Business assignment

For this assignment, you will be acting as a business consultant for a 2-acre blueberry farm.

First create a plan or script/storyboard to bolster sales for the 2-acre blueberry farm. The total advertising budget is $1,000. The client expects an expenditure sheet including your fee and a breakdown of costs for the proposed advertisement plan provided as an excel document.

Second make suggestions about how to maximize the business. What is the expected gross and profit from these two acres? Calculate the number of years to recoup the initial total costs considering first three years of production (how much profit should the owner take as payment per year?). How soon until the business can produce a genuine profit (this should take the initial costs into account)? Please show your logic and calculations.

Background on the farm

The farm's current name is Brown's Blueberry Farm and was started 3 years ago. Potentially this will be the first year in full production. It currently has 2-acres planted in blueberries Blueberry plants come into full production 4 to 6 years after planting and will last approximately 25 years. Until the plants are in full production, figure 2,000 lbs. of blueberries per acre per year.

The client is expecting to produce between 5,000 to 20,000 lbs. of blueberries per acre after the plants go into full production. The variance is based on environmental and weather conditions. The client has been selling the blueberries for $4 per lb. The initial land cost was $12,000 per acre. An additional initial investment of $40,000 purchased the plants, irrigation system, adjusted the soil, and set up the 2-acre farm (included pollinators, pest management, etc.)

The average cost per year for irrigation and other cultural costs for the 2-acres is estimated to be $7.842.

Below are two reference charts created by the University of California Davis Extension 2009.

Costs per acre at carrying yields to produce blueberries

		YILED
	Fresh	6,000	8,000	10,000	12,000	14,000	16,000	18,000
Operating Cost/acre
Culture cost		3921	3921	3921	3921	3921	3921	3921
Harvest cost		13,851	18,469	23,086	27,703	32,320	36,937	41554
Interest on operating capital		95	128	161	194	227	261	294
Total operating cost/acre		17867	22518	27168	31818	36468	41119	45554
Total operating cost/lb		2.98	2.81	2.72	2.65	2.60	2.57	2.54
Cash overhead cost/acre		915	916	917	917	918	918	918
Total cash costa/acre		18782	23434	28065	32735	37386	42037	46687
Total cash cost/lb		3.13	2.93	2.81	2.73	2.67	2.63	2.59
Non-cash overhead cost/acre		2143	2151	2158	2165	2170	2174	2178
Total cost/acre		20925	2151	2158	2165	2170	2174	3178
Total cost/lb		3.49	3.20	3.02	2.91	2.83	2.76	2.71

Net return per acre above operating costs

Price	Yield (lbs/acre)
Fresh	6000	8000	10000	12000	14000	16000	18000
2.00	-5,867	-6518	-7165	-7818	-8468	-9119	-9769
2.50	-2867	-2518	-2168	-1818	-1468	-1119	-769
3.00	133	1482	2832	4182	5532	6881	8231
3.50	3133	5482	7832	10182	12532	14881	17231
4.00	6133	9482	12832	16182	19532	22881	26231
4.50	9133	13482	17832	22182	26532	30881	35231
5.00	12113	17482	22832	28182	33532	38881	44231