Simply Agriculture LLC | Application Preview
Simply Agriculture LLC is seeking government grants for their agricultural business, which focuses on sustainable, organic crop production. For the year 2022, the company primarily sold sprouts and microgreens at farmer's markets, averaging $200 in sales, while working on greenhouse construction. Other products like jams and syrups did see some sales, but several items such as honeys and powders are projected to enter the market in 2023.
In 2023, Simply Agriculture expects substantial growth with projected revenues of $7,400 from sprouts and microgreens, $2,390 from jams, and additional income from farm shares, honey production, syrup sales, and educational programs related to online teaching. The plan outlines specific crop production, sales strategies, and a budget for seeds, clam shells, and other supplies.
The business emphasizes community involvement, aiming to provide healthy food options and education on sustainable practices. Simply Agriculture's mission is to produce fresh, organic produce while minimizing environmental impact. The company aims to establish strong connections with local markets, co-ops, and restaurants, thereby meeting community demands for fresh food.
The management team, led by James Prusi, combines expertise in agriculture, business, and community outreach. The financial plan highlights a need for infrastructure investments, projected steady revenue growth, and a focus on maintaining high-quality products with a strong active botanical concentration. The proposal underscores the growing demand for organic, locally-sourced foods and outlines how Simply Agriculture plans to position itself within that market.
Simply Agriculture aims for financial viability and community support, representing a model for sustainable practices in agriculture, focusing on education, and contributing positively to local health and well-being. The business aspires to generate significant revenue while supporting local networks and reducing its carbon footprint through eco-friendly practices.
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General Information
Business Registration Number: 802638256
Location: Negaunee, MI, United States
Length of Operation: 1-5
Number of Employees: 1-10 Employees
Annual Gross Income: Less than $100k
Annual Gross Expense: Less than $100k
Open to Loans: YES
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Funding Usage
Crop Production and Sales January 1st, 2022, through December 31st, 2022 Sprouts and Microgreens Sprouts and Microgreens are sold in clam shells containing three ounces of product per shell. Sprouts in general, start with two tablespoons of seed that grow 12-14 ounces per grow container; three to five days later the product is ready to box and sell. Hydroponic microgreens also start with two tablespoons of seed per grow container but in general, take two weeks to grow before the product is ready for boxing and selling. We sell the product as follows: one shell for $4.00, two for $7.00 and three for $10.00. In 2022, we spent minimal time producing and selling product as we were focusing on greenhouse construction on land we are in the process of acquiring. We averaged $200.00 in sprout/microgreen sales at the farmer’s market occasion. Basil, Kale, Lettuce, Broccoli There were no sales of these products in 2022 as they are products of new markets available to us beginning in 2023. Jams We averaged $30 a month in jam sales through a company named Thistle (they stock our jam on their shelves). We averaged near $50 in sales at farmer’s markets per occasion. Syrup, Honey There were no sales of these products in 2022 as they are products of new markets available to us beginning in 2023. Sprout Powder There were no sales of these products in 2022 as they are products of new markets available to us beginning in 2023. Teaching Online My wife and I are both certified to teach English online and have worked with many different companies since 2018. Currently, we are contracted through Simply Agriculture LLC, EIN 88-1596201 (1099) by Ivy Plus LLC. In 2022, we received 23 payments totaling 9908.37. Projected Crop Production and Sales January 1st, 2023, through December 31st, 2023 Farmer’s Market Sprouts and Microgreens $7,400 income ($5,000) 1 year expense May through December, there are 25 available dates to sell product in Marquette and 12 dates to sell product in Negaunee. Selling product at every opportunity the market provides while keeping our average sales would allow for $7,400.00 in sales at Farmer’s Markets this year. To maintain this average, we will need a minimum of 150 ounces of sprouts and microgreens per date (50 clam shells at 3 ounces). To provide this, a minimum of 16 grow containers operating weekly (192 to 224 ounces). Jams $2,390 If the average sales of jam at the farmer’s market is maintained in 2023, expected income will be $1,850.00 annually. Our average sales of jam at Thistle have been increasing. We expect to average $45 per month, $540.00 annually. Seeds ($5,000) The weight of two tablespoons of seeds varies per species, though many of the seeds utilized are broccoli size/shape/weight, including, alfalfa, clover, basil, radish, cilantro and many more. The average weight of two tablespoons of broccoli seed is 0.0196 pounds: roughly 1020 tablespoons per ten pounds of seed. We purchase our seeds from True Leaf Market, organic, usually available in five-pound bags, over $60.00 per bag. The latest seed purchase (August 1st, 2022, consisted of 18 different species, size ranging from 1 pound – 25 pounds. The total weight was 61.5 pounds, and the total cost was $557, over $9 per pound of seed. Considering variety of 35 different species, the budget is $5,000.00 annually toward sprout and microgreen seed purchasing. Farm Share $12,000 income ($2,140) 1 year expense Our farm share will include bi-weekly meets with share members. Location of meetings for pickup are: 1, Marquette Commons Farmer’s Market, every other Saturday; 2, Miner’s Park, Negaunee Farmer’s Market, every other Wednesday; 3, Alluma Yoga in Marquette, every other