Happy Hill Harvest
Business Plan
OWNERS
Kevin Sage
kevin.sage@live.com
Christine Witt
christinewitt@hotmail.com
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I.
Table of Contents
I.
Table of Contents .................................................................................................................................... 2
II.
Executive Summary ................................................................................................................................ 3
III.
General Company Description ............................................................................................................. 5
IV.
Products and Services ............................................................................................................................. 9
V.
Marketing Plan ....................................................................................................................................... 11
VI.
Operational Plan .................................................................................................................................... 23
VII.
Management and Organization ........................................................................................................... 29
VIII. Personal Financial Statement............................................................................................................... 30
IX.
Startup Expenses and Capitalization .................................................................................................. 31
X.
Financial Plan ......................................................................................................................................... 32
XI.
Appendices ............................................................................................................................................. 34
XII.
Refining the Plan ................................................................................................................................... 35
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II.
Executive Summary
During a trip to Montana in January, it was obvious that there was a significant lack of fresh local produce.
When we got back home, we started to research produce availability in Montana. We found that a limited
variety of local produce is only available for a few months during the year because of the harsh climate and
short growing season. Most grocery stores get produce from out of state commercial growers, and these
large out of state operations deliver food when they have full shipments ready. That causes the produce to sit
in warehouses and sit in dry van trailers waiting to be delivered for up to several days.
The questions in our minds were:
1. Is there a market for fresh year round produce in Montana?
2. Is there a way to grow a variety of quality produce in Montana?
3. Is there a way to grow fresh produce year round in Montana?
When we were back up in Montana in June, we talked to several people about the available produce, and we
took a look at the produce that was available during the summer, although it was early in the growing season.
We found that the local growers in the area were charging premium prices for their produce and the stores
were not stocking their produce. We also saw that the produce available was very questionable quality and
ready to spoil. Based on our research, yes there is a huge market for fresh produce in Montana year round!
Ok, so there is a market, how do we actually grow produce year round? During that research we found that
there was limited greenhouse usage in Montana; most greenhouses were used to extend the growing season.
However, we did find one small farm that uses their greenhouse year round, however, during the winter they
only grow microgreens. So, we researched cold climate greenhouses, specifically in harsh climates and high
altitudes. The biggest issue with a cold climate greenhouse is the heat loss during the winter, and that can be
overcome with a boiler system. In addition, the shorter days means limited sunlight, and again there is a
solution for that, grow lights. Based on that, there is a way to grow a variety of produce year round in
Montana!
Now we are on to something great! One minor issue, while it is possible to overcome the issues with a
commercial greenhouse in Montana, it will cost a lot of money to keep it going and a greenhouse on its own
barely covers the cost. Now, there are ways to offset the costs. The boiler can burn multiple fuel sources, so
we can get cheaper fuel, and we can get solar arrays to help cover the cost of the grow lights. In addition, we
can recover the exhaust from the boiler to do CO2 enrichment and promote more growth. Even with this,
the output would barely cover the cost of the bills and the loan payments. That prompted us to find other
ways that we could make this successful, and came up with the road side store and rental cabins.
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During the June trip, we met with a realtor that has land available about a mile from Newlan Creek Reservoir,
which is a popular lake to go to during summer months. In addition the land is close to the national forest
and Showdown Ski Area, so during the winter there would be the opportunity to rent the cabins as well.
With the cabins and the fresh produce, it makes sense to also have the road side store. All of these things
combined, makes the entire venture profitable.
To purchase the land, build the greenhouses, purchase the cabins, purchase the road side store, and build a
storage shed, we will need to get loans to cover $4,000,000 of initial startup costs. We have estimated for an
initial startup cost of $3,800,00, and have added on $200,000 for overrun costs so that we do not go cash
negative at any point. We will be able to start paying back the loans in the second year after we start
production in the greenhouse.
We will hire 2 part-time employees for the second year, and then bring on an additional part-time employee in
year 3 and 4, so eventually we will have 4 part-time employees. In addition, the project will bring a number of
jobs to White Sulphur Springs, for the construction of the greenhouses. Also, there will be the need for
firewood, or various other fuels, for the boiler, which will bring jobs as well. Last, we will also offer
internships at the greenhouse to give high school and college students the opportunity to learn about
different options to grow produce.
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III. General Company Description
Mission Statement: Provide year round exceptionally high quality local produce along with a unique
experience.
Company Goals and Objectives:
1. Build a sustainable and environmentally friendly greenhouse, along with a store front, and rental
cabins.
a. Acquire the land
b. Work with a greenhouse manufacturer and Engineers to design the site.
c. Drill well for water
d. Establish geothermal heat pump and multi-fuel burner
e. Break land and lay foundations, with radiant heating and cooling, for the greenhouses
f. Establish head house for storage, staging, and transition room
g. Construct the greenhouse structures
h. Install modular homes, modular store front, storage shed, and manufactured cabins for
rental.
i. Install hydroponics with ergonomics in mind to minimize effort to maintain the greenhouse
j. Install environmental monitors, i.e. weather, hydroponic water nutrition.
k. Install computer servers to record all the readings and track output.
l. Purchase additional equipment for the greenhouses
2. Propagate and harvest produce year round
a. Purchase seeds for a variety of crops so that failure of crops does not wipeout the
greenhouse, based on demand and quality of final product this list will vary:
i. Basil
ii. Beets
iii. Blueberries
iv. Broccoli
v. Brussels sprouts
vi. Cabbage
vii. Cantaloupes
viii. Carrots
ix. Cauliflower
x. Celery
xi. Cucumbers
xii. Eggplant
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xiii. Garlic
xiv. Green Beans
xv. Green Onions
xvi. Herbs
xvii. Leeks
xviii. Lettuce
xix. Onions
xx. Parsnips
xxi. Peas
xxii. Peppers (sweet)
xxiii. Potatoes
xxiv. Radishes
xxv. Raspberries
xxvi. Rutabagas
xxvii. Shelling Beans
xxviii. Spinach
xxix. Strawberries
xxx. Tomatoes
xxxi. Turnips
xxxii. Zucchini
xxxiii. Summer Squash
xxxiv. Winter Squash
b. Monitor greenhouse condition daily and tend plants
c. While plants are growing, reach out and get agreements in place to deliver the first year’s
crops. Will most likely take a loss on all crops the initial years to establish the market.
d. Two part time employees assist in planting, maintaining, and harvesting produce, with
additional employees added as there is need.
3. Expand a market for produce that is currently a fairly new market in Montana.
a. Create website that promotes the concepts of the greenhouse, and will allow people to
purchase produce online with limited availability until production rates are determined.
b. Advertise on social media and document the progress
c. Provide reports on greenhouse production for other cold weather greenhouses
d. Work with local grocery stores and local school to provide produce.
e. Build road side market to sell produce fresh from the greenhouse.
f. Sponsor local events within White Sulphur Springs to increase brand recognition.
4. Establish the location as a point of interest and tourist destination.
a. Market the year round aspect of the greenhouse, with tours during the winter months.
b. Market the scenic views.
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c. Market the available activities and other points of interest close to the site, such as Newlan
Creek Reservoir, Spa Hot Springs, Showdown Ski Area, and hunting available.
5. Establish the company as the market pioneer.
a. Marketing material will promote the fact that the greenhouse is introducing a new market to
Montana
b. Sell based on Local sourced Made in Montana produce
c. Create a loyalty program that reduces the cost of produce for loyal customers, both by
tracking money spent at the farm, purchases online, promotion of the farm, and provide
different programs based on organizations and individuals that are purchasing produce.
6. Educate and assist other businesses in similar goals.
a. Collaborate with other cold weather permaculture greenhouse growers
b. Create workshops to demonstrate knowledge learned
c. Invest in other greenhouses that wish to open other markets
Business Philosophy: Develop a safe and productive greenhouse offering high quality produce that offers a
unique experience for tourists.
Produce will be marketed to a variety of consumers.
1.
2.
3.
4.
5.
6.
Restaurants that wish to offer high quality local farm to table food
Local grocery stores that have established customer bases
Cafeteria at local schools to promote healthy lunches
Roadside store
Farmers markets
Local families and ranches that would be interested in the convenience of high quality
produce that is locally grown.
Year round greenhouse based production of high quality produce, which is a well-established market in most
regions of the US. There are a number of greenhouses being established in colder climates in recent years
based on improvements in glazing and production techniques. This will provide the main source of income
for the company since this is an emerging market and with the land that would be available, it is a market that
allows significant growth for the company. Our company will be the first farm that is offering year round
produce in western Montana; in addition it will be high quality, which will allow us to charge a premium
which will cover operating costs. Our company will work with established cold weather greenhouse growers
to create greenhouses that will have manageable operating cost. Long term, there will be more and more
greenhouses being created in cold weather climates to provide healthier produce options in areas that
historically did not have quality produce available. This also ties into restaurant trends toward farm to table
locally source produce that highlights the quality of the food.
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In addition to the greenhouses, there will be a roadside store and cabin rentals will provide additional income
that will make the company profitable. The cabins are going to be manufactured homes on foundations, so
the overhead cost for the purchase adds a minimal cost to the project, however, renting out the cabins 60 –
70% of the time will cover the cost of the cabins within a couple of years. The roadside store will allow us to
sell branded merchandise along with the fresh produce from the greenhouse, especially on days that we are
not delivering to stores.
The owners of the company bring a history of business knowledge and technical skill, both of which will be
critical to the success of the greenhouse business. While the owners do not have knowledge of growing
vegetables in a greenhouse, we do know how to work with the people who do know how to successfully grow
vegetables in a greenhouse.
Legal form of ownership: Sole proprietor, Partnership, Corporation, Limited liability corporation (LLC)?
This is an open question for right now, we are leaning towards a corporation, however, we plan to check with
the finance company to determine if the type of incorporation will affect available financing.
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IV. Products and Services
Our product is fresh locally sourced produce grown year round in state of the art greenhouses that are energy
efficient and ergonomic. Our produce will vary season to season and will be tailored to the needs of the
market and during the initial years different produce will be attempted to determine what will grow the best.
Initial produce will be the following:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Basil
Beets
Blueberries
Broccoli
Brussels sprouts
Cabbage
Cantaloupes
Carrots
Cauliflower
Celery
Cucumbers
Eggplant
Garlic
Green Beans
Green Onions
Herbs
Leeks
Lettuce
Onions
Parsnips
Peas
Peppers (sweet)
Potatoes
Radishes
Raspberries
Rutabagas
Shelling Beans
Spinach
Strawberries
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30.
31.
32.
33.
34.
Tomatoes
Turnips
Zucchini
Summer Squash
Winter Squash
In addition to the produce, there will be marketability in the location and the concept, which we plan to
utilize in branded merchandise.
The biggest factors that will give us the competitive advantage will be the scale of the greenhouses and the
output. We will be able to provide produce year round on a large scale for restaurants in the area that are
interested in delivering high quality farm to table food. The biggest disadvantages will be climate and the
uncertainty of the ability to maintain the heat and sunlight in the greenhouse to accommodate year round
production. The assumption will be that there will likely not be enough sunlight, which will be offset with
growing lights, and there will be significant cost in heating the greenhouse, which will be offset with
geothermal heating and a boiler that can use various forms of fuel. The exhaust from the boiler will be used
to provide CO2 enrichment to the greenhouse. Second disadvantage will be existing greenhouse farms; we
will establish relationships with them so that our operation does not create direct competition. The other
greenhouse farms cater to individual families and do not have the capacity to service numerous restaurants.
Pricing will be based on current market price for high quality produce, and since the greenhouse will utilize
hydroponics, we will most likely not be able to get organic certification; however, we will still attempt to get
it, which would allow us to market for a higher price. The price of the produce will fluctuate and value of the
produce will vary based on the type of produce. Because of the local growing and produce during off season,
we will be able to charge a premium price. For estimation of the value of the crops that will be produced,
prior to getting real market values, we will estimate the price per pound to be $1.50 year round. On average,
the produce will take approximately 3 months to grow, which is average across multiple types of produce.
The estimated square feet of the greenhouse will be 60,000 square feet which will give us 100 hydroponic
rows that are 180 feet in length. Of course, we will offset planting and harvesting so that we will harvest
crops several days during the week, especially during the summer when there will be up to 3 farmers markets
per week. Based on a production spreadsheet, we estimate we will have approximately 122,000 pounds of
produce during the year, with an estimated value of $245,000 per year once we are at full production.
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V.
Marketing Plan
Economics
Facts about your industry:

