hop to it farms business plan
TRANSCRIPT
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Hop To It
Hop To It Farms
10855 Hering Rd
Gasting, OR
Brandon Kothmann
817-996-0553
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Table of Contents
Executive Summary ....................................................................................................... 1 Business Description .................................................................................................. 1 Mission Statement ...................................................................................................... 1 Goals .......................................................................................................................... 1 Plan Summary ............................................................................................................ 2 Capital Request .......................................................................................................... 3
Business Description ...................................................................................................... 4 Business Overview ..................................................................................................... 4 Location ...................................................................................................................... 4 Facilities ..................................................................................................................... 4 Business History ......................................................................................................... 5 Ownership Structure ................................................................................................... 5
Operations ...................................................................................................................... 6 Products ...................................................................................................................... 6 Services ...................................................................................................................... 7 Production System ..................................................................................................... 8 Customer Service ....................................................................................................... 9 Inventory Management .............................................................................................. 9 Licenses, Permits & Regulations ............................................................................... 9 Quality Control.....10 Implementation Timeline ......................................................................................... 11
Marketing Plan ............................................................................................................. 13 Market Trends .......................................................................................................... 13 Customers ................................................................................................................. 13 Strategic Partners ..................................................................................................... 13 Pricing ...................................................................................................................... 14 Promotion ................................................................................................................. 17 Target Market ........................................................................................................... 17 Competitive Advantage ............................................................................................ 18
Management & Organization ....................................................................................... 19 Management Team ................................................................................................... 19 Personnel Plan .......................................................................................................... 20 Professional Services ............................................................................................... 20
Financial Plan ............................................................................................................... 21 Financial Position ..................................................................................................... 21 Financial Projections ................................................................................................ 21 Benchmarks .............................................................................................................. 29 Capital Request ........................................................................................................ 29
List of References30 Supporting Documents.31
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Executive Summary
Business Description
Hop To It Farms is a start up business planning on settling in Gaston,
Oregon. We are looking to begin business as a producer of craft quality
hops for craft and home brewers. We will start out as a small operation,
servicing only the west coast and as our operation grows so will our market.
Connections have already been made with many craft brewers and brewing
supply shops but more will be made through advertising in trade magazines
and beer festivals.
Our market is saturated with low quality producers, but at Hop To It Farms
we strive to produce the largest variety and highest quality of hops
available. Quality hops grown for brewers, by brewers.
Mission Statement
Hop To It Farms is dedicated to providing a variety of top quality American
grown hops to brewers while researching and developing new strains to help
improve the market.
Goals
1. To make Hop To It Farms the preferred quality hops grower on the west coast.
2. To provide quality and consistent results in our hops to all brewers. 3. To educate and assist customers on the importance of a quality hop. 4. To see a net profit of 5% in year one. 5. To see a net profit of 10% in year two. 6. To expand growing area to new sites by year five. 7. To expand our market to the east coast by year ten.
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Plan Summary
As a startup business Hop To It Farms does not intend to come sprinting out
of the gates and become nationwide in our first year of business. We
understand that in order to be successful we need to enter the market and
climb the ladder. We plan to begin by servicing the west coast and building
a name for ourselves with all of the great breweries in the region. From there
we plan to build on our success and spread east, eventually having
distributors located from coast to coast. As we expand on the outside we
will be doing the same internally. We plan to select out, and develop new,
more desirable varieties of hops that will distinguish us from other growers.
Our products will not be what is normally found on the market now. We
refuse to offer sub-par, par, or even simply above average hops. We will
only grow and sell the highest quality of hops available on the market.
Thanks to years of experience in the horticulture field we understand how to
do this, and how to do it efficiently. It is this pride in our work that sets us
above the rest.
Keys to Success
1. Continue to maintain our relationships in the brewing industry and receive honest feedback about what products are needed.
2. Grow the company in small but sufficient steps, do not attempt to expand in an unmanageable, overly risky way.
3. Be a leader and innovator in the industry when it comes to new product lines.
4. Do our part to support the craft beer movement and educate the public about the industry to help promote growth.
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Capital Request
As the founder of Hop To It Farms I will be investing an initial $100,000.00
in the company. This investment will put us on the right track but not place
us where we need to be. In order to achieve our goals we are asking for help
in the form of an equity share investment. We need to raise at least an
additional $100,000.00 or up to $150,000.00. In return for every $12,500
invested, investors will recieve a 2.5% share of the company. Investors can
expect a full return on their investment by year five with dividends paid after
that. This investment money will go towards necessary expenditures such as
labor and equipment needed to maintain and harvest the hops. This is not a
loan we are asking for, this is an opportunity to join in our business. As we
succeed, so will you, and at Hop To It we see no options other than success.
