Hydroponics Farm Business Plan

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Fynbos Farm
Table of Contents
Executive Summary 1
Chart: Highlights........................................................................................................................2
Keys to Success...............................................................................................................................2
Mission............................................................................................................................................3
Company Summary 3
Start-up Summary............................................................................................................................3
Table: Start-up.............................................................................................................................4
Chart: Start-up............................................................................................................................7
Company Locations and Facilities...................................................................................................7
Products 8
Product Description.........................................................................................................................8
Market Analysis Summary 9
Market Segmentation.......................................................................................................................9
Chart: Market Analysis (Pie).....................................................................................................11
Table: Market Analysis..............................................................................................................11
Target Market Segment Strategy...................................................................................................12
Industry Analysis...........................................................................................................................12
Competition and Buying Patterns..................................................................................................12
Competition...............................................................................................................................12
Buying Patterns.........................................................................................................................12
Strategy and Implementation Summary 13
Competitive Edge..........................................................................................................................13
Sales Strategy.................................................................................................................................13
Sales Forecast...........................................................................................................................14
Table: Sales Forecast................................................................................................................15
Management Summary 15
Management Team.........................................................................................................................15
Management Team Gaps...............................................................................................................15
Personnel Plan...............................................................................................................................16
Table: Personnel........................................................................................................................16
Financial Plan 16
Important Assumptions..................................................................................................................17
Nature of Operations.................................................................................................................17
Revenues....................................................................................................................................17
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Fynbos Farm
Expenses....................................................................................................................................17
Table: General Assumptions......................................................................................................17
Projected Cash Flow......................................................................................................................17
Chart: Cash...............................................................................................................................18
Table: Cash Flow......................................................................................................................19
Break-even Analysis......................................................................................................................20
Chart: Break-even Analysis.......................................................................................................20
Table: Break-even Analysis.......................................................................................................21
Projected Profit and Loss...............................................................................................................21
Chart: Profit Monthly................................................................................................................21
Chart: Profit Yearly...................................................................................................................22
Chart: Gross Margin Monthly...................................................................................................22
Chart: Gross Margin Yearly......................................................................................................23
Table: Profit and Loss...............................................................................................................24
Projected Balance Sheet................................................................................................................24
Table: Balance Sheet.................................................................................................................25
Business Ratios..............................................................................................................................26
Table: Ratios..............................................................................................................................26
Appendix i
Sales Forecast (With Monthly Detail)..............................................................................................i
Personnel (With Monthly Details)...................................................................................................ii
General Assumptions (With Monthly Detail).................................................................................iii
Profit and Loss Statement (With Monthly Detail)..........................................................................iv
Cash Flow Statement (With Monthly Detail)..................................................................................v
Balance Sheet (With Monthly Detail) vi
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Fynbos Farm
Executive Summary
Introduction
FynbosFarm will be a project built around a highly successful businessman and the development
and training of skilled and semi-skilled staff in the hydroponics and instant turf market. The
project aim is to carry out intensive and high turnover production, off a small area, while
providing work and leadership experience for local women.
The company is a combination of cutting edge, high quality, efficient food technology and
production. It is committed to the improvement of taste in vegetables and excellent quality and
nutritional value. The company will provide education, experience and research in the
hydroponic field. It has the experience and extensive knowledge of well-known grower Mike
Shelly as a consultant. This project will be KZN-based, and will supply vegetables for the
national and international markets, and instant turf for the local market.
Products
The 4 main crops to be grown will be instant turf, long life tomatoes, cucumbers, and coloured
peppers.
 Tomatoes: 4ha under plastic which will produce 2100 000 kgs per year
 Cucumbers: 1ha under plastic which will produce 205 000 kgs per year
 Peppers: 1ha under plastic which will produce 250 000 kgs per year
 Turf: 30ha in the open.
Financial considerations
The company is seeking both short-term and long-term funding to finance the purchase of a new
farm and development costs of the project. This will cover startup expenses and first year loses.
It is estimated that the company will begin to make a profit in year 2 of operations. The project is
expected to begin production within 8 months from start of the first tunnel being erected.
Chart: Highlights
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Keys to Success
The keys to success will be:
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Fynbos Farm
 Store design that will be both visually attractive to customers, and designed for fast and
efficient operations.
 Employee training to insure the best coffee preparation techniques.
 Marketing strategies aimed to build a solid base of loyal customers, as well as
maximizing the sales of high margin products, such as espresso drinks.
Mission
Farmers Group is an Alabama-based company, whose mission is to provide high quality,
nutritional, and flavorful vegetables and strawberries for consumption in both near and remote
regions of the United States. Additionally the company will provide high quality planting
materials for use nationwide.
Company Summary
Farmers Group is the buyout and merger of two successful vegetable farms. The idea behind the
business is to provide healthy and delicious vegetables and fruit to the public. In addition to
vegetables and fruits, the company plans to produce and market manure compost garden
amendment products.
Start-up Summary
 Projected revenues for Year 1 to Year 5 are $-40,000, $8,500, $50,000, $70,800 and
$82,500 respectively. Additionally the company estimates that once fully operational,
income per product, per annum would be as follows; vegetable ($50,000) manure
($20,000) and horticulture ($10,000).
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 The following chart and table summarize the start-up assumptions:
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $19,000
Facilities modification $300,000
Seed $600
Organic Herbicides/Pesticides $5,000
Consultants $25,000
Insurance $10,000
Research and development $25,000
Expensed equipment $250,000
Other $50,000
Total Start-up Expenses $684,600
Start-up Assets
Cash Required $245,400
Start-up Inventory $150,000
Other Current Assets $250,000
Long-term Assets $500,000
Total Assets $1,145,400
Total Requirements $1,830,000
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automatically.
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Fynbos Farm
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Fynbos Farm
Chart: Start-up
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Company Locations and Facilities

