January 2001

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 Table of Contents
1.0 Executive Summary.............................................................................................................................1
1.1 Objectives ...................................................................................................................................2
1.2 Mission........................................................................................................................................2
2.0 Company Summary.............................................................................................................................2
2.1 Company Ownership .................................................................................................................3
2.2 Start-up Summary ......................................................................................................................3
3.0 Products ...............................................................................................................................................5
4.0 Market Analysis Summary..................................................................................................................5
4.1 Market Segmentation ................................................................................................................6
4.2 Target Market Segment Strategy.............................................................................................7
4.3 Industry Analysis .........................................................................................................................8
5.0 Strategy and Implementation Summary ............................................................................................8
5.1 Competitive Edge ......................................................................................................................8
5.2 Sales Strategy............................................................................................................................9
5.2.1 Sales Forecast........................................................................................................................9
5.3 Milestones ................................................................................................................................10
6.0 Management Summary ....................................................................................................................11
6.1 Personnel Plan.........................................................................................................................11
7.0 Financial Plan ....................................................................................................................................12
7.1 Important Assumptions............................................................................................................12
7.2 Projected Cash Flow ...............................................................................................................12
7.3 Break-even Analysis................................................................................................................14
7.4 Projected Profit and Loss .......................................................................................................15
7.5 Projected Balance Sheet ........................................................................................................19
7.6 Business Ratios .......................................................................................................................20

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 Mixed Greens Salad Gardens

1.0 Executive Summary

Mixed Greens Salad Gardens (MGSG) is an exciting new company that meets an unsatiated need
for quality salad greens. The close proximity to Eugene ensures a steady flow of customers.
MGSG is a start-up grower and distributor of exotic salad greens for restaurants and individual
consumers. MGSG is loc ated in Blue River, Oregon and serves the southern Willamette Valley.
MGSG's objec tives are to develop a product-based company whose goal is to exceed customer's
expec tations, increase production efficiency by 10% a year, and lastly, and develop a
sustainable farm business, able to survive off their cash flow.

Products

MGSG will sell a spring mix of salad field greens. These greens will include but are not limited to:
red leaf, arugula, radicchio, mustard greens, endive, and chicory. These greens are grown for
use in salad mixtures, purchased by the end consumer as well as by restaurants who then serve
it to their patrons.

The Market

MGSG has dec ided to target two distinct market segments, individual customers and restaurants.
The individual customers will purchase greens from MGSG at the Tuesday and Saturday Farmer's
Market. This segment is growing at 12% and has 12,000 potential customers. The second
segment is loc al restaurants. This market is smaller at only 28 potential customers, but is more
consistent in demand throughout the year.

Competitive Edge

MGSG has two competitive edges that will help them maintain strong growth rates, increasing
their market penetration. The first edge is quality. MGSG prides themselves on the high quality of
exotic salad greens. Greens that do not meet MGSG high standards of quality are rejected as
imperfec ts and go to a not-for-profit food bank. MGSG's second c ompetitive edge is their
flexibility. The entire farm has been set up to allow them to change crops or sc ale existing crops
to meet demand. This is highly unusual as most farms are unable to change crops mid year.

Management

MGSG is led by Heidi Ponic. Heidi initially got her start in growing while working at a greenhouse.
After college, Heidi went to work for a large grass seed company. This experience is what
solidified Heidi's desire to continue working in an agricultural capacity. Soon after her experience
at the Willamette Seed Company she dec ided to enroll in Oregon State University's Master of
Horticulture Program. Heidi's Masters provided her with requisite detail and skills to develop her
own farm business.

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1.1 Objectives

The objec tives for the first three years of operation include:

1. To create a product-based company whose goal is to exceed customers' expec tations.

2. The utilization of Mixed Greens' lettuce products in at least 20% of the top restaurants in
Eugene as listed in loc al paper's restaurant reviews.
3. To increase the efficiency of our production by 10% a year.
4. To develop a sustainable farm, surviving off its own c ash flow.

1.2 Mission

Mixed Greens Salad Gardens' mission is to provide the highest-quality salad greens. We exist to
attrac t and maintain c ustomers. When we adhere to this maxim, everything else will fall in to
plac e. Our services will exceed the expec tations of our customers.

