AVTARSINGH FARM HOUSE INC.

Business Plan
October 2020

Mr. Dalbir Singh Matharoo

avtarsinghfarmhouse@gmail.com

Business Plan – Avtarsingh Farm House Inc. 1

Avtarsingh Farm House Inc.
78 Vienneau, Cap Pele NB E4N 2C5
 Table of Contents
Executive summary...........................................................................................................
Project objectives.............................................................................................................................................. 5
Businnes description........................................................................................................................................ 5
Products and services....................................................................................................................................... 5
Financing need.................................................................................................................................................. 6
Key people......................................................................................................................................................... 6
Risk assessment and contigency plan............................................................................................................. 6

Business overview..........................................................................................................7
Business description......................................................................................................................................... 7
Mission, vision, values..................................................................................................................................... 7
Industry overview and trends.......................................................................................................................... 7
Technological trends........................................................................................................................................ 8
Government regulations................................................................................................................................... 8
The market......................................................................................................................................................... 8
Overview of market trends 8
Target market 8
Products and services 9
The competition................................................................................................................................................ 9
Competitors and types of competition 9
Competitors’ strengths and weaknesses 9
Competitive advantage and differentiator 9

Sales and marketing....................................................................................................10

Customers........................................................................................................................................................ 10
Suppliers.......................................................................................................................................................... 10
Advertising and promotion............................................................................................................................ 10
Pricing and distribution.................................................................................................................................. 11
Customer service policy and warranties...................................................................................................... 11

Business Plan – Avtarsingh Farm House Inc. 1

Operating plan............................................................................................................12
Business location............................................................................................................................................ 12
Equipment....................................................................................................................................................... 12
Technology requirements and investment needs........................................................................................ 12
Environmental compliance............................................................................................................................ 13

People........................................................................................................................14
Description of the management team........................................................................................................... 14
Description of advisory team........................................................................................................................ 14
Key employees................................................................................................................................................ 14

Action Plan.................................................................................................................16
Project objectives............................................................................................................................................ 16
Ressources required........................................................................................................................................ 16
Action plan...................................................................................................................................................... 16
Risk assessment and contingencies.............................................................................................................. 16

Business Plan – Avtarsingh Farm House Inc. 1

EXECUTIVE SUMMARY

Avtarsingh Farm House Inc. (hereafter also referred to as the Farm House) has 20-acre apple orchards
and 5-arce varieties of vegetables for a total of 25-arce land. Mr. Dalbir Singh Matharoo and his
partner, Mr. Gurpreet Singh Sandhu, will turn the 25-arce land into a thriving produce business.
Avtarsingh Farm House Inc. is based on the sound principles of conserving natural resources, limiting
the carbon footprint, growing, hiring and eating locally grown and prepared foods, and making the
world a better place to live in. This unique perspective clearly shows in the quality of the produce, the
well cared for gardens, and natural friendliness and ease of its owners.
Avtarsingh Farm House Inc. was created to meet the growing needs of a community that shares these
same views and is concerned about what they eat and feed their children. This is a community that is
tired of ‘fresh’ apple bought at the local grocery store. When more than likely the “fresh” apple was
picked while still unripe, shipped 3,000 miles over several days/weeks, and then artificially "ripened"
using ethylene gas, thus robbing it of practically all of its nutritional value. The Farm is a community
supported agriculture business entity. This is both a marketing strategy and a philosophy.
Avtarsingh Farm House Inc.’s slogan is simple: “Live life simply and simply live”. The owners also
believe in contributing to their community and the planet. The Farm believes that in order for the
survival of the planet, we must rely on local resources. Buying from local farmers supports the local
economy. By reducing reliance on energy is better for the planet and conserves our natural resources.
Happy members ensure repeat business, and their referrals grow the business.

Project Objectives

Avtarsingh Farm House Inc. has simple objectives: provide healthy and delicious tasting vegetables
while simultaneously leaving a minimal carbon footprint. Avtarsingh Farm House Inc.’s mission is to
raise the best tasting and finest quality fruits and vegetables for the local community. The Farm will
only use natural and sustainable farming methods, free from pesticides or fertilizers. Natural foods
and natural farming methods leaves a smaller carbon footprint while simultaneously improves the
health of its customers and its local community.

Business Plan – Avtarsingh Farm House Inc. 1

Business Description

Mr. Dalbir Singh Matharoo and his partner, Mr. Gurpreet Singh Sandhu run, manage, and operate
Avtarsingh Farm House Inc. The company initially sells apples and vegetables to market then quickly
begins supporting local restaurants with surplus (waste) sold at the local farmers’ market. Mr. Dalbir
Singh Matharoo and his partner, Mr. Gurpreet Singh Sandhu are operating the business as a
community supported agriculture business entity, a business for the first time this year. Mr. Dalbir
Singh Matharoo’s main plan is to grow apple orchards on the 20-arce land, and during off-season, he
will produce vegetables such as potatoes, onions, carrots, etc…
Avtarsingh Farm House Inc. is corporation formed in the province of New Brunswick. The entity is
wholly owned by Mr. Dalbir Singh Matharoo and Mr. Gurpreet Singh Sandhu.

Avtarsingh Farm House Inc. is located 78 Vienneau, Cap Pele NB E4N 2C5. Cap Pele is one of the
most northerly growing regions in North America, giving Cap Pele’s commercial apple producing
region a relatively short and cool growing season. Within Canada, New Brunswick is the only
province producing apples with a shorter and cooler season. The annual precipitation for Cap Pele,
NB is average 1,200 mm which means that most growers in Cap Pele do not need to rely on irrigation
to produce a crop. The short, cool and moist growing season can provide a competitive advantage to
growers with respect to input costs and apple quality. One of the greatest climatic advantages that
New Brunswick has over other apple producing regions is the ability to produce highly coloured
apples due to the cool evening temperatures in late summer and the fall combined with good light
diffusion. The other advantages New Brunswick growers have with respect to weather are, that New
Brunswick orchards are less prone to adverse weather events and frost damage. New Brunswick
apples are also less prone to calcium deficiency which is advantageous to the New Brunswick
growers and contributes to the ability to produce quality fruit.

