Business Plan for
Carolinny Sprouts Ltd.
Agribusiness Venture Management
Commerce 492.3
Bill Brown & Marv Painter
November 29, 2000
Dean Hurd
Ryan Hunt
Chris Kinar
Corey Giasson
Carolinny Sprout’s History

Carolinny Sprouts Ltd. started in August of
1997.
The Owners and Team

Carolinny Sprouts Ltd. is a corporation owned by
a married couple, Carolyn and Randy Pilling.

Randy has worked in the retail food chain for 20
years, including being the manager of produce at
Harold’s I.G.A.

Carolyn has experience in the restaurant and food
industry, plus she has experience with the
office/clerical industry.
Human Resource Management
Job Descriptions
Plant Manager:
• Supervisor of all plant
employees;
• Seed scheduling,
product manufacturing,
product processing,
seed testing, and
shipping and receiving.
Assistant Plant Manager:
• Works closely with the
plant manager;
• Keeps up to date on
everyday operations,
including cleaning and
sanitation procedures.
Human Resource Management
Office Manager:
• All clerical duties, including the ordering of all
stock and supplies.
Assistant Business Manager:
• Not in effect until the 5th year of operations;
• A basic knowledge of all the office and plant
operations;
• Main “on the road” personnel
General Labourers:
• cleaning sinks, sweep floors, packing.
Organizational Structure
Co-Presidents
Randy & Carolyn
Pilling
Plant Manager
(1)
Office/Accounts
Manager
(1)
Assistant Plant
Manager
Assistant Business
Manager
(1)
(1)
General
Labourers
(8)
Employee Benefits
Salary
Wage Earning Employees
Employment Insurance 3.4%
Canadian Pension Plan 3.9%
Workers Compensation 2.9%
Medical/health.optical
Holiday
Pay
$800/yr
5.8%
Medical/health.optical $400/yr
Employee Salaries and Wages
Office/Accounts Manager - $37,000
Assistant Business Manager - $0 ($25,000 in year 5)
Plant Manager - $37,000
Assistant Plant Manager - $25,000
Full Time - $10.00/hour
Part Time - $8.00
Summer Student - $7.00
Past Performance
– Current Maximum Production
• 3000-4000lbs./week
– Supply sprouts through Sobey’s
• Garden Market IGA
– 200-300 cases/week
The Market


Little information about sales and
consumption
Correlation between healthy eating and the
consumption of sprouts
–  health =  sprout consumption

Baby Boomers reaching age of 50.
– longevity = healthy eating
Competition

Chinese Universal
– Winnipeg, Manitoba
– Only produce alfalfa and clover

Living Foods
– Camrose, Alberta
– Saskatchewan branch closed by Health Canada
Customers

Wholesalers
– Sobey’s, Federated Co-op, West Fair Foods

Retailers
– Privately owned grocery/convenience stores

Restaurants
– Sub shops, cafeterias, family dining, bar and
grills
Product

Nine Varieties
–
–
–
–
–
–
–
–
–
Alfalfa/clover
Radish
Radish Mix
Pure Broccoli
Broccoli Mix
Onion Mix
Pea Shoot
Sunflower
Lentils
Sales and Profit Objectives

Sales Objectives
– These estimates are based only on a steady sale of sprouts.
The amount of sprouts estimated to be sold each year with
no increase is 141,519lbs.

Profit Objectives
– This 5 year estimate is based on an inflation increase of
3.27%
–
–
2000
$793,075
2001
2002
$900,898 $930,358
2003
$960,780
2004
2005
$992,198 $1,024,643
Select
Markets/Product/Service Mix

Carolinny had recently received approval
from OCIA which makes it the only
approved organic sprout producer in Canada

Carolinny sprouts goal is to dominate the
sprout industry in the prairie provinces offer
to them a selection of sprouts.
Selling and Advertising

Demo In-Store
– This increases impulse buying
– Inform people about sprouts

Jacket Draw
– Encourages people to try the sprouts

Advertising
– Magazines directed toward wholesalers and restaurants

Tradeshows
– Lets their potential customers see what they have to offer
and get a taste
3. Seed
2. Seed
Sprout Production
Process
Germination
Weighing
1. Seed
Inventory
4. Tray
Spouter
8.
SortingDrum
 Rotary
7.
Sprouter