2.0 Company Summary

Mixed Greens Salad Gardens, soon to be loc ated in Blue River, OR, is a grower and seller of exotic
salad field greens. MGSG grows a wide variety of field greens including red leaf, arugula,
radicchio, mustard greens, endive, and chicory. MGSG sells the greens both at farmer markets as
well as direc t to restaurants.

The business will be based out of Heidi Ponic's home. The office will be within her home and the
greenhouse will be on her adjoining 20 ac res of land.

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2.1 Company Ownership

Mixed Greens Salad Gardens will be a sole proprietorship with Heidi Ponic as the founder and
owner. Heidi will be funding the business with a $50,000 investment of her own. An additional
$10,000 will be invested by family member O.G. Tylthe with exit/repayment initially sc heduled for
year five.

2.2 Start-up Summary

Mixed Greens Salad Gardens' start-up costs will include all the equipment needed for the home-
based office, the construction of the greenhouse and all the necessary equipment, and other
essentials for growing.

The home office equipment will be the largest chunk of the start-up expenses. This equipment
includes a computer system, fax mac hine, office supplies, cellular phone, and pager. The
computer should have at least a 500 megahertz Celeron/Pentium proc essor, 64 megabytes of
RAM (preferably 128), 6 gigabyte hard drive, and a rewritable CD-ROM for bac king up the
system. The home office will also require a few piec es of furniture such as a desk, chair, and
book shelf to transform a standard room into an office. Lastly, an additional land phone line will
be required.

The greenhouse will need the following equipment: a 25' x 100' greenhouse structure made out
of poly carbonate, a ventilation system, a heater, a mister system, supplemental lighting,
fertilizer injec tor, pruners, pots, trays, soil, seeds, and assorted chemicals.

Please note that of the $25,300 of long-term assets, $20,000 will be deprec iated straight line for
27.5 years (real estate) and the remaining $5,300 will be deprec iated on a seven year straight-
line sc hedule.

Table: Start-up
Start-up

Requirements

Start-up Expenses
Legal $300
Stationery $200
Insurance $200
Untilities Upgrades $150
Rent $250
Expensed Computer Equipment $3,500
Other $500
Total Start-up Expenses $5,100

Start-up Assets
Cash Required $34,700
Start-up Inventory $0
Other Current Assets $500
Long-term Assets $25,300
Total Assets $60,500

Total Requirements $65,600

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Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $5,100
Start-up Assets to Fund $60,500
Total Funding Required $65,600

Assets
Non-cash Assets from Start-up $25,800
Cash Requirements from Start-up $34,700
Additional Cash Raised $0
Cash Balance on Starting Date $34,700
Total Assets $60,500

Liabilities and Capital

Liabilities
Current Borrowing $5,000
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $5,000

Capital

Planned Investment
Heidi Ponic $50,000
Investor 2 $10,000
Other $0
Additional Investment Requirement $600
Total Planned Investment $60,600

Loss at Start-up (Start-up Expenses) ($5,100)

Total Capital $55,500

Total Capital and Liabilities $60,500

Total Funding $65,600

3.0 Products

MGSG will sell a spring mix of salad field greens. These greens will include but are not limited to:
red leaf, arugula, radicchio, mustard greens, endive, and chicory. These greens are grown for
use in salad mixtures, purchased by the end consumer as well as by restaurants who then serve
it to their patrons. While the greens are washed at the farm, they are not certified washed and
the patrons are told to wash them an additional time.

4.0 Market Analysis Summary

MGSG will be foc using on two distinct users of greens, individual consumers, and restaurants.
The consumer market is seasonal so we will have production shifts during the consumer off
season and all of the production will go toward wholesale restaurant distribution. During the
spring and the summer MGSG will be serving both the consumer markets through farmer market
stands and the restaurants through direc t distribution.

