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Business Model – WASTE REDUCTION – Town of Labin – Croatia

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Business Model – WASTE REDUCTION – Town of Labin – Croatia

June 19th, 2019|Activities|

Defining the business model and training program

Annex 3a


TOWN of LABIN – Croatia


4.1 Canva………………………………………………………………………………………………..7
4.2 Notes to the canvas………………………………………………………………………………..8
7.1 Roles………………………………………………………………………………………………..11
7.2 Functions……………………………………………………………………………………………11


BEGIN is a project to define models for creation and management of social start-ups finalized to the inclusion of disadvantaged people.

Marginalized groups – e.g. unemployed, women, young people, immigrants, disabled, ex-convicts, former drug addicts – are counting significant percentage in every partner country.

Innovative feature and main objective of BEGIN is the creation of tools to encourage the creation and development of social start-ups active in safeguarding of environmental protection for social work inclusion and employment of disadvantaged people, which then contribute to improvement of territories both for use citizens and tourists. BEGIN will transfer know-how from more innovative and experienced regions to those lagging behind creating an innovative model that can be transferred also to other regions not involved in the project. Main common challenge tackled regards environmental protection, also to promote tourism development. This challenge is faced through joint analyses of territorial frameworks to identify work activities at the base of social start-ups models and business models that are involving specifically marginalized groups. Non-profit and third sector organizations are an efficient tool for environmental protection, but are not very developed and structured in project countries, except for Italy. Hence, the project will capitalize results of research conducted in Italy by providing specific know-how.

Direct project beneficiaries of milestones, outputs and deliverables will be the FACILITATORS OF SOCIAL START-UPS. Indirect beneficiaries will be potential social start-uppers, people with disadvantage employment, employees of social start-ups, research and innovation centers, training centers and employment agencies, as well as legal and relevant public authorities in every country.

They also will lay the foundation for the creation of an INTERNATIONAL FACILITATORS NETWORK. This represent the main project output together with a TRANSNATIONAL STRATEGY FOR SUPPORTING SOCIAL START-UPS which will be built on the 10 local-regional strategies which will be realized in project regions. Besides main outputs, BEGIN expects additional project milestones being the elaboration of BUSINESS MODELS for the Management and creation of SOCIAL START-UPS as well as LEARNING PROCESSES for the dissemination of business models.

This document contains the business model for the creation of new social startups

This document, at the end of the project, will be available for other subjects interested facilitate the creation of social startups.


a) The business idea = a general summary
In this section it is described the business idea. What activities for which market.

b) Canvas = blocks from 1 to 9 for each of main customer segments
In this section it is explained the Business Model Canvas of the business idea. Potential start-uppers and facilitators will have a schematic overview of the business model.
Please, read this section following this order
1 = customer segment
2 = value proposition
3 = channel
4 = customer relationships
5 = Revenue streams
6 = Key activities
7= Key resources
8 = Key partners
9 = Cost structure
This section is replicate for each customer segment identified for the business idea

c) Legislative references for the establishment of the startup
In this section it is described how to establish the new social enterprise.

d) Legislative references for personnel hiring
In this section it is described what kind of contract it is possible to use for human resource management

e) Organization (roles, functions, able-bodied and disadvantaged people skills)
In this section it is explained the human resources needs to manage the new social enterprise


Social enterprises and social economy sector in Croatia is not well developed. Due to the specific situation, the activities were implemented in two locations, Labin and Rijeka. After analizing the sector and market posibilities with participants of workshops, a business idea was created in order to include people with disabilities to the labour market and provide services connected with reuse and collection of textile.

In 2013., as output of one EU project in the north of Croatia several private and legal persons establihed a social cooperative called Humana Nova. After two years of testing the business model on the market, the protagonist expanded the business model to capital city Zagreb, and in 2017. in Labin. Today, there are three social cooperatives operating in different counties. The mission of the coops is to reduce and reuse textile form the environment and to use it again. Business model is consist from “reverse” logistic chain in a way that textile is collected, than sorted in different categories, and than distributed to second hand shops or to other enterprises who are working in the sector of recycling waste. Each coop is employing from 10 to 18 employees, mostly from deprived groups or people with disabilities.