The farm is located in Calhoun county approximately 4.5 miles outside of Jasper.
The operation will utilize:
 One large greenhouse, enclosing the vegetable area.
 Horticultural greenhouse.
 Filters, water treatment devices.
 Backwash facilities.
 Outdoor vegetable facilities.
 Business office building.
An additional portion of the operation will be the manure composting facility. Local and regional
dairy operations have trouble with manure accumulations, and the company hopes to enter into
contracts in removing the manure. Farmers Group will then turn this into a saleable product. The
company plans to supply the region's nursery outlets with a top-quality, premium garden and soil
amendment product for area horticulture.
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CONFIDENTIAL - DO NOT DISSEMINATE. This business plan contains confidential, trade-secret
Fynbos Farm
Products
While at Mobile Farmers Vegetable Farm James Jackson, steadily used and experimented with
compost and fertilized with manure of different kinds. The most important things with manure
usage is to eliminate the viable weed seed drawback by thoroughly composting the manure, to
add enough cellulose on product to bring it to the proper ratio and to bring its water content to
proper levels. A properly composted manure product has no seeds that will germinate and
proliferate in it. Additionally, a properly composted manure product has something a chemically
formulated synthetic fertilizer does not have: enzymes. Enzymes are critical for producing a truly
nutritious and superior flavored product. Research has shown that the superior flavor of a fruit or
vegetable is closely related to vitamin content and folic acid content in green vegetables.
The state-of-the-art vegetable equipment starting up in the new location utilizes revolutionary
harvest designs that:
 Allow faster, longer growth
 Cut the harvest labor by over 80%
 Cut the harvest time and by so doing:
o Decrease loss in weight gain, and
o Eliminate weight loss from shock.
Product Description
Vegetables
Farmers Group's first line of production will be the green vegetable and red vegetable. During
the summer months Farmers Group will be growing carrots, romaine lettuce, leeks, red onions,
summer squash, and spinach. In the fall, production will center on pumpkins, winter squash,
globe beets and winter greens. With the growth of the popular organic food niche, and the federal
government's new organic labeling policy, Farmers Group will focus its produce on the
intermediate organic label. This means that approximately 70% of the food production process
will be organic and all foods produced by Farmers Group will be eligible for the "contains
organic ingredients" label. The company's farm will have a capacity sufficient to produce in
excess of 200,000 lbs. of vegetables per year.
Strawberries
The company's more technical horticultural aspects include efforts to utilize traditional and more
advanced plant technologies to produce new cultivars of crops such as strawberries and lima
beans with locally-adapted superior characteristics for the Gulf-South growing area. Flavor,
disease resistance, adaptability to green-house culture, fall and winter season production are
factors being combined in greens cultivation to tap into the $2.99 pint berry market of the fall
and winter.
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Fynbos Farm
Farmers Group's strategy is a combination of the two technologies during the cool winter months
which will allow the utilization of normally wasted space in the greenhouses for the high price
winter greens production. This will allow double cultivation of the greenhouses with almost no
additional heating necessary in this climate.
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Market Analysis Summary