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4.1 Market Segmentation

Mixed Greens Salad Gardens has two distinct customers:

1. Individual Consumers. This group of people buy exotic salad greens bec ause they have a
more sophisticated pallette. Average Americans have been raised on iceberg lettuce and this
is their green of choice (unfortunately). When people from this class get a little "crazy" they
might even try romaine lettuce. These people are typically unsophisticated or unadventurous
in terms of culinary habits. These are NOT the people MGSG serves. MGSG is going after
people that apprec iate healthier, tastier alternatives to the standby of iceberg lettuce. This
group of consumers is more likely to make their own meals instead of going out, apprec iates
fine dining, and generally is from a higher socio/economic class. Mixed Greens Salad Gardens'
field greens are more expensive than c hoices like iceberg or romaine, therefore one can
conclude that the consumer typically makes more money if they are willing to pay
significantly more for their salad greens, and second, people with more sophisticated palates
typically are more educated.
2. Restaurants. Not all restaurants use exotic field greens mixes, generally it is a restaurant of
fine dining that serves the finer greens. To be even more specific, it is typically an
adventurous American or nouveau c uisine restaurant as opposed to a nicer French or German
restaurant that apprec iates the exotic field greens mix. For what ever reason (probably
attributable to demand of their customers), the French and German restaurants, even the
finer ones tend to serve "peasant greens." The restaurants are a year round customer which
is helpful to balance the seasonal demand of individual consumers (group 1 above). Another
advantage of having the restaurants as a customer is that even though they get a better
price, MGSG has a long term contrac t with them which helps out in terms of stability.

Table: Market Analysis

Market Analysis
2001 2002 2003 2004 2005
Potential Customers Growth CAGR
Individual Consumers 12% 12,000 13,440 15,053 16,859 18,882 12.00%
Restaurants 8% 28 30 32 35 38 7.93%
Other 0% 0 0 0 0 0 0.00%
Total 11.99% 12,028 13,470 15,085 16,894 18,920 11.99%

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4.2 Target Market Segment Strategy

Mixed Greens Salad Gardens' target market segment strategy is fairly easy. Our two different
customer groups purchase from two distinct loc ations so it is quite easy to target them
individually.

Individuals. These customers will be buying MGSG products from the different farmer markets
loc ated in Eugene, OR. The main one is "The Farmers Market" held downtown twice a week in the
spring, summer, and the early autumn. This market gets quite a bit of traffic bec ause there is a
nice selec tion of different farmers and products and it is in a central loc ation in the heart of
Eugene. Additionally, there are several other smaller farmer markets that exist in outlining
communities. By setting up a booth in these markets, there is already a steady flow of interested
customers. There obviously is a fee to set up a stand, but what you get for the fee is all of your
marketing taken care of and a line of customers. In addition to individuals frequenting the farmer
markets, some restaurants will go there as well. This oc curs when a restaurant needs certain
ingredients but did not have the time to order it in advance.

Restaurants. MGSG will target these customers by introducing MGSG and their products to the
restaurants through meetings with the buyers at each restaurant. There are about 25-30
different restaurants in Eugene that use field greens in their salad and MGSG intends to approach
these to form long-term relationships.

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4.3 Industry Analysis

There are three different types of competitors that MGSG fac es:

1. Supermarkets. These stores sell a salad greens mix to consumers. The advantage of the
supermarket is convenience. There are many supermarkets around the city and they are
open many hours during the day. Their disadvantage is price and quality. The quality and
variety lower than the standards set by the offerings of MGSG and other similar loc al
farmers. The cost is higher, usually 15% more.
2. Similar local farmers. These are very similar operations to MGSG, sometimes larger and
sometimes smaller. There appears to be room in the market for multiple farmers as most of
the farmers sell out their products eac h day at the farmer markets.
3. Large distributors. An example of this would be Food Service of America (FSA) which buys
a wide variety of products and quality of produce from farmers and distributes them to
restaurants. The produce is not usually loc al, and is a few more days older from the field
compared with the loc al farmers. The price is comparable and the quality can be comparable,
but not necessarily. The disadvantage of a food distributor is the lac k of flexibility relative to
a loc al grower when serving loc al customers.

Buying patterns are based on the customer's desires. What is meant by this is that lower-end
restaurants (or at least restaurants that are less concerned about quality) will not bother to get
greens from loc al farmers, there is no need for them to. This pattern is similar for the individuals.
There are some individuals that are content with the offerings from supermarkets. There are
others that apprec iate the difference in quality and are willing to sc hedule a trip to the farmers
market to meet their weekly needs.