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Business Description
Business Overview
Hop To It Farms is a start up hop farm looking to service the west coast with
a high quality hop not currently on the market. Too many growers sell sub-
par hops that we find unacceptable. That's why at Hop To It we cut no
corners, and take no shortcuts. We stand by our product and vow to sell the
highest quality hops on the market to both homebrewers and craft brewers
alike.
Location
Hop To It Farms is conveniently located in Gaston, OR, less than an hours
drive from more than 35 different breweries. this area is prime hop growing
land due to its sufficient rainfall and mild climate.
Hop To It Farms
10855 Hering Rd
Gaston, OR
817-996-0553
Facilities
Upon recieving the investment needed we will be installing three facilities
on sight. The first will be a 30'x50' pre-fab building that will act as the
offices, and classroom area. The second facility will be a larger 50'x100'
aluminum sided building for grinding and dry and frozen storage of the hops
after they've been harvested. The third and final facility will be a 50'x100'
open pavilion with nothing more than a roof, this will be used to process the
hops as we harvest them and prepare them for drying and/or grinding.
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Business History
The idea for Hop To It came from necessity. Our founder, Brandon
Kothmann, homebrewed and worked in commercial brewing for years and
through his experience came to realize that there was something wrong with
the hop market. Nobody seemed to produce the types or quality of hops that
so many brewers needed. With seven years of experience in horticulture
before his transition to brewing he realized that maybe he was the guy for
the job. His knowledge of plant production combined with his connections
and knowledge of the brewing industry seemed like the perfect match. After
much deliberation and research Hop To It Farms is beginning to materialize
and is preparing to become the premium hop supplier for the west coast and
eventually, the nation.
Ownership Structure
Hop To It Farms will be running under the premise of a Limited Liability
Company (LLC). This allows investors to join into the company with an
equity share but remain only liable for the amount of money they've
invested. 20-30% of the company will be sold to investors with the
remainder of the shares being held by the founder of the company. This
allows investors to have a hands off limited liability way to make money. At
Hop To It we believe this is the structure that will help to push us forward
and grow into the successful business we dream of.
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Operations
Products
Hop Variety Amounts Available Alpha Acid Style
Cascade 1oz 8oz 1lb 5lb 6.2% Pellet
4oz 8oz 1lb 5lb Whole Leaf
Centennial 1oz 8oz 1lb 5lb 7.8% Pellet
4oz 8oz 1lb 5lb Whole Leaf
Northern Brewer 1oz 8oz 1lb 5lb 8.0% Pellet
4oz 8oz 1lb 5lb Whole Leaf
Willamette 1oz 8oz 1lb 5lb 4.0% Pellet
4oz 8oz 1lb 5lb Whole Leaf
Fuggles 1oz 8oz 1lb 5lb 3.3% Pellet
4oz 8oz 1lb 5lb Whole Leaf
Nugget 1oz 8oz 1lb 5lb 12.2% Pellet
4oz 8oz 1lb 5lb Whole Leaf
Hallertauer 1oz 8oz 1lb 5lb 3.2% Pellet
4oz 8oz 1lb 5lb Whole Leaf
Mt. Hood 1oz 8oz 1lb 5lb 4.0% Pellet
4oz 8oz 1lb 5lb Whole Leaf
Liberty 1oz 8oz 1lb 5lb 2.7% Pellet
4oz 8oz 1lb 5lb Whole Leaf
Magnum 1oz 8oz 1lb 5lb 11.4% Pellet
4oz 8oz 1lb 5lb Whole Leaf
Chinook 1oz 8oz 1lb 5lb 10.4% Pellet
4oz 8oz 1lb 5lb Whole Leaf
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Above is a list of our primary line of hops along with the quantities we
intend to sell through retail, and the alpha acid of each. Bulk orders will be
available through contract which will help draw in some of the larger
breweries as customers. These are our baseline products and are vital to our
company having early success. These are some of the most commonly used
varieties of hops, however with time we would like to develop new varieties
or make these current varieties better. Our product line is what will seperate
us from the competition and allow us to succeed.
Services
At Hop To It we believe that educating the public is key to increasing the
clientelle base. We will offer public tours of the farm and classes to help
brewers understand which hops are needed to meet their goals and why
quality is so important. Partaking in these opportunities will help customers
to have a sense of connection with the entire process that goes into making a
beer. They will better understand the importance of hops be able to spread
the word about our company to their homebrewing friends and/or colleagues
in the industry.
