Business Plan: Natural Farmers Food Storage

Business Plan
Natural Farmers Food Storage
Table of Contents
INTRODUCTION .....................................................................................................................5
EXECUTIVE SUMMARY .......................................................................................................5
PART 1 ......................................................................................................................................6
OPPORTUNITY GAP ..............................................................................................................6
The problem and demand gap of customers: ............................................................................6
The opportunity.......................................................................................................................6
The Solution: Natural Farmers Food Storage Limited (NFFS) .................................................7
FEASIBILITY RESEARCH ....................................................................................................8
Product/ Service feasibility- ....................................................................................................8
Industry feasibility ..................................................................................................................8
Industry attractiveness .........................................................................................................8
Organizational feasibility analysis ...........................................................................................9
Financial feasibility ............................................................................................................... 10
Total start up cash needed for NFFS .................................................................................. 10
ASSUMPTIONS FOR THE NEW VENTURE START UP & DEVELOPMENT .............. 11
Assumption about competition .......................................................................................... 11
Assumption about Growth ................................................................................................. 11
Financial assumptions ....................................................................................................... 11
Personnel assumption ........................................................................................................ 11
THE BUSINESS MODEL ...................................................................................................... 12
Building block 1: Core Strategy ............................................................................................ 12
Mission ............................................................................................................................. 12
Product or Market scope .................................................................................................... 12
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Business Plan for Natural Farmer Food Storage
Basis for differentiation ..................................................................................................... 13

2nd building block: strategic resources ................................................................................... 13
Core competencies ............................................................................................................ 13
Strategic assets .................................................................................................................. 13
3rd building block: partnership network ................................................................................. 13
Supplier ............................................................................................................................. 13
4th building block: customers interface .................................................................................. 14
Target market- ................................................................................................................... 14
VENTURE & WORKING CAPITAL NEEDS FOR THE INVESTORS ............................ 16
FINANCIAL JUSTIFICATION............................................................................................. 18
Break Even analysis for Natural Farmers Food Storage Limited (NFFS) ............................... 18
Projected profit and loss for Natural Farmers Food Storage Limited (NFFS)- ........................ 19
Pro forma profit and loss statement: ...................................................................................... 20
Pro forma Cash Flow:............................................................................................................ 22
Pro forma Balance Sheet for NFFS: ....................................................................................... 24
PART 2 .................................................................................................................................... 25
COMPREHENSIVE ASSESSMENT ..................................................................................... 25
CRITICAL FACTORS FOR SUCCESS................................................................................ 25
Health factor ......................................................................................................................... 25
Price Level ............................................................................................................................ 25
Decoration & Cleanliness ...................................................................................................... 25
Parking .................................................................................................................................. 25
CRITICAL FACTORS FOR FAILURES ............................................................................. 26
CONCLUSION ....................................................................................................................... 26
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REFERENCES ........................................................................................................................ 27
References............................................................................................................................. 27
APPENDICES ......................................................................................................................... 29
Sales forecast: ....................................................................................................................... 29
Personnel Plan: ...................................................................................................................... 29
General Assumptions ............................................................................................................ 30
Pro Forma Cash Flow ............................................................................................................ 31
Pro Forma Balance Sheet ...................................................................................................... 33
Figure Contents
Figure 1 - the need for Natural Farmers food storage limited ......................................................7
Figure 2 Start-up cost contribution ............................................................................................ 10
Figure 3- Value creation process of NFFS ................................................................................. 14
Figure 4 Customer growth prediction ........................................................................................ 15
Figure 5 Funding and Requirements (Format source: Barringer and Ireland, 2013; Estimation of
Amount- own research) ............................................................................................................. 17
Figure 6 BEP analysis ............................................................................................................... 18
Figure 7 BEP Estimation for NFFS ........................................................................................... 18
Figure 8 Monthly Profit for NFFS ............................................................................................. 19
Figure 9 Yearly Profit for NFFS ................................................................................................ 19
Figure 10 Monthly Gross Margin for NFFS ............................................................................... 20
Figure 11 Yearly gross margin for NFFS ................................................................................... 20
Figure 12 Projected Cash flow for NFFS ................................................................................... 22
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Introduction
The decision to purchase organic food over conventionally grown food is a personal one, and as
any one walk through the supermarket, many of which are now adding organic sections, one will
likely ask the question: Is organic food really better? Day to day the demand for organic food is
increasing among the public. So building a business on organic food idea would not be a bad
one!
Executive summary
According to the research of IFIC (International Food Information Council) 71% of the total
population prefer health and environment issue while buying their day to day product specially
grocery or retail product. On the other hand only 30% of 71% health cautious people get their
desired product. There is huge demand and supply gap among these people.
As the organic foods demand increasing at 15% every year according to the study of OTA
(Organic Trade Association), the big idea is to form a grocery retail shop which will offer
organic and eco friendly products to the health caution people of our target area.
Natural Farmers Food Storage is an Organic food supplier rather than traditional food. Natural
Farmers Food Storage will collect the food that is free of any synthetic fertilizer or medicine and
then serve it to the health cautious customers which are increasing dramatically and thus will
make money. It will be situated in Southampton, England, UK. And our primary target market
will be the 50,000 people who live in this community.
The initial need of 143,000 will be collected from 2 primary sources. Cofounders, William and
David, will invest 88,000. Other 55,000 will be collected from SBA loan. Within 1 year the
company will reach to its BEP. Monthly BEP will be 35,505.
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Part 1
Opportunity Gap
The problem and demand gap of customers:

