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1. Executive Summary
Introduction
Farmers Group is being formed from the acquisition of two successful vegetable farms, Green Acres Vegetable Farm and Mobile Farmers Vegetable Farm. The latter has long-researched horticultural and agronomic techniques, as well as compost and soil blending technology now being promoted by the DEO, the USDA, the EPA, and other government agencies.
The company is a combination of cutting edge, highest quality, and efficient food technology and production. It is committed to the improvement of food taste and nutritional quality. It is being founded to build upon an extensive array of biological and horticultural education, experience, and the research of its founders. This is further coupled with the experience of James Jackson, the current manager of Mobile Farmers Vegetable Farm, and consultation with the present owner of Green Acres Vegetable Farm, Errol Grynthum.
The Company
Farmers Group is an Alabama-based company, located in Calhoun county, whose mission is to provide high quality, nutritional, and flavorful vegetables and strawberries for consumption in both near and remote regions of the United States. Additionally the company will provide high quality planting materials for use nationwide.
Farmers Group is the buyout and merger of two successful vegetable farms. The idea behind the business is to provide healthy and delicious vegetables and fruit to the public. In addition to vegetables and fruits, the company plans to produce and market manure compost garden amendment products.
Farmers Group's management team is led by Mr. James Jackson as Business Manager, who has extensive knowledge of the industry. The company expects to employ five temporary employees during the equipment re-location phase, four employees on a permanent basis, and three part-time employees.
Products
Farmers Group's plans to concentrate on vegetables as its primary product. This includes growing carrots, romaine lettuce, leeks, red onions, summer squash, spinach, pumpkins, winter squash, globe beets, and winter greens. The company's farm, will have a capacity sufficient to produce in excess of 200,000 lbs. of vegetables per year.
The company plans to utilize traditional and more advanced plant technologies to produce new cultivars of strawberries and lima beans with locally-adapted superior characteristics for the Gulf-South growing area.
This strategy will allow Farmers Group to produce crops during most of the year and will allow double cultivation of the greenhouses with almost no additional heating necessary in the winter months.
The Market
Over the past decade the market for organic food has grown by 15% to 20% and every year 40% of U.S. consumers occasionally reach for something labeled organic. Sales for organic foods are expected to top $11 billion this year. Sales by farmers' markets have increased by 79% since 1994, to 3,137 markets in all 50 states, and the number of farmers who sell at them has more than tripled to 67,000. About three million Americans a week now get their fresh food directly from the farmers who grew it. This makes for an excellent environment for a industry participant such as Farmers Group that is willing to compete in a niche market and be first to the market with new products.
Financial Considerations
The company is seeking $830,000 in both short-term and long-term loans to finance the purchase of Farmers Group's new farm, upgrade the facilities, and cover start-up expenses and first year losses. It is estimated that the company will begin to make a profit in Year 2 of operations. The company does not expect to have any cash flow problems during the first four years of operations.
1.1 Mission
Farmers Group is an Alabama-based company, whose mission is to provide high quality, nutritional, and flavorful vegetables and strawberries for consumption in both near and remote regions of the United States. Additionally the company will provide high quality planting materials for use nationwide.
2. Company Summary
Farmers Group is the buyout and merger of two successful vegetable farms. The idea behind the business is to provide healthy and delicious vegetables and fruit to the public. In addition to vegetables and fruits, the company plans to produce and market manure compost garden amendment products.
2.1 Start-up Summary
Projected revenues for Year 1 to Year 5 are $-40,000, $8,500, $50,000, $70,800 and $82,500 respectively. Additionally the company estimates that once fully operational, income per product, per annum would be as follows; vegetable ($50,000) manure ($20,000) and horticulture ($10,000).
| START-UP REQUIREMENTS | |
| Start-up Expenses | |
| Legal | $19,000 |
| Facilities modification | $300,000 |
| Seed | $600 |
| Organic Herbicides/Pesticides | $5,000 |
| Consultants | $25,000 |
| Insurance | $10,000 |
| Research and development | $25,000 |
| Expensed equipment | $250,000 |
| Other | $50,000 |
| TOTAL START-UP EXPENSES | $684,600 |
| Start-up Assets | |
| Cash Required | $245,400 |
| Start-up Inventory | $150,000 |
| Other Current Assets | $250,000 |
| Long-term Assets | $500,000 |
| TOTAL ASSETS | $1,145,400 |
| Total Requirements | $1,830,000 |
2.2 Company Locations and Facilities
The farm is located in Calhoun county approximately 4.5 miles outside of Jasper.
The operation will utilize:
- One large greenhouse, enclosing the vegetable area.
- Horticultural greenhouse.
- Filters, water treatment devices.
- Backwash facilities.
- Outdoor vegetable facilities.
- Business office building.
An additional portion of the operation will be the manure composting facility. Local and regional dairy operations have trouble with manure accumulations, and the company hopes to enter into contracts in removing the manure. Farmers Group will then turn this into a saleable product. The company plans to supply the region's nursery outlets with a top-quality, premium garden and soil amendment product for area horticulture.
3. Products
While at Mobile Farmers Vegetable Farm James Jackson, steadily used and experimented with compost and fertilized with manure of different kinds. The most important things with manure usage is to eliminate the viable weed seed drawback by thoroughly composting the manure, to add enough cellulose on product to bring it to the proper ratio and to bring its water content to proper levels. A properly composted manure product has no seeds that will germinate and proliferate in it. Additionally, a properly composted manure product has something a chemically formulated synthetic fertilizer does not have: enzymes. Enzymes are critical for producing a truly nutritious and superior flavored product. Research has shown that the superior flavor of a fruit or vegetable is closely related to vitamin content and folic acid content in green vegetables.