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Production System
Our hops will originally be grown from cuttings we purchase from other
growers. eventually we will start a seed propagation area on our farm so that
we may start selecting out and developing new hops varieties. The hop
bines(this is what each hop plant is called) will grow up our trellices to later
be collected. There is not much need for watering in our area of the country
so that is not a problem but fertilizer will be spread manually by workers
when needed. To collect our hops we intend to use a bine 3060 harvester.
This harvester requires two workers to operate it and can clear and harvest
and entire acre of hop bines in an estimated 33 hours. This will free up
workers to process already harvested hops, and care for hop plants that
haven't been harvested yet. With 7 acres of land this will only take 462 man
hours per year to harvest our entire crop. After the crop has been harvested
we need to process it by allowing the leaves and flowers to dry and then
package them in foil packs for sale.
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Customer Service
At Hop To It we know that customer relations are the key to our success.
Thats why we invite customers to come visit our farm and take our classes
on the proper use of our hops. We guarantee all of our products to contain
the correct alpha acid percentage and to stay fresh until the date listed on the
package. We will gladly replace or refund any faulty products. As a small
business we know that no client is too small to give our full attention to and
thats why any serious complaints will be dealt with in a timely fashion by
management, not just the first worker who stumbles upon the problem. Any
problems with quality or timing of our products will result in us reassessing
our prices and in the case of a loss of a specific crop, we will buy the hop
wholesale from another grower and sell it at a markup so that we may keep
our vast selection available to customers.
Inventory Management
As a hops grower inventory management is crucial, hops need to be
available for sale year round but are only harvested once a year. We will be
able to keep up with this lengthy demand by storing our hops in sealed foil
packs in freezers. This method of storage allows hops to keep fresh for
multiple years. We will also need to store our foil packs and packaging that
are yet to be used, however other than this we will hold no inventory on
sight, everything will be available to be delivered when needed.
Licenses, Permits & Regulations
Oregon Department of Agriculture licenses-
Nursery Stock Growers and Collectors of native plants-This license is
for nursery growers, other than greenhouse growers of herbaceous plants,
and for collectors of native plants.
Private Pesticide Applicator License-required of individuals who use or
supervise the use of restricted-use pesticides on land in agricultural
production that is owned, leased, or rented by them or their employer.
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Phytosanitary Certificates-federal or state certifications for the
following: nursery stock, Christmas trees, logs, lumber, and any other plant
material requested. Phytosanitary certificates verify to foreign and other
states' authorities that an official inspection of the commodity has been made
and it addresses specific concerns of the importing country or state.
Scales Type A-This license is required for commercially used scales
where the manufacturer's rated capacity is from 0 to 400 pounds.
"Commercial use" is any application or use in connection with or related to
transactions in which, in exchange for commodities received or services
rendered, consideration is given in terms of currency, negotiable
instruments, credit, merchandise or any other thing of value.
United States Department of Agriculture licenses-
PPQ586-Application for Permit To Transit Plants and/or Plant Products,
Plant Pests, and/or Associated Soil Through The United States
Quality Control
Before any batch of hops is packaged it is tested for alpha acid percentage
and hand tested by management for aroma and appearance. As employees
gain tenure in our company they will gain the experience through immersion
to start recognizing quality in the field. This will help act as a double check
to prevent any oversight by management. This ensures only quality
materials are sold and our customers stay happy.
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Implementation Timeline
Hop To It Farms' goal is to become one of the premier hops growers in the
nation. This will not be an immediately attainable goal and will require us to
grow in stages. Setting a timeline for these stages helps us to evaluate
whether or not our business is performing as expected.
Year One:
First year of growth
Adapt production strategies to what is learned along the way
Create positive net income
Year Three:
Have clientelle along entire west coast
Over 10% net profit
Have production strategy finalized
Start work on website for online sales
Year Five:
Have all investors fully reimbursed
Begin expansion of acreage by adding other farms or buying adjacent land
Begin research on new hops varieties
Have online clients as far as east coast
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Year Ten:
Evaluate other expansion opportunities
Have at least 3 new hops varieties established
Have contracted clients across entire country
Have at least 30 acres of land in production
If our goals are not met by these deadlines we will evaluate how close we
are to reaching these goals and the reasons we have not yet met them. We
will then make necessary changes to our business strategies. With sufficient
positive growth of the company we will always be happy but we strive for
excellence and know that we can always improve more.