5.0 Strategy and Implementation Summary

MGSG will be aggressively courting the farmer markets to ensure the ability to have a booth at
the markets. Additionally, MGSG will be aggressive in going after the loc al restaurants that have
a consistent need for the greens. Through an assurance of top-shelf service and superior
customer service and reliability, MGSG will continue to grow its number of clients.

5.1 Competitive Edge

Mixed Greens Salad Gardens' competitive edge has two main aspects: quality and flexibility.

1. Quality. While the quality of the other loc al farmers is quite good, Heidi's extensive
educational bac kground and prac tical experience provides her with tools to create a superior
product. Heidi is a perfec tionist and her striving for perfec tion will lead MGSG to developing a
product that will be a notch better than the competition.
2. Flexibility. With MGSG being both small and loc al in nature, it will be able to be flexible in
meeting customer's demands. For instance, if a loc al restaurant has customers that prefer
more arugula in their salad mix, MGSG can rapidly shift production to meet the needs of that
customer. Most of the farmers, and all of the distributors, typically have their production
sc hedules set up for maximum yield and are unable to modify crop production very much.
Heidi is less concerned about maximizing yield, she is more concerned with pleasing the
customer. She believes, rightfully so, that talking care of the customer is the most important
thing.

A combination of quality and flexibility will create a sustainable competitive advantage that will
allow MGSG to succeed.

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5.2 Sales Strategy

MGSG's sales strategy will be based on visibility, consistency, and strategic relationships.

• Visibility. MGSG will need to generate visibility that sets them apart from the other loc al
farmers that sell at the market. This in part will be done through the use of a colorful,
distinct booth set-up that stands out among the other farmers. This visibility will create
rec ognition for MGSG. This is important bec ause the produce of the different farmers appears
to be the same. The differences are disc overed upon tasting the produce in your home. If
MGSG stands out in terms of the booth appearance, the repeat customer will more easily
make the connec tion between the unusual booth and MGSG's product.
• Consistency. In addition to product consistency, MGSG will have consistency in regards to
their presence at the farmer markets. It is much easier to build awareness and loyalty if
people can reliably expec t to see MGSG every week in the same plac e.
• Strategic relationships. This will be the key for restaurant sales. As stated before,
restaurant sales are a consistent income that help reduce the seasonality of MGSG's sales.
Forming mutually beneficial, strategic partnership will be of upmost importance for building a
good revenue base.

5.2.1 Sales Forecast

The first month will be used to set up the greenhouse and get things underway. There will not
be sales ac tivity until month three when the first greens will be sprouting. Month three will see a
steady increase in production and sales, and this will continue until month nine when the
consumer sales will be significantly dec reasing due to the closing of the farmer markets. From
month nine to 16 Mixed Greens Salad Gardens will have an increase in restaurant sales to offset
the elimination of the consumer sales. By month 17, restaurant sales will dec rease slightly to
ac commodate for the ramping up of consumer sales again.

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Table: Sales Forecast

Sales Forecast
2001 2002 2003
Sales
Individual Consumers $23,154 $40,519 $70,908
Restaurants $58,558 $81,981 $114,774
Total Sales $81,712 $122,500 $185,682

Direct Cost of Sales 2001 2002 2003

Individual Consumers $2,778 $4,862 $8,509
Restaurants $7,027 $9,838 $13,773
Subtotal Direct Cost of Sales $9,805 $14,700 $22,282

5.3 Milestones

MGSG will have several milestones early on:

1. Business plan completion. This will be done as a road map for the organization. While we do
not need a business plan to raise capital, it will be an indispensable tool for the ongoing
performance and improvement of the company.
2. Greenhouse set-up.
3. First batch of greens sold.
4. The end of the consumer season and the ramping up of the restaurant supply cycle.

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Table: Milestones
Milestones

Milestone Start Date End Date Budget Manager Department

Business Plan Completion 1/1/2001 1/1/2001 $0 Heidi N/A
Greenhouse Setup 1/1/2001 2/1/2001 $0 Heidi N/A
First Batch of Greens Sold 4/1/2001 4/1/2001 $0 everyone N/A
End of the Consumer Season 9/1/2001 9/1/2001 $0 everyone N/A
and the Ramping up of the
Restaurant Supply Cycle
Totals $0

6.0 Management Summary

Heidi Ponic, founder and owner, first bec ame interested in growing vegetables at the age of five.
Heidi pursued her love for plants by obtaining a biology degree at the University of Washington.
Throughout her last three years at Washington, she worked in a greenhouse that grew many
different types of annuals. Upon graduation, Heidi went to work for a large grass seed
manufac turer. Although the growing of grass seed proved to be far less interesting then most
other plants, she was determined to get management experience, a skill set that she lac ked.
After two years at Willamette Seed Company, she enrolled in Oregon State University's Masters
of Horticulture program.

