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THE BUSINESS PLAN |
Harold D. Koch PO Box 167 Gann Valley, SD 57401 Phone #: 605-293-3430 Toll Free: 1-800-822-3430 Email: hdkoch@midstatesd.net |
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THE BUSINESS PLAN |
Harold D. Koch PO Box 167 Gann Valley, SD 57401 Phone #: 605-293-3430 Toll Free: 1-800-822-3430 Email: hdkoch@midstatesd.net |
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WHAT IS THE MANUFACTURE/RETAIL PLAN? Koch Manufacturing is a manufacturing/retailing business. It is a system whereby the producer,
with a small labor force produces the product and sells the product directly to the customer.
This reduces overhead, labor, warehousing, shipping, and to some extent dealers. When dealers
are used, there should be some markup allowance to enable them to competitively sell the
products. |
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The Ag-Topper, which is the main product, has many applications,
sizes, configurations, and colors. Almost every application of the Ag-Topper
is special. This makes it almost impossible for dealers to know what
to stock. If the dealer orders a special topper, shipping becomes
a problem. Keeping a customer waiting, so the dealer can put together
a package deal to reduce delivery costs, doesn't work effectively. Add to the topper business the related products and the
other bulky products, mentioned in the products pages, the ideal solution
is to manufacture these products in the vicinity where they will be sold.
Therefore, what is proposed here is to establish manufacturing/retailing
businesses in farming communities, contract the manufacturing/retailing
business to manufacture farm related products, and retail these products
out of the local manufacturing/retailing business. Koch Manufacturing
can provide the product design, some advertising, and some sales leads.
Koch Manufacturing would provide this for a percentage or a flat rate of
each product whether we make the sale or the manufacturing/retailing business
makes the sale. HOW TO IMPLEMENT THE MANUFACTURING/RETAILING BUSINESS PLAN. BUILDING: It will require about 2400 sq.ft. to adequately house this facility. It would require about a 300 amp. service and good lighting. We now operate out of a 40 x 60 ft. pole building, which adequately houses our machinery and allows enough room to manufacture the toppers. The building has a ten foot ceiling and a poured concrete floor. We paint the products in an old hog barn that we preheat with a Knipco before painting when it's cold. MACHINERY: A list of some required machinery is provided on another page. Koch Manufacturing designed and constructed most of it's own machinery because it was either unavailable or too costly. For instance, we designed and constructed our own apron brake and power unit since there was nothing available on the market. We constructed our own hydraulic press and used the same power unit we use on the apron brake for operation of the press. For that matter we could probably build the iron worker and shear for less cost and use the same hydraulic unit as the brake and press. In other words the machinery will not be so technologically advanced that the cost would be prohibitive. We invite you to come to our facility and witness our simple operation. JIGS AND FIXTURES: Some of the jigs and fixtures are, of course specialized. Koch Manufacturing builds and paints the toppers on wheeled carts. The manufacturing/retailing business could purchase one from us and build their own using the purchased cart for a pattern. Most other jigs and fixtures could be built by the manufacturing/retailing business. Koch Manufacturing will furnish it's name, the drawings, the special specifications, and the features as necessary or as requested by the manufacturing/retailing business. MATERIALS: We will provide a list of materials to get you started. The closer proximity the business is to the suppliers, the less inventory required. Obviously it is wise to have some orders before purchasing a large quantity of materials. EXPERIENCE: Koch Manufacturing began its venture with very little practical experience in the business of manufacturing. Having been a Mechanical Engineer, we had the basic knowledge of the manufacturing processes, but we had no experience in the welding, shaping, or painting processes. We had a positive attitude, learned from our mistakes, and practiced every aspect and operation. We sought perfection and constantly worked toward that goal. Anyone with determination, a little ingenuity, and good faith can do the same thing. Any interested party is invited to observe the steps in our operation in our facility. As you improve your technique and skills, friends and neighbors will begin to depend on you for specialized repairs and projects. INVESTMENT: We will furnish the manufacturing/retailing business with a good idea of what tools would be necessary to