Kontrol; http://www.euromakkontrol.com/news/index2/

(Taken from company’s website): Euromak-Kontrol is expertly trained and specialized control organization, founded in 1999 in Skopje as a company for technical testing, quality and quantity control and consulting. Euromak-Kontrol is the first consulting firm in Macedonia certified according to the requirements of the standards ISO 9001:2008 (Q-363/2001-05-30) and ISO 14001:2004 ( E-325/2009-02-18 ) and an accredited inspection body by the Institute for Accreditation of the Republic of Macedonia to control quality and quantity of goods. Euromak-Kontrol offers superb quality and speed of service implementation, competitive prices, and objectivity and impartiality. As a result of our work, EuromakKontrol has successful cooperation with prominent companies (small and large), institutions and laboratories as well as government bodies.

Potential competitors

Other than foreign firms possibly entering the environmental consultancy industry in Macedonia, potential competitors of Paramount Bricolage Consulting are already existing consultancy firms that start introducing environmental consulting services as they see the rising trend. What is important to PBC, however, is the fact that once PBC provides a service, PBC Mastermind would continuously be in touch with the company/institution he/she has serviced. For high quality service will be ensured, and a lot of effort will be put in ensuring high quality supplies, already serviced firms/institutions are expected to be loyal.

Exit strategy

The exit strategy would be the willingness of PBC to merge with or be acquired by a major, already established consulting firm. It does not necessary have to be an environmental consulting firm, on the contrary, it is even better that the consulting company acquiring PBC is not specialized in eco-consulting. That way, PBC could continue to operate as a special branch of the mother consulting firm and at least partly keep its autonomy in operations.

Corporate Operations Strategy & Operations

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Competitive strategy Strategy embodies the aspects of both mission (what to do) and implementation (how to do it). To achieve competitive advantage Paramount Bricolage Consulting could adopt one or a mix of the following strategies: competing on cost, differentiation, and/or response. Paramount Bricolage Consulting’s strategy is a mix of both differentiation and response.

Competing on differentiation - PBC is unique in the consulting service it provides to firms in a way that focuses solely on the environmentally sustainable strategies that these firms can pursue. The environmentally sound approach, however, embodies the three most significant aspects of a company: efficient management of the human and the financial capital without harmful effect on the environment. It is thus a holistic approach of doing business. Therefore, a firm operating according to an environmentally sound strategy will result with the firm being more responsive towards the environmental changes we undergo nowadays and more appealing towards environmentally conscious consumers – a growing market; be more cost efficient, and put the human wellbeing in the heart of its operations. Paramount Bricolage Consulting will not only be conducting environmental assessments, but it will be providing companies/institutions with suggestions on environmentally sustainable practices that they can use in order to reduce their harmful impact on the environment. The consulting provided will be highly customized to the needs of the firm in stance. In addition, the frequent follow-ups with the already served firms that will be conducted by PBC is another activity that would differentiate PBC from the peers. Most importantly, PBC will play a proactive role within the society as an entity that preserves the environment, and this will distinguish the consultancy from our competitors. Competing on response - As a company promoting and urging environmental sustainability, PBC will be able to quickly respond to customers’ needs of setting up and implementing environmentally friendly strategies as this will be PBC’s main expertise. PBC will be reliable in scheduling the services it provides, as well as in managing the collaboration between the firms in need of an environmentally sustainable strategy with companies that will provide devices that support the implementation of these strategies. Finally, in today’s ever-changing environment, PBC’s flexibility will be of immense importance. The way we are going to cope with the changes in customers’ needs is to have the PBC Mastermind appointed to assist certain organization being always available to provide further assistance to the same company/institution. The appointed PBC Mastermind will also consult with the second PBC expert before she delivers the final suggested strategy to the customer.

Steps to providing Paramount Bricolage Consulting’s services

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Becoming more eco-friendly, or going green, will benefit both the environment and one’s business. Environmentally soundly established or restructured company has lower costs in the long run. Moreover, environmentally conscious consumers are a growing market; thus, implementing PBC’s strategy will help company’s reputation and will show that this company cares about bigger things than just its own success.

The strategy provided by PB Consulting will have as a main objective not only to prepare assessments for governmental or local approval, but also to increase cost savings, minimize risk in terms of environment liability, and generally prepare the site for a better tomorrow. The initial tool that will be used by expert consultants for all assessments, as well as a basis of the tailored environmental strategy is eco-mapping. Eco-mapping is used to analyze the environmental health of a specific location, identify all relevant eco-issues and give priority to the ones that should be worked upon. It helps in analyzing and managing the environmental behavior of the company; in addition, once eco-mapping is completed, it serves as a foundation for future actions to reduce a firm’s negative impact on the environment. Therefore, as potential clients ask for PBC’s services by calling PBC’s premises, registering on our website, and/or walking in, PBC’s first step is for them to be assigned to a PBC Mastermind. From then on, the assigned PBC Mastermind takes on the customers in his/her hands and begins providing the service by firstly visiting the site of the customer (enterprise/institution). This one and the next step of eco-mapping described below are common for every customer and every service PBC will be delivering in the first six months of its operations. - Eco-mapping is based on a simple map of the site as seen from above. To do this, the steps below will be followed: o Step 1: Prepare satellite map for the entire company’s site and the surrounding environment. Additionally, the PBC Mastermind will prepare separate satellite maps showing the interior spaces. All maps will be copied 8 times, so as to designate each one of them to be one of the following: urban situation, nuisances, water, soil, air/odours/noise/dust, energy, waste, or risks map. o Step 2: Perform an input-output-analysis, carried out by checking the quantity and quality of materials and products within that space (outdoors/office/classroom/hallway), and identifying their nature; the places where energy and water enter the space, and the services, wastes and emissions leaving the space.

o Step 3: Eco-mapping the overall site (urban situation) would follow; that is, putting in everything that interacts with the environment in the outdoor parts of the company, such as: car-park (potential oil spillage), traffic generated in the surroundings, public transportation, gardening 24

and landscaping (useful biotops, pesticide use, etc.), neighbouring institutions, etc.

o Step 4: Eco-mapping nuisances: this map will look at the environmental nuisances that affect people outdoors – noise, odours and waste storage.

o Step 5: Water eco-map: will look at the room’s water consumption, and discharge of waste water.

o Step 6: Soil eco-map: will look at the storage of flammable, dangerous or hazardous products in relation to groundwater.

o Step 7: Air/odours/noise/dust eco-map: will look at the main emission points (heating system, extractor fan etc.), and their functioning.

o Step 8: Energy eco-map: will look at the points of energy consumption, and if there’s any energy wastage. o Step 9: Waste eco-map: will look at the management of waste.

o Step 10: Risks eco-map: will look at the risks of pollution, identify the risks of possible accidents (fire, toxic products dispersion), and whether there are any emergency procedures to be applied if any unfortunate event happens.

The operations of Paramount Bricolage Consulting would more particularly include Project Management; having the PBC Mastermind come in the startup/company/institution that looks for guidance on receiving an environmental approval and/or just being environmentally sustainable, and staying there until the ‘project’ of setting up environmental ground rules/practices for the customer is done. The environmental strategy will embrace usage of devices that will assist our clients’ strategy implementation. This is where our suppliers come in; as soon as the design of the environmental strategy for the client is finalized by the PBC Mastermind, confirmed by a second PBC Mastermind, and agreed upon with the customer, the PBC Mastermind will connect our client with the supplier/s of the device/s needed to implement the final strategy. A follow up and further assistance will also be provided by the PBC Mastermind, as explained earlier. Future Plans

*Balkan Takeover As PB Consulting will be set up in the Former Yugoslav Republic of Macedonia, a non-EU country, after building the foundations of environmentally sustainable entrepreneurship there, it will strive to expand to another non-EU country within the Balkan region. The objective is to influence the business sector of the Balkan countries that are not part of the European Union and do not need neither to employ 25

environmental assessments and sustainable practices in their operations nor to comply with certain environmental policies established by the European Union. This will contribute to the long term environmental efficiency in the region. *Widen the range of services offered

Carbon management and ecological footprint analysis - Lifecycle – based carbon and resource modeling and ecological footprint analysis production.

Noise and vibration assessment - Companies’ / institutions’ assessments and control of environmental noise and vibration; surveying and designing noise mitigation in order to improve operations and protect the community.

Corporate responsibility - Evaluating, designing, and implementing effective corporate responsibility strategies including environmental, social and economic aspects, while working along with customer’s staff and stakeholders. Green Events - Assistance at every stage of Green Event project management: planning, organizing and delivering. Connecting customers with suppliers of environmentally friendly materials, organic food providers, environmental sustainability advocates and speakers, and environmentally and socially responsible organizations.

Green ME - Expand services by providing environmental solutions to households and individuals. Introduction of Green ME smart phone application where individuals could receive a tailored strategy for lowering their carbon footprint and leading more environmentally friendly lifestyles based on their current lifestyle. Same holds for households, including being more cost and energy efficient.

Quality Management

Total Quality Management (TQM) Total Quality Management is a process that includes every part of the organization and supply chain process, from supplier to customer. Paramount Bricolage Consulting is a services-based company and service quality is more difficult to measure and communicate due to the nature of the business. However, PBC will be offering to the customer solutions that will result with governmental approvals/disapprovals of a certain project, and/or strategies for a business becoming more environmentally sustainable and connect different suppliers and customers according to their needs. As a result, there will be ways to measure quality. 26

Physical Evidence of a Service Although the company’s services are intangible, the solutions it provides lead to tangible assets like an approval of a certain project and/or connecting the customer with the supplier. Physical evidence of the service the company provides is identifiable through the measurement of total environmental impact (e.g. reduced water usage and energy consumption) after the implementation of the strategy and the application of the products PBC recommended. The success of the strategy will be evident to PBC through requested feedbacks from the customers after decided point of time of implementing PBC’s strategy. Additionally, a periodical follow up with the PBC Mastermind that has been managing the creation and implementation of the environmental strategy of the firm will be required, so that quality of service is insured.

