Sedibeng Breweries is a medium-scale brewery that is located in