Products and Services

Avtarsingh Farm House Inc.’s first apple plantation season will start in early May or June 2021. Mr.
Dalbir Singh Matharoo will use 20-arce land to produce the apple orchards. The first step to
determining the tree requirements is to measure the field and decide on the spacing that will suit the
desired management techniques. You may wish to consult with a tree fruit specialist at this point in the
planning. The success of the new orchard planting is highly influenced by the quality of the nursery
trees that are planted. The nursery stock should be vigorous, one or two year old trees with lateral
shoots and high density. Where early production is required it is advised to plant one-year old
feathered trees with a minimum of eight lateral shoots. The trees should be dormant, free from freezing
and other injury and should have never been subjected to drying conditions. It is important that the
trees be planted as soon as possible after they are received. Spring time (April-May) is the best time
for planting nursery stock, as soon as the soil is ready.
You might think that today there are a wide range of apple cultivars, however you might be interested
to know that over a century ago there was up to 1000 different cultivars available in the United States
and Canada. Over many seasons growers withdrew a number of cultivars that were not favored by

Business Plan – Avtarsingh Farm House Inc. 1

consumers or did not store well. The apple cultivars most in demand on the market include (Listed in
order of Harvest):
 Cortland
 Honeycrisp
 Gala
 McIntosh
 Red Delicious

Establishment and Cost of Production Assumptions

It has been assumed that the development is a 20 acre orchard and there will be a purchase of a tractor
and other related equipment such as a mower and sprayer at an investment of $50,000 borrowed at a
fixed rate 6.5% for 10 years. For the purpose of calculating the land tax, a rate of $0.80/$100 was used.
The land preparation costs are based on land in a pasture state prior to planting. The cost of land has
not been included in this study because of the great deal of variation in land prices and values. It is
therefore important to remember that if you are using this information in the planning of your own
development, you will need to allow for the land expense in the calculation of your own establishment
and operating costs. Costs associated with general farm overhead like accounting, legal, office and
general farm maintenance have not been included due to the variability that exists from situation to
situation. The information in this document looks at the establishment of orchards unsupported at 300
trees/acre and supported at 400, 600 and 800 trees/acre. The establishment is based on the higher
valued apple cultivars. For the purpose of this report year one is the pre-planting year.
Costs and Returns of Apple Production
Variable Costs

Business Plan – Avtarsingh Farm House Inc. 1

The variable costs are those costs that change directly with an increase or decrease in acreage. Trees,
training materials, pesticides, fertilizers, labour and operating expenses for machinery are examples of
variable costs.
Fixed Costs
Fixed cost or overhead costs do not change as a result of an increase or decrease in acreage. Some
examples of fixed costs are machinery (depreciation and interest), and taxes.
Year 1: Pre-planting - Costs
In the year prior to planting the orchard, the selected location will require preparation for the planting
of the trees. The site will, in most cases, require installation of tile drainage. Following the installation
of the tile drain, the site will require tilling, fumigation, deep ripping and the application of lime,
fertilizer and manure according to recommendations from soil testing. Once the land preparations are
complete a cover crop should be planted for the winter to prevent erosion.
Table 1. Pre-Planting year 1 costs (all plantings)

Variable Costs Cost/Acre

Tile Drainage $2000
Deep Ripping $500
Land Preparation (seed bed condition) $500
Fumigation $1200
Soil Testing and Amendments $126
Cover Crop $35
Tractor and Equipment Expenses $200
Labour $300
Total Variable Costs $4,861
Fixed Costs
Interest and Depreciation Tractor and Equipment $560
Taxes (land) $28
Total Fixed Costs $588
Total Cost for Pre-planting Year $5,449

Year 2: Planting Year – Costs

It is in the year of planting that there is a requirement for a significant infusion of cash into the
orchard. Labour is a very large part of the cost in the planting year, as is the cost of supplies for the
support system and the trees themselves. There will be variation in the requirements for some things
like pesticides, fertilizer, manure and lime.

Business Plan – Avtarsingh Farm House Inc. 1

 Table 2. Establishment Costs per acre – Year 2: Planting Year

Unsupported Supported Supported Supported

Variable Costs Trees 300 Trees 400 Trees 600 Trees 800
Soil Testing and
Amendments $400 $400 $400 $400
Tractor and Equipment
Expenses $200 $200 $200 $200
Labour $1,500 $1,500 $1,500 $1,500
Trees ($11/tree) $3,300 $4,400 $6,600 $8,800
Tree Support $0 $1,800 $2,700 $3,600
Insect, Pest and Weed
control $100 $100 $100 $100
Total Variable Expenses $5,500 $8,400 $11,500 $14,600

Fixed Costs
Taxes (land) $28 $28 $28 $28
Interest and Depreciation
Tractor and Equipment $560 $560 $560 $560
Total Fixed Expenses $588 $588 $588 $588

Total Expenses $6,088 $8,988 $12,088 $15,188

The labour expense will vary depending on the amount of labour you need to hire, the availability of
the labour, and the wage expected by the labour pool available to you at the time of planting. If you are
using your own labour and family labour it is important to remember that even if you are not using
cash to pay for it directly it still has a value and the value must be accounted for in all financial
projections.
Year 3: Growth Year
In year three, the trees are left to grow and establish themselves. There will be some input this year in
the areas of labour, pesticides and fertilizer. In year three there is no expectation for revenue. In the
growth year the cost will be similar in all plantings.