Although buying the organic food rather traditional food is conventionally vary from person to
person as it is a personal decision, globally the demand for organic food in increasing rapidly.
Organic foods cover over 10% of the global sales. The amount of sales is nearly 35 billion in
2013. As the people are getting health caution they are reluctant to use the synthetic product. A
global research on organic food explains the reason of usage behind the organic foods. The
research shows almost 15 solid reasons behind the usage of organic food.
The first reason is the negative influence of pesticides on our health. The pesticides can create
problem on human body in the area of neurotoxicity, disruption of the endocrine system,
carcinogenicity as well as can create problem in immune system suppression. Alarming news isexposure of pesticides has a high probability to harm the male reproduction system and this
problem is technically connected to the miscarriages in women (Burch, 1986).
In accordance with the pesticide contamination problem, another lacing of traditional food is
having low amount of nutrients. Recent study shows that because of synthetic pesticide
traditional food cannot get as much nutrition as the organic food. On an average traditional
production is capable of producing only 70% of the nutrients of the organic produce. Researchers
found that organic food contains a very high level of nutrient namely vitamin C, strong content
of iron, magnesium and phosphorus, as well as considerably less nitrates (a toxin) in organic
crops.
The opportunity:
These reasons tell us that organic food is far better than non organic food (Burch, 1986). Another
study of OTA (Organic Trade Association) rose at a rate of 15% every year. In the last year the
sales was 32 billion but al present the global sales of organic food is 35 billion. The
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percentage rate of increasing demand is around 12%. According to OTA (Organic Trade
Association) the growth rate will sustain in the year coming.
Increasing at 12% per

year
only 20% of demanding

customers get organic product
Huge demand supply gap
Demand is
Supply is Low
Increasing
Natural Farmers: The solution
Natural Farmers is retailer who will

provide organic product to the
demand supply gap
Thus way- make money
Figure 1 - the need for Natural Farmers food storage limited
The Solution: Natural Farmers Food Storage Limited (NFFS)

Considering this situation and opportunity gap Natural Farmers Food Storage Limited (NFFS) is
retailers which will provide the customers locally produced and organic, preservation and
comical free groceries, body care which cruelty free is and eco friendly household products.
Rather than the conventional grocery chain non organic food, Natural Farmers Food Storage
Limited (NFFS) will provide healthy groceries. It will be located at Southampton, England, UK.
Our initial target market will be 30,000 residents.
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Feasibility Research
Feasibility is the study to determine the rationality of the business idea (Burch, 1986). After the
feasibility test one can only proceed to the next phase- writing business plan. There are 4 steps in
feasibility test. The feasibility of Natural Farmers Food Storage Limited (NFFS) is given below-
Product/ Service feasibilityService feasibility test asses the overall appeal of the service. There are 2 components of service
feasibility test. One is service desirability and another is service demand.
In case of service desirability of Natural Farmers Food Storage Limited (NFFS) we can say
that according to the research of OTA (Organic Trade Association) and IFIC (International Food
Information Council) the consumers are excited about these kinds of service as the number of
health cautions consumers increase globally.
A well known organization IFIC (International Food Information Council) recently published a
survey results and the results shows that 71% consumers said healthiness is the major factor
which influence their buying behavior. In the last year this percentage was 61%. Around 54%
customers say that they like organic food. According to the research of OTA the demand of the
organic food is increasing at a rate of around 12% per year.
So according to the study we can say Natural Farmers Food Storage Limited (NFFS) passed the
service feasibility test and service demand test.
Industry feasibility
In case of industry feasibility test the overall appeal of the target market and industry is assessed
(Burch, 1986).
Industry attractiveness- The retailing industry is fragmented (Carsrud and Brannback , 2007).
As the entry barrier is low, day to day new venture is coming in the way without hesitation. But
sustaining in this industry successfully is truly challenging. There are 3 ways of differentiation to
sustain in the competitive market like grocery and retailing industry (Burch, 1986). One way is
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cost differentiation. In the cost differentiation the company has to invent such way to operate the
business so that the cost of business operation will be low (Carsrud and Brannback , 2007). As a
result they can offer competitive low price. Another way of sustaining is differentiation which
allows the company to invent new service and then impose high price(Carsrud and Brannback ,
2007). The last way of differentiation is focus differentiation. In this stage the company targets a
group of customers and then tries to find out their unique needs. And according to customer
needs, the company serve unique product.
Natural Farmers Food Storage Limited (NFFS) follow the focused differentiation strategy to
sustain in the competitive market. It will serve the niche of health cautions customers and will
serve the customers organic groceries and food. So according to the study we can say industry
attractiveness and target market attractiveness is favorable for Natural Farmers Food
Storage Limited (NFFS).
Organizational feasibility analysis:

The organizational feasibility analyzes the management expertise and resource sufficiency of
the new business ideas (Burch, 1986). If we talk about the management expertise then Natural
Farmers Food Storage Limited (NFFS) has favors because co founders, John William and David
Baker, have more than 12 years experience in the same line of business.
David Baker served the Mason Peak Natural Grocery, 4th and Tyler. This grocery was
established in 1992 by a nonprofit organization NEDCO (Neighborhood Economic Development
Corporation). Mr. Baker entered into the company as a store manager and eventually advanced to
the post of area manager. So professionally Baker has better market concept about Grocery
customer which he can apply in his own business Natural Farmers Food Storage Limited
(NFFS).
John William is a university teacher has a higher degree on food and nutrition. He worked as the
head of research and development department of a local food company. So professionally
William has sufficient knowledge about organic food which he can apply in his own business
Natural Farmers Food Storage Limited (NFFS).
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In case of sufficient resource to move forward Natural Farmers Food Storage Limited (NFFS)
has special skills and intellectual property protection on the key aspect of Natural Farmers Food
Storage Limited (NFFS).
Financial feasibility
Financial feasibility analysis asses the important issues like total stat up needed, financial
performance of the similar business and financial attractiveness of the new business idea (Covin
and Slevin, 1991). The financial feasibility of Natural Farmers Food Storage Limited (NFFS) is
given belowTotal start up cash needed for NFFS
Primary inventory and display equipment will cover the initial start-up cost (Carsrud and
Brannback, 2007). 2 co founders William and David will invest 88,000. The co founders will
also apply for SBA loan of 55,000.
Start-up Cost contribution for
NFFS
39%
Students
61%
Families
Figure 2 Start-up cost contribution
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Assumptions for the New Venture Start Up & Development

While making the business plan there are some issues that we need to assume (Covin and Slevin,
1991). The assumptions for Natural Farmers Food Storage Limited (NFFS) is given belowAssumption about competition- as we are new in this area we will not face direct competitor.
But we need to face the indirect competitors like super markets which have an organic section of
their own recently.
Assumption about Growth- our target market consists of families and students. The rate of
growth of families is around 15% and the rate of growth of students is 10%. And overall our
sales and other variable will increase at an average of 12% every year.
Financial assumptions- we assume that we will able to reach our BEP (Break Even Point)
within a year. As we assume that our customer will increase, we will need to open new branch in
different places.
Personnel assumption- Initially we will recruit 3 new employees. And in the second year we
will recruit another 2 employees. After the 3 rd year, according to our target customer need we
will have to recruit new employees.
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The Business Model

A business model is a blueprint for a venture which explain how the company will compete with
the competitors, how it will use its resources, structure its relations, face the customers and how
it will create values to sustain in the future (Bygrave and Zacharakis, 2008). There are four
building blocks of an effective business model (Burch, 1986). They are explained on the
perspective of NFFS-
Building block 1: Core Strategy

This is the first building block of an effective business model. It explains how the company will
compete relative to the competitors (Bygrave and Zacharakis, 2008). Mission statement, product
or market scope, basis for differentiation are the main things to discuss in this analysis.
Mission- Natural Farmers Food Storage Limited (NFFS) mission is to help the customer who
wants to lead a healthy and sound life. For that matter the firm will serve prime quality, organic
and fresh food, and eco friendly day to day products. Our employees who are educated enough to
understand the consumers are devoted to serve the customer eagerly.
Product or Market scope- Natural Farmers Food Storage Limited (NFFS) will be situated at
Southampton, England, UK. It will concentrate on the 50,000 people who live in this
community. The firm will offer the customers locally produced and organic, preservation and
comical free groceries, body care which cruelty free is and eco friendly household products.
The products that Natural Farmers Food Storage Limited (NFFS) are:
No synthetic preservatives.
No Synthetic colours.
No chemical additives.
Organically grown, in every possible way
Availability of least processed version
Product is Non-irradiated
Cruelty free products
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Basis for differentiation- without any differentiation it will not possible for a company to
sustain in the competitive industry like retailer (Bygrave and Zacharakis, 2008). Natural
Farmers Food Storage Limited (NFFS) will be differentiating itself on the basis of offering
unique service like providing organic food and eco friendly product.
2nd building block: strategic resources

