rhonda ehalt jeff prosko braden hudye terrance mckee n.
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Rhonda Ehalt Jeff Prosko Braden Hudye Terrance Mckee. 45’ cutting width reduced wheel tracks increased operating speed safer transport Improved contouring ability Fewer passes Reduced inputs cost of the XP Chopper. “ A revolution in organic weed control”.

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45’ cutting width

  • reduced wheel tracks
  • increased operating speed
  • safer transport
  • Improved contouring ability
  • Fewer passes
  • Reduced inputs
  • cost of the XP Chopper
  • “A revolution in organic weed control”
construction costs
Construction Costs
  • Complete Machine including all:
    • Steel
    • Hydraulic Components
    • Mechanical Components
    • Paint and Decals
    • Labor

Comes to a total cost of $21,048

start up working plan year 1
Start Up Working Plan (Year 1)
  • Engineer develops a working blue print
  • Research and Development with 45’ model (side by side plot trials)
  • Field demos
  • Attend Trade Shows (new inventions at Farm Progress)
  • Goal: to sell 5 machines in year 1
working plan year 2
Working Plan (Year 2+)
  • Once established as a reputable company sales will continue to increase on a yearly basis
  • Attend Saskatoon, Brandon, and Red Deer Trade Shows in January
  • Early Spring will consist of taking and delivering orders to our dealers
  • R and D manager and summer student will manage side by side plot trials across prairies
working plan continued
Working Plan continued
  • Marketing Manager and summer student will be in charge of taking orders and all public relations
  • Marketing Reps will put on field demos across the prairies
  • Marketing Reps will continue attending trade shows throughout the summer and develop advertisements
  • Continue developing new and improved models
human resource plan
Human Resource Plan
  • 2 Share Holders (President and Vice President)
  • Company Profits split 50-50 between share holders
  • 5 positions
    • President (Marketing Manager)
    • Vice President (R and D Manager)
    • Secretary/Administrator
    • 2 Summer Students
human resource plan1
Human Resource Plan
  • President and Vice President are sole investors and each own 50% of the Company
  • President will have the responsibilities of Marketing
  • Vice President will have the responsibilities of Research and Development
  • Full time Secretary will be hired to handle administration and bookkeeping (Accountant will be hired for tax filing)
  • Part time research and marketing assistants will be hired during the busy season (University Summer Students)
human resource plan2
Human Resource Plan
  • XP Choppers will pay out $158,003 per year in wages
the marketing mix
The Marketing Mix
  • Products and Services – Organic in-crop weed control system with many advantages over traditional systems.
  • Pricing - No direct competition making XP Choppers a price establisher, will use premium pricing.
  • Promotion – More effective weed control, higher ground speeds, reduced wheel tracks.
  • Place – Western Canadian organic farmers.
segmentation targeting and positioning
Segmentation, Targeting and Positioning
  • Segmentation – 45’ model being built to service the needs of larger organic farms, smaller models will be built in the future.
  • Targeting – Leading edge organic producers who desire improved weed control.
  • Positioning – Long term sustainability by controlling weeds effectively without the use of chemical.
swot analysis internal strengths and weaknesses
SWOT AnalysisInternal Strengths and Weaknesses
  • Human Resources
    • (Strength) Well educated staff.
    • (Weakness) Possible conflicts (two equal partners)
  • Physical Resources
    • (Strength) Welding shops, location, building.
    • (Weakness) Quality control issues.
  • Financial Resources
    • (Strength) Low overhead, investors run company
    • (Weakness) Two-Three year break even period.
swot analysis external opportunities and threats

Increasing number of organic farms (5%/yr)

Increased consumer demand for organics.

Premium prices

No direct competition


Many variable affecting producer income.

Possibility of biological herbicides.

Renewed emphasis on convention practices.

SWOT AnalysisExternal Opportunities and Threats
market analysis
Market Analysis
  • The Market – 1500 organic farms in western Canada consisting of approx. 1,500,000 acres as of 2005 (OCPP, 2005)
  • Competition – Close direct competition consists of farmers using existing swather tables.
  • Customers - Organic producers looking for improved methods of mechanical weed control.
  • Target Markets – Will start out in western Canada and eventually move into the United States and Australia.
market analysis cont d
Market Analysis (cont’d)
  • Product/Service Features - The XP Chopper is the first machine of its kind, it is designed to bash the structure of the weed as opposed to cutting the stem clean, causing the plant to die or re-grow at a much slower rate.
  • Opportunity – One of a kind machine entering into an untapped market.
marketing strategy
Marketing Strategy
  • Sales Objectives – to sell 797 units in 10 years capturing 34% of total market share.
  • Profit Objectives – 125% of the cost per unit.
  • Channels of Distribution – Year one sell directly to customers, in year two will establish a dealer network consisting of existing equipment dealers.
marketing strategy cont d
Marketing Strategy (cont’d)
  • Pricing Policy – pricing will be based on the cost of the machine (25% Markup)
  • XP Choppers
    • Cost to build $ 21,048 x 25 % = $ 5,262 profit
  • Dealership:
    • Cost to buy $ 26,310 x 25% = $ 6,578 profit
    • Machine Retails at $ 32,890
selling and advertising
Selling and Advertising
  • Attend agricultural tradeshows
    • Booth with video of machine, brochures,

research, etc.

  • Arrange field days/demonstrations
  • Write press releases and submit to Grainews, Western producer, Top Crop Manager, etc.
  • Feature the machine on the prairie farm report.
  • Attend organic crop growers conferences
financial plan
Financial Plan
  • The initial start up cost is $350,000
  • $300,000 will come from owner’s equity
  • The remaining $50,000 will be long term debt
  • The $50,000 loan will be amortized over 5 years at an average interest rate of 7%
  • Annual loan payment will be $12,195 for 5 years.
breakeven analysis
Breakeven Analysis
  • Economic Breakeven
    • the percent of markup on the cost of goods manufactured can be reduced from the current 25% down to a 13% markup before a 0% I.R.R. is reached
  • Cash Flow Breakeven
    • In order for the company to avoid a negative cash balance, the percent of markup can only drop by 1% from 25 down to 24
breakeven analysis1
Breakeven Analysis
  • Income Breakeven
    • needs to maintain a minimum 20% markup to achieve a minimum income in order to avoid a negative return to equity.
sensitivity analysis
Sensitivity Analysis
  • Base Case uses the current 25% Markup on the cost of goods manufactured
  • Best Case scenario the markup has been raised from 25% to 45%
  • Worst Case scenario the markup has been dropped by 10% down to 15%
  • In order for XP Choppers to meet and maintain their cash flow requirements in the beginning, the initial sales targets must be met. A 25% markup over the cost of production must also be maintained.
  • XP Choppers can potentially decrease the cost of production based on volume sales and manufacturing contracts, lowering our cost of goods sold.
  • This allows room to increase the markup, while still achieving the same list price, thereby increasing the company’s revenue and profit margins.
  • If these objectives are met will be a highly profitable business, delivering an outstanding internal rate of return of 35.7%, and a 24.4% external rate of return, proving to be a sound financial investment.