Town of Brant Erie County, New York

Transcription

1 Town of Brant Erie County, New York PRODUCE AUCTION MODEL BUSINESS PLAN December 2004 Shepstone Management Company 100 Fourth Street Honesdale, PA FAX

2 Produce Auction Model Business Plan Table of Contents Table of Contents Page i 1.0 Executive Summary Business Description, Mission Statement and Business Goals Description of Business Business Mission Statement Business Goals Marketing Plan Market and Competition Business Marketing Plan Management Plan Financial Plan Sales Forecast, Income and Expenses Capital Requirements and Financing Proposal Cash Flow Analysis Appendices 6-1 A. Pro Forma Income and Expense Statements A-1 B. Pro Forma Balance Sheets B-1 C. Cash Flow Projections C-1 D. Resumes of Management Personnel D-1 E. Background Materials on Other Produce Auctions E-1 Shepstone Management Company i Table of Contents

3 Produce Auction Model Business Plan Executive Summary Brant Produce Auction, Inc., proposes to establish a fruit and vegetable produce auction in Brant, New York. This facility will operate from June to November on a twice-weekly basis with a number of special auctions of unrelated items (e.g. crafts, hay, etc.) on selected days, particularly at the season's outset when the supply of produce is limited. There will also be a retail operation conducted on-site on such days as the auction is open for business. The Brant Produce Auction will be a stock corporation with 85 shares sold at $2,000 each to raise the necessary equity. The company will be managed by five member Board of Directors and a parttime paid manager. Auctioneering services will be secured through a combination of independent contractors and paid members of the company who will secure auctioneer licenses (a common arrangement for produce auctions). It is anticipated the auction will attract approximately suppliers and an equal number of regular buyers (farm stands, restaurants and other produce handlers) at the outset. Suppliers are expected to come primarily from Chautauqua and Erie Counties, with buyers coming from Buffalo, Jamestown, Erie, Rochester and nearby areas of Ohio, Pennsylvania and New York. Expenditures on food consumed at home by households within one hour of Brant total almost $2.2 billion. Food consumed away from home by these households represented yet another $1.4 billion, yielding a total food market of $3.6 billion available to Brant producers. Moreover, there are an estimated 470,000 adults among this population who regularly dine out and 184,000 who cook for fun. Therefore, the greater Buffalo market area offers an excellent selling opportunity for a produce auction. There is relatively little competition within the market area for this type of enterprise. The nearest produce auction is the Finger Lakes Produce Auction in Penn Yan (Yates County) which is hours away. There are, however, numerous farm markets, distributors and processors in the region who will compete for the produce that will be needed by the auction. These include a wide variety of businesses who are licensed by the New York State Department of Ag and Markets as farm products dealers. Some are, potentially, buyers and sellers for the auction; others will be competition. The Brant Produce Auction will target the various vendors selling at these markets (several producers sell at multiple market locations) to offer them an additional or alternative outlet and to also sell them product for resale at the farmers' markets. The auction will, in fact, introduce a new dynamic into the overall market for produce. Its base market, from both a demand and supply side, will be the growers and other agri-businesses who have purchased stock in the company. Shepstone Management Company Page 1-1 Executive Summary

4 Produce Auction Model Business Plan The Brant Produce Auction will operate on Tuesdays and Thursdays, from June to November to minimize conflicts with farmers' markets and maximize the potential for serving their vendors. The demand for such a new outlet is readily apparent from the volume and growth in fruit and vegetable crop production within Erie County. The auction is forecasted to generate $450,000 per year of auction sales plus $90,000 in retail sales (including grower supplies such as berry baskets) in the third year, at which point it will be profitable. These sales are expected to produce $76,500 in gross revenues for the enterprise, yielding a profit of approximately $2,000. It is proposed to raise the sum of $170,000 to finance the establishment of this business through the issuance of 85 shares of stock at $2,000 per share. A $10,000 line of credit for working capital purposes is also proposed, although minimal use of this line is projected. The capital expenses involve an estimated $30,000 in land and site work, and $100,000 of building expenses for the pavilion structure. Approximately $10,000 will also be required for office equipment, hand trucks, carts and related loading equipment. NOTE: This model plan is an example of how to develop a produce auction, similar some of the others that have been established elsewhere in New York, Kentucky, Wisconsin and other states. It provides a recommended approach for organizing such a business, relying upon a number of assumptions that are fictional in nature. It is, therefore, not intended and should not be used as a substitute for the extensive due diligence and financial analysis connected with a new business, activities that must be tailored to the needs of each individual enterprise. This business will required no long-term debt and very little working capital (during the second year). It will generate approximately an 8% return on equity starting with the fifth year while also providing members with new outlets and sources for produce. Shepstone Management Company Page 1-2 Executive Summary

5 2.0 Business Description, Mission Statement and Business Goals 2.1 Business Description Produce Auction Model Business Plan Brant Produce Auction, Inc., proposes to establish a fruit and vegetable produce auction in Brant, New York. This facility will operate from June to November on a twice-weekly basis with a number of special auctions of unrelated items (e.g. crafts, hay, etc.) on selected days, particularly at the season's outset when the supply of produce is limited. There will also be a retail operation conducted on-site on such days as the auction is open for business. The auction will be located on a 5 acre parcel located along Route 249, approximately 5 miles from the intersection with Route 20, near the Brant Community Center. The Brant Produce Auction will be modeled on similar enterprises in other vegetable growing regions, including the Finger Lakes Produce Auction in Penn Yan, New York, the Badgerland Produce Auction in Montello, Wisconsin and the Fairview Produce Auction in Fairview, Kentucky. Background materials relating to these facilities may be found in Appendix E. The operation will take place in a pavilion type structure with open sides and a small closed in office area at the one end. The structure will be approximately 2,500 square feet in size with loading docks on one side to facilitate the delivery of product (see photograph). The Brant Produce Auction will be operated by a stock corporation of the same name, with 85 shares at $2,000 sold to raise the necessary equity. The company will be managed by five member Board of Directors and a parttime paid manager. Auctioneering services will be secured through a combination of independent contractors and paid members of the company who will secure auctioneer licenses (a common arrangement for produce auctions). The company will be licensed as a Farm Products Dealer under the New York State Department of Agriculture and Markets. As the business develops, additional services may be added including renting out of spaces for other retail vendors and cold storage capacity. It is also expected that the number of non-produce auctions will be expanded over time to handle additional products and more fully develop the operation as a tourist attraction that will help to draw new customers and improve the returns for all participants. It is anticipated the auction will attract approximately suppliers and an equal number of regular buyers (farm Shepstone Management Company Page 2-1 Business Description and Mission