The state-of-the-art vegetable equipment starting up in the new location utilizes revolutionary harvest designs that:
- Allow faster, longer growth
- Cut the harvest labor by over 80%
- Cut the harvest time and by so doing:
Decrease loss in weight gain, and
Eliminate weight loss from shock.
3.1 Product Description
Vegetables
Farmers Group's first line of production will be the green vegetable and red vegetable. During the summer months Farmers Group will be growing carrots, romaine lettuce, leeks, red onions, summer squash, and spinach. In the fall, production will center on pumpkins, winter squash, globe beets and winter greens. With the growth of the popular organic food niche, and the federal government's new organic labeling policy, Farmers Group will focus its produce on the intermediate organic label. This means that approximately 70% of the food production process will be organic and all foods produced by Farmers Group will be eligible for the "contains organic ingredients" label. The company's farm will have a capacity sufficient to produce in excess of 200,000 lbs. of vegetables per year.
Strawberries
The company's more technical horticultural aspects include efforts to utilize traditional and more advanced plant technologies to produce new cultivars of crops such as strawberries and lima beans with locally-adapted superior characteristics for the Gulf-South growing area. Flavor, disease resistance, adaptability to green-house culture, fall and winter season production are factors being combined in greens cultivation to tap into the $2.99 pint berry market of the fall and winter.
Farmers Group's strategy is a combination of the two technologies during the cool winter months which will allow the utilization of normally wasted space in the greenhouses for the high price winter greens production. This will allow double cultivation of the greenhouses with almost no additional heating necessary in this climate.
3.2 Technology
The company is currently seeking contact with Alabama universities in order to learn about and acquire new hybrids of strawberries and vegetables that are hardier and grow faster in our local microclimates. These and other available species and systems will be constantly tracked.
In addition to the above, the company is seeking contacts at Universities in Italy and Germany that are involved in greens, and will continue the quest for the best flavored, large, and firm fall and winter strawberries.
Currently, Farmers Group is conducting research to test certain clay-sand-manure mixture levels to obtain better, cheaper bedding and agronomic soil mixtures that are more effective than the standard used in the industry in Alabama (Pine bark mulch-composted).
3.3 Future Products
In the meantime, the company would like to explore the possibilities of crayfish production. Farmers Group believes this to be a high revenue venture with retail prices running in excess of $15.00 per pound in most places. The company also believes that if crayfish production is successful then it could become the number one endeavor of Farmers Group.
Currently there is a defunct fish farming production facility with all the necessary capital equipment approximately two miles from the current farm. Purchase of this facility would allow Farmers Group to begin production and to capitalize on this higher margin product. What makes this most attractive is the two ventures have significant joint cost potential, allowing for a reduction in marginal costs for all products and creation of real economies of scale that would provide Farmers Group with a competitive advantage.
4. Market Analysis Summary
At a time when eating has become a political statement, the government is paying up to $19 billion a year to subsidize commodity crops in a glutted global market. Federal officials say that nearly 40% of all farm income now comes directly from government subsidies, and the farm bill signed by President Bush this year will pay $190 billion over 10 years, which includes $83 billion in new spending. However, there are two market niches that are growing at an amazing rate, the organic market and the simple farmers' market.
The organic market provides less than 2% of the nation's food supply and takes up less than 1% of its cropland. But organic farms are flourishing as never before. Over the past decade the market for organic food has grown by 15 to 20% and every year 40% of U.S. consumers occasionally reach for something labeled organic. Sales for organic foods are expected to top $11 billion this year. Conglomerates as big as Heinz and General Mills are now launching or buying organic lines and selling them in mainstream supermarkets.*
With no subsidies and no middle men, farmers' markets have increased by 79% since 1994, to 3,137 markets in all 50 states, and the number of farmers who sell at them has more than tripled to 67,000, the Agriculture Department has reported. About three million Americans a week now get their fresh food directly from the farmers who grew it. "Right now, green markets are growing faster than anything in agriculture," said Dr. Steven Blank, a farm economist at the University of California at Davis and the author of three books on the subject.
These numbers, of course, represent a very thin slice of the big pie of national food. Farmers' markets reported about $1 billion in sales last year, compared with more than $200 billion in overall farm revenue. Barely 3% of the nation's two million farmers sell some of what they grow directly to consumers.
But in an era of big-box food stores, when 10 major grocery chains control the purchase of 50% of fresh food, the proliferation of open-air markets has come out of nowhere, giving more consumers an option and allowing many small farmers to stay in business.**
With these trends in mind, Farmers Groups will concentrate on:
- Wholesale live vegetable markets nationwide that sell organic produce.
- Fresh farmers' markets.
- Fall and winter greens market.
- Nursery outlets selling composted manure.
*Source: Certified Organic Geoffrey Cowley NEWSWEEK September 30, 2000.
**Source: Farmers Markets Booming Across US Timothy Egan New York Times, September 29, 2000.
4.1 Market Segmentation
The target customers include oriental vegetable markets demanding organic and semi-organic green vegetables, vegetable processors, and private individual buyers through direct selling and farmers markets. The company will continue to service the existing customers of the purchased vegetable farms. In its greens production the company will target virtually all main food outlets. The company plans to use the Internet as one of its marketing channels in the future.
The company's target customers will be as follows:
Vegetables:
- Oriental vegetable markets demanding organic and semi-organic vegetables.
- Vegetable processors.
- Alabama National Guard.
- People approaching the farm.
- Roadside stands and farmers' markets.
Product-Bagged Manure:
- Nursery and Garden Centers.
- Private customers approaching facility.
- Bulk customers.
The company will also take over customers from the previous owner of the vegetable facility. Farmers Group has an established list of present customers of Errol Grynthum's vegetable farm, which is a major asset to the sales of the company.