At a time when eating has become a political statement, the government is paying up to $19
billion a year to subsidize commodity crops in a glutted global market. Federal officials say that
nearly 40% of all farm income now comes directly from government subsidies, and the farm bill
signed by President Bush this year will pay $190 billion over 10 years, which includes $83
billion in new spending. However, there are two market niches that are growing at an amazing
rate, the organic market and the simple farmers' market.
The organic market provides less than 2% of the nation's food supply and takes up less than 1%
of its cropland. But organic farms are flourishing as never before. Over the past decade the
market for organic food has grown by 15 to 20% and every year 40% of U.S.
consumers occasionally reach for something labeled organic. Sales for organic foods are
expected to top $11 billion this year. Conglomerates as big as Heinz and General Mills are now
launching or buying organic lines and selling them in mainstream supermarkets.*
With no subsidies and no middle men, farmers' markets have increased by 79% since 1994, to
3,137 markets in all 50 states, and the number of farmers who sell at them has more than tripled
to 67,000, the Agriculture Department has reported. About three million Americans a week now
get their fresh food directly from the farmers who grew it. "Right now, green markets are
growing faster than anything in agriculture," said Dr. Steven Blank, a farm economist at the
University of California at Davis and the author of three books on the subject.
These numbers, of course, represent a very thin slice of the big pie of national food. Farmers'
markets reported about $1 billion in sales last year, compared with more than $200 billion in
overall farm revenue. Barely 3% of the nation's two million farmers sell some of what they grow
directly to consumers.
But in an era of big-box food stores, when 10 major grocery chains control the purchase of 50%
of fresh food, the proliferation of open-air markets has come out of nowhere, giving more
consumers an option and allowing many small farmers to stay in business.**
With these trends in mind, Farmers Groups will concentrate on:
 Wholesale live vegetable markets nationwide that sell organic produce.
 Fresh farmers' markets.
 Fall and winter greens market.
 Nursery outlets selling composted manure.
*Source: Certified Organic Geoffrey Cowley NEWSWEEK September 30, 2000.
**Source: Farmers Markets Booming Across US Timothy Egan New York Times, September 29,
2000.
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Fynbos Farm
Market Segmentation
The target customers include oriental vegetable markets demanding organic and semi-organic
green vegetables, vegetable processors, and private individual buyers through direct selling and
farmers markets. The company will continue to service the existing customers of the purchased
vegetable farms. In its greens production the company will target virtually all main food outlets.
The company plans to use the Internet as one of its marketing channels in the future.
The company's target customers will be as follows:
Vegetables:
 Oriental vegetable markets demanding organic and semi-organic vegetables.
 Vegetable processors.
 Alabama National Guard.
 People approaching the farm.
 Roadside stands and farmers' markets.
Product-Bagged Manure:
 Nursery and Garden Centers.
 Private customers approaching facility.
 Bulk customers.
The company will also take over customers from the previous owner of the vegetable facility.
Farmers Group has an established list of present customers of Errol Grynthum's vegetable farm,
which is a major asset to the sales of the company.
Alabama is one of the premier farming areas of the eastern United States. This creates an
intensely competitive environment with a large number of industry participants. Since almost all
of the produce is considered to be commodities, and large scale buyers are more consolidated
than the farmers themselves, overall margins are small and rivalries for wholesaler contracts are
strong. Competitive threats come from three main segments:
 Imported vegetables of lower quality.>
 Mississippi pound raised vegetables.
 Alabama vegetable producers.
Direct competition in the individual buyers market segment comes from three farms in the
immediate area including the Anniston farm, Organics-To-You farm, and the Terrance Livingston
vegetable farm. Each of these competitors has produce stands as well as selling to local farmers'
markets. However, with the exception of Organics-To-You Farm, none of the others focus on a
niche market and depend heavily on federal subsidies.
The Market Analysis Pie shown below reflects the total number of potential customers for
Farmers Group. The number of Oriental markets and vegetable processors represent national
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Fynbos Farm
estimates of industry participants, whereas the number of individual buyers represents the
estimated annual number of individuals that will be driving by the farm.
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Fynbos Farm
Chart: Market Analysis (Pie)
Year 1 Year 2 Year 3 Year 4 Year 5

Potential Growth CAGR
Customers
Vegetable 3% 5,000 5,150 5,305 5,464 5,628 3.00%
processors
Oriental 1% 25,000 25,250 25,503 25,758 26,016 1.00%
vegetable
markets
Individual 5% 300,000 315,000 330,750 347,288 364,652 5.00%
buyers
Total 4.68% 330,000 345,400 361,558 378,510 396,296 4.68%
automatically.
Target Market Segment Strategy

Farmers Group will initially market and supply its products to target customers. The company is
further exploring marketing opportunities on the Internet. To this extent, the company would like
to set up a website to market its products.
The company will utilize aggressive advertising strategies to further market its products. These
strategies include the promotion of products through the sponsoring of spots on cooking shows
and exhibitions, and also engaging prominent chefs to help promote this fledgling industry.
Industry Analysis
Alabama is one of the premier farming areas of the eastern United States. This creates an
intensely competitive environment with a large number of industry participants. Since almost all
of the produce is considered to be commodities, and large scale buyers are more consolidated
than the farmers themselves, overall margins are small and rivalries for wholesaler contracts are
strong. Competitive threats come from three main segments:
 Imported vegetables of lower quality.>
 Mississippi pound raised vegetables.
 Alabama vegetable producers.
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Fynbos Farm
Direct competition in the individual buyers market segment comes from three farms in the
immediate area including the Anniston farm, Organics-To-You farm, and the Terrance Livingston
vegetable farm. Each of these competitors has produce stands as well as selling to local farmers'
markets. However, with the exception of Organics-To-You Farm, none of the others focus on a
niche market and depend heavily on federal subsidies.
Competition and Buying Patterns

Competition
Farmers Group's main competitive advantages are:

 Efficient production utilizing greenhouses.
 Reduced overhead by fully realizing crop output potential and economies of scale
through joint costs.
 Knowledge due to research since 1988.
Buying Patterns
The company sets its pricing based on market rates as far as vegetable products are
concerned.
Farmers Group's pricing for strawberries will exceed the average market price for the
following reasons:
 Taste sampling at outlets will be encouraged.