Having gone through the three years of the Masters program, she realized two things, 1) she
needed to create a job/c ompany for herself, 2) she should follow her passion and grow
vegetables. These realizations were the final catalyst to pursue her lifelong dream of running her
own greenhouse operation.

Heidi's educational training and her passion creates the ideal combination for an owner of a
start-up company.

6.1 Personnel Plan

The staff will consist of Heidi working full time. While the bulk of the time Heidi will spend
managing the operation, she will always spend a few hours a week tending to the plants. In
addition to all of the general management required for the production of the greens, Heidi will be
setting up strategic relationships with loc al restaurants. Mixed Greens Salad Gardens will have
hired two full-time gardeners beginning in the middle of the first month, and will hire a part-time
helper by month four. The gardeners will be primarily responsible for the raising of the field
greens, while the part-time help will be used to help staff the farmers market booth for the
consumer selling of the greens.

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Table: Personnel
Personnel Plan
2001 2002 2003
Heidi $24,000 $24,000 $24,000
Gardener $16,650 $17,500 $18,500
Gardener $16,650 $17,500 $18,500
Part-time Helper $0 $9,000 $9,500
Part-time Helper $6,750 $0 $9,000
Total People 4 5 6

Total Payroll $64,050 $68,000 $79,500

7.0 Financial Plan

The following sections will outline the important financial information.

7.1 Important Assumptions

The following table highlights some of the important financial assumptions.

Table: General Assumptions

General Assumptions
2001 2002 2003
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Projected Cash Flow

The following chart and table will indicate projec ted cash flow.

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Table: Cash Flow

Pro Forma Cash Flow
2001 2002 2003
Cash Received

Cash from Operations

Cash Sales $32,685 $49,000 $74,273
Cash from Receivables $36,451 $67,222 $101,685
Subtotal Cash from Operations $69,136 $116,223 $175,958

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $69,136 $116,223 $175,958

Expenditures 2001 2002 2003

Expenditures from Operations

Cash Spending $64,050 $68,000 $79,500
Bill Payments $29,537 $40,751 $59,778
Subtotal Spent on Operations $93,587 $108,751 $139,278

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $2,400 $2,400 $800
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $95,987 $111,151 $140,078

Net Cash Flow ($26,851) $5,072 $35,879

Cash Balance $7,849 $12,920 $48,800

7.3 Break-even Analysis

The Break-even Analysis below indicates the monthly sales needed to break even.

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Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $8,294

Assumptions:
Average Percent Variable Cost 12%
Estimated Monthly Fixed Cost $7,299

7.4 Projected Profit and Loss

The following table will indicate projec ted profit and loss. Our losses at start-up are evident, as
is the turn of the corner in July when we bec ome profitable.

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Table: Profit and Loss

Pro Forma Profit and Loss
2001 2002 2003
Sales $81,712 $122,500 $185,682
Direct Cost of Sales $9,805 $14,700 $22,282
Other $0 $0 $0
Total Cost of Sales $9,805 $14,700 $22,282

Gross Margin $71,906 $107,800 $163,400

Gross Margin % 88.00% 88.00% 88.00%

Expenses
Payroll $64,050 $68,000 $79,500
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $2,532 $2,532 $2,532
Leased Equipment $0 $0 $0
Utilities $3,000 $3,000 $3,000
Insurance $2,400 $2,400 $2,400
Rent $6,000 $6,000 $6,000
Payroll Taxes $9,608 $10,200 $11,925
Other $0 $0 $0

Total Operating Expenses $87,590 $92,132 $105,357

Profit Before Interest and Taxes ($15,683) $15,668 $58,043

EBITDA ($13,151) $18,200 $60,575
Interest Expense $370 $140 ($20)
Taxes Incurred $0 $3,882 $14,758

Net Profit ($16,053) $11,646 $43,305

Net Profit/Sales -19.65% 9.51% 23.32%

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7.5 Projected Balance Sheet

The following table will indicate the projec ted balance sheet.