Business Plan – Avtarsingh Farm House Inc. 1

Table 3. Establishment Costs per acre – Year 3: Growth Year

Variable Costs All Orchards

Soil Testing and Amendments $400
Tractor and Equipment Expenses $200
Labour $1,000
Insect, Pest and Weed control $200
Thinning (hand) $90
Total Variable Expenses $1,890

Fixed Costs
Taxes (land) $28
Interest and Depreciation Tractor and
Equipment
Total Fixed Expenses $560
$588

Total Expenses $2,478

Year 4 and Beyond: Production Years

It is in the fourth year of the establishment when the higher density orchard plantings (600+ Supported
Trees/acre) will begin to yield some return. As the orchard begins to produce fruit it will take a number
of years to reach full production of a mature orchard. The density of the planting impacts the time it
takes to reach the mature yield. The unsupported orchard planting will not reach the expected mature
yield until year 14, however the supported orchard at 800 trees/acre should reach the mature yield in
year
7. Once the orchard is in a mature state the expected yield is 800 bushel/acre and the variable cost of
production is approximately $4800/acre.

Business Plan – Avtarsingh Farm House Inc. 1

Treatment of Establishment Costs
The establishment of an orchard requires that a grower manage four successive years of establishment costs
prior to any revenue being received. In order to evaluate the orchard enterprise it is often necessary to
accumulate the establishment costs until such time as a crop is harvested and revenue is received. In order to do
this, the variable establishment costs in each of the three years along with their respective interest charges are
accumulated to the fourth year using an interest rate of 6.5% compounded annually. The total compounded
amount represents the variable cost of establishment per acre of orchard that is to be repaid over a period of
years of harvesting.

Table 4. Establishment Costs per acre

Unsupported Supported Supported Supported Trees 300 Trees 400 Trees

600 Trees 800
Preplanting Costs (variable) $4,861 $4,861 $4,861 $4,861
Planting Costs (variable) $5,500 $8,400 $11,500 $14,600
Growth Year 3 Costs
(variable) $1,890 $1,890 $1,890 $1,890
Growth Year 4 Costs
(variable) $1,890 $1,890
Total Variable Cost of
Establishment $14,141 $17,041 $18,251 $21,351
Compounded Interest $2,705 $3,270 $2,455 $2,858
Total Variable Cost of
Establishment +
Compounded Interest $16,846 $20,311 $20,706 $24,209
Interest Rate on
Establishment cost 6.50% 6.50% 6.50% 6.50%
Term 10 10 10 10
Yearly Payment $2,343 $2,825 $2,880 $3,368
To maintain a straightforward approach to production costs, it is necessary to assume constant costs and returns
for each of the successive harvest years. It is for the same reason that the total compounded cost of
establishment is amortized and the repayment of these costs is divided equally over the harvest years. By
assuming that the establishment of the orchard increases the asset value of the land, the grower is able to
depreciate the costs annually over a defined number of years of actual harvesting.

Table 4 above shows the amortization of the total three year establishment cost over a 10 year period at an
interest rate of 6.5% for each of the planting densities.
In the meantime, Mr. Dalbir Singh Matharoo will produce and profit from vegetables from the 5-arce farmland:
 Spring: Beets, Broccoli, Cabbage, Carrots, Garlic, Green Onions, Kale, Lettuce (several varieties),
Radishes, Peas, Spinach
 Summer: Beans, Carrots, Cucumbers, Eggplant, Green Onions, Leeks, Melons, Onions, Sweet Peppers,
Summer Squash, Tomatoes, Zucchini
 Fall: Beans, Beets, Broccoli, Cauliflower, Cucumbers, Chard, Lettuce (several varieties), Potatoes, Red
Onions, Spinach, Winter Squash.

All produce will be grown on the Farm, and Mr. Dalbir Singh Matharoo will actively work and manage the
farm. Mr. Dalbir Singh Matharoo will utilize a detailed planting schedule which historically has helped
immensely especially in the hectic summer planting season. The detailed guide begins with the plantings that
tolerate the coldest spring. Summer crops will be shade with cloths if necessary (like spinach for instance).
The farmers will plant many tomatoes (which are very popular) and only some eggplant which is less popular.
Other considerations that are detailed in the planting calendar will be the amount of produce that is needed.
One way to plant more is to plant smaller amounts more often. Examples include broccoli, carrots, scallions,
and summer squash. Mr. Dalbir Singh Matharoo has learned that planting these items two or three times during
the growing season yields more crop and the surplus can readily be sold at the farmers’ market. Picking peas is
difficult at harvest time, so he always plans to plant surplus to make harvest time worthwhile. It is expected that
any surplus can be sold at the farmers’ market. The Farm’s concept is all about freshness. The produce is
delivered immediately from the farm to the purchasers.
The owners of the farm have plans to introduce honeybees the following season and offer honey as another
organic product. On occasion, Avtarsingh Farm House Inc. partners with its neighboring dairy farm and an
organic bakery in town. From time to time members will find fresh cheeses and organic breads in their weekly
selection boxes. Avtarsingh Farm House Inc. owners are currently considering joining forces with a local
orchard company as well. The orchard will supply apple butter and jams.
Avtarsingh Farm House Inc. has long term plans to purchase an additional 10 acres. To support the farm, they
will hire apprentice farmers, part-time delivery drivers and a bookkeeper. Mr. Dalbir Singh Matharoo would

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then be able to focus their efforts on crop research, marketing trends and their members. Part of the focus of
growing is returning back to the community. All employees will earn fair wages for work performed.
Other future plans include accessing the internet to increase awareness and the importance of local and
community farming. Mr. Gurpeet Singh Sandhu and Mr. Dalbir Singh Matharoo are compiling a recipe E-book
to sell on Avtarsingh Farm House Inc. website which will supplement cash flow during non-productive months.
The book will focus on modern organic farming techniques for the novice farmer. A second book is
forthcoming dealing with environmental concerns and social responsibility.
Additionally, Avtarsingh Farm House Inc. will publish a weekly newsletter to identify what is happening on the
farm and recipes. The newsletter will educate members to seasonal eating and sustainable principles. The Farm
House has future plans for constructing a vegetable processing area with electricity and water. The facility will
have a walk-in cooler, a washing and grading area, stainless steel tables and two scales. Additional capital
expenditures will be for the purchase of a newer (used) pickup truck and attachments for their tractor.
(Currently they borrow their neighbor’s).