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Marketing Plan
Market Trends
While hop acreage in Oregon dropped by 9.09% the yield in Oregon grew
by 6.93% as opposed to a national average of 3.92%. This means that there
is more space opening up Oregon for hops growers and less space is needed
to produce the same amount of hops. This creates the perfect opportunity to
start a hop farm in Oregon and opens many doors for us. The need for hops
has grown due to the growth of the craft beer industry. Craft beer
production grew by 13% in 2011 and 12% in 2010. With craft brewers
being our primary target clients this is great news for a hops grower. With a
young and growing market of craft beer drinkers this trend of growth is
expected to continue into the foreseeable future.
The quality hop market relies on the craft beer market and the good news is
that people are always going to drink beer. They drink when they're happy
and they drink when they're sad, and with more and more people
transitioning to craft beer this means that the hops demand will grow even as
beer demand stays the same. After research and working in the markets, we
are very optimistic about our future at Hop To It.
Customers
As a hop grower we have a very specific customer base. Homebrewers and
craft breweries need quality hops and that's what we provide. This customer
is growing with the craft beer movement and should be only positive for us
in the future. We currently have connections with many breweries across
the United States but in order to grow our customer base we will advertise in
trade magazines and have representation at many beer festivals and events.
We will also implement a website which can be ordered from to bring in
homebrewing clients.
Strategic Partners
At Hop To It we view all of our creft brewery customers as strategic
partners. We rely on them to make quality beer that will sell in order for our
demand to stay up and they rely on us to provide them with quality hops to
make the quality beer. This mutual relationship helps us to work together to
grow as one.
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Pricing
Hops Variety Style Weight Price
Cascade Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
5lb 45.00
Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
Centennial Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
5lb 45.00
Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
Northern Brewer Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
5lb 45.00
Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
Willamette Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
5lb 45.00
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Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
Fuggles Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
5lb 45.00
Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
Nugget Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
5lb 45.00
Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
Hallertauer Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
5lb 45.00
Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
Mt. Hood Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
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5lb 45.00
Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
Liberty Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
5lb 45.00
Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
Magnum Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
5lb 45.00
Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
Chinook Whole Leaf 4oz 3.00
8oz 5.75
1lb 11.00
5lb 45.00
Pellet 1oz 1.25
8oz 7.50
1lb 13.50
5lb 60.00
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Above is a tentative list of our prices for the different products we will sell.
As we learn more about how much each of these is going to cost us to
produce we will adjust prices for individual items as we see fit. There is a
built in incentive in our prices to buy in bulk which will draw in larger
customers, yet we still sell the small quantities for the smaller homebrewing
customers. Our prices are comparable to most retail hops sellers but because
we skip the middle man by selling them ourselves we will be making a
greater profit. These prices are only for one time sales, if customers wish to
have a contract with us this will save them money but guarantee us the sales
for the length of the contract. These contracts will be negotiated on a
customer-to-customer basis.
Promotion
Hop To It's promotion strategy is fairly straightforward and simple. Our
customers know what they want, so we just need to let them know who we
are. We will promote our brand image through trade magazines, in-person
introductions at breweries, at beer festivals, and through our website which
will show up with a Google search for hops. We are going to look into
partnering with some beer equipment distributors to include coupons or
advertisements for our hops with their brewing kits. Because our target
market is so small there is not much need for mass advertising and we feel
that the strategies above will be more than sufficient to get the Hop To It
name out there.
Target Market
As mentioned throughout this business plan our target market is a
combination of craft breweries and homebrewers. These are the two groups
of customers that are looking for the high quality of hops that we produce.
This market is growing tremendously as shown in the market trends section
and we feel that we can use this growth as a tool for our own success.
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Competitive Advantage
There are many hop farms in the United States but there is one major
difference between their operation and ours. Most of these hop farms are
run by farmers who are simply growing hops as a crop. They have no
interest in the hops quality, or the purpose it is intended for. With a brewing
and horticultural background, we at Hop To It better understand the needs of
brewers and are better suited to make a quality product. Also by selling
directly to retail customers we are able to keep costs down to around what
you would buy a lesser quality hop for at a retail store.
People want quality, and we are here to give it to them. This is what will set
us aside from all of our competitors and allow us to succeed on a national
scale. Our personal interest and knowledge of the brewing process will also
help to make the customers feel included in our business. We look forward
to training a staff that is just as enthusiastic as we are and will help to
promote our business in the same way. All of these aspects put us one step
ahead of the rest of the industry and ensure us a competitive place in the
market.
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Management & Organization
Management Team
Brandon Kothmann
Founder/Head Grower
B.S. Horticulture from Texas A&M
4 Years Experience home and commercial brewing
When we have the funding and the go ahead to begin operations we will
bring on a marketing manager and our labor force. As we grow further and
acquire new farms we will hire management teams for each of those farms.