Opportunity to communicate service

The service process is of great importance. PBC needs to be reliable, effective, communicative and efficient towards its clients. For that reason, from the moment a new client is signed, a specific consultant – Mastermind - will be appointed to be the bridge of communication between PBC and the client. This way, miscommunication mistakes through the process will be prevented. The appointed PBC Mastermind will study the client-organization and its processes and will come up with possible solutions. However, in order to make a final strategic recommendation, she will present the organization and his proposed solution to a second PBC Mastermind in order to evaluate and give feedback. In the end, the appointed expert will present the strategic recommendation to the client and receive their feedback. Only after all these processes have been completed, the PBC Mastermind will connect the client with specific suppliers of environmentally friendly devices. The collaboration between the two parties will be solely up to them; nevertheless, the PBC Mastermind that has worked on the particular project will have to follow up with both the client and the supplier. This way there will be a clear communication process not only within the organization, but also with the client and the supplier; thus, there will be little space for mistakes.

Customer’s Expectations

This is the most important part for PBC’s existence in the future. PBC needs to meet the customer expectations and deliver what it has promised; a thorough and complete environmental assessment and/or strategic solution for a more environmentally sustainable organization. If PBC fails to meet those expectations, it will not only lose the client, but also reliability in the market which would sacrifice the reputation and subsequently the existence of the company (PBC) itself. 27

Exceptions Occurred In case of a mistake, the appointed PBC Mastermind will communicate with the client and solve any problem that has occurred. In order not to lose the customer’s faith in PBC, promptness and efficiency in solving the mistake will be necessary, but also good coordination between the appointed PBC Mastermind and the rest of PBC the team. In the end, the expert can offer a gift from PBC (either a discount or energy sustainable products by suppliers) for any inconvenience caused from our side. TQM techniques to be employed to safeguard quality

DMAIC Model:

• •

• • •

Define: Customer surveys and evaluations will help PBC define areas that need improvement before and after the implementation of the strategy. Measure: The evaluations are measured against expectations and other data collections. In addition, there will be the measurement of cost efficiency and energy consumption comparisons after the implementation of the recommended solutions that will define the success of the strategy. Analysis: Analysis of the strategy will be conducted from the moment of signing the client to the moment that the strategy is implemented. Improvement: The analysis is important in order to identify areas of improvement both in PBC’s service quality or the suppliers’ quality. Control: Control procedures will take place often in order to make sure that our clients’ targets of energy consumption (or energy reduction from previous operations; thus, benchmarking), lowering carbon footprint, becoming more cost effective, and becoming more environmentally friendly in general, are met.

Empowering employees

Paramount Bricolage Consulting’s team members will be the core of PBC’s existence. Consequently, their innovative contribution with creative ideas for any operating process at all stages of PBC’s service delivery will be strongly encouraged. They will all be empowered to think imaginatively and come to a conclusion to an issue occurred themselves. Nevertheless, all PBC team members will be welcome to seek guidance and advice from one another and from the founder. The culture at PBC will be the one of learning from everyday challenges and other team members’ experiences. Even though empowered, PBC’s team members will be supportive of each other and especially supported by the founder, at all times. It will be our continuous goal to have an atmosphere of trust, reliance, well-being, and rewarding job for an individual and greater good, and every PBC team member will be expected to contribute to this.

Supply Chain & Logistics Vertical integration

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Since PBC is a services-based organization, it will use the vertical supply chain. This means that PBC will provide a solution package to the client and connect him with the suppliers that provide the necessary equipment for the implementation of the strategic recommendation when it comes to providing Tailored Environmental Strategy and Environmentally Sustainable Home. The benefits of applying vertical integration to PBC are: • Cost saving (no need for buying equipment and storing it); • Achieving differentiation and market response strategies (each client will have different needs and different budget); • Risk avoidance from technological changes (buy equipment that will soon change due to technological improvements). Although the advantages outweigh the disadvantages, there are still some drawbacks in using external partners and special attention is needed to keep track of the quality of the equipment PBC suggests. The weaknesses of vertical supply chain for PBC are: •

•

No control over the operations of the suppliers (e.g. if there are enough products when needed); No control over the quality regulations of the suppliers.

In order to overcome those difficulties, PBC consultants will always have a list of different suppliers for each product in case the first recommended supplier does not have enough of the equipment needed. In addition, PBC Masterminds and the R&D intern will be always in the lookout for new better products in the market or companies with better prices or better quality of equipment. Numerical Analysis

The Capital Requirements table is shown below:

Capital Requirements table

Item

Unit/s

Cost

Office equipment Computer Desk RecyClear Chair Organic stationery office supplies Organic cleaning supplies (Office) Conference table for 8 Camera Vehicle (biofuel) Insurance, legal and permit fees Startup costs and Deposits 29

8 8 8 8 1 2 1

2.240,00 € 400,00 € 320,00 € 100,00 € 40,00 € 1.000,00 € 2.000,00 € 15.000,00 € 1.000,00 € 5.000,00 €

Total Financial resources

27.100,00 €

Personal Investment Cash (Office) Conference table for 8 Desk

1 2

Proposed loan Amount Length: 7 yrs Terms: 4.4% for 7 yrs Annual payment Monthly payment Total

17000 7 0,044 2.874,38 €

9.000,00 € 1.000,00 € 100,00 € 17.000,00 €

-239,53 € 27.100,00 €

Target Market Market Overview It is rather difficult to successfully predict anything in the business environment which is why what best one can do is to make reasonable, educated estimates. In order to somewhat determine the target market of Paramount Bricolage Consulting, I used both primary and secondary data. In regards with primary data, I conducted a ‘Demand for environmental consulting services in Macedonia’ survey that was distributed to 22 entities through email and to 6 others through the social media platform Facebook. All of the contacted people are employees in the public (in municipalities), private or nongovernmental sector across the country, and were approached on the basis of being part of my personal and/or professional network. For all of them are individuals I have collaborated with very closely, I was certain that they will take the time to answer my questionnaire. All 28 responded to the survey, and as I had also asked them to forward it to other professionals from their own networks, I received a response from total of 60 entities from across the country within three weeks from the day I published the survey. The survey was created and distributed in Macedonian (see Appendix 7 for the survey translated in English) and ensured anonymity of the respondents. Participation in the survey was voluntary and respondents did not receive any kind of compensation.

Market segmentation

The findings of the survey assisted the overall market analysis, especially the demographic, geographic, benefit and psychographic segmentation of the market. The summarized results below include segment size, potential buying frequency, average resources available and market growth of each segment pertaining to the environmental services that Paramount Bricolage Consulting would eventually deliver.

The examined results from question 1 – Q1 (see Appendix 8 for results presented in charts) are given below: 30

• • • • • • • • • •

23 LLC responded (individuals from LLCs responded)* (38.3%) 13 state owned institutions responded (21.6%) 5 NGOs (8.3%) 4 FDIs (6.7%) (from Other) 4 LLC with one liable person (6.7%) (from Other) 4 Private health institutions (6.7%) (from Other) 3 individuals – no legal form of association (5%) 2 GP companies responded (3.3%) No responders from LP companies No responders from LP with Shares companies

Each business plan is a living matter in the sense that it can be constantly improved. The same goes for the marketing plan of every business plan, meaning that the market research could deliver better results if substantial time, energy, and other resources are spent on it. Given the time and resource constrains of completing this market research for PBC, I have assumed that a number of 60 answered surveys is a good sample of the market that PBC would serve for various market segments were represented in this batch. *Municipalities: There are total of 84 municipalities in the country as reported in the State Statistical Office of Republic of Macedonia, and even according to UNDP’s story “FYR Macedonia: Municipalities join forces to improve energy efficiency,” they are crucial players in the implementation of more environmentally sustainable practices (Undp.org, 2013). As a result, although only 13 of them were surveyed (about 16% of the total), I have taken this sample to be sufficient for me to arrive to some conclusions because every municipality shares some common demographic characteristics (Stat.gov.mk, 2014).

*Companies: The Euro Business Center – Skopje, in 2012, has published a list of 200 largest and another list of 200 most successful companies in Macedonia. Examining both lists, one can conclude that most of the companies that are on one list; actually appear on both. As they are the ones that employ 67% of the total working force in the private sector in the country, and assuming that I have mostly examined employees from this 67%, I conclude that they are well represented segment with the 37 survey responses by LLCs, GPs, FDIs and PHIs together (Euobc.com.mk, 2012). *Foreign Direct Investment: Quoted from “Investment Climate Statement 2013 – Macedonia”

“Both the Law on Customs and the Law on Profit Taxes offer incentives to foreign investors. Foreign investors are eligible for profit tax exemptions for: profits generated during the first three years of operation in proportion to the amount of foreign investment; all profits reinvested in the company; profits invested in environmental protection; and profits invested in "underdeveloped" regions of the country (National Bank of Republic of Macedonia, 2013).” According to the exempt of an article above, as well as many other findings including country assessments by EBRD and The World Bank, Macedonia possesses many business characteristics that attract FDIs in the country. Although in 2012 the country 31

has drawn only €100 million - one-third of the level of attracted FDIs in the previous year, Macedonia is ranked 25th among 189 countries in having a positive climate for doing business (EBRD, 2013).

