hop to it farms business plan

Hop To It

Hop To It Farms

10855 Hering Rd

Gasting, OR

Brandon Kothmann

817-996-0553

[email protected]

Table of Contents

Executive Summary ....................................................................................................... 1 Business Description .................................................................................................. 1 Mission Statement ...................................................................................................... 1 Goals .......................................................................................................................... 1 Plan Summary ............................................................................................................ 2 Capital Request .......................................................................................................... 3

Business Description ...................................................................................................... 4 Business Overview ..................................................................................................... 4 Location ...................................................................................................................... 4 Facilities ..................................................................................................................... 4 Business History ......................................................................................................... 5 Ownership Structure ................................................................................................... 5

Operations ...................................................................................................................... 6 Products ...................................................................................................................... 6 Services ...................................................................................................................... 7 Production System ..................................................................................................... 8 Customer Service ....................................................................................................... 9 Inventory Management .............................................................................................. 9 Licenses, Permits & Regulations ............................................................................... 9 Quality Control.....10 Implementation Timeline ......................................................................................... 11

Marketing Plan ............................................................................................................. 13 Market Trends .......................................................................................................... 13 Customers ................................................................................................................. 13 Strategic Partners ..................................................................................................... 13 Pricing ...................................................................................................................... 14 Promotion ................................................................................................................. 17 Target Market ........................................................................................................... 17 Competitive Advantage ............................................................................................ 18

Management & Organization ....................................................................................... 19 Management Team ................................................................................................... 19 Personnel Plan .......................................................................................................... 20 Professional Services ............................................................................................... 20

Financial Plan ............................................................................................................... 21 Financial Position ..................................................................................................... 21 Financial Projections ................................................................................................ 21 Benchmarks .............................................................................................................. 29 Capital Request ........................................................................................................ 29

List of References30 Supporting Documents.31

- 1 -

Executive Summary

Business Description

Hop To It Farms is a start up business planning on settling in Gaston,

Oregon. We are looking to begin business as a producer of craft quality

hops for craft and home brewers. We will start out as a small operation,

servicing only the west coast and as our operation grows so will our market.

Connections have already been made with many craft brewers and brewing

supply shops but more will be made through advertising in trade magazines

and beer festivals.

Our market is saturated with low quality producers, but at Hop To It Farms

we strive to produce the largest variety and highest quality of hops

available. Quality hops grown for brewers, by brewers.

Mission Statement

Hop To It Farms is dedicated to providing a variety of top quality American

grown hops to brewers while researching and developing new strains to help

improve the market.

Goals

1. To make Hop To It Farms the preferred quality hops grower on the west coast.

2. To provide quality and consistent results in our hops to all brewers. 3. To educate and assist customers on the importance of a quality hop. 4. To see a net profit of 5% in year one. 5. To see a net profit of 10% in year two. 6. To expand growing area to new sites by year five. 7. To expand our market to the east coast by year ten.

- 2 -

Plan Summary

As a startup business Hop To It Farms does not intend to come sprinting out

of the gates and become nationwide in our first year of business. We

understand that in order to be successful we need to enter the market and

climb the ladder. We plan to begin by servicing the west coast and building

a name for ourselves with all of the great breweries in the region. From there

we plan to build on our success and spread east, eventually having

distributors located from coast to coast. As we expand on the outside we

will be doing the same internally. We plan to select out, and develop new,

more desirable varieties of hops that will distinguish us from other growers.

Our products will not be what is normally found on the market now. We

refuse to offer sub-par, par, or even simply above average hops. We will

only grow and sell the highest quality of hops available on the market.

Thanks to years of experience in the horticulture field we understand how to

do this, and how to do it efficiently. It is this pride in our work that sets us

above the rest.

Keys to Success

1. Continue to maintain our relationships in the brewing industry and receive honest feedback about what products are needed.

2. Grow the company in small but sufficient steps, do not attempt to expand in an unmanageable, overly risky way.

3. Be a leader and innovator in the industry when it comes to new product lines.

4. Do our part to support the craft beer movement and educate the public about the industry to help promote growth.

- 3 -

Capital Request

As the founder of Hop To It Farms I will be investing an initial $100,000.00

in the company. This investment will put us on the right track but not place

us where we need to be. In order to achieve our goals we are asking for help

in the form of an equity share investment. We need to raise at least an

additional $100,000.00 or up to $150,000.00. In return for every $12,500

invested, investors will recieve a 2.5% share of the company. Investors can

expect a full return on their investment by year five with dividends paid after

that. This investment money will go towards necessary expenditures such as

labor and equipment needed to maintain and harvest the hops. This is not a

loan we are asking for, this is an opportunity to join in our business. As we

succeed, so will you, and at Hop To It we see no options other than success.

