Business Concept
BUSINESS CONCEPT
We are part of the insulation industry. The primary insulation market is new construction and is served by companies whose business is insulating new construction houses with fiberglass insulation products. A growing segment of the primary market is being captured by insulators blowing stabilized cellulose insulation in attics as well as using wet-spray cellulose for wall insulation.
We are located in the secondary or retrofit insulation market. After extensive product research we have concluded that stabilized cellulose is the insulation product of choice for attics. As a result of our research we will use cellulose in attics and continue to use fiberglass as a cost effective insulation under floors and in knee-walls. Due to the frequent use of attics for storage and consequent air quality considerations, we will use dust-free, stabilized Insulation in all attic applications.
Our business is retrofit weatherization — air-sealing and insulating homes. Important characteristics of this niche market are:
- Sales are direct to the homeowner.
- Preparation work is required to properly retrofit insulate homes.
- A homeowner must be shown the advantage of cellulose over fiberglass for ceilings.
- A cap of cellulose is required for existing fiberglass to realize its rated R-Value.
Our target is the estimated 46 million under-insulated, existing home market. We will offer an exclusive factory guaranteed energy savings program and we will educate the homeowner to the advantages of cellulose as a superior insulation product for ceilings using the results of independent research, testimonials, expert opinion and a unique demonstrator we affectionately call "The Bird House."
We will capture this market with our unique strategy of strategic partners. We will build brand name recognition and enable advertising in previously economically unfeasible media.
VISION STATEMENT
Our vision is to be a force in the possibility of everyone living in a warm, comfortable home — saving money and conserving energy. We will be known for complete weatherization, guaranteed energy savings and fair prices. We will differ from our competitors in the following manner:
- Our competitors are in the business of insulating buildings
- We are in the business of helping people conserve energy and save money.
Management has developed the strategy of strategic partnerships in sales and preparation and, most importantly, in the delivery and installation of stabilized cellulose.
Unlike the shareholder centered companies of old, our vision is to strike a balance between the different important stakeholders in our organization. We see the four pivotal stakeholders as:
- The homeowner
- Our strategic partners
- Our supplier of quality cellulose product
- Our valued co-workers.
By striving to serve all four equally, we will serve the interests of each individually.
COMPETITION
Our competitors are established insulators whose primary business is insulating new homes. There is a sprinkling of retrofit insulators in the market. Those retrofit insulators who are using cellulose to insulate ceilings are considered partners rather than competitors in fulfilling our vision of everyone living in a warm, comfortable home — conserving energy, saving money. Our customers are owners of inadequately insulated homes including homes with attics insulated with fiberglass of any depth.
While some sales will be lost to primary insulators due to their current market presence, these sales are of insignificant market share to be of economic concern. We expect these competitors to be tempted to try to take advantage of the window of opportunity that high energy costs have opened.
The dynamics of serving the new construction market vs. the retrofit market dictate failure for any attempt to dually serve the two markets. The requirements for preparation discourage all-out entry into the retrofit market and the mechanics recruited to blow insulation in new construction are generally unsuited to service the homeowner market.
The retrofit market is virtually untapped by the insulators currently serving the new construction insulation market. Although cellulose is the ideal product for retrofit insulation the manufactures of cellulose have been mostly unsuccessful in interesting their existing customers in the retrofit market. Why is that?
The high volume business model of the new construction insulator discourages actively seeking the low volume homeowner business. Some business is falling in their laps and they are reluctantly using their resources to serve it. The reason for the reluctance is simple; it is the fear of serving an uncertain and un-established retrofit homeowner market at the risk of losing their new-home builder customers.
We intend to be the value leader in our field. We will not be known for low prices. However, we will be known for providing guaranteed energy savings at a fair price. We intend for Apple Blossom Insulators to be synonymous with retrofit insulation.
UNIQUE QUALIFICATONS
We have 15 years experience weatherizing homes for the low-income and elderly in the Department of Energy's Weatherization Assistance Program. Critical to quality weatherization and insulation of existing homes is education and training. We are under contract to weatherize and insulate over 200 houses. We will use these houses and our certified weatherization team for hands-on training to supplement classroom instruction.
OVERALL MARKET
Potential households for retrofit insulation number approximately 46 million in the United States. The majority of houses built in the United States were under-insulated when they were built. In addition to that, as the "Bird House" so clearly demonstrates, any attic not insulated with cellulose is under-insulated regardless of the depth of the fiberglass insulation or stated R-value.
Because retrofit insulation is in its relative infancy, it is difficult to say what percentage of potential buyers will actually purchase blown insulation in the next few years. Even with the uncertainty of the actual size, this market is clearly poised for dramatic growth. There is no slowdown in sight for growth and growth could possibly accelerate as energy costs rise and homeowners become more disenchanted with the effectiveness of their existing attic insulation.
As the retrofit insulation market is institutionalized and blown cellulose is commoditized, demand for cellulose will stress supply chains. Entries into the retrofit market will be stymied. Until new capacity for producing blown cellulose product is generated by the building of new plants, new entry will continue be slow and difficult. With demand outstripping supply today, slow-pay desirable customers are being weeded out by manufacturers.
Other compatible business opportunities have been identified as the "tornado" retrofit market slows into a more steady demand for retrofit insulation, insuring the future for us and our strategic partners.
TAPPING THE MARKET
With the current market dynamic, a window of opportunity is open for those with the vision and courage to step through. Today is an exceptional point in time for the Contractor with the foresight to partner with a dedicated retrofit insulator. We intend to reach this market by developing strategic partnerships with existing Home Improvement and Renovation Contractors. These Contractors, armed with education and training in weatherization are in perfect position to exploit the demand for air-sealing and insulation.
By partnering with Home Improvement Contractors who have an existing past-customer base, immediate sales opportunities will be created. As these sales opportunities are exhausted, new sales from incentives for referrals, yard signs, truck signs, etc., will be generated. Market specific advertising such as direct mail will also generate sales.
The design of our business operations will enable us to insulate and weatherize homes in previously economically unfeasible markets - fulfilling on our vision of everyone living in a warm, comfortable home — conserving energy and saving money.
Proven access to the homeowner, economic opportunity for our strategic partners and retrofit-specific designed equipment will be the building blocks of our team that assault the emerging retrofit market. Traditional advertising will further create demand.
MEETING DEMAND
Traditional methods of sales, delivery and placement have built in inefficiencies as well as problems with accessing more distant customers. Our business strategy of strategic partners and our unique and cost effective way of solving problems related to the delivery and placement of blown cellulose insulation gives access to supplying a very large market. We have a well established business relationship with our supplier of stabilized cellulose and expect to continue to be adequately supplied with quality cellulose product in the foreseeable future.
HOW WE WILL BE KNOWN
We will be known by our customers, competitors, and suppliers as the industry leader. We particularly want to be known as a company that is committed to the mission of everyone living in a comfortable, energy-efficient home: conserving energy and saving money.