This has resulted with many global brands like Fujitsu (Japan), Johnson Matthey (UK), Mobilkom Austria (Austria), EVN (Austria), Deutsche Telecom (Germany), Kromberg & Schubert (Germany), Draxlmaier Group (Germany), Van Hool (Belgium), Societe Generale (France), Johnson Controls (USA), KEMET Corporation (USA), Hellenic Bottling Company S.A. (Greece), QBE Insurance Group Limited (UK), Mittal Steel (Netherlands), Duferco (Switzerland), Titan Group (Greece) and many others to start operating in the country as FDIs. Considering the fact that most of these companies appear on the lists of 200 largest and most successful companies in Macedonia and being the conglomerates they are, one could assume that at least 30% of them would have some environmental programs already on board (InvestinMacedonia,com, 2014). Thus, even if only 30% (normal distribution) of the FDIs follow the example of sound environmental policy like Fujitsu’s for instance, aim to obtain all environmental approvals before starting operations and all tax holidays that proceed that, there tends to be about €30 million FDI drawn inwards (Fujitsu.com, 2014). For the average total revenue of the 200 largest companies in the country is more than €38 million, and an average of more than €3 million of the best performing ones, this opens a large market segment that PBC should have its eye on (Tr.ebrd.com, 2013). When interpreting the results of the survey, I have kept in mind the probable deviation of complete truthfulness on the answer provided on each question. The reason is that some of the answers on one question vary from the answers on another question, although they are supposed to coincide. For instance, 21.6% of the respondents were municipalities according to Q1; while in Q3, the same entities round up to almost 30% of the respondents. Since Q3 was addressed only towards municipalities, I assume that the higher percentage of municipalities as respondents here is due to an accidental response given even by non-municipalities surveyees. This, however, does not alter the results of the survey in any significant way for at least 13 munucipalities (21.6%) certainly did take the survey and the rest of the interpretation of results takes only this percentage in account.

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* As shown in the pie chart results of question 2 form the survey (above), about 25% from the companies surveyed assume the responsibility of being required to comply with national environmental laws, thus, they already possess some sort of environmental assessment. -

-

•

•

10% of those 25% have acknowledged that the environmental assessment they have obtained has assisted them in becoming more environmentally sustainable, thus, these 10% - 6 companies - can be assumed that will be returning customers. The survey shows that, unfortunately, nearly 34% of the companies surveyed are not familiar with the governmental requirements on environmental protection; therefore they have stated that they are in no need of any environmental assessment.

About 20% of the responders are state owned institutions; 14% of which are either a municipality or else – that are required to have conducted an environmental assessment by law and 2% of which have declared that it has help them in being more environmentally efficient. The rest 4-ish% are under the impression that they are not required to conduct any sort of environmental assessment. Finally, the non-governmental sector is also not too familiar with the eco requirements of the Macedonian Law on Environment, as stated by the majority of NGO respondents. Evidently, only 4% have conducted and benefitted by the environmental assessment they have gained.

From the above findings, it can be concluded that not everyone in the workforce is familiar with all the governmental requirements they need to fulfill as business, public or private entities. Thus, PBC will take a proactive approach in its marketing, so as not only to familiarize the market of its existence, but also to educate and be an advocate for fair market practices that are directed towards preserving the environment. The aim, of course, will be not only protecting the environment, but generating a vast market size for its own operations. *The 3rd question in the survey addressed only municipalities. As mentioned in the operations part early in the business plan and confirmed by UNDP’s article, implementation of environmental regulation in the country is decentralized and municipalities are now the responsible entities for approving environmental elaborates that are prepared on the bases of environmental assessments for firms and institutions. Only 6 of the 13 municipalities surveyed (see Appendix 8) answered that they (frequently) receive environmental assessments elaborates for approval while more than the half either receive these very rarely or never (Undp.org, 2013).

It is crucial that each municipality has knowledgeable, skilled and equipped employees in order to deliver approvals/denials of submitted environmental elaborates. That is still not the case in most municipalities in Macedonia when it comes to familiarity with national environmental regulations (UNDP). The five closest municipalities to the one where PBC will operate (in Centar – Central in English) have an average budget of 2,000,000,000 MKD (€ 3,252,032) each and highest services expenditures in the country. Therefore, PBC will aim to take the opportunity of the extra services 33

expenditures that these five municipalities (Centar, Aerodrom, Karposh, Tetovo and Kumanovo) have in disposal and offer them to deliver not only the environmental assessments, but also their approval (Sledi gi parite, 2014).

*The results on Q4 (above) of the survey have showed that 18 from the 60 respondents have answered negatively when asked whether they (the institutions they work for) are in need of any environmental assessments. After carefully examining the national environmental laws, I can confidently assume that the negative response of most of these 18 is simply due to lack of familiarity with the environmental regulations all business and public entities have to comply with on a national level. •

-

Environmental elaborate (same as Environmental Site Assessment), Environmental Impact Assessment, Strategic waste management, and a tailored analysis followed by environmental strategy design as services seem to be top four popular services among most respondents. This resulted with each of the service having the probability of being asked for 15 times on average. Strategic Environmental Assessment follows with 10 probable requests, while in consultancy and preparation of Local environmental action plans there were only 7 respondents interested. The least interest was in receiving environmental services on Documentation for integrated environmental permits with only 5 potential requests. The findings from this question strengthen PBC’s focus on providing the top four most commonly requested environmental consulting services.

34

*Finally, the last question of the survey examined participants’ willingness to financially contribute to environmental consulting services. For every single environmental consulting service provided depends on many factors attributable only to the customer in stance, the average hourly payment of an environmental consultant was asked for. The results have shown that most institutions, more than 50% of the respondents that is, are willing to pay 500 – 2000 MKD per hour for this kind of consulting services. That is a range of 8 – 33 € per hour.

*Household consulting: The only market segment that was not addressed above although it is an important one for PBC is the market for consulting households on building and equipping environmentally sustainable housing. Paramount Bricolage Consulting will initially offer its services to the 20 wealthiest families in Macedonia for these families are known business owners and opinion leaders. Their share of expenditure versus per capita expenditure in the country exceeds 29% (UNDP, 2009). PBC will aspire to build strong relationships with them and enter their network of professional and personal allies in order establish itself in the field of environmental engineering.

Market Trends According to the most recent statistics, the average annual monetary household expenditures in 2012 in Macedonia equaled 329,329 MKD (about 5,330 Euros) (Republic of Macedonia State Statistical Office, 2012). As stated in the 2012 ‘Impact of Environmental Concern and Awareness on Consumer Behavior’ research article, “household consumption […] represents more than half of the GDP, so consumers are the essential engine for promoting less environmentally hazardous products or practicing ecologically responsible consumption (JIEAS, 2012).” The research suggests that there is a growing trend of environmentally conscious customers that are mostly female and have demonstrated a pro-environmental concern. 35

The reason why this trend will impact the demand of PBC’s services is the fact that companies’ and public institutions’ everyday operations are reflected in the products/services they provide to the Macedonian public. The growing trend of environmentally conscious consumers will urge public institutions and companies not only to comply with environmental standards, but also go out of their way to be more environmentally friendly in order to appeal to this growing trend. After all, it is the demand of the final customer that keeps the economy going.

Market Needs and Key Customers

The reason why I have merged the part examining the market needs and prioritizing PBC’s key customers is because both come down to successful implementation of the already existing environmental legal framework. I have addressed in detail the target segments of the market that PBC will serve in the market overview above. Once more, these consist of:

* Municipalities – providing the necessary know-how to approve of submitted environmental elaborates. * Any startup/existing company, other private and/or public institution that require environmental approvals for their operations and/or want to implement environmentally sustainable strategies in order to lower its carbon footprint, lower its environmental impact, lower resource usage, and become more efficient. * FDIs that enter the country and are in need of environmental assessments in order to gain governmental approvals for operating within the country and/or want to be environmentally sustainable. * Any private entity with desire to build an environmentally sustainable housing.

If the system was rather efficient and environmental standards were maintained on a national level, PBC would focus solely on providing environmental consultancy to firms in need. Nevertheless, the shifted power of environmental approvals to the municipal level renders PBC to firstly and foremostly aim to lobby the five closest and wealthiest municipalities in terms of excess funding for services providers. They would be PBC’s key customers for several reasons:

-The impact that municipalities can have on successful implementation of the environmental legislature is major. If efficient in arranging frequent and unbiased environmental audits in their regions, municipalities wound not only request environmental assessments for themselves, but also be the needed drive for other institutions in the region to follow that practice. This would create a large market for PBC that would not only consist of municipalities, but of entities from all the above mentioned segments. -Another reason why municipalities would be PBC’s key customers is the existence of substantial funding for consulting services in their budgets. For example, Centar – the municipality where PBC will be situated had nearly 300,000,000 MKD (4,878,049 in Euros) in 2013 in disposal, at least 30% of which were spent for services that PBC would provide (Sledi gi parite, 2014). Thus, with effective lobbying, Paramount Bricolage Consulting can be the company to collect some or most of that capital. 36

Strategy and Implementation Marketing Plan Positioning Paramount Bricolage Consulting’s market positioning in comparison to its competitors and relative to its own significant characteristics is represented in the axis below:

The closest competitor of PBC currently on the market is Euromak Kontrol. This is the case because Euromak, besides providing focused environmental consulting, has been already cooperating with governmental bodies and has certain advantage in shaping the market through that cooperation.

