Baron Woolen Mills Business Plan
This business plan for the use of an old woolen mill building was prepared with the help of Beverly King of the Small Business Development Center at Weber State University.
Baron Woolen Mills Living Museum
The Friends of Baron Woolen Mill wish to promote and operate the historic Baron Woolen Mill in order to preserve the heritage of the wool blanket product it has been renowned for since the 19th Century. Originally built in 1869-1870, the Mill was part of the Brigham City Manufacturing and Mercantile Association, also known as the Cooperative (see Appendix A -- excerpt from Brigham City Historic Tour). Although the Mill has had several additions, the original stone building is still highly visible and will be utilized as part of the living museum.
The Mill was a full process operation, purchasing wool fleeces from the local sheep ranchers. The raw wool was cleaned, dyed, carded, spun, woven and finished, all onsite. The building still houses the vintage machinery used for production, which is highly prized both for its historical significance and for its artistic imagery.
The Mill gained the name by which it is now known through four generations of ownership by the Baron family. Since the Baron family's departure, the Mill has experienced one, short-lived ownership that ended in bankruptcy and then a period of revival under the current owners, Bob and Marva Sadler. The Sadlers put a gallant effort into producing the traditional Baron's woolen blanket. However, due to the constant complications of trying to produce while utilizing the aged equipment, the Sadlers were unable to produce a sufficient number of blankets to break-even and their loans are now in default.
Friends of Baron Woolen Mill
The Friends of Baron Woolen Mill was organized in 1999 to rescue this valuable piece of Utah history and pioneer technology. The mission of the Friends will be twofold:
1) To produce and sell blankets in the tradition of Baron's in order to participate in adding value to Utah's agricultural products.
2) To provide a historical and educational experience.
The Friends will operate in partnership with Utah Open Lands (see Appendix B). Through the raising of grant and donation funds in partnership with Utah Open Lands and other sources, the current outstanding debt will be cleared, renovations to bring the building up to code will be performed and equipment for production capabilities will be added.
The revitalization of the Mill is anticipated to come about in three stages:
Stage 1: Purchase the building and stabilize it for minimal production. Preserve the historical facade of the facility.
Stage 2: Develop markets for the blanket product.
Stage 3: Develop the educational programs.Blanket Production
A limited number of blankets will be produced initially. However, instead of performing the full process as the Mill has done in the past, initially only the weaving process will be completed on site. The steps for equipment replacement and production capabilities have been segregated into four phases:
Phase I: Will allow for the blankets to be woven on-site.
Phase II: Will allow for the fitting and finishing of the woven material.
Phase III: Will allow for the carding and spinning processes.
Phase IV: Will allow for the cleaning, dying and mixing of the raw wool.
Although it would be most desirable to start with all phases, this plan anticipates only implementing Phase I upon startup. Services will be subcontracted from outside sources for the other processes. It may take five to ten years before Phase II will be undertaken and then only if feasible. This limited processing helps the Friends to achieve a couple of goals:
- Reduces startup cost for replacement equipment. Two newer looms will be purchased to facilitate weaving of the blankets rather than trying to utilize the historical equipment. Other equipment will not be repaired or replaced initially
- Frees up space in the building for meeting rooms, maintenance areas and rental space.
Blankets will be sold at a small, on-site retail store, as well as marketed to outside customers both at retail and wholesale. The wool blanket is a specialty product valued by individuals who enjoy the warmth and feel of real wool. These blankets cannot be competitively priced against the many cotton, fleece or synthetic material blankets carried by retail chains. No attempt will be made to enter these markets. Instead the blankets will be sold for a premium price, selling not just the quality and beauty of the blanket, but also selling the appeal of preservation of the sheep industry and the open range lands of Utah. An option to also produce a lower-level blanket and sell to different markets will be retained by the Friends.
Even though the blankets will be marketed only as an elite product, sales are anticipated to be much higher than the Sadlers were able to achieve while limping along with the antiquated equipment. With the newer looms, the ability to produce will be increased tremendously allowing production to meet the market demands. The newer looms will be chosen to retain the historical atmosphere and to not compromise the environment of the living museum.
Profits made from sale of the blankets will be used to cover costs of the educational programs. Lifelines are also being sought to waylay various expenses. These lifelines will be ongoing financial assistance or in-kind services through various city, county and organizations.
