Business Plan 

 

Midwest GrownMorris Hall

Minnesota State UniversityMankato, MN 56001

Midwest Grown

Table of ContentsTitle Page…………………………………………………………………………………………………………….1

Table of Contents…………………………………………………………………………………………………2

Executive Summary................................................................................................................................... 3

Mission Statement...................................................................................................................................... 3

The Company................................................................................................................................................ 4

Organization and Management.............................................................................................................4

The Products................................................................................................................................................. 5

Product Description............................................................................................................................... 5

Product Cost.............................................................................................................................................. 6

Marketing Strategy..................................................................................................................................... 6

Pricing Strategy....................................................................................................................................... 7

Promotion Strategy................................................................................................................................8

Sales Strategy........................................................................................................................................... 8

Competitor Analysis.................................................................................................................................. 8

Strengths and Opportunities..................................................................................................................8

Operations...................................................................................................................................................... 9

Financial Analysis.................................................................................................................................... 10

Revenue Forecast................................................................................................................................10

(Best, Expected, Worst)....................................................................................................................10

Projected Balance Sheet...................................................................................................................11

Break Even Sales.......................................................................................................................................12

Timeline........................................................................................................................................................12

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Midwest Grown

Executive SummaryMidwest Grown is located at Minnesota State University, Mankato. We are a small, motivated company operated by 16 students who are enrolled in the United Prairie Bank Integrated Business Experience at MSU, Mankato.Midwest Grown's objectives include creating a student operated business in order to gain real-world experience in the marketplace. Our end-goal is to maximize earnings to be donated to Make-a-Wish Foundation. The donation can be directed to the Minnesota chapter, where children in Minnesota with life-threatening medical conditions will be granted a wish.Midwest Grown's homemade terrarium, which is an ecosystem of small plants, was created to reflect the beautiful Minnesota landscape. A terrarium is a decorative home décor piece that is popular in today's society because they are environmentally friendly, low maintenance, and convenient size for college living or an office desk.The "Best in the Midwest" crewneck sweatshirt was designed to reflect our passion for Minnesota by offering a stylish and comfortable garment for Fall and Winter weather.Midwest Grown's primary target markets consist of students located at Minnesota State University, Mankato, ranging in age from 18-25. Our secondary target market include faculty at MNSU and the community members in the Greater Mankato Area. Midwest Grown's crewneck sweatshirt is competitively priced at $35. We are able to make use of price markdowns as needed. Our homemade terrarium is priced at $30 and will not be discounted because we are confident that our product will sell and materials can be purchased on short notice, allowing us to easily control inventory levels.Key competitors of the floral décor industry include Home Depot, Lowe's, Hobby Lobby, and Hilltop Florist. All of these competitors offer plants, soil, and supplies for a customer to assemble their own terrarium. However, none of our competitors offer a pre-assembled terrarium, which gives us a competitive advantage in selling this product. There are online sites such as Amazon that offer different types of assembled terrariums that range from $30-$80 depending on size and plant style.Key competitors of Midwest Grown in the clothing industry include Walmart, Scheels, Barnes and Noble Bookstore, and Maverick Bookstore. These stores sell screen-printed graphic sweatshirts, but none with unique designs comparable to ours that showcase the state of Minnesota as a whole. Competitor’s prices for screen-printed crewneck sweatshirts range from $30-$50 depending on style and design. Our new and unique design will be positioned in the customer's minds as a superior product of higher value.We are seeking a loan of $2,323 to purchase inventory, supplies, and additional startup materials including promotion and advertising costs.

Mission Statement"To celebrate our state by creating a Minnesota based community through business,

entrepreneurship, and education."