- 4 -

Business Description

Business Overview

Hop To It Farms is a start up hop farm looking to service the west coast with

a high quality hop not currently on the market. Too many growers sell sub-

par hops that we find unacceptable. That's why at Hop To It we cut no

corners, and take no shortcuts. We stand by our product and vow to sell the

highest quality hops on the market to both homebrewers and craft brewers

alike.

Location

Hop To It Farms is conveniently located in Gaston, OR, less than an hours

drive from more than 35 different breweries. this area is prime hop growing

land due to its sufficient rainfall and mild climate.

Hop To It Farms

10855 Hering Rd

Gaston, OR

817-996-0553

Facilities

Upon recieving the investment needed we will be installing three facilities

on sight. The first will be a 30'x50' pre-fab building that will act as the

offices, and classroom area. The second facility will be a larger 50'x100'

aluminum sided building for grinding and dry and frozen storage of the hops

after they've been harvested. The third and final facility will be a 50'x100'

open pavilion with nothing more than a roof, this will be used to process the

hops as we harvest them and prepare them for drying and/or grinding.

- 5 -

Business History

The idea for Hop To It came from necessity. Our founder, Brandon

Kothmann, homebrewed and worked in commercial brewing for years and

through his experience came to realize that there was something wrong with

the hop market. Nobody seemed to produce the types or quality of hops that

so many brewers needed. With seven years of experience in horticulture

before his transition to brewing he realized that maybe he was the guy for

the job. His knowledge of plant production combined with his connections

and knowledge of the brewing industry seemed like the perfect match. After

much deliberation and research Hop To It Farms is beginning to materialize

and is preparing to become the premium hop supplier for the west coast and

eventually, the nation.

Ownership Structure

Hop To It Farms will be running under the premise of a Limited Liability

Company (LLC). This allows investors to join into the company with an

equity share but remain only liable for the amount of money they've

invested. 20-30% of the company will be sold to investors with the

remainder of the shares being held by the founder of the company. This

allows investors to have a hands off limited liability way to make money. At

Hop To It we believe this is the structure that will help to push us forward

and grow into the successful business we dream of.

- 6 -

Operations

Products

Hop Variety Amounts Available Alpha Acid Style

Cascade 1oz 8oz 1lb 5lb 6.2% Pellet

4oz 8oz 1lb 5lb Whole Leaf

Centennial 1oz 8oz 1lb 5lb 7.8% Pellet


Northern Brewer 1oz 8oz 1lb 5lb 8.0% Pellet


Willamette 1oz 8oz 1lb 5lb 4.0% Pellet


Fuggles 1oz 8oz 1lb 5lb 3.3% Pellet


Nugget 1oz 8oz 1lb 5lb 12.2% Pellet


Hallertauer 1oz 8oz 1lb 5lb 3.2% Pellet


Mt. Hood 1oz 8oz 1lb 5lb 4.0% Pellet


Liberty 1oz 8oz 1lb 5lb 2.7% Pellet


Magnum 1oz 8oz 1lb 5lb 11.4% Pellet


Chinook 1oz 8oz 1lb 5lb 10.4% Pellet


- 7 -

Above is a list of our primary line of hops along with the quantities we

intend to sell through retail, and the alpha acid of each. Bulk orders will be

available through contract which will help draw in some of the larger

breweries as customers. These are our baseline products and are vital to our

company having early success. These are some of the most commonly used

varieties of hops, however with time we would like to develop new varieties

or make these current varieties better. Our product line is what will seperate

us from the competition and allow us to succeed.

Services

At Hop To It we believe that educating the public is key to increasing the

clientelle base. We will offer public tours of the farm and classes to help

brewers understand which hops are needed to meet their goals and why

quality is so important. Partaking in these opportunities will help customers

to have a sense of connection with the entire process that goes into making a

beer. They will better understand the importance of hops be able to spread

the word about our company to their homebrewing friends and/or colleagues

in the industry.

- 8 -

Production System

Our hops will originally be grown from cuttings we purchase from other

growers. eventually we will start a seed propagation area on our farm so that

we may start selecting out and developing new hops varieties. The hop

bines(this is what each hop plant is called) will grow up our trellices to later

be collected. There is not much need for watering in our area of the country

so that is not a problem but fertilizer will be spread manually by workers

when needed. To collect our hops we intend to use a bine 3060 harvester.