4.2 Industry Analysis
Alabama is one of the premier farming areas of the eastern United States. This creates an intensely competitive environment with a large number of industry participants. Since almost all of the produce is considered to be commodities, and large scale buyers are more consolidated than the farmers themselves, overall margins are small and rivalries for wholesaler contracts are strong. Competitive threats come from three main segments:
- Imported vegetables of lower quality.>
- Mississippi pound raised vegetables.
- Alabama vegetable producers.
Direct competition in the individual buyers market segment comes from three farms in the immediate area including the Anniston farm, Organics-To-You farm, and the Terrance Livingston vegetable farm. Each of these competitors has produce stands as well as selling to local farmers' markets. However, with the exception of Organics-To-You Farm, none of the others focus on a niche market and depend heavily on federal subsidies.
4.3 Target Market Segment Strategy
The Market Analysis Pie shown below reflects the total number of potential customers for Farmers Group. The number of Oriental markets and vegetable processors represent national estimates of industry participants, whereas the number of individual buyers represents the estimated annual number of individuals that will be driving by the farm.
| MARKET ANALYSIS | |||||||
| YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | |||
| Potential Customers | Growth | CAGR | |||||
| Vegetable processors | 3% | 5,000 | 5,150 | 5,305 | 5,464 | 5,628 | 3.00% |
| Oriental vegetable markets | 1% | 25,000 | 25,250 | 25,503 | 25,758 | 26,016 | 1.00% |
| Individual buyers | 5% | 300,000 | 315,000 | 330,750 | 347,288 | 364,652 | 5.00% |
| Total | 4.68% | 330,000 | 345,400 | 361,558 | 378,510 | 396,296 | 4.68% |
5. Strategy and Implementation Summary
The Farmers Group strategy is to profitably and efficiently utilize present and future agricultural technology in the production of vegetables. The company, by acquiring an existing profitable vegetable farm with all the necessary custom-innovated equipment, will gain a significant industry advantage. Additional application and utilization of horticultural technology in the production of strawberries will allow double utilization of the climate controled portion of the overhead. Farmers Group hopes to consolidate considerable goodwill already created by exercising the option of not adding another high-production facility to the present supply-demand scenario.
The company's goals in the first year are to:
- Prepare the future site.
- Relocate and expand Green Acres vegetable system and get it operational.
- Integrate greens culture into the system.
- Have the composting system in full production by early spring of the second year.
The company's long-term plan is to phase out whichever products are least lucrative and replace them with products that are practical and cost efficient.
5.1 Competitive Edge
Farmers Group's main competitive advantages are:
- Efficient production utilizing greenhouses.
- Reduced overhead by fully realizing crop output potential and economies of scale through joint costs.
- Knowledge due to research since 1988.
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5.2 Marketing Strategy
Farmers Group will initially market and supply its products to target customers. The company is further exploring marketing opportunities on the Internet. To this extent, the company would like to set up a website to market its products.
The company will utilize aggressive advertising strategies to further market its products. These strategies include the promotion of products through the sponsoring of spots on cooking shows and exhibitions, and also engaging prominent chefs to help promote this fledgling industry.
5.2.1 Pricing Strategy
The company sets its pricing based on market rates as far as vegetable products are concerned.
Farmers Group's pricing for strawberries will exceed the average market price for the following reasons:
- Taste sampling at outlets will be encouraged.
- Unparalleled flavor superiority will addict greens tasters.
- Promotion of pesticide-free, fumigant-free cultural techniques of soil, environment, ozone, and health-friendly production techniques.
5.3 Sales Strategy
At Farmers Group, the sales process is primarily the same for vegetables as it is for composting products, in that both products will be mainly sold through wholesale marketing. As in the past, live shipments will be delivered by contract carriers in special oxygenated tanks carrying 8,000 vegetables or more, and will be continued as demanded. Farmers Group's bagged manure products will be delivered and unloaded in sizable wholesale quantities by the pallet.
Smaller, more local orders will significantly increase the overall sales when the 300-450 live vegetables carrying tank system is put into service late in 2000 or early in 2001.
The company's average sales cycle from first contact to closing of the sale is approximately 3 to 12 days for vegetable products. Farmers Group plans to shorten this cycle. Furthermore, the company estimates that from first contact to sale conclusion, the cycle for fresh strawberries will run 3 days or less. Composted products sale cycle should run from 3 to 12 days.
Direct sales contacts of vegetable markets by delivery personnel, as well as cold calling by telephone of potential market outlets, will also be employed.
5.4 Strategic Alliances
The company has strategic alliances with:
- Alabama State University Horticulture Department
- Southeastern Alabama State University Biology Department
- Dr. Michael Smith - Vegetable Specialist
- James Edwards - Horticultural Inspection
- Charles Newton - Wildlife
- Alabama Wildlife
- Mobile Nursery Center
6. Sales Forecast
The following table and charts show our projected sales.
| SALES FORECAST | |||||
| YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | |
| Sales | |||||
| Sales | $575,000 | $700,000 | $850,000 | $889,100 | $927,331 |
| Other | $0 | $0 | $0 | $0 | $0 |
| TOTAL SALES | $575,000 | $700,000 | $850,000 | $889,100 | $927,331 |
| Direct Cost of Sales | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Sales | $391,000 | $478,100 | $578,850 | $601,032 | $627,803 |
| Other | $0 | $0 | $0 | $0 | $0 |
| Subtotal Direct Cost of Sales | $391,000 | $478,100 | $578,850 | $601,032 | $627,803 |
7. Management Summary
Farmers Group's management team is led by Mr. James Jackson, Business Manager, and the current manager of Mobile Farmers Vegetable Farm, who has extensive knowledge of the industry and has been tracking vegetable trends for 30 years.
The company's management philosophy is based on responsibility and mutual respect. Farmers Group has an environment and structure that encourages productivity and respect for customers and fellow employees.