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Midwest Grown

The CompanyMidwest Grown is located at Minnesota State University in Mankato, MN. Our company is targeting college students and faculty since we are based on campus grounds and the Greater Mankato area community since our employees have strong ties within the city. The majority of our team members are natives to Minnesota, therefore we wanted to show appreciation for our home state. Our company thought of the name Midwest Grown because we all truly appreciate growing up in Minnesota with the great agriculture and land of 10,000 lakes. Our main objective is to create a student operated business in order to gain real-world experience in the marketplace. By receiving a $2,323 loan, we plan to generate enough revenue to pay back our loan, and have profit left over to donate to charity. Our company decided to donate all profits to Make-a-Wish Foundation of Minnesota. We want to raise as much as possible to donate to this great program that allows children with life threatening medical conditions to be granted a wish.

Organization and Management

President, Nick Kaufman, and Vice President, Katie Bunde, are both juniors majoring in Business Management. Both Nick and Katie have a strong desire to lead; enabling them to motivate the company to achieve aspirational goals. Head of Finance is Colin Thompson, a manager at Hy-Vee. His leadership skills are used to utilize the experiences of the rest of the Finance team, including Jodi Anderson, Treasurer, who has experience in banking and finance from Wells Fargo. Lee Jong has experience with cash records and has created spreadsheets for keeping track of sales and inventory. Jim Tong has experience working in a retail store environment and has taken over the role of tracking inventory. 

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Midwest Grown

Head of marketing, Eric Wagner, has excellent communication skills that will help him promote our products and communicate with customers. Members of the marketing team include Ryan Berggren who is a PC salesman at Best Buy and Marketing/Social Media Manager at Wow! Zone in which he brings marketing and sales experience to our company. Thomas Schneider has experience with sales in which will help sell our products. Jacob Seedenburg created our design for our crewnecks and has experience with non-profit charities in which can help our company with marketing skills of our shirts and connections with our charities. Melanie Gerold is a Best Buy Mobile Sales Consultant and brings selling skills to our team. Head of Management, Madelyn Hertaus, works for the City of Mankato and has connections within the city to network our company. The management team consists of William Stuckert, an excellent salesman that shares real-world experiences with the team and negotiates all our inventory costs. Nicole Boyd is head of our events team and is also the President of Mavericks for SHRM (Society of Human Resources Management) here on campus. Maxwell Horn has experience as a social media specialist and is a professional event planner. Aron Peterson has experience as a supervisor for UPS, making him a professional at completing tasks on time and working well with teams.

The ProductsMidwest Grown's homemade terrarium ($30), which is an ecosystem of small plants, was created to reflect the beautiful Minnesota landscape. A terrarium is a decorative home décor piece that is popular in today's society because they are environmentally friendly, low maintenance, and convenient size for college living or an office desk.The "Best in the Midwest" crewneck sweatshirt ($35) was designed to reflect our passion for Minnesota by offering a stylish and comfortable garment for Fall and Winter weather, showcasing Minnesota.Product DescriptionMidwest Grown will sell two products that reflect our passion for Minnesota.The terrarium is made with a glass bowl, clay pebbles to absorb excess water, colored sand for aesthetics, soil, river pebbles, moss, and two terrarium specific plants. Altogether, the finished product creates a mini ecosystem that requires very little water and sunlight. Our terrariums will display a scene replicating a beautiful Minnesota landscape of greenery and similar pebbles found by our many lakes and rivers.Our "Best in the Midwest" crewneck sweatshirt was designed ourselves with Minnesota as the focus. The sweatshirt will feature a large two-color screen-printed design on the back and a smaller design on the front left pocket. We chose grey as the color to appeal to a large amount of tastes.

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Product CostTerrarium

Cost per unit: $7.53Quantity: 72

Total terrarium inventory cost: 7.53 * 72 = $542.16Sweatshirt

Cost per unit: $10.25Quantity: 144

Total sweatshirt inventory cost: $1476

Marketing StrategyOur Target Market is Minnesota State University, Mankato students and faculty, along with the Greater Mankato and Southern Minnesota community members. We are targeting this group of people because being based on MNSU campus, we have the greatest ability to reach our products to students and faculty. Our products are also very appealing to 18-24 year olds, as our survey shows. Even though our main target market lies within MNSU campus, we decided to make our products marketable to community members to reach more customers.