This harvester requires two workers to operate it and can clear and harvest

and entire acre of hop bines in an estimated 33 hours. This will free up

workers to process already harvested hops, and care for hop plants that

haven't been harvested yet. With 7 acres of land this will only take 462 man

hours per year to harvest our entire crop. After the crop has been harvested

we need to process it by allowing the leaves and flowers to dry and then

package them in foil packs for sale.

- 9 -

Customer Service

At Hop To It we know that customer relations are the key to our success.

Thats why we invite customers to come visit our farm and take our classes

on the proper use of our hops. We guarantee all of our products to contain

the correct alpha acid percentage and to stay fresh until the date listed on the

package. We will gladly replace or refund any faulty products. As a small

business we know that no client is too small to give our full attention to and

thats why any serious complaints will be dealt with in a timely fashion by

management, not just the first worker who stumbles upon the problem. Any

problems with quality or timing of our products will result in us reassessing

our prices and in the case of a loss of a specific crop, we will buy the hop

wholesale from another grower and sell it at a markup so that we may keep

our vast selection available to customers.

Inventory Management

As a hops grower inventory management is crucial, hops need to be

available for sale year round but are only harvested once a year. We will be

able to keep up with this lengthy demand by storing our hops in sealed foil

packs in freezers. This method of storage allows hops to keep fresh for

multiple years. We will also need to store our foil packs and packaging that

are yet to be used, however other than this we will hold no inventory on

sight, everything will be available to be delivered when needed.

Licenses, Permits & Regulations

Oregon Department of Agriculture licenses-

Nursery Stock Growers and Collectors of native plants-This license is

for nursery growers, other than greenhouse growers of herbaceous plants,

and for collectors of native plants.

Private Pesticide Applicator License-required of individuals who use or

supervise the use of restricted-use pesticides on land in agricultural

production that is owned, leased, or rented by them or their employer.

- 10 -

Phytosanitary Certificates-federal or state certifications for the

following: nursery stock, Christmas trees, logs, lumber, and any other plant

material requested. Phytosanitary certificates verify to foreign and other

states' authorities that an official inspection of the commodity has been made

and it addresses specific concerns of the importing country or state.

Scales Type A-This license is required for commercially used scales

where the manufacturer's rated capacity is from 0 to 400 pounds.

"Commercial use" is any application or use in connection with or related to

transactions in which, in exchange for commodities received or services

rendered, consideration is given in terms of currency, negotiable

instruments, credit, merchandise or any other thing of value.

United States Department of Agriculture licenses-

PPQ586-Application for Permit To Transit Plants and/or Plant Products,

Plant Pests, and/or Associated Soil Through The United States

Quality Control

Before any batch of hops is packaged it is tested for alpha acid percentage

and hand tested by management for aroma and appearance. As employees

gain tenure in our company they will gain the experience through immersion

to start recognizing quality in the field. This will help act as a double check

to prevent any oversight by management. This ensures only quality

materials are sold and our customers stay happy.

- 11 -

Implementation Timeline

Hop To It Farms' goal is to become one of the premier hops growers in the

nation. This will not be an immediately attainable goal and will require us to

grow in stages. Setting a timeline for these stages helps us to evaluate

whether or not our business is performing as expected.

Year One:

First year of growth

Adapt production strategies to what is learned along the way

Create positive net income

Year Three:

Have clientelle along entire west coast

Over 10% net profit

Have production strategy finalized

Start work on website for online sales

Year Five:

Have all investors fully reimbursed

Begin expansion of acreage by adding other farms or buying adjacent land

Begin research on new hops varieties

Have online clients as far as east coast

- 12 -

Year Ten:

Evaluate other expansion opportunities

Have at least 3 new hops varieties established

Have contracted clients across entire country

Have at least 30 acres of land in production

If our goals are not met by these deadlines we will evaluate how close we

are to reaching these goals and the reasons we have not yet met them. We

will then make necessary changes to our business strategies. With sufficient

positive growth of the company we will always be happy but we strive for

excellence and know that we can always improve more.

- 13 -

Marketing Plan

Market Trends

While hop acreage in Oregon dropped by 9.09% the yield in Oregon grew

by 6.93% as opposed to a national average of 3.92%. This means that there

is more space opening up Oregon for hops growers and less space is needed

to produce the same amount of hops. This creates the perfect opportunity to

start a hop farm in Oregon and opens many doors for us. The need for hops

has grown due to the growth of the craft beer industry. Craft beer

production grew by 13% in 2011 and 12% in 2010. With craft brewers

being our primary target clients this is great news for a hops grower. With a

young and growing market of craft beer drinkers this trend of growth is

expected to continue into the foreseeable future.