Sunday, January through April. Annual membership expense is: 1, one-time payment of $300 annually; 2, $30.00 per month. Bi-weekly benefits include, but not limited to, 12 ounces of sprouts and microgreens, one pound of organic, hydroponic produce (pending second greenhouse construction), seasonal products when available (1 qt of maple syrup, 1 pound of honey, 1 eight- ounce jar of jam, 1 two-ounce container of sprout powder). We intend to market our target audience to maximize potential membership opportunity, though intend to support a maximum of 40 members during 2023. This gives us a revenue potential of $12,000 - $14,040, dependent on payment frequency. Clam shell expense is $32 per 125 clam shells from GFS. Farm share will utilize 4,160 clam shells annually and farmer’s market will utilize 1,850 clam shells annually. This is equivalent to 49 cases. $1,568 in clam shell expenses. Grow trays will also need to be purchased. One hundred 10”x20” trays without holes for $175 and one hundred 10”x20” trays with drain holes for $175. Jute fiber grow medium, two, 100 count packs at $110 each. These products will be purchased from https://trueleafmarket.com. Cherry Capital Foods $5,720 ($17,160 with added greenhouses) income (long-term $14,000 greenhouse expense) Is a company responsible for distributing local foods from the Upper Peninsula to Detroit, Grand Rapids and Traverse City on a bi-weekly basis. The company allows the farmer to choose the capacity of product distributed based on what is possible for the farmer. These totals are considered per greenhouse. There is only one greenhouse existing, the loan would include building two more greenhouses. Intending to provide 8 months of the year. Basil- Two pounds per month, $10.00 per pound, $20 per month, $160 annually. Kale- Forty pounds per month, $5.00 per pound, $200 per month, $2400 annually. Bibb Lettuce- Fifty pounds per month, $5.00 per pound, $250 per month, $3000 annually. Broccoli- Four pounds per month, $5.00 per pound, $20.00 per month, $160 annually. Total Cherry Capital Foods Income per greenhouse: $5,720 Maple Syrup $10,480 income (1 year $150 expense, long-term $1,300 expense) We will be harvesting sweet water from 175 old secondary growth Maple trees this spring. Research indicates 20-40 gallons of sweet water per tree (more likely on the higher end the first year the tree is tapped). Forty gallons of sweet water is equivalent to 1 gallon of syrup. If the average amount of collected sweet water is 30 gallons per tree, the total harvest will be 5,250 gallons, resulting in over 131 gallons of syrup. We will sell the syrup for $20.00 per quart. 524 quarts will garner $10,480 in 2023. To process this syrup two 55-gallon barrel maple syrup evaporators from Basset Maple Company will be purchased for $1000. Additionally, $150 is budgeted to purchase tapping and tree equipment. The evaporators will be fueled by downed trees on the property in which we are harvesting. Another $300 will be spent on processing, bottling, and storing the product. Birch Syrup $9,600 income There are over 100 birch trees on the property that will be tapped. Each tree is predicted to produce 30 gallons of sweet water. It takes nearly 50 gallons of sweet water to make one gallon of birch syrup. This will result in 60 gallons of syrup which will be sold $40 per quart. Birch income will be a minimum of $9,600 annually. Honey $3,200 income (Long-term expense $2,415, 1-year expense of $195) The 2023 honey start-up budget consists of purchasing two, three-pound packages of western honeybees for $500, two flow hives from honeyflow.com (each hive is $870.00), two $100.00 suits, one pair of $50 goatskin gloves, one Alexander vented veil for $25 and $195 for storage and containment. A healthy hives of western honeybees can produce 60-100 lbs. of honey annually. With two working hives, there will be roughly 160 pounds of honey. The honey will be sold for $20.00 per pound resulting in $3,200.00 annually. Sprout and Microgreen Powder $1,040 income ($1,500 1-year expense) According to https://www.emergenresearch.com, consumers are looking for sustainable, healthy, and organic solutions to relieve stress, improve their lifestyle and health and driving the rapid growth of the nutraceutical industry. Extra product is inevitable and to reduce waste there is an opportunity to dehydrate excess sprouts which creates plant-based powders. Simply Agriculture LLC is working with Jamie Rahrig, MSU Center for Reginal Food Systems to get nutrition labels made for the powder products. The budget consists of $1000 toward marketing the product, $500 for storage and the purchase of two more dehydrators. Simply Agriculture LLC is also an Amazon Business Seller, and we plan to market and sell the product through Amazon. The product is priced at $10 per two ounces. Based on the extra amount being grown to cover the potential sales at the farmer’s markets, there will be 12-24 boxes per week to dehydrate, or 36-72 oz. Twelve ounces of fresh product creates two ounces of powder, equivalent to 3 to 6 oz of powder per week. The projected income for this product is a minimum of $1,040 the first year. If the target market is reached successfully, we will grow specific to the product and meet the demand. Teaching online $9,900 income (Long-term expense $2,400) Simply Agriculture LLC has a regular schedule set for the year with Ivy Plus LLC. We will be paid $380 on a bi-weekly basis, totaling $9,900 for the year. I am currently utilizing a MacBook pro with macOS Catalina 10.15.07 from 2015, which is outdated. We are budgeting for a new MacBook pro laptop, Pro 16” with Apple M1 Pro chip and 16GB, on sale at BestBuy for $2,400. Potential Opportunities for 2023 Simply Agriculture LLC has many opportunities to work with local business regarding the products they grown and make. These markets are included below and have not been pursued at this time due to limited resources toward growing potential. Opportunities start with the Marquette Food Co-op as there is potential to list sprouts, microgreens and produce through their online platform to be