7.1 Personnel Plan
Overall, Farmers Group will have 12 personnel. The company expects to employ 5 temporary employees during the equipment re-location phase, 4 employees on a permanent basis, and 3 part-time employee. The Farmers Group team is organized into three groups:
Management
Management will be responsible for supervising and participating in the daily operations of the facility. Management consists of:
- James Jackson, Business Manager, Full Time
- Terry Howard, Executive Director, Full Time
- Kevin Perry, Management Trainee, 3/4 Time
- Victor Green, Management Trainee, 1/4 Time
Daily Maintenance
This group will consist of the following:
- Henry Jones, Logistical Engineer, Full Time
- Colin Henry, Heavy Equipment, Full Time
- Michael Owen, Welder, 1/2 Time
Contract Personnel
They will be utilized initially for the moving and setting up of the vegetable farm, greenhouses, and the building of the manure composting facility.
| PERSONNEL PLAN | |||||
| YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | |
| Business Manager | $25,000 | $30,000 | $30,000 | $30,000 | $30,000 |
| Executive Director | $25,000 | $30,000 | $30,000 | $30,000 | $30,000 |
| Manager Trainee | $9,000 | $6,000 | $6,000 | $6,000 | $6,000 |
| Manager Trainee | $4,000 | $6,000 | $6,000 | $6,000 | $6,000 |
| Logistic engineer | $18,000 | $18,000 | $18,000 | $18,000 | $18,000 |
| Heavy equipment | $18,000 | $18,000 | $18,000 | $18,000 | $18,000 |
| Welder | $3,500 | $3,000 | $3,000 | $3,000 | $3,000 |
| Contract workers | $15,000 | $0 | $0 | $0 | $0 |
| TOTAL PEOPLE | 7 | 7 | 7 | 7 | 7 |
| Total Payroll | $117,500 | $111,000 | $111,000 | $111,000 | $111,000 |
8. Financial Plan Summary
The following topics and tables outline our financial plan.
8.1 Start-up Funding
Funding Requirements and Uses
The company is seeking to raise of $830,000 for the purpose of financing the acquisition of the Green Acres Vegetable Farm and Mobile Farmers Vegetable Farm, facilities modifications, equipment, and funding operating expenses. Another $1,000,000 will be invested in the company by its four co-owners. The following is a breakdown of how the funds will be used:
| Breakdown of Use of Funds | |
| Acquisition: | |
| Property |
$1,300,000 |
| Equipment System |
$400,000 |
| Sub-total |
$1,700,000 |
| Operating Expenses: | |
| Salaries |
$80,000 |
| Marketing and promotion |
$10,000 |
| Other operating expenses |
$10,000 |
| Sub-total |
$100,000 |
|
Total |
$1,800,000 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $684,600 |
| Start-up Assets to Fund | $1,145,400 |
| TOTAL FUNDING REQUIRED | $1,830,000 |
| Assets | |
| Non-cash Assets from Start-up | $900,000 |
| Cash Requirements from Start-up | $245,400 |
| Additional Cash Raised | $0 |
| Cash Balance on Starting Date | $245,400 |
| TOTAL ASSETS | $1,145,400 |
| Liabilities and Capital | |
| Liabilities | |
| Current Borrowing | $400,000 |
| Long-term Liabilities | $400,000 |
| Accounts Payable (Outstanding Bills) | $30,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $830,000 |
| Capital | |
| Planned Investment | |
| Investor 1 | $250,000 |
| Investor 2 | $250,000 |
| Investor 3 | $250,000 |
| Investor 4 | $250,000 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,000,000 |
| Loss at Start-up (Start-up Expenses) | ($684,600) |
| TOTAL CAPITAL | $315,400 |
| TOTAL CAPITAL AND LIABILITIES | $1,145,400 |
| Total Funding | $1,830,000 |
8.2 Important Assumptions
Nature and Limitation of Projections
This financial projection is based on sales volume at the levels described in the sales forecast section and presents, to the best of management's knowledge, the company's expected assets, liabilities, capital, and revenues and expenses. The projections reflect management's judgement of the expected conditions and its expected course of action given the hypothetical assumptions.
Nature of Operations
The company is in the business of vegetable farming, greens cultivation, and composting. The company expects to be operating in 2000.
Revenues
The company's revenue is derived primarily from the sale of vegetables, strawberries, and bagged composted manure products.
Expenses
The company's expenses are primarily those of salaries, utilities, and insurance costs. Other expenses are based on management's estimates and industry averages.
| GENERAL ASSUMPTIONS | |||||
| YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | |
| Plan Month | 1 | 2 | 3 | 4 | 5 |
| Current Interest Rate | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% |
| Long-term Interest Rate | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% |
| Tax Rate | 20.83% | 20.00% | 20.83% | 20.00% | 20.83% |
| Other | 0 | 0 | 0 | 0 | 0 |
8.3 Break-even Analysis
The company's break-even analysis is given below.
| BREAK-EVEN ANALYSIS | |
| Monthly Revenue Break-even | $36,974 |
| Assumptions: | |
| Average Percent Variable Cost | 68% |
| Estimated Monthly Fixed Cost | $11,832 |
8.4 Projected Profit and Loss
As the profit and loss table shows, Farmers Group expects a steady growth in profitability over the next few years.