What is the total size of your market? The market size is roughly 100,000 to 150,000 people, based
on population in major cities that are within a few hours of the location of the greenhouses. Based
on production levels and demand, the greenhouse can provide food for a 400 mile radius and still be
considered local produce, which will add to delivery cost but will more than triple the market size.
Based on research in 2011, http://www.npr.org/sections/thesalt/2011/12/31/144478009/theaverage-american-ate-literally-a-ton-this-year, the average American eats 415 pounds of vegetables
and 273 pounds of fruit in a year. Based on approximately 100,000 to 150,000 people, eating 688
pounds of fruit and produce consumed in a year, the bottom ends of the need is 68,800,000 pounds
of fruit and produce a year, which will be well above our production output.

What percent share of the market will you have? Our competitors will mainly be other greenhouse
farms for competing produce; however, additional competitors will be grocery stores, while we will
have a better product the fact is a lot of people will only look at price. So, in the overall picture, we
are going to have a very small share of the market, however, in relation to our main competitors, we
will most likely look at taking approximately 50% of the market share (based on the size of their
combined greenhouses).

Current demand in target market. Farm fresh locally sourced foods are a major selling point for high
end restaurants and specialty retailers. While restaurants will be the main focus, there are several
grocery stores in the area we will be focused on. In addition there are farmers markets and if we are
able to get organic certified, we will sign up with http://www.montanaorganicassociation.org/ that
advocates and promotes organic agriculture. This is an industry that has been gaining steam and will
continue to grow in years to come.

Trends in target market—growth trends, trends in consumer preferences, and trends in product
development. Currently, in lower income places, such as Montana, there are still a large number of
people who buy whatever is cheap and convenient. The success of other greenhouses in remote
areas, the convenience of quality produce is usually enough to get people to pay the additional price.
We will target high end restaurants and specialty food retailers that have a demand for the high
quality produce.

Growth potential and opportunity for a business of your size. As mentioned above, our current
production will not even come close to providing the amount of produce that will serve the demand,
so the likelihood of saturating the market is slim. We are consulting with a greenhouse manufacturer
who will help us determine the best greenhouse designs and equipment to ensure success. To grow
the business, once we have approximately 80% of our produce sold year around, we will build more
greenhouses based on demand. The first few years should be slow growth as we establish ourselves
in the market, so there is no expectation that we would need more greenhouse space in the first 5
years of operation.

What barriers to entry do you face in entering this market with your new company?
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
o
High construction costs – Each square foot of greenhouse space is approximately $35, to
ensure that it is constructed in a way that conserves heat during the cold winters.
o
High equipment costs – There will be significant costs to purchase all of the equipment
needed to maintain the climate of the greenhouse year around, in addition to the equipment
to move the produce and assist in planting/harvesting/etc.
o
Consumer acceptance and brand recognition – Since we will be new to the market, people
will be skeptical about our operation and will likely question how we are able to operate a
greenhouse in Montana during the winter. We will overcome this by being very open with
our operation and demonstration how we are accomplishing it will be part of the marketing
strategy.
o
Training and skills – This will be mostly be getting up to speed on how to effectively run a
greenhouse and then put what we have learned into operation. To overcome this, prior to
starting to build the greenhouse, we will work with existing greenhouses to get an idea of
pitfalls other people have already dealt with. In addition we are planning on consulting with
CRMPI, http://crmpi.org/, to get input on our operation, since they have faced a lot of the
same issues we are likely to face.
o
Shipping costs – To deliver the produce to areas where we can sell it, will require shipping
the produce. To overcome shipping costs, during the initial years, we will use the company
vehicles, 2 Ford Expedition SUVs along with one refrigerated trailer (including a solar
generator to power the trailer at the Farmers Markets), to deliver produce. Since we will
deliver food year round, we need very reliable SUVs, and they will standout, which will be
part of the marketing. In the future, the quantity of produce will exceed our ability to deliver
with the Expeditions, and at that point we will need to contract with a trucking company.
We will layout our site to ensure that larger trucks will be able to get into our loading docks.
How could the following affect your company?
o
o
o
o
Change in technology – As we build new greenhouses and make repairs to the initial
greenhouses, we will always research the latest technology trends in greenhouses and make
sure to use them. Changes to technology will not affect the operations of the greenhouses
except during updating or expanding.
Change in government regulations – This would have significant impact on our company;
however, we are going to work with the USDA/State of Montana and ensure we exceed the
minimum requirements. In addition, we will use the internet to stay on top of any changing
to regulations and make sure we money in reserve to cover any costs that will come up.
Change in the economy – Our company will initially be very impacted by changes in the
economy, however, once we have the operation established we will have options to charge
less for our produce and merchandise.
Change in your industry – The industry will always be in fluctuation, i.e. there will always be
better ways to grow produce and the demand for types of produce will change. We are
going to make a major investment in the hydroponic technology we are going to use initially.
We have researched numerous options and have selected the technology that is a good
combination of established technology and cutting edge techniques.
Page 13 of 36
Product
Our customers will see our produce as fresh locally sourced. We will have a variety of popular fruits and
vegetables that will be able to be harvested several times a week year round, initially that may not be a reality
however that will be the goal. In time the brand of the company will be a reflection of the quality of produce
we plan to grow.
Features and Benefits
List all of your major products or services.

Produce – Fruits and Vegetables – Most important feature will be high quality. Compared to other
farms, our produce will not stand out, however, during the winter months; we will continue to grow
produce, with the same quality as summer. The year round production is what will allow us to stand
out against other greenhouse based farms. The benefit will be healthy quality produce year round
without having to resort to low quality produce that is available in Montana during the winter.
Initially, we will deliver the produce directly to customers and will have invoices that describe the
quality of the produce at the time it left the greenhouse, including date and time it was harvested
along with the date and time it left the greenhouse. We will have the customer receive the produce
and sign off on the quality at time of delivery. The fruit and vegetables will have a freshness and
quality guarantee, so if within 3 days of delivery, a customer finds the produce to be unacceptable, we
will make every effort to replace any produce that is unacceptable. There will be a time limit on the
guarantee to avoid people purchasing the product, losing track of time and not consuming it before it
goes rotten. When dealing with restaurants or whole foods stores we will want to keep detailed
records of purchases and returns, if a restaurant abused the guarantee, they will be cut off on future
deliveries; however, this will be an extreme option. Initially, we will have one time deliveries of
produce, however, if a customer is interested in setting up a contract we will work out contracts after
the first year or two, when we know what our production capabilities will be. When people take a
delivery, they will be provided with a website address and/or a QR code to be able to take a survey
on their satisfaction and to let us know if they have any improvements they would like to see. To
increase feedback, we will offer a small discount on their next order if they provide feedback,
however, discounts will be minimized, we are not trying to grow cheap produce we want quality
produce. Refunds will be an option, however, that will be reserved for clients that cannot be
satisfied, it will require a return of unused portions and if more than 25% of the produce has been
consumed the refund will be prorated. Extreme dissatisfaction will result in a full refund regardless
of the unused portions and will need to be approved by senior management, also this will result in
denial of future deliveries to the customer; the assumption is that extreme dissatisfaction will be a
lost customer and we are trying to minimize fallout, rather than retaining the customer.

Cabin Rental – We are going to purchase quality manufactured homes that will be the rental cabins.
The overall cost of the rental cabins will be low enough that we can recover our cost on purchasing
Page 14 of 36
the cabins. The cabins will be maintained on a regular basis, with daily cleaning. The interior of the
cabins will be upper end furniture that will be inviting and comfortable, we want people to come
back because of how nice the cabin is!

