Caitlin Gobert Chris Thorson Brady Heatcoat Curtis Dunnington

Introduction SGP will be based out of Saskatchewan. SGP will be based out of Saskatchewan. The owner will operate the business out of his home. The owner will operate the business out of his home. Grain prices will be sent to local producers via text messages Grain prices will be sent to local producers via text messages Farmers will sign up and be charged a monthly fee for their monthly subscription Farmers will sign up and be charged a monthly fee for their monthly subscription

Objectives Get commodity prices to farmers on a daily basis via text messaging Get commodity prices to farmers on a daily basis via text messaging Will result in no phone tag Will result in no phone tag Prices come to producers rather than producers looking for prices Prices come to producers rather than producers looking for prices

Industry Overview Currently there is no other service like this in Canada Currently there is no other service like this in Canada There is a similar service through Farms.com in the USA. Farms.com only provides future prices from the CBOT. There is a similar service through Farms.com in the USA. Farms.com only provides future prices from the CBOT.

Operations Plan

Organizational Structure Owner/General Manager Part Time Marketing Rep/Accounting Potential Part Time Accounting Employee

Location/Site Plan SGP will be based out of SK SGP will be based out of SK The office will be the owner’s home The office will be the owner’s home 150 sq. ft office will be used 150 sq. ft office will be used

Work Plan/Flow of Work will receive commodity prices from cooperating companies will receive commodity prices from cooperating companies Daily prices will input into the database program before the daily deadline Daily prices will input into the database program before the daily deadline Text messages will be sent to subscribed customers Text messages will be sent to subscribed customers Subscriber’s information will also be put into the database Subscriber’s information will also be put into the database

Flow of Work Receive commodity prices from companies Enter information into computer database Sign up customers for the service Information processed and a text message is sent to customer

Average Business Cycles Daily activities will remain fairly constant from day to day Daily activities will remain fairly constant from day to day The business will be operating 5 days a week, 52 weeks of the year (stat holidays are an exception) The business will be operating 5 days a week, 52 weeks of the year (stat holidays are an exception) Each day the prices will be text messaged to the customers at a specified time Each day the prices will be text messaged to the customers at a specified time The marketing rep will also work to attract new customers and promote the company The marketing rep will also work to attract new customers and promote the company

Capital Budget has a fairly small start up cost has a fairly small start up cost The primary investment will be the cost of the database program The primary investment will be the cost of the database program Other costs include a computer and other office equipment, an accounting program, and office furniture Other costs include a computer and other office equipment, an accounting program, and office furniture

Capital Budget 2007 Computer Database Program/Website Setup $11,639 Laptop Computer$2,500 Fax machine/copier/scanner/Printer$150 Office Furniture$1,100 Accounting Software$400 Total$15,789

Cost of Sales Direct Expenses Website Fee$6,000 Direct Labor & Benefits 50% of manager’s salary & 50% of marketer’s salary$36,096 Overhead Costs Utilities$960 Phone 960 CCA2,313 Rent4,800 $8,033 Total Cost of Sales$51,129

Cash Conversion Cycle doesn’t have anything that will be inventoried doesn’t have anything that will be inventoried Customers will be billed on a monthly basis Customers will be billed on a monthly basis Some payables will be paid monthly and some will be paid cash on demand Some payables will be paid monthly and some will be paid cash on demand

Cash Conversion Cycle Days Average Days in Inventory1 Average Collection Period (Receivables)30 Average Days Payable13 Cash Conversion Cycle18

Human Resources

HR Plan- Job Descriptions Owner/General Manager Owner/General Manager Ensure that data is received and input before the daily cut off Ensure that data is received and input before the daily cut off Oversee other employees Oversee other employees Assist with data input Assist with data input Marketing Rep/Accounting Manager Marketing Rep/Accounting Manager Oversee all financial transactions Oversee all financial transactions Assist in data input Assist in data input Promotion/advertising for SGP Promotion/advertising for SGP

Labour Cost- Owner/GM Portion of Total PayPay Amount Total Pay100%46, Base Pay 42, Indirect Pay 4, Mandatory Benefits CPP4.95%2, EI1.95 % (up to 36,000) WCB1.20%1,730.40

Marketing Rep/Account Manager Portion of Total PayPay Amount Total Pay100%24, Base Pay 22, Indirect Pay 2, Mandatory Benefits CPP4.95%1, EI1.95% WCB1.20%905.60

Future Human Resources When it grows and the work load becomes too much for the current 2 employees a 3 rd may be hired When it grows and the work load becomes too much for the current 2 employees a 3 rd may be hired The potential 3 rd employee would be to assist the accounting manager in accounting activities and data input The potential 3 rd employee would be to assist the accounting manager in accounting activities and data input

Marketing Plan

Products and Services SGP will be marketing a service that provides customers a text messaging service. SGP will be marketing a service that provides customers a text messaging service. The service consists of grain prices from local elevators The service consists of grain prices from local elevators

Pricing Pricing will not have to be set at a competitive level as there is no direct competition Pricing will not have to be set at a competitive level as there is no direct competition Results from a survey we conducted suggests that farmers that would use the service are willing to pay $10-$15 per month Results from a survey we conducted suggests that farmers that would use the service are willing to pay $10-$15 per month $10 will get producers up to 5 prices and $15 will get up to 10 $10 will get producers up to 5 prices and $15 will get up to 10

Promotion will get interviews with local agricultural publications will get interviews with local agricultural publications Advertisements will be placed in local media Advertisements will be placed in local media Booth at local trade shows across the province will be purchased Booth at local trade shows across the province will be purchased

SWOT

Strengths Low capital cost Low capital cost Low human resource requirement Low human resource requirement Marketing Rep has extensive public relations knowledge Marketing Rep has extensive public relations knowledge

Weaknesses Lack of experience and knowledge of the market Lack of experience and knowledge of the market Unsure of the workload that the database program requires Unsure of the workload that the database program requires The GM has limited experience of managing a company of this nature The GM has limited experience of managing a company of this nature

Opportunities Potential to expand into other Western Canadian provinces if successful in Saskatchewan Potential to expand into other Western Canadian provinces if successful in Saskatchewan SGP has no direct competition SGP has no direct competition First mover of such a service First mover of such a service Expansion of service to include futures pricing is possible Expansion of service to include futures pricing is possible

Threats Very easy for other companies to enter the market Very easy for other companies to enter the market needs cooperation from grain companies needs cooperation from grain companies Aging population unaware of technology Aging population unaware of technology

Market Analysis

Analysis Past performance – Little to no info. on past history. Farms.com from the US. Text message future prices to customers. Past performance – Little to no info. on past history. Farms.com from the US. Text message future prices to customers. Market – Service will be sold to local farmers with the younger generation being the primary target. A survey was conducted to see if and what producers are willing to pay. Market – Service will be sold to local farmers with the younger generation being the primary target. A survey was conducted to see if and what producers are willing to pay. Competition – No direct competition, Farmers who have access to the internet may get prices for free online from grain companies. Competition – No direct competition, Farmers who have access to the internet may get prices for free online from grain companies.

Analysis (cont.) Target markets and Customers – Grain producers. Customers will have to subscribe on a monthly basis. Target markets and Customers – Grain producers. Customers will have to subscribe on a monthly basis. Product Features – Commodity prices send out 52 weeks per year at a specific time. Producers don’t have to look for prices they come to them. Product Features – Commodity prices send out 52 weeks per year at a specific time. Producers don’t have to look for prices they come to them. The opportunities – Great opportunity for producers who are on the go, they can receive prices while in the combine, tractor etc. Opportunity to expand if sufficient interest is developed. The opportunities – Great opportunity for producers who are on the go, they can receive prices while in the combine, tractor etc. Opportunity to expand if sufficient interest is developed.

Survey Results Total farmers surveyed 50 Total farmers surveyed 50 48% would use the service 48% would use the service 10% would not use the service 10% would not use the service The remaining 42% said maybe The remaining 42% said maybe 44% would spend $6-$10 on the service 44% would spend $6-$10 on the service 38% would be willing to spend $0-$5 38% would be willing to spend $0-$5 11% would spend $11-15 on the service 11% would spend $11-15 on the service 7% would be willing to spend $16-$20 on the service 7% would be willing to spend $16-$20 on the service

Segmentation Targeting and Positioning Segmentation – Prospective customers can be segmented in several categories such as Large, and small farms or Young 55 years of age. Segmentation – Prospective customers can be segmented in several categories such as Large, and small farms or Young 55 years of age. Targeting –will target the younger generation more than the older, and larger rather than smaller operations because of more commodities and busier lives. Targeting –will target the younger generation more than the older, and larger rather than smaller operations because of more commodities and busier lives. Positioning –has an advantage over Grain companies that have online access because producers can receive prices on the go. Also no computer is required for text messaging. Positioning –has an advantage over Grain companies that have online access because producers can receive prices on the go. Also no computer is required for text messaging.

Channels of Distribution Grain companies will submit commodity prices, who will then enter them into a database. Information from the database will then be sent out to subscribing producers. Grain companies will submit commodity prices, who will then enter them into a database. Information from the database will then be sent out to subscribing producers.

Marketing Strategy Selling and Advertising –will initially try and get interviews with local publications. SGP will also attend Trade shows to promote there service. Advertisements may also be placed in local Publications. Selling and Advertising –will initially try and get interviews with local publications. SGP will also attend Trade shows to promote there service. Advertisements may also be placed in local Publications. Marketing Plan Budget Marketing Plan Budget Publications (newspapers, etc)$3,000 Tradeshows$10,000 Total Marketing Budget$13,000

Financial Plan

Critical Variables 2 critical variables 2 critical variables Selling Price of the Service Selling Price of the Service Volume of Sales Volume of Sales Best Case (IRR~71%) Base Case Worst Case (IRR=0) Selling Price$145$120$77.17 Amount of Sales

SGP Financials IRR of 42.7% IRR of 42.7% ERR of 36.1% ERR of 36.1% 1 st year has a net loss, but other years have net income 1 st year has a net loss, but other years have net income No long term debt because SGP has no assets that can be used to secure a loan No long term debt because SGP has no assets that can be used to secure a loan All financing for the company is done through owner’s equity All financing for the company is done through owner’s equity

Conclusion This plan is based on the fact that it is not paying for the information received from the grain companies, provided the grain companies will even give out the information. This plan is based on the fact that it is not paying for the information received from the grain companies, provided the grain companies will even give out the information. If it can receive the prices, it has great opportunity for success throughout Canada. If it can receive the prices, it has great opportunity for success throughout Canada.