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Personnel Plan
Personnel in the hops industry tend to be slightly undereducated when it
comes to the hops and treat the plants as they would any cash crop. At Hop
To It we know that this is what leads to lower quality hops. We intend to
avoid this problem by hiring workers who show a sincere interest in hops
and show a willingness to learn. We will have a 3 month probationary
period in which workers must learn a good deal about hops and this
information will be provided to them in the employee handbook. At the end
of the probationary period they will have two chances to pass a test showing
that they know about and understand the important parts of the hop. When
they've passed this they will be allowed to stay on staff and recieve a pay
raise. We intend to pay our employees above the industry standards in order
to draw in the most qualified personnel. Staff will do everything from
planting, fertilizing, training, and crowning the crops, to harvesting,
packaging, and delivering. We will evaluate staff and give them jobs that
they perform the majority of the time based on their strengths but no job is
too big or little for anybody at Hop To It. We require all staff, including
management, to be willing to help where help is needed. In the beginning
staff will be trained by the head grower, but as the business grows we will
deem certain other team members able to train new staff.
Professional Services
Accountant-Garland R. Taylor, CPA, PC
205 SE Spokane St
Portland, OR 97202
Reviews books and prepares taxes
Hops Inspector-United States Department of Agriculture
Inspects all hops processing centers and procedures
Graphic Design- Kinesis Marketing
30 nw 10th Ave
Portland, OR 97209
Designs graphics for packaging, merchandise
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Financial Plan
Financial Position
Hop To It Farms is a startup business and therefore currently has no
financial status. However we have $100000.00 invested by the founder, and
with another hundred thousand we feel that we will be sufficiently liquid.
We cannot provide financial documents because we have not yet opened our
doors but the next section will show our projections for the next three years.
Financial Projections
Projected financial statements years 1 through 3 Income statement(projected year 1)
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4
Annual Totals
TOTAL ANNUAL SALES 62500.00 50000.00 75000.00 62500.00 250000.00 MARKUP 3.00 3.00 3.00 3.00 3.00 C.0.G.S. 20833.33 16666.67 25000.00 20833.33 83333.33 GROSS PROFIT 41666.67 33333.33 50000.00 41666.67 166666.67 EXPENSES SALARY 7500.00 7500.00 7500.00 7500.00 30000.00 LABOR 9375.00 7500.00 11250.00 9375.00 50000.00 ADVERTISING 2500.00 2500.00 2500.00 2500.00 10000.00 SUPPLIES 9375.00 9375.00 9375.00 9375.00 37500.00 UTILITIES 2500.00 2500.00 2500.00 2500.00 10000.00 INSURANCE 1250.00 1250.00 1250.00 1250.00 5000.00 RENT 2500.00 2500.00 2500.00 2500.00 10000.00 C.L. INTEREST 0.00 0.00 0.00 0.00 0.00 L.L INTEREST 2250.00 2250.00 2250.00 2250.00 9000.00 TOTAL EXPENSES 37250.00 35375.00 39125.00 37250.00 161500.00 PRETAX INCOME 4416.67 -2041.67 10875.00 4416.67 17666.67
INCOME TAXES (34%) 1501.67 -694.17 3697.50 1501.67 6006.67
NET INCOME 2915.00 -1347.50 7177.50 2915.00 11660.00
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SALES AND EXPECTED CASH FLOWS YEAR 1 % SALES PER ITEM
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4 TOTAL %
% of Tl. Sales
TREES 0.00 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 0.00 COLOR/BEDDING 0.00 0.00 0.00 0.00 0.00 0.00 TROPICAL/FOLIAGE 0.00 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 0.00 PACKAGED MEDIA/SOIL 0.00 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00 TOOLS,SPRINKLERS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00
X-MAS TREE, ORNAMENT 0.00 0.00 0.00 0.00 0.00 0.00 SPECIAL ITEMS(NICHES) 25.00 20.00 30.00 25.00 100.00 100.00 100.00