pre-sold and delivered to the co-op biweekly. There are four health store/yoga studios located in Marquette County that have shown potential interest in stocking sprouts, microgreens, and powders. There are three Thai restaurants in Marquette interested in purchasing mung bean sprouts and Thai basil on a set schedule. Superior Culture, A local kombucha company has expressed interest in purchases hydroponic Thai basil grown by Simply Agriculture LLC. Lastly, fifteen, 45-gallon pots will be utilized to grow luffa sponge gourds. We will sell them at every farmer’s market occasion and include them in the farm share. Family Living Expenses ($4,600) Designating 10% of gross income for family use, according to Benchmarking Family Living Expenses in Agriculture, https://extension.iastate.edu is a safe approach. Projected gross income for 2023 is minimally $45,960, with a 10% of gross income at $4,600. Setting 10% aside for emergency family living expenses will be crucial in preventing interference with the set budget. Additional Long-Term Expenses Crop King 200-gallon aquaponic system Model # AQUHILM01, ($5,500) (x2) ($11,000). Z-Shade 12-Ft L Square Blue Pop-Up Canopy (x2) (Lowes item # 806329 Model # ZSB1212EVRBL (150x2) ($300).
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Business Plan
Not only is life on the farm our occupation, but also a place where we have created a series of avenues of approach that conveniently allow collaborations with one of our major business / life goals: To assist in providing food that enables healthy lifestyle choices while giving back through any means available to our local communities. Here at Simply Agriculture, we focus on healthy, low-environmental impact approaches on agriculture growing and farming techniques, to ensure the healthiest, organic produce growth; one really great way to give back to the community. We also focus on providing healthy, organic produce during the winter season while utilizing our greenhouse crop-rotation techniques. Mission Statement Simply Agriculture's mission is to produce and distribute fresh, organic produce, while being conscious of our environment and by serving as a low-impact, sustainable, educational, and social networking hub for our surrounding communities. We will achieve this mission through our CSA delivery involvement, Farmers’ Market produce sales opportunities, local store and vending clientele, local restaurants, and other community connections that continue to grow with the demand for fresh, local, organic produce. Executive Summary Simply Agriculture is a business proposition dedicated to the production of botanical perennials and organic produce grown hydroponically. Simply Agriculture is formed as a Michigan-based Limited Liability Corp. (L.L.C.) located in Negaunee, Michigan. Simply Agriculture will become a leading producer of botanical plants and organic produce for the natural supplement industry as well as plant nurseries by offering a fair industry approach toward supplying the community. Simply Agriculture focuses on community health and well being through organic gardening and holistic remedial medicinal practices. Our produce will be sold and distributed to local co-ops, food markets and vegetable stands in all shapes and forms , (i.e. food carts, stands, etc.) . By providing a certain amount of our produce to local establishments in need of support ( i.e. food shelters, school cafeterias, and other local supporting businesses). By leveraging a well thought out business plan executed by a skilled management team, Simply Agriculture will generate over $216,000 in year three sales. Simply Agriculture strives to be a one-of-a-kind agriculture company that not only encourages conservation of resources but also practices it within their community. Simply Agriculture is the future of social well being because of its ability to sustain healthy life styles while education and promoting the benefits of green living. Simply Agriculture is a new business that started in April of 2021. Our major focus of revenue is produce distribution and our target market is an expanding statistic on an exponential rate; mostly people who want good food. The demographics can be broken down and examined in many different ages, classes and psychographics, such as the Green Way of Life, or the Health-Conscious movement. The organic target market is dynamic and expanding in ways that have been making good food more affordable to lower income middle class families and commonly preferred by most fresh-food eaters.. Our avenues of approach regarding distribution are almost limitless as explained before, but we also want to focus on community education, commercial recreation and a relaxing escape for self-contemplation available to anyone looking for it. As I learned while earning my B.S. degree with a major in Recreation and Tourism (with a focus in Nature-based Tourism and Commercial Recreation while earning my minor in Adventure Tourism), nature, leisure and a healthy lifestyle are an ideal combination to aid in bringing a happy community together. These are ideas for expansion as our business progress allows. We will achieve an outreach in community education by offering gardening classes and educational interpretive programs regarding soil composition and growing techniques, what to grow when, etc. Commercial Recreation will be offered through different acquired specialties, such as acupuncture, yoga and sauna retreats, as for self-contemplation, all commercial recreational opportunities offer this opportunity. Presently, our major focus is wholesale produce. We are in need of finances for infrastructure, sustainable, low-impact farming equipment, payroll for our workers, food and equipment for our livestock and capital to allow us to purchase the land our farm is located on. Capital for Staffing Purposes: According to results of a resent study written by J. Hendrickson in his peer-reviewed journal named, Grower to Grower, Actual farm labor hours range from 933 to 2,994 hours per acre annually, with an average of just under 2, 000 hours. This study, which included over 