Without sufficient resources a company will not possible to implement its strategy (Carsrud and
Brannback, 2007). For a start-up initial strategic resources are bound to the competencies of its
founders, opportunity they define and the uniqueness to supply its product to the customers.
Core competencies- core competencies is the unique capability or resource which work as a
basis for competition (Carsrud and Brannback , 2007). The core competency of Natural Farmers
Food Storage Limited (NFFS) is its service of organic food. And this competency is unique,
valuable to the customers, difficult to imitate and transferable to new opportunities (Covin and
Slevin, 1991).
Strategic assets- strategic assets for Natural Farmers Food Storage Limited (NFFS) are plant
and equipment, location, patent of their services, a prime quality team workers and unique
partnership with the suppliers.
3rd building block: partnership network

A venture has to relay on other line of business for their product and services to offer (Bygrave
and Zacharakis, 2008). A new ventures partnership consists of suppliers, and other partners
(Carsrud and Brannback, 2007).
Supplier- suppliers provide raw materials or other ingredients to the company. A supply chain
consists of all the parties related to the value creation of the ultimate customers. The supplier of
Natural Farmers Food Storage Limited (NFFS) is the local farm of organic foods.
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Natural
Local organic firm

which
produces
Farmers Food
Storage
organic products
The ultimate
customers
Limited
(NFFS)
Figure 3- Value creation process of NFFS
4th building block: customers interface

This building block explains how the firm will interact with its customers (Bygrave and
Zacharakis, 2008). The components of customer interface include the target market analysis,
fulfillment and support, and structure of pricing. According to Natural Farmers Food Storage
Limited (NFFS) these components are explained belowTarget marketIn the past 10 years our target area is drastically improving (Covin and Slevin, 1991). The
student community together with the new families is the perfect customer base for Natural
Farmers Food Storage Limited (NFFS).
At present our target market is served by super markets and they do not offer any of our product
lines. There is no natural food store near. According to David who has an experience in this
market is very optimistic about the product demand.
.Segmentation of the market- Natural Farmers Food Storage Limited (NFFS) will focus on 2
customer basesStudents- there are a lot of students who prefer organic food rather traditional food line.
As Natural Farmers Food Storage Limited (NFFS) is situated within their walking
distance, the students can conveniently buy their required products. Good news is the
number of students is increasing day by day.
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Families- at present many new families move to our target market. According to the
research we found that 80% of these family members are willing to use healthy products
rather than conventional products. This buying behavior makes our business idea
profitable.
Customer base for NFFS
10%
Students
Families
35%
55%
Others
Target market analysis- Our target market analysis shows the following information-
Potential
Customers
base
Family
Students
Other
Total
Year 1
Year 2
Year 3
Year 4
Year 5
18%
17,500
20,650
24,367
28,753
33,929
12%
27,500
32,450
38,291
45,183
53,316
1%
5000
5,900
6,962
8,215
9,694
50,000
59,000
69,620
82,152
96,939
Growth
rate
Figure 4 Customer growth prediction
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Venture & Working Capital Needs for the investors

To initiate a venture the company will need a huge amount of investments (Covin and Slevin,
1991). Before implement the business plan the company needs to assume the needs of fund and
how they would be collected. In the following section describes the needs of start-up fund and
requirements for Natural Farmers Food Storage Limited (NFFS
Funding for Start-up NFFS
Amount
Start-up Expenses to Fund
85580.00
Start-up Expenses
Start-up Assets to Fund
57420.00
Legal
Total Funding Required
143000.00
Requirements for Start-up NFFS
Start-Up Inventory
Non-cash Assets from Start-up
11000.00
Display Set-Up
Cash Requirements from

Start-up
Additional Cash Raised
46420.00
Cash Reserve for

Hiring
Advertising
Cash Balance on Starting Date
46420.00
Other
Total Assets
57420.00
Total Start-up
Expenses
0.00
1,100
0
Insurance
Rent
Assets
Amount
1,980
44,000
5,500
33,000
0
0
85,580
Liabilities and Capital

Liabilities
Start-up Assets
0.00
Current Borrowing
Long-term Liabilities
Accounts Payable
(Outstanding Bills)
Other Current Liabilities
(interest-free)
Total Liabilities
55000.00
Cash Required
46,420
0
Other Current Assets
0.00
Long-term Assets
11,000
0.00
Total Assets
57,420
55000.00
Total Requirements
143,000
Capital
Planned Investment
William and David
88000.00
Other
0.00
Additional Investment
Requirement
Total Planned Investment
0.00
88000.00
Loss at Start-up (Start-up
-85580.00
Page | 16
Expenses)
Total Capital
Total Capital and Liabilities
Total Funding
2420.00
57420.00
143000.00
Figure 5 Funding and Requirements (Format source: Barringer and Ireland, 2013; Estimation of Amount- own research)
Page | 17
Financial justification
In the financial justification section the firms BEP (break Even point) projected profit condition,
projected income statement, projected balance sheet, projected cash flow statements are
described on the basis of Natural Farmers Food Storage Limited (NFFS.
Break Even analysis for Natural Farmers Food Storage Limited (NFFS)
The monthly breakeven point for Natural Farmers Food Storage Limited (NFFS) will be
35,505. The graph show the way-
Figure 6 BEP analysis
Monthly Revenue Break-even for 35,505