6 Produce Auction Model Business Plan stands, restaurants and other produce handlers) at the outset. Suppliers are expected to come primarily from Chautauqua and Erie Counties, with buyers coming from Buffalo, Jamestown, Erie, Rochester and nearby areas of Ohio, Pennsylvania and New York. 2.2 Mission Statement The Brant Produce Auction will, by providing a location where fruit and vegetable farmers can market their produce, as well as other products, create a destination tourist attraction, generate farm and auction profits for members and create economic activity for the community as a whole. visitation, expansions and new offerings, growing sales by a minimum of 3% per year long-term. F. Maintain operating margins by continually upgrading facilities and offerings. G. Establish and maintain a position of leadership in the produce industry to gain name recognition and increase future returns. I. Create a visitor attraction for Brant that will serve to grow the customer base for all related activities. 2.3 Business Goals The following are the key business goals of the Brant Produce Auction, Inc. in launching this project: A. Creating a new outlet for fruit and vegetable produce as well as other farm and related products. B. Generating a positive cash flow within three years of business establishment. C. Generating a profit within three years of business establishment. D. Increasing margins on produce sold through the auction, as compared to wholesale distribution options, by a minimum of 10%. E. Establishing a foundation for future business growth through increased Shepstone Management Company Page 2-2 Business Description and Mission

7 Produce Auction Model Business Plan Marketing Plan 3.1 Market and Competition The Brant Produce Auction will be located in the Town of Brant, Erie County, New York. It will enjoy relatively easy access from I-90 via exits 57 and 58. This route is the major link between the cities of Buffalo and Erie. It carries 28,040 vehicles per day, a significant portion of which represent potential customers for the Brant Produce Auction when it is engaged in selling products directly to consumers (retail sales and special auctions). Other major market factors include the following: A. U.S. Route 20 also provides access to the site and serves as a regional alternate and collector for I-90. It carries 15,600 vehicles per day. B. There is a total market of over 1,225,000 persons within 60 minutes of Brant. C. The market within 30 minutes is also considerable. It has a population of over 207,000 persons, of which almost 85,000 are adults 45+ years of age. These are customers likely to dine out or cook for fun. They, in turn, provide outlets for produce auction customers such as restaurants, farm stands and related produce handlers. D. While total population for the region is not growing, household numbers are relatively stable 490,000+. E. There are, too, large gains in households earning over $50,000 per year with the additional disposal income to spend at restaurants and on higher quality goods. Those households are increasing at a rate of about 3% per year across the market as a result of income gains as the population ages. The amount of spending within the identified market areas (0-30 minutes (Primary Market), minutes (Secondary Market) and minutes (Tertiary or Fringe Market) is quite impressive. The following table summarizes some of the most relevant trends: Market Area Demographics, Minutes Minutes Minutes Total Population, , , ,155 1,234,934 Population, , , ,731 1,225,082 Population, , , ,511 1,206,169 Population 5-14, ,583 97,503 46, ,638 Population 5-14, ,371 91,503 44, ,388 Population 5-14, ,323 82,504 40, ,865 Households, , , , ,561 Households, , , , ,357 Households, , , , ,772 HH's $50K Income, , ,740 47, ,686 HH's $50K Income, , ,945 52, ,929 HH's $50K Income, , ,814 60, ,259 Growth, ,253 16,869 8,209 30,331 % Growth, % 15.3% 15.6% 15.3% Annual % Growth 3.0% 3.1% 3.1% 3.1% Population 45+, , , , ,378 Population 45+, , , , ,548 Population 45+, , , , ,586 Growth, ,718 14,241 7,080 26,039 % Growth, % 5.2% 5.3% 5.3% Annual % Growth 1.1% 1.0% 1.1% 1.1% Source: ESRI - Business Information Solutions Shepstone Management Company Page 3-1 Marketing Plan

8 Produce Auction Model Business Plan Three other specific categories of consumer spending within the market were also examined. Expenditures on food consumed at home by households within one hour of Brant, for example, total businesses who are licensed by the New York State Department of Ag and Markets as farm products dealers. Some are, potentially, buyers and sellers for the auction; others will be competition. Market Area Visitation to Attractions and Expenditures 0-30 Minutes Minutes Minutes Total Travel Expenditures $116,234,322 $368,658,225 $200,149,685 $685,042,232 Average Per Household $1,464 $1,304 $1,536 $1,391 Food at Home $363,722,872 $1,191,502,865 $633,567,637 $2,188,793,374 Average Per Household $4,580 $4,216 $4,862 $4,446 Food Away from Home $238,439,072 $779,625,745 $413,638,094 $1,431,702,911 Average Per Household $3,002 $2,758 $3,174 $2,908 A sample listing of farm products dealers within the greater zip code region of which Brant is part is provided in the table found on the next page. Adults Who Dined Out 82, , , ,903 Who Cooked for Fun 30, ,252 50, ,359 Source: ESRI - Business Information Solutions almost $2.2 billion. Food consumed away from home by these households represented yet another $1.4 billion, yielding a total food market of $3.6 billion available to Brant producers. Moreover, there are an estimated 470,000 adults among this population who regularly dine out and 184,000 who cook for fun. The greater Buffalo market area offers an excellent selling opportunity for a produce auction. There is relatively little competition within the market area for this type of enterprise. The nearest produce auction is the Finger Lakes Produce Auction in Penn Yan (Yates County) which is hours away. There are, however, numerous farm markets, distributors and processors in the region who will compete for the produce that will be needed by the auction. These include a wide variety of There are many other outlets. Nevertheless, these also constitute potential customers who are either seeking alternative sources of supply or who are looking for additional market outlets. The primary competition (but the vendors again representing a source of potential customers) will come from the farmers' markets serving the region. These include the following: Niagara Frontier Growers Co-op Market on Clinton Street and Bailey Avenue in Buffalo, which operates on Saturdays from January through March and 6 days per week April through November, offering both wholesale and retail buying and selling opportunities. Forever Elmwood Farmers' Market on Bidwell Parkway and Elmwood Avenue in Buffalo, which operates Saturdays, June through October. Downtown Country Market at Buffalo Shepstone Management Company Page 3-2 Marketing Plan

9 Produce Auction Model Business Plan Place on Main Street in Buffalo, which operates on Tuesdays and Thursdays, July through October. Licensed Farm Product Dealers (Selected examples, zip code region) Licensee City Zip First Choice Produce, Inc. Batavia Eden Valley Growers, Inc. Eden Oak Orchard Produce, Inc. Elba P & R Produce, Inc. Hamburg Thruway Produce, Inc. Lyndonville Alessi, Charles J. & Susan, Sr. North Collins Boulevard Produce, Inc. Tonawanda Sunset Fruit & Vegetable Buffalo Perry's, Lenny Produce, Inc. Buffalo Calvello, R. P. Produce, Inc. Niagara Falls Lamont, Ingrid Albion Dewey Produce, Inc. Byron Younglove Produce, LLC Kendall Flower City Produce, Inc. Rochester Rochester Food Provisions Rochester American Fruit & Vegetable Rochester Brigiottas Farmland Produce Jamestown Source: NYS Ag & Markets Alden Farmers' Market, on Broadway in Alden, New York, which operates Saturdays, July through October. Clarence Farmers' Market, in Victoria Park, in Alden, New York, which operates Saturdays, July through October. East Aurora Farmers Market, operated from the East Aurora Village Shopping Center in East Aurora, New York, which operates Wednesday's and Saturdays, July through November. Gentner Commission Farmers' Market on Main Street in the Village of Springville, which is a covered fresh produce market conducted in an auction house and operated year round on Wednesdays. Hamburg Farmers Market on Main and Buffalo Streets, which operates on Saturdays, July through November. Kenmore Farmers' Market on Delaware Avenue and Delaware Road in Kenmore, which operates on Saturdays from July through October. Orchard Park Farmers' Market at the Orchard Park Antique Mall in Cheektowaga, which operates on Saturdays, July through October. The Brant Produce Auction will target the various vendors selling at these markets (several producers sell at multiple market locations) to offer them an additional or alternative outlet and to also sell them product for resale at the farmers' markets. The auction will, in fact, introduce a new dynamic into the overall market for produce. Its base market, from both a demand and supply side, will be the growers and other agri-businesses who have purchased stock in the company. The demand for such a new outlet is readily apparent from the volume and growth in fruit and vegetable crop production within Erie County. There is major growth in several categories suggesting much additional potential that can be encouraged through the auction. The following table, compiled from the most recent U.S. Census of Agriculture, summarizes: Shepstone Management Company Page 3-3 Marketing Plan