Financing Need

Total cost of the project is approximately $1 million. Mr. Dalbir Singh Matharoo will personally invest a total
of $250,000 into the Farm House, and Mr. Gurpreet Singh Sandhu will also invest the same amount. The bank
will loan $500,000 to Avtarsingh Farm House Inc. under the Canadian Agricultural Partnership (CAP) or
Canadian Agricultural Loan Act (CALA) program.
Investment:
From Mr. Dalbir Singh Matharoo’s Personal Account $250,000
From Mr. Gurpreet Singh Sandhu’s Personal Account $250,000
Total Investment $500,000

Intended use of funds:

Expenses to Be Made in Year 1:
Land Purchase $100,000
Website Creation $3,000
Product Costs $360,000
Farm Machinery Lease $6,000
Vehicle Lease $6,000
Fertilizer Cost $10,000
Pesticide Cost $12,000

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 Total

The following table represents the annual sales forecast for the initial three years of operations:

Annual Sales Forecast Year 1 Year 2 Year 3 Year 4 Year 5

Apple Sale $500,000 $750,000

Vegetables Sale $60,000 $90,000 $135,000 $202,500 $303,750
E Cookbooks $200 $300 $450 $675 $1,013
Honey $0 $0 $520 $780 $1,170

Gross Margin $60,200 $90,300 $135,970 $703,955 $1,055,933

Key People

Mr. Dalbir Singh Matharoo will serve as the Farm House’s Farm Manager. Mr. Dalbir Singh Matharoo will
lead, motivate, and work together with General Farm Workers to take care of the farm, apple orchards, and
vegetables. Mr. Dalbir Singh Matharoo will supervise nursery and farm workers, sort and pack fruits and
vegetables, purchase machinery, livestock, seed, feed and other supplies. In addition, he will also plant
seedlings, pick row and orchard crops, perform general farm duties and organize and direct nursery operations.
Mr. Dalbir Singh Matharoo will manage overall operation of farm, maintain farm machinery, equipment and
buildings, and recruit, hire and supervise staff and/or volunteers. He will supervise staff in planting,
transplanting, feeding and spraying. As the owner of the Company, Mr. Dalbir Singh Matharoo will perform
additional duties. He will develop business strategies and plans, ensuring their alignment with short-term and
long-term objectives. Mr. Dalbir Singh Matharoo will review financial and non-financial reports to devise
solutions or improvements. He will ensure that her staff is focused on the Company’s goals. He will oversee all
operations and business activities to ensure they produce the desired results and are consistent with the
Company’s overall strategy and mission. He will also be involved in marketing, community outreach, events
coordination, and customer service.
From December 2017 to date, Mr. Dalbir Singh Matharoo works as a Farm Manager and Greenhouse Worker at
Avtatsingh Farm House Inc. in Kitchener, Ontario. His tasks included the following, among others:
 Transplant bulbs and seedlings on a regular basis
 Set up and maintain outdoor and greenhouse irrigation systems
 Plan species to be planted in conjunction with holidays, climate, time of year
 Provide supervision over greenhouse workers

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  Inspect facilities and equipment for signs of disrepair, and perform necessary maintenance work
 Maintain stock and inventory records on a regular basis
 Operate tractors and other greenhouse machinery safely and responsibly
 Assess soil quality for potting and repotting a variety of plants
 Apply fertilizer and mild pesticides to greenhouse stock on a regular basis
 Handle in-person and telephone customer queries in a courteous and accurate fashion
 Identify plants as well as problems such as diseases, weeds, and insect pests

General Farm Worker (NOC 1221)

Avtarsingh Farm House Inc. will hire six General Farm Workers in Year 1. General farm workers will plant,
cultivate and harvest crops, raise livestock and poultry and maintain and repair farm equipment and buildings.
These employees will operate and maintain farm machinery and equipment, and detect disease and health
problems in crops, livestock and poultry. Additionally, they will examine produce for quality and prepare for
market, set and monitor water lines, air flow and temperature in barns, pens and chicken coops, and clean
stables, barns, barnyards and pens.
Marketing Specialist (NOC 1123)

The Farm House will hire one Marketing Specialist in Year 1. This employee will develop strategies and tactics
to promote the Farm House. Duties of the Marketing Specialist will include deploying successful marketing
campaigns and monitoring their implementation from ideation to execution and producing valuable and
engaging online content that attracts and converts the Farm House’s target groups. This employee will
experiment with a variety of organic and paid acquisition channels like content creation, content curation, pay
per click campaigns, event management, publicity, social media, lead generation campaigns, copywriting, and
performance analysis. The Marketing Specialist will build strategic relationships and partner with key industry
players, agencies and vendors and prepare and monitor the marketing budget on a quarterly and annual basis
and allocate funds wisely. This employee will be tasked with overseeing and approving marketing material,
from website banners to hard copy brochures and case studies and measuring and reporting on the performance
of marketing campaigns, gaining insight and assessing goals. The Marketing Specialist will also analyze
consumer behavior and adjust email and advertising campaigns accordingly.

Personnel Plan and Expenses

Number of Employees per Position Year 1 Year 2 Year 3 Year 4 Year 5

Chief Dance Instructor: Mrs. Sharda Bakshi (NOC 1 1 1 1 1
5134)
Office and Marketing Administrator (NOC 1221) 1 1 1 1 1
Dance Instructors (NOC 5134) 1 3 3 3 3

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 Dance Teacher Assistant (NOC 5134) 1 1 1 1 1
Total Employees 4 6 6 6 6

Designated Salary per Position Year 1 Year 2 Year 3 Year 4 Year 5

Chief Dance Instructor: Mrs. Sharda Bakshi (NOC $60,32 $63,33 $66,50 $69,82 $73,31
5134) 0 6 3 8 9
Office and Marketing Administrator (NOC 1221) $37,44 $39,31 $41,27 $43,34 $45,50
0 2 8 1 9
Dance Instructors (NOC 5134) $41,60 $43,68 $45,86 $48,15 $50,56
0 0 4 7 5
Dance Teacher Assistant (NOC 5134) $35,36 $37,12 $38,98 $40,93 $42,98
0 8 4 4 0

Position NOC Wage per Hours per Weeks per

code hour week year
Chief Dance Instructor: Mrs. Sharda 5134 $29.00 40 52
Bakshi
Office and Marketing Administrator 1221 $18.00 40 52
Dance Instructors 5134 $20.00 40 52
Dance Teacher Assistant 5134 $17.00 40 52

Risk Assessment and Contingency Plan

SWOT stands for strengths, weaknesses, opportunities and threats. The following is the SWOT analysis for
Avtarsingh Farm House Inc.