Merchandise – We will stock a variety of merchandise with a range in prices and will get new
merchandise each year. The merchandise will be greenhouse, gardening, camping, hunting, and
skiing related, all of which are marketable to the area. In addition, we will work with other people in
the area that make items that we can sell in the store.
Customers

Restaurants
o Industry (or portion of an industry) – Food preparation industry, including cafeterias,
restaurants, and catering companies.
o Location – Any city within a 2 hour drive of White Sulphur Springs, MT. Major cities that
fall into this location will be Great Falls, Helena, and Bozeman. In the future, if this market
does not support our output, and we have contracted with delivery companies, then we can
expand all the way out to a 400 mile radius of White Sulphur Springs and still be considered
locally sourced, which opens us up to 7 states in the Northwest Market.
o Size of firm – Small to medium sized locally owned individual restaurants, catering
companies, and cafeterias (small school cafeterias such as White Sulphur Springs that might
have government assistance for promoting healthy meals for children).
o Quality, technology, and price preferences – The restaurants would target the local farm to
table produce, which would be upscale restaurants that target upper level income consumers.

Grocery Stores
o Industry (or portion of an industry) – Standard Grocery Stores that work with local farms to
source produce. This will be a way of introducing ourselves to the consumer market.
o Location – Any city within a 2 hour drive of White Sulphur Springs, MT. Major cities that
fall into this location will be Great Falls, Helena, and Bozeman. In the future, if this market
does not support our output, and we have contracted with delivery companies, then we can
expand all the way out to a 400 mile radius of White Sulphur Springs and still be considered
locally sourced, which opens us up to 7 states in the Northwest Market.
o Size of firm – Small to large stores that are willing to work with upstart farms that may
fluctuate in output.
o Quality, technology, and price preferences – The stores will target consumers that are mid to
upper level income, and interested in healthy local foods.

Farmers Market
o Industry (or portion of an industry) – Farmer markets are stands where local farmers can
bring their produce. We will reach out for vendor information.
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o
o
Location –
 Great Falls, MT: http://www.farmersmarketgf.com
 Helena, MT: http://www.helenafarmersmarket.com/
 Bozeman, MT: http://www.gallatinvalleyfarmersmarket.com/
The Farmers Markets will be a way of introducing ourselves to various other customers, and
will be a place we take produce to on a regular basis during their hours of operation, typically
during the summer months on the weekends.

Small Town Grocery Stores
o Industry (or portion of an industry) – Any small town grocery store that is willing to take
produce from local farmers.
o Location – White Sulphur Springs MT, and other small towns within an hour or two of
White Sulphur Springs, such as Townsend.
o This will just be during the initial startup years as we try to get brand recognition.
Depending on demand and available produce, we may or may not continue to market to this
customer.