10 Produce Auction Model Business Plan Erie County Fruit & Vegetable Production Produce Categories Change % Land in Vegetables Farms % Acres 3,227 3, % Land in Orchards (Inc. Grapes) Farms % Acres 1,767 2, % Berries Farms % Acres % Total Farms % Acres 5,142 5, % Major Vegetable Crops Change % Bell Peppers N/A 158 N/A N/A Cabbage Acres % Cucumber Acres % Lettuce Acres % Pumpkin Acres % Sweet Corn 1,386 1, % Tomato Acres % Source: U.S. Census of Agriculture The Brant Produce Auction will operate on Tuesdays and Thursdays, from June to November to minimize conflicts with farmers' markets and maximize the potential for serving their vendors. 3.2 Business Marketing Plan will be targeted at the Buffalo, Erie and Rochester markets. A variety of other marketing techniques will be used to build interest in the Brant Produce Auction. These will include: Specialty auctions or other events that can be used as an excuse for advertising and publicity (e.g. Annual Crafts Auction), particularly during the early months when the volume of produce is limited. Use of calendars and other advertising specialties. Regular direct mailings to growers and buyers, compiling a mailing list of existing customers and using public lists (e.g. licensed farm product dealers). Publicity will be used to generate free advertising by developing news releases that provide local media with a feature stories on Brant Produce Auction events. A media list will be developed for this purpose and news releases will be sent to appropriate media each time there is a special occasion or event associated with Brant Produce Auction. Marketing will be accomplished using a combination of advertising, promotion and publicity. Advertising will consist primarily of a brochure to be distributed to growers, vendors, restaurants and other potential buyers. Examples of materials from other auctions may be found in Appendix E. A professional website incorporating all the same information will also be developed. These two tools Shepstone Management Company Page 3-4 Marketing Plan

11 Produce Auction Model Business Plan Management Plan The Brant Produce Auction will be owned and operated by a stock corporation known as Brant Produce Auction, Inc.. There will be 85 stockholders at the outset, each share valued at $2,000. The corporation will reserve additional shares to raise additional equity, if necessary. Brant Produce Auction Stockholders (85 members) Brant Produce Auction Board of Directors (5 members) A 5-member Board of Directors will guide the operation and management James Smith will serve both as Chairman and Manager, while William Jones will act as Treasurer of the operation. All employees will be part-time. Auctioneering services will be purchased from independent contractors. However, selected members of the Board and other stockholders will be encouraged to become licensed auctioneers to facilitate licensing as an auction house. An organization chart is depicted in the right-hand column. Resumes, including work experience, education, professional affiliations and other qualifications to run this business, are attached. It is anticipated the Manager, although a part-time position, will be the only permanent employee. Other positions will be filled with part-time seasonal personnel. It is anticipated that approximately 2-3 such employees will be required, most of whom will be youth, retirees or other individuals seeking parttime work. Still other labor will be provided on a volunteer basis by members (most of whom are expected to be suppliers or buyers and will be available to assist with such efforts. James Smith Manager Part-time Employees William Jones Treasurer Auctioneer(s) Shepstone Management Company Page 4-1 Management Plan

12 Produce Auction Model Business Plan Financial Plan 5.1 Sales Forecast, Income and Expenses The Brant Produce Auction is forecasted to generate $450,000 per year of auction sales plus $90,000 in retail sales (including grower supplies such as berry baskets) in the third year, at which point it will be profitable. These sales are expected to produce $76,500 in gross revenues for the enterprise, yielding a profit of approximately $2,000. An Income and Expense Statement is attached as Appendix A. Pro Forma Balance Sheets are also attached as Appendix B. analysis are also provided. It indicates this business will required no long-term debt and very little working capital. It will generate approximately an 8% return on equity starting with the fifth year while also providing members with new outlets and sources for produce. 5.2 Capital Requirements and Financing Proposal It is proposed to raise the sum of $170,000 to finance the establishment of this business through the issuance of 85 shares of stock at $2,000 per share. A $10,000 line of credit for working capital purposes is also proposed, although minimal use of this line is projected. The capital expenses involve an estimated $30,000 in land and site work, and $100,000 of building expenses for the pavilion structure. Approximately $10,000 will also be required for office equipment, hand trucks, carts and related loading equipment. 5.3 Cash Flow Analysis A self-explanatory cash flow analysis is attached as Appendix C of this Business Plan. The assumptions used in the Shepstone Management Company Page 5-1 Financial Plan

13 6.0 Appendices Attached, as appendices to this Business Plan, are the following business financial documents: A. Pro Forma Income and Expense Statements B. Pro Forma Balance Sheets C. Cash Flow Projections D. Resumes of Management Personnel E. Background Materials on Other Produce Auctions Produce Auction Model Business Plan Shepstone Management Company Page 6-1 Appendices

14 APPENDIX A Pro Forma Income & Expense Statements

15 Brant Produce Auction PRO FORMA FINANCIAL STATEMENTS INCOME AND EXPENSES: FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 INCOME Auction net revenue $22,500 $36,000 $45,000 $47,250 $49,500 Retail revenue $45,000 $72,000 $90,000 $94,500 $99,000 SUB-TOTAL $67,500 $108,000 $135,000 $141,750 $148,500 Cost of goods sold (retail) $29,250 $46,800 $58,500 $61,425 $64,350 GROSS INCOME $38,250 $61,200 $76,500 $80,325 $84,150 EXPENSES Manager salary $20,000 $20,000 $20,000 $20,000 $20,000 Other variable labor costs $5,400 $8,640 $10,800 $11,340 $11,880 Labor overhead $3,810 $4,296 $4,620 $4,701 $4,782 Auctioneer expenses $6,750 $10,800 $13,500 $14,175 $14,850 Repairs/maintenance $2,000 $2,000 $2,000 $2,000 $2,000 Supplies $675 $1,080 $1,350 $1,418 $1,485 Utilities $2,000 $2,000 $2,000 $2,000 $2,000 Insurance $1,200 $1,200 $1,200 $1,200 $1,200 Office expense/professional fees $1,200 $1,200 $1,200 $1,200 $1,200 Marketing $3,200 $4,820 $5,900 $6,170 $6,440 Contingency/miscellaneous $2,312 $2,802 $3,129 $3,210 $3,292 SUB-TOTAL $48,547 $58,838 $65,699 $67,414 $69,129 Interest $0 $6 $0 $0 $0 Depreciation $8,800 $8,800 $8,800 $8,800 $8,800 TOTAL EXPENSES $57,347 $67,644 $74,499 $76,214 $77,929 NET INCOME BEFORE TAXES ($19,097) ($6,444) $2,002 $4,111 $6,221