Educational Programs
For the second goal as a Living Museum, a variety of educational experiences will be offered:
Tourism
In cooperation with the Box Elder Tourism council, the Mill will be part of a historical/heritage experience. Other elements in the near vicinity include the Golden Spike National Historic Site, LDS Tabernacle, Brigham City Court House, Brigham City Train Depot and Willard historical homes tour. On a regional level, the Mill will compliment the experience offered at the American West Heritage Center in Logan and other experiences being developed throughout the state by the Utah Heritage Council. Volunteer docents will give Tours of the Mill. Information will be given about the development of the Cooperative, the construction and history of the building, the process of moving the wool through each phase from raw material to finished blanket and the current status of the Mill's operations.
School Programs
In order to build knowledge of both Utah heritage and agricultural-to-market production methods, schools will be encouraged to utilize the facility as an educational experience. Management and volunteer docents will be utilized to relay the history and production information. Programs will be offered to suit the nature of the audience ranging from simple demonstrations for grade school children to hands on experiences for upper level students.
Arts and Fiber Guilds
Members of various art and fiber guilds have shown an interest in utilizing the facility for meetings and workshops. Meeting rooms will be created within the building and processing equipment will be on display.
The facility will be opened up as much as is possible to the users so that they are able to pursue their experience, while still providing a safe environment and protecting the equipment and work-in-process blankets. A part-time person will be hired as coordinator for these functions. This individual will be responsible for the booking of the functions as well as the hosting duties. Meeting rooms will have tables, seating, screens and projection equipment available. Food catering can be provided by various entities in the Brigham City area when requested. Docents and the operations employees will be utilized to provide information about the Mill and perform the demonstrations.
A minimal fee will be requested for use of the facility in order to cover the cost of equipment and supplies. The fee, however, will be considered a donation and will not be required of any users.
ORGANIZATION
In order to achieve the best results for each goal, there will be a separation of departments in the organizational structure. Some crossover of personnel may occur. In addition, a management position to oversee marketing of both the blanket product and the educational programs will need to be filled. This could be combined into one position or separated into a couple part time positions that coordinate their efforts. Positions for general manager, accounting and finance, and human resources will also be required. The Board of Directors of the Friends will be responsible for selecting the individuals that fill the management positions. As the organization will be entrusted with public and private donations, it is imperative that due diligence and accountability be assured. These positions could be sponsored by lifelines or paid as salaried positions. A simple organizational chart follows. It is possible that several positions will be subcontracted to service providers.
FACILITY/LOCATION
Baron Woolen Mill is located at 56 N 500 E in Brigham City. The original building, built in 1869-1870, is constructed of rock and mortar. Most of the original building is still visible and the ambiance definitely is reminiscent of a long ago era. To the front a newer brick section has been added. This addition is dated to the early to mid 20th century. It would be possible to remove this section and take the building back to its 19th century roots, but leaving it has a couple advantages: 1) Provides space for the retail store and 2) Demonstrates the stages the business has gone through during its lifetime. This entire facility includes 21,168 square feet on two floors.
A variety of metal buildings has been erected to the south of the original structure. These buildings were utilized for various processes of the blanket production. There is a small amount of parking also to the south and front (west) of the building.
At this stage a complete picture of needed renovations is not available. The business was allowed to squeeze by during its 1990's operations with minimal requirements by OSHA and Brigham City Planning. To operate as an educational facility, the Friends wish to be in compliance with all regulations. This means that the building must comply with fire safety standards, health and safety standards, the ADA requirements, and any applicable EPA regulations plus allow for site planning for parking, landscaping and any other city requirements. Considerable renovations are anticipated with the additional goal of maintaining and preserving the historical nature of the building.
The Mill will benefit from a recently adopted Brigham City ordinance, which facilitates the preservation and reuse of historic buildings and sites. However, under this ordinance, the City will expect the building and site to become an asset, functionally and aesthetically, to the surrounding neighborhood. In its current state, with weeds, gravel parking, and poor maintenance, it is not such an asset. Part of the project will be the upgrading of the site to an aesthetic standard that will meet or exceed Brigham City's expectations and requirements.
The metal outbuildings will possibly be removed and portions of equipment moved into the main building. As feasible, the original processing equipment will be arranged in a display area where tour leaders can explain the tasks of each item as the wool moved through the production process. The newer looms will be set up in a separate area where viewers can be protected from the noise and moving parts while watching the weaving process. Classrooms will be sectioned off and bathrooms will be upgraded to accommodate the guests. Electrical and heating upgrades will be required. Additional parking and landscaping will be created.
