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1.0 Executive Summary
Microgreens Farm, LLC (“the Company”) is seeking to develop a moderate scale farm that will provide microgreens. The business is based in Lancaster, Pennsylvania and it was founded by John Rivers. The business will operate as a family owned and operated farm. The Founder is seeking $1,000,000 in order to establish the operations of the business.
1.1 The Services
As stated above, the primary revenue center will come from the ongoing sale of microgreens on both a direct to consumer and wholesale basis. The farm will feature ten acres and it will have several onsite greenhouses. The Company will employ five people that will assist in the day-to-day operations of the business. Microgreens Farm will also have an indoor greenhouse that will allow for year-round operations.
In regards to sales, the Company will sell its microgreens at farmers markets and to restaurants, grocery stores, and food service businesses throughout the greater Lancaster market area. The business will also maintain an online presence so that sales can be made to any person in the country (with packages shipped overnight).
The third section of the business plan will discuss the operations of Microgreens Farm.
1.2 Financing
As stated above, Microgreens Farm is seeking $1,000,000 in order to establish its farming operations. This business plan assumes that the Company will receive a 20 year loan carrying an 8% interest rate. The funds will be principally allocated as follows:
• Land acquisition
• Greenhouse development
• General furniture, fixtures, and equipment
• Working capital
As time progresses, the Company would be a strong candidate for expansion financing given the highly predictable income generated from the ongoing sale of microgreens. In the event that a second farming location is developed, the Company will acquire an additional business loan. This event will not occur within the next three years.
1.3 Mission Statement
The Company’s mission is to provide organic microgreens at an affordable price to the Lancaster community.
1.4 Management Team
John Rivers has seven years of experience as a professional farmer. He will be able to develop an outstanding reputation for Microgreens Farm, LLC while bringing the operations of the business to profitability within its first year.
1.5 Sales Forecasts
1.6 Expansion Plan
Over the next three years, the Company will make sustained reinvestment into the production capacity of the business. This will include the development of additional greenhouses onsite. After Year 3, the business may seek to develop additional locations given the immense demand for microgreens.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Microgreens Farm, LLC. The business is registered as a limited liability company in the State of Pennsylvania.
2.2 Required Funds
The Company is seeking $1,000,000 in order to establish microgreens production operations. Management will contribute $250,000 towards the development as a down payment. The funds are to be used as follows:
2.2 Management Equity
John Rivers and members of his family will retain a 100% ownership interest in the business.
2.3 Exit Strategy
Most likely, the farm would be sold to a third party. Based on the anticipated profitability of the business, Microgreens Farm, LLC could receive a sales premium of up to ten times the previous year’s earnings. However, this event is not expected to occur for a substantial period of time as Management intends to pass the farm down for generations to come.
3.0 Operations
As stated in the executive summary, Microgreens Farm is seeking to develop its microgreens farm on ten acres of land on the outskirts of Lancaster. The location, upon completion, will initially feature 15 greenhouses. A large indoor greenhouse will also be developed so that production operations can occur year-round.
The Company will develop purchase order relationships with numerous restaurants, food service businesses, caterers, supermarkets, and specialty food retailers that will acquire inventories in bulk. The business will also attend farmers markets every weekend in order to further increase inventory turnover.
In order to maximize the revenues of the business, the Company will host a number of onsite events. These events will include tours of the facility, wine tasting events that feature wines from area grape farms, and learning workshops. The substantial gross margins generated from these operations will further contribute to the economic stability of the farm.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
At this time, the economy is doing very well. Interest rates are now declining, and the US Federal Reserve has indicated that they will continue to implement monetary policies that will avoid a recession and preserve economic growth. Inflation is abating and unemployment continues to remain at historically low levels.
Any potential future issue with the economy will not impact Microgreens Farm’s ability to remain profitable and cash flow positive. The business will have highly controllable operating costs and the demand for microgreens will remain strong in any economic climate.
4.2 Industry Analysis
Currently, there are 800 companies that operate one or more farming locations that specifically produce microgreens. These farms generate $1 billion per annum and provide jobs for 16,000 people.
The demand for microgreens has increased over the past ten years as more restaurants have integrated them into dishes. Additionally, with the popularity of cooking shows (including online channels), the demand among home cooks to use microgreens has increased. The ongoing growth rate of this industry will be similar to that of the economy as a whole.
4.3 Customer Profile
As has been one of the themes throughout this document, the Company will primarily work with restaurants, supermarkets, and food service businesses throughout the Lancaster market area.
Management has specifically chosen this market given the wide range of specialty restaurants. Additionally, the population density and wealth of Lancaster and its surrounding market areas will drive substantial patronage for the onsite events.
4.4 Competition
The ongoing competition that Microgreens Farm, LLC will face is moderate. There are only a handful of farms within Lancaster that provide microgreens. The business will be the ongoing farm that exclusively develops vegetable greens for early harvest. This will be both a major competitive and differentiating factor for the business. The Company will further maintain an advantage through the extensive use of online sales channels, which will further lead to the economic stability of the business. In this section, you can further expand upon why your microgreens farm will be better than that of local or regional competitors.
5.0 Marketing Plan
Microgreens Farm will use numerous marketing strategies in order to ensure full inventory turnover for its harvested vegetable greens. Most importantly, the business will foster ongoing relationships with companies including restaurants and food service businesses.
5.1 Marketing Objectives
• Develop ongoing purchase order relationships with restaurants throughout Lancaster.
• Attend farmers markets, which will increase brand name awareness while also contributing to higher sales.
• Maintain an ecommerce enabled platform to make sales of the Company’s organic microgreens throughout the country.
5.2 Marketing Strategies
Through direct outreach and marketing, Microgreens Farm, LLC will create ongoing purchase order relationships with the types of entities discussed throughout this document. This will continue to be the main driver of revenue and growth for the business over the next three years and throughout the life of the business. Once these relationships are solidified, they will produce highly predictable income for the business.
As it relates to the Company’s website, this will be a mobile device and search engine friendly platform that features ecommerce capabilities. On this platform, video walkthrough tours of the greenhouses and facilities will be shown. These videos will also be distributed on YouTube. The ecommerce functionality will allow any person or business to place orders. Packages will be sent via overnight delivery. Once the business commences operations, Management will hire an SEO firm that will assist the business with appearing frequently among search results when queries for organic microgreens are completed.
To further increase brand name awareness, the Company will maintain a presence on Facebook and Instagram. News about Microgreens Farm will be frequently posted as well as images of the Company’s operations. Events will be announced through these channels as well.
In order to position the Company as a community minded business, Management will support charitable and civics organizations that promote ecological causes as well as matters pertaining to food insecurity. The Company will work with organizations to further their goals while also engaging in co-branding opportunities.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• Microgreens Farm will acquire $1,000,000 (carrying a 20 year term and an 8% interest rate) to acquire land and build the farm.
• Management will contribute $250,000 towards the venture.
7.2 Sensitivity Analysis
The Company’s revenues are relatively secure from recession or downward trends in the economy. Microgreens remain in demand among restaurateurs and home cooks, and they carry a relatively low cost. The Company will further maintain economic stability as a result of the onsite events. The business will be able to service its financial obligations at all times.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