13 different farms, resulted with a payroll average between 0 - 42% of gross sales annually. The avenues of sales approach within these 13 farms combine to be very similar to our distribution strategy and the farms are located in a climate similar to that of Negaunee, Michigan. At Simply Agriculture, our goals focus and depend on the productivity of our staff. While keeping Hendrickson's study in mind we have determined that a labor staff of one employee working 50 hours per week, 52 weeks a year, at a wage of $40.00 per hour, would be ideal for the topography, layout and acreage available on our farm for farming purposes. One staff member will cost Simply Agriculture $78,000 annually in pay. With benefits, personal holidays, vacation days, individual staff insurance, certifications, training and other miscellaneous cost to consider while providing work opportunity, we accurately find staffing costs to be approximately $100,000 annually. Infrastructure Keys to Success Simply Agriculture has identified three keys that will be instrumental in their success. The first is the implementation of strict financial controls . By having the proper controls, production efficiency will be maximized. The second key will be the never-ending pursuit for the industry's highest concentration levels of botanical ingredients in each plant while utilizing an organic approach. The third key is the recognition and implementation of the philosophy that 100% customer satisfaction is required to ensure a profitable business. Profits are a by-product of satisfying customers, not the other way around. Simply Agriculture is a very resourceful interdependent establishment that works for and depends on community members to take advantage of the opportunity in order for it to exist. It will take community awareness and contact to ensure our survival, such as: one, heavy local marketing within public areas; two, periodic consumer surveying and research; and three, consumer perks. Products Simply Agriculture is a ___ acre farm that concentrates on the growing of botanical medicinals and healthy organic produce. Simply Agriculture has chosen five plant species that have significant market demand as well being well suited for growth in the Midwest region of the United States. Simply Agriculture will feature: Echinacea - an immune system booster; Ginseng - a source of energy; St John's Wort - for mild depression; Skullcap- for inflammation; and Ginger - a stomach soother. These living plants will be our main focus toward botanical medicinals; we will also offer a variety of organic produce. Market Simply Agriculture has three distinct medicinal customers: supplement companies, processors of botanicals for supplement companies, and nurseries that resell the plants. The first two customers purchase the plants for use in their products that they ultimately sell to the end consumer. The market for natural supplements is quite exciting. Surveys show that over 158 million consumers (over 55% of U.S. population) use dietary supplements. An estimated 115.3 million consumers buy vitamins and minerals for themselves, and 55.8 million purchase them for other members of their family, including children. Consumer surveys consistently find that nearly half of all Americans now use herbs - a statistic that is particularly remarkable when we realize that today's herbal products industry is just over a quarter century old. Psychographics There has been a recent and steady growth in the Green Movement through individuals, communities and businesses. To market to the Green Movement effectively will be a crucial step in building the Simply Agriculture foundation of support. Many areas across the country house the mentality of a Green Movement but lack a physical presence (facility) to exercise this approach. In gaining the support of the Green Movement supporters, a word-of-mouth marketing phenomenon (whether it be intentional or unintentional) will be established throughout the community. Once established, the Green Movement followers and company (friends and family) will have an established facility to exercise the green lifestyle. In a user-friendly approach, we will also establish a compostable material schedule. Management Team Responsibilities of the owners include financial management of the company including accounts payable/receivable and payroll, conversant with new technologies that support renewable energy resources, over all decision-making in program development, community outreach. Simply Agriculture will be lead by the team of James Prusi. James brings a wealth of business and project management skills to the company, while working hands on. James is responsible for the successful growth and establishment of gardening fundamentals. Utilizing a range of skills including Construction and landscaping as well as several years of hands on horticultural experience, James will be the driving force of the operation, growing the highest active ingredient content plants in the country, he will also be responsible for the Plant biology and growth operations of the farm. James, with a background of business, marketing and management, will monitor business expenses and profit/loss ratios. Additionally, because of his wealth of knowledge through experience and education, he will be the leader of the sales department. Financial Plan Simply Agriculture began as a dream that allows the team to directly contribute in a positive manner toward Michigan’s lack of healthy food for children while also serving to the general public through the distribution process of high-end, fresh herbs and plants. Over the last year they have carefully worked out all of the bugs related to production. Additionally, they are now quite hungry to succeed, creating one of the premier botanical perennial farms in the country while also managing a small organic garden to feed local Co-ops, Farmer’s Markets and Food Carts. To finance our growth and full-time production, we need to purchase $95,000 worth of new equipment as long-term assets. To that end, we are seeking a $95,000 10. Sales forecasts conservatively indicate that $190,000 revenue will be generated in year two, rising to $216,000 the following year. 1.1 Objectives Simply Agriculture has identified several objectives for the business: Become a leading supplier of botanical perennials for the health/vitamin industry. Leading Negaunee Organic produce industry for local Co-ops, Farmers Markets and Food Cart Vendors. Reach the point of sustainable profitability. Offer produce at a subsidized price for Michigan residents in need. Enjoy work while making a good living. 