Natural Fertilizer final presentation

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Natural Fertilizer
AgEc 75.6 Capstone Final Presentation
Chad Nykolaishen
Michael Wheeler
Kristen Bestrop
Sarah Eymann
Natural Fertilizer
 Natural
Fertilizer is finished compost
 Has many advantages for soil
improvement
 Plans are to process 450 tonnes of
compost/year
2
Philosophy
 Focusing
on Saskatchewan
 Focusing on the environment in mind
 Trying to use our resources and
markets to the fullest
Natural Fertilizer
3
Operations Plan
Organizational Structure
Board of
Directors
7 External,
1 Internal
Manager
Marketing
Department
Operations
Department
Secretary/
Treasurer
Bagging
Technicians
Shareholders
 Investors
 Manager

Natural Fertilizer
5
Site Plan
Natural Fertilizer
6
Floor Plan
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Site Setup
Land costs: (10ac)
Site Setup:
Yard lights
Building
Swage System
Electricity installation
Town water installation
Landscaping
Total:
3,750
2,000
86,800
3,500
25,000
14,300
400
135,750
Natural Fertilizer
8
Building Costs
Building Costs:
Cover-All
60,000
Office Building
20,000
Sasktel
500
Plumbing
6,000
SaskPower
300
Total Building Costs:
86,800
Natural Fertilizer
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The Facilities

Large shell type building for bagging
equipment and storage
Natural Fertilizer
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Equipment Costs
Equipment Costs:
Bagger
45,505
Screener
49,595
Scale
6,500
Total cost of equipment:
Natural Fertilizer
103,600
11
Flow of Work Chart
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Work Plan
Plan to operate year round with
processing during certain months
 Haul compost in fall
 Bag half of the product in the spring and
the other half in fall
 2 full time employees and 3 part time
employees.

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Cost of Goods Sold
 Beginning
finished goods inventory is
$0
 Cost of goods manufactured is
$38,099
 Cost of goods available for sale
$38,099
 Ending finished goods inventory
$3,500
 Costs of goods sold is $34,599
Natural Fertilizer
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Costs of Goods Manufactured
Bags $4,784
Direct labor
Handling $930
Nutrient tests $500
Part time baggers
$3,960
Overhead
Variable Overhead
$8,212
Fixed Overhead
$19,960
Direct materials
Cost of good
manufactured
Natural Fertilizer
5,714
4,213
28,172
38,099
15
Production and Inventories
Production of compost for bulk is
100 tonnes and for bags 350 tonnes
which is equal to 17,500 bags
 Average days inventory will be held
for 60 days
 Year ending inventory is equal to
$3500

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Working Capital
A/R
3,538
Raw Inventory
0
Finished Inventory
3,500
A/P
13,839
Total:
20,877
Natural Fertilizer
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Capital Budget Summary
Land
3,750
Building
86,800
Equipment
106,200
Working Capital
20,877
Total Capital Required
217,627
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Funding
 Private
and business investment
 Loans
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Human Resources
Plan
Human Resources
 Manager/Marketer-
to have a degree
in business management
 Secretary/Accountant- post
secondary diploma
 Baggers/Screeners- grade 10
education. Knowing how to work the
machines is more important.
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Human Resources Plan
Wages:
Manager / Marketer
59,000
Secretary
15,000
Baggers @ 3 people @ $11.00/hr
3,465
Employment Insurance
986
Canada Pension Plan
1409
Workers Comp
784
Total of wages:
80,644
Natural Fertilizer
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Marketing Plan
The Marketing Mix
Products & Services – composted beef
cattle manure in bulk and 20kg bags
 Pricing – competitive pricing
- selling bags for $6.00/bag
- selling bulk for $225/tonne
 Promotion – promote locally
- environmentally friendly
- natural product
 Place – based mainly in Saskatchewan
through retail and direct sales

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Opportunities and Threats
Opportunities
-growth in organic farming
-environmentally friendly
-contracts
-gardening industry is growing
 Threats
-how much product will be sold
-indirect competition is the greatest threat

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Competition - Bags
Agricore – the real
thing
Lethbridge, AB
40L is $8.98
equal
to
18kg
20kg $3.99
NU- Grow
Calgary/Ontario
Green Leaf
Olds, AB
20kg
$3.68-$3.99
Wholesale
$2.44
***Prices shown are retail prices which may vary.
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Competition - Bulk
Lakeshore Garden
Centre
$24.99/cubic yard
Retail
Wilson’s Greenhouse
$14-$15/cubic yard
Own Use
20 tonne truck
delivered $600.00
Agricore – the real
thing
***Prices shown are retail prices which may vary.
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Segmentation, Targeting and
Positioning



Segmentation – environmentally friendly
green thumb
Targeting – gardeners
- green houses, landscapers
Positioning – promote environmentally
friendly products
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S.W.O.T.
Human Resources
Strengths
- does not require a large number of
laborers

Weakness
- seasonality and location
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S.W.O.T.
Physical Resources
Strengths
- located by the supplier
- deals with a large company
- only large scale operation in
Saskatchewan *
Weakness
- climate only allows the company to
operate during certain months due to
cold

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S.W.O.T
Financial Resources
Strengths
- lower over head
- inventory level is low in off
season.
Weakness
- profits are based less on large
margins and more on volume
- pay out large dividends in the second
year.

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Market Analysis
On average a store sells around 400
bags a year
 61 garden centers in Saskatchewan
 14 landscaper companies in Saskatoon
 15 greenhouses in Saskatoon
 Potential for increased sales due to
increased environmental awareness and
Kyoto

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Marketing Strategy
 Sales
and Profit- receiving 20% on
selling of 450 tonnes across
Saskatchewan.
 Channels of Distribution- bags sold
retail and bulk will be sold direct.
 Pricing Policy- making 20% of the
price Natural Fertilizer will receive
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Marketing Strategy
 Select
Markets/Products/Service Mixcompetitive market, consisting of
peat moss and chemical fertilizers
 Selling and Advertising –
– advertising through a web page, flyers,
& pamphlets.
– marketing manager will be traveling
around promoting the product.
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Marketing Plan Budget
Marketing and Advertising :
Traveling
500
Cell phone
480
Internet - Web page
350
Flyers and pamphlets
300
Trade shows
3,000
Hotel
1,200
Meals
300
Business Cards
100
Total
$6,230
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Selling Features
 Saskatchewan
made product
 Natural fertilizer
 Contains less weed seeds and
pathogens than raw manure
 Slowly releases nutrients
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Financial Plan
Income Statement
Sales Revenue:
Bulk
Bags
Total
22,500
119,000
141,500
Cost of Goods Sold
Gross Margin
34,599
106,901

The quantity stays the same, but the
inflation rate of 2.5% is added on to each
year.
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Year One Cash Flow
 Cash
from (used in) operating
activities $42,218
 Cash from (used for) financing
activities $257,597
 Cash from (used for) investing
activities $241,950
Natural Fertilizer
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Risk Analysis
 Over
the next 10 years, very stable
with no extremes.
 Internal Rate of Return is 26.2%
 External Rate of Return is 19.2%
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Worst, Base,& Best Case
Scenarios
Variable
Worst Case Base Case
Quantity of 50%
Sales
Average
75%
Selling
Price
Average
150%
Trucking
Costs
Best Case
100%
110%
100%
125%
100%
75%
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Dividend Policy
 Dividends
are paid out when cash
available exceeds 1.5 times the cash
required for the following year.
 Dividends start being paid out in the
second year.
Natural Fertilizer
42
Questions??
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