Individual Consumers
o Age – 15 – 70 – Teens to adults who are concerned with their health and environment.
o Gender – Male/Female/Other
o Location – People living in White Sulphur Springs, MT, and within a 2 hour drive of White
Sulphur Springs. Major cities that fall into this location will be Great Falls, Helena, and
Bozeman. In the future, if this market does not support our output, and we have contracted
with delivery companies, then we can expand all the way out to a 400 mile radius of White
Sulphur Springs and still be considered locally sourced, which opens us up to 7 states in the
Northwest Market.
o Income level – Our produce will be competitively priced against other produce, so midlevel
income and up would be the target.
o Social class and occupation – All social classes and occupations consume produce so there is
no limitation on it.
o Education – High school and higher education would be the target consumer. They would
educate themselves on the benefits of local produce over people who are lower income.
Competition
Other local produce farms will be competitors, especially ones that run year round. However, the reality is
that we would rather consult and work with other farmers to help promote the benefits of local farming and
to cut into the market share that classic food stores have.
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List your major competitors (most likely there are other competitors that do not have an easily found web
presence):
Farmerlicious, Inc.
1256 Sheep Coulee Rd.
Big Sandy, MT 59520
Community Food Co-op - Bozeman
Co-op West Main, 908 West Main, Bozeman, 406-587-4039
Co-op Downtown, 44 East Main, Bozeman, 406-922-2667
Contact: Alison Grey Germain, Marketing and Membership Manager
801 West Main Street, Suite 3B
Bozeman, MT 59715
Groundworks Farm
PO Box 118
Fort Shaw, MT 59443
Lime Kiln Green/L5 Ranch
3643 Lime Kiln Road
Lewistown, MT 59457
Steve & Cindy’s Garden
2975 Arabian Road
Helena, MT
Towne's Harvest Garden
MSU Ag Experiment Station
Bozeman, MT
There will be overlapping markets, not sure what their business plans are. Most likely we will service a lot of
the same customers, however, we will reach out to these farms to let them know we are starting up operations
and see if they will work with us in the market so that we will not be direct competitors.
The most important indirect competitor will be grocery stores that purchase produce from large out of state
farms. However, a number of these grocery stores will purchase produce from local farms to provide options
to their customers.
Our produce will most likely be very comparable to other farms; however, the variety and crop rotation will
most likely vary between farms. Our biggest advantage will be our year round production, which will be hard
to compete with.
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Table 1: Competitive Analysis
FACTOR
Me
Products
Will offer a
variety of
produce based
on having
different zones
in the
greenhouses to
allow a variety
of growing
conditions for
year round
production
Strength
Weakness
X
Competitor A
Competitor B
Importance to
Customer
Offers a more
focused variety
of produce due
to smaller
square feet of
growing room
Will be able to
offer the same
variety of
produce,
however, they
have limited
production
during off
season.
1 – Winter
produce will be
a major
importance
They have
established
customers that
will not switch
to another farm
for the same
price
They have
established
customers that
will not switch
to another farm
for the same
price
3 – It is
important
compared to
grocery store
prices,
however, within
the produce
market, prices
will be fairly
consistent
They have years
of experience
that will allow
them to have
consistent
product,
however they
will not have
the ability to
control the
growing
conditions as
efficiently.
They have years
of experience,
however, only a
small portion
of their crops
are grown in a
controlled
greenhouse
environment so
they are more
at risk for
weather
changes.
1 – High quality
produce is the
only reason to
pay higher
prices for high
quality produce
They know
what their
customers want
and have years
of experience
growing that
produce.
4 – Some
people will
want to try new
things, but
most customers
know what
produce they
like and want.
They have years
of working with
customers and
2 – I think
service is
second to
Price
We will price
our produce to
the market,
which will be
comparable to
the competition
Quality
We are going to
go out of our
way to create a
greenhouse that
will replicate
ideal growing
conditions, not
just for volume
but also for
taste and
texture.
Selection
The first few
years will be
trying to
experiment
with different
produce, and
see what we
can grow
effectively with
the hope of
offering a
variety of
produce year
round
X
They know
what their
customers want
and have years
of experience
growing that
produce.
We will work
with our
customers to
X
They have years
of working with
customers and
Service
X
X
Page 18 of 36
FACTOR
Me
Strength
Weakness
service the
customers to
the best of our
ability.
Competitor A
Competitor B
have already
figured out
ways to service
them.
have already
figured out
ways to service
them.
Reliability
This will be one
of our biggest
weaknesses.
We have no
way to ensure
reliability,
however, in a
few years we
will have this
down.
Stability
This will also
be a big
weakness, we
are a startup
and therefore
there is a lot of
instability as we
establish the
company
Expertise
We will consult
with industry
leading experts
and are up to
speed on latest
greenhouse
trends and
techniques.
Company
Reputation
As a startup, we
will not have a
reputation, and
we will do
everything we
can to build it
Location
We are centrally
located
between
Helena, Great
Falls, and
Bozeman, in
addition this is
right about the
center of
Montana
X
Located close
to Bozeman, so
they are able to
serve Bozeman
easier.
Appearance
We are going to
have Cadillac
Escalades with
X
No idea what
they have for
making an
X
X
X
X
Importance to
Customer
quality and
availability.
Existing
customer base
and years of
experience
2 – For the
restaurant
business this
will be a 1,
however, for
other
customers it
will be 3.
Existing
customer base
and years of
experience
Existing
customer base
and years of
experience
2 – For the
restaurant
business this
will be a 1,
however, for
other
customers it
will be 5.
They have the
years of
experience,
however
sometimes with
years of
experience
comes
complacency.
They have the
years of
experience,
however
sometimes with
years of
experience
comes
complacency.
5 – The
costumer is
going to be
worried about
the product,
not the
expertise in
growing it.
From what I
have read, they
have a very
good reputation
with the
community
From what I
have read, they
have a very
good reputation
with the
community
3 – For the
restaurant
business this
will be a 2,
however, other
customers will
be a 4.
Located close
to Great Falls
so they will be
able to serve
Great Falls
easier
5 – In the age
of the internet
and delivery of
products, the
only
importance
with location is
the 400 mile
radius for local
produce.
They have
trucks and
trailers that
3 – Seeing a
memorable
sight sticks in
Existing
customer base
and years of
experience
Page 19 of 36
FACTOR
Me
Strength
Weakness
Competitor B
appearance
have their logos
X
They have an
established
presence so
they have
established
sales methods.
They have an
established
presence so
they have
established
sales methods.
3 – Will need to
have sales
methods that
target the
customer
X
No credit for
individual
customers
however they
most likely
have invoicing
for larger
customers
No credit for