Once approval has been given, inspections by the appropriate agencies will be requested. Bids will then be gathered from qualified individuals concerning cost of renovations. Until that time, the Friends are using a renovation estimate of $100 per square foot. This should be a high-end estimate of what it will take to bring the property up to specification.
See Appendix C for a drawing of the property and buildings.
EQUIPMENT
Baron Woolen Mill has historically performed the full processing from the raw fleece to the finished blanket. Ideally, as a living museum, it would be nice to continue with the full process. Costs to purchase new equipment or upgrade the old equipment in order to perform the full process are estimated at almost $900,000.
The Friends have analyzed the processing equipment and placed each into a phase. Phase I is all that is being contemplated at this time. The others would be added, in order, at such time as is desirable and financially feasible.
Phase I Will allow for the blankets to be woven on-site
New looms - 2 each
$195,000
Upgrade old looms
10,000
Material handling equipment
30,000
Warping frame, repair
30,000
Total
$265,000
Phase II Will allow for the fitting and finishing of the woven material.
Napper
$185,000
Tenter Frame, used
120,000
Rigging & erection, repair
60,000
Sewing, repair
1,000
Total
$366,000
Phase III Will allow for the carding and spinning processes.
Cards, new
$50,000
Spinning frames, repair
15,000
Repackaging, used
65,000
Total
$130,000
Phase IV Will allow for the cleaning, dying and mixing of the raw wool.
Scouring train, repair
$60,000
Stock Dyer, upgrade
20,000
Blender/Mixer, used or upgrade
10,000
Accumulators
10,000
Total
$100,000
At startup only the weaving will be performed on-site. The raw wool will be subcontracted to outside providers to process it to the stage of being ready to go onto the looms and all finish work will also be subcontracted. Tentative contracts should be established with these providers to ensure that the Mill's volume, even though small, can be handled. See Appendix D for a potential list of outside sources and standards that the raw wool must meet to be acceptable for production purposes.
MARKETING
Due to the two goals involved there are two different marketing issues. While it is reasonable to believe that some crossover will occur, it is important to develop separate marketing strategies for each.
Blanket Production: Most of the traditional means of marketing a product will be utilized within reasonable costs. In the past extensive efforts have gone into marketing blankets, which were sold both at wholesale and at retail directly to the customer. Retail sales were the most profitable but orders from wholesale customers are valuable in order to move sufficient quantities.
A primary marketing tool in the past was a retail catalog. When produced in a timely and professional manner, these catalogs generated many sales. Catalog sales can only be effective though if the catalog is adequately distributed. Mailing lists are a common means of distribution. Mailing lists are generally purchased from other catalog distributors and contain the names and addresses of their more recent customers. Depending on the source, mailing lists can be quite expensive. Other means of distribution for catalogs can include making them available at other places of business or tourist information booths, ads in magazines, or through web page requests.
E-commerce is extremely popular today. Selling via the Internet is a viable method. Good web page design and search engines are a must in order to make this method effective. It would be essential that the customer be able to use credit cards for purchases.
The small retail store itself will be a primary source of sales. Visitors and residents alike will be encouraged to shop this direct outlet. It will also be possible to carry goods other than the blankets, especially if these goods are placed into the store on consignment. Other items could include other wool products, tourist mementos, and artwork.
Wholesale sales will be targeted to the high-end retailer, especially retailers who portray an image of natural materials and outdoor activities. Wool is still one of the best products for providing warmth while not retaining moisture. The former owner had a variety of contacts in the wholesale market. Initial contact will be made with these parties. It is crucial in Stage II that the specialty product marketing be established and tied to both goals of the Mill.
Other methods of marketing will be utilized as determined by the marketing manager and the Board of the Friends.
Educational Programs: Knowing the customer is essential in any marketing strategy. The customer for educational opportunities will be broad.
School children - As part of the education of our youth, it is always important to introduce them to live experiences. The Mill's living museum will expose these children to the heritage of the cooperative experience in Brigham City, it will expose them to a manufacturing process that is still relevant to textile products used daily and it will expose them to the relationship between agricultural production and their daily lives. Tours to schoolchildren will be offered. Docents will be utilized to conduct the tours as well as perform demonstrations of hand spinning and weaving. Programs for High School students will provide a more hands-on experience with the possibility that for-credit classes could also be available. For the most part school children will come from the Box Elder County area, but the programs will be marketed in conjunction with other county attractions to a much larger area.
University Students - Studies in agricultural and textile programs, as well as the arts will be able to incorporate the living museum into their class instruction. Tours and workshops will be individually designed to the needs of the class. Utah State University, as the agricultural school for the state, will be the prime market for these programs, but marketing efforts will again be made on a broader scale.