16 APPENDIX B Pro Forma Balance Sheets

17 ASSETS AND LIABILITIES: Brant Produce Auction PRO FORMA FINANCIAL STATEMENTS Beginning FY 2005 Beginning FY 2006 Beginning FY 2007 Beginning FY 2008 Beginning FY 2009 Ending FY 2009 ASSETS CURRENT ASSETS Cash on hand $170,000 $7,703 $10,059 $20,861 $33,772 $48,793 Accounts receivable $0 $0 $0 $0 $0 $0 TOTAL CURRENT ASSETS $170,000 $7,703 $10,059 $20,861 $33,772 $48,793 FIXED ASSETS (DEPRECIATED VALUE) Land $0 $20,000 $20,000 $20,000 $20,000 $20,000 Buildings and equipment $0 $118,533 $110,067 $101,600 $93,133 $84,667 Organization expenses $0 $4,667 $4,333 $4,000 $3,667 $3,333 TOTAL FIXED ASSETS $0 $143,200 $134,400 $125,600 $116,800 $108,000 TOTAL ASSETS $170,000 $150,903 $144,459 $146,461 $150,572 $156,793 LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable $0 $0 $0 $0 $0 $0 Short-term debt $0 $0 $0 $0 $0 $0 Current portion of long-term debt $0 $0 $0 $0 $0 $0 TOTAL CURRENT LIABILITIES $0 $0 $0 $0 $0 $0 LONG-TERM LIABILITIES Non-current portion of long-term debt $0 $0 $0 $0 $0 $0 TOTAL LIABILITIES $0 $0 $0 $0 $0 $0 Equity $170,000 $170,000 $170,000 $170,000 $170,000 $170,000 Retained earnings $0 ($19,097) ($25,541) ($23,539) ($19,428) ($13,207) TOTAL LIABILITIES AND EQUITY $170,000 $150,903 $144,459 $146,461 $150,572 $156,793

18 APPENDIX C Cash Flow Projections

19 Brant Produce Auction Cash Flow Analysis FISCAL YEAR VOLUME AS % OF BASE 50% 80% 100% 105% 110% 113% 116% 119% 122% 125% REVENUE Gross auction sales - produce $150,000 $240,000 $300,000 $315,000 $330,000 $339,000 $348,000 $357,000 $366,000 $375,000 Gross auction sales - other goods $75,000 $120,000 $150,000 $157,500 $165,000 $169,500 $174,000 $178,500 $183,000 $187,500 AUCTION REVENUE $22,500 $36,000 $45,000 $47,250 $49,500 $50,850 $52,200 $53,550 $54,900 $56,250 Retail sales (produce and other) $45,000 $72,000 $90,000 $94,500 $99,000 $101,700 $104,400 $107,100 $109,800 $112,500 Cost of goods $29,250 $46,800 $58,500 $61,425 $64,350 $66,105 $67,860 $69,615 $71,370 $73,125 GROSS MARGIN (OTHER) $15,750 $25,200 $31,500 $33,075 $34,650 $35,595 $36,540 $37,485 $38,430 $39,375 TOTAL REVENUE $38,250 $61,200 $76,500 $80,325 $84,150 $86,445 $88,740 $91,035 $93,330 $95,625 OPERATING EXPENSES Manager salary $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 Other variable labor costs $5,400 $8,640 $10,800 $11,340 $11,880 $12,204 $12,528 $12,852 $13,176 $13,500 Labor overhead $3,810 $4,296 $4,620 $4,701 $4,782 $4,831 $4,879 $4,928 $4,976 $5,025 Auctioneer expenses $6,750 $10,800 $13,500 $14,175 $14,850 $15,255 $15,660 $16,065 $16,470 $16,875 Repairs/maintenance $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Supplies $675 $1,080 $1,350 $1,418 $1,485 $1,526 $1,566 $1,607 $1,647 $1,688 Utilities $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Insurance $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 Office expense/professional fees $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 Marketing $3,200 $4,820 $5,900 $6,170 $6,440 $6,602 $6,764 $6,926 $7,088 $7,250 Contingency/miscellaneous $2,312 $2,802 $3,129 $3,210 $3,292 $3,341 $3,390 $3,439 $3,488 $3,537 TOTAL OPERATING EXPENSES $48,547 $58,838 $65,699 $67,414 $69,129 $70,158 $71,187 $72,216 $73,245 $74,274 OPERATING MARGIN (CASH) ($10,297) $2,362 $10,802 $12,911 $15,021 $16,287 $17,553 $18,819 $20,085 $21,351 DEVELOPMENT COSTS Land $20,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Site work $10,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Building construction costs $100,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment costs $10,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Financing/organizational costs $5,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Contingency $7,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEVELOPMENT COSTS $152,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 FINANCING & EQUITY Equity in land $20,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cash equity contribution $150,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL EQUITY $170,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan proceeds $0 $1,000 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan repayments $0 $1,000 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan interest $0 ($6) $0 $0 $0 $0 $0 $0 $0 $0 Loan proceeds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Amortization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEBT SERVICE $0 ($6) $0 $0 $0 $0 $0 $0 $0 $0 CASH FLOW $7,703 $2,356 $10,802 $12,911 $15,021 $16,287 $17,553 $18,819 $20,085 $21,351 CUMULATIVE CASH $7,703 $10,059 $20,861 $33,772 $48,793 $65,080 $82,633 $101,452 $121,537 $142,887 RATE OF RETURN 4.5% 1.5% 6.7% 7.6% 8.2% 8.2% 8.2% 8.1% 8.0% 7.9% Cash Flow Assumptions Manager salary $20,000 Interest rate 7.5% Variable labor costs 2.0% Labor overhead 15.00% Auctioneer costs 3.0% Repair/maintenance costs/year $2,000 Retail sales margin 35.0% Variable supply costs 0.25% Retail sales ratio 20.0% Utility costs (annual) $2,000 Auction sales (other) - base level $100,000 Insurance costs (monthly) $100 Auction produce sales - base level $300,000 Office/professional expense (monthly) $100 Auction charges 10.0% Variable marketing costs 1.0% Annual grand opening expense $500 Contingency expense 5.00% Loan term (months) 84 1st year sales % 50.0% 2nd year sales % 80.0% 3rd year sales % 100.0% Annual sales growth rate (years 4 to 5) 5.0% Annual sales growth rate (years 6+) 3.0%

