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Transcript
Caitlin Gobert
Chris Thorson
Brady Heatcoat
Curtis Dunnington
Introduction

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

SGP will be based out of Saskatchewan.
The owner will operate the business out of
his home.
Grain prices will be sent to local producers
via text messages
Farmers will sign up and be charged a
monthly fee for their monthly subscription
Objectives



Get commodity prices to farmers on a
daily basis via text messaging
Will result in no phone tag
Prices come to producers rather than
producers looking for prices
Industry Overview

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Currently there is no other service like this
in Canada
There is a similar service through
Farms.com in the USA. Farms.com only
provides future prices from the CBOT.
Operations Plan
Organizational Structure
Owner/General Manager
Part Time
Marketing
Rep/Accounting
Potential Part Time
Accounting Employee
Location/Site Plan

SGP will be based out of SK

The office will be the owner’s home

150 sq. ft office will be used
Work Plan/Flow of Work

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will receive commodity prices from
cooperating companies
Daily prices will input into the database
program before the daily deadline
Text messages will be sent to subscribed
customers
Subscriber’s information will also be put
into the database
Flow of Work
Receive commodity prices
from companies
Sign up customers for
the service
Enter information into
computer database
Information processed and a text
message is sent to customer
Average Business Cycles

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Daily activities will remain fairly constant
from day to day
The business will be operating 5 days a
week, 52 weeks of the year (stat holidays
are an exception)
Each day the prices will be text messaged
to the customers at a specified time
The marketing rep will also work to attract
new customers and promote the company
Capital Budget



has a fairly small start up cost
The primary investment will be the cost of
the database program
Other costs include a computer and other
office equipment, an accounting program,
and office furniture
Capital Budget
2007
Computer Database Program/Website
Setup
Laptop Computer
Fax machine/copier/scanner/Printer
Office Furniture
Accounting Software
Total
$11,639
$2,500
$150
$1,100
$400
$15,789
Cost of Sales
Direct Expenses
Website Fee
$6,000
Direct Labor & Benefits
50% of manager’s salary & 50% of marketer’s salary
$36,096
Overhead Costs
Utilities
$960
Phone
960
CCA
2,313
Rent
4,800
$8,033
Total Cost of Sales
$51,129
Cash Conversion Cycle

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doesn’t have anything that will be
inventoried
Customers will be billed on a monthly
basis
Some payables will be paid monthly and
some will be paid cash on demand
Cash Conversion Cycle
Cash Conversion Cycle
Days
Average Days in Inventory
1
Average Collection Period (Receivables)
30
Average Days Payable
13
Cash Conversion Cycle
18
Human Resources
HR Plan- Job Descriptions
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Owner/General Manager
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Ensure that data is received and input before
the daily cut off
Oversee other employees
Assist with data input
Marketing Rep/Accounting Manager
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Oversee all financial transactions
Assist in data input
Promotion/advertising for SGP
Labour Cost- Owner/GM
Total Pay
Portion of Total Pay
Pay Amount
100%
46,792.20
Base Pay
42,000.00
Indirect Pay
4,792.20
Mandatory Benefits
CPP
EI
WCB
4.95%
2,079.00
1.95 % (up to 36,000)
982.80
1.20%
1,730.40
Marketing Rep/Account Manager
Total Pay
Portion of Total Pay
Pay Amount
100%
24,509.80
Base Pay
22,000.00
Indirect Pay
2,509.80
Mandatory Benefits
CPP
4.95%
1,089.00
EI
1.95%
515.20
WCB
1.20%
905.60
Future Human Resources
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When it grows and the work load becomes
too much for the current 2 employees a
3rd may be hired
The potential 3rd employee would be to
assist the accounting manager in
accounting activities and data input
Marketing Plan
Products and Services

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SGP will be marketing a service that
provides customers a text messaging
service.
The service consists of grain prices from
local elevators
Pricing
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Pricing will not have to be set at a
competitive level as there is no direct
competition
Results from a survey we conducted
suggests that farmers that would use the
service are willing to pay $10-$15 per
month
$10 will get producers up to 5 prices and
$15 will get up to 10
Promotion
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will get interviews with local agricultural
publications
Advertisements will be placed in local
media
Booth at local trade shows across the
province will be purchased
SWOT
Strengths

Low capital cost

Low human resource requirement

Marketing Rep has extensive public
relations knowledge
Weaknesses

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Lack of experience and knowledge of the
market
Unsure of the workload that the database
program requires
The GM has limited experience of
managing a company of this nature
Opportunities
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Potential to expand into other Western
Canadian provinces if successful in
Saskatchewan
SGP has no direct competition
First mover of such a service
Expansion of service to include futures
pricing is possible
Threats

Very easy for other companies to enter
the market

needs cooperation from grain companies

Aging population unaware of technology
Market Analysis
Analysis

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Past performance – Little to no info. on past
history. Farms.com from the US. Text message
future prices to customers.
Market – Service will be sold to local farmers
with the younger generation being the primary
target. A survey was conducted to see if and
what producers are willing to pay.
Competition – No direct competition, Farmers
who have access to the internet may get prices
for free online from grain companies.
Analysis (cont.)
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Target markets and Customers – Grain
producers. Customers will have to subscribe on
a monthly basis.
Product Features – Commodity prices send out
52 weeks per year at a specific time. Producers
don’t have to look for prices they come to them.
The opportunities – Great opportunity for
producers who are on the go, they can receive
prices while in the combine, tractor etc.
Opportunity to expand if sufficient interest is
developed.
Survey Results
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Total farmers surveyed 50
48% would use the service
10% would not use the service
The remaining 42% said maybe
44% would spend $6-$10 on the service
38% would be willing to spend $0-$5
11% would spend $11-15 on the service
7% would be willing to spend $16-$20 on the
service
Segmentation Targeting and
Positioning
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Segmentation – Prospective customers can be
segmented in several categories such as Large,
and small farms or Young <55 and older >55
years of age.
Targeting –will target the younger generation
more than the older, and larger rather than
smaller operations because of more commodities
and busier lives.
Positioning –has an advantage over Grain
companies that have online access because
producers can receive prices on the go. Also no
computer is required for text messaging.
Channels of Distribution

Grain companies will submit commodity
prices, who will then enter them into a
database. Information from the database
will then be sent out to subscribing
producers.
Marketing Strategy
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
Selling and Advertising –will initially try and get interviews
with local publications. SGP will also attend Trade shows
to promote there service. Advertisements may also be
placed in local Publications.
Marketing Plan Budget
Publications (newspapers, etc)
Tradeshows
Total Marketing Budget
$3,000
$10,000
$13,000
Financial Plan
Critical Variables
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2 critical variables
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
Selling Price of the Service
Volume of Sales
Selling Price
Amount of Sales
Best Case
(IRR~71%)
$145
Base
Case
$120
Worst Case
(IRR=0)
$77.17
690
575
336
SGP Financials
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IRR of 42.7%
ERR of 36.1%
1st year has a net loss, but other years
have net income
No long term debt because SGP has no
assets that can be used to secure a loan
All financing for the company is done
through owner’s equity
Conclusion
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This plan is based on the fact that it is not
paying for the information received from
the grain companies, provided the grain
companies will even give out the
information.
If it can receive the prices, it has great
opportunity for success throughout
Canada.