$ VALUE PER ITEM SALES
TREES 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 BEDDING PLANTS 0.00 0.00 0.00 0.00 0.00 FOLIAGE 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 PACKAGED GOODS 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00 TOOLS,SPRINKLERS,ETC. 0.00 0.00 0.00 0.00 0.00 X-MAS TREE, ORNAMENT 0.00 0.00 0.00 0.00 0.00 SPECIAL ITEMS(NICHES) 62500.00 50000.00 75000.00 62500.00 250000.00
Sales per Quarter 62500.00 50000.00 75000.00 62500.00 250000.00 (Tl. annual sales)
BALANCE SHEET- YEAR 1
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4
Annual Totals
CURRENT ASSETS:
STARTING CASH 100000.00 CASH 102915.00 98652.50 107177.50 102915.00 102915.00 INVENTORY 5208.33 4166.67 6250.00 5208.33 5208.33 TOTAL CURRENT ASSETS 108123.33 102819.17 113427.50 108123.33 108123.33
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FIXED ASSETS: PHYSICAL FACILITIES 30000.00 29400.00 28800.00 28200.00 30000.00 LESS DEPRECIATION -600.00 -600.00 -600.00 -600.00 -2400.00 NET 29400.00 28800.00 28200.00 27600.00 27600.00 LAND 50000.00 50000.00 50000.00 50000.00 50000.00 TOTAL FIXED ASSETS: 79400.00 78800.00 78200.00 77600.00 77600.00 TOTAL ASSETS 187523.33 181619.17 191627.50 185723.33 185723.33
LIABILITIES CURRENT 0.00 0.00 0.00 0.00 0.00 LONG-TERM 100000.00 100000.00 100000.00 100000.00 100000.00 TOTAL LIABILITIES 100000.00 100000.00 100000.00 100000.00 100000.00 NET WORTH 87523.33 81619.17 91627.50 85723.33 85723.33 FINANCIAL RATIOS- YEAR 1
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4
Annual Totals
RETURN ON EQUITY (net income/net worth) 3.33 -1.65 7.83 3.40 13.60 RETURN ON ASSETS (net income/total assets) 1.55 -0.74 3.75 1.57 6.28 CURRENT RATIO (cur. assets/cur. liabilities) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! QUICK RATIO (current assets-inventory/ #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! current liabilities) DEBT/EQUITY RATIO (total liabilities/net worth) 1.14 1.23 1.09 1.17 1.17 NET WORTH TO F.A. (net worth/fixed assets) 1.10 1.04 1.17 1.10 1.10 NET PROFIT MARGIN (after tax net income/sales) 4.66 -2.70 9.57 4.66 4.66
TOTAL ASSETS TURNOVER
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(sales/total assets) 0.33 0.28 0.39 0.34 1.35
FINANCIAL LEVERAGE (total assets/net worth) 2.14 2.23 2.09 2.17 2.17
INCOME STATEMENT (PROJECTED)
YEAR 2
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4
Annual Totals
SALES 87500.00 70000.00 105000.00 87500.00 350000.00 MARKUP 3.00 3.00 3.00 3.00 3.00 C.O.G.S 29166.67 23333.33 35000.00 29166.67 116666.67 GROSS PROFIT 58333.33 46666.67 70000.00 58333.33 233333.33 EXPENSES SALARY 7500.00 7500.00 7500.00 7500.00 30000.00 LABOR 13125.00 10500.00 15750.00 13125.00 52500.00 ADVERTISING 3500.00 3500.00 3500.00 3500.00 14000.00 SUPPLIES 13125.00 13125.00 13125.00 13125.00 52500.00 UTILITIES 3000.00 3000.00 3000.00 3000.00 12000.00 INSURANCE 1750.00 1750.00 1750.00 1750.00 7000.00 RENT 2500.00 2500.00 2500.00 2500.00 10000.00 C.L. INTEREST 0.00 0.00 0.00 0.00 0.00 L.L. INTEREST 2250.00 2250.00 2250.00 2250.00 9000.00 TOTAL EXPENSES 46750.00 44125.00 49375.00 46750.00 187000.00 PRETAX INCOME 11583.33 2541.67 20625.00 11583.33 46333.33 INCOME TAXES 3706.67 813.33 6600.00 3706.67 14826.67 NET INCOME 7876.67 1728.33 14025.00 7876.67 31506.67
SALES AND EXPECTED CASH FLOWS YEAR 2 % SALES PER ITEM
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4 TOTAL %
% of Tl. Sales
TREES 0.00 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 0.00 BEDDING PLANTS 0.00 0.00 0.00 0.00 0.00 0.00 FOLIAGE 0.00 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 0.00 PACKAGED GOODS 0.00 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00
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TOOLS,SPRINKLERS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00
X-MAS TREE, ORNAMENT 0.00 0.00 0.00 0.00 0.00 0.00 SPECIAL ITEMS(NICHES) 25.00 20.00 30.00 25.00 100.00 100.00 100.00
$ VALUE PER ITEM SALES
