ENP 7320 Module 4 Business Plan Part 5: The Executive Summary Example

Mill Hill Mushroom Company: Executive Summary

Student Name

Master of Business Administration, Thomas Edison State University

ENP-7320: Entrepreneurship

Mentor Name

Month Day, Year

Mill Hill Mushroom Company: Executive Summary

The Opportunity

Restaurants in central New Jersey and Philadelphia pay premium prices for gourmet mushrooms that arrive three to six days after harvest, dry and bruised. Mill Hill Mushroom Company will grow oyster, lion's mane, chestnut and king trumpet mushrooms year-round in climate-controlled rooms in Trenton and deliver them within 24 hours of harvest to restaurants within 40 miles. In interviews with 31 chefs, 24 named freshness as their main complaint and 19 said they would pay at least a dollar a pound more for next-day delivery. Timmons et al. (2015) note that many investors read the executive summary first and decide from it whether to read the rest, so it must stand on its own.

Market and Customers

The primary market is about 310 independent, chef-led restaurants in four counties and central Philadelphia, 115 of which already serve gourmet mushrooms. A typical account buys 15 to 30 pounds a week. Forty accounts at 20 pounds each would take most of the farm's second-year output. Two year-round farmers markets, in Lambertville and Philadelphia, add retail sales at about $14 a pound and build the brand with home cooks.

Marketing Approach

Mill Hill will win accounts chef by chef. The founder, who bought produce for a 14-restaurant group for six years, will visit kitchens with harvest-day samples and offer a four-week trial at wholesale prices. Accounts that continue will move to standing twice-weekly orders, which steady production and make cash flow predictable. A simple website, a weekly availability email to chefs and the farm's name on restaurant menus will build recognition. The company competes on freshness and reliability, not price; its plan assumes a price premium of about a dollar a pound over distributor product.

Competition

Gourmet mushrooms reach these restaurants through broadline and specialty produce distributors, which buy from large growers, and from two small local growers who sell mainly at markets. None delivers harvest-day product to restaurants daily. The method can be copied within a year, so Mill Hill's defense is speed: signing standing orders with the area's leading kitchens before a rival builds capacity.

Team

The chief executive brings six years of restaurant purchasing and the buyer relationships to open accounts. The co-founder brings four years of commercial growing at a Kennett Square, Pennsylvania, mushroom farm and training in sterile culture. An advisory board adds a food-safety consultant, a farm-to-table restaurant owner and a retired small-business banker. Founders' shares vest over four years.

Operations

The farm will lease 4,000 square feet of light industrial space with two separate fruiting rooms, so a contamination problem in one cannot halt all supply. Substrate is made and pasteurized on site each week, harvest happens every morning and deliveries leave before noon in a refrigerated van. A written food-safety plan traces every package to its harvest date.

Financial Summary

The farm breaks even at about 840 pounds a week, which it expects to pass early in year two. No assumption matters more than price: a 10 percent cut wipes out year-two profit, so the farm competes on freshness, not discounts.

Capital Required

Mill Hill needs $250,000: $145,000 for grow room build-out and equipment, $38,000 for a refrigerated van, $12,000 for initial supplies and deposits and a $55,000 working capital reserve that covers the first-year cash shortfall with room to spare. The founders contribute $60,000, two family investors $40,000 for 15 percent of the company and the balance, $150,000, is sought as a 10-year SBA 7(a) loan secured by the equipment and van.

Harvest

The most likely exit is a sale within five to seven years to a regional produce distributor or a larger grower seeking a local gourmet supply near Philadelphia. A buyout by the co-founder or senior staff, or continued ownership with profit distributions, are the alternatives. Family investors hold tag-along rights in any sale.

Why Now

Diners and chefs increasingly ask where food comes from, and gourmet mushrooms have spread from specialty restaurants to everyday menus in the area, by the founder's count of local menus. Sahlman (1997) observed that investors read a plan for its people, opportunity, context and the risks and rewards; Mill Hill offers a team matched to the work, a gap distributors cannot close quickly, a growing local market and a modest capital need with a clear path to repayment. Shane and Venkataraman (2000) describe entrepreneurship as discovering and acting on opportunities others have not yet exploited, and the timing matters: the gap between what chefs want and what distributors deliver is open now, before larger growers move in.

References

Sahlman, W. A. (1997). How to write a great business plan. Harvard Business Review, 75(4), 98-108.

Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217-226. https://doi.org/10.5465/amr.2000.2791611

Timmons, J. A., Spinelli, S., Jr., & Adams, R. J. (2015). New venture creation: Entrepreneurship for the 21st century (10th ed.). McGraw-Hill.