NFFS
Assumptions for BEP:
Average Percent Variable Cost
30%
Estimated Monthly Fixed Cost
24,743
Figure 7 BEP Estimation for NFFS
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Projected profit and loss for Natural Farmers Food Storage Limited (NFFS)In the following graphs and table explain the financial projection of NFFS
Figure 8 Monthly Profit for NFFS
Figure 9 Yearly Profit for NFFS
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Figure 10 Monthly Gross Margin for NFFS
Figure 11 Yearly gross margin for NFFS
Pro forma profit and loss statement:

The pro forma statement for Natural Farmers Food Storage Limited (NFFS) is given belowParticulars
Sales
Direct Cost of Sales
Year 1
465300
Year2
517000
Year 3
141042
165000
192500
572000
Other Production
Expenses
Total Cost of Sales
141042
165000
192500
Gross Margin
324258
352000
379500
Gross Margin %
0.76659
0.74899
0.72985
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Expenses
219120
239800
259600
Sales and Marketing and

Other Expenses
7700
11000
14300
Depreciation
1584
1584
1584
Utilities
5280
5280
5280
Insurance
6600
6600
6600
Rent
23760
23760
23760
Payroll Taxes
32868
35970
38940
Total Operating Expenses
296912
323994
350064
Profit Before Interest and

Taxes
EBITDA
27346
28006
29436
28930
29590
31020
Interest Expense
4904.9
3851.1
2751.1
6732
7246.8
8005.8
Net Profit
15709.1
16909.2
18679.1
Net Profit/Sales
0.03718
0.03597
0.03597
Payroll
Leased Equipment
Other
Taxes Incurred
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Pro forma Cash Flow:

The pro forma Cash Flow statement for Natural Farmers Food Storage Limited (NFFS) is given
below-
Figure 12 Projected Cash flow for NFFS
Particulars
Year 1
Year 2
Year 3
Cash Received
Cash from Operations
Cash Sales
116,325
129,250
143,000
Cash from Receivables
276,733
379,723
420,461
Subtotal Cash from Operations
393,058
508,973
563,461
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Additional Cash Received
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Sales of Long-term Assets
New Investment Received
4,400
397,458
508,973
563,461
Year 1
Year 2
Year 3
Cash Spending
219,120
239,800
259,600
Bill Payments
205,387
260,944
289,389
Subtotal Spent on Operations
424,507
500,744
548,989
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
10,996
10,996
10,996
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
435,502
511,740
559,985
Net Cash Flow
-38,045
-2,767
3,476
8,375
5,609
9,085
Subtotal Cash Received

Expenditures
Expenditures from Operations
Additional Cash Spent
Long-term Liabilities Principal Repayment
Cash Balance
Page | 23
Pro forma Balance Sheet for NFFS:

The pro forma Balance Sheet statement for Natural Farmers Food Storage Limited (NFFS) is
given belowParticulars
Year 1
Year 2
Year 3
Assets
Current Assets
Cash
8,375
5,609
9,085
Accounts Receivable
72,243
80,269
88,809
Other Current Assets
Total Current Assets
80,618
85,878
97,893
11,000
11,000
11,000
Accumulated Depreciation
1,584
3,168
4,752
Total Long-term Assets
9,416
7,832
6,248
90,034
93,710
104,141
Year 1
Year 2
Year 3
23,500
21,264
24,011
0
0
0
0
0
0
23,500
21,264
24,011
Long-term Assets
Long-term Assets
Total Assets
0
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
0
Long-term Liabilities
44,004
33,009
22,013
Total Liabilities
67,505
54,273
46,024
Paid-in Capital
92,400
92,400
92,400
-85,580
-69,871
-52,962
Earnings
15,709
16,909
18,679
Total Capital
22,529
39,438
58,117
Total Liabilities and Capital
90,034
93,710
104,141
Net Worth
22,529
39,438
58,117
Retained Earnings
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Part 2
Comprehensive Assessment
The business plans success depends on the perfect explanation of different components that
explained in the part 1. We can summarize that according to the demand and supply gap of the
customer need of organic food and supplies, Natural Farmers Food Storage Limited (NFFS) will
provide organic foods and other eco friendly groceries. The analysis of target customer explains
that there is a huge potential customer in the target market. The competition is in favor for
Natural Farmers Food Storage Limited (NFFS) because of unique service it provides. Thats
how they will compete with the market and make money.
Critical Factors for Success