20 Brant Produce Auction Cash Flow Analysis FISCAL YEAR MONTH Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec VOLUME AS % OF BASE 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% REVENUE Gross auction sales - produce $0 $0 $0 $0 $0 $7,500 $45,000 $30,000 $45,000 $22,500 $0 $0 Gross auction sales - other goods $0 $0 $0 $0 $0 $15,000 $7,500 $15,000 $15,000 $15,000 $7,500 $0 AUCTION REVENUE $0 $0 $0 $0 $0 $2,250 $5,250 $4,500 $6,000 $3,750 $750 $0 Retail sales (produce and other) $0 $0 $0 $0 $0 $4,500 $10,500 $9,000 $12,000 $7,500 $1,500 $0 Cost of goods $0 $0 $0 $0 $0 $2,925 $6,825 $5,850 $7,800 $4,875 $975 $0 GROSS MARGIN (OTHER) $0 $0 $0 $0 $0 $1,575 $3,675 $3,150 $4,200 $2,625 $525 $0 TOTAL REVENUE $0 $0 $0 $0 $0 $3,825 $8,925 $7,650 $10,200 $6,375 $1,275 $0 OPERATING EXPENSES Manager salary $500 $500 $500 $500 $2,000 $3,000 $3,000 $3,000 $3,000 $3,000 $500 $500 Other variable labor costs $0 $0 $0 $0 $0 $540 $1,260 $1,080 $1,440 $900 $180 $0 Labor overhead $75 $75 $75 $75 $300 $531 $639 $612 $666 $585 $102 $75 Auctioneer expenses $0 $0 $0 $0 $0 $675 $1,575 $1,350 $1,800 $1,125 $225 $0 Repairs/maintenance $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 Supplies $0 $0 $0 $0 $0 $68 $158 $135 $180 $113 $23 $0 Utilities $50 $50 $50 $50 $200 $300 $300 $300 $300 $300 $50 $50 Insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Office expense/professional fees $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Marketing $0 $0 $0 $0 $0 $770 $630 $540 $720 $450 $90 $0 Contingency/miscellaneous $50 $50 $50 $50 $143 $313 $396 $369 $424 $342 $77 $50 TOTAL OPERATING EXPENSES $1,041 $1,041 $1,041 $1,041 $3,010 $6,563 $8,325 $7,753 $8,896 $7,181 $1,613 $1,041 OPERATING MARGIN (CASH) ($1,041) ($1,041) ($1,041) ($1,041) ($3,010) ($2,738) $600 ($103) $1,304 ($806) ($338) ($1,041) DEVELOPMENT COSTS Land $20,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Site work $10,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Building construction costs $100,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment costs $10,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Financing/organizational costs $5,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Contingency $7,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEVELOPMENT COSTS $152,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 FINANCING & EQUITY Equity in land $20,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cash equity contribution $150,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL EQUITY $170,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan proceeds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan repayments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Loan proceeds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Amortization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEBT SERVICE $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 CASH FLOW $16,959 ($1,041) ($1,041) ($1,041) ($3,010) ($2,738) $600 ($103) $1,304 ($806) ($338) ($1,041) CUMULATIVE CASH $16,959 $15,918 $14,876 $13,835 $10,825 $8,087 $8,688 $8,585 $9,889 $9,082 $8,745 $7,703 Cash Flow Assumptions Manager salary $20,000 Interest rate 7.5% Other Produce Variable labor costs 2.0% Labor overhead 15.00% January 0.0% 0.0% Auctioneer costs 3.0% Repair/maintenance costs/year $2,000 February 0.0% 0.0% Retail sales margin 35.0% Variable supply costs 0.25% March 0.0% 0.0% Retail sales ratio 20.0% Utility costs (annual) $2,000 April 0.0% 0.0% Auction sales (other) - base level $150,000 Insurance costs (monthly) $100 May 0.0% 0.0% Auction produce sales - base level $300,000 Office/professional expense (monthly) $100 June 20.0% 5.0% Auction charges 10.0% Variable marketing costs 1.0% July 10.0% 30.0% Annual grand opening expense $500 Contingency expense 5.00% August 20.0% 20.0% Loan term (months) 84 1st year sales % 50.0% September 20.0% 30.0% 2nd year sales % 80.0% October 20.0% 15.0% 3rd year sales % 100.0% November 10.0% 0.0% Annual sales growth rate (years 4 to 5) 5.0% December 0.0% 0.0% Annual sales growth rate (years 6+) 3.0% Total % 100.0%

21 Brant Produce Auction Cash Flow Analysis FISCAL YEAR MONTH Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec VOLUME AS % OF BASE 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% REVENUE Gross auction sales - produce $0 $0 $0 $0 $0 $12,000 $72,000 $48,000 $72,000 $36,000 $0 $0 Gross auction sales - other goods $0 $0 $0 $0 $0 $24,000 $12,000 $24,000 $24,000 $24,000 $12,000 $0 AUCTION REVENUE $0 $0 $0 $0 $0 $3,600 $8,400 $7,200 $9,600 $6,000 $1,200 $0 Retail sales (produce and other) $0 $0 $0 $0 $0 $7,200 $16,800 $14,400 $19,200 $12,000 $2,400 $0 Cost of goods $0 $0 $0 $0 $0 $4,680 $10,920 $9,360 $12,480 $7,800 $1,560 $0 GROSS MARGIN (OTHER) $0 $0 $0 $0 $0 $2,520 $5,880 $5,040 $6,720 $4,200 $840 $0 TOTAL REVENUE $0 $0 $0 $0 $0 $6,120 $14,280 $12,240 $16,320 $10,200 $2,040 $0 OPERATING EXPENSES Manager salary $500 $500 $500 $500 $2,000 $3,000 $3,000 $3,000 $3,000 $3,000 $500 $500 Other variable labor costs $0 $0 $0 $0 $0 $864 $2,016 $1,728 $2,304 $1,440 $288 $0 Labor overhead $75 $75 $75 $75 $300 $580 $752 $709 $796 $666 $118 $75 Auctioneer expenses $0 $0 $0 $0 $0 $1,080 $2,520 $2,160 $2,880 $1,800 $360 $0 Repairs/maintenance $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 Supplies $0 $0 $0 $0 $0 $108 $252 $216 $288 $180 $36 $0 Utilities $50 $50 $50 $50 $200 $300 $300 $300 $300 $300 $50 $50 Insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Office expense/professional fees $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Marketing $0 $0 $0 $0 $0 $932 $1,008 $864 $1,152 $720 $144 $0 Contingency/miscellaneous $50 $50 $50 $50 $143 $362 $511 $467 $554 $424 $93 $50 TOTAL OPERATING EXPENSES $1,041 $1,041 $1,041 $1,041 $3,010 $7,592 $10,726 $9,811 $11,641 $8,896 $1,956 $1,041 OPERATING MARGIN (CASH) ($1,041) ($1,041) ($1,041) ($1,041) ($3,010) ($1,472) $3,554 $2,429 $4,679 $1,304 $84 ($1,041) DEVELOPMENT COSTS Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Site work $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Building construction costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Financing/organizational costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Contingency $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEVELOPMENT COSTS $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 FINANCING & EQUITY Equity in land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cash equity contribution $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL EQUITY $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan proceeds $0 $0 $0 $0 $0 $1,000 $0 $0 $0 $0 $0 $0 Working capital loan repayments $0 $0 $0 $0 $0 $0 $1,000 $0 $0 $0 $0 $0 Working capital loan balance $0 $0 $0 $0 $0 $1,000 $0 $0 $0 $0 $0 $0 Working capital loan interest $0 $0 $0 $0 $0 ($6) $0 $0 $0 $0 $0 $0 Loan proceeds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Amortization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEBT SERVICE $0 $0 $0 $0 $0 ($6) $0 $0 $0 $0 $0 $0 CASH FLOW ($1,041) ($1,041) ($1,041) ($1,041) ($3,010) ($478) $2,554 $2,429 $4,679 $1,304 $84 ($1,041) CUMULATIVE CASH $6,662 $5,621 $4,580 $3,538 $528 $50 $2,604 $5,033 $9,713 $11,016 $11,100 $10,059 Cash Flow Assumptions Manager salary $20,000 Interest rate 7.5% Other Produce Variable labor costs 2.0% Labor overhead 15.00% January 0.0% 0.0% Auctioneer costs 3.0% Repair/maintenance costs/year $2,000 February 0.0% 0.0% Retail sales margin 35.0% Variable supply costs 0.25% March 0.0% 0.0% Retail sales ratio 20.0% Utility costs (annual) $2,000 April 0.0% 0.0% Auction sales (other) - base level $150,000 Insurance costs (monthly) $100 May 0.0% 0.0% Auction produce sales - base level $300,000 Office/professional expense (monthly) $100 June 20.0% 5.0% Auction charges 10.0% Variable marketing costs 1.0% July 10.0% 30.0% Annual grand opening expense $500 Contingency expense 5.00% August 20.0% 20.0% Loan term (months) 84 1st year sales % 50.0% September 20.0% 30.0% 2nd year sales % 80.0% October 20.0% 15.0% 3rd year sales % 100.0% November 10.0% 0.0% Annual sales growth rate (years 4 to 5) 5.0% December 0.0% 0.0% Annual sales growth rate (years 6+) 3.0% Total % 100.0%