Table: Balance Sheet

Pro Forma Balance Sheet
2001 2002 2003
Assets

Current Assets
Cash $7,849 $12,920 $48,800
Accounts Receivable $12,576 $18,854 $28,578
Inventory $1,438 $2,156 $3,268
Other Current Assets $500 $500 $500
Total Current Assets $22,363 $34,430 $81,145

Long-term Assets
Long-term Assets $25,300 $25,300 $25,300
Accumulated Depreciation $2,532 $5,064 $7,596
Total Long-term Assets $22,768 $20,236 $17,704
Total Assets $45,131 $54,666 $98,849

Liabilities and Capital 2001 2002 2003

Current Liabilities
Accounts Payable $3,084 $3,373 $5,051
Current Borrowing $2,600 $200 ($600)
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $5,684 $3,573 $4,451

Long-term Liabilities $0 $0 $0
Total Liabilities $5,684 $3,573 $4,451

Paid-in Capital $60,600 $60,600 $60,600

Retained Earnings ($5,100) ($21,153) ($9,507)
Earnings ($16,053) $11,646 $43,305
Total Capital $39,447 $51,093 $94,398
Total Liabilities and Capital $45,131 $54,666 $98,849

Net Worth $39,447 $51,093 $94,398

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7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 0161, Lettuce Farms, as part of Vegetables and
Melons, Not Elsewhere Classified, are shown for comparison.

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Table: Ratios
Ratio Analysis
2001 2002 2003 Industry Profile
Sales Growth 0.00% 49.92% 51.58% -4.60%

Percent of Total Assets

Accounts Receivable 27.87% 34.49% 28.91% 12.90%
Inventory 3.19% 3.94% 3.31% 14.40%
Other Current Assets 1.11% 0.91% 0.51% 28.90%
Total Current Assets 49.55% 62.98% 82.09% 56.20%
Long-term Assets 50.45% 37.02% 17.91% 43.80%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 12.59% 6.54% 4.50% 31.10%

Long-term Liabilities 0.00% 0.00% 0.00% 20.50%
Total Liabilities 12.59% 6.54% 4.50% 51.60%
Net Worth 87.41% 93.46% 95.50% 48.40%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 88.00% 88.00% 88.00% 32.00%
Selling, General & Administrative Expenses 107.19% 78.41% 64.56% 20.70%
Advertising Expenses 0.00% 0.00% 0.00% 0.20%
Profit Before Interest and Taxes -19.19% 12.79% 31.26% 1.70%

Main Ratios
Current 3.93 9.64 18.23 1.65
Quick 3.68 9.03 17.50 0.88
Total Debt to Total Assets 12.59% 6.54% 4.50% 51.60%
Pre-tax Return on Net Worth -40.70% 30.39% 61.51% 2.20%
Pre-tax Return on Assets -35.57% 28.41% 58.74% 4.50%

Additional Ratios 2001 2002 2003

Net Profit Margin -19.65% 9.51% 23.32% n.a
Return on Equity -40.70% 22.79% 45.88% n.a

Activity Ratios
Accounts Receivable Turnover 3.90 3.90 3.90 n.a
Collection Days 56 78 78 n.a
Inventory Turnover 10.89 8.18 8.22 n.a
Accounts Payable Turnover 10.58 12.17 12.17 n.a
Payment Days 27 29 25 n.a
Total Asset Turnover 1.81 2.24 1.88 n.a

Debt Ratios
Debt to Net Worth 0.14 0.07 0.05 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios
Net Working Capital $16,679 $30,857 $76,694 n.a
Interest Coverage -42.39 111.92 0.00 n.a

Additional Ratios
Assets to Sales 0.55 0.45 0.53 n.a
Current Debt/Total Assets 13% 7% 5% n.a
Acid Test 1.47 3.76 11.08 n.a
Sales/Net Worth 2.07 2.40 1.97 n.a

