Transcript Natural Fertilizer final presentation

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
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Philosophy
 Focusing
on Saskatchewan
 Focusing on the environment in mind
 Trying to use our resources and
markets to the fullest
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Operations Plan
Organizational Structure
Board of
Directors
7 External,
1 Internal
Manager
Marketing
Department
Operations
Department
Secretary/
Treasurer
Bagging
Technicians
Shareholders
 Investors
 Manager

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Site Plan
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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
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Building Costs
Building Costs:
Cover-All
60,000
Office Building
20,000
Sasktel
500
Plumbing
6,000
SaskPower
300
Total Building Costs:
86,800
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The Facilities

Large shell type building for bagging
equipment and storage
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Equipment Costs
Equipment Costs:
Bagger
45,505
Screener
49,595
Scale
6,500
Total cost of equipment:
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103,600
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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
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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
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5,714
4,213
28,172
38,099
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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
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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
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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
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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.
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Questions??