For being success in the grocery market NFFS needs to identify its key success factor and then
need to serve accordingly (En.allexperts.com, 2014). The key success factor for NFFS is given
belowHealth factor- according to the recent survey80% of the customer emphasize on health issue
while buying everyday groceries (En.allexperts.com, 2014). As NFFS offer organic and eco
friendly products, customer will be attractive to buy the product.
Price Level- price is another major factor for retail customer (En.allexperts.com, 2014). But
because of competitive advantage on differentiation NFFS can get benefit on price.
Decoration & Cleanliness- the decoration will attract new customers. NFFS will ensure the
beautiful decoration by taking an interior design.
Parking- parking is another issue. Especially bicycle parking opportunity will attract the students
. NFFS will ensure this placement beside the grocery shop.
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Critical Factors for Failures

There are some critical factors which can ruin the retailing business. The company needs to be
careful on these factors. The critical failure factors for NFFS are given belowFail to give after sales service- if the company cannot provide after sales service properly then
customer will churn rate will increase day by day (Studymode.com, 2014). It will hamper the
future business demand. NFFS will ensure it by devoting an employee on this matter.
Low quality goods for higher price- customers are paying a good amount of money for a unique
and healthy product but if the company cheats on this matter then the customer will lose its trust
and switch to another substitute product (En.allexperts.com, 2014).. NFFS will ensure the quality
on the entry level of the product into the storage.
Conclusion
Preparing a business plan forces an entrepreneur to think through how he/she is going to start,
grow, and even exit the business before spend a dime. It allows analyzing your company's
mission, financial needs, strategies and structure, while forcing to do some real research about
your market, potential competitors, and how you might position your business at an advantage.
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References
References
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Carsrud, A. and Brannback, M. (2007). Entrepreneurship. 1st ed. Westport, Conn.: Greenwood
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Appendices
Sales forecast:
Sales Forecast
Sales
Sales
Others
Total Sales
Direct Cost of Sales
0%
0%
Sales
Others
Subtotal Direct Cost of Sales
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month
10
Month
11
Month
12
26,000
0
26,000
Month 1
29,000
0
29,000
Month 2
30,000
0
30,000
Month 3
34,000
0
34,000
Month 4
36,000
0
36,000
Month 5
38,000
0
38,000
Month 6
34,000
0
34,000
Month 7
33,000
0
33,000
Month 8
35,000
0
35,000
Month 9
9,000
0
9,000
9,500
0
9,500
9,600
0
9,600
10,200
0
10,200
10,500
0
10,500
11,300
0
11,300
10,000
0
10,000
10,000
0
10,000
11,000
0
11,000
39,000
0
39,000
Month
10
12,000
0
12,000
43,000
0
43,000
Month
11
12,120
0
12,120
46,000
0
46,000
Month
12
13,000
0
13,000
Month
10
2,800
2,800
7,000
4,000
7
16,600
Month
11
2,800
2,800
7,000
4,000
7
16,600
Month
12
2,800
2,800
7,000
4,000
7
16,600
Personnel Plan:
Personnel Plan
Mary Stevens
Josh Wingard
Cashiers
Produce Staff
Total People
Total Payroll
0%
0%
0%
0%
Month
1
2,800
2,800
7,000
4,000
7
16,600
Month
2
2,800
2,800
7,000
4,000
7
16,600
Month
3
2,800
2,800
7,000
4,000
7
16,600
Month
4
2,800
2,800
7,000
4,000
7
16,600
Month
5
2,800
2,800
7,000
4,000
7
16,600
Month
6
2,800
2,800
7,000
4,000
7
16,600
Month
7
2,800
2,800
7,000
4,000
7
16,600
Month
8
2,800
2,800
7,000
4,000
7
16,600
Month
9
2,800
2,800
7,000
4,000
7
16,600
General Assumptions
Month
1
1
Month
2
2
Month 3
Month 4
Plan
3
Month
Current
10.00% 10.00% 10.00%
10.00%
Interest
Rate
Long10.00% 10.00% 10.00%
10.00%
term
Interest
Rate
Tax
30.00% 30.00% 30.00%
30.00%
Rate
Other
0
0
0
0
Pro Forma Profit and Loss
Month 1
Month 2 Month 3
Sales
Direct Cost
of Sales
Other
Production
Expenses
Total Cost
of Sales
Gross
Margin
Gross
Margin %
Expenses
Payroll
Sales
and
Marketing
and Other
Expenses
Depreciation
Leased
Equipment
Utilities
Month
5
5
Month 6
Month
7
7
Month 8
Month 9
Month 10
Month 11
Month 12
10
11
12
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
Month 4
26,000
9,000
29,000
9,500
30,000
9,600
34,000
10,200
Month
5
36,000
10,500
Month
6
38,000
11,300
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
34,000
10,000
33,000
10,000
35,000
11,000
39,000
12,000
43,000
12,120
46,000
13,000
9,000
9,500
9,600
10,200
10,500
11,300
10,000
10,000
11,000
12,000
12,120
13,000
17,000
19,500
20,400
23,800
25,500
26,700
24,000
23,000
24,000
27,000
30,880
33,000
65.38%
67.24%
68.00%
70.00%
70.83%
70.26%
70.59%
69.70%
68.57%
69.23%
71.81%
71.74%
16,600
1,000
16,600
1,000
16,600
500
16,600
500
16,600
500
16,600
500
16,600
500
16,600
500
16,600
500
16,600
500
16,600
500
16,600
500
120
0
120
0
120
0
120
0
120
0
120
0
120
0
120
0
120
0
120
0
120
0
120
0
400
400
400
400
400
400
400
400
400
400
400
400
Page | 30
Insurance
Rent
Payroll
Taxes
Other
Total
Operating
Expenses
Profit
Before
Interest and
Taxes
EBITDA
Interest
Expense
Taxes
Incurred
Net Profit
Net
Profit/Sales
15%
500
1,800
2,490
500
1,800
2,490
500
1,800
2,490
500
1,800
2,490
500
1,800
2,490
500
1,800
2,490
500
1,800
2,490
500
1,800
2,490
500
1,800
2,490
500
1,800
2,490
500
1,800
2,490
500
1,800
2,490
0
22,910
0
22,910
0
22,410
0
22,410
0
22,410
0
22,410
0
22,410
0
22,410
0
22,410
0
22,410
0
22,410
0
22,410
(5,910)
(3,410)
(2,010)
1,390
3,090
4,290
1,590
590
1,590
4,590
8,470
10,590
(5,790)
410
(3,290)
403
(1,890)
396
1,510
389
3,210
382
4,410
375
1,710
368
710
361
1,710
354
4,710
347
8,590
340
10,710
333
(1,896)
(1,144)
(722)
300
812
1,174
367
69
371
1,273
2,439
3,077
(4,424)
-17.01%
(2,669)
-9.20%
(1,684)
-5.61%
701
2.06%
1,896
5.27%
2,740
7.21%
855
2.52%
160
0.49%
865
2.47%
2,970
7.62%
5,691
13.23%
7,180
15.61%
Pro Forma Cash Flow