Tourists - Box Elder County's three prime tourist attractions are the Bear River Bird Refuge, Golden Spike National Historic Site, and Thiokol Rocket Garden. Additional attractions include the Willard Historic Home tour, LDS Tabernacle, Box Elder County Court House, Brigham City Train Depot, Brigham City Museum and Gallery and Eli Anderson's wagon and buggy collection. The Mill's living museum will fit in well with these attractions and audiences. Tours will be offered at selected times of the year, week and day. Marketing efforts will be coordinated with the Box Elder County Tourism Council, the Golden Spike Empire and local businesses.
Artisans - Extensive efforts will be placed on hosting workshops for various art guilds. Members of the fiber art guilds have shown an interest, as well as photographers and painters. The historic building and the aged equipment make an interesting study for artists. The actual weaving of a product is an activity that pulls many individuals back to their basic roots. Fees to groups utilizing the facility will be kept as low as possible while still covering costs.
Marketing efforts to reach as broad an audience as possible will include brochures, a web page, ads in appropriate magazines, partnerships with other non-profit groups and one-on-one contacts by the marketing manager. Publicity releases will be utilized on a regular basis. Additional marketing ideas will be utilized as determined by the marketing manager and coordinated with the Board.
EMPLOYEES
There are former employees participating in the Friends of Baron Woolen Mill. These employees have demonstrated an excellent knowledge base about blanket production during preparation of this business plan. Utilization of these individuals is highly recommended. They would also be well utilized in the educational programs due to their extensive knowledge of the machinery and the industry.
Wage positions anticipated at startup for the blanket production include:
Master weaver
Warper
Apprentice
FloaterA part-time individual for the educational programs would be required at startup with additional part-time positions possible in the future.
A search for individuals to fill the salaried positions of General Manager, Accounting and Finance, Human Resources, and Marketing would be recommended. All but the Marketing position could be filled part-time, especially if retirees with strong backgrounds in their fields could be enticed. Contracting services to outside sources is also a viable option.
LIFELINES
Lifelines are a means of reducing costs through requesting assistance from sources in the community and State. As an example, Box Elder County School District could provide the yard maintenance that will be required utilizing their current personnel and equipment. In return, the school children of the District obtain a valuable resource for educational experiences. A similar agreement has been reached between Pioneer Craft House and Granite School District. Endowments from private individuals will also be sought.
The Friends will request various lifelines. The financial forecasts do not currently show the benefit of the lifelines to operating expenses, but they clearly will make a difference to the survival of the Mill.
FUNDING REQUIREMENTS
The following funding requirements are anticipated in order to establish the living museum as presented in this plan. The initial funding requirements will allow the Mill to start up at a level that will provide for its own existence well into the future. To do any less risks the likelihood of a long-term life.
Buyout of current debt
Utah Technology Finance Corporation
$140,000
Deseret Certified Development Co.
143,000
Bear River Association of Governments
105,000
C. Sadler (father of Bob Sadler)
60,000
Box Elder County Assessor, Property taxes
12,000
Brigham City Light & Power
4,700
Questar
2,800
Boiler debt
22,000
Wages payable to former employees
40,000
Total buyout
$529,500
Building renovation
21,168 sq. ft @ $100 per sq. ft.
2,116,800
Landscaping
40,000
Parking (1/2 acre)
52,000
Other site costs
18,000
Phase I - Equipment repair and replacement
265,000
Working capital
400,000
Initial Funding Requirement
$3,421,300
Follow-up Funding Requirement
Phase II - Equipment repair and replacement
$366,000
Phase III - Equipment repair and replacement
130,000
Phase IV - Equipment repair and replacement
100,000
Follow-up Funding Requirement
$596,000Total Project Cost
$4,017,300
FINANCIAL PROJECTIONS
Following in Appendix E are financial projections prepared by Beverly King of the Small Business Development Center. They are simple statements for one fiscal year based roughly on financial information provided by Bob Sadler from previous operations. More detail should be included as this draft is refined including information on lead-time for inventory purchases, terms given customers for repayment, and seasonal fluctuations in production and sales. Expenses are best estimates; no specific details back up the numbers used. Members of the Friends have reviewed the projections and agreed to the numbers included.