TREES 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 BEDDING PLANTS 0.00 0.00 0.00 0.00 0.00 FOLIAGE 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 PACKAGED GOODS 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00 TOOLS,SPRINKLERS, ETC. 0.00 0.00 0.00 0.00 0.00
X-MAS TREE, ORNAMENT 0.00 0.00 0.00 0.00 0.00 SPECIAL ITEMS(NICHES) 87500.00 70000.00 105000.00 87500.00 350000.00
Sales per Quarter 87500.00 70000.00 105000.00 87500.00 350000.00 (Tl. annual sales)
BALANCE SHEET- YEAR 2
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4
Annual Totals
ASSETS
CURRENT ASSETS: CASH 110791.67 112520.00 126545.00 134421.67 134421.67 ACCOUNTS RECEIVABLE 5250.00 4200.00 6300.00 5250.00 5250.00 INVENTORY 7291.67 5833.33 8750.00 7291.67 7291.67 TOTAL CURRENT ASSETS 123333.33 122553.33 141595.00 146963.33 146963.33 FIXED ASSETS: PHYSICAL FACILITIES 27600.00 27048.00 26496.00 25944.00 27600.00 LESS DEPRECIATION -552.00 -552.00 -552.00 -552.00 -2208.00 NET 27048.00 26496.00 25944.00 25392.00 25392.00 LAND 50000.00 50000.00 50000.00 50000.00 50000.00 TOTAL FIXED ASSETS: 77048.00 76496.00 75944.00 75392.00 75392.00 TOTAL ASSETS 200381.33 199049.33 217539.00 222355.33 222355.33
LIABILITIES CURRENT 0.00 0.00 0.00 0.00 0.00 LONG-TERM 100000.00 100000.00 100000.00 100000.00 100000.00
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TOTAL LIABILITIES 100000.00 100000.00 100000.00 100000.00 100000.00 NET WORTH 100381.33 99049.33 117539.00 122355.33 122355.33 FINANCIAL RATIOS- YEAR 2
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4
Annual Totals
R.O.E. (net income/net worth) 7.85 1.74 11.93 6.44 25.75 RETURN ON ASSETS (net income/total assets) 3.93 0.87 6.45 3.54 14.17 CURRENT RATIO (cur. assets/cur. liabilities) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! QUICK RATIO (current assets-inventory/ #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! current leabilities) DEBT/EQUITY RATIO (total liabilities/net worth) 1.00 1.01 0.85 0.82 0.82 NET WORTH TO F.A. (net worth/fixed assets) 1.30 1.29 1.55 1.62 1.62 NET PROFIT MARGIN (after tax net income/sales) 9.00 2.47 13.36 9.00 9.00
ASSET TURNOVER (sales/total assets) 0.44 0.35 0.48 0.39 1.57
FINANCIAL LEVERAGE (total assets/net worth) 2.00 2.01 1.85 1.82 1.82
INCOME STATEMENT (PROJECTED)
YEAR 3
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4
Annual Totals
SALES 112500.00 90000.00 135000.00 112500.00 450000.00 MARKUP 3.00 3.00 3.00 3.00 3.00 C.0.G.S. 37500.00 30000.00 45000.00 37500.00 150000.00 GROSS PROFIT 75000.00 60000.00 90000.00 75000.00 300000.00
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EXPENSES
SALARY 7500.00 7500.00 7500.00 7500.00 30000.00 LABOR 16875.00 13500.00 20250.00 16875.00 67500.00 ADVERTISING 3500.00 3500.00 3500.00 3500.00 14000.00 SUPPLIES 16875.00 16875.00 16875.00 16875.00 67500.00 UTILITIES 3750.00 3750.00 3750.00 3750.00 15000.00 INSURANCE 1750.00 1750.00 1750.00 1750.00 7000.00 RENT 2500.00 2500.00 2500.00 2500.00 10000.00 C.L. INTEREST 0.00 0.00 0.00 0.00 0.00 L.L. INTEREST 2250.00 2250.00 2250.00 2250.00 9000.00 TOTAL EXPENSES 55000.00 51625.00 58375.00 55000.00 220000.00 PRETAX INCOME 20000.00 8375.00 31625.00 20000.00 80000.00 INCOME TAXES 6800.00 2847.50 10752.50 6800.00 27200.00 NET INCOME 13200.00 5527.50 20872.50 13200.00 52800.00
SALES AND EXPECTED CASH FLOWS YEAR 3 % SALES PER ITEM
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4 TOTAL %
% of Tl. Sales
TREES 0.00 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 0.00 BEDDING PLANTS 0.00 0.00 0.00 0.00 0.00 0.00 FOLIAGE 0.00 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 0.00 PACKAGED GOODS 0.00 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00 TOOLS,SPRINKLERS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00
X-MAS TREE, ORNAMENT 0.00 0.00 0.00 0.00 0.00 0.00 SPECIAL ITEMS(NICHES) 25.00 20.00 30.00 25.00 100.00 100.00 100.00
$ VALUE PER ITEM SALES