Month 1
Cash Received
Cash
from
Operations
Cash Sales
Cash
from
Receivables
Subtotal
Cash
from Operations
Additional
Cash
Received
Sales Tax, VAT,
HST/GST
Received
New
Current
Borrowing
New
Other
Liabilities
(interest-free)
New
Long-term
Liabilities
0.00%
6,500
650
Month 2
Month 3
Month 4
Month 5
Month 6
Month
7
8,500
9,000
9,500
22,600
25,550
27,050 28,400
Month 8
Month 9
Month
10
Month 11
Month
12
8,500
25,475
8,250
8,750
24,800 26,350
9,750
29,350
10,750
11,500
7,250
7,500
21,775
6,500
7,900
27,075
30,275
31,600
35,050
35,550
36,650
34,225
34,550
37,100
40,850
19,575
Page | 31
Sales of Other
Current Assets
Sales of Long-term
Assets
New Investment
Received
Subtotal
Cash
Received
Expenditures
Expenditures from
Operations
Cash Spending
Bill Payments
Subtotal Spent on
Operations
Additional
Cash
Spent
Sales Tax, VAT,
HST/GST
Paid
Out
Principal
Repayment
of
Current Borrowing
Other Liabilities
Principal
Repayment
Long-term
Liabilities
Principal
Repayment
Purchase
Other
Current Assets
Purchase
Longterm Assets
Dividends
Subtotal
Cash
Spent
Net Cash Flow
Cash Balance
4,000
6,500
7,900
27,075
30,275
35,600
35,050
35,550
36,650
34,225
34,550
37,100
40,850
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month
7
Month 8
Month 9
Month
10
Month 11
Month
12
16,600
457
17,057
16,600
13,745
30,345
16,600
14,949
31,549
16,600
15,018
31,618
16,600
16,606
33,206
16,600
17,423
34,023
16,600
18,469
35,069
16,600
16,414
33,014
16,600
16,163
32,763
16,600
17,478
34,078
16,600
19,353
35,953
16,600
20,640
37,240
833
833
833
833
833
833
833
833
833
833
833
833
0
17,890
0
31,178
0
32,382
0
32,451
0
34,039
0
34,856
0
35,902
0
33,847
0
33,596
0
34,911
0
36,786
0
38,073
(11,390)
30,810
(23,278)
7,532
(5,307)
2,224
(2,176)
49
1,561
1,609
194
1,804
(352)
1,452
2,803
4,254
629
4,883
(361)
4,522
314
4,836
2,777
7,614
Page | 32
Pro Forma Balance Sheet