Strengths

Avtarsingh Farm House Inc. receives share proceeds prior to start of the season which helps to pay for seeds,
supplies and inputs. During the off-season the owners of Avtarsingh Farm House Inc. can market and recruit
new members and complete their E Books.
The Farm House will establish long term relationships with its members lasting at least one season
Members share in the financial risks of the farm
Low capital requirements, relatively inexpensive startup business

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Our strength as a fruit farm is the fact that we have healthy relationships with major players in the agriculture
industry; both suppliers and buyers within and outside of the United States. We have some of the latest farming
machines, tools and equipment that will help us cultivate fruits in commercial quantities with less stress.
Aside from our relationships (network) and equipment, we can confidently boast that we have some the most
experienced hands in the fruits cum greenhouse commercial farming line of business under our payroll.

Weaknesses
As many as 30 or more different crops must be grown to provide diversity to members throughout the season
Location-if the farm is not close to its customers, it becomes burdensome for the farmer to make deliveries
Labor intensive – during the season, crops are continually being planted, harvested, cleaned, sorted and packed
– leaving little extra time for the farmer
Member retention is key – if the member is not happy the likelihood of returning next season or providing a
good recommendation is not good.
Our weakness could be that we are a new fruit farm in the United States; it might take some time for our
organization to break into the market and gain acceptance especially from international markets in the already
saturated and highly competitive commercial farming industry; that is perhaps our major weakness. Another
weakness is that we may not have the required cash to promote our business the way we would want to.

Opportunities

The greater Sheboygan County is a prime location for organic produce with an historically high demand.
Because many farmers still utilize traditional farming methods (pesticide and herbicide applications) Avtarsingh
Farm House Inc. stands out from the crowd with its Certified Organic stamp of approval
The opportunities that are available to us cannot be quantified. Everybody on planet earth eat fruits. So also
changes in consumer preferences have led supermarkets and other retail outlets to demand fresh fruits all year-
round. We are ready to take advantage of any opportunity that is available in the industry.

Threats

New entrants to the market pose a threat. Partially mitigating this risk is the recommended 2-3 year trial
farming period – which would give Avtarsingh Farm House Inc. the necessary ‘heads-up’ to go against (said)
competitors.
Weather, storms, pests – can damage or even destroy crops.
The farm is economically tied, and in inflationary times, consumers could revert back to traditional methods of
buying fruits and vegetables at the local grocery store.
The number of small local farms and larger commercial farms has been growing. Increasing imports of fresh
produce will slightly constrain demand for vegetables and fruits. Just like any other business, one of the major
threats that we are likely going to face is economic downturn.

Another threat that may likely confront us is the arrival of a new fruit farm or commercial green farm in the
same location where our target market exists and who may want to adopt same business model like us.

Strategy Pyramid

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 Strategy Create awareness that Avtarsingh Farm House Inc. delivers a wide variety of quality
wholesome and healthy vegetables on a consistent basis.
Tactics Create a specific, detailed planting guide, planting several times over the growing
season.
Programs Post fliers and brochures at local restaurants, and locally owned and operated
organic/natural item stores in town.

Strategy Create a community of awareness to think globally, act locally.

Tactics Constant communication with members will foster the awareness who in turn will relate
these ideals to the local community.
Programs Host open house events at Avtarsingh Farm House Inc. for special events such as
Harvest Time and Earth Day.

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The Market

Overview of market trends

Within Canada, New Brunswick is the only province producing apples with a shorter and cooler season. With
respect to the amount of precipitation, Cap Pele surpasses most North American apple producing regions. The
annual precipitation for Cap Pele, NB is average of 1,200 mm which means that most growers in Cap Pele do
not need to rely on irrigation to produce a crop. The short, cool and moist growing season can provide a
competitive advantage to growers with respect to input costs and apple quality. One of the greatest climatic
advantages that Cap Pele has over other apple producing regions is the ability to produce highly coloured apples
due to the cool evening temperatures in late summer and the fall combined with good light diffusion. The other
advantages Cap Pele growers have with respect to weather are, that Cap Pele orchards are less prone to adverse
weather events and frost damage. Cap Pele apples are also less prone to calcium deficiency which is
advantageous to the Cap Pele growers and contributes to the ability to produce quality fruit.
The growing of apples in New Brunswick can be traced back more than 400 years to the arrival of the first
French settlers in the region of Annapolis Royal. New Brunswick currently produces over million bushels of
apples, which is equal to between eight and nine percent of the Canadian production or 1% of the US
production. The farm gate value of New Brunswick’s annual apple crop is approximately $20 million. Over the
past century the tree fruit sector in New Brunswick has gone through significant change with the consolidation
of the industry, changes in cultivars and the development of a packing house and processing industry. New
Brunswick is currently and is likely to remain a net exporter of apples due to the volume of apples produced
relative to the available customers in the domestic marketplace.