1.2 Mission It is Simply Agriculture’s mission to become the leading provider of botanical perennials to the health/vitamin industry and a healthy contributor to local resources in need of supply for fresh, organic produce. This will be accomplished by providing quality plants at fair prices while exceeding customer's expectations. 1.3 Keys to Success Simply Agriculture will adhere to three keys that will be instrumental in its success: Strict financial controls. The never-ending pursuit of the highest concentration of botanicals in every plant. Ensuring that all customers’ needs are met and they are satisfied with the purchased products. To be an established farm that provides produce to our community on an annual basis, while providing work opportunity on our farm for 3 to 5 individuals. To utilize proper crop patterns, rotations and weather conditions to maximize harvest potential, while establishing the tools, shelters, processes and schedules needed to do so efficiently. To connect with other local farms, our neighbors, and establish a successful manure compost system that will feed our lands more healthy, fertile soil for future generations of agriculture. To be able to provide the healthiest foods for our direct nuclear families and our cherished neighbors on an annual basis as a means of a healthy lifestyle aid. Company Summary Simply Agriculture is an Oregon based perennial farm that grows a variety of botanical medicinal perennials. The company has been formed as an Michigan L.L.C. The farm has been in existence for two months now, initially operating as a hobby as rather than a profit producing business. 2.1 Company History in developmental stage Simply Agriculture is in its theoretical structure/ f has been in operation for two years. Initially it was started as a hobby where Susan could use her plant biology skills while covering some of the costs. The Nealon's were able to achieve this lifestyle due to a windfall that David received as a result of exercised stock options. After the second year, the Nealon's decided that although they had the money to live on for many years, it would be irresponsible to needlessly spend it so they got serious about the business and made a concerted effort to become profitable. Simply Agriculture has chosen the Willamette River Valley as an ideal place to grow perennials. Botanical Bounty has 10 acres of land which they use for production. During several of the winter months, production is moved into their green house for propagation. Botanical Bounty employs a drip irrigation system for all of the plants. 2.2 Company Ownership Simply Agriculture is an Oregon L.L.C. owned by James Prusi. The L.L.C. business formation has been chosen as a strategic way to shield James from personal liability. Products Simply Agriculture offers a range of botanical perennials (plants where the root structure remains, allowing the plant to regrow every year). Botanical perennials were chosen for two main reasons. The first is the medicinal value that they offer; therefore the plants have a positive contribution to society by improving people's health. The second reason is that the market for medicinal herbs is a very strong industry with excellent growth, ensuring demand for their plants. Botanical Bounty will offer the following excellent: Echinacea Echinacea was used extensively by Native Americans and the early settlers also adopted its use. It has been used for years in alternative medicine to support the immune system, and to purify the blood, especially during season changes and during the cold and flu season. Scientific studies have confirmed the presence of natural chemicals, echinacosides, which increase white blood cell activity. Ginseng Ginseng stimulates and increases endocrine activity in the body. Promotes a mild increase in metabolic activity and relaxes heart and artery movements. Stimulates the medulla centers and relaxes the central nervous system. St. John's Wort St. John's Wort has been used as a medicinal for thousands of years, but has only recently been studied for its medicinal value. Now proven to have many highly active compounds including rutin, pectin, choline, sitosterol, hypericin and pseudohypericin. The flowers and leaves are medicinal as analgesic, antiseptic, antispasmodic, aromatic, astringent, cholagogue, digestive, diuretic, expectorant, nervine, resolvent, stimulant, vermifuge and vulnerary. Some compounds of the plant have been shown to have potent anti-retroviral activity without serious side effects and they are being researched in the treatment of AIDS. Skullcap Skullcap is a powerful medicinal herb, it is used in alternative medicine as an anti-inflammatory, abortifacient, antispasmodic, slightly astringent, emmenagogue, febrifuge, nervine, sedative and strongly tonic. Some valuable constituents found in the plant are scutellarin, catalpol, other volatile oils, bitter iridoids and tannins. Scientific studies are proving this to be a valuable plant in many areas for mental disorders. Skullcap is used in the treatment of a wide range of nervous conditions including epilepsy, insomnia, hysteria, anxiety, delirium tremens, withdrawal from barbiturates and tranquilizers. Ginger Ginger roots and dried herb are medicinal and edible, it has a spicy, hot, crispy, taste and can be eaten fresh in small quantities in salads, used as a relish, a condiment, or made into a sauce for meat, especially good on chicken, or used to make ginger candy. Widely used as an alternative medicine ginger contains the valuable constituent aristolochic acid, scientific study shows it to