individual
customers
however they
most likely
have invoicing
for larger
customers
4 – This will be
a 3 for
restaurants, and
perhaps a 1 for
a lot of
restaurants,
however, other
customers will
be a 5
X
They have a
web presence
and word of
mouth
They have a
web presence
and word of
mouth
5 – Most
customers are
not going to
care about the
advertising for
produce.
X
Local quality
produce with
microgreens
available year
round
Local quality
produce
3 – The image
of a farm is
important to
some
customers
the company
logo to make a
statement when
we deliver
produce and
are meeting
with customers
Sales Method
We will sell
directly to
customers, with
a variety of
methods. We
will have a great
online presence
and will be easy
to reach
Credit
Policies
No credit
available,
however, in the
future, if we
have contracts
we will be able
to float the cost
for a month for
some
customers
Advertising
Word of mouth
and web
presence
advertising,
along with
podcasts to
explain how we
are setting up
and operating
the greenhouse
Image
Local quality
produce that is
available year
round
Importance to
Customer
Competitor A
the minds of
people, even if
they would not
think of it as
important
Our biggest strengths will be production capacity and year round growing. All of our produce will be grown
in the 60,000 square foot greenhouse, under controlled conditions, and year round. Our biggest weaknesses
will be that we are new to the market and have a lot of unknowns around the operation. We are going to
great lengths to make sure we know what the risks are and we will design the greenhouse to minimize those
risks, however, this will still be a best guess until we actually start production.
Page 20 of 36
Niche
Our unique corner of the market will be year round production of produce, without having to resort to
smaller crops such as microgreens to accomplish year round production.
Strategy
Promotion
To get initial word out to customers we will offer produce to local town grocery stores during the winter, and
we will get signed up as vendors for farmers markets (listed above). In addition we will have the company
name and contact information on the Ford Expeditions, which we will use to take fresh produce to local
grocery stores to see if they will sell the produce for us.
Advertising: We will also start a website when we start to break ground on the greenhouses to be able to let
people see what we are doing. In addition to the website, we will look into having Twitter, LinkedIn, subreddit to communicate with customers, and Instagram (so that we can share photos of produce that is getting
ready for harvest). We will have a Facebook page; however, it will not be a major portal to our business. We
are going to target sites that offer constant communication with customers in addition to allowing us to share
tips and tricks to help others with their growing endeavors.
A majority of the promotional budget will go to creating display stands for farmers. The cost for the website
will be less than $15 a year and will be hosted on http://www.winhost.com, which allows for .NET
development, which will avoid having to hire website designers. The rest of the social media sites will be free
to use.
A majority of promotion will go into farmers markets, grocery stores, and word of mouth for restaurants. To
help get recognition with restaurants we will become a member of the Montana Restaurant Association,
http://www.mtretail.com/montana-restaurant-association.
We want our customers to see us as an innovative cutting edge farm that is excited about producing high
quality produce throughout the entire year in an environmentally friendly way.
We are going to let the greenhouses be the focus of the promotion when people come to the farm, we will
offer tours of the greenhouses and we will offer classes on hydroponic growing. For our signage, farmers’
market stands, grocery store stands, business cards and promotional cards, we will work with a design
company to come up with the images. All promotional material will include the website and the QR codes
that will take them to either the website or a survey. We will get farmers market supplies from places like
http://www.farmersmarketonline.com.
Page 21 of 36
We will have the option of having customers signing up for email notifications when we will have their
favorite produce ready, and will allow people to sign up in a queue for produce as it becomes available.
Promotional Budget
The startup cost for the Farmers market will be around $2000. The cost for signage for Farmers market,
grocery stores, etc, will be $5000. Cost for designing the logo and layouts will be $5000.
Ongoing cost for the Farmers market will be mostly supplies, so around $1000 per year depending on how
often we go to the farmers markets. Yearly cost for signage will be $500, mostly to replace signs as needed.
Occasionally there will be need of updating logo design and marketing layout, so we will put aside $5000 per
year to be used as needed.
Pricing
Our pricing will be based on the USDA price guides for produce and we will target higher end prices and
only deliver high quality produce. http://www.ams.usda.gov/mnreports/fvwretail.pdf
We will not offer credit, however, for larger customers we will allow monthly invoicing, with discounts if the
invoice is paid within 10 days of sending out the invoice. In addition, we will offer a branded shopping bag
that will give customers an additional 10% discount after purchase.
Proposed Location
The location has already been determined, however, this section will be filled out to show how acceptable the
location is.
Our market is based on the location, so the customers will be within the range of the location.
We will encourage people to come to the location for tours and to see the greenhouses. We will have a
roadside office/market setup where people can stop by during the year to either purchase produce when we
have it available, get marketing information, or take a tour of the greenhouse. Customers will appreciate
being able to come to the greenhouse and see that the farm represents the image we project as a company.
The farm will be located out in the country, away from competitors, giving room to grow. There is no value
in being close to the competition since we will most likely all be going to the same farmers’ markets.
Distribution Channels
We will distribute directly to our customers. In the initial years, our focus will be on Farmers’ Markets, which
involve contacting the Farmers’ Markets and getting signed up as a vendor. Then we will get a space to
display our produce, and depending on the Farmers’ Market we will be able to setup our booth. In addition,
we will distribute to grocery stores of various types, and based on this report it should be fairly easy to find
Page 22 of 36
grocery stores that are close and will like working with us: http://www.greenhousegrower.com/businessmanagement/marketing/marketing-greenhouse-vegetables-to-grocery-stores
Sales Forecast
The ProduceOutput.xlsx spreadsheet details out the worst case scenarios. This includes all wholesale pricing
for produce along with higher priced (low quantity) seeds and the minimum production space. However, in
coming up with a Sales Forecast, several needs were identified, such as a trailer from the beginning and a way
to organize the production tables.
Page 23 of 36
VI. Operational Plan
Production
How and where are your products or services produced? All produce will be grown in a 60,000+ square foot
greenhouse near White Sulphur Springs, MT, on a field that is part of the Wisdom Ranch.
Explain your methods of:

All plants will be started in Grodan starter cubes and after germination and sprouting, any cubes that
have successfully sprouted and are growing good, will be placed in Grodan cubes or placed in the
NFT rows or the root vegetable perlite rows. Any plants in the Grodan cubes will be monitored for
grow, and once they show that they have rooted properly, we will them place these cubes on the
Grodan slabs with drip irrigation.

Every day, we will inspect each planter for mold, fungus, weeds, pests, etc. We will consult the
internet, specifically other greenhouse growers, on how to address issues. In addition to inspecting
the plants, we will verify the climate controls in the greenhouse to ensure that the temperature and
humidity (along with other factors) are remaining in their ideal range. Most systems to control the
environment in the greenhouse will be automated, however, we will still need to verify that
everything is happening, i.e. vents open when needed and shade cloth deploys/retracts.

We will have a website and use social media to stay in contact with our customers. We plan to make
it easy for customers to report issues with the produce and we will use a CRM application to track
customer experience (initially, the CRM software might be custom built to avoid costs, however, we
will most likely switch over to a commercial CRM package when we have an established customer
base). We will follow up with customers on a daily basis, during downtime at the greenhouse.

Inventory will be controlled by offsetting the planting.

We will work with customers to identify desired produce that they would like to see. Then we will
research our ability to grow the additional types of produce. We will have some staple produce, such
as onions/carrots/lettuce/etc, that we will grow based on demand, then we will grow other produce
that will generate more money.
Location
The location has already been identified, and right now it is just a matter of getting the land to be able to
move forward with the business plan.
Physical requirements:

We will need several acres available for future growth. The field should be easily accessible and
south / southwest facing. The field we plan to setup the greenhouses in offers an ideal location, with
additional areas available for solar areas and other needs, such as loading bays.
Page 24 of 36

The main building will be the greenhouse, with an entrance room for storage. There will also be
solar arrays to help offset electric needs.

Currently the field is in a rural area so there should not be any zoning issues and we will need less
than 35 gpm for water, so we do not need to get water rights.

We will need to have electricity run to the greenhouse, along with the ability to sell back electricity
generated by the solar array. We will also a boiler that can burn various fuels and the exhaust will be
used for CO2 enrichment. Will need to drill a well, setup a filtration system, and build a septic
system for the greenhouse.
Access:
There will be a highway access built off of US 89N that will allow for access to the Farm Stand, the
Greenhouses, and other buildings.
There will be one main entrance into the greenhouse and additional emergency exits.
As the company grows, and more employees are hired we will either purchase more land for parking or setup
a shuttle service so that people can park in White Sulphur Springs.
A greenhouse manufacturer has been contacted to work on the design of the greenhouses.
In evaluating the construction costs for building the greenhouse, the current construction cost will be close to
$3.8 Million. We will look into getting USDA/State of Montana grants and loans to cover the costs
The greenhouse might be available for tours during normal business hours as needed; however, the operation
time for the greenhouse will be 24/7. It will not require people to be at the greenhouse 24/7, but it will
require someone to be on call to respond to any system failures.
Legal Environment
Describe the following:

Initially there will not be any licensing or bonding needed, however, as soon as we have employees
and have contracts we will need to get bonded.

We are going to get Made in Montana certification and research the possibility of getting Organic
Certification.

There are not many regulations on greenhouses; however, we plan to work with OHSA to ensure
that our greenhouse is a safe work environment. We are also planning on tools and equipment that
will help us maintain an ergonomic friendly environment.
Page 25 of 36

We will need to get crop insurance, along with home owners insurance, and vehicle insurance. In
addition we will need to get insurance to cover the company in case we are sued for any reason (i.e.
an umbrella policy). We will work with State Farm to identify our needs and find insurance that will
cover the company.
Personnel

Initially, we will need to hire two part-time employees to work in the greenhouse, and we will hire
additional employees over the third and fourth year based on need.

Employees working in the greenhouse will be unskilled. In the future, as the number of employees
increase we will need to hire additional support staff for account and human resources, which will
need to be skilled employees.

Our first source of personnel will be locals who live around White Sulphur Springs. If we find that
White Sulphur Springs does not offer enough quality employees, we will advertise in towns close to
White Sulphur Springs, with offers to cover the cost of a basic apartment in White Sulphur Springs
for a set amount of time. We will offer internships to college students who are working toward
agriculture based degrees, and if they work out as interns we will offer them full time employment.
Eventually, we will need to find people who are interested in a career that will include management;
hopefully we will find people we can groom into these positions.

No existing staff.

All employees will be paid every other week, and the wages will be based on competitive wages for
similar employment. If needed we will allow for higher wages to attract quality employees if needed.

For employees working at the greenhouse, we will offer on the job training. We will document
procedures to ensure that the environment is maintained, and we will have color photo quality
printouts for important things to look for.

Initially, everyone will have to do any of the jobs they are qualified for. Eventually, we will define the
jobs and we will ensure the employees for those jobs receive training; however we will also ensure
that employees can get trained in other areas if they want to expand their knowledge.

