Golden FlaxProcessing Ltd. Business Plan Prepared by:

1. Golden FlaxProcessing Ltd. Business Plan Prepared by: OksanaAkhova, ÉricLefol and Sarah Schuster April 05, 2007

2. Site Plan

3. Product description Golden Flax: toasted, ready to eat, unique “nutty” flavour, healthy (Omega-3, Fibres) Toasting at “InfraReady” : unique process with high temperature for a short time Packaging: Vacuum packed in aluminized plastic to keep flax air-tight and avoid exposition to light

4. Operation Plan • Organizational Structure • Average work day, and activities • Cash Conversion Cycle • Capital Budget Projection

5. Owner/Manager Owner Administrative Assistant Operation Plan: Organizational Structure

6. Operation Plan: Average Work Day and Yearly Schedule of Activities • Winter vs. Summer commitment • Monthly activities include Trade Shows and Taxes!

7. Operation Plan: Activities $ 0.20 $ 0.14 $ 0.55 $ 0.04 $ 1.43 $ 0.14 $ 0.01

8. Operation Plan: Cash Conversion Cycle CCC = 30 + 180 – 30 = 180 days Account Payable Packaged Toasted Seed in Inventory Account Receivable Received 30 180 210 days

9. Operation Plan: Capital Budget projection

10. Summary • Look into lowering Packaging Cost • Lower Average Day in Inventory • Keep good ratio between Owners’ Equity and Expenses & Costs

11. Human Resources • Wages for 2006 • Shareholders’ agreement • 50/50 net profits • Building arrangements

12. Marketing Plan • The Marketing Mix (Product, Pricing, Promotion, Place) • Segmentation, Targeting, and Positioning • Summary

13. Marketing Plan: The Marketing Mix: Product • Golden Toasted Flax • Omega-3 Fatty Acids • Fibres • ZPP Image and Service • Sold only in Health Food Stores • Quality control (Colour, Toasting) • Naturally grown

14. Marketing Plan: The Marketing Mix: Pricing • The Competition in SK • CanMar Products Ltd. • Northern Quinoa Corporation • Pricing Strategy • Parity Pricing • Price Taker

15. Marketing Plan: The Marketing Mix: Promotion • From our Farm to your Home • Selling & Advertising • Health Benefits • Differentiation • Tools (trade shows, web-site, direct advertising, pamphlets)

16. Marketing Plan: The Marketing Mix: Place • Health Food Stores in Saskatchewan • Health Food Stores in the Prairies • Network

17. Marketing Plan: Segmentation, Targeting, and Positioning

18. Marketing Plan: Summary Based on: • STRENGTHS in reputation, enthusiasm, and healthy product claims, • WEAKNESSES in competitive pressure, risk associated with outsourcing, limited production capabilities, limited advertising of product and health benefits, • OPORTUNITIES in higher margin selling to health food stores, and innovation of diversification, • THREATS in existing and new competition, and other available sources of Omega 3 ZPP should: • Approach the retailer Nutter’s • Seek approval of Golden Flax with a broker • Continue to approach Saskatchewan health food stores • Follow up with the shaker

19. Financial Plan • Financial results • Critical variables analysis • Break-even analysis • Scenario analysis

20. Financial Plan: Goals • Sales: • Price per bag (1 Pound): $4.54

21. Financial Plan: Financial overview Net Present Value (NPV) 53,674 Internal Rate of Return (IRR) on Equity Investment 55.60% External Rate of Return (ERR) on Equity Investment 31.00%

22. Financial Plan: The Critical Variables Analysis • The most critical variable for ZPP is price per unit. A drop from $4.54 to $3.91 (14%) drives the NPV from $53,674 to zero • The second critical variable is number of packages sold. 34% of decrease of this variable brings NPV to zero • The least critical variable is secretarial salary. It is needed to be changed by 336% to bring NPV to zero.

23. Financial Plan: Break-even analysis NPV=53,674 NPV=0 Price per unit, $

24. Financial Plan: Break-even analysis NPV=53,674 NPV=0 Packages sold

25. Financial Plan: Summary • Price is the most critical variable for the business. If this variable change by -14% brings ZPP business to NPV=0. • Sales level is the second critical variable • ZPP’s business is able to generate positive NPV under projected sales and price at $4.54

26. Recommendations • Look into lowering Packaging Cost • Lower Average Day in Inventory • Keep good ratio between Owners’ Equity, and Expenses & Costs • Approach the retailer Nutter’s • Seek approval of Golden Flax with a broker • Continue to approach Saskatchewan health food stores • Maintained level of sales as outlined in the break-even analysis • Seek possibilities to increase price per unit if volume of sales drops

27. Acknowledgments • Bill Brown and classmates

28. Thank You