Target market
Avtar Singh Farming Inc. is targeting households with earnings in excess of $50,000 in the greater Sheboygan
County. Additionally, Avtar Singh Farming Inc. will focus its energies primarily on its members and provide
services exceeding expectations by offering farm to door delivery service, providing supplemental local organic
products and by providing a festive like atmosphere at the farm – especially on harvest day and other special
occasions. Products and services

What to include here:

 What products or services are you currently selling?
 What portion of overall revenues does each product or service represent?
 How do your products or services fit within the overall market?
 How can your products or services evolve to respond to market changes?
Your text here…

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The competition

Competitors and types of competition

What to include here:

 Who are your direct competitors?
 Who sells similar products or services in your market?
 Can you also identify indirect competitors?
 Are there companies disrupting or undermining your industry or selling a new product or service that may
replace yours?
Your text here…

Competitors’ strengths and weaknesses

What to include here:

 Where do you see your competitors as vulnerable?
 What are they doing successfully?
Your text here…

Competitive advantage and differentiator

What to include here:

 What would make customers choose your product or service over your competitors’ offerings?
 What’s different about your product or service?
 What unique solution are you offering?
 Do you have unique means of distributing your product or service?
 Do you offer competitive payment terms or guarantees to your customers?
Your text here…

Sales and marketing

Identify your key customers and suppliers, how you communicate with them, (sales, web, promotions, ongoing
support), how you price and distribute your product or service, and customer support. You use BDC’s
marketing plan template further detail your sales and marketing efforts. Include highlights of your marketing
plan here.
Avtar Singh Farming Inc. will utilize product differentiation to stand apart from the competition. By growing
wholesome organic produce, offering farm to door service, and actively engaging with its members, Avtar
Singh Farming Inc. will go above and beyond to maintain and grow its member base.

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5.4.1 Positioning Statement

Avtar Singh Farming Inc. will be the premier organic CSA in the greater Sheboygan County by offering at least
30 of the most delicious and mouth watering organic vegetables available in the local growing area and by
providing exceptional relationships with its members, its community and the planet.
5.4.2 Pricing Strategy

Avtar Singh Farming Inc. will utilize a fair price for a fair value. Some research suggests that the CSA farm is
usually lower in price than organically grown food from local markets and is often less than foods from the
supermarket. This could be a selling point for attracting new members, however, it also important to note this
in not about cheap food.
5.4.3 Promotion and Advertising Strategy

The best strategy is word of mouth advertising. When people are happy with their shares they tell friends.
Avtar Singh Farming Inc. will place brochures with other CSA businesses such as the local organic bakery and
neighboring dairy farm. Avtar Singh Farming Inc.’s website will provide additional marketing information. In
addition to its map and location, Avtar Singh Farming Inc. will be listed with other CSA organizations such as
national CSA and the USDA. In the off season, the Mr. Dalbir Singh Matharoo will provide lectures to civic
and environmental groups. During harvest time, the farm will be open to the public to browse and purchase
surplus from the harvest bounty. They will also host special events such as Earth Day.
5.4.4 Website

Avtar Singh Farming Inc.’s website will be a vital key in marketing. In addition to providing its history,
location and contact information, the site will also have links to its CSA affiliations, the USDA website and
current organic industry topics. The website will also have links to the current weekly newsletter (during
season) and off season the owners will maintain a blog of what items are currently going to seedlings in the
greenhouse and what new and exciting produce will be available in the upcoming season. Additionally, the site
will have links to Kathy and Frank’s forthcoming E-books which will provide additional cash flow during the
non-production months. The site will also take advantage of social media and have a Facebook link as well.

5.4.5 Marketing Programs

Avtar Singh Farming Inc. will actively work to engage its members and local community by:

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• Creating fliers and brochures and posting in community gathering places such as churches, community
centers, farmers markets and other environmentally centric business.
• Avtar Singh Farming Inc.’s website with emphasis on its USDA Certified Organic stamp of approval;
the website will also have links to the USDA website and the national CSA website.
• Word of Mouth will play an important role

5.4.6 Sales Strategy

Avtar Singh Farming Inc. has already sold all 30 of its shares for the upcoming season with future plans to sell
60 shares in Year Two and 90 shares in Year Three. In order to meet these goals, the farmers will continue to
rely on advertising fliers, its online presence and most importantly word of mouth. The word of mouth
recommendation from a satisfied member not only generates an opportunity for repeat business, but also is
beneficial in recruiting new members.

Suppliers

Name Address Product/Service

1 Corn Hill Nursery 2700 Route 890, Corn Hill NB E4Z 1M2 Apple Tree and Vegetables
2 Handyfruit Tree Nursery 5094 route 125, Rawdon, QB J0K 1S0 Apple Tree

Advertising and promotion

What to include here:

 How you are reaching and selling to customers?
 What technology and staff resources do you have in place to support your advertising?
Your text here…

Pricing and distribution

With the production of apples, the revenue or return on the investment does not begin until the fourth year,
however, it is not until year 7 or later that a grower should expect the orchard to be mature and to produce a full
yield. On average, a grower practicing best management practices in Nova Scotia should expect a mature yield
to be about 800 bushel/acre.
The price that a grower receives for the apples produced is a function of cultivar and quality. It is important that
potential growers understand there is a correlation between cultivar and price. The current farm gate value for
high valued apples depending upon quality(or pack-out) ranges from $110 - $500/bin. Each bin of apples
contains 17 bushels so the price per bushel ranges between $6.47 - $29.41/bushel.

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Contribution Margin
The contribution margin is the difference between the revenue generated and the expenses used to generate the
revenue. The contribution margin must provide funds to cover the other expenses such as overhead, loan
payments and capital expenses. The contribution margin on a mature orchard producing 800 bushels per acre is
dependant on the price received for the apples, which is a function of the cultivar and quality.
Table 5. Price and Contribution Margin
Price Contribution Margin
$10.00/bushel $2,334
$12.50/bushel $4,134
$15.00/bushel $5,934
$20.00/bushel $9,534
$25.00/bushel $13,134
$30.00/bushel $16,734

Breakeven Analysis
Table 6. Breakeven Analysis per acre

Financing Planting Density Price/bushel Price/bushel Price/bushel Price/bushel Price/bushel

$10 $12.50 $15 $20 $30
No 300 Non- 25 years 17 years 14 years 11 years 9 years
supported
400 supported 24 16 15 11 9
600 supported 22 14 11 9 8
800 supported 22 13 11 9 7
Yes 300 Non- 30+ years 22 years 17 years 13 years 10 years
supported
400 supported 30+ 24 18 14 11
600 supported 30+ 22 16 12 9
800 supported 30+ 23 17 12 8

It can be easily seen from table 6 that the price received for the crop and the requirement for financing the
establishment both have a significant impact on the number of years it takes to break even on the orchard
enterprise. In all cases the breakeven does not include principle or interest payments on land.