Tray Sprouter
5. Rotary
6.
Washing
Drum model
– homebuilt
Sprouter
– Cost $2,828/sprouter
• Proven reliability and efficiency
– Roto Tech sprouter from ISS
• On average it uses 80 gallons of
Seed
Freezer
• cost $14,500/sprouter
9. Packaging
waterDryer
per day
Centrifuge
12’x12’
• ability to wash,
soak, pre-sprout
• Used mainly for larger sprouting
and grow Already
own –Cyclone
Centrifuge System
10.
11. seeds
Wholesale
Restaurant
• on average itpreserve
consumes vigour
400
and
fromgermination
ISS– Pea, lentil, and sunflower
Inventory
Inventory
gallons of water
per day
• Estimated
Capacity=91-Kg/batch
•cost
$10,600/dryer
• Estimated capacity = 272Kg/batch
•dry 50-lbs of sprouts in 30
12.
Shipping
seconds
Drying
Business Floor Plan
12’x12’
Seed
Freezer
Germination
Table
Seed
Weighing and
Testing
Office Space
Rotary Drum Sprouters
Centrifuge
Wash Sinks
Dryer
Sorting and Packaging
Tables
Tray Sprouters
Packing Supplies
Storage
Water
Storage
Tanks
30’ x 30’
Cooler
Loading/Unloading
Bay
Loading Dock
Capital Cost of Expansion
Tray Sprouter
14,140
Delivery Truck
8,000
Rotary Drum Sprouter
58,000
Growing Trays
1,350
Cooler
16,500
Computer
1,200
Centrifuge Dryer
10,600
Water Tanks
1,620
35,000
Germination Supplies
1,242
Chiller
Tables
3,000
Weigh Scales
1,400
Metal Sinks
8,000
Plumbing
30,000
Pallet Jack
2,500
Installation
Electrical
Total = $205,552
3,000
10,000
Sprout Sanitation

Implement a Sanitation Program
– Clean with a bleach and water solution and double rinse
•
•
•
•
•
Table and sinks - end of everyday
Growing trays and germination pails - after every use
Tray spouter growing chamber - once a week
Rotary drum sprouter - after every use
Cooler and working area floors - every second day
– Employee Hygiene
• Wash hands before handling sprouts and equipment
• Employee breaks outside of work area
Financial Plan
Capital Cost
Equipment
Electrical
Installation
Plumbing
Working Capital
Total
$162,552
$10,000
$3,000
$30,000
$205,552
$83,232
$288,784
Financing Budget
Agri-Food Equity Fund
Shareholders Equity
Total
$120,000
$168,784
$288,784
AFEF
Shareholders
Equity
Loan Amortisation
AFEF will loan $120,000
- 16% interest rate
- for 8 years
Dividend Policy
Shareholders will receive dividend after cash
flow is greater than $50,000
200000
180000
160000
140000
120000
100000
80000
60000
40000
20000
0
Dividends
2001 2002 2006 2011 2016 2021
Net Working Capital
Accounts Receivable
Sprout Inventory
Accounts Payable
Total Net Working Captial
Average Days
2002
30
$ 74,046
5
$ 10,736
30
$ 8,218
$ 76,565
$
$
$
$
2021
136,463
18,439
15,145
139,757
Summary of Financial Results
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
2001 2002 2006 2011 2016 2021
Sales
Gross Profit
Net Income
Cost of Goods Sold
Expenses
Net Cash Flow to Equity
Liquidity
30
25
20
15
10
5
0
2001
2002
2006
2011
2016
Current Ratio
2021
Solvency
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2001
2002
2006
2011
Debt Ratio
2016
2021
Profitability
60%
$600,000
50%
$500,000
40%
$400,000
30%
$300,000
$200,000
20%
$100,000
10%
$0
0%
Return on Equity
52%
Net Present
Value
$544,773
Sensitivity Analysis
120%
100%
80%
60%
40%
20%
0%
Growth in Growth in
Selling Price Cost of
Seed
Best Case
Growth in Growth in
Quantity of Fixed Cost
Sales
Growth in Growth in Growth in
Variable
Cost of Wages and
Cost
Goods Sold Salaries
Base Case
Worst Case
Break-even Analysis
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
-20.0%
-40.0%
Quantity of Cost of Sprout Sprout Price
Sprout Sales
Seed
Charged
Cash Flow
Net Income
NPV
Summary