In order to test the market position in Labin, specificly in Istrian county, there was one meeting implemented, with participant directly involved in the coops daily work, such as coop manager, employees and coop members. Other meeting was with participants from Rijeka who are going to implement the business model in Primorsko goranska county, specificly second hand shops, and who are directly working with young people with disabilities. Final idea is to open a chain of second hand shops from Istria county to Međimurska county (north-west) lead by social coops and to employ people with disabilities and other deprived groups. Main resource is textile waste who needs to be used or as clothes in second hand shops or in a process of recycling and than be used as isolation in houses etc.

With this business idea protagonists can prevent that textile is going on the landfills and the hipper production of textile and clothes. Aproximatly 2.400 t of textile can be used in the process, which is directly connected to downsizing CO2 emission and H2O usage. The process can generate form 5 to 20 working units for people with disabilites or other, depending on the mission of the organization. Although business idea is low profit or even non profit if is managed well can be organized as sustainable business.

The main users of the products would be: private persons with low incomes, or person with strong sense of environmental couciousnes, legal persons who have second hand shops and enterprises who operate in the field of textile recycle process and create new products such as isolation material.
Apart from them, it is evident that there are interest from tourist organizations that would like to use these products. Namely, this is a positive affirmation of persons with disabilities who by providing this idea will provide themselves with decent living conditions, not only in the economic but also in the social sense. They would be active participants in social life, self-aware of their work and other sophistication and recognize themselves as members of the community who are not burdensome.
Realizing this idea would create a high level of satisfaction, not only for people with disabilities, but also for users in terms of transferring a part of income to affirmative projects and ideas that contribute to the strengthening of the social community, and thus make the community better and more convenient for life and economic activity. In addition, the realization of this idea would provide support to the strengthening of activities that aim to support sustainable development, through the protection of the environment and stimulating the use of recycled, upcycled or reused materials or products. Consequently, the emission of harmful substances into the environment would also be significantly reduced. The sale would be in the following channels: Direct sales (second hand shops); Distribution to brokers (sales facilities – gift shops, for profit second hand shops and similar stores) and On-line sales (in the future, sales could be developed through the site for upcycled products).
In terms of resources, it is certainly the most important initial (financial) capital, which would be used to procure equipment and means of work, which are imperceptible to ensure a smooth production process. Certainly, and not least, there is a human capital, without which everything cannot be organized and executed. Key partners in these projects are certainly local utility companies, which are directly interested in the realization of project activities. Then there are associations with a disabled person, as well as other associations that gather sensitive groups, and whose inclusion in the realization of this project would result in greater inclusion.
The project would be unthinkable without representatives of companies and representatives of the civil sector, as well as responsible individuals and informal groups interested in greater inclusion of persons with disabilities in social life. Individuals and individuals interested in protecting the environment and encouraging the use of recycled materials would make a special whole. The most important are the costs of equipping equipment and equipping work space. The most important resource is certainly equipment and storage, along with quality and trained personnel.

4.1 Canvas
(1) Customer segment:
– Private persons (with lower income, and counciuous persons)
– Tourism companies and organizations
– Citizens who like to reuse
– Various associations and informal groups fighting for the rights of “green”
– Non profit organizations
– Merchants
– Constructional entreprises

(2) Value proposition:
– Participation in the realization of the project with a higher value
– Support inclusion of persons with disabilities
– Ecologically clean product suitable for use in many situations.
– A feeling of security and self-confidence in relation to a healthy environment.
– Support of recycling of materials

(3) Channels:
– Direct sales (second hand shops, fairs, exhibitions)
– Sales to brokers
– On-line sales (via site)
– Sales via social networks

(4) Customer relationships:
– Sustainability and loyality
– Cutomer education and etchical values shared
– Creation of tailor made mini events with and for customers

(5) Revenue streams – Most of the sales is going on in second hand shops where textile and clothes can be bouth with cash and cards, so called kilo shop (1 kg for 7 EUR), part of upcycled clothes can be bouth trough second hand shops and on web shop, there is a huge potential to sale textile that is lower quality to buyers/enterprises who recycle textile into new products. The rest can be sold to for profit second hand shops in EU.