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It can be easily seen from table 6 that the price received for the crop and the requirement for financing the
establishment both have a significant impact on the number of years it takes to break even on the orchard
enterprise. In all cases the breakeven does not include principle or interest payments on land.

Business location

Avtar Singh Farming Inc. is located 78 Vienneau, Cap Pele NB E4N 2C5. Cap Pele is one of the most northerly
growing regions in North America, giving Cap Pele’s commercial apple producing region a relatively short and
cool growing season. Within Canada, New Brunswick is the only province producing apples with a shorter and
cooler season. The annual precipitation for Cap Pele, NB is average 1,200 mm which means that most growers
in Cap Pele do not need to rely on irrigation to produce a crop. The short, cool and moist growing season can
provide a competitive advantage to growers with respect to input costs and apple quality. One of the greatest
climatic advantages that New Brunswick has over other apple producing regions is the ability to produce highly
coloured apples due to the cool evening temperatures in late summer and the fall combined with good light
diffusion. The other advantages New Brunswick growers have with respect to weather are, that New Brunswick
orchards are less prone to adverse weather events and frost damage. New Brunswick apples are also less prone
to calcium deficiency which is advantageous to the New Brunswick growers and contributes to the ability to
produce quality fruit.

Equipment

What to include here:

 What kind of equipment do you rely on to conduct business?
 Will you have to purchase new equipment or replace/upgrade existing equipment soon?
 Do you have the right equipment to respond to changes in the market?

Your text here…Mowers

There are two types of mowers used in apple orchards: rotary mowers and flail mowers. Rotary mowers are useful
to mow the ground cover close to the tree trunks and often are wider than flail mowers so more ground can be
covered with a single pass. However, rotary mowers do not chop up prunings or leaf litter like flail mowers, which is
a key practice performed in organic IPM to reduce disease inoculum. Rotary mowers usually require less tractor
horsepower than flail mowers.

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Small rotary mower used to mow close to trunks

Off-set flail mower used to chop up overwintered leaves and winter prunings

Flail mowers use a horizontally-mounted spinning drum on which knives are mounted that shred materials during
operation. This action is important in orchard sanitation, as leaf litter, dropped fruit, and prunings can be finely
chopped to allow for biological degradation in the field. This can potentially reduce overwintering levels of apple
scab inoculum and spotted tentiform leafminers, as well as recycle nutrients from orchard debris. Flail mowers tend
to have higher horsepower requirements than rotary mowers and can be narrower, thus requiring more passes
through the orchard. Some flail mowers include hydraulically operated sweepers that push debris in the tree row into
the mower path for better coverage. Many are also offset to extend under the dripline of the trees, with some
including a hydraulically operated offset to adjust to differing tree row widths.

Tractors

When deciding what tractor(s) best fits the orchard's needs, the grower should take into consideration the
horsepower requirements for orchard mowers and sprayers. There are three types of tractors necessary for orchard

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management, however, one tractor may span two or more of these types. First, a spray tractor is required. In
organic apple production spraying fungicides and insecticides is essential for quality fruit and the proper equipment
ensures safe and effective application.

A spray tractor should have high horsepower, a cab to protect the driver from pesticide exposure, and be narrow
enough for the tree planting. A spray tractor requires a 45-75 PTO horsepower in order to power an airblast sprayer.

A second general purpose tractor for mowing should be narrow and not have a cab so it can drive as close to the
trees as possible. This tractor does not need as much horsepower as the spray tractor, except when flail mowing
when high horsepower may be required. A general purpose tractor must have a PTO to power the mower, rototiller,
or other attachments necessary. Remote hydraulic outlets are also important for many implements that use
cylinders or hydraulic motors for adjustment of operation.

A third tractor with a bucket is necessary if loading mulch and other materials is going to be a frequent occurrence in
the orchard.

An example of a general purpose high horsepower tractor with detachable bucket

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An example of a spray tractor with enclosed cab

Sprayers

There are different types of sprayers available depending on the size of the orchard and the size of the trees. A
backpack sprayer can be useful on a small scale when trees are short and easy to reach. A hydraulic handgun
sprayer that uses pumped water rather than air is useful to reach the tops of tall trees with spray materials. The
sprayer must provide and maintain high pressure and sufficient flow of liquid so that the large droplets of the stream
can reach the tops of the trees. Handgun sprayers are adaptable for different small fruit crops and may be the best
choice for a diversified farm. A versatile hydraulic handgun sprayer can attach to the three-point hitch of the tractor
and may carry 50 or 100 gallons of spray material. These sprayers require relatively little horsepower to operate, but
the weight of the filled tank on the three-point hitch can lead to instability of the tractor in some situations.

An airblast sprayer is most commonly used in commercial apple orchards because it is more time-efficient and it
uses less water than a handgun sprayer. An airblast sprayer broadcasts small droplets of concentrated pesticide
mixture into the tree and therefore measures must be taken to minimize drift when using an airblast sprayer.
Properly calibrated airblast sprayers can spray an area in less time and with more uniform coverage than a handgun
sprayer, but they require more horsepower than a handgun sprayer to operate.