What would differentiate PBC will not be only the delivery of its top quality service and reliability, thorough environmental assessments, regulatory approvals, design of environmental strategies and their implementation, but also its extremely proactive role in the society. The activities that would institute Paramount Bricolage Consulting as a market leader will be directed towards establishing PBC’s brand through communicating the environmental urgency of everyone and everything becoming more environmentally sustainable. PBC will achieve this through promoting itself by interactively engaging different sectors of the society in which it will operate. These promotional activities are described in detail in the Promotion part below.

Product

37

PBC’s service line will consist of the six services described below. Included are each service’s objective, features and the benefits it delivers. 1. Elaborate for environmental safety – Governmental requirement

- Objective and benefits: comply with the Law on Environment; get municipality approvals for performing activities in environmental hazards free surroundings: obtain governmental approvals for starting operations on a certain site; receive certificate of approval in order to apply for financing. -Law on Environment (Official Gazette no. 53 / 05 dated 05.07.2005 yr.) obliges all legal entities who perform activities for which they must have prepared an elaborate according to the Regulation on activities (Official Gazette of RM no. 80 / 09) and get it approved by the municipality they perform those activities in. These entities are obliged to prepare reports or modify existing elaborates in order to align their operations with the prescribed standards for environmental quality and the prescribed emission limit values. -Will be conducted by the certified Professional Surveyor. 2. Strategic Environmental Assessment (SEA)–Governmental requirement

-Objectives and benefits: assessing the environment in which a project implementation is planned and receiving strategic alternatives of improving that environment (required in specific industries, list provided in Appendix 3). - It is an organized process of identifying; describing and evaluating the likely effects on the environment and human health of implementing the planning document, and providing reasonable alternatives taking into account the objectives and the geographical scope of the planning document. -Will be conducted by the certified Professional Surveyor. 3. Environmental Impact Assessment (EIA) – Governmental requirement

-Objectives and benefits: assessing the immediate surroundings and focusing on preventing possible negative impacts on the environment (required in specific sectors, list provided in Appendix 3).

-It is a planning and management tool for sustainable development that seeks to identify the type, magnitude and probability of environmental and social changes likely to occur as direct or indirect result of a project or policy and to design the possible mitigation procedure (Vanclay and Bronstein, 1995; Harvey, 1998; Momtaz et al., 1998; Thomas, 1998). -Will be conducted by the certified Professional Surveyor.

4. Waste management assessment – Governmental requirement (See Appendix 6)

- Objective and benefits: Evaluation of company/institution’s waste management practices and/or creation of strategic waste management plan. -Will be conducted by the certified Professional Surveyor.

38

5. Environmentally Sustainable Home - consulting services for building and equipping environmentally friendly housing

-Objective and benefits: a 100% ecological living environment with minimized resource consumption and costs, waste and carbon footprint reduction and alternative resource employment. -Will be conducted by the certified Professional Surveyor and the Professional Engineer in partnership with Eko Inzenering. 6. Tailored Environmental Strategy - Objective and benefits: a company/institution becoming fully environmentally friendly product/service providers.

- It is an all-inclusive strategy customized towards the startup/firm/institution’s needs in becoming more resource efficient (reduction of energy consumption, waste management, reduction of water usage, lowering overall carbon footprint, becoming more efficient). This strategy will also include recommendations on use of devices that assist achieving the above mentioned goals and successful implementation of the proposed strategy. Thus, the service-product mix described below: *Service-product mix: consultation and communication - Full-service consultancy provided by PBC will include: expert environmental assessment, environmental strategy design, connecting customers with suppliers of devices for environmental efficiency, full strategy implementation, communications, media relations and follow up.

-Will be conducted by both the Professional Surveyor and the Professional Engineeer and customers will be referred to appropriate suppliers of the devices they need in order to successfully implement the recommended strategy.

The periodical follow up with a PBC Mastermind will be ensured as it will be part of every service package. The included periods will be the following: quarterly check-ups in the first year of environmental strategy implementation, semi-annual check-ups in the second and third year of strategy implementation, and annual check-ups after the third year of environmental strategy implementation. Therefore, the frequent follow up will guarantee that the implementation of each service is fulfilling the expected results of each customer of PBC. Immediate measures will be taken in the case of occurrence of mistake, as explained in the Quality Management part of the operations.

Cost factors and cost

The cost factors that pertain to delivering PBC’s services are multiple: •

Fundamental to being able to deliver the first four services as numbered above is for PBC Masterminds to have received accreditation certificate by the Institute for Accreditation of the Republic of Macedonia (IARM) and the Ministry for Environment and Physical Planning. The license that both the Professional Surveyor and the Professional Engineer should have obtained in advance of their 39

employment at PBC costs 300 Euros (each) and has to be maintained by paying 100 Euros/year membership fee (Iarm.gov.mk, 2014). This cost of 100 Euros yearly for both experts will be borne by PBC as long as they are employed here. •

•

•

Equipment needed for conducting the assessments: o PBC will sign a contract with the St. Cyril and Methodius University of Skopje (UKIM) in order for PBC’s Masterminds to be able to use the university’s research laboratory when needed. In return, PBC team members will deliver lectures on environmental education across faculties and provide internship opportunities at PBC with university credits to UKIM students. o An initial cost for PBC will be the purchase of two Canon 60D professional cameras in order to be used by PBC Masterminds in conducting any of the environmental assessment, thus, in providing the services. Both cameras will cost up to 2,000 Euros and will be used in the foreseeable future.

Major cost factor that has to be considered is PBC Masterminds’ compensation for working hours. Given the readily available information on compensation of environmental consultants in the region as well as the results from Q5 from the collected primary data (see Market Overview) – the willingness of customers to pay for environmental consulting – PBC Masterminds will be receiving an hourly wage of 8 Euros/hour. The two PBC consultants will have a full time schedule of 40 hours per week, thus, the wage expenditures for delivering its services that PBC will occur is estimated to 2,590 Euros/monthly – where another 15 Euros for each is included for commuting expenses.

Another cost that PBC has to take into consideration is the running cost of the vehicle that amounts to 1,375 Euros/monthly. To break it down, this amount considers the expense of 1.1 Euro for a liter of biodiesel B6 that will be used by PBC’s Volkswagen Beetle Green (Kapital MK, 2014). The car will be utilized in the case that a PBC team member has to visit another company that is far from the center of Skopje or it is in a nearby city, for the sake of conducting promotion activities and/or providing environmental services. The reason why there will be only one car is because each PBC team member will have a 15 Euros monthly allowance for taking public transportation to and from PBC.

Promotion

*Overarching objective: Paramount Bricolage Consulting will strive to build a brand name for itself by establishing its constant presence in the media and engaging the public. This will be achieved through various activities: ***Below the line communication***

1) Educational: PBC team members delivering ECO-Edu to UKIM students

ECO-Edu (PBC short and long term goal)

40

There are total of 50,000 students at UKIM and PBC will aim to reach 1800 of them through delivering 60 environmental workshops throughout the academic year with 30 students attending each one. From those 1800 GRPs, the conversion rate that PBC hopes to reach is 10% (to provide at least 180 paid environmental consulting services afterwards as a result of the workshops delivered). As the dates and times for the workshops will be arranged in advance, students who are truly interested in the topic of environmental protection will be given the chance to register early. Nevertheless, as the amphitheaters in UKIM are vast, walk-ins during the workshops will still be allowed.

Reasoning: the generation of young adults that will follow PBC’s workshops will hopefully develop a different mindset because of the inspirational workshops that call for urgent action on environmental protection. That is, PBC hopes that after its workshops, the majority of the students will be aware of the detrimental consequences of climate change and business as usual, and due to this they will take into account the environmental sustainability factor in everything that they will engage with in life later on. Therefore, this youth would prefer entering the work force in companies and institutions that are environmentally sound and engage in projects for environmental protection (in recycling, optimal resource usage, good waste management, etc.). Why this is important for Paramount Bricolage Consulting is because these young generations will be the entrepreneurs and job creators of tomorrow, thus, potential customers of PBC. In addition, there might be students that are already entrepreneurs and/or in close (family) relation with other businesses, thus, will spread the word of PBC’s existence.

Cost: 6 PBC team members (including the unpaid intern) will be responsible to deliver 10 workshops each annually = 60 workshops, 30 of which will take place September through December and another 30 from February till May. A workshop will last for an hour and a half and there will be half an hour spent on commuting back and forth from PBC premises to UKIM added as well. Another 12 hours should be counted in for that is how much approximately will be needed in total for advance preparation of the workshops. Therefore, there will be 132 working hours spent on this activity, only 112 of which will bear a cost (PBC intern is unpaid). The breakdown: - CEO: 10 workshops x 2 hours + 2 hours/preparation = 22 x 8.3 = 182.6 Euros - Creative Director: 10w x 2 hours + 2h/prep = 22 x 6.34 = 140 Euros - PBC Masterminds(x2): 20w x 2 hours + 4h/prep = 44 x 8 = 352 Euros - Policy Specialist: 10w x 2 hours + 2h/prep = 22 x 8 = 176 Euros - PBC Intern: unpaid  Total expenses for this activity: 850 Euros From the 180 expected environmental assessments to be provided as a result of this promotion, 100 are anticipated to be conducting elaborates for environmental safety (EES), 70 – waste management assessments (WMA) and 10 - tailored environmental strategies (TES). Given that there in reality there is little demand for environmental consulting services around the time of New Year’s (Dec-Jan) and during the peak of the summer holidays (Jul-Aug), the revenue that would be collected if the planned services are provided throughout the year would be as shown in the table below. 41

*The expenses of providing these 180 services as well as the expected services from the following promotion activities are estimated by multiplying the hours needed to be dedicated for each service with the hourly wage of the consultants. ECO-Edu