 Unparalleled flavor superiority will addict greens tasters.
 Promotion of pesticide-free, fumigant-free cultural techniques of soil, environment,
ozone, and health-friendly production techniques.
Strategy and Implementation Summary

Farmers Group will initially market and supply its products to target customers. The company is
further exploring marketing opportunities on the Internet. To this extent, the company would like
to set up a website to market its products.
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Fynbos Farm
Competitive Edge
The Farmers Group will utilize aggressive advertising strategies to further market its products.
These strategies include the promotion of products through the sponsoring of spots on cooking
shows and exhibitions, and also engaging prominent chefs to help promote this fledgling
industry.
Sales Strategy
At Farmers Group, the sales process is primarily the same for vegetables as it is for composting
products, in that both products will be mainly sold through wholesale marketing. As in the past,
live shipments will be delivered by contract carriers in special oxygenated tanks carrying 8,000
vegetables or more, and will be continued as demanded. Farmers Group's bagged manure
products will be delivered and unloaded in sizable wholesale quantities by the pallet.
Smaller, more local orders will significantly increase the overall sales when the 300-450 live
vegetables carrying tank system is put into service late in 2000 or early in 2001.
The company's average sales cycle from first contact to closing of the sale is approximately 3 to
12 days for vegetable products. Farmers Group plans to shorten this cycle. Furthermore, the
company estimates that from first contact to sale conclusion, the cycle for fresh strawberries will
run 3 days or less. Composted products sale cycle should run from 3 to 12 days.
Direct sales contacts of vegetable markets by delivery personnel, as well as cold calling by
telephone of potential market outlets, will also be employed.
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Fynbos Farm
Sales Forecast
Chart: Sales Monthly
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Chart: Sales by Year
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Table: Sales Forecast
Sales Forecast
Sales
Sales $575,000 $700,000 $850,000 $889,100 $927,331
Other $0 $0 $0 $0 $0
Total Sales $575,000 $700,000 $850,000 $889,100 $927,331
Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5

Sales $391,000 $478,100 $578,850 $601,032 $627,803
Other $0 $0 $0 $0 $0
Subtotal Direct Cost of $391,000 $478,100 $578,850 $601,032 $627,803
Sales
Management Summary
Farmers Group's management team is led by Mr. James Jackson, Business Manager, and the
current manager of Mobile Farmers Vegetable Farm, who has extensive knowledge of the
industry and has been tracking vegetable trends for 30 years.
The company's management philosophy is based on responsibility and mutual respect. Farmers
Group has an environment and structure that encourages productivity and respect for customers
and fellow employees.
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Fynbos Farm
Management Team
Management
Management will be responsible for supervising and participating in the daily operations of the
facility. Management consists of:
 James Jackson, Business Manager, Full Time
 Terry Howard, Executive Director, Full Time
 Kevin Perry, Management Trainee, 3/4 Time
 Victor Green, Management Trainee, 1/4 Time
Management Team Gaps

Despite the owners' and manager's experience in the definitely industry, the company will retain
the additional and consulting services for the following work:
Daily Maintenance
This group will consist of the following:
 Henry Jones, Logistical Engineer, Full Time
 Colin Henry, Heavy Equipment, Full Time
 Michael Owen, Welder, 1/2 Time
Contract Personnel
They will be utilized initially for the moving and setting up of the vegetable farm, greenhouses,
and the building of the manure composting facility.
Personnel Plan
The table below outlines the personnel needs of Farmers Group's company.
Table: Personnel
Personnel Plan
Business Manager $25,000 $30,000 $30,000 $30,000 $30,000
Executive Director $25,000 $30,000 $30,000 $30,000 $30,000
Manager Trainee $9,000 $6,000 $6,000 $6,000 $6,000
Manager Trainee $4,000 $6,000 $6,000 $6,000 $6,000
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Fynbos Farm
Logistic engineer $18,000 $18,000 $18,000 $18,000 $18,000

Heavy equipment $18,000 $18,000 $18,000 $18,000 $18,000
Welder $3,500 $3,000 $3,000 $3,000 $3,000
Contract workers $15,000 $0 $0 $0 $0
Total People 7 7 7 7 7
Total Payroll $117,500 $111,000 $111,000 $111,000 $111,000
automatically.
Financial Plan
The company is seeking to raise of $830,000 for the purpose of financing the acquisition of the
Green Acres Vegetable Farm and Mobile Farmers Vegetable Farm, facilities modifications,
equipment, and funding operating expenses. Another $1,000,000 will be invested in the company
by its four co-owners. The following is a breakdown of how the funds will be used:
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Important Assumptions
Nature and Limitation of Projections
This financial projection is based on sales volume at the levels described in the sales
forecast section and presents, to the best of management's knowledge, the company's
expected assets, liabilities, capital, and revenues and expenses. The projections reflect
management's judgement of the expected conditions and its expected course of action
given the hypothetical assumptions.
Nature of Operations
The company is in the business of vegetable farming, greens cultivation, and composting. The
company expects to be operating in 2000.
Revenues
The company's revenue is derived primarily from the sale of vegetables, strawberries, and
bagged composted manure products.
Expenses
The company's expenses are primarily those of salaries, utilities, and insurance costs. Other
expenses are based on management's estimates and industry averages.
Table: General Assumptions
General Assumptions
Plan Month 1 2 3 4 5
Current Interest Rate 7.00% 7.00% 7.00% 7.00% 7.00%
Long-term Interest Rate 7.00% 7.00% 7.00% 7.00% 7.00%
Tax Rate 20.83% 20.00% 20.83% 20.00% 20.83%
Other 0 0 0 0 0
Projected Cash Flow