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Hydraulic handgun sprayer

Airblast sprayer

Apple Transport & Harvest Equipment

Once the apples are picked (usually requiring picking buckets, ladders, and boxes or bins to load with apples)
equipment is needed to transport the full boxes or bins back to the storage facility. If bushel boxes are used, a
simple wagon pulled by a utility vehicle can suffice. However, on a large scale commercial orchard bins ranging in
size from 12-20 bushels are filled with apples in the field and equipment such as a bin trailer or bin jack is necessary
to transport the apples to the storage facility. Filled apple bins can weigh up to 800 pounds, so a forklift, either
tractor operated or a separate, dedicated machine, must be used to move them in the field and in the
loading/storage area. Electric or propane-powered forklifts are available for use indoors where fumes from gas or
diesel engines would be dangerous. (Note: If the farm also has non-certified fruit, that fruit must be harvested into

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separate bins or boxes than the organically certified fruit. Those boxes/bins must be labeled as such and always
kept separate to ensure non-approved materials do not get transferred to the organically certified apples.)

Harvesting apples using a ladder and picking bucket

Wagon used to transport harvested fruit to the loading dock

In a commercial operation where apples are stored, a cooler or refrigerated truck/trailer is required to keep your
produce cool and increase its shelf life. Organically certified apples must be stored separately from non-certified
fruit. They can be in the same cooler, but in separate areas, and the storage must meet the conditions of the
certifying agency.

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In addition, an area suitable for loading/unloading apple boxes and bins is important to the efficiency of a
commercial apple orchard. This area can also serve as a receiving dock for other heavy materials such as trellis
posts or fertilizers.

Site Preparation Equipment

Site preparation is not something that is performed every year and therefore it might be more cost effective to rent
the equipment necessary from a vendor or a grower nearby who owns what is needed. Another option is to hire out
the job of prepping the site for a future orchard to an operation with experience and suitable equipment. Unlike the
specialized equipment used in fruit production, site preparation uses equipment common to dairy farms or field crop
operations. Preparing a fallow field or an existing orchard for a new planting of organic apples can involve many
different tools.

 If an existing orchard is located where the new orchard is being planted then a powerful tractor must be
used to rip stumps from the soil.
 Test the soil to determine if lime and/or other soil amendments are needed to create an optimal site for
apples. Lime dealers will often apply the order directly to the field upon delivery.
 The lime and other amendments are incorporated with a plow and the area smoothed with disc harrows to
create a firm planting bed.
 If a cover crop is needed to build organic matter or to manage apple replant disease, plant the best cover
crop for the site's needs using a broadcast seeder or grain drill. Instead of, or in addition to, a cover crop,
manure (or compost, although this option is often cost prohibitive) could be spread over the site.
 The cover crop should be managed according to the needs of the plant(s) before being incorporated into the
soil with a plow, rototiller (impractical for large areas), or disc harrows. Harrowing ensures a smooth working
surface before planting apple trees. Managing Cover Crops Profitably, 3rd Edition. (SARE Publication)
 A sub-soiler may be necessary in the tree rows at this point to break up the hard pan caused by compaction
in the soil that can be detrimental to the root growth of young trees.
 The sub-soiler makes a furrow along the tree row that is perfect for the application of the recommended
compost along the tree rows with a mulch/compost spreader.
 The rows are rototilled to incorporate the compost and to smooth the furrow from the sub-soiler.
 The rototiller will leave the tree rows as smooth, fluffy soil beds into which to plant the new apple trees.

Tree Planting & Trellis Building Equipment

Tree planting and trellis building also require a few pieces of equipment that can be rented or leased from a vendor
or grower. A tree planter can be very time efficient when planting a high density orchard. Tractor-pulled tree planters
open a furrow in which an operator places a tree at a marked spot, then closes the furrow during one pass. If a tree
planter is not used at planting time and individual holes are made for each tree, an auger would be used to drill the
holes.

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Tractor-pulled tree planter (http://agbioresearch.msu.edu/nwmihort/Confoste.htm)

Skid steer-mounted hydraulic auger with 18" diameter bit

Once the trees are planted in a high density orchard, the trellis must be built for support. Building a trellis requires a
post pounder, which can also be rented, as well as wire running, cutting and crimping equipment.

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A hydraulic post pounder

Crimp sleeves and wire crimper/stripper/cutter are used to fasten the tensioned trellis wire

Mulch Spreader

A mulch spreader can be used in organic apple production to reapply mulch about every two years, but also can be
used to apply compost. A tractor-pulled, PTO driven, automated side delivery mulch wagon is time efficient and and
practical when running a commercial organic apple orchard.

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Tractor-pulled side delivery mulch spreader

Fertilizer Spreader

Fertilizer will most likely have to be applied every year to organic apple orchards, in addition to soil amendments
necessary during site preparation. Depending on the scale of the orchard a fertilizer spreader may be needed to
mechanize the task of fertilizing trees.

It takes a significant amount of time to fertilize the trees by hand

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An example of a PTO-driven fertilizer spreader
(http://www.extension.iastate.edu/Wine/Resources/winegrowernews119.htm)

Pruning Equipment

Dormant pruning and summer pruning both require equipment such as hand-held clippers, loppers, saws, pole
pruners, pole saws, and a power pruner. There are three different types of power pruners: engine driven, hydraulic
driven, and electric. The grower can decide what type best suits his/her needs in the orchard.

Hand saw used to prune larger braches

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Loppers used to prune shoots

Pole pruner used to reach shoots at the tops of trees

Environmental compliance

What to include here:

 What type of permits, monitoring and inspections do you require to ensure your business complies with
environmental regulations?
 Are you subject to hazardous waste compliance, pollution monitoring or packaging regulations?
 Identify regional, national and international regulations or laws that affect your operations.
 Are there any new regulations or laws in place or impending that could impact your business?
Your text here…
Action plan
Outline the goal of the project, resources required, (people and money), key milestones (including dates and
measurable outcomes), and an end-date. Identify key individuals or teams responsible, external dependencies
and risk management and contingencies, (Plan B).

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Project objectives

What to include here:

 What is your goal and your target completion date?
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Ressources required

What to include here:

 How much money will you require to complete the project?
 How much will you finance yourself?
 Will you require new equipment or real estate?
 Do you need to hire new people?
Your text here…

Action plan

Action Key milestone/metrics Person resposible

1
2
3
4
Additional information

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