Page 21
 Mixed Greens Salad Gardens
Dividend Payout 0.00 0.00 0.00 n.a

Page 22
 Appendix
Table: Sales Forecast

Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales
Individual Consumers 0% $0 $0 $0 $2,956 $3,354 $3,789 $3,458 $3,687 $2,847 $2,063 $1,000 $0
Restaurants 0% $0 $0 $0 $2,974 $3,654 $4,545 $5,588 $6,245 $7,258 $7,987 $9,412 $10,895
Total Sales $0 $0 $0 $5,930 $7,008 $8,334 $9,046 $9,932 $10,105 $10,050 $10,412 $10,895

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Individual Consumers $0 $0 $0 $355 $402 $455 $415 $442 $342 $248 $120 $0
Restaurants $0 $0 $0 $357 $438 $545 $671 $749 $871 $958 $1,129 $1,307
Subtotal Direct Cost of Sales $0 $0 $0 $712 $841 $1,000 $1,086 $1,192 $1,213 $1,206 $1,249 $1,307

Page 1
 Appendix
Table: Personnel

Personnel Plan
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Heidi 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Gardener 0% $700 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450
Gardener 0% $700 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450 $1,450
Part-time Helper 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Part-time Helper 0% $0 $0 $0 $750 $750 $750 $750 $750 $750 $750 $750 $750
Total People 0 3 3 4 4 4 4 4 4 4 4 4

Total Payroll $3,400 $4,900 $4,900 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650

Page 2
 Appendix
Table: General Assumptions

General Assumptions
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Page 3
 Appendix
Table: Profit and Loss

Pro Forma Profit and Loss

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales $0 $0 $0 $5,930 $7,008 $8,334 $9,046 $9,932 $10,105 $10,050 $10,412 $10,895
Direct Cost of Sales $0 $0 $0 $712 $841 $1,000 $1,086 $1,192 $1,213 $1,206 $1,249 $1,307
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $0 $0 $712 $841 $1,000 $1,086 $1,192 $1,213 $1,206 $1,249 $1,307

Gross Margin $0 $0 $0 $5,218 $6,167 $7,334 $7,960 $8,740 $8,892 $8,844 $9,163 $9,588
Gross Margin % 0.00% 0.00% 0.00% 88.00% 88.00% 88.00% 88.00% 88.00% 88.00% 88.00% 88.00% 88.00%

Expenses
Payroll $3,400 $4,900 $4,900 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650
Sales and Marketing and Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Expenses
Depreciation $211 $211 $211 $211 $211 $211 $211 $211 $211 $211 $211 $211
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250
Insurance $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Rent $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Payroll Taxes 15% $510 $735 $735 $848 $848 $848 $848 $848 $848 $848 $848 $848
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $5,071 $6,796 $6,796 $7,659 $7,659 $7,659 $7,659 $7,659 $7,659 $7,659 $7,659 $7,659

Profit Before Interest and Taxes ($5,071) ($6,796) ($6,796) ($2,440) ($1,491) ($325) $302 $1,082 $1,234 $1,186 $1,504 $1,929
EBITDA ($4,860) ($6,585) ($6,585) ($2,229) ($1,280) ($114) $513 $1,293 $1,445 $1,397 $1,715 $2,140
Interest Expense $40 $38 $37 $35 $33 $32 $30 $28 $27 $25 $23 $22
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit ($5,111) ($6,834) ($6,833) ($2,475) ($1,525) ($356) $272 $1,053 $1,207 $1,161 $1,481 $1,907
Net Profit/Sales 0.00% 0.00% 0.00% -41.75% -21.76% -4.27% 3.01% 10.61% 11.95% 11.55% 14.22% 17.51%

Page 4
 Appendix
Table: Cash Flow

Pro Forma Cash Flow

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Received

Cash from Operations

Cash Sales $0 $0 $0 $2,372 $2,803 $3,334 $3,618 $3,973 $4,042 $4,020 $4,165 $4,358
Cash from Receivables $0 $0 $0 $0 $119 $3,579 $4,231 $5,015 $5,445 $5,963 $6,062 $6,037
Subtotal Cash from Operations $0 $0 $0 $2,372 $2,922 $6,913 $7,850 $8,987 $9,487 $9,983 $10,227 $10,395

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $0 $0 $0 $2,372 $2,922 $6,913 $7,850 $8,987 $9,487 $9,983 $10,227 $10,395

Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Expenditures from Operations