Production capabilities with the new looms will be much greater than the quantity of blankets that are projected to be sold. Actual capacity could be as much as ten times more. The quantities have purposely been held low for two reasons. One, as a not-for- profit entity, the purpose it not to compete with for-profit businesses, which have debt repayment and taxes to contend with. Second, the wool blanket is not in high demand. It would create a much higher risk to be dependent on selling high volumes of blankets.
The selling price per blanket indicated is a probable mix between the price offered at wholesale and that offered at retail. The goal will be to market the blankets as an elite product that supports the continuance of a viable sheep industry and the preservation of open lands in Utah. The high retail price will be a request for the customer to participate in supporting these goals.
APPENDIX B
BRIGHAM CITY CO-OP
Excerpt from Brigham City Historic Tour
"I try to keep two objects in view--to amalgamate the feelings of the people and to establish a financial system in which everybody can secure necessaries and conveniences of life through their labour and be preserved from the evils and corruption of outside influence." Lorenzo Snow, founder of the Brigham City Co-op
In 1865, Lorenzo Snow asked all the Brigham City merchants to unite their businesses for the common interest of the community. The purpose was to provide jobs for everyone and to make the people self-sustaining. Most supported the request, and on December 7, 1865, the cooperative enterprise was formed.
Lorenzo Snow, Samuel Smith, William Thomas and Alvin Nichols were the first stockholders. Stock was sold at $5 a share, and produce and labor as well as cash, were accepted. The first business was a mercantile store. When the store had made enough money, the association established its first industry, a tannery.
To comply with the Territorial Incorporation Act of 1870, the cooperative was incorporated December 15, 1870 and became the Brigham City Mercantile and Manufacturing Association, commonly known as the Brigham City Co-op. Almost every resident of the community was involved in some way.
The cooperative grew quickly during the 1870's adding such departments as a woolen factory, planning mill, boot and shoe shop, farms, harness shop, carpentry department, butchery, saw mill, adobe and brick yards and a dairy.
Not all Co-op enterprises were in Brigham City. For example, the dairy was established in Collinston, about 20 miles north of Brigham City. Christian Hansen managed the dairy. His wife Elizabeth, who had made cheese in her native Denmark, supervised the dairy's cheese production. They asked farmers to give the dairy use of their cows in the summertime in return for cheese and butter. Between 300 and 700 cows were left there each summer.
Brigham City's Pioneer Days celebration in 1875 featured displays from 29 cooperative departments. The Brigham City Co-op became a model for other Mormon settlements to follow.
The Co-op maintained a high level of success until the late 1870s when a series of disasters occurred. Some of the problems were crop failures due to drought and grasshoppers, destruction of the woolen mill by fire, and loss of the saw mill to the federal government. In 1878 a federal tax was levied on local currency used for trade, and $10,200 had to be borrowed to pay the assessment. The combined losses were so great that after 1878 only the mercantile business remained in operation. In 1884 the federal government returned some of the tax money, and the new Brigham City Mercantile and Manufacturing store was built and opened in 1891. It continued to operate until the Co-op closed down in 1895.
APPENDIX D
OUTSIDE SOURCES
QUALITY STANDARDS
OUTSIDE SOURCES
Good whiteface wool from breeds such as Columbia, Polypay, Corriedale or Rambouillet could be purchased from Utah breeders and processed into yarn at a mill such as the following:
Harrisville Designs, Inc., Harrisville NH (603) 827-3333
Briggs & Little Woolen Ltd., NB Canada (506) 366-5438
Fairbault Woolen Mill Co., Fairbault MN (507) 334-6444
Woonsocket Spinning Co., Charlotte NC (704) 537-7011
Fingerlakes Woolen Mill (800)441-9665
Custom Woolen Mill, Canada (403) 337-2221
Blackberry Ridge Woolen Mill, WI (608) 437-3762
Frankenmuth Woolen Mill, MI (517) 652-8121
Taos Valley Wool Mill, NM (505) 338-9415
Zellinger's Wool Mill, MI (517) 652-2920
QUALITY STANDARDS
Shearing
No second cuts
Skirting
Process of separating the high quality wool from the underbelly and stained wool.
Range management
Reduce the vegetation in the wool to minimize or eliminate need for carbonization, which removes vegetation but damages protein fibers in wool.
Grade
Medium grade wools, defined by diameter of fiber, not length.
Length
Prefer range from ?" to 3".
Color
Keeping colors grouped is important if weaving natural blankets. White face is pure white wool.
Tensile
Strength within healthy ranges. Usually related to environment, birthing, feed and wellness of the animals.
Baron's is prepared to have wool blended in order to be able to use Utah wool.