have anti-inflammatory, antiviral, antitumor activity, cures warts in some cases and is a broad-spectrum antibacterial and antifungal. Portland Goodness sells these excellent perennials in plant form for the botanicals to be extracted by their customers. Botanical Bounty concentrates on producing the healthiest plants which have the highest concentration of active botanicals. Market Analysis Summary Simply Agriculture has identified three main customer groups: supplement companies; botanical processors; and other nurseries. The customer segments are distinct enough to be able to target each one differently. The industry that Simply Agriculture produces for has been undergoing consolidation for several years now. Simply Agriculture will be able to serve the industry by leveraging their competitive edge of healthy, high yielding organic produce. Are there enough people to buy from Simply Agriculture? In order to accurately measure the market Simply Agriculture hopes to penetrate the 'Green' paradigm. Simply Agriculture researched statistics within renewable energy sources and organic agriculture trends. Strictly analyzing a market by statistics does not account for all aspects of the market. Along with demographics, Simply Agriculture took into consideration consumer psychographics. For decades, advertisers have used demographics as a way of targeting specific age and income groups. In addition to demographics, advertisers now use psychographics as a way of matching products and services they are selling to the routine values of a particular segment. Psychographics include social class, lifestyle, and personality traits. Simply Agriculture clients will not be targeted through key demographics, but rather through these carefully selected psychographics. Psychographics delve deeper into people's lifestyles and behaviors, including their interests and values. Rec-Energy will focus on these due to the nature of the business. Industry Trends The major trend affecting Simply Agriculture has a positive outlook. The world energy crisis is a concern that has been established as a priority to be dealt with immediately by our Federal government. We are encouraged to be creative and innovative in ways to change our energy consumption habits to enable opportunity for a healthy lifestyle to all animals, also to enable a healthier world for our future generations. With clear recognition of the need established for the facility, there is only room for growth. Simply Agriculture places our energy and food consumption on the dinner plate; we challenge ourselves to be aware of our actions within every stage of our business, we want to make a positive difference in statistical evidence and research, we aim to do this by supporting our local community and by enabling ourselves as a business to be flexible toward the continuously dynamic needs of individuals within the community. Organic Agriculture and Trends According to Organic Trade Association’s 2010 Organic Industry Survey, U.S. sales of organic food and beverages have grown from $1 billion in 1990 to $24.8 billion in 2009. Sales in 2009 represented 5.1 percent growth over 2008 sales. Experiencing the highest growth in sales during 2009 were organic fruits and vegetables, up 11.4 percent over 2008 sales. Certified organic acreage in the United States reached more than 4.8 million acres in 2008, according to updated data posted by USDA. U.S. total organic cropland reached 2,655,382 acres in 2008, while land devoted to organic pasture totaled 2,160,577 acres. California leads with the most certified organic cropland, with over 430,000 acres, largely used for fruit and vegetable production. Certified organic cropland acreage between 2002 and 2008 averaged 15 percent annual growth increase. 4.1 Market Segmentation Simply Agriculture has identified three different target market segments which they will sell to: Supplement Companies This customer group manufactures botanical supplements for their own label products. The companies purchase the plants and extract the active ingredients and transform them into sellable products for their own brand. There are a handful of large companies that operate in this market space. Ten years ago there were many different ones but through consolidation the industry has grown in size but decreased in the number of different players. Processors These customers purchase the plants, extract the botanicals and either sell the concentrated botanicals to the end producers or they themselves produce the supplement and sell the final product to other companies for their private label products. In essence they are the subcontractor for the supplement companies. These companies therefore are one layer within the manufacturing system and do not sell to the end consumer. They act as a supplier/processor for the retail brands. Other Nurseries/Garden Centers This customer group purchases the plants which they in turn sell at retail to the individual end consumer. The typical consumer is a health conscious individual who is interested in either extracting the botanical from the plant immediately or growing the plant in his or her own garden for future use. 4.2 Target Market Segment Strategy Simply Agriculture has chosen the three market segments based on the consistent demand for botanical extracts. While there are other potential customers, they are smaller, less consistent in terms of demand, and more difficult to reach. The supplement companies, processors, and to a smaller degree the nurseries are attractive customers due to the their consistent demand and typical long-term contract needs. There is significant value to these customers for a grower to consistently offer the same high level of active botanicals in each plant and to be able to meet the needs of large volume, long duration contracts. 