The chart and table below contain the cash flow assumptions and projections for Farmers Group
during the first five years of plan implementation. Year 1 monthlies are presented in the
appendix.
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Fynbos Farm
Chart: Cash
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Table: Cash Flow
Pro Forma Cash Flow

Cash Received
Cash from Operations

Cash Sales $143,750 $175,000 $212,500 $222,275 $231,833
Cash from Receivables $431,250 $525,000 $637,500 $666,825 $695,498
Subtotal Cash from
$575,000 $700,000 $850,000 $889,100 $927,331
Operations
Additional Cash Received

Sales Tax, VAT, HST/GST
$0 $0 $0 $0 $0
Received
New Current Borrowing $0 $0 $0 $0 $0
New Other Liabilities
$0 $0 $0 $0 $0
(interest-free)
New Long-term Liabilities $0 $0 $0 $0 $0
Sales of Other Current
$0 $0 $0 $0 $0
Assets
Sales of Long-term Assets $0 $0 $0 $0 $0
New Investment Received $0 $0 $97,000 $0 $0
Subtotal Cash Received $575,000 $700,000 $947,000 $889,100 $927,331
Expenditures Year 1 Year 2 Year 3 Year 4 Year 5
Expenditures from
Operations
Cash Spending $117,500 $111,000 $111,000 $111,000 $111,000
Bill Payments $408,920 $525,422 $676,335 $686,874 $721,183
Subtotal Spent on
$526,420 $636,422 $787,335 $797,874 $832,183
Operations
Additional Cash Spent

Sales Tax, VAT, HST/GST
$0 $0 $0 $0 $0
Paid Out
Principal Repayment of $54,000 $100,000 $100,000 $25,000 $35,000
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Current Borrowing
Other Liabilities Principal
$0 $0 $0 $0 $0
Repayment
Long-term Liabilities
$0 $25,000 $25,000 $50,000 $50,000
Principal Repayment
Purchase Other Current
$0 $0 $0 $0 $20,000
Assets
Purchase Long-term Assets $0 $0 $0 $0 $0
Dividends $0 $25,000 $20,000 $10,000 $10,000
Subtotal Cash Spent $580,420 $786,422 $932,335 $882,874 $947,183
Net Cash Flow ($5,420) ($86,422) $14,665 $6,226 ($19,852)

Cash Balance $239,980 $153,559 $168,224 $174,450 $154,598
Break-even Analysis
The company's break-even analysis is given below.
Chart: Break-even Analysis
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Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even $36,974
Assumptions:
Average Percent Variable Cost 68%
Estimated Monthly Fixed Cost $11,832
Projected Profit and Loss

As the profit and loss table shows, Farmers Group expects a steady growth in profitability over
the next few years.
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Chart: Profit Monthly
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Chart: Profit Yearly
Chart: Gross Margin Monthly
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Chart: Gross Margin Yearly
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Table: Profit and Loss
Pro Forma Profit and Loss

Sales $575,000 $700,000 $850,000 $889,100 $927,331
Direct Cost of Sales $391,000 $478,100 $578,850 $601,032 $627,803
Other $10,000 $10,000 $10,000 $10,000 $10,000
Total Cost of Sales $401,000 $488,100 $588,850 $611,032 $637,803
Gross Margin $174,000 $211,900 $261,150 $278,068 $289,528

Gross Margin % 30.26% 30.27% 30.72% 31.28% 31.22%
Expenses
Payroll $117,500 $111,000 $111,000 $111,000 $111,000
Sales and Marketing and
$11,400 $11,100 $16,550 $15,300 $17,550
Other Expenses
Depreciation $0 $0 $0 $0 $0
Gas and Oil $2,040 $3,000 $3,000 $3,000 $3,000
Utilities $6,000 $6,000 $6,000 $6,000 $6,000
Insurance $5,040 $5,500 $5,500 $5,500 $5,500
Payroll Taxes $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0
Total Operating Expenses $141,980 $136,600 $142,050 $140,800 $143,050
Profit Before Interest and

$32,020 $75,300 $119,100 $137,268 $146,478
Taxes
EBITDA $32,020 $75,300 $119,100 $137,268 $146,478
Interest Expense $54,664 $47,845 $39,095 $32,095 $26,495
Taxes Incurred $0 $5,491 $16,668 $21,035 $24,996
Net Profit ($22,644) $21,964 $63,337 $84,139 $94,987

Net Profit/Sales -3.94% 3.14% 7.45% 9.46% 10.24%
28
Fynbos Farm
automatically.
Projected Balance Sheet

We project solid cash balance and net worth over the years of the plan.
Table: Balance Sheet
Pro Forma Balance

Sheet
Assets
Current Assets
Cash $239,980 $153,559 $168,224 $174,450 $154,598
Accounts Receivable $0 $0 $0 $0 $0
Inventory $55,760 $53,589 $64,243 $57,206 $60,112
Other Current Assets $250,000 $250,000 $250,000 $250,000 $270,000
Total Current Assets $545,740 $457,147 $482,467 $481,655 $484,710
Long-term Assets
Long-term Assets $500,000 $500,000 $500,000 $500,000 $500,000
Accumulated
$0 $0 $0 $0 $0
Depreciation
Total Long-term Assets $500,000 $500,000 $500,000 $500,000 $500,000
Total Assets $1,045,740 $957,147 $982,467 $981,655 $984,710
Liabilities and Capital Year 1 Year 2 Year 3 Year 4 Year 5
Current Liabilities
Accounts Payable $6,984 $46,427 $56,410 $56,460 $59,527
Current Borrowing $346,000 $246,000 $146,000 $121,000 $86,000
Other Current Liabilities $0 $0 $0 $0 $0
Subtotal Current
$352,984 $292,427 $202,410 $177,460 $145,527
Liabilities
Long-term Liabilities $400,000 $375,000 $350,000 $300,000 $250,000