January

# of EES

February

March

April

May

June

July

Septembe r

August

October

November

Decembe r

Total #servies & total Exp & Revenue / service

5

10

10

10

10

10

5

5

10

10

10

5

100

Expenses

404,56 €

809,13 €

809,13 €

809,13 €

809,13 €

809,13 €

404,56 €

404,56 €

809,13 €

809,13 €

809,13 €

404,56 €

8.091,25 €

Revenue

1.625,00 €

3.250,00 €

3.250,00 €

3.250,00 €

3.250,00 €

3.250,00 €

1.625,00 €

1.625,00 €

3.250,00 €

3.250,00 €

3.250,00 €

1.625,00 €

32.500,00 €

2

7

8

8

8

7

2

3

8

8

7

2

70

Expenses

226,56 €

792,94 €

906,22 €

906,22 €

906,22 €

792,94 €

226,56 €

339,83 €

906,22 €

906,22 €

792,94 €

226,56 €

7.929,43 €

Revenue

1.300,00 €

4.550,00 €

5.200,00 €

5.200,00 €

5.200,00 €

4.550,00 €

1.300,00 €

1.950,00 €

5.200,00 €

5.200,00 €

4.550,00 €

1.300,00 €

45.500,00 €

# of TES

0

1

2

2

1

1

0

0

1

1

1

0

10

Expenses

0,00 €

525,93 €

1.051,86 €

1.051,86 €

525,93 €

525,93 €

0,00 €

0,00 €

525,93 €

525,93 €

525,93 €

0,00 €

5.259,31 €

Revenue

0,00 €

1.400,00 €

2.800,00 €

2.800,00 €

1.400,00 €

1.400,00 €

0,00 €

0,00 €

1.400,00 €

1.400,00 €

1.400,00 €

0,00 €

14.000,00 €

January

February

March

April

May

June

July

August

September

October

November

Decembe r

EES

1.220,44 €

2.440,88 €

2.440,88 €

2.440,88 €

2.440,88 €

2.440,88 €

1.220,44 €

1.220,44 €

2.440,88 €

2.440,88 €

2.440,88 €

1.220,44 €

24.408,75 €

WMA

1.073,45 €

3.757,06 €

4.293,78 €

4.293,78 €

4.293,78 €

3.757,06 €

1.073,45 €

1.610,17 €

4.293,78 €

4.293,78 €

3.757,06 €

1.073,45 €

37.570,58 €

0,00 €

874,07 €

1.748,14 €

1.748,14 €

874,07 €

874,07 €

0,00 €

0,00 €

874,07 €

874,07 €

874,07 €

0,00 €

8.740,69 €

2.293,88 €

7.072,00 €

8.482,79 €

8.482,79 €

7.608,72 €

7.072,00 €

2.293,88 €

2.830,61 €

7.608,72 €

7.608,72 €

7.072,00 €

2.293,88 €

70.720,01 €

# of WMA

TES

Total Profit

Revenue (Sales)

2.925,00 €

9.200,00 €

11.250,00 €

11.250,00 €

9.850,00 €

9.200,00 €

2.925,00 €

3.575,00 €

9.850,00 €

9.850,00 €

9.200,00 €

2.925,00 €

Thus, if Paramount Bricolage Consulting’s ECO-Edu program is conducted successfully, for an expense of 850 Euros, the consultancy would generate approximately 70,720 Euros in profit annually. 2) MunicipalECO-Edu: PBC CEO arranging meetings with mayors from the five municipalities: Centar, Aerodrom, Karposh, Tetovo and Kumanovo to deliver a presentation on the services PBC provides.

GRP: 5 municipalities; aim to achieve a conversion rate of 40% - at least two municipalities to agree on cooperation with PBC. The kind of services that are most appealing to municipalities are the environmental consulting services for big projects. 42

TOTAL

92.000,00 €

Therefore, PBC hopes to land an agreement with two municipalities to whom it would provide one Strategic Environmental Assessment (SEA) and one Environmental Impact Assessment (EIA). Frequency: three visits to each municipality. Cost: what is included in the costs for this activity is the time spent by PBC’s CEO on reaching each of the five municipalities; thus, costs for commuting are included as well. For the average distance from PBC to a municipality is 18 km and the average commuting time is half an hour, the expenses for commuting and conducting the activity would be: MunicipalECO-Edu # of visits h @ meeting h commuting CEO's hourly wage Total expenses:

Total hours

3 2 1 8,31 € 74,78 €

6 3

The revenues generated with this activity are expected to be as the following: Janua ry

February

March

0

1

0

Expenses

0

1.294,60 €

Revenue

0

SEA

EIA Expenses

May

June

July

Augu st

Septem ber

Octo ber

Nove mber

Dece mber

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

675,00 €

0

0

0

0

0

0

0

0

0

0

0

0

0

1

0

0

0

0

0

0

0

0

0

0

0

3.641,06 €

0

0

0

0

0

0

0

0

April

0

0

0

6.750,00 €

0

0

0

0

0

0

0

0

Expenses (CoS)

0

1.294,60 €

0

3.641,06 €

0

0

0

0

0

0

0

0

Revenues (Sales)

0

675,00 €

0

6.750,00 €

0

0

0

0

0

0

0

0

Total Profit

0

-619,6

0

3108,93 75

0

0

0

0

0

0

0

0

Revenue

In the best case scenario, the 75 Euros expenses will yield 2,290 Euros roughly on an annual basis. ***Above the line communication*** 1) Blog posting

Keeping a blog on our website – www.paramountbc.mk - with the aim of reaching a broader public, raise awareness about environmental issues and PBC’s role in addressing them, and push for effective implementation of environmental laws in Macedonia. 43

TOTAL 1 1.294,60 € 675,00 € 1 3.641,06 € 6.750,00 € 4.935,66 € 7.425,00 € 2.489,34 €

Content of the blog: topics of environmental sustainability on a national and global level; success stories from communities that employ their own energy systems; solidarity with communities affected by climate change around the globe; most recent compliances of Macedonian environmental laws with the EU environmental acquis and the impacts and/or benefits from it, etc. GRPs: aim to reach a hundred views on PBC’s webpage; conversion rate goal: 1% (1 request for service). It is in my belief that there is a potential of higher conversion rate once PBC is somewhat known in the market. Frequency: on a weekly basis.

Costs of this promotional activity include Tech Whiz’s working hours + 10 Euros initial cost for purchasing the domain of the website. In addition, part of PBC’s CEO wage – approximately 4 hours/ week to research, write and post on the blog; therefore, the monthly and annual costs for this activity are shown below in the table: Blogging

Tech Whiz working h CEO working h Total expenses: 1 20 4 10,00 € 158,25 € 33,24 € 201,49 € 2.417,85 €

Initial cost

Expenses Yearly expenses

ESH Expen ses Reven ue

The service that PBC hopes to attract demand for with blogging is Environmentally Sustainable Housing (ESH) that would start being provided June on. The revenue would be collected evenly in the months till the end of the calendar year and would be as estimated below:

Janu ary

Febr uary

Mar ch

Ap ril

May

0

0

0

0

0

2.225,09 €

0

0

0

0

0

0

0

0

1.857,14 €

1.857,14 €

1.857,14 €

1.857,14 €

Total Profit

June

July

Septembe r

August

October

November

December

0

0

0

1.857,14 €

1.857,14 €

1.857,14 €

10.774,91 €

If the blogging yields the desired demand for Environmental Sustainable Housing, the annual expenses of 2,418 Euros for this promotional activity would bring about 10,775 Euros in profits. 2) Media/ social media activity

Create PBC webpage, Facebook, Twitter, and Instagram accounts that will aim to reach 150 views, 300 likes, 100 followers, and another 100 followers, respectively, solely in the first month of PBC’s operation. From the total of 650 GRPs in the first month, however, aim to obtain requests for at least 5 services – Tailored Environmental Strategies (TES) throughout the year. 44

TOTAL 2.225,09 € 13.000,00 €

Consider the creation of fun videos and memes with an environmental theme and PBC’s logo and link to its webpage on them that will be shared on the above mentioned channels, for these are creative methods of spreading a message and building brand awareness. Frequency: postings on the social media on a daily basis.

Costs: 25 working hours weekly in total, 20 of which pertaining to the work load of the Creative Director and another 5 of the Tech Wizz which have already been computed as expenses in the blogging activity. Additionally, for the first year of operating, in order to generate clicks on our website, PBC will advertize on Facebook. The Facebook advertisement will be cost per click (CPC) bid because this is the form that would cause an action: visit of PBC’s website by Facebook ad viewers. The total cost of the above mentioned promotion activities is calculated below: Creative Director working h annually

Social Media

1920 12.172,80 €

Expenses

TES # of TES

Janua ry

Facebook Ad annually 5e daily 1.825,00 €

Revenue: Tailored Environmental Strategy (TES) x 5 Febru ary

0

0

March

April 1

May 1

0

June

July 1

Total annual expenses

13.997,80 €

Augus t

Septe mber

0

0

0

Expen ses

0,00 €

0,00 €

525,93 €

525,93 €

0,00 €

525,93 €

0,00 €

0,00 €

0,00 €

Reven ue

0,00 €

0,00 €

1.400,00 €

1.400,00 €

0,00 €

1.400,00 €

0,00 €

0,00 €

0,00 €

October 1

Novembe r

Dec emb er

1

0

525,93 €

525,93 €

0,00 €

1.400,00 €

1.400,00 €

0,00 €

Total Profit

3) Advertizing on three online platforms:

Zlatna Kniga: http://zk.mk/inner/apply (national level)

Costs: as it is a platform that clusters businesses according to sectors for free, it will be only the insignificant cost of 5 minute work to add the details of PBC on the platform. Therefore, there will be no costs assigned to this activity.

