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
27,013
33,545
47,862
58,794
Net Cash Flow 20,708
NPV
$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
Packaging
Base Case
IRR=0
% Change
1.06
1.45
0.27
10
31.68
0.72
0.02
4.1
1.00
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
Wages
Inflation
Internet Selling Price
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?