| PRO FORMA PROFIT AND LOSS | |||||
| YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | |
| Sales | $575,000 | $700,000 | $850,000 | $889,100 | $927,331 |
| Direct Cost of Sales | $391,000 | $478,100 | $578,850 | $601,032 | $627,803 |
| Other | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 |
| TOTAL COST OF SALES | $401,000 | $488,100 | $588,850 | $611,032 | $637,803 |
| Gross Margin | $174,000 | $211,900 | $261,150 | $278,068 | $289,528 |
| Gross Margin % | 30.26% | 30.27% | 30.72% | 31.28% | 31.22% |
| Expenses | |||||
| Payroll | $117,500 | $111,000 | $111,000 | $111,000 | $111,000 |
| Sales and Marketing and Other Expenses | $11,400 | $11,100 | $16,550 | $15,300 | $17,550 |
| Depreciation | $0 | $0 | $0 | $0 | $0 |
| Gas and Oil | $2,040 | $3,000 | $3,000 | $3,000 | $3,000 |
| Utilities | $6,000 | $6,000 | $6,000 | $6,000 | $6,000 |
| Insurance | $5,040 | $5,500 | $5,500 | $5,500 | $5,500 |
| Payroll Taxes | $0 | $0 | $0 | $0 | $0 |
| Other | $0 | $0 | $0 | $0 | $0 |
| Total Operating Expenses | $141,980 | $136,600 | $142,050 | $140,800 | $143,050 |
| Profit Before Interest and Taxes | $32,020 | $75,300 | $119,100 | $137,268 | $146,478 |
| EBITDA | $32,020 | $75,300 | $119,100 | $137,268 | $146,478 |
| Interest Expense | $54,664 | $47,845 | $39,095 | $32,095 | $26,495 |
| Taxes Incurred | $0 | $5,491 | $16,668 | $21,035 | $24,996 |
| Net Profit | ($22,644) | $21,964 | $63,337 | $84,139 | $94,987 |
| Net Profit/Sales | -3.94% | 3.14% | 7.45% | 9.46% | 10.24% |
8.5 Projected Cash Flow
The chart and table below contain the cash flow assumptions and projections for Farmers Group during the first five years of plan implementation. Year 1 monthlies are presented in the appendix.
| PRO FORMA CASH FLOW | |||||
| YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | |
| Cash Received | |||||
| Cash from Operations | |||||
| Cash Sales | $143,750 | $175,000 | $212,500 | $222,275 | $231,833 |
| Cash from Receivables | $431,250 | $525,000 | $637,500 | $666,825 | $695,498 |
| SUBTOTAL CASH FROM OPERATIONS | $575,000 | $700,000 | $850,000 | $889,100 | $927,331 |
| Additional Cash Received | |||||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $97,000 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $575,000 | $700,000 | $947,000 | $889,100 | $927,331 |
| Expenditures | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Expenditures from Operations | |||||
| Cash Spending | $117,500 | $111,000 | $111,000 | $111,000 | $111,000 |
| Bill Payments | $408,920 | $498,803 | $668,927 | $694,140 | $720,435 |
| SUBTOTAL SPENT ON OPERATIONS | $526,420 | $609,803 | $779,927 | $805,140 | $831,435 |
| Additional Cash Spent | |||||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $54,000 | $100,000 | $100,000 | $25,000 | $35,000 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $25,000 | $25,000 | $50,000 | $50,000 |
| Purchase Other Current Assets | $0 | $0 | $0 | $0 | $20,000 |
| Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 |
| Dividends | $0 | $25,000 | $20,000 | $10,000 | $10,000 |
| SUBTOTAL CASH SPENT | $580,420 | $759,803 | $924,927 | $890,140 | $946,435 |
| Net Cash Flow | ($5,420) | ($59,803) | $22,073 | ($1,040) | ($19,104) |
| Cash Balance | $239,980 | $180,177 | $202,250 | $201,210 | $182,106 |
8.6 Projected Balance Sheet
We project solid cash balance and net worth over the years of the plan.
| PRO FORMA BALANCE SHEET | |||||
| YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | |
| Assets | |||||
| Current Assets | |||||
| Cash | $239,980 | $180,177 | $202,250 | $201,210 | $182,106 |
| Accounts Receivable | $0 | $0 | $0 | $0 | $0 |
| Inventory | $55,760 | $24,586 | $29,767 | $31,136 | $32,475 |
| Other Current Assets | $250,000 | $250,000 | $250,000 | $250,000 | $270,000 |
| TOTAL CURRENT ASSETS | $545,740 | $454,763 | $482,017 | $482,346 | $484,581 |
| Long-term Assets | |||||
| Long-term Assets | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 |
| Accumulated Depreciation | $0 | $0 | $0 | $0 | $0 |
| TOTAL LONG-TERM ASSETS | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 |
| TOTAL ASSETS | $1,045,740 | $954,763 | $982,017 | $982,346 | $984,581 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Current Liabilities | |||||
| Accounts Payable | $6,984 | $44,043 | $55,960 | $57,150 | $59,399 |
| Current Borrowing | $346,000 | $246,000 | $146,000 | $121,000 | $86,000 |
| Other Current Liabilities | $0 | $0 | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $352,984 | $290,043 | $201,960 | $178,150 | $145,399 |
| Long-term Liabilities | $400,000 | $375,000 | $350,000 | $300,000 | $250,000 |
| TOTAL LIABILITIES | $752,984 | $665,043 | $551,960 | $478,150 | $395,399 |
| Paid-in Capital | $1,000,000 | $1,000,000 | $1,097,000 | $1,097,000 | $1,097,000 |
| Retained Earnings | ($684,600) | ($732,244) | ($730,280) | ($676,943) | ($602,804) |
| Earnings | ($22,644) | $21,964 | $63,337 | $84,139 | $94,987 |
| TOTAL CAPITAL | $292,756 | $289,720 | $430,057 | $504,196 | $589,182 |
| TOTAL LIABILITIES AND CAPITAL | $1,045,740 | $954,763 | $982,017 | $982,346 | $984,581 |
| Net Worth | $292,756 | $289,720 | $430,057 | $504,196 | $589,182 |
8.7 Business Ratios
The business ratios given below are contrasted to industry standards for SIC code 0161 which covers vegetable and melon growers. Within this category, research has shown that there can be significant deviations from industry standards due to farm size, product life cycle, and capital resources.