Market Konekt: http://marketkonekt.com/makedonija/register/business (national level) 45

Total 5 2.629,66 € 7.000,00 € 4.370,34 €

Costs: another great and free platform for advertizing PBC.

Renewable Energy Directory: http://energy.sourceguides.com/services.shtml (global level)

Costs: free advertizing for the first six months. PBC will take advantage of the first six month free advertizing, and check the conversion rate to determine whether it is worth paying to stay on this directory. GRPs and conversion rate of advertising on these platforms are difficult to determine for PBC’s details will only come up and may be viewed if the viewer researches for environmental consulting companies. Although the three of the platforms seem to be rather frequent, no one and nothing ensures PBC’s visibility there for they are all free. PBC can estimate approximate GRPs and conversion rates after using the platforms for a time of few months.

Distribution

Paramount Bricolage Consulting will be reaching its customers through two main distribution channels: online and offline.

Both channels will have the objective to not only familiarize customers with the services PBC provides, but also to educate and raise awareness about environmental issues. Achieving this will affect the demand of PBC’s services. The way this will be done, together with the geographical scope reached, expenses, and revenues generated is thoroughly explained in the Promotion part above.

Pricing

In order to determine the optimal way of pricing the services that PBC will offer, I turned to experts that have been working in the field for quite some time now. I spoke with 3 environmental consultants and questioned them on the costs that they occur to provide various environmental assessment and the prices they are charging for each. After having spoken to them, I realized that there is no way of determining fixed prices for the service line that Paramount Bricolage Consulting is providing; thus, I have taken the lowest and the highest amounts charged for such services in the market and used the average (in the Financial Plan). This is the case because all of the services are highly tailored to the customer in stance and the final price of the service provided will be affected by many factors. Some of these factors include but are not be restricted to: • • • • • • • •

time spent by PBC team members on a project, commuting distance to and from customer’s site, customer’s exact consulting need, type of assessment conducted, equipment used during assessment, coupons delivered to the customer, discounts provided, commission provided by suppliers, 46

• •

credit costs, ways of collecting payment, etc.

For the first years of operation, PBC will not be providing any coupons, discounts or credits for its customers and will be collecting the payments in the month the service has been provided. An exception will be the collection of income for providing Environmental Sustainable Housing service whose total price will be charged evenly throughout 7 months. PBC’s pricing objectives will initially include:

*Quality leadership – pricing the six different services in a manner that the price conveys the quality services PBC is providing. *Sales maximization – this sales oriented pricing objective will aim to boost the volume of services provide and establish its own market share by pricing the services in a way that they would be appealing to PBC’s market segments.

Financial Plan

Cost and Price estimation Paramount Bricolage Consulting is environmental consulting services provider. Because of the nature of the business, PBC will not encounter specific variable costs in delivering its services besides the working hours of PBC’s team members dedicated on providing each service and the incremental costs of setting up a website, advertising, promotion, etc. as elaborated on in the Marketing Plan above. In order to estimate the Cost of Services, the number of total working days in a year of PBC’s employees is relevant. Excluding the weekends as well as paid holidays, there are 240 working days in a year. This means that full time PBC team members (CEO, Creative Director, R&D Intern and two PBC Masterminds) have 1,920 working hours throughout the year, whereas the Financial Director and the Policy Specialist have 720 each, and the Tech Whiz has 960 working hours. These calculations are mostly relevant to the working days and working hours of PBC’s experts as they will be the ones that will be providing the services and the most direct interaction with PBC’s customers.

Figure 1

47

EES SEA 80,91 € 1.294,60 €

Expenses

EIA 3.641,06 €

WMA 113,28 €

ESH 2.225,09 €

TES 525,93 € 1.652,00 €

Price (+18% VAT)

383,50 €

796,50 €

7.965,00 €

767,00 € 15.340,00 €

Lowest price charged in the market

150,00 €

350,00 €

3.500,00 €

300,00 €

1.000,00 €

300,00 €

Highest price charged in the market

500,00 € 1.000,00 € 10.000,00 € 1.000,00 € 25.000,00 €

2.500,00 €

Hours needed to deliver the service

10

160

450

14

1000

160

450

980

275

65

Total h needed to deliver according to expected demand 275 975 = 650+325

Figure 2

Initial Budget 1

Premises: Vehicle (biofuel): Office supplies & equipment: Insurance, legal and permit fees: Startup cost and deposit: Advertising: Website domain: Licence: Total:

50.000,00 € 15.000,00 € 6.100,00 € 1.000,00 € 5.000,00 € 1.825,00 € 10,00 € 200,00 € 79.135,00 €

Included in the office supplies and equipment are the annual expenses for CDs and USBs to be used by PBC consultants in order to deliver the strategies planned to customers, as well as the lap tops that will be purchased for the office and the 2 professional cameras (full list of initial office supplies and equipment and else in the Numerical Analysis in the operations plan above). As stated earlier, the main expense of providing PBC’s services is the working hours of PBC team members. There is the salary break down in Figure 3 below.

Figure 3

1

Annual Depreciation of real estate in Macedonia: 1% of total price of the land/premise

48

Salaries:

Real (See Appendix Nominal 9)

People

Monthly

Months

Annualy

Hourly

# of hours worked monthly

CEO Creative Director

850

1314,5

1

1.329,50 €

12 15.954 €

8,309375

160

620

999,4

1

1.014,40 €

12 12.173 €

6,34

160

Consultant Financial Director

830

1287,1

2

2.589,20 €

12 31.070 €

8,09125

320

290

467,3

1

482,30 €

12 5.788 €

8,038333

60

Policy Specialist

290

467,3

1

482,30 €

12 5.788 €

8,038333

60

Tech Whiz

400

618

1

633,00 €

12 7.596 €

7,9125

80

0

0

1

15,00 €

PBC R&D Intern Total:

6.545,70 €

12 180 €

N/A

78.548 €

In the costs for salaries there is a 15 Euros monthly allowance per PBC team member included in the total payment for commuting costs. Figure 4

Overhead Electricity Water Advertising Salaries: Building maintenance Heating Internet Vehicle running cost Liscence maintainance CDs, USBs, paper Miscellaneous Total:

Annual Monthly 330,00 € 27,50 € 144,00 € 12,00 € 1.825,00 € 152,08 € 78.548,40 € 6.545,70 € 120,00 € 10,00 € 600,00 € 50,00 € 204,00 € 17,00 € 16.500,00 € 1.375,00 € 200,00 € 16,67 € 600,00 € 50,00 € 500,00 € 41,67 € 99.571,40 € 8.297,62 €

Figure 5 Utilities Electricity 27,50 € Water 12,00 € Heating 50,00 € Building maintenance 10,00 € Internet 17,00 € Vehicle running cost 1.375,00 € Miscellaneous 41,67 € Total: 1.533,17 €

The final price of PBC’s services takes into consideration not only the coverage of expenses for working hours of PBC’s team members, but also the situation in the market currently. Therefore, the lowest and the highest price that has been charged in the market for providing environmental assessments as the ones PBC provides were taken into consideration, and the average of both (plus 18% VAT) was taken in order to determine the price that PBC will charge for the specific service (Shown in Figure 1). 49

160

The Cost of Service does not only include the cost of working hours of PBC team members, but it also includes the monthly expenses for CDs, USBs, and paper (found in Overheads - Figure 4) that will be used for delivery of the write up of the specific environmental assessment and/or environmental strategy. These costs, besides the salaries payables, have also been taken into account in the Cost of Service part of the Projected Income Statement in Figure 6 below: Figure 6

50

Projected Income Statement January Sales

February

March

April

May

June

July

August

September

October

November

December

Total 140.921,50 €

3.451,50 €

11.652,50 €

14.927,00 €

22.892,00 €

11.623,00 €

14.699,43 €

5.642,93 €

6.409,93 €

13.814,43 €

15.466,43 €

14.699,43 €

5.642,93 €

681,12 €

3.472,60 €

3.343,14 €

6.984,20 €

2.291,28 €

4.929,02 €

681,12 €

794,40 €

2.291,28 €

2.817,21 €

2.703,93 €

681,12 €

2.770,38 €

8.179,90 €

11.583,86 €

15.907,80 €

9.331,72 €

9.770,40 €

4.961,81 €

5.615,53 €

11.523,15 €

12.649,22 €

11.995,50 €

4.961,81 €

127,76 €

127,76 €

127,76 €

127,76 €

127,76 €

127,76 €

127,76 €

127,76 €

127,76 €

127,76 €

127,76 €

127,76 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

152,08 €

152,08 €

152,08 €

152,08 €

152,08 €

152,08 €

152,08 €

152,08 €

152,08 €

152,08 €

152,08 €

152,08 €

1.825,00 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

6.100,00 €

Total Expenses

7.333,88 €

7.333,88 €

7.333,88 €

7.333,88 €

7.333,88 €

7.333,88 €

7.333,88 €

7.333,88 €

7.333,88 €

7.333,88 €

7.333,88 €

7.333,88 €

88.006,57 €

Operating Profit

4.563,50 €

846,02 €

4.249,98 €

8.573,92 €

1.997,84 €

2.436,52 €

2.372,07 €

1.718,35 €

4.189,27 €

5.315,34 €

4.661,62 €

2.372,07 €

21.244,53 €

256,20 €

256,20 €

256,20 €

256,20 €

256,20 €

256,20 €

256,20 €

256,20 €

256,20 €

256,20 €

256,20 €

256,20 €

41,67 € 4.861,36 €

41,67 €

41,67 €

41,67 €

41,67 €

41,67 €

41,67 €

41,67 €

3.952,12 €

8.276,05 €

1.699,98 €

2.138,66 €

41,67 € 2.016,21 €

41,67 €

548,16 €

41,67 € 2.669,93 €

3.891,41 €

5.017,48 €

4.363,75 €

41,67 € 2.669,93 €

- €

4,57 €

32,93 €

68,97 €

14,17 €

17,82 €

- €

- €

32,43 €

41,81 €

36,36 €

- €

543,59 €

3.919,18 €

8.207,09 €

1.685,81 €

2.120,84 €

2.669,93 €

2.016,21 €

3.858,98 €

4.975,66 €

4.327,39 €

2.669,93 €

Cost of service

Gross Profit

31.670,40 €

109.251,10 €

Expenses Selling & Administrative Salaries Advertising Office supplies & equipment:

Financial Expenses Depreciation Expenses Earnings before Taxes

Taxes Tax rate Net Profits After Tax

Cost of service

1.533,17 € 78.548,40 €

3.074,38 € 500,00 € 17.670,16 €

249,06 €

10% 4.861,36 €

20%

30%

22%

31%

20%

34%

0

12%

12%

17%

18%

18%

12%

17.421,09 €

Sales represent the sum of the expenses for all of the services that are forecasted (as shown and separated by service type in the Marketing Plan above).