Total Liabilities $752,984 $667,427 $552,410 $477,460 $395,527
Paid-in Capital $1,000,000 $1,000,000 $1,097,000 $1,097,000 $1,097,000

Retained Earnings ($684,600) ($732,244) ($730,280) ($676,943) ($602,804)
29
Fynbos Farm
Earnings ($22,644) $21,964 $63,337 $84,139 $94,987

Total Capital $292,756 $289,720 $430,057 $504,196 $589,182
Total Liabilities and
$1,045,740 $957,147 $982,467 $981,655 $984,710
Capital
Net Worth $292,756 $289,720 $430,057 $504,196 $589,182
automatically.
Business Ratios
The table below outlines the company's business ratios. The last column represents industry
average business ratios for Specialty Eating Places (SIC 5812).
Table: Ratios
Ratio Analysis
Year 1 Year 2 Year 3 Industry
Profile
Sales Growth n.a. 10.00% 10.00% 7.60%
Percent of Total Assets

Inventory 7.83% 6.13% 5.09% 3.60%
Other Current Assets 0.00% 0.00% 0.00% 35.60%
Total Current Assets 80.11% 86.41% 90.46% 43.70%
Long-term Assets 19.89% 13.59% 9.54% 56.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 14.31% 9.54% 7.13% 32.70%

Long-term Liabilities 7.40% 4.44% 2.54% 28.50%
Total Liabilities 21.71% 13.98% 9.67% 61.20%
Net Worth 78.29% 86.02% 90.33% 38.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 65.00% 65.00% 65.00% 60.50%
Selling, General & 47.94% 48.47% 47.37% 39.80%
Administrative Expenses
Advertising Expenses 2.26% 2.18% 2.26% 3.20%
Profit Before Interest and Taxes 23.27% 22.47% 23.85% 0.70%
Main Ratios
30
Fynbos Farm
Current 5.60 9.05 12.69 0.98

Quick 5.05 8.41 11.98 0.65
Total Debt to Total Assets 21.71% 13.98% 9.67% 61.20%
Pre-tax Return on Net Worth 62.87% 44.64% 37.71% 1.70%
Pre-tax Return on Assets 49.22% 38.40% 34.06% 4.30%
Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 17.00% 16.58% 17.62% n.a
Return on Equity 46.93% 33.48% 28.12% n.a
Activity Ratios
Inventory Turnover 10.91 10.26 10.39 n.a
Accounts Payable Turnover 11.25 12.17 12.17 n.a
Payment Days 27 30 29 n.a
Total Asset Turnover 2.16 1.74 1.44 n.a
Debt Ratios
Debt to Net Worth 0.28 0.16 0.11 n.a
Current Liab. to Liab. 0.66 0.68 0.74 n.a
Liquidity Ratios
Net Working Capital $177,858 $284,304 $408,334 n.a
Interest Coverage 48.16 62.07 104.13 n.a
Additional Ratios
Assets to Sales 0.46 0.58 0.69 n.a
Current Debt/Total Assets 14% 10% 7% n.a
Acid Test 5.05 8.41 11.98 n.a
Sales/Net Worth 2.76 2.02 1.60 n.a
Dividend Payout 0.00 0.00 0.00 n.a
automatically.
31
Fynbos Farm
Appendix
Sales Forecast (With Monthly Detail)
Sales
Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Coffee 0% $24,000 $27,000 $28,800 $28,800 $28,800 $28,800 $28,800 $28,800 $29,400 $31,200 $33,000 $33,000
beverages
Coffee beans 0% $6,000 $6,750 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,350 $7,800 $8,250 $8,250
Pastries, etc. 0% $10,000 $11,250 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,250 $13,000 $13,750 $13,750
Total Sales $40,000 $45,000 $48,000 $48,000 $48,000 $48,000 $48,000 $48,000 $49,000 $52,000 $55,000 $55,000
Direct Cost of Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Coffee $6,000 $6,750 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,350 $7,800 $8,250 $8,250
beverages
Coffee beans $3,000 $3,375 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,675 $3,900 $4,125 $4,125
i
CONFIDENTIAL - DO NOT DISSEMINATE. This business plan contains confidential, trade-secret information and is shared only with the
understanding that you will not share its contents or ideas with third parties without the express written consent of the plan author.
Fynbos Farm
Pastries, etc. $5,000 $5,625 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,125 $6,500 $6,875 $6,875
Subtotal $14,000 $15,750 $16,800 $16,800 $16,800 $16,800 $16,800 $16,800 $17,150 $18,200 $19,250 $19,250
Direct Cost of
Sales
Personnel (With Monthly Details)