22 Brant Produce Auction Cash Flow Analysis FISCAL YEAR MONTH Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec VOLUME AS % OF BASE 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% REVENUE Gross auction sales - produce $0 $0 $0 $0 $0 $15,000 $90,000 $60,000 $90,000 $45,000 $0 $0 Gross auction sales - other goods $0 $0 $0 $0 $0 $30,000 $15,000 $30,000 $30,000 $30,000 $15,000 $0 AUCTION REVENUE $0 $0 $0 $0 $0 $4,500 $10,500 $9,000 $12,000 $7,500 $1,500 $0 Retail sales (produce and other) $0 $0 $0 $0 $0 $9,000 $21,000 $18,000 $24,000 $15,000 $3,000 $0 Cost of goods $0 $0 $0 $0 $0 $5,850 $13,650 $11,700 $15,600 $9,750 $1,950 $0 GROSS MARGIN (OTHER) $0 $0 $0 $0 $0 $3,150 $7,350 $6,300 $8,400 $5,250 $1,050 $0 TOTAL REVENUE $0 $0 $0 $0 $0 $7,650 $17,850 $15,300 $20,400 $12,750 $2,550 $0 OPERATING EXPENSES Manager salary $500 $500 $500 $500 $2,000 $3,000 $3,000 $3,000 $3,000 $3,000 $500 $500 Other variable labor costs $0 $0 $0 $0 $0 $1,080 $2,520 $2,160 $2,880 $1,800 $360 $0 Labor overhead $75 $75 $75 $75 $300 $612 $828 $774 $882 $720 $129 $75 Auctioneer expenses $0 $0 $0 $0 $0 $1,350 $3,150 $2,700 $3,600 $2,250 $450 $0 Repairs/maintenance $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 Supplies $0 $0 $0 $0 $0 $135 $315 $270 $360 $225 $45 $0 Utilities $50 $50 $50 $50 $200 $300 $300 $300 $300 $300 $50 $50 Insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Office expense/professional fees $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Marketing $0 $0 $0 $0 $0 $1,040 $1,260 $1,080 $1,440 $900 $180 $0 Contingency/miscellaneous $50 $50 $50 $50 $143 $394 $587 $533 $641 $478 $104 $50 TOTAL OPERATING EXPENSES $1,041 $1,041 $1,041 $1,041 $3,010 $8,278 $12,327 $11,183 $13,470 $10,040 $2,185 $1,041 OPERATING MARGIN (CASH) ($1,041) ($1,041) ($1,041) ($1,041) ($3,010) ($628) $5,523 $4,117 $6,930 $2,710 $365 ($1,041) DEVELOPMENT COSTS Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Site work $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Building construction costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Financing/organizational costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Contingency $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEVELOPMENT COSTS $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 FINANCING & EQUITY Equity in land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cash equity contribution $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL EQUITY $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan proceeds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan repayments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Loan proceeds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Amortization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEBT SERVICE $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 CASH FLOW ($1,041) ($1,041) ($1,041) ($1,041) ($3,010) ($628) $5,523 $4,117 $6,930 $2,710 $365 ($1,041) CUMULATIVE CASH $9,018 $7,977 $6,935 $5,894 $2,884 $2,256 $7,780 $11,897 $18,826 $21,537 $21,902 $20,861 Cash Flow Assumptions Manager salary $20,000 Interest rate 7.5% Other Produce Variable labor costs 2.0% Labor overhead 15.00% January 0.0% 0.0% Auctioneer costs 3.0% Repair/maintenance costs/year $2,000 February 0.0% 0.0% Retail sales margin 35.0% Variable supply costs 0.25% March 0.0% 0.0% Retail sales ratio 20.0% Utility costs (annual) $2,000 April 0.0% 0.0% Auction sales (other) - base level $150,000 Insurance costs (monthly) $100 May 0.0% 0.0% Auction produce sales - base level $300,000 Office/professional expense (monthly) $100 June 20.0% 5.0% Auction charges 10.0% Variable marketing costs 1.0% July 10.0% 30.0% Annual grand opening expense $500 Contingency expense 5.00% August 20.0% 20.0% Loan term (months) 84 1st year sales % 50.0% September 20.0% 30.0% 2nd year sales % 80.0% October 20.0% 15.0% 3rd year sales % 100.0% November 10.0% 0.0% Annual sales growth rate (years 4 to 5) 5.0% December 0.0% 0.0% Annual sales growth rate (years 6+) 3.0% Total % 100.0%