The quality hop market relies on the craft beer market and the good news is

that people are always going to drink beer. They drink when they're happy

and they drink when they're sad, and with more and more people

transitioning to craft beer this means that the hops demand will grow even as

beer demand stays the same. After research and working in the markets, we

are very optimistic about our future at Hop To It.

Customers

As a hop grower we have a very specific customer base. Homebrewers and

craft breweries need quality hops and that's what we provide. This customer

is growing with the craft beer movement and should be only positive for us

in the future. We currently have connections with many breweries across

the United States but in order to grow our customer base we will advertise in

trade magazines and have representation at many beer festivals and events.

We will also implement a website which can be ordered from to bring in

homebrewing clients.

Strategic Partners

At Hop To It we view all of our creft brewery customers as strategic

partners. We rely on them to make quality beer that will sell in order for our

demand to stay up and they rely on us to provide them with quality hops to

make the quality beer. This mutual relationship helps us to work together to

grow as one.

- 14 -

Pricing

Hops Variety Style Weight Price

Cascade Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

5lb 45.00

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

Centennial Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

5lb 45.00

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

Northern Brewer Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

5lb 45.00

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

Willamette Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

5lb 45.00

- 15 -

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

Fuggles Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

5lb 45.00

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

Nugget Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

5lb 45.00

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

Hallertauer Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

5lb 45.00

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

Mt. Hood Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

- 16 -

5lb 45.00

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

Liberty Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

5lb 45.00

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

Magnum Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

5lb 45.00

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

Chinook Whole Leaf 4oz 3.00

8oz 5.75

1lb 11.00

5lb 45.00

Pellet 1oz 1.25

8oz 7.50

1lb 13.50

5lb 60.00

- 17 -

Above is a tentative list of our prices for the different products we will sell.

As we learn more about how much each of these is going to cost us to

produce we will adjust prices for individual items as we see fit. There is a

built in incentive in our prices to buy in bulk which will draw in larger

customers, yet we still sell the small quantities for the smaller homebrewing

customers. Our prices are comparable to most retail hops sellers but because

we skip the middle man by selling them ourselves we will be making a

greater profit. These prices are only for one time sales, if customers wish to

have a contract with us this will save them money but guarantee us the sales

for the length of the contract. These contracts will be negotiated on a

customer-to-customer basis.

Promotion

Hop To It's promotion strategy is fairly straightforward and simple. Our

customers know what they want, so we just need to let them know who we

are. We will promote our brand image through trade magazines, in-person

introductions at breweries, at beer festivals, and through our website which

will show up with a Google search for hops. We are going to look into

partnering with some beer equipment distributors to include coupons or

advertisements for our hops with their brewing kits. Because our target

market is so small there is not much need for mass advertising and we feel

that the strategies above will be more than sufficient to get the Hop To It

name out there.

Target Market

As mentioned throughout this business plan our target market is a

combination of craft breweries and homebrewers. These are the two groups

of customers that are looking for the high quality of hops that we produce.

This market is growing tremendously as shown in the market trends section

and we feel that we can use this growth as a tool for our own success.

- 18 -

Competitive Advantage

There are many hop farms in the United States but there is one major

difference between their operation and ours. Most of these hop farms are

run by farmers who are simply growing hops as a crop. They have no

interest in the hops quality, or the purpose it is intended for. With a brewing

and horticultural background, we at Hop To It better understand the needs of

brewers and are better suited to make a quality product. Also by selling

directly to retail customers we are able to keep costs down to around what

you would buy a lesser quality hop for at a retail store.

People want quality, and we are here to give it to them. This is what will set

us aside from all of our competitors and allow us to succeed on a national

scale. Our personal interest and knowledge of the brewing process will also

help to make the customers feel included in our business. We look forward

to training a staff that is just as enthusiastic as we are and will help to

promote our business in the same way. All of these aspects put us one step

ahead of the rest of the industry and ensure us a competitive place in the

market.

- 19 -

Management & Organization

Management Team

Brandon Kothmann

Founder/Head Grower

B.S. Horticulture from Texas A&M

4 Years Experience home and commercial brewing

When we have the funding and the go ahead to begin operations we will

bring on a marketing manager and our labor force. As we grow further and

acquire new farms we will hire management teams for each of those farms.

