This financial model allows users to explore the feasibility of starting/running an apple orchard. There are a lot of things to consider and a good amount of varying sources on costs/revenues when looking into growing your own fruit bearing trees.
$45.00 USD
Recent Updates: Added a fully integrated 3-statement model (Income Statement, Balance Sheet, Cash Flow Statement) and a cap table, capex with dynamic depreciation specific to the orchard industry, and better overall global assumptions.
So, what I did is tried to assume as little as possible and give the user as much flexibility in developing their own assumptions so that each person using it would be able to figure out what the cash flows look like with their specific situation and all the caveats that may come with that.
Key financial model features:
Like I said in the video, over time there will be a financing aspect created so you can see what the cash flow looks like based on financing a certain percentage of the orchard initial investment requirement.
The main thing to keep in mind if you are going to use leverage (debt) is that it will increase your IRR and overall return on investment in most cases, but you need to ensure the operating profits are high enough to support the debt service repayments. This is a risk factor to seriously consider. The more leverage, the higher your IRR will be, but the greater risk involved.
One interesting thing about leverage is it allows you to get more with less starting capital. You will see less total cash and net cash returns because you have to pay debt service, but it makes the cash requirements much easier to manage up front when you are trying to get everything up and running.
Obviously you have to make the operation make money, but it is nice to see how much it will impact your returns over time.
Key financial model features:
- Model up to 50 years.
- 20+ inputs to really give you something that is useful.
- Return sheet:
- IRR
- Total/Net cash returns and annual % yields
- Survival analysis
- Chart showing running cash flow over time
- Breakeven year
- Ability to change the total acres you are cultivating over various time-frames of the project.
- Change how many harvest you do per year.
- User enters up to 6 types of fruit/bundles with varying costs.
- Up to 5 extra annual costs available to play with.
- Choose over what time-frames you want to apply various costs.
- Financing assumptions have been fully integrated.
I have truly tried to read as much as I possibly could into developing your own apple orchard so that everything was thought of in terms of initial costs, time it takes to start getting sellable fruit, and operational costs.
Sometimes I have a hard time appreciating the financial models I do because it is always on to the next thing, but this is really something that is sticking in the forefront of my mind going forward and I don't think you will find anything as useful across the entire Internet within the farming/orchard industry.
Like I said in the video, over time there will be a financing aspect created so you can see what the cash flow looks like based on financing a certain percentage of the orchard initial investment requirement.
One interesting thing about leverage is it allows you to get more with less starting capital. You will see less total cash and net cash returns because you have to pay debt service, but it makes the cash requirements much easier to manage up front when you are trying to get everything up and running.
Obviously you have to make the operation make money, but it is nice to see how much it will impact your returns over time.
More Industry-Specific Bottom-up Financial Models:
