1. Ground-Maker™ A Product of Pound-Maker Agventures Ltd. AgEc 75.6 Capstone Final Presentation AgEc 75.6 Capstone Final Presentation Chad Nykolaishen Michael Wheeler Kristen Bestrop Sarah Eymann

2. Ground-Maker 2 Ground-Maker™  Ground-Maker™ is finished compost acquired from Pound-Maker  Has many advantages for soil improvement  Plans are to process 450 tonnes of compost/year

3. Ground-Maker 3 Philosophy  Focusing on Saskatchewan  Focusing on the environment in mind  Trying to use our resources and markets to the fullest

4. Ground-Maker 4 Where?  Small bagging and storage facility to be built near Pound-Maker  Compost will be hauled from Pound-Maker to our facility

5. Operations Plan

6. Ground-Maker 6 Organizational Structure Board of Directors 7 External, 1 Internal Manager Marketing Department Operations Department Bagging Technicians Secretary/ Treasurer  Shareholders  Investors  Manager

7. Ground-Maker 7 Site Plan

8. Ground-Maker 8 Floor Plan

9. Ground-Maker 9 Site Setup Land costs: (10ac) 3,750 Site Setup: Yard lights 2,000 Building86,800 Swage System 3,500 Electricity installation 25,000 Town water installation 14,300 Landscaping400 Total:135,750

10. Ground-Maker 10 Building Costs Building Costs: Cover-All60,000 Office Building20,000 Sasktel500 Plumbing6,000 SaskPower300 Total Building Costs:86,800

11. Ground-Maker 11 The Facilities  Large shell type building for bagging equipment and storage

12. Ground-Maker 12 Equipment Costs Equipment Costs: Bagger45,505 Screener49,595 Scale6,500 Total cost of equipment:103,600

13. Ground-Maker 13 Flow of Work Chart

14. Ground-Maker 14 Work Plan  Plan to operate year round with processing during certain months  Haul compost from Pound-Maker 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.

15. Ground-Maker 15 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

16. Ground-Maker 16 Costs of Goods Manufactured Direct materials Bags $4,784 5,714 Handling $930 Nutrient tests $500 Direct labor Part time baggers $3,9604,213 Overhead Variable Overhead $8,212 28,172 Fixed Overhead $19,960 Cost of good manufactured38,099

17. Ground-Maker 17 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

18. Ground-Maker 18 Working Capital A/R3,538 Raw Inventory0 Finished Inventory3,500 A/P13,839 Total:20,877

19. Ground-Maker 19 Capital Budget Summary Land 3,750 Building 86,800 Equipment 106,200 Working Capital 20,877 Total Capital Required217,627

20. Ground-Maker 20 Funding  Private and business investment  Loans  Possibility of Pound-Maker investing

21. Human Resources Plan

22. Ground-Maker 22 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.

23. Ground-Maker 23 Human Resources Plan Wages: Manager / Marketer 59,000 Secretary15,000 Baggers @ 3 people @ $11.00/hr 3,465 Employment Insurance 986 Canada Pension Plan1409 Workers Comp784 Total of wages:80,644

24. Marketing Plan

25. Ground-Maker 25 The Marketing Mix  Products & Services – composted beef cattle manure in bulk and 20kg bags  Pricing – competitive pricing - selling bags for $6.00/bag - selling bags for $6.00/bag - selling bulk for $225/tonne - selling bulk for $225/tonne  Promotion – promote locally - environmentally friendly - environmentally friendly - natural product - natural product  Place – based mainly in Saskatchewan through retail and direct sales

26. Ground-Maker 26 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

27. Ground-Maker 27 Competition - Bags Agricore – the real thing Lethbridge, AB 40L is equal to 18kg $8.98 NU- Grow Calgary/Ontario20kg$3.99 Green Leaf Olds, AB 20kg$3.68-$3.99 Wholesale $2.44 ***Prices shown are retail prices which may vary.

28. Ground-Maker 28 Competition - Bulk Lakeshore Garden Centre $24.99/cubic yard Retail Wilson’s Greenhouse $14-$15/cubic yard Own Use Agricore – the real thing 20 tonne truck delivered $600.00 ***Prices shown are retail prices which may vary.

29. Ground-Maker 29 Segmentation, Targeting and Positioning  Segmentation – environmentally friendly green thumb  Targeting – gardeners - green houses, landscapers - green houses, landscapers  Positioning – promote environmentally friendly products

30. Ground-Maker 30 S.W.O.T.  Human Resources Strengths - Ground-Maker does not require a large number of laborers Weakness - seasonality and location

31. Ground-Maker 31 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

32. Ground-Maker 32 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.

33. Ground-Maker 33 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

34. Ground-Maker 34 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 Ground-Maker will receive

35. Ground-Maker 35 Marketing Strategy  Select Markets/Products/Service Mix- competitive 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.

36. Ground-Maker 36 Marketing Plan Budget Marketing and Advertising : Traveling500 Cell phone480 Internet - Web page350 Flyers and pamphlets300 Trade shows3,000 Hotel1,200 Meals300 Business Cards100 Total$6,230

37. Ground-Maker 37 Selling Features  Saskatchewan made product  Natural fertilizer  Contains less weed seeds and pathogens than raw manure  Slowly releases nutrients

38. Financial Plan

39. Ground-Maker 39 Income Statement Sales Revenue: Bulk 22,500 Bags 119,000 Total 141,500 Cost of Goods Sold 34,599 Gross Margin 106,901  The quantity stays the same, but the inflation rate of 2.5% is added on to each year.

40. Ground-Maker 40 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

41. Ground-Maker 41 Risk Analysis  Over the next 10 years Ground- Maker is very stable with no extremes.  Internal Rate of Return is 26.2%  External Rate of Return is 19.2%

42. Ground-Maker 42 Worst, Base,& Best Case Scenarios VariableWorst CaseBase CaseBest Case Quantity of Sales 50%100%110% Average Selling Price 75%100%125% Average Trucking Costs 150%100%75%

43. Ground-Maker 43 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.

44. Questions??