- 20 -

Personnel Plan

Personnel in the hops industry tend to be slightly undereducated when it

comes to the hops and treat the plants as they would any cash crop. At Hop

To It we know that this is what leads to lower quality hops. We intend to

avoid this problem by hiring workers who show a sincere interest in hops

and show a willingness to learn. We will have a 3 month probationary

period in which workers must learn a good deal about hops and this

information will be provided to them in the employee handbook. At the end

of the probationary period they will have two chances to pass a test showing

that they know about and understand the important parts of the hop. When

they've passed this they will be allowed to stay on staff and recieve a pay

raise. We intend to pay our employees above the industry standards in order

to draw in the most qualified personnel. Staff will do everything from

planting, fertilizing, training, and crowning the crops, to harvesting,

packaging, and delivering. We will evaluate staff and give them jobs that

they perform the majority of the time based on their strengths but no job is

too big or little for anybody at Hop To It. We require all staff, including

management, to be willing to help where help is needed. In the beginning

staff will be trained by the head grower, but as the business grows we will

deem certain other team members able to train new staff.

Professional Services

Accountant-Garland R. Taylor, CPA, PC

205 SE Spokane St

Portland, OR 97202

Reviews books and prepares taxes

Hops Inspector-United States Department of Agriculture

Inspects all hops processing centers and procedures

Graphic Design- Kinesis Marketing

30 nw 10th Ave

Portland, OR 97209

Designs graphics for packaging, merchandise

- 21 -

Financial Plan

Financial Position

Hop To It Farms is a startup business and therefore currently has no

financial status. However we have $100000.00 invested by the founder, and

with another hundred thousand we feel that we will be sufficiently liquid.

We cannot provide financial documents because we have not yet opened our

doors but the next section will show our projections for the next three years.

Financial Projections

Projected financial statements years 1 through 3 Income statement(projected year 1)

QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4

Annual Totals

TOTAL ANNUAL SALES 62500.00 50000.00 75000.00 62500.00 250000.00 MARKUP 3.00 3.00 3.00 3.00 3.00 C.0.G.S. 20833.33 16666.67 25000.00 20833.33 83333.33 GROSS PROFIT 41666.67 33333.33 50000.00 41666.67 166666.67 EXPENSES SALARY 7500.00 7500.00 7500.00 7500.00 30000.00 LABOR 9375.00 7500.00 11250.00 9375.00 50000.00 ADVERTISING 2500.00 2500.00 2500.00 2500.00 10000.00 SUPPLIES 9375.00 9375.00 9375.00 9375.00 37500.00 UTILITIES 2500.00 2500.00 2500.00 2500.00 10000.00 INSURANCE 1250.00 1250.00 1250.00 1250.00 5000.00 RENT 2500.00 2500.00 2500.00 2500.00 10000.00 C.L. INTEREST 0.00 0.00 0.00 0.00 0.00 L.L INTEREST 2250.00 2250.00 2250.00 2250.00 9000.00 TOTAL EXPENSES 37250.00 35375.00 39125.00 37250.00 161500.00 PRETAX INCOME 4416.67 -2041.67 10875.00 4416.67 17666.67

INCOME TAXES (34%) 1501.67 -694.17 3697.50 1501.67 6006.67

NET INCOME 2915.00 -1347.50 7177.50 2915.00 11660.00

- 22 -

SALES AND EXPECTED CASH FLOWS YEAR 1 % SALES PER ITEM

QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4 TOTAL %

% of Tl. Sales

TREES 0.00 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 0.00 COLOR/BEDDING 0.00 0.00 0.00 0.00 0.00 0.00 TROPICAL/FOLIAGE 0.00 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 0.00 PACKAGED MEDIA/SOIL 0.00 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00 TOOLS,SPRINKLERS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00

X-MAS TREE, ORNAMENT 0.00 0.00 0.00 0.00 0.00 0.00 SPECIAL ITEMS(NICHES) 25.00 20.00 30.00 25.00 100.00 100.00 100.00

$ VALUE PER ITEM SALES

TREES 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 BEDDING PLANTS 0.00 0.00 0.00 0.00 0.00 FOLIAGE 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 PACKAGED GOODS 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00 TOOLS,SPRINKLERS,ETC. 0.00 0.00 0.00 0.00 0.00 X-MAS TREE, ORNAMENT 0.00 0.00 0.00 0.00 0.00 SPECIAL ITEMS(NICHES) 62500.00 50000.00 75000.00 62500.00 250000.00

