Living Skies

Organic Birdseed

Braden Michnik

PRODUCT

Certified organic birdseed

Blended for canaries, budgies, and finches

Ingredients: mixture of organic canary seed, millet, sunflower seeds and canola seed

MISSION STATEMENT

For the bird owner who wants their feathered companion to enjoy a healthy and balanced diet, Living Skies Organic Birdseed provides essential nutrients that contribute to a long-lasting life.

TARGET MARKETS

Market Segments Bird Owners Bird Watchers Bird Breeders

Sell to people who want the best for their pet bird

PLACE Primarily retail through:

Independent pet stores Supermarket chains Website

PRICING

Will charge a premium price Direct to customer

$7.00 + 30% = $9.10 To Retailers

$7.00 – 25% = $5.25 To Wholesale Distribution

$5.25– 25% = $3.94

BUYING LOCAL

Eating local has many benefits beyond the environment

Recognize and reward Saskatchewan farmers

COST BREAKDOWN FOR 2KG BAG

Unit Cost Analysis

2011 2012 2013

Canary Seed .27 .28 .31

Millet .26 .27 .29

Canola Seed .28 .29 .32

Packaging 1.06 1.04 1.02

Direct Materials 1.87 1.88 1.94

Direct Labor 1.27 1.15 .98

Overhead 0.43 0.35 0.28

Total Unit Cost 3.57 3.41 3.23

FINANCIAL ANALYSIS

Year 2011 2012 2013 2014 2015

Sales 107,358

115,076

124,779

139,468

135,192

COGS 59,600 65,052 68,513 71,983 79,462

Gross Margin

48,758 50,024 66,266 68,485 85,730

Total Expenses

45,077 49,332 58,365 59,132 64,935

Income Taxes

3,319 4,588 8,865 11,745 21,524

Net Income 42,778 45,045 50,314 48,633 57,952

Dividends 0 0 0 0 0

Net Cash Flow

20,708 27,013 33,545 47,862 58,794NPV $14,990

IRR 20.1%

ERR 14.2%

CRITICAL RISK FACTORS There are three main critical variables:

raw material expense selling price (to stores = most critical) quantity of sales

Critical Variables Base Case

IRR=0 % Change

Packaging 1.06 1.45 0.27

Wages 10 31.68 0.72

Inflation 0.02 4.1 1.00

Internet Selling Price

7 5.04 -0.39

Retail Selling Price 5.25 2.76 -0.18

Sales Quantity in Retail

6884 9600 0.28

Sales Quantity Online

1543 2400 0.36

CONCLUSION

Business plan shows that the business is a feasible enterprise

The required rate of the return (20%) is achieved

Future challenges for bird seed manufacturers is food pellets.

Any Questions?