(6) Key activities:
– Education of users.
– Education of employees
– Pickup of waste textile
– Sorting of textile
– Redesign of clothes
– Direct sales, retail chains and online sales.
– Transaction-based revenue

(7) Key resourses:
– Financial – seed capital.
– Physical – facilities, vehicles and machines.
– Human – skilled workforce
– Raw material – textile, clothes

(8) Key partner:
– Second hand shops
– Textile buyer enterprises
– Civil sector
– Responsible individuals and fighters for environmental rights
– Utility companies

(9) Cost structure – The most important are the costs of equipping equipment and equipping work space. The most important resource is certainly equipment and storage, along with quality and trained personnel.
The most expensive activities would be: Procurement of equipment, Training of personnel and Establishment of distribution network. For high quality supply of second hand shops and textile collection there is a need to buy a vehicle/van, 1 or 2 depending on the size of workload.

4.2 Notes to the canvas

1. customer segment – there are interested buyers / users who would be very happy to use the products of this venture. There is insufficient information for some segments, but this could be overcome by more education activities and distribution of information, and stronger marketing activities on social networks.

2. value proposition – it is a higher objective than an economic interest, because its realization raises the level of quality in society, expecially for deprived groups. This is a non for profit venture directed to downsize textile waste and to upsize reuse of resources/materials.

3. Channel – traditional channels of sales are established, the second hand shops, while for online (on-line) channels it takes a bit of time, but there is surely a real chance for sales to develop through these channels of sales.

4. Customer relationships – depends most on trust among partners, cooperative members and employees. With tailor made approach to customers and constant evaluation of relations bounds can quickly be made and local community support will not be deficient.

5. Revenue streams – most of the sales is going on in second hand shops where textile and clothes can be purchased with cash and cards, so called kilo shop (1 kg for 7 EUR),

6. Key actions – inform, educate, develop marketing activities and manage proposed activities in a way that will ensure achievement of the goal.

7. Key resources – both financial and human resources in the business venture can be at high risk, as non for profit maybe there is going to be lack of capital to start up and later on lead the business. Human capital must be managed good in order to take the most of the employed but at the same time to not put in the position evently to “normal” employees due to less capacity.

8. Key partners – the key of success is to gather reliable partners who are going to support business venture in different phazes of growth, with capital, human and other resources.

9. Cost structure – the biggest challenge is the initial capital that is necessary for the procurement of equipment and training of personnel, but also to find a storage for textile and van(s) for delivery and collecting textile from containers.


Legal nature Establishment of a company in line with the current regulations in the form of social cooperative The statute should define that a major part of the profit must be reinvested.
Reference laws Law on Business Enterprises
Law on cooperatives
Law on environment protection
Law on Vocational Rehabilitation and Employment of Persons with Disabilities

Link to the laws


Types of contract Labor contracts
Contracts for supplementary engagement
Other contracts of work
Voluntary contracts

Conditions Full time – 40 hours a week
Short working hours – 20 hours a week
Ad hoc engagement as needed
Voluntary work in non profits

Reference law Labor law
Law on Protection and Health at Work
Law on Vocational Rehabilitation and Employment of Persons with Disabilities

Link to documents


The new social startup needs the following human resources

Type Role n.
Able-bodied Cooperative manager 1
Asistant manager 1
Disadvantaged people Sorting house coordinator 1
Operative (vendors, sorters, shofer) 5

Type of disadvantaged people
 long term unemployed
 women in difficulty,
 young people with disabilities
 physical impaired
 pensioners

7.1 Roles

Cooperative manager- 1 person
Assistant Manager – 1 person
Sorting house coordinator – 1 person
Worker in production – 4 persons
Distributor / driver – 1 person

7.2 Functions

Cooperative manager – is responsible for creating and implementing a work plan, a sales plan and designing marketing activities. It’s about the uncompleted business and legal obligations of the company. Financial directors manage financial assets within the enterprise, which implies the management of cash inflows and outflows. They perform their business in accordance with the business policy of the company. In order to know the distribution of funds, it is necessary to compile periodic cash flow plans, as well as reports of executed plans items. They also perform and analyze reports that they produce monthly, quarterly, semi-annual and / or annual(Disadvantaged people)

Asistant Manager – in charge of procurements of raw materials and materials for labor, manages labor and market placement of products. If necessary, he / she carries out activities in the field of marketing activities. Workers in second hand shops. (Disadvantaged people)

Worker in production – people who work in sorting place and in second hand shops. (Disadvantaged people)

Distributor / driver – delivers raw materials and other means of labor, performs final product deliveries and performs other tasks as needed.