23 Brant Produce Auction Cash Flow Analysis FISCAL YEAR MONTH Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec VOLUME AS % OF BASE 105% 105% 105% 105% 105% 105% 105% 105% 105% 105% 105% 105% REVENUE Gross auction sales - produce $0 $0 $0 $0 $0 $15,750 $94,500 $63,000 $94,500 $47,250 $0 $0 Gross auction sales - other goods $0 $0 $0 $0 $0 $31,500 $15,750 $31,500 $31,500 $31,500 $15,750 $0 AUCTION REVENUE $0 $0 $0 $0 $0 $4,725 $11,025 $9,450 $12,600 $7,875 $1,575 $0 Retail sales (produce and other) $0 $0 $0 $0 $0 $9,450 $22,050 $18,900 $25,200 $15,750 $3,150 $0 Cost of goods $0 $0 $0 $0 $0 $6,143 $14,333 $12,285 $16,380 $10,238 $2,048 $0 GROSS MARGIN (OTHER) $0 $0 $0 $0 $0 $3,308 $7,718 $6,615 $8,820 $5,513 $1,103 $0 TOTAL REVENUE $0 $0 $0 $0 $0 $8,033 $18,743 $16,065 $21,420 $13,388 $2,678 $0 OPERATING EXPENSES Manager salary $500 $500 $500 $500 $2,000 $3,000 $3,000 $3,000 $3,000 $3,000 $500 $500 Other variable labor costs $0 $0 $0 $0 $0 $1,134 $2,646 $2,268 $3,024 $1,890 $378 $0 Labor overhead $75 $75 $75 $75 $300 $620 $847 $790 $904 $734 $132 $75 Auctioneer expenses $0 $0 $0 $0 $0 $1,418 $3,308 $2,835 $3,780 $2,363 $473 $0 Repairs/maintenance $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 Supplies $0 $0 $0 $0 $0 $142 $331 $284 $378 $236 $47 $0 Utilities $50 $50 $50 $50 $200 $300 $300 $300 $300 $300 $50 $50 Insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Office expense/professional fees $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Marketing $0 $0 $0 $0 $0 $1,067 $1,323 $1,134 $1,512 $945 $189 $0 Contingency/miscellaneous $50 $50 $50 $50 $143 $402 $606 $549 $663 $492 $107 $50 TOTAL OPERATING EXPENSES $1,041 $1,041 $1,041 $1,041 $3,010 $8,449 $12,727 $11,526 $13,927 $10,326 $2,242 $1,041 OPERATING MARGIN (CASH) ($1,041) ($1,041) ($1,041) ($1,041) ($3,010) ($417) $6,016 $4,539 $7,493 $3,062 $436 ($1,041) DEVELOPMENT COSTS Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Site work $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Building construction costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Financing/organizational costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Contingency $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEVELOPMENT COSTS $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 FINANCING & EQUITY Equity in land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cash equity contribution $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL EQUITY $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan proceeds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan repayments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Loan proceeds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Amortization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEBT SERVICE $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 CASH FLOW ($1,041) ($1,041) ($1,041) ($1,041) ($3,010) ($417) $6,016 $4,539 $7,493 $3,062 $436 ($1,041) CUMULATIVE CASH $19,819 $18,778 $17,737 $16,696 $13,686 $13,269 $19,284 $23,823 $31,316 $34,378 $34,813 $33,772 Cash Flow Assumptions Manager salary $20,000 Interest rate 7.5% Other Produce Variable labor costs 2.0% Labor overhead 15.00% January 0.0% 0.0% Auctioneer costs 3.0% Repair/maintenance costs/year $2,000 February 0.0% 0.0% Retail sales margin 35.0% Variable supply costs 0.25% March 0.0% 0.0% Retail sales ratio 20.0% Utility costs (annual) $2,000 April 0.0% 0.0% Auction sales (other) - base level $150,000 Insurance costs (monthly) $100 May 0.0% 0.0% Auction produce sales - base level $300,000 Office/professional expense (monthly) $100 June 20.0% 5.0% Auction charges 10.0% Variable marketing costs 1.0% July 10.0% 30.0% Annual grand opening expense $500 Contingency expense 5.00% August 20.0% 20.0% Loan term (months) 84 1st year sales % 50.0% September 20.0% 30.0% 2nd year sales % 80.0% October 20.0% 15.0% 3rd year sales % 100.0% November 10.0% 0.0% Annual sales growth rate (years 4 to 5) 5.0% December 0.0% 0.0% Annual sales growth rate (years 6+) 3.0% Total % 100.0%

24 Brant Produce Auction Cash Flow Analysis FISCAL YEAR MONTH Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec VOLUME AS % OF BASE 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% 110% REVENUE Gross auction sales - produce $0 $0 $0 $0 $0 $16,500 $99,000 $66,000 $99,000 $49,500 $0 $0 Gross auction sales - other goods $0 $0 $0 $0 $0 $33,000 $16,500 $33,000 $33,000 $33,000 $16,500 $0 AUCTION REVENUE $0 $0 $0 $0 $0 $4,950 $11,550 $9,900 $13,200 $8,250 $1,650 $0 Retail sales (produce and other) $0 $0 $0 $0 $0 $9,900 $23,100 $19,800 $26,400 $16,500 $3,300 $0 Cost of goods $0 $0 $0 $0 $0 $6,435 $15,015 $12,870 $17,160 $10,725 $2,145 $0 GROSS MARGIN (OTHER) $0 $0 $0 $0 $0 $3,465 $8,085 $6,930 $9,240 $5,775 $1,155 $0 TOTAL REVENUE $0 $0 $0 $0 $0 $8,415 $19,635 $16,830 $22,440 $14,025 $2,805 $0 OPERATING EXPENSES Manager salary $500 $500 $500 $500 $2,000 $3,000 $3,000 $3,000 $3,000 $3,000 $500 $500 Other variable labor costs $0 $0 $0 $0 $0 $1,188 $2,772 $2,376 $3,168 $1,980 $396 $0 Labor overhead $75 $75 $75 $75 $300 $628 $866 $806 $925 $747 $134 $75 Auctioneer expenses $0 $0 $0 $0 $0 $1,485 $3,465 $2,970 $3,960 $2,475 $495 $0 Repairs/maintenance $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 Supplies $0 $0 $0 $0 $0 $149 $347 $297 $396 $248 $50 $0 Utilities $50 $50 $50 $50 $200 $300 $300 $300 $300 $300 $50 $50 Insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Office expense/professional fees $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Marketing $0 $0 $0 $0 $0 $1,094 $1,386 $1,188 $1,584 $990 $198 $0 Contingency/miscellaneous $50 $50 $50 $50 $143 $411 $625 $565 $685 $505 $109 $50 TOTAL OPERATING EXPENSES $1,041 $1,041 $1,041 $1,041 $3,010 $8,621 $13,127 $11,869 $14,385 $10,611 $2,299 $1,041 OPERATING MARGIN (CASH) ($1,041) ($1,041) ($1,041) ($1,041) ($3,010) ($206) $6,508 $4,961 $8,055 $3,414 $506 ($1,041) DEVELOPMENT COSTS Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Site work $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Building construction costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equipment costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Financing/organizational costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Contingency $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEVELOPMENT COSTS $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 FINANCING & EQUITY Equity in land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cash equity contribution $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL EQUITY $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan proceeds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan repayments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Working capital loan interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Loan proceeds $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Amortization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL DEBT SERVICE $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 CASH FLOW ($1,041) ($1,041) ($1,041) ($1,041) ($3,010) ($206) $6,508 $4,961 $8,055 $3,414 $506 ($1,041) CUMULATIVE CASH $32,731 $31,690 $30,648 $29,607 $26,597 $26,391 $32,899 $37,860 $45,915 $49,328 $49,834 $48,793 Cash Flow Assumptions Manager salary $20,000 Interest rate 7.5% Other Produce Variable labor costs 2.0% Labor overhead 15.00% January 0.0% 0.0% Auctioneer costs 3.0% Repair/maintenance costs/year $2,000 February 0.0% 0.0% Retail sales margin 35.0% Variable supply costs 0.25% March 0.0% 0.0% Retail sales ratio 20.0% Utility costs (annual) $2,000 April 0.0% 0.0% Auction sales (other) - base level $150,000 Insurance costs (monthly) $100 May 0.0% 0.0% Auction produce sales - base level $300,000 Office/professional expense (monthly) $100 June 20.0% 5.0% Auction charges 10.0% Variable marketing costs 1.0% July 10.0% 30.0% Annual grand opening expense $500 Contingency expense 5.00% August 20.0% 20.0% Loan term (months) 84 1st year sales % 50.0% September 20.0% 30.0% 2nd year sales % 80.0% October 20.0% 15.0% 3rd year sales % 100.0% November 10.0% 0.0% Annual sales growth rate (years 4 to 5) 5.0% December 0.0% 0.0% Annual sales growth rate (years 6+) 3.0% Total % 100.0%