Expenses: Selling and Administrative: monthly Utilities payable (total of Figure 5). Salaries: monthly Salaries Payable (see Figure 3). Advertizing: monthly expenses for Facebook CPC advertisement. Office Supplies and Equipment: monthly expenses for office supplies and purchased equipment (see Figure 2).

Financial expenses: monthly loan payments and monthly payment for PBC Mastermind license maintenance. Depreciation expenses: monthly premises depreciation payment.

Taxes: 10% for income taxes in Macedonia. No taxes paid on negative earnings.

There are 4 months in the first year of PBC operation that are estimated to end with loss for PBC. This is due to the lack of Demand for environmental consulting services in these two periods of the year: December and January – around Christmas and New Year’s celebrations, and July and August – vacation times. This is also evident in the Cash Flow Statement in Figure 7 below. Cash Sales: as mentioned before, there will be no credit sales in the first years’ operation of PBC; thus, Cash Sales include all of the sales that will occur monthly in the first year (see Figure 6).

Other Cash Inflows: account for 15% of the total profits from preparing Tailored Environmental Strategy that PBC will be collecting from the suppliers of devices for implementation of environmental strategies. Cost of Service: monthly cost of service (see Figure 6). Salaries: monthly Salaries payable (see Figure 6). Utilities: monthly Utilities payable (see Figure 5). Office supplies and equipment: monthly expenses for office supplies and purchased equipment (see Figure 2). Vehicle: monthly payments for vehicle purchased on credit (30 payments). Initial Cash Balance: initial investment by founder and initial loan taken (see Numerical Analysis).

Figure 7 0

Cash Flow Statement January

February

March

April

May

June

July

August

11.652,50 €

14.927,00 €

22.892,00 €

11.623,00 €

14.699,43 €

168,91 €

506,73 €

506,73 €

168,91 €

337,82 €

5.642,93 € €

6.409,93 € €

140.921,50 €

168,91 €

337,82 €

337,82 €

- €

2.533,65 €

6.409,93 €

13.983,34 €

15.804,25 €

15.037,25 €

5.642,93 €

143.455,15 €

681,12 €

794,40 €

2.291,28 €

2.817,21 €

2.703,93 €

681,12 €

31.670,40 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

78.548,40 €

1.533,17 €

1.533,17 €

1.533,17 €

1.533,17 €

1.533,17 €

1.533,17 €

1.533,17 €

1.533,17 €

18.398,00 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

508,33 €

6.100,00 €

500,00 €

500,00 €

500,00 €

500,00 €

500,00 €

500,00 €

500,00 €

500,00 €

500,00 €

6.000,00 €

4,57 €

32,93 €

68,97 €

14,17 €

17,82 €

€

32,43 €

41,81 €

36,36 €

- €

249,06 €

11.821,41 €

15.433,73 €

23.398,73 €

11.791,91 €

15.037,25 €

5.642,93 €

681,12 €

3.472,60 €

3.343,14 €

6.984,20 €

2.291,28 €

4.929,02 €

Salaries

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

6.545,70 €

Utilities

1.533,17 €

1.533,17 €

1.533,17 €

1.533,17 €

508,33 €

508,33 €

508,33 €

500,00 €

Taxes

€

Total

5.642,93 €

3.451,50 €

-

December

14.699,43 €

Total inflows

500,00 €

November

15.466,43 €

3.451,50 € €

Office supplies & equipment: Purchase of vehicle:

October

13.814,43 €

Cash Sales Other cash inflows

Cost of service

September

-

500,00 € €

-

Loan Payments

239,53 €

239,53 €

239,53 €

239,53 €

239,53 €

239,53 €

239,53 €

239,53 €

239,53 €

239,53 €

239,53 €

239,53 €

2.874,38 €

Total outflows

10.007,85 €

12.803,90 €

12.702,80 €

16.379,90 €

11.632,17 €

14.273,58 €

10.007,85 €

10.121,13 €

11.650,44 €

12.185,75 €

12.067,03 €

10.007,85 €

143.840,24 €

Initial Cash Balance

26.000,00 €

19.443,65 €

18.461,16 €

21.192,09 €

28.210,92 €

28.370,66 €

29.134,33 €

24.769,41 €

21.058,21 €

23.391,11 €

27.009,61 €

29.979,84 €

Ending Cash Balance

19.443,65 €

18.461,16 €

21.192,09 €

28.210,92 €

28.370,66 €

29.134,33 €

24.769,41 €

21.058,21 €

23.391,11 €

27.009,61 €

29.979,84 €

25.614,91 €

0

25.614,91 €

Figure 8

year 1

Projected Income Statement year 2 year 3

year 4

year 5

Sales 140.921,50 €

150.786,01 €

161.341,03 €

172.634,90 €

184.719,34 €

Gross Profit 109.251,10 € Operating Profit 21.244,53 €

116.898,68 €

125.081,58 €

133.837,30 €

143.205,91 €

26.251,91 €

34.434,82 €

43.190,53 €

52.559,14 €

Net Profit 17.421,09 € Retained Earnings 25.614,91 € Reservses 8.193,82 €

20.409,78 €

27.774,40 €

35.654,54 €

44.086,29 €

27.407,96 € 6.998,18 €

29.326,52 € 1.552,12 €

31.379,37 €

33.575,93 €

4.275,17 €

10.510,36 €

Cash balance 25.614,91 € Depreciation

27.407,96 €

29.326,52 €

31.379,37 €

33.575,93 €

500,00 €

500,00 €

500,00 €

500,00 €

Premises: 500,00 €

Estimations from Figure 8: - Sales to grow 7% from year to year. - Profits to grow 7% from year to year according to sales growth. - As expected inflation for 2015 is 3%, I have adjusted the expenses for the next year to increase by the same percentage. - Took the operating profit from the first year and subtracted the financial and depreciation expenses from it - these expenses stay the same in the following years since the payment with the bank has been arragned when the loan was taken, and depreciation expense stays the same unles the government decides to change the law. For the time being, real estate depreciates 1% each year. Finally, the estimated earnings were adjusted for 10% taxes. - The company will not be paying dividents; all the cash for the time being will be reinvested back in the business; thus, Retained Earnings account is the same as the cash balance.

Finally, Figure 9 below represents the Balance Sheet and the accounts in there are the ones as explained below Figure 9:

Figure 9

0

Balance Sheet Assets: Year 1

Year 2

Equity & Liabilities Year 3

Year 4

Year 5

Current Assets:

Year 1

Year 3

Year 4

Year 5

Equity: Cash

25.614,9 1€

27.407,9 6€

29.326,5 2€

31.379,3 7€

33.575,9 3€

Total CA

25.614,9 1€

27.407,9 6€

29.326,5 2€

31.379,3 7€

33.575,9 3€

25.614,9 1€ 25.614,9 1€

27.407,9 6€ 27.407,9 6€

29.326,5 2€ 29.326,5 2€

31.379,3 7€ 31.379,3 7€

33.575,9 3€ 33.575,9 3€

17.000,0 0€ 17.000,0 0€

17.000,0 0€ 17.000,0 0€

14.000,0 0€ 14.000,0 0€

10.000,0 0€ 10.000,0 0€

0,00 €

Total ST

4.500,00 € 9.000,00 € 15.686,4 0€ 2.561,49 € 3.066,33 € -8.193,82 € 21.489,6 0€ 48.110,0 0€

6.207,00 € 3.000,00 € 16.156,9 9€ 2.740,80 € 3.158,32 € -6.998,18 € 23.363,3 6€ 47.628,3 0€

4.555,00 € 9.000,00 € 16.641,7 0€ 2.932,65 € 3.253,07 € -1.552,12 € 15.298,5 4€ 50.128,8 5€

3.425,00 € 3.000,00 € 17.140,9 5€ 3.137,94 € 3.350,67 € 4.275,17 € 19.299,1 4€ 53.628,8 6€

0,00 € 17.655,1 8€ 3.357,59 € 3.451,19 € 10.510,3 6€ 23.370,5 5€ 63.128,8 7€

TOTAL EQUITY + DEBT

90.724,9 2€

92.036,2 5€

93.455,3 7€

95.008,2 3€

96.704,8 0€

Retained Earnings Total Equity (BV)

Fixed Assets:

Year 2

Long term Liabilities: 15.000,0 0€ 49.500,0 0€

15.000,0 0€ 49.000,0 0€

15.000,0 0€ 48.500,0 0€

15.000,0 0€ 48.000,0 0€

15.000,0 0€ 47.500,0 0€

Total FA

610,00 € 65.110,0 0€

628,30 € 64.628,3 0€

628,85 € 64.128,8 5€

628,87 € 63.628,8 7€

628,87 € 63.128,8 7€

TOTAL ASSETS

90.724,9 1€

92.036,2 6€

93.455,3 7€

95.008,2 4€

96.704,7 9€

Vehicle (biofuel): Premises: Office Equipment:

Bank loan Total LT Short term Liabilities:

Short Term Borrowings Vehicle Payable Salaries Payable Taxes Payable Utilities Payable Reserves Other Payables

0

4.784,00 €

Cash: as taken from the Cash Balance account in Figure 8 above. Vehicle: in Macedonia, only luxury cars get depreciated. Premises: depreciated value. Office Equipment: assumption made that only 10% of the total office equipment is appropriate to be depreciated. Retained Earnings: same as the Cash balance. Bank loan: *take another loan for 17,000 Euros the second year and consider adding other types of services (see Future plans in Operations plan). *another 14,000 Euros in the 3rd year in case demand for PBC's services grows so much that more consultants need to be emloyed. *and yet another 10,000 Euros in the 4th year so as to puchase one more vehicle. If demand and employees grow, the need for commuting will increase as well in order to provide services.

