This report presents findings from the financial analysis of a heritage farm proposed to be set up
in Pine River, Minnesota. Heritage Group North, Inc. is spearheading the idea of setting up the
proposed heritage farm with an aim to promote the knowledge and appreciation of the region’s
history and continue to do so while being able to be operationally sustainable. The farm would
have three major components – (1) Heritage Tourism, (2) On-Site Lodging and (3) Event Center
with a Commercial Kitchen and a Deli style restaurant. The farm would also add to the economic
and educational activities in the region by promoting heritage tourism, designing programs for
school children, development of a robust summer camp program and grow as a prominent event
center for both private and business events.
The focus of the financial analysis is to understand if the farm can generate enough revenues to
sustain its operating expenses. The feasibility is analyzed by taking into account four different
scenarios which explores multiple revenue sources for the farm. The base case scenario explores
the feasibility by taking into account all the aforementioned project components and analyzing
the revenue potential from all those sources. Three different alternative scenarios have been
explored which analyzes operating with farm with various combinations of the aforementioned
project components and studying its financial impact on the operations of the farm.
Given the unconventional nature of the project, the report adopts a conservative approach in
studying the revenue potential. However, a thorough sensitivity analysis is carried out to
ascertain the feasibility of the project both in a negative or a positive scenario. The findings of
the study support the feasibility of the farm sustaining its operating costs in most scenarios. In
the base case itself the project generates a revenue of $273,322 against operating expenses of
$197,495 in its very first year, resulting in a cash surplus of $75,827. It further has a Net Present
Value (NPV) of $1713019 from its cash flows when discounted at 4 percent. However,
considering that the report has a conservative approach in estimating the revenue potential, the
scenarios wherein the project revenues fall short of its operating expenses, the report shares
data on the extent of the shortfall both in financial terms and also in terms of visitor potential for
better understanding of the situation. This would help the project proponents to assess the
scenario more from their regional experiences and consider if the project could attract more
visitors that could make those alternative scenarios operationally feasible. It is also important to
acknowledge that the revenue sources considered in the report were prior to February 2020 and
these avenues were severely impacted during Covid-19, which are not addressed in this report.
The scope of assessing the capital cost has been kept of this report. However, taking into
account the learning from secondary study of similar projects and interactions with various
regional farms in Minnesota, it is estimated that the project would have a capital cost of $1.4
Prepared in partnership with Heritage Group North, Inc and Happy Dancing Turtle by the Community Assistantship Program (CAP), which is administered by the Center for Urban and Regional Affairs (CURA) at the University of Minnesota.
Panda, Anindya K.
A Feasibility Plan for a Heritage Farm in Pine River, MN.
Retrieved from the University of Minnesota Digital Conservancy,
Content distributed via the University of Minnesota's Digital Conservancy may be subject to additional license and use restrictions applied by the depositor.