5/15/2015AgEc Business Proposal

5/15/2015AgEc Business Proposal Outline  Overview of Business Planning  Operations Plan  Human Resources Plan  Marketing Plan  Financial Plan  Conclusion

5/15/2015AgEc Business Proposal Production Facility

5/15/2015AgEc Business Proposal Flow of Work

5/15/2015AgEc Business Proposal Average Business Week  About 11.7 L/ 15 minutes  L/ day  1 day/week on marketing  1 day/week on distribution  About 90,000 L/ year at maximum production capacity

5/15/2015AgEc Business Proposal Cost of Goods Manufactured

5/15/2015AgEc Business Proposal Cost of Goods Sold Beginning Inventory0 Cost of Goods Manufactured52,421 Cost of Goods Available for Sale52,421 Total Ending Inventory4,309 COST OF GOODS SOLD48,112

5/15/2015AgEc Business Proposal Human Resources Plan

5/15/2015AgEc Business Proposal Organizational Structure

5/15/2015AgEc Business Proposal Marketing Mix  Product  Promotion  Place  Price

5/15/2015AgEc Business Proposal SWOT Analysis StrengthsWeaknesses Human Resources  Education in ice cream production  Experience with product and customers  Ease of communication due to small work force  Prior knowledge of fruit processing  Seasonal labour will be difficult to gauge and rely on  Intense workload for employees Physical Resources  Land is already purchased  Fruit is grown in close proximity to processing facility  Facility located off of a paved road  Buildings and equipment need to be purchased which will come at a high cost  Freezer space will be an important part of the facilities but the company’s needs may change drastically over time Financial Resources  More land for building expansion is easily acquired  Transport costs are still minimal and done  Situated in lower tax assessed area  Cost split  Initial start-up costs will be large and take a large amount of capital  Seasonal labour wages will be difficult to gauge based on quality of work

5/15/2015AgEc Business Proposal SWOT Analysis OpportunitiesThreats  Need for premium ice cream in hotel and convention centers  Contracting product out during the slow season will reduce the effects of market flux  Need for this type of premium dessert product in special events market  Market trend in ice cream has been decreasing (Goff, 2007)  Competitors in the market will fight for the market to acquire  Contracts may be difficult to maintain year- round  Seasonal inventory needs to be stored until it is needed

5/15/2015AgEc Business Proposal Competitive Analysis of SK Ice Cream Producers

5/15/2015AgEc Business Proposal Customer Analysis of SK Ice Cream Buyers

5/15/2015AgEc Business Proposal The Opportunity “To explore a niche market in the Saskatchewan premium ice cream industry by positioning a company that provides a unique option allowing customers to tailor a signature ice cream brand to meet the needs of the menu at their locale.”

5/15/2015AgEc Business Proposal Marketing Budget

5/15/2015AgEc Business Proposal Financial Plan

5/15/2015AgEc Business Proposal Recommended Debt vs. Equity  75% Equity at $87,751 : 25% Debt at $16,249  Debt will be financed using a 7% interest rate  Reduces company’s risk  Increases IRR and NPV to be artificially high from original base case  IRR = 23.8%  NPV = $18,415

5/15/2015AgEc Business Proposal Risk Analysis Critical ValueBase CaseIRR=0%Allowable % Change Selling Price$2.99$2.6212% Production18,000L15,260L15% Labour$7,100$13,27787% Manager$7,200$33,978372% Marketing Salary$12,900$39,676208% Ice Cream Mix$14,400$21,15747% Fruit Expense$5,769$12,521117% Packaging$9,413$16,19872% Sales Revenue$53,820$45,62815%

5/15/2015AgEc Business Proposal Break-Even Analysis Break-Even Sales Price

5/15/2015AgEc Business Proposal Break-Even Analysis Break-Even Sales Quantity

5/15/2015AgEc Business Proposal Scenario Analysis Sales Price & Sales Quantity

5/15/2015AgEc Business Proposal Conclusions

5/15/2015AgEc Business Proposal Questions?