Sales per Quarter 62500.00 50000.00 75000.00 62500.00 250000.00 (Tl. annual sales)

BALANCE SHEET- YEAR 1

QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4

Annual Totals

CURRENT ASSETS:

STARTING CASH 100000.00 CASH 102915.00 98652.50 107177.50 102915.00 102915.00 INVENTORY 5208.33 4166.67 6250.00 5208.33 5208.33 TOTAL CURRENT ASSETS 108123.33 102819.17 113427.50 108123.33 108123.33

- 23 -

FIXED ASSETS: PHYSICAL FACILITIES 30000.00 29400.00 28800.00 28200.00 30000.00 LESS DEPRECIATION -600.00 -600.00 -600.00 -600.00 -2400.00 NET 29400.00 28800.00 28200.00 27600.00 27600.00 LAND 50000.00 50000.00 50000.00 50000.00 50000.00 TOTAL FIXED ASSETS: 79400.00 78800.00 78200.00 77600.00 77600.00 TOTAL ASSETS 187523.33 181619.17 191627.50 185723.33 185723.33

LIABILITIES CURRENT 0.00 0.00 0.00 0.00 0.00 LONG-TERM 100000.00 100000.00 100000.00 100000.00 100000.00 TOTAL LIABILITIES 100000.00 100000.00 100000.00 100000.00 100000.00 NET WORTH 87523.33 81619.17 91627.50 85723.33 85723.33 FINANCIAL RATIOS- YEAR 1

QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4

Annual Totals

RETURN ON EQUITY (net income/net worth) 3.33 -1.65 7.83 3.40 13.60 RETURN ON ASSETS (net income/total assets) 1.55 -0.74 3.75 1.57 6.28 CURRENT RATIO (cur. assets/cur. liabilities) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! QUICK RATIO (current assets-inventory/ #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! current liabilities) DEBT/EQUITY RATIO (total liabilities/net worth) 1.14 1.23 1.09 1.17 1.17 NET WORTH TO F.A. (net worth/fixed assets) 1.10 1.04 1.17 1.10 1.10 NET PROFIT MARGIN (after tax net income/sales) 4.66 -2.70 9.57 4.66 4.66

TOTAL ASSETS TURNOVER

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(sales/total assets) 0.33 0.28 0.39 0.34 1.35

FINANCIAL LEVERAGE (total assets/net worth) 2.14 2.23 2.09 2.17 2.17

INCOME STATEMENT (PROJECTED)

YEAR 2

QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4

Annual Totals

SALES 87500.00 70000.00 105000.00 87500.00 350000.00 MARKUP 3.00 3.00 3.00 3.00 3.00 C.O.G.S 29166.67 23333.33 35000.00 29166.67 116666.67 GROSS PROFIT 58333.33 46666.67 70000.00 58333.33 233333.33 EXPENSES SALARY 7500.00 7500.00 7500.00 7500.00 30000.00 LABOR 13125.00 10500.00 15750.00 13125.00 52500.00 ADVERTISING 3500.00 3500.00 3500.00 3500.00 14000.00 SUPPLIES 13125.00 13125.00 13125.00 13125.00 52500.00 UTILITIES 3000.00 3000.00 3000.00 3000.00 12000.00 INSURANCE 1750.00 1750.00 1750.00 1750.00 7000.00 RENT 2500.00 2500.00 2500.00 2500.00 10000.00 C.L. INTEREST 0.00 0.00 0.00 0.00 0.00 L.L. INTEREST 2250.00 2250.00 2250.00 2250.00 9000.00 TOTAL EXPENSES 46750.00 44125.00 49375.00 46750.00 187000.00 PRETAX INCOME 11583.33 2541.67 20625.00 11583.33 46333.33 INCOME TAXES 3706.67 813.33 6600.00 3706.67 14826.67 NET INCOME 7876.67 1728.33 14025.00 7876.67 31506.67


QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4 TOTAL %

% of Tl. Sales

TREES 0.00 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 0.00 BEDDING PLANTS 0.00 0.00 0.00 0.00 0.00 0.00 FOLIAGE 0.00 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 0.00 PACKAGED GOODS 0.00 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00

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TOOLS,SPRINKLERS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00



TREES 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 BEDDING PLANTS 0.00 0.00 0.00 0.00 0.00 FOLIAGE 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 PACKAGED GOODS 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00 TOOLS,SPRINKLERS, ETC. 0.00 0.00 0.00 0.00 0.00