Month 1
Assets
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Starting
Balances
Current Assets
Cash
Accounts
Receivable
Other
Current
Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated
Depreciation
Total
Long-term
Assets
Total Assets
Liabilities
and
Capital
Accounts Payable
Current Borrowing
Other
Current
Liabilities
Subtotal
Current
Liabilities
Long-term
Liabilities
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and
Capital
Net Worth
42,200
0
30,810
19,500
7,532
40,600
2,224
43,525
49
47,250
1,609
51,650
1,804
54,600
1,452
53,050
4,254
49,400
4,883
50,175
4,522
54,625
4,836
60,525
7,614
65,675
42,200
50,310
48,132
45,749
47,299
53,259
56,404
54,502
53,654
55,058
59,147
65,361
73,289
10,000
0
10,000
120
10,000
240
10,000
360
10,000
480
10,000
600
10,000
720
10,000
840
10,000
960
10,000
1,080
10,000
1,200
10,000
1,320
10,000
1,440
10,000
9,880
9,760
9,640
9,520
9,400
9,280
9,160
9,040
8,920
8,800
8,680
8,560
52,200
60,190
Month 1
57,892
Month 2
55,389
Month 3
56,819
Month 4
62,659
Month 5
65,684
Month 6
63,662
Month 7
62,694
Month 8
63,978
Month 9
67,947
Month 10
74,041
Month 11
81,849
Month 12
0
0
0
13,247
0
0
14,451
0
0
14,465
0
0
16,027
0
0
16,805
0
0
17,922
0
0
15,877
0
0
15,582
0
0
16,834
0
0
18,666
0
0
19,903
0
0
21,364
0
0
13,247
14,451
14,465
16,027
16,805
17,922
15,877
15,582
16,834
18,666
19,903
21,364
50,000
49,167
48,334
47,501
46,668
45,835
45,002
44,169
43,336
42,503
41,670
40,837
40,004
50,000
80,000
(77,800)
0
2,200
52,200
62,414
80,000
(77,800)
(4,424)
(2,224)
60,190
62,785
80,000
(77,800)
(7,093)
(4,893)
57,892
61,966
80,000
(77,800)
(8,777)
(6,577)
55,389
62,695
80,000
(77,800)
(8,076)
(5,876)
56,819
62,640
84,000
(77,800)
(6,180)
20
62,659
62,924
84,000
(77,800)
(3,440)
2,760
65,684
60,046
84,000
(77,800)
(2,585)
3,615
63,662
58,918
84,000
(77,800)
(2,424)
3,776
62,694
59,337
84,000
(77,800)
(1,559)
4,641
63,978
60,336
84,000
(77,800)
1,411
7,611
67,947
60,740
84,000
(77,800)
7,101
13,301
74,041
61,368
84,000
(77,800)
14,281
20,481
81,849
2,200
(2,224)
(4,893)
(6,577)
(5,876)
20
2,760
3,615
3,776
4,641
7,611
13,301
20,481
Page | 33

Business Plan: Natural Farmers Food Storage

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Business Plan: Natural Farmers Food Storage

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Business Plan

Natural Farmers Food Storage

Basis for differentiation ..................................................................................................... 13

The problem and demand gap of customers:

Increasing at 12% per

only 20% of demanding

Huge demand supply gap

Natural Farmers: The solution

Natural Farmers is retailer who will

Thus way- make money

Figure 1 - the need for Natural Farmers food storage limited

The Solution: Natural Farmers Food Storage Limited (NFFS)

Organizational feasibility analysis:

Figure 2 Start-up cost contribution

Assumptions for the New Venture Start Up & Development

The Business Model

Building block 1: Core Strategy

Organically grown, in every possible way

Availability of least processed version

Cruelty free products

2nd building block: strategic resources

3rd building block: partnership network

Local organic firm

4th building block: customers interface

Customer base for NFFS

Figure 4 Customer growth prediction

Venture & Working Capital Needs for the investors

Start-up Expenses to Fund

Start-up Assets to Fund

Total Funding Required

Requirements for Start-up NFFS

Non-cash Assets from Start-up

Cash Requirements from

Cash Reserve for

Cash Balance on Starting Date

Liabilities and Capital

Other Current Assets

Loss at Start-up (Start-up

Figure 6 BEP analysis

Monthly Revenue Break-even for 35,505

Estimated Monthly Fixed Cost

Figure 7 BEP Estimation for NFFS

Figure 8 Monthly Profit for NFFS

Figure 9 Yearly Profit for NFFS

Figure 10 Monthly Gross Margin for NFFS

Figure 11 Yearly gross margin for NFFS

Pro forma profit and loss statement:

Sales and Marketing and

Total Operating Expenses

Profit Before Interest and

Pro forma Cash Flow:

Figure 12 Projected Cash flow for NFFS

Cash from Receivables

Subtotal Cash from Operations

Sales Tax, VAT, HST/GST Received

New Current Borrowing

New Other Liabilities (interest-free)

New Long-term Liabilities

Sales of Other Current Assets

Additional Cash Received

Sales of Long-term Assets

New Investment Received

Subtotal Spent on Operations