4.3 Industry Analysis The botanical perennial growing market is typically concentrated in several regions around the U.S. which have optimum growing conditions. While there are a couple mega farms, on the whole, 78% of the U.S. production comes from growers with 5-20 acres of land. Approximately 23% of botanical extracts are grown abroad and imported into the United States. Reasons for botanical growth to occur overseas is typically based on the type of herb and its ability to grow better in the respective region. The market for supplements is huge and growing: U.S. Supplement Market Surveys show that over 158 million consumers (over 55% of the U.S. population) use dietary supplements. An estimated 115.3 million consumers buy vitamins and minerals for themselves, and 55.8 million purchase them for other members of their family, including children. Consumer surveys consistently find that nearly half of all Americans now use herbs - a statistic that is particularly remarkable when we realize that today's herbal products industry is just over a quarter century old. The basic reason cited for dietary supplement growth is the desire for self-care. Consumers use dietary supplement products to help them achieve their self-care goals that arise out of a sense of alienation from the established health care system. Results from a national survey conducted in 1999 by Men's Health magazine show that consumers use dietary supplements as a means of ensuring good health. They also use supplements for very specific medicinal purposes such as treating and preventing serious illnesses, colds, and the flu; increasing mental sharpness; and alleviating depression. The consumer's desire for self-care and the widespread use of dietary supplements may cause problems for public health. An estimated 22.8 million consumers use herbal remedies instead of prescription medicine, and an estimated 19.6 million use them with a prescription product. In the past, except for vitamin and mineral products, dietary supplements, particularly botanical products, were sold mainly to adults in health food stores. In contrast, now such products are available in supermarkets, other retail stores, and on the Internet, making these products readily accessible to children and other vulnerable populations. The Nutrition Business Journal estimated that in 1999, U.S. consumer sales of supplements over the Internet amounted to $142 million, almost three times the previous year's total of $48 million. The five main channels of distribution are: consumer-direct (includes direct mail/catalog, direct from sales representatives, multi-level marketing, Internet & infomercial/direct from television); food, drug, mass-market stores, health and natural food stores, healthcare professionals and practitioners, others. Channel of Distribution % of $ Sales The 10 largest companies in the botanical and dietary supplement market account for 83% of the total U.S. annual market. Company 2001 Sales 4.3.1 Competition and Buying Patterns As mentioned previously, competition takes two forms, farms similar in size and production capacity to Simply Agriculture and megafarms. The similarly sized farms range in size from 5-30 acres. The number of different herbs grown varies from a handful to upwards of 50. The choice of plants grown is based on owner preference as well as location and the ability of the local growing conditions to support the different plants. On the other end of spectrum is the megafarm. These farms have a similar range of species cultivated; however they differ greatly in production capacity. These farms are huge, typically not less than 100 acres, peaking at 300 acres. These growers however are few numbers. The buying patterns of the different customers are typically based on these variables: Price Availability Ability to deliver consistently on long-term contracts Significant % of active ingredients Consistency. Strategy and Implementation Summary Simply Agriculture will leverage their competitive edge in order to gain significant market share. Their competitive edge is their ability to consistently produce plants with high active botanical percentages as well as a high ratio of healthy plants (sellable). The marketing strategy will have the objective of raising awareness and visibility of their industry-leading percentages of active botanicals. The strategy will communicate the fact that Botanical Bounty's plants will yield a significantly higher amount of botanicals measured per plant. The sales strategy, in addition to reinforcing the competitive edge, will seek to qualify leads by concentrating on Portland Goodness's ability to perform reliably on long-term contracts, becoming a stable supplier to the larger companies that need a steady supply stream. 5.1 Competitive Edge Simply Agriculture has a dual competitive edge: Healthy Plants The healthier the plant, the faster it will grow, the more botanicals that can be extracted from it. This means an increase in production efficiency due to a larger percentage of plants that are sellable. Other characteristics of healthy plants which are important on the production side are: lower pest counts, more established root structures, and high biomass. High Concentration of Active Botanicals This is beneficial to the purchaser because they are buying the plants precisely for the active botanicals. High concentration levels are valuable to Simply Agriculture because they increase the amount of botanicals produced per plant or per acre, increasing the production capacity of a given amount of land, thereby increasing their return on investment and increasing the attractiveness of Simply Agriculture’s plants relative to the competition. 5.2 Marketing Strategy The marketing strategy will be based on generating awareness and visibility of Simply Agriculture and their ability to produce the highest percentages of botanicals. The strategy will rely on several different forms of communication. The main form is participation in the numerous trade shows for the industry. The trade shows are where everyone from the industry gathers to meet and transact business. It is a wonderful place to network as well as learn about new developments in the industry. The second form of communication will be the use of advertisements. The main venues for advertisements will be industry trade magazines. The trade magazines are a well-read source of information that buyers and sellers refer to for many different transactions. 