X-MAS TREE, ORNAMENT 0.00 0.00 0.00 0.00 0.00 SPECIAL ITEMS(NICHES) 87500.00 70000.00 105000.00 87500.00 350000.00



QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4

Annual Totals

ASSETS

CURRENT ASSETS: CASH 110791.67 112520.00 126545.00 134421.67 134421.67 ACCOUNTS RECEIVABLE 5250.00 4200.00 6300.00 5250.00 5250.00 INVENTORY 7291.67 5833.33 8750.00 7291.67 7291.67 TOTAL CURRENT ASSETS 123333.33 122553.33 141595.00 146963.33 146963.33 FIXED ASSETS: PHYSICAL FACILITIES 27600.00 27048.00 26496.00 25944.00 27600.00 LESS DEPRECIATION -552.00 -552.00 -552.00 -552.00 -2208.00 NET 27048.00 26496.00 25944.00 25392.00 25392.00 LAND 50000.00 50000.00 50000.00 50000.00 50000.00 TOTAL FIXED ASSETS: 77048.00 76496.00 75944.00 75392.00 75392.00 TOTAL ASSETS 200381.33 199049.33 217539.00 222355.33 222355.33

LIABILITIES CURRENT 0.00 0.00 0.00 0.00 0.00 LONG-TERM 100000.00 100000.00 100000.00 100000.00 100000.00

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TOTAL LIABILITIES 100000.00 100000.00 100000.00 100000.00 100000.00 NET WORTH 100381.33 99049.33 117539.00 122355.33 122355.33 FINANCIAL RATIOS- YEAR 2

QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4

Annual Totals

R.O.E. (net income/net worth) 7.85 1.74 11.93 6.44 25.75 RETURN ON ASSETS (net income/total assets) 3.93 0.87 6.45 3.54 14.17 CURRENT RATIO (cur. assets/cur. liabilities) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! QUICK RATIO (current assets-inventory/ #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! current leabilities) DEBT/EQUITY RATIO (total liabilities/net worth) 1.00 1.01 0.85 0.82 0.82 NET WORTH TO F.A. (net worth/fixed assets) 1.30 1.29 1.55 1.62 1.62 NET PROFIT MARGIN (after tax net income/sales) 9.00 2.47 13.36 9.00 9.00

ASSET TURNOVER (sales/total assets) 0.44 0.35 0.48 0.39 1.57


INCOME STATEMENT (PROJECTED)

YEAR 3

QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4

Annual Totals

SALES 112500.00 90000.00 135000.00 112500.00 450000.00 MARKUP 3.00 3.00 3.00 3.00 3.00 C.0.G.S. 37500.00 30000.00 45000.00 37500.00 150000.00 GROSS PROFIT 75000.00 60000.00 90000.00 75000.00 300000.00

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EXPENSES

SALARY 7500.00 7500.00 7500.00 7500.00 30000.00 LABOR 16875.00 13500.00 20250.00 16875.00 67500.00 ADVERTISING 3500.00 3500.00 3500.00 3500.00 14000.00 SUPPLIES 16875.00 16875.00 16875.00 16875.00 67500.00 UTILITIES 3750.00 3750.00 3750.00 3750.00 15000.00 INSURANCE 1750.00 1750.00 1750.00 1750.00 7000.00 RENT 2500.00 2500.00 2500.00 2500.00 10000.00 C.L. INTEREST 0.00 0.00 0.00 0.00 0.00 L.L. INTEREST 2250.00 2250.00 2250.00 2250.00 9000.00 TOTAL EXPENSES 55000.00 51625.00 58375.00 55000.00 220000.00 PRETAX INCOME 20000.00 8375.00 31625.00 20000.00 80000.00 INCOME TAXES 6800.00 2847.50 10752.50 6800.00 27200.00 NET INCOME 13200.00 5527.50 20872.50 13200.00 52800.00


QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4 TOTAL %

% of Tl. Sales

TREES 0.00 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 0.00 BEDDING PLANTS 0.00 0.00 0.00 0.00 0.00 0.00 FOLIAGE 0.00 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 0.00 PACKAGED GOODS 0.00 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00 TOOLS,SPRINKLERS, ETC. 0.00 0.00 0.00 0.00 0.00 0.00



TREES 0.00 0.00 0.00 0.00 0.00 SHRUBS 0.00 0.00 0.00 0.00 0.00 BEDDING PLANTS 0.00 0.00 0.00 0.00 0.00 FOLIAGE 0.00 0.00 0.00 0.00 0.00 LANDSCAPE MATERIALS 0.00 0.00 0.00 0.00 0.00 PACKAGED GOODS 0.00 0.00 0.00 0.00 0.00 FERTILIZERS 0.00 0.00 0.00 0.00 0.00 PESTICIDES 0.00 0.00 0.00 0.00 0.00 FOUNTAINS, ETC. 0.00 0.00 0.00 0.00 0.00