Personnel
Plan
Manager 0% $2,917 $2,917 $2,917 $2,917 $2,917 $2,917 $2,917 $2,917 $2,917 $2,917 $2,917 $2,917
Baristas 0% $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167
Employees 0% $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300
Total People 7 7 7 7 7 7 7 7 7 7 7 7
Total Payroll $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383
Need to create your own financial tables? Tools like LivePlan will do this for you automatically.
ii
Fynbos Farm
General Assumptions (With Monthly Detail)

General
Assumptions
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Interest Rate
Long-term 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Interest Rate
Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
iii
Fynbos Farm
Profit and Loss Statement (With Monthly Detail)

Pro Forma Profit
and Loss
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Sales $40,000 $45,000 $48,000 $48,000 $48,000 $48,000 $48,000 $48,000 $49,000 $52,000 $55,000 $55,000
Direct Cost of $14,000 $15,750 $16,800 $16,800 $16,800 $16,800 $16,800 $16,800 $17,150 $18,200 $19,250 $19,250
Sales
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $14,000 $15,750 $16,800 $16,800 $16,800 $16,800 $16,800 $16,800 $17,150 $18,200 $19,250 $19,250
Gross Margin $26,000 $29,250 $31,200 $31,200 $31,200 $31,200 $31,200 $31,200 $31,850 $33,800 $35,750 $35,750
Gross Margin % 65.00% 65.00% 65.00% 65.00% 65.00% 65.00% 65.00% 65.00% 65.00% 65.00% 65.00% 65.00%
Expenses
Payroll $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383
Sales and $2,150 $2,150 $2,150 $2,150 $2,150 $2,150 $2,150 $2,150 $2,150 $2,150 $2,150 $2,150
Marketing and
Other Expenses
Depreciation $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450
Rent $0 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400
Rent $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Maintenance $400 $450 $480 $480 $480 $480 $480 $480 $490 $520 $550 $550
Utilities/Phone $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750
Payroll Taxes 15% $1,558 $1,558 $1,558 $1,558 $1,558 $1,558 $1,558 $1,558 $1,558 $1,558 $1,558 $1,558
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
iv
Fynbos Farm
Total Operating $16,191 $20,641 $20,671 $20,671 $20,671 $20,671 $20,671 $20,671 $20,681 $20,711 $20,741 $20,741
Expenses
Profit Before $9,809 $8,609 $10,529 $10,529 $10,529 $10,529 $10,529 $10,529 $11,169 $13,089 $15,009 $15,009
Interest and Taxes
EBITDA $10,259 $9,059 $10,979 $10,979 $10,979 $10,979 $10,979 $10,979 $11,619 $13,539 $15,459 $15,459
Interest Expense $248 $245 $243 $241 $239 $236 $234 $232 $229 $227 $225 $223
Taxes Incurred $2,868 $2,091 $2,572 $2,572 $2,573 $2,573 $2,574 $2,574 $2,735 $3,216 $3,696 $3,697
Net Profit $6,693 $6,273 $7,715 $7,716 $7,718 $7,720 $7,721 $7,723 $8,205 $9,647 $11,088 $11,090
Net Profit/Sales 16.73% 13.94% 16.07% 16.08% 16.08% 16.08% 16.09% 16.09% 16.74% 18.55% 20.16% 20.16%
Cash Flow Statement (With Monthly Detail)

Pro Forma Cash Flow
Cash Received
Cash from Operations

Cash Sales $40,000 $45,000 $48,000 $48,000 $48,000 $48,000 $48,000 $48,000 $49,000 $52,000 $55,000 $55,000
Subtotal Cash from Operations $40,000 $45,000 $48,000 $48,000 $48,000 $48,000 $48,000 $48,000 $49,000 $52,000 $55,000 $55,000
Additional Cash Received

Sales Tax, VAT, HST/GST 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Received
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
free)
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $40,000 $45,000 $48,000 $48,000 $48,000 $48,000 $48,000 $48,000 $49,000 $52,000 $55,000 $55,000
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations

Cash Spending $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383 $10,383
Bill Payments $728 $22,112 $29,845 $30,569 $29,450 $29,449 $29,447 $29,445 $29,474 $30,424 $32,727 $34,195
v
Fynbos Farm
Subtotal Spent on Operations $11,112 $32,496 $40,228 $40,952 $39,834 $39,832 $39,830 $39,829 $39,857 $40,808 $43,110 $44,578
Additional Cash Spent

Sales Tax, VAT, HST/GST Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Out
Principal Repayment of Current $275 $275 $275 $275 $275 $275 $275 $275 $275 $275 $275 $275
Borrowing
Other Liabilities Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment
Long-term Liabilities Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $11,387 $32,771 $40,503 $41,227 $40,109 $40,107 $40,105 $40,104 $40,132 $41,083 $43,385 $44,853
Net Cash Flow $28,613 $12,229 $7,497 $6,773 $7,891 $7,893 $7,895 $7,896 $8,868 $10,917 $11,615 $10,147
Cash Balance $95,736 $107,966 $115,462 $122,235 $130,127 $138,020 $145,914 $153,811 $162,679 $173,596 $185,211 $195,358
Balance Sheet (With Monthly Detail)