Cash Spending $3,400 $4,900 $4,900 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650 $5,650
Bill Payments $50 $1,507 $1,723 $1,775 $3,310 $2,836 $2,988 $3,011 $3,132 $3,058 $3,024 $3,120
Subtotal Spent on Operations $3,450 $6,407 $6,623 $7,425 $8,960 $8,486 $8,638 $8,661 $8,782 $8,708 $8,674 $8,770

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $3,650 $6,607 $6,823 $7,625 $9,160 $8,686 $8,838 $8,861 $8,982 $8,908 $8,874 $8,970

Net Cash Flow ($3,650) ($6,607) ($6,823) ($5,253) ($6,238) ($1,773) ($989) $126 $505 $1,074 $1,352 $1,425
Cash Balance $31,050 $24,443 $17,619 $12,366 $6,128 $4,354 $3,366 $3,492 $3,997 $5,072 $6,424 $7,849

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 Appendix
Table: Balance Sheet

Pro Forma Balance Sheet

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Assets Starting Balances

Current Assets
Cash $34,700 $31,050 $24,443 $17,619 $12,366 $6,128 $4,354 $3,366 $3,492 $3,997 $5,072 $6,424 $7,849
Accounts Receivable $0 $0 $0 $0 $3,558 $7,644 $9,065 $10,261 $11,206 $11,824 $11,891 $12,076 $12,576
Inventory $0 $0 $0 $0 $783 $942 $1,100 $1,194 $1,311 $1,334 $1,327 $1,374 $1,438
Other Current Assets $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Total Current Assets $35,200 $31,550 $24,943 $18,119 $17,207 $15,213 $15,020 $15,321 $16,509 $17,655 $18,789 $20,374 $22,363

Long-term Assets
Long-term Assets $25,300 $25,300 $25,300 $25,300 $25,300 $25,300 $25,300 $25,300 $25,300 $25,300 $25,300 $25,300 $25,300
Accumulated Depreciation $0 $211 $422 $633 $844 $1,055 $1,266 $1,477 $1,688 $1,899 $2,110 $2,321 $2,532
Total Long-term Assets $25,300 $25,089 $24,878 $24,667 $24,456 $24,245 $24,034 $23,823 $23,612 $23,401 $23,190 $22,979 $22,768
Total Assets $60,500 $56,639 $49,821 $42,786 $41,663 $39,458 $39,054 $39,144 $40,121 $41,056 $41,979 $43,353 $45,131

Liabilities and Capital Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Current Liabilities
Accounts Payable $0 $1,450 $1,666 $1,664 $3,216 $2,736 $2,888 $2,907 $3,030 $2,958 $2,921 $3,014 $3,084
Current Borrowing $5,000 $4,800 $4,600 $4,400 $4,200 $4,000 $3,800 $3,600 $3,400 $3,200 $3,000 $2,800 $2,600
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $5,000 $6,250 $6,266 $6,064 $7,416 $6,736 $6,688 $6,507 $6,430 $6,158 $5,921 $5,814 $5,684

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $5,000 $6,250 $6,266 $6,064 $7,416 $6,736 $6,688 $6,507 $6,430 $6,158 $5,921 $5,814 $5,684

Paid-in Capital $60,600 $60,600 $60,600 $60,600 $60,600 $60,600 $60,600 $60,600 $60,600 $60,600 $60,600 $60,600 $60,600
Retained Earnings ($5,100) ($5,100) ($5,100) ($5,100) ($5,100) ($5,100) ($5,100) ($5,100) ($5,100) ($5,100) ($5,100) ($5,100) ($5,100)
Earnings $0 ($5,111) ($11,945) ($18,778) ($21,253) ($22,778) ($23,134) ($22,862) ($21,809) ($20,602) ($19,441) ($17,961) ($16,053)
Total Capital $55,500 $50,389 $43,555 $36,722 $34,247 $32,722 $32,366 $32,638 $33,691 $34,898 $36,059 $37,539 $39,447
Total Liabilities and Capital $60,500 $56,639 $49,821 $42,786 $41,663 $39,458 $39,054 $39,144 $40,121 $41,056 $41,979 $43,353 $45,131

Net Worth $55,500 $50,389 $43,555 $36,722 $34,247 $32,722 $32,366 $32,638 $33,691 $34,898 $36,059 $37,539 $39,447

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