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Midwest Grown

In order to confirm our target market, the results from our survey showed that the majority of people that took it were students.

Pricing StrategyMidwest Grown is selling our terrariums for $30 and our crewneck sweatshirts for $35. We believe our products will sell at full price for the extent of our business. However, we realize that demand for the sweatshirts can drop by the week of November 1. If this is the case, we have a plan in place to lower our price to $30. In an extreme case of excess inventory, we are able to lower our price to $25 per sweatshirt and still be profitable. If we are exceeding our selling expectations in the first four weeks, we will reorder

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sweatshirts no later than the week of November 9th. Costs of reordering would be around $11.25 per unit for an order of 100 units with a turnaround time of 2-7 business days. Our goal is to not discount the terrariums at all, but with an expected demand decrease of 10% every week we can discount if needed.Promotion StrategyMidwest Grown will have its own Facebook, Twitter, and Instagram accounts to reach customers via social media. We will also be using table tents and flyers and place them around campus and throughout the community as a form of advertisement for our products. Our strongest tools will be using word of mouth and peer promotion around campus and the community.Sales StrategyTo promote Midwest Grown, we will set up booths around campus to reach out to students and faculty, our primary target market. To attract students and faculty to our products, we will set up tables in the Centennial Student Union and the Taylor Center as they have the most foot traffic on campus. We also are looking at opportunities to sell off campus to our secondary target market which is the community of Greater Mankato. We have opportunities to table outside at Walmart and Cub Foods since we are a not-for-profit company. Through the networks our employees have created, we will also sell through word of mouth to our friends, family, and customers. Midwest Grown does not plan to deliver our products.

Competitor AnalysisKey competitors of the clothing industry are Barnes and Noble Bookstore located in the Centennial Student Union, Maverick Bookstore located on Stadium Road near campus, Walmart located on Madison Avenue, and Scheels located in River Hills Mall on Adams Street. All these stores offer crewneck sweatshirts, but do not compare to Midwest Grown's stylish, comfortable, and original designed garment at an affordable price of $35. Our competitors pricing of screen-printed crewneck sweatshirts ranges from $30-$50 depending on style and design.Key competitors of floral décor industry are Home Depot located on St. Andrews Dr., Lowe's located on Bassett Avenue, Hobby Lobby on Madison Avenue, and Hilltop Florist on Madison Avenue. All of these competitors offer retail plants, soil, supplies, etc. for a customer to assemble their own terrarium. However, none of our competitors offer a terrarium pre-assembled, which gives us a competitive advantage in selling this product.

Strengths and OpportunitiesMidwest Grown connects well with the community since we have many members that are local to Mankato. The employees of Midwest Grown have different personalities that mix well to accomplish our company goals as a team. Since we are a small company, all employees have roles that are equally important to the company as a whole. Midwest Grown is brand new, therefore we are new in the business realm and do not have name recognition. We are going to utilize our resources on campus to get our name out there through our promotional strategy. Since the business can only be run for this

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Midwest Grown

semester, we have limited time and finances for this business to grow. This challenge will only make us more motivated to accomplish our goals in a quick and efficient manner.Midwest Grown is bringing a new product (terrariums) to the market that our competitors are not offering currently as one product. Midwest Grown also has the opportunity to grow in the Mankato community because of the interest of our products for an environmental friendly décor item. Midwest Grown has a number of competitors in the clothing industry, however, we have set ourselves apart by having a brand new, unique logo focusing on the beautiful state of Minnesota. We are divesting into the market with a brand new product, our terrarium, meaning few to no competitors. We believe that our exclusive terrariums will attract our customers to our business while also creating buzz on campus and within the community.