Schedule will be Monday – Friday, 8 to 5, with flexibility for harvest days (i.e. we will harvest early in
the morning and go to the farmers markets. We will try to keep the employees at 40 hours a week or
less and will have paid time off for employees. In the future as the size of the greenhouses expand,
additional employees will be hired, and we will most likely do offset start times to ensure
productivity.

Job Description:
o
Greenhouse worker – Work with greenhouse management to plant and harvest produce
from the greenhouse.

Tasks and Responsibilities – Plant various produce, weed planters, inspect plants for
issues, harvest produce, clean/sanitize equipment, and monitor hydroponic reserves.
Page 26 of 36


No skills or experience required, just need to have a positive attitude and a
willingness to learn.

Hours will be 8 – 5 Monday – Friday, some off hours may be needed, will work with
the employee to work out these details when needed.
If we are experiencing production issues with the greenhouse, we will hire contractors from
established greenhouses to come help us identify the issues.
Inventory

Our inventory will be produce waiting to be shipped; however, we will try to ship produce the same
day it is harvested.

We should only have around $5,000 to $10,000 of produce ready to be shipped at a time.

We plan on turning over our entire inventory once or twice a week depending on grocery stores that
purchase our produce and farmers markets.

There will not be a way to order produce initially; however, if there is a demand, we will allow people
to reserve produce as it becomes available. If it is something we do not grow normally, then the lead
time will be months, however, if we do grow it the lead time should be days or weeks.

We will also have branded merchandise that we will need to store, display, and manage.
Suppliers
Identify key suppliers:


We will source seeds from various organic seed suppliers, there are several suppliers and we will need
to purchase seeds as they are available:
o
http://www.groworganic.com/seeds/bulk-seeds/bulk-vegetable-seeds.html
o
http://www.highmowingseeds.com/
o
There are additional organic seed suppliers in case we have issues with these suppliers.
Additional hydroponic supplies will be purchased as needed; however, initially we will get a bulk
shipment of the supplies to get a better price.
o
http://www.thermorock.com/perlite.htm
o
https://www.growerssupply.com/farm/supplies/cat1;;gs_seed_starting.html
o
http://www.conveyabull.com/westmt_materials.html
o
Additional suppliers will be identified based on need.
Page 27 of 36
We will need to have several suppliers to avoid delays to production, however, ideally we will be ordering
supplies early enough that we are not having to wait for deliveries.
Sometimes seed may not be available or will sell out quickly, so if we find something that does really good in
the greenhouse we will make sure to have it purchased when available and store the seeds. We will most
likely buy seeds in bulk and store them, for any seeds that do well in the greenhouse.
The cost of seeds fluctuates based on supply/demand and environmental impacts on the seeds. There are
several varieties of produce, so we can always consider growing another variety of produce if something is not
available.
Credit Policies

Typically, we will not provide produce on credit. We would only consider providing produce on
credit when we have a contract, i.e. we will invoice companies monthly and float the cost until they
pay the bill.

It is not customary to have produce sales on credit; however, we might consider offering some
produce for trade if needed.

We will only give credit to established businesses, and will require the business show that they have a
good history of paying bills. We will run a business credit search as well.

All credit will be defined in the contract, usually with an option to save 10% if paid in 10 days, and
non-payment will result in termination of deliveries.

All prices are based on wholesale prices, and we will be selling at retail prices, so we have room for
allowing discounts.
Our policy for dealing with slow-paying customers:

All invoices will need to be paid in 30 days, after 35 days we will call to verify that the invoice will be
paid.

At 40 days, all deliveries will be halted and another call will be made.

After 60 days, a letter will be sent and if the customer has not called to complain about the lack of
delivery, they will be tracked for non-payment and all future deliveries will be cash only.

A second letter will be sent after 90 days, and will let the customer know that we will turn the matter
over to our attorney after 120 days if they do not call to make arrangements to pay.

After 120 days, we will contact an attorney and try another letter first, then file a petition to recover
payment.
Page 28 of 36
When we get deliveries we will check for early payment discounts. If there is we will pay those off
immediately, if not, we will ensure we pay in full in the first 30 days. We will get operating loans and/or
business credit cards to make sure that we have credit available.
Page 29 of 36
VII. Management and Organization
Kevin Sage will manage the business on a day-to-day basis while there are less than 5 employees. As the
number of employees increase a greenhouse manager will be hired to help manage the employees. Kevin
brings the vision for the greenhouse and has done a majority of the research on what is needed and how to
make it a reality. Once the greenhouse is up and operating, Kevin will be documenting procedure manuals
and will create software to help track the greenhouse productivity. In addition to Kevin, Christine Witt will
also manage the business, and she will bring her years of experience working with people and her MBA.
After the business has been established, and initial employees have been trained, the business will be able to
continue operation without Kevin or Christine being part of day to day operations. If Kevin or Christine is
incapacitated the other one will step up and take on the additional responsibility, and if needed another
manager will be found.
Initially there will be less than 10 employees, and any employees will report directly to Kevin and Christine.
Include position descriptions for key employees. If you are seeking loans or investors, include
resumes of owners and key employees. We both have professional resumes available.
Professional and Advisory Support
List the following:

Board of directors – Kevin Sage, Christine Witt

Management advisory board - None

Attorney – Will find a business attorney in Great Falls or Helena.

Accountant – Will initially use an application like QuickBooks to track accounting needs. As we
grow we will hire an accounting firm.

Insurance agent – Will meet with a State Farm agent in Montana immediately after incorporating.

Banker – We will research banks that provide the best services for businesses. Most likely we will
find a bank that can offer us the most benefits.

Consultant or consultants/Mentors and key advisors – We will consult with other cold climate
greenhouse operators to get feedback on our plans. http://crmpi.org/consulting/ will be the main
consultant if they are available and interested.
Page 30 of 36
VIII. Personal Financial Statement
The owners of the business will not bring any personal financing to the business. The reason is that most
assets that could be used as collateral will be sold when moving to Montana. The first phase of the project
will be land purchase along with site prep and support buildings.
Page 31 of 36
IX. Startup Expenses and Capitalization
To create the estimates for the startup expenses, we researched the high end retail price of the various
components we need to get a starting range. Then we have been working with greenhouse manufacturers to
determine the estimated price of the complete greenhouse. The estimates for the site prep are probably the
most likely to be way off because there are so many variables when dealing with preparing site, and the only
way to get fairly accurate estimates is to have a company come to the site. We have contacted KirK, an
Engineering firm to work with us on site layout and water management issues. Once we purchase the land,
we will reach out to get more accurate estimates and to find the best rate, however, for the initial estimates;
we again found the high end of cost per square foot, or yard, to do the site prep. We have also added line
items to help cover cost overages, with extra wiggle room added on items that have a huge price range.
Any costs that come up prior to financing and moving forward with the project will be put on personal credit
cards, and an invoice will be created for the business to repay any significant costs prior to incorporation.
After incorporation, we are planning on getting a corporate credit card to cover small items that come up,
and will pay off those items as part of our financing. We will keep the credit card use to a minimum prior to
completion of the greenhouses, and then keep the use down to what we can pay off during the month. After
we start up the company, the credit card will be used to track expenses that are business related to keep
business expenses separate from person expenses.
Page 32 of 36
X.
Financial Plan
12-Month Profit and Loss Projection
See attached Profit-Loss-Projection - Startup.xls, the Year 1 worksheet estimates out the profit and loss for
the first year. The sales at the end of the year are a complete crap shoot and are dependent on us meeting the
other deadlines. Those sales are extremely modest and would not make or break the business plan, and that
also applies to the first few months of year 2. However, by April of year 2, we need to be on target to make
year 2 a success.
In addition, see attached ProduceOutput.xlsx, this is the worksheets to estimate out the produce we plan on
growing, what we estimate to be the number of hydroponic rows we have for the various produce and the
amount of sales. This also includes the estimates for merchandise that will be part of our sales strategy. All
of the production numbers are best estimates based on research from sites such as:

http://www.highmowingseeds.com/

http://www.seedsofchange.com/home.aspx

http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateO&rightNav1
=ViewU.S.TerminalMarketPriceReports&topNav&leftNav&page=FVMarketNewsTerminalMarketR
eportsMore

http://www.ams.usda.gov/AMSv1.0/fv

http://www.almanac.com/
Four-Year Profit Projection (Optional)
See attached Profit-Loss-Projection - Startup.xls, the Year 2 – 5 worksheets estimate out our four year profit
projections.
Projected Cash Flow
See attached Projected Cash Flow.xlsx, it details out the projected cash flow through the first five years.
Normal business will not involve credit, so the cash that we earn will come in during the same month. After
year 2, the cash flow will level out and we will be able to bring on more employees. Right now, we show a
significant cash reserve at the end of year 5, and in year 6, we will most likely have additional expenses, such
as additional Grodan purchase to replace plants that are starting to slow down on production. Extra cash
reserves will also be used to purchase additional rental cabins in the future, along with investing the cash
reserves to earn interest and save money for purchasing more land and greenhouses.
Page 33 of 36
End of First Year Balance Sheet
See attached End of First Year Balance Sheet.xls, this details the position of the company at the end of the
first year. We chose to do the end of first year balance rather than opening day balance, since a majority of
the money spent during the first year will go towards assets that we have available.
Break-Even Analysis
The Break-Even point is calculated as follows:
The fixed expenses for the company at the end of year 5 (when it is stabilized), will be $304,266.
The total variable expenses, for the produce, will be $20,760.
The total variable expenses, for the Merchandise, will be $8,308.
The total variable expenses, for the Rental Cabin will be $2,400.
The break-even point, across all of the revenue streams will be $335,734. The assumption is that between the
sales from the produce and the cabin rental, most of the revenue to break-even will be reached. The breakeven analysis takes into account the payroll expenses for 4 employees and the owners, along with the loan
payments.
The reality is that by itself, the greenhouse will barely cover its cost and we will need the addition revenue
streams to actually make money with the greenhouse.
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XI. Appendices
Include details and studies used in your business plan; for example:

Brochures and advertising materials – Planning on using the finished site are a big part of the
advertising, so this will be provided as we start to develop it. For now the advertising is done
through social media, and www.happyhillharvest.com

Industry studies – Our business depends on several industries, so we will get industry studies that
meet those needs.

Blueprints and plans – As the blueprints and plans are created we will provide these. We will plan on
providing them from the website as well.

Maps and photos of location – We will provide photos and conceptual illustrations as we have them
available.

Magazine or other articles – Throughout the business plan we have links to numerous sites and
articles about what we are doing.

Detailed lists of equipment owned or to be purchased – See attached Estimate.xlsx, the Startup Plan
worksheet details out the equipment that will be purchased. Other worksheets in this spreadsheet
were used to get us to this point.

Copies of leases and contracts – There will not be any leases at this point, and once we have
contracts drawn up we will provide a copy.

Letters of support from future customers – Great idea.

Market research studies – Most of the research was done from internet websites listed in the business
plan.

List of assets available as collateral for a loan – After phase one we will update this with assets
purchased during phase one, and the greenhouses along with the equipment in the greenhouses will
be assets that will be able to be used as collateral.
Page 35 of 36
XII. Refining the Plan
The generic business plan presented above should be modified to suit your specific type of business and the
audience for which the plan is written.
For Raising Capital
For Bankers

Bankers want assurance of orderly repayment. If you intend using this plan to present to lenders,
include:
o
o
o
o
o
The total amount of funds that we will need is $4,000,000.
See attached Estimate.xlsx, the Startup Plan worksheet details out the equipment that will be
purchased. In addition, the amount over the total in this worksheet will cover the first year
expenses.
This is to setup the greenhouses and additional buildings that are needed. The greenhouses
are the heart of the business.
From our estimated output per year, we are going to ask that we do not have to start paying
back the loans until after we are producing, which will be April 2017. Then at that point we
ask for making quarterly payments, since there will be chances for fluctuation, repaying
quarterly give us more flexibility in making sure we have the funds available, also it will give
us the ability to forecast any issues and work with the bank. Last, because of the amount, we
are asking for a 40 year term on the loan, unless the interest rate is low enough that we can
make the payment.
The collateral will be listed after phase one is completed.
For Type of Business
Manufacturing

Planned production levels – The planned production level for the greenhouse will vary over times,
we are going to spread out the propagation of the plants over several months, so that we can try to
have somewhat predictable output (i.e. higher output during the spring through fall).

Anticipated levels of direct production costs and indirect (overhead) costs—how do these compare
to industry averages (if available)? – Our production costs will be higher than comparable
greenhouses in more moderate climates, and will be higher than greenhouses that are used to extend
the growing season. We know this and we are designing systems that will help reduce those costs.

Prices per product line – Prices per produce is detailed out in ProduceOutput.xlsx.
Retail Business

Company image
Page 36 of 36

Pricing:
o
o

Explain markup policies.
Prices should be profitable, competitive, and in accordance with company image.
Inventory:
o
o
Selection and price should be consistent with company image.
Inventory level: Find industry average numbers for annual inventory turnover rate (available
in RMA book). Multiply your initial inventory investment by the average turnover rate. The
result should be at least equal to your projected first year's cost of goods sold. If it is not, you
may not have enough budgeted for startup inventory.

Customer service policies: These should be competitive and in accord with company image.

Location: Does it give the exposure that you need? Is it convenient for customers? Is it consistent
with company image?

Promotion: Methods used, cost. Does it project a consistent company image?

Credit: Do you extend credit to customers? If yes, do you really need to, and do you factor the cost
into prices?