Farmers Group is a start-up venture, and therefore has a more heavy debt to equity ratio than most existing farms. Furthermore, due to its move into a niche market, the company is expected to spend more on advertising than its competitors. The first two years of operations are expected also to have a higher growth rate than average as it gains market share.
| RATIO ANALYSIS | ||||||
| YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | INDUSTRY PROFILE | |
| Sales Growth | 0.00% | 21.74% | 21.43% | 4.60% | 4.30% | -4.60% |
| Percent of Total Assets | ||||||
| Accounts Receivable | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 12.90% |
| Inventory | 5.33% | 2.58% | 3.03% | 3.17% | 3.30% | 14.40% |
| Other Current Assets | 23.91% | 26.18% | 25.46% | 25.45% | 27.42% | 28.90% |
| Total Current Assets | 52.19% | 47.63% | 49.08% | 49.10% | 49.22% | 56.20% |
| Long-term Assets | 47.81% | 52.37% | 50.92% | 50.90% | 50.78% | 43.80% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 33.75% | 30.38% | 20.57% | 18.14% | 14.77% | 31.10% |
| Long-term Liabilities | 38.25% | 39.28% | 35.64% | 30.54% | 25.39% | 20.50% |
| Total Liabilities | 72.00% | 69.66% | 56.21% | 48.67% | 40.16% | 51.60% |
| NET WORTH | 28.00% | 30.34% | 43.79% | 51.33% | 59.84% | 48.40% |
| Percent of Sales | ||||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 30.26% | 30.27% | 30.72% | 31.28% | 31.22% | 32.00% |
| Selling, General & Administrative Expenses | 37.26% | 29.04% | 24.76% | 23.31% | 22.31% | 20.70% |
| Advertising Expenses | 0.83% | 0.71% | 1.23% | 1.20% | 1.23% | 0.20% |
| Profit Before Interest and Taxes | 5.57% | 10.76% | 14.01% | 15.44% | 15.80% | 1.70% |
| Main Ratios | ||||||
| Current | 1.55 | 1.57 | 2.39 | 2.71 | 3.33 | 1.65 |
| Quick | 1.39 | 1.48 | 2.24 | 2.53 | 3.11 | 0.88 |
| Total Debt to Total Assets | 72.00% | 69.66% | 56.21% | 48.67% | 40.16% | 51.60% |
| Pre-tax Return on Net Worth | -7.73% | 9.48% | 18.60% | 20.86% | 20.36% | 2.20% |
| Pre-tax Return on Assets | -2.17% | 2.88% | 8.15% | 10.71% | 12.19% | 4.50% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Profit Margin | -3.94% | 3.14% | 7.45% | 9.46% | 10.24% | n.a |
| Return on Equity | -7.73% | 7.58% | 14.73% | 16.69% | 16.12% | n.a |
| Activity Ratios | ||||||
| Accounts Receivable Turnover | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | n.a |
| Collection Days | 60 | 0 | 0 | 0 | 0 | n.a |
| Inventory Turnover | 3.93 | 11.90 | 21.30 | 19.74 | 19.74 | n.a |
| Accounts Payable Turnover | 55.25 | 12.17 | 12.17 | 12.17 | 12.17 | n.a |
| Payment Days | 29 | 17 | 27 | 30 | 29 | n.a |
| Total Asset Turnover | 0.55 | 0.73 | 0.87 | 0.91 | 0.94 | n.a |
| Debt Ratios | ||||||
| Debt to Net Worth | 2.57 | 2.30 | 1.28 | 0.95 | 0.67 | n.a |
| Current Liab. to Liab. | 0.47 | 0.44 | 0.37 | 0.37 | 0.37 | n.a |
| Liquidity Ratios | ||||||
| Net Working Capital | $192,756 | $164,720 | $280,057 | $304,196 | $339,182 | n.a |
| Interest Coverage | 0.59 | 1.57 | 3.05 | 4.28 | 5.53 | n.a |
| Additional Ratios | ||||||
| Assets to Sales | 1.82 | 1.36 | 1.16 | 1.10 | 1.06 | n.a |
| Current Debt/Total Assets | 34% | 30% | 21% | 18% | 15% | n.a |
| Acid Test | 1.39 | 1.48 | 2.24 | 2.53 | 3.11 | n.a |
| Sales/Net Worth | 1.96 | 2.42 | 1.98 | 1.76 | 1.57 | n.a |
| Dividend Payout | 0.00 | 1.14 | 0.32 | 0.12 | 0.11 | n.a |
9. Appendix
| SALES FORECAST | |||||||||||||
| MONTH 1 | MONTH 2 | MONTH 3 | MONTH 4 | MONTH 5 | MONTH 6 | MONTH 7 | MONTH 8 | MONTH 9 | MONTH 10 | MONTH 11 | MONTH 12 | ||
| Sales | |||||||||||||
| Sales | 0% | $0 | $0 | $10,000 | $25,000 | $40,000 | $55,000 | $100,000 | $175,000 | $120,000 | $50,000 | $0 | $0 |
| Other | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| TOTAL SALES | $0 | $0 | $10,000 | $25,000 | $40,000 | $55,000 | $100,000 | $175,000 | $120,000 | $50,000 | $0 | $0 | |
| Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
| Sales | $0 | $0 | $6,800 | $17,000 | $27,200 | $37,400 | $68,000 | $119,000 | $81,600 | $34,000 | $0 | $0 | |
| Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Subtotal Direct Cost of Sales | $0 | $0 | $6,800 | $17,000 | $27,200 | $37,400 | $68,000 | $119,000 | $81,600 | $34,000 | $0 | $0 |
| GENERAL ASSUMPTIONS | |||||||||||||
| MONTH 1 | MONTH 2 | MONTH 3 | MONTH 4 | MONTH 5 | MONTH 6 | MONTH 7 | MONTH 8 | MONTH 9 | MONTH 10 | MONTH 11 | MONTH 12 | ||
| Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
| Current Interest Rate | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | |
| Long-term Interest Rate | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | 7.00% | |