OperationsOperations for the Terrariums begin with ordering the plants from Mary's Flower Shop in St. Peter, Minnesota, which will take 2 to 4 business days. The raw materials such as colored sand and river pebbles will be purchased from Walmart; this allows for quick material acquisition. Soil will be purchased from Home Depot; this too will allow for quick material acquisition. Glass bowls and clay pebbles will be purchased online and have an expected shipment time of 7 business days at the maximum. Once all materials have been obtained, they will be assembled into finished products and stored in our Treasurer's, Jody Anderson's, garage. Renter's insurance covers any potential theft or destruction of the products and materials. Terrarium production will be led by Jacob Seedenburg and all team members will participate in the assembly of the product.

Our plan for our apparel is to place an order for our crewneck sweatshirts through Doug Fenske. The product will take 2-4 business days because the manufacturer is ready for our order and will begin production within hours of receiving payment. Any reorder of sweatshirts will be a maximum of 10 business days. After receiving the products from Doug, they will be stored in Jody Anderson's garage along with the terrariums. Jody, Jim, and Lee will be in charge of inventory and keeping track of what is taken out and brought into the garage. Those three team members will be the only people with access to the stored products and materials. Those working at the selling tables will be responsible of all inventory on location. Any lost, stolen, or damaged products will be paid for by the respective team members at the current selling price. When items are sold, the cash/check amount will be stored in a locked cash box in which the treasurer, Jody Anderson, will be in charge. Money will be deposited every Friday by Jody Anderson to United Prairie Bank.

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Financial Analysis Revenue Forecast (Best, Expected, Worst)

Semester

Revenue

Crew neck $5,040

$4,820$4,720

Terrarium $2,160$2,075$2,010

Total Revenue $7,200$6,895$6,730

Direct Cost

Crew neck $1,476

Terrarium $542

Total Direct Cost $2,018

Gross Margin$5,182$4,877$4,712

Projected Balance SheetFY2016 FY2017 FY2018

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Midwest Grown

Cash $4,499 $4,499 $4,499

Accounts Receivable $0 $0 $0

Inventory

Other Current Assets

Total Current Assets $4,499 $4,499 $4,499

Long-Term Assets

Accumulated Depreciation

Total Long-Term Assets

Total Assets $4,499 $4,499 $4,499

Accounts Payable $0 $0 $0

Income Taxes Payable $0 $0 $0

Sales Taxes Payable $0 $0 $0

Short-Term Debt

Prepaid Revenue

Total Current Liabilities $0 $0 $0

Long-Term Debt $0 $0 $0

Total Liabilities $0 $0 $0

Paid-in Capital

Retained Earnings $4,499 $4,499

Earnings $4,499 $0 $0

Total Owner's Equity $4,499 $4,499 $4,499

Total Liabilities & Equity $4,499 $4,499 $4,499

Break Even SalesTerrarium: 27% allocation rate - $542 total cost/$30 price per unit

= 19 Terrariums to break even

Crew neck: 73% allocation rate - $1,476 total cost/$35 price per unit= 43 Crewnecks to break even

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TimelineOctober 5Deliver loan presentation. Upon approval of our loan, we will place orders for crewnecks and terrarium materials.October 12-14Receive products from our suppliers. Start production of terrariums. Begin selling products.October 16Report week one financials. Deposit sales revenue to United Prairie Bank.October 23Report week two financials. Deposit sales revenue to United Prairie Bank. October 30Report week three financials/ Deposit sales revenue to United Prairie Bank. November 6Reach our breakeven point. Report week four financials. Deposit sales revenue to United Prairie Bank.November 13Report week five financials. Deposit sales revenue to United Prairie Bank.November 20Report week six financials. Deposit sales revenue to United Prairie Bank. November 27Report week seven financials. Deposit sales revenue to United Prairie Bank.December 4Report week eight financials. Deposit sales revenue to United Prairie Bank.December 7Pay back loan plus interest to United Prairie Bank. Shut down Midwest Grown. Donate all proceeds to Make-a-Wish Minnesota.

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