Short term borrowings: assumtion that they will be needed to cover operations (commuting costs, developing photos for assessments, etc.). Salaries payable: for the two+ last months of the end of the year (rollover to the coming year). Taxes payable: 10% from the cash at the end of the year.

Utilities payable: amount for the two last months from the previous year, inflation adjusted.

0

Appendix 1. PREVENTION AND CONTROL OF ENVIRONMENTAL POLLUTION

The 2005 Law on Environment, with its provisions on integrated pollution prevention and control, has contributed to a considerable improvement in environment management. Before the introduction of the Law, there werenopermitsforairemissionsorforsolid waste production. Companiesdealingwithchemicalshadpermitsforimportanduse,butnotfordisposal of products. Followingthe adoption ofthelaw,companiesneedtohave an integratedenvironmentalpermit(IEP)describing obligations, such as limitvalues of emissionsintotheair orwater,aswell as solidwaste management procedures, a deadlineforadjustmentsto operationalplans to complywithlegislation,and reportingobligations. http://www.unece.org/fileadmin/DAM/env/epr/epr_studies/Synopsis/Former_Yugosl av_Republic_of_Macedonia_Synopsis_English.pdf 2. Article 24: Environmental impact assessment elaborate for projects

(1) Investors whose activities or works do not comprise projects that are subject to an environmental impact assessment procedure according to this Law and regulations adopted on the basis of this Law, shall develop environmental impact assessment elaborate and submit it to the body of the state administration responsible for the project approval and implementation, which shall forward it to the body specified under the regulation referred to in paragraph (2) of this Article for approval.

(2) The Minister managing the body of the state administration responsible for the affairs of the environment shall prescribe the content of the elaborate referred to in paragraph (1) of this Article, the types of activities, for which the elaborate shall be developed, as well as the competence, the manner and the procedure for the environmental impact assessment elaborate approval. http://faolex.fao.org/docs/pdf/mac105107.pdf 3. Article 65: Strategic assessment

(1) The Government of the Republic of Macedonia following a proposal of the stateadministrative body competent in the field of environment shall prescribe the strategies,plans and programmes, including amendments of such strategies, plans and programmes(hereinafter: planning documents), that are subject to mandatory procedure for assessmentof their effects on the environment and human health (hereinafter: strategic assessment). (2) Strategic assessment shall be carried out for planning documents which are prepared foragriculture, forestry, fisheries, energy, industry, mining, transport, regional 1

development,telecommunications, waste management, water management, tourism, spatial and urbanplanning and land use which set the framework for future development of projects that aresubject to environmental impact assessment, or for planning documents governing themanagement with protected areas, declared as protected areas by law, or that are likely tohave effects on those areas.

Law on Environment (extract Chapter 10) („Official Gazette of the Republic of Macedonia“ No. 53/05, 81/05, 24/07, 159/08, 83/09, 48/10, 124/10 и 51/11)

http://faolex.fao.org/docs/pdf/mac105107.pdf

4. Article 67: Report on strategic environmental assessment

(1) Where implementation of a strategic environmental assessment is required under Article65 of this Law, the body preparing the planning document shall prepare a report on strategicenvironmental assessment (hereinafter: environmental report). "in the course of preparationof the planning document namely before its submission for adoption by the competent body." (2) The Government of the Republic of Macedonia following a proposal of the Minister incharge of the state administrative body competent in the field of environment shall prescribethe content of the environmental report "in which the likely effects on the environment andhuman health of implementing the planning document, and reasonable alternatives takinginto account the objectives and the geographical scope of the planning document, areidentified, described and evaluated.” Law on Environment (extract Chapter 10) („Official Gazette of the Republic of Macedonia“ No. 53/05, 81/05, 24/07, 159/08, 83/09, 48/10, 124/10 и 51/11)

http://faolex.fao.org/docs/pdf/mac105107.pdf

http://api.commissiemer.nl/docs/mer/diversen/os_macedonie_legislation.pdf

5. Second Review Synopsis of the UN Environmental Performance Review on Macedonia According to the 2011 Second Review Synopsis of the Environmental Performance Review of Macedonia by the United Nations Economic Commission for Europe, EIA follow up activities need to be reinforced so as to better monitor and assess the impacts of a plan or a project. Proposed control actions are the following: site visits to verify documentation and evaluate whether the practices, measures taken, and devices employment are effectively preventing, reducing or eliminating adverse environmental impacts (UNECE page 6). http://www.unece.org/fileadmin/DAM/env/epr/epr_studies/Synopsis/Former_Yugosl av_Republic_of_Macedonia_Synopsis_English.pdf 6. National Strategy for Waste Management in Republic of Macedonia 2009 2015 (page 23) 2

http://edemokratija.mk/documents/10157/26919/%D0%9D%D0%B0%D1%86%D0%B8%D0%BE%D0%BD%D0%B0%D0%B B%D0%B5%D0%BD+%D0%BF%D0%BB%D0%B0%D0%BD+%D0%B7%D0%B0+%D1%83%D0%BF%D1%80%D0%B0 %D0%B2%D1%83%D0%B2%D0%B0%D1%9A%D0%B5+%D1%81%D0%BE+%D0%BE%D1%82%D0%BF%D0%B0% D0%B4+%D0%BD%D0%B0+%D0%A0%D0%B5%D0%BF%D1%83%D0%B1%D0%BB%D0%B8%D0%BA%D0%B0+% D0%9C%D0%90%D0%BA%D0%B5%D0%B4%D0%BE%D0%BD%D0%B8%D1%98%D0%B0+(2009-2015)

7. Demand for environmental consulting services http://freeonlinesurveys.com/app/rendersurvey.asp?sid=p61geh70sdlwd33463702&refer=www%2Efreeonlin esurveys%2Ecom

16.04.2014 This survey is conducted as part of the thesis research of Simona Getova, student at American College of Thessaloniki, in order to analyze the demand of environmental consulting services in Macedonia. Answering the questionnaire below takes less than two minutes. Participation in the survey is anonymous, voluntary and without compensation. Your responses are essential for achieving the goals of the thesis research. Thank you very much in advance for your participation, Simona Getova ************************************************** ************************** Please consider the environment before printing this questionnaire. 1.

Choose your legal form of association below:

General Partnership (JTD) Limited Partnership (KD) Limited Liability Company (DOO) Joint Stock Company (AD) Limited Partnership with Shares (KDA) Foreign Direct Investment NGO State institution Other (please specify) 2.

Has your institution ever had an environmental assessment prepared? Check all that apply:

Yes (This is the company; we are required to have one by environmental law) Yes (This is a company , the assessment has helped us to be eco-efficient) No (This is a company , we are not required to have one) Yes (This is a municipality, we are required to have one by environmental law) Yes (This is another state institution we are required to have one by environmental law) Yes (This is a state institution, the assessment has helped us to be eco-efficient) No (This is a state institution , we are not required to have one) Yes (This is a non-governmental organization, we are required to have one by environmental law) Yes (This is a non-governmental organization, the assessment has helped us to be eco-efficient) No (This is a non-profit organization, we are not required to have one) 3.

(Only municipality) How other do you receive institutions’ /companies’ environmental assessments in need for approval?

Frequently Sometimes Rarely Very rarely Never 4.

What kind of environmental consulting services would your firm/institution ask for?

Environmental elaborate Assessment of environmental impact Strategic environmental assessment Strategic waste management Local environmental action plans Proposed measures (analysis and design) Documentation for integrated environmental permit (IPPC) A and B Have no need of environmental consulting services 5.

How much would you pay for receiving environmental consulting services?

500 to 1.000 MKD/hour 1.000 to 2.000 MKD/hour 2.000 to 3.000 MKD/hour 3.000 to 4.000 MKD/hour 4.000 to 5.000 MKD/hour I would not spent on environmental consulting services Other (please specify)

3

8. Survey results

9. Real Salary payables Real includes: Pension Insurance Health Insurance Employment Insurance Occupational illness insurance Personal Income tax K-15 2

18% 7,3% 1,2% 0,5% 10% 150 €

2

K-15 – annual bonus, has to be paid to employees yearly by law: http://www.dnevnik.mk/?ItemID=BAA6406C679AD54BBD1319214874B093

4

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