Pro Forma Balance
Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
10 11 12
Assets Starting
Balances
Current Assets
Cash $67,123 $95,736 $107,966 $115,462 $122,235 $130,127 $138,020 $145,914 $153,811 $162,679 $173,596 $185,211 $195,358
Inventory $16,027 $15,400 $17,325 $18,480 $18,480 $18,480 $18,480 $18,480 $18,480 $18,865 $20,020 $21,175 $21,175
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $83,150 $111,136 $125,291 $133,942 $140,715 $148,607 $156,500 $164,394 $172,291 $181,544 $193,616 $206,386 $216,533
Long-term Assets
Long-term Assets $59,170 $59,170 $59,170 $59,170 $59,170 $59,170 $59,170 $59,170 $59,170 $59,170 $59,170 $59,170 $59,170
Accumulated $0 $450 $900 $1,350 $1,800 $2,250 $2,700 $3,150 $3,600 $4,050 $4,500 $4,950 $5,400
Depreciation
Total Long-term $59,170 $58,720 $58,270 $57,820 $57,370 $56,920 $56,470 $56,020 $55,570 $55,120 $54,670 $54,220 $53,770
Assets
Total Assets $142,320 $169,856 $183,561 $191,762 $198,085 $205,527 $212,970 $220,414 $227,861 $236,664 $248,286 $260,606 $270,303
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
10 11 12
Current Liabilities
Accounts Payable $0 $21,118 $28,825 $29,587 $28,469 $28,467 $28,465 $28,464 $28,462 $29,335 $31,586 $33,092 $31,974
vi
Fynbos Farm
Current Borrowing $10,000 $9,725 $9,450 $9,175 $8,900 $8,625 $8,350 $8,075 $7,800 $7,525 $7,250 $6,975 $6,700
Other Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Subtotal Current $10,000 $30,843 $38,275 $38,762 $37,369 $37,092 $36,815 $36,539 $36,262 $36,860 $38,836 $40,067 $38,674
Liabilities
Long-term Liabilities $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Total Liabilities $30,000 $50,843 $58,275 $58,762 $57,369 $57,092 $56,815 $56,539 $56,262 $56,860 $58,836 $60,067 $58,674
Paid-in Capital $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000 $140,000
Retained Earnings ($27,680) ($27,680) ($27,680) ($27,680) ($27,680) ($27,680) ($27,680) ($27,680) ($27,680) ($27,680) ($27,680) ($27,680) ($27,680)
Earnings $0 $6,693 $12,966 $20,680 $28,397 $36,115 $43,834 $51,556 $59,279 $67,484 $77,130 $88,218 $99,308
Total Capital $112,320 $119,013 $125,286 $133,000 $140,717 $148,435 $156,154 $163,876 $171,599 $179,804 $189,450 $200,538 $211,628
Total Liabilities and $142,320 $169,856 $183,561 $191,762 $198,085 $205,527 $212,970 $220,414 $227,861 $236,664 $248,286 $260,606 $270,303
Capital
Net Worth $112,320 $119,013 $125,286 $133,000 $140,717 $148,435 $156,154 $163,876 $171,599 $179,804 $189,450 $200,538 $211,628
vii
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Hydroponics Farm Business Plan

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Sales Forecast (With Monthly Detail)..............................................................................................i

Personnel (With Monthly Details)...................................................................................................ii

General Assumptions (With Monthly Detail).................................................................................iii

Profit and Loss Statement (With Monthly Detail)..........................................................................iv

Cash Flow Statement (With Monthly Detail)..................................................................................v

Balance Sheet (With Monthly Detail) vi

 The following chart and table summarize the start-up assumptions:

Total Requirements $1,830,000

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Company Locations and Facilities

Market Analysis Summary

Chart: Market Analysis (Pie)

Year 1 Year 2 Year 3 Year 4 Year 5

Target Market Segment Strategy

Competition and Buying Patterns

Farmers Group's main competitive advantages are:

 Taste sampling at outlets will be encouraged.

Strategy and Implementation Summary

Chart: Sales Monthly

Chart: Sales by Year

Table: Sales Forecast

Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5

Management Team Gaps

Logistic engineer $18,000 $18,000 $18,000 $18,000 $18,000

Total Payroll $117,500 $111,000 $111,000 $111,000 $111,000

Table: General Assumptions

Projected Cash Flow

Table: Cash Flow

Pro Forma Cash Flow

Cash from Operations

Additional Cash Received

Expenditures Year 1 Year 2 Year 3 Year 4 Year 5

Additional Cash Spent

Net Cash Flow ($5,420) ($86,422) $14,665 $6,226 ($19,852)

Chart: Break-even Analysis

Table: Break-even Analysis

Monthly Revenue Break-even $36,974

Projected Profit and Loss

Chart: Profit Monthly

Chart: Profit Yearly

Chart: Gross Margin Monthly

Chart: Gross Margin Yearly

Table: Profit and Loss

Pro Forma Profit and Loss

Gross Margin $174,000 $211,900 $261,150 $278,068 $289,528

Total Operating Expenses $141,980 $136,600 $142,050 $140,800 $143,050

Profit Before Interest and

Net Profit ($22,644) $21,964 $63,337 $84,139 $94,987

Projected Balance Sheet

Pro Forma Balance

Liabilities and Capital Year 1 Year 2 Year 3 Year 4 Year 5