5.3 Sales Strategy Simply Agriculture’s sales strategy efforts will focus on identifying qualified leads and turning them into paying customers. The main sales effort that Simply Agriculture will undertake is the reinforcement of the fact that Simply Agriculture’s plants have the industry's highest percentage of botanicals. This will be quite appealing to the buyers as this is exactly what they want, more botanicals per plant. In addition to selling the buyers on Simply Agriculture’s competitive edge of potent plants, there will be an emphasis on Simply Agriculture’s ability to perform on long-term contracts. Simply Agriculture recognizes that the transactions should not be thought of as individual sales, but as long-term relationships. This is a reasonable assumption based on the fact that the customers are in the business of utilizing botanicals, that they will continually have the need for the botanicals, and that it is far less expensive to establish a relationship with one vendor than to continually have to find new vendors that can meet their needs. 5.3.1 Sales Forecast The sales forecast indicates that growth will be slow but steady. Growth will be slow because of the time and effort needed to develop the customers. Production is not the slowing element as Simply Agriculture has been in production for a couple of months. Granted they were not producing at the same level, or for that matter with the same goal of business efficiency, but nonetheless they will be able to reasonably raise production to meet the sales needs. During the wet months of the year, the forecast reflects a tapering of sales as production will fall during these months. There will however be some sales and production which will be moved inside to the greenhouses. There are a few risks that could have a negative impact on sales. The first is weather. Plants are dependent on the weather. A poor growing season will have a serious effect on production. This risk is spread amongst all of the producers of the specific region meaning the weather risk is imposed on everyone, generally not a specific farmer. Another risk that could affect sales is some sort of pest that could unexpectedly negatively affect the crops. By planting multiple botanicals and choosing them based on their heartiness relative to the growing climate, Simply Agriculture is able to minimize these risks as much as possible. 5.4 Milestones The value of Simply Agriculture milestones is in creating a set of measurable activities that will be achievable goals. The achievement of the milestones will be closely monitored and the assigned person will be held accountable for hitting the milestones. Milestones Milestone Start Date End Date Budget Manager Department Business plan completion 1/1/2003 2/1/2003 $0 David Strategic planning First large contract 1/1/2003 4/30/2003 $0 Sue Sales $100K in revenue 1/1/2003 4/4/2004 $0 Sue Sales Profitability 1/1/2003 7/30/2004 $0 David Operations Totals $0 Management Summary The Simply Agriculture management team is made up of James Prusi. James studied at Winona State College, a school located in southern Minnesota. James graduated with a major in Outdoor Recreation with an emphasis in Low-impact Eco-tourism and a minor in Adventure Tourism. James was the Director of Movies in the Park in Portland, Oregon for Portland, Oregon in 2011 and 2012. James was a Service Manager for 5 years at Tires Plus and was in charge some business development activities. His first "home run" was his senior thesis feasibility plan regarding piezoelectric electricity, renewable electric resources, agriculture development and recreation. If funds were more readily available, he would be approaching you with this business plan instead. 6.1 Personnel Plan James: Operations including vendor relations, accounting, and some growing responsibility. James: Head grower and operations management. As head grower he is responsible for supervising, scheduling plant production, the cutting schedules, crop selection, growing schedules, fertilizer selection and application schedules, irrigation system development, and pest control. Because James has the technical knowledge regarding the plants and their industry leading botanical concentrations, he will be in charge of sales which will include qualifying leads as well as participating in the final negotiations and account management. Grower: James will have the assistance of a full-time grower in order to allow him to meet h sales responsibilities. Laborers: The laborer positions will be seasonal as there is more work required in the summer months, however, there will always be some laborers on staff throughout the year. Some of the responsibilities of the laborers are soil tilling, compost distribution, plant collections and trimming. Financial Plan The following sections will outline important financial information. 7.1 Important Assumptions The following table details important Financial Assumptions. 7.2 Break-even Analysis The Break-even Analysis is shown below. 7.3 Projected Profit and Loss The following table and charts show the Projected Profit and Loss. 7.4 Projected Cash Flow The following table and chart display the Projected Cash Flow, including our purchase of new equipment, and the loan (and principal repayment) related to the farm's expansion. 7.5 Projected Balance Sheet The Projected Balance Sheet table appears below. 7.6 Business Ratios Aquaponics/hydroponics/urban farming are all rapidly growing fields due to many reasons, including convenience, sustainability, health, and demand to population growth.
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Self Identified Competition
Walmart Bayer Very minimal local competition, some at farmers markets. Simply Agriculture practices what it teaches and offers/will be offering educational courses in hydroponic farming. We utilize eco-friendly practices as conscious responsibilities which result in fresh, organic produce to our customers and a lower carbon footprint from us.
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