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TOOLS,SPRINKLERS, ETC. 0.00 0.00 0.00 0.00 0.00

X-MAS TREE, ORNAMENT 0.00 0.00 0.00 0.00 0.00 SPECIAL ITEMS(NICHES) 112500.00 90000.00 135000.00 112500.00 450000.00



QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4

Annual Totals

ASSETS

CURRENT ASSETS: CASH 147621.67 153149.17 174021.67 187221.67 187221.67 ACCOUNTS RECEIVABLE 6750.00 5400.00 8100.00 6750.00 6750.00 INVENTORY 9375.00 7500.00 11250.00 9375.00 9375.00 TOTAL CURRENT ASSETS 163746.67 166049.17 193371.67 203346.67 203346.67

FIXED ASSETS: PHYSICAL FACILITIES 27600.00 27048.00 26496.00 25944.00 27600.00 LESS DEPRECIATION -552.00 -552.00 -552.00 -552.00 -2208.00 NET 27048.00 26496.00 25944.00 25392.00 25392.00 LAND 50000.00 50000.00 50000.00 50000.00 50000.00 TOTAL FIXED ASSETS: 77048.00 76496.00 75944.00 75392.00 75392.00 TOTAL ASSETS 240794.67 242545.17 269315.67 278738.67 278738.67

LIABILITIES CURRENT 0.00 0.00 0.00 0.00 0.00 LONG-TERM 100000.00 100000.00 100000.00 100000.00 100000.00 TOTAL LIABILITIES 100000.00 100000.00 100000.00 100000.00 100000.00 NET WORTH 140794.67 142545.17 169315.67 178738.67 178738.67 FINANCIAL RATIOS- YEAR 3

QUARTER 1

QUARTER 2

QUARTER 3

QUARTER 4

Annual Totals

R.O.E. (net income/net worth) 9.38 3.88 12.33 7.39 29.54 RETURN ON ASSETS (net income/total assets) 5.48 2.28 7.75 4.74 18.94 CURRENT RATIO (cur. assets/cur. liabilities) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

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QUICK RATIO (current assets-inventory/ #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! current liabilities) DEBT/EQUITY RATIO (total liabilities/net worth) 0.71 0.70 0.59 0.56 0.56 NET WORTH TO F.A. (net worth/fixed assets) 1.83 1.86 2.23 2.37 2.37 NET PROFIT MARGIN (after tax net income/sales) 11.73 6.14 15.46 11.73 11.73

ASSET TURNOVER (sales/total assets) 0.47 0.37 0.50 0.40 1.61


Benchmarks

To see our projected benchmarks refer to the goals section. All of our goals

are where we expect to be at that given time.

Capital Request

As the founder of Hop To It Farms I will be investing an initial $100,000.00

in the company. This investment will put us on the right track but not place

us where we need to be. In order to achieve our goals we are asking for help

in the form of an equity share investment. We need to raise at least an

additional $100,000.00 or up to $150,000.00. In return for every $12,500

invested, investors will recieve a 2.5% share of the company. Investors can

expect a full return on their investment by year five with dividends paid after

that. This investment money will go towards necessary expenditures such as

labor and equipment needed to maintain and harvest the hops. This is not a

loan we are asking for, this is an opportunity to join in our business. As we

succeed, so will you, and at Hop To It we see no options other than success.

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List of References

http://www.realbeer.com/hops/justhops.html

http://www.landandfarm.com/search/Oregon-Undeveloped-Land-for-sale/

http://www.smallbusinessnotes.com/business-finances/angel-investors.html

http://bineimplement.com/3060_Harvester.php

http://www.usahops.org/graphics/File/Stat%20Pack/2011%20Stat%20Pack.

pdf

http://www.brewersassociation.org/pages/business-tools/craft-brewing-

statistics/facts

http://licenseinfo.oregon.gov/index.cfm?fuseaction=category_lic&itemid_an

d_category=1902|Agriculture

http://www.aphis.usda.gov/plant_health/permits/plantproducts.shtml

- 31 -

Supporting Documents.

hop to it farms business plan

Documents

business description

business overview

business history

plan summary

marketing plan

hering rd gasting

brandon kothmann

quality control