25 APPENDIX D Resumes of Management Personnel

26 APPENDIX E Background Materials on Other Produce Auctions

27 Just Think! Fresh Wisconsin Produce... ripe for the taking, instead of aging, shipped-in produce from who knows where. Our aim is to bring to you the best quality and selection of Wisconsin s home grown produce while taking the least amount of your time. We know how to make your search for great produce as painless as possible. We see no reason for you to forfeit freshness or time! Why a produce auction? Wholesale produce auctions have been very successful for quite some time. Indiana, Iowa, Kentucky, Missouri, New Jersey, New York, and our very own Wisconsin are all states hosting one or more auction sites. Produce auctions are the only way for buyers and sellers alike, to be on equal footing for the sale of truly fresh produce. If you haven t tried one yet, you don t know what you re missing! Who are we? Badgerland Produce Coop is made up from some of South Central Wisconsin s most dedicated farm families. From the seeds we plant and cultivate, to the produce we harvest and deliver, its all a hands on operation. We know you ll feel the same pride as you re purchasing farm fresh produce and supporting the families of southern Wisconsin s farming community. SUPPLY & DEMAND Price will follow the supply and demand. FAIR Treats every buyer and seller the same. FAST Produce will be sold in a quick and efficient manner. EASY Very easy to get in and out and on with your day. Badgerland Produce Auction Bringing growers together with large scale buyers looking for the best Wisconsin produce! Auction Location: N2954 State Hwy 22, Montello (2 miles south of Montello) State Hwy 39 Mailing address and contact information: PO Box 128 Montello, WI (608) Map to Produce Auction Site State Hwy 22 PORTAGE State Hwy 22 MONTELLO State Hwy 23 Badgerland Produce Auction N2954 State Hwy 22 Montello, WI (2 miles south of Montello) State Hwy 33 W N S E PRODUCE CO-OP AUCTION Weekly Schedule! (see 2004 calendar inside) 10 am - 1 pm N2954 State Road 22 Montello Selling Wisconsin s Finest Produce at Auction!

28 BADGERLAND PRODUCE CO-OP AUCTION Seasonal Availability Information May Bedding plants, baskets, perennials, spring onions, radishes, lettuce, strauberries, peas, asparagus, spinach, etc Auction Schedule Shaded dates are regularly scheduled auction days all auctions start at 10 am sharp Badgerland Produce Auction N2954 State Hwy. 22, Montello, WI June Asparagus, broccoli, cabbage, cauliflower, cucumbers, green beans, lettuce, onions, peas, perennials, potatoes, radishes, spinach, strawberries, zucchini, etc. April-May 2004 S M T W T F S June 2004 S M T W T F S July 2004 S M T W T F S July Blackberries, cabbage, cucumbers, cut flowers, green beans, muskmelon, onions, peas, peppers, potatoes, raspberries, strawberries, sweet corn, watermelon, zucchini, etc August Blackberries, cabbage, cucumbers, cut flowers, green beans, muskmelon, onions, peppers, potatoes, squash, raspberries, sweet corn, watermelon, zucchini, etc. September Cabbage, cucumbers, dried flowers, fall mums, gourds, green beans, muskmelon, onions, ornamental corn, peppers, potatoes, pumpkins, squash, sweet corn, turnips, watermelon, zucchini, etc. October Corn fodder shocks/swags, dried flowers/wreaths/ arrangements, fall mums, gourds, late produce, ornamental corn, pumpkins, winter squash, etc. Produce picked fresh for each auction. All produce to be graded and packed in standard containers. Produce will be sold by box, pallet, or bin lots August 2004 S M T W T F S September 2004 S M T W T F S S M T W T F S / 31 October Special Auctions to take place after the regular produce auction: April 27 Machinery Auction; April 30 Spring Craft Sale Auction; September 9 Fall Craft Sale Auction; October 21 Machinery Auction and Harvest Potluck.

29 PROFILES IN AGRICULTURAL ENTREPRENEURSHIP FAIRVIEW PRODUCE AUCTION, INC. FAIRVIEW, KY AEC-EXT Matthew Ernst, Extension Associate October 2000 It doesn t take long to spot the village of Fairview, KY, when driving east from Hopkinsville on the newly widened Highway 68/80. Since 1924, Fairview has been home to one of the country s tallest monuments a 324- foot obelisk on the south side of the highway commemorating the birthplace of American soldier and politician Jefferson Davis. One summer day in 1996, a group of Fairview-area farm families met underneath a park shelter in the shadow of the Davis memorial. The meeting was the result of an ongoing discussion among a few farmers from the Fairview Mennonite community. The farmers thought that the area could support a produce auction similar to successful auctions in Pennsylvania, Missouri, and Ohio. They held the meeting to determine if people were willing to buy shares to support such a venture. Today, the Fairview passerby will still surely notice the silhouette of the Davis Memorial on the south side of the highway. But another sight may be noticed to the north if one passes by at midday or on a certain summer evening. A line of mule and horse-drawn wagons loaded with fresh produce extend around an open-faced, steelframed building where a crowd gathers round. The visitor who turns north at the sign labeled Fairview Produce Auction, Inc. will hear the chant of an auctioneer over various lots of fresh produce for sale to the highest bidder. Walking into the closed portion of the building, one might observe some buyers already settling their bills at the auction office. Behind them, smaller lots of produce are lined on tables awaiting sale okra in shallow boxes, various-colored peppers, quarts of blackberries picked in Madisonville that morning, and more. From the open portion of the building where larger lots of produce are aligned, cantaloupes can be spotted flying through the air some 50 feet from the auction building. Three boys have confidently formed a relay team as a load already sold is transferred from a horse-drawn to a pickup-drawn wagon. Not one melon is dropped. Need help to load? asks a sign posted by the auction office. Ask the boys...they are glad to help! The Fairview Produce Auction serves as a successful example of a community driven, cooperative effort in agricultural entrepreneurship. Organizers are quick to point out that the auction mechanism is by no means a new or universal solution for small-farm produce marketing efforts. In this certain case, though, the Fairview Produce Auction has provided a way for farmers from the immediately surrounding areas and beyond to capture the highest price buyers are willing to pay on any given day for produce. THE IDEA Under a Shade Tree The auction was one was of those things that just started out in a conversation underneath a shade tree, says Harold Eli. Eli is the Kentucky State University Extension Small Farms program assistant in Christian County. A Christian County native, he has been working for the Christian County Cooperative Extension Service since the first Mennonite families moved to Christian County around AGRICULTURE & NATURAL RESOURCES FAMILY & CONSUMER SCIENCES 4-H/YOUTH DEVELOPMENT RURAL & ECONOMIC DEVELOPMENT 1