build the Ag-Toppers. Koch Manufacturing will provide any tooling the manufacturing/retailing business cannot purchase or which is so expensive to the extent that we can build it for less. The manufacturing/retailing business can start operation with a single MIG welder. We constructed our own punch press and notcher and used them in the hydraulic press. Thus we did without the iron worker for many years. Instead of a punch press, the manufacturing/retailing business can drill the round holes. Most of the tools listed in the development costs page are essential. The steel and paint lists will build about 20 toppers, which will generate between $10,400 and $13,000 income. With another $3,900 for sheet steel, that income could revolve into another 20 toppers. FINANCES: Koch Manufacturing has the product and we know how to build it. We have customer leads and we can make some of the machinery to produce the product. However we cannot finance the venture. Therefore, it is up to the interested party to seek it's own financing. We will produce the equipment and supply them to the manufacturing/retailing business at the least cost. The least cost in building an apron brake is about $18,200, which does include the power unit. A power unit could also be a hydraulic unit found in most tractors. This could reduce the costs for the apron brake. Some of the machines are standard equipment on most farms and small machine shop operations. There are many investment sources available, your local banks, community or municipal development corporations, COOPs, state and state agriculture development corporations, U.S. Rural Development and Small Business Administration,and capital venture/private investment groups. All these groups require a plan. We can help. SUMMARY: Koch Manufacturing started as a small family farm venture whereby we purchased some shop machinery to generate extra income on the farm. Our labor force was just family members for a long time. We designed and constructed most of our own equipment and developed products of our own. As our business grew, we were employing more and more people. Soon our business outgrew our facility and labor market. Our manufacturing income exceeded our farm income by more than ten times. We sold off a big part of the business to concentrate
on a different product, the Ag-Topper. Because the Ag-Topper has
so many and such diversified uses and features, it requires a different
marketing approach. A better approach for getting the product to
the customer is to retail the Ag-Topper at the factory door. It is proposed to establish manufacturing/retailing business
facilities strategically located in territories where there seems to be
a large demand. The recommended and required machinery will provide
the potential manufacturer the capability of expanding into other products
of local demand. In the case of a small family farm it will provide
additional on the farm income. It will require a 2400 sq.ft. building with a 300 amps
electrical service. It will require about $55,900 worth of manufacturing
equipment, jigs, and fixtures. Some of the machinery Koch Manufacturing
will have to build because it is not available. We can provide this
machinery at low cost, provide the product, and some sales leads.
The manufacturing/retailing business will have to learn the process (we
will help); establish his own suppliers; and seek their own finances.
We will provide the products and name for a percentage of the income.CONCLUSION: Face it, there is not a family alive in the hustle of big city living that would not like to scrap it all to live in a small community environment to raise a family. Koch Manufacturing has done just that and has had very good success. We think it has great potential for anyone with guts, ability, determination, and faith. If you have a small parcel of land and, depending on what
you already have in machinery, the investment is no greater than purchasing
a new car. Expanding your farming or ranching business horizontally
often requires bigger and more expensive equipment. It sometime decentralizes
your operation. Capital investing in vertical farm related expansion,
such as dairy, hog, or poultry factories, is expensive, and is a 24 hour,
seven day a week, and 52 week a year, business. This plan is less expensive, more exciting, clean, inspiring,
challenging, fulfilling, and fun. You may have setbacks, but every
failure is experience and a challenge. There is no instant success
or instant security written in this plan. At the same time there
are no absolute rules or specifications to restrict the manufacturing/retailing
business from doing it their way. It is a plan to give you independence;
to be yourself; to exercise your skills; and tax your ability to persevere.
It cannot be imagined what creative innovations transpire or how much closer
individual minds work when a close nit family works together, as a family
unit, on a family project. |