TREES 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 BEDDING PLANTS 0.00 0.00 0.00 0.00 0.00 FOLIAGE 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 PACKAGED GOODS 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00
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TOOLS,SPRINKLERS, ETC. 0.00 0.00 0.00 0.00 0.00
X-MAS TREE, ORNAMENT 0.00 0.00 0.00 0.00 0.00 SPECIAL ITEMS(NICHES) 112500.00 90000.00 135000.00 112500.00 450000.00
Sales per Quarter 112500.00 90000.00 135000.00 112500.00 450000.00 (Tl. annual sales)
BALANCE SHEET- YEAR 3
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4
Annual Totals
ASSETS
CURRENT ASSETS: CASH 147621.67 153149.17 174021.67 187221.67 187221.67 ACCOUNTS RECEIVABLE 6750.00 5400.00 8100.00 6750.00 6750.00 INVENTORY 9375.00 7500.00 11250.00 9375.00 9375.00 TOTAL CURRENT ASSETS 163746.67 166049.17 193371.67 203346.67 203346.67
FIXED ASSETS: PHYSICAL FACILITIES 27600.00 27048.00 26496.00 25944.00 27600.00 LESS DEPRECIATION -552.00 -552.00 -552.00 -552.00 -2208.00 NET 27048.00 26496.00 25944.00 25392.00 25392.00 LAND 50000.00 50000.00 50000.00 50000.00 50000.00 TOTAL FIXED ASSETS: 77048.00 76496.00 75944.00 75392.00 75392.00 TOTAL ASSETS 240794.67 242545.17 269315.67 278738.67 278738.67
LIABILITIES CURRENT 0.00 0.00 0.00 0.00 0.00 LONG-TERM 100000.00 100000.00 100000.00 100000.00 100000.00 TOTAL LIABILITIES 100000.00 100000.00 100000.00 100000.00 100000.00 NET WORTH 140794.67 142545.17 169315.67 178738.67 178738.67 FINANCIAL RATIOS- YEAR 3
QUARTER 1
QUARTER 2
QUARTER 3
QUARTER 4
Annual Totals
R.O.E. (net income/net worth) 9.38 3.88 12.33 7.39 29.54 RETURN ON ASSETS (net income/total assets) 5.48 2.28 7.75 4.74 18.94 CURRENT RATIO (cur. assets/cur. liabilities) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
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QUICK RATIO (current assets-inventory/ #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! current liabilities) DEBT/EQUITY RATIO (total liabilities/net worth) 0.71 0.70 0.59 0.56 0.56 NET WORTH TO F.A. (net worth/fixed assets) 1.83 1.86 2.23 2.37 2.37 NET PROFIT MARGIN (after tax net income/sales) 11.73 6.14 15.46 11.73 11.73
ASSET TURNOVER (sales/total assets) 0.47 0.37 0.50 0.40 1.61
FINANCIAL LEVERAGE (total assets/net worth) 1.71 1.70 1.59 1.56 1.56
Benchmarks
To see our projected benchmarks refer to the goals section. All of our goals
are where we expect to be at that given time.
Capital Request
As the founder of Hop To It Farms I will be investing an initial $100,000.00
in the company. This investment will put us on the right track but not place
us where we need to be. In order to achieve our goals we are asking for help
in the form of an equity share investment. We need to raise at least an
additional $100,000.00 or up to $150,000.00. In return for every $12,500
invested, investors will recieve a 2.5% share of the company. Investors can
expect a full return on their investment by year five with dividends paid after
that. This investment money will go towards necessary expenditures such as
labor and equipment needed to maintain and harvest the hops. This is not a
loan we are asking for, this is an opportunity to join in our business. As we
succeed, so will you, and at Hop To It we see no options other than success.
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List of References
http://www.realbeer.com/hops/justhops.html
http://www.landandfarm.com/search/Oregon-Undeveloped-Land-for-sale/
http://www.smallbusinessnotes.com/business-finances/angel-investors.html
http://bineimplement.com/3060_Harvester.php
http://www.usahops.org/graphics/File/Stat%20Pack/2011%20Stat%20Pack.
pdf
http://www.brewersassociation.org/pages/business-tools/craft-brewing-
statistics/facts
http://licenseinfo.oregon.gov/index.cfm?fuseaction=category_lic&itemid_an
d_category=1902|Agriculture
http://www.aphis.usda.gov/plant_health/permits/plantproducts.shtml
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Supporting Documents.