| Tax Rate | 30.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | |
| Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| PRO FORMA CASH FLOW | |||||||||||||
| MONTH 1 | MONTH 2 | MONTH 3 | MONTH 4 | MONTH 5 | MONTH 6 | MONTH 7 | MONTH 8 | MONTH 9 | MONTH 10 | MONTH 11 | MONTH 12 | ||
| Cash Received | |||||||||||||
| Cash from Operations | |||||||||||||
| Cash Sales | $0 | $0 | $2,500 | $6,250 | $10,000 | $13,750 | $25,000 | $43,750 | $30,000 | $12,500 | $0 | $0 | |
| Cash from Receivables | $0 | $0 | $0 | $250 | $7,875 | $19,125 | $30,375 | $42,375 | $76,875 | $129,875 | $88,250 | $36,250 | |
| SUBTOTAL CASH FROM OPERATIONS | $0 | $0 | $2,500 | $6,500 | $17,875 | $32,875 | $55,375 | $86,125 | $106,875 | $142,375 | $88,250 | $36,250 | |
| Additional Cash Received | |||||||||||||
| Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| SUBTOTAL CASH RECEIVED | $0 | $0 | $2,500 | $6,500 | $17,875 | $32,875 | $55,375 | $86,125 | $106,875 | $142,375 | $88,250 | $36,250 | |
| Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
| Expenditures from Operations | |||||||||||||
| Cash Spending | $11,500 | $11,500 | $11,000 | $7,500 | $7,000 | $9,500 | $9,000 | $9,500 | $10,000 | $10,500 | $10,000 | $10,500 | |
| Bill Payments | $30,250 | $7,507 | $7,509 | $7,573 | $7,571 | $7,508 | $10,129 | $91,730 | $178,012 | $46,511 | $7,394 | $7,225 | |
| SUBTOTAL SPENT ON OPERATIONS | $41,750 | $19,007 | $18,509 | $15,073 | $14,571 | $17,008 | $19,129 | $101,230 | $188,012 | $57,011 | $17,394 | $17,725 | |
| Additional Cash Spent | |||||||||||||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $5,000 | $15,000 | $4,000 | $0 | $0 | $0 | $30,000 | $0 | |
| Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| SUBTOTAL CASH SPENT | $41,750 | $19,007 | $18,509 | $15,073 | $19,571 | $32,008 | $23,129 | $101,230 | $188,012 | $57,011 | $47,394 | $17,725 | |
| Net Cash Flow | ($41,750) | ($19,007) | ($16,009) | ($8,573) | ($1,696) | $867 | $32,246 | ($15,105) | ($81,137) | $85,364 | $40,856 | $18,525 | |
| Cash Balance | $203,650 | $184,643 | $168,634 | $160,061 | $158,365 | $159,232 | $191,478 | $176,373 | $95,236 | $180,599 | $221,455 | $239,980 |
| PRO FORMA BALANCE SHEET | |||||||||||||
| MONTH 1 | MONTH 2 | MONTH 3 | MONTH 4 | MONTH 5 | MONTH 6 | MONTH 7 | MONTH 8 | MONTH 9 | MONTH 10 | MONTH 11 | MONTH 12 | ||
| Assets | Starting Balances | ||||||||||||
| Current Assets | |||||||||||||
| Cash | $245,400 | $203,650 | $184,643 | $168,634 | $160,061 | $158,365 | $159,232 | $191,478 | $176,373 | $95,236 | $180,599 | $221,455 | $239,980 |
| Accounts Receivable | $0 | $0 | $0 | $7,500 | $26,000 | $48,125 | $70,250 | $114,875 | $203,750 | $216,875 | $124,500 | $36,250 | $0 |
| Inventory | $150,000 | $150,000 | $150,000 | $143,200 | $126,200 | $99,000 | $61,600 | $74,800 | $130,900 | $89,760 | $55,760 | $55,760 | $55,760 |
| Other Current Assets | $250,000 | $250,000 | $250,000 | $250,000 | $250,000 | $250,000 | $250,000 | $250,000 | $250,000 | $250,000 | $250,000 | $250,000 | $250,000 |
| TOTAL CURRENT ASSETS | $645,400 | $603,650 | $584,643 | $569,334 | $562,261 | $555,490 | $541,082 | $631,153 | $761,023 | $651,871 | $610,859 | $563,465 | $545,740 |
| Long-term Assets | |||||||||||||
| Long-term Assets | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 |
| Accumulated Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| TOTAL LONG-TERM ASSETS | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 |
| TOTAL ASSETS | $1,145,400 | $1,103,650 | $1,084,643 | $1,069,334 | $1,062,261 | $1,055,490 | $1,041,082 | $1,131,153 | $1,261,023 | $1,151,871 | $1,110,859 | $1,063,465 | $1,045,740 |
| Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
| Current Liabilities | |||||||||||||
| Accounts Payable | $30,000 | $7,256 | $7,256 | $7,321 | $7,321 | $7,260 | $7,176 | $85,647 | $176,417 | $46,265 | $7,153 | $6,984 | $6,984 |
| Current Borrowing | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 | $395,000 | $380,000 | $376,000 | $376,000 | $376,000 | $376,000 | $346,000 | $346,000 |
| Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $430,000 | $407,256 | $407,256 | $407,321 | $407,321 | $402,260 | $387,176 | $461,647 | $552,417 | $422,265 | $383,153 | $352,984 | $352,984 |
| Long-term Liabilities | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 | $400,000 |
| TOTAL LIABILITIES | $830,000 | $807,256 | $807,256 | $807,321 | $807,321 | $802,260 | $787,176 | $861,647 | $952,417 | $822,265 | $783,153 | $752,984 | $752,984 |
| Paid-in Capital | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 | $1,000,000 |
| Retained Earnings | ($684,600) | ($684,600) | ($684,600) | ($684,600) | ($684,600) | ($684,600) | ($684,600) | ($684,600) | ($684,600) | ($684,600) | ($684,600) | ($684,600) | ($684,600) |
| Earnings | $0 | ($19,007) | ($38,013) | ($53,387) | ($60,460) | ($62,171) | ($61,494) | ($45,894) | ($6,794) | $14,206 | $12,306 | ($4,919) | ($22,644) |
| TOTAL CAPITAL | $315,400 | $296,393 | $277,387 | $262,013 | $254,940 | $253,229 | $253,906 | $269,506 | $308,606 | $329,606 | $327,706 | $310,481 | $292,756 |
| TOTAL LIABILITIES AND CAPITAL | $1,145,400 | $1,103,650 | $1,084,643 | $1,069,334 | $1,062,261 | $1,055,490 | $1,041,082 | $1,131,153 | $1,261,023 | $1,151,871 | $1,110,859 | $1,063,465 | $1,045,740 |
| Net Worth | $315,400 | $296,393 | $277,387 | $262,013 | $254,940 | $253,229 | $253,906 | $269,506 | $308,606 | $329,606 | $327,706 | $310,481 | $292,756 |
| PRO FORMA PROFIT AND LOSS | |||||||||||||
| MONTH 1 | MONTH 2 | MONTH 3 | MONTH 4 | MONTH 5 | MONTH 6 | MONTH 7 | MONTH 8 | MONTH 9 | MONTH 10 | MONTH 11 | MONTH 12 | ||
| Sales | $0 | $0 | $10,000 | $25,000 | $40,000 | $55,000 | $100,000 | $175,000 | $120,000 | $50,000 | $0 | $0 | |
| Direct Cost of Sales | $0 | $0 | $6,800 | $17,000 | $27,200 | $37,400 | $68,000 | $119,000 | $81,600 | $34,000 | $0 | $0 | |
| Other | $800 | $800 | $867 | $867 | $833 | $833 | $833 | $833 | $833 | $833 | $833 | $833 | |
| TOTAL COST OF SALES | $800 | $800 | $7,667 | $17,867 | $28,033 | $38,233 | $68,833 | $119,833 | $82,433 | $34,833 | $833 | $833 | |
| Gross Margin | ($800) | ($800) | $2,333 | $7,133 | $11,967 | $16,767 | $31,167 | $55,167 | $37,567 | $15,167 | ($833) | ($833) | |
| Gross Margin % | 0.00% | 0.00% | 23.33% | 28.53% | 29.92% | 30.48% | 31.17% | 31.52% | 31.31% | 30.33% | 0.00% | 0.00% | |
| Expenses | |||||||||||||
| Payroll | $11,500 | $11,500 | $11,000 | $7,500 | $7,000 | $9,500 | $9,000 | $9,500 | $10,000 | $10,500 | $10,000 | $10,500 | |
| Sales and Marketing and Other Expenses | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $950 | $950 | |
| Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Gas and Oil | $170 | $170 | $170 | $170 | $170 | $170 | $170 | $170 | $170 | $170 | $170 | $170 | |
| Utilities | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | |
| Insurance | $420 | $420 | $420 | $420 | $420 | $420 | $420 | $420 | $420 | $420 | $420 | $420 | |
| Payroll Taxes | 15% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Total Operating Expenses | $13,540 | $13,540 | $13,040 | $9,540 | $9,040 | $11,540 | $11,040 | $11,540 | $12,040 | $12,540 | $12,040 | $12,540 | |
| Profit Before Interest and Taxes | ($14,340) | ($14,340) | ($10,707) | ($2,407) | $2,927 | $5,227 | $20,127 | $43,627 | $25,527 | $2,627 | ($12,873) | ($13,373) | |
| EBITDA | ($14,340) | ($14,340) | ($10,707) | ($2,407) | $2,927 | $5,227 | $20,127 | $43,627 | $25,527 | $2,627 | ($12,873) | ($13,373) | |
| Interest Expense | $4,667 | $4,667 | $4,667 | $4,667 | $4,638 | $4,550 | $4,527 | $4,527 | $4,527 | $4,527 | $4,352 | $4,352 | |
| Taxes Incurred | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Net Profit | ($19,007) | ($19,007) | ($15,373) | ($7,073) | ($1,711) | $677 | $15,600 | $39,100 | $21,000 | ($1,900) | ($17,225) | ($17,725) | |
| Net Profit/Sales | 0.00% | 0.00% | -153.73% | -28.29% | -4.28% | 1.23% | 15.60% | 22.34% | 17.50% | -3.80% | 0.00% | 0.00% |
| PERSONNEL PLAN | |||||||||||||
| MONTH 1 | MONTH 2 | MONTH 3 | MONTH 4 | MONTH 5 | MONTH 6 | MONTH 7 | MONTH 8 | MONTH 9 | MONTH 10 | MONTH 11 | MONTH 12 | ||
| Business Manager | 0% | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 |
| Executive Director | 0% | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 |
| Manager Trainee | 0% | $0 | $0 | $0 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 |
| Manager Trainee | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $1,000 | $1,000 | $1,000 | $1,000 |
| Logistic engineer | 0% | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 |
| Heavy equipment | 0% | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 |
| Welder | 0% | $500 | $500 | $0 | $500 | $0 | $500 | $0 | $500 | $0 | $500 | $0 | $500 |
| Contract workers | 0% | $5,000 | $5,000 | $5,000 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| TOTAL PEOPLE | 12 | 12 | 12 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | |
| Total Payroll | $11,500 | $11,500 | $11,000 | $7,500 | $7,000 | $9,500 | $9,000 | $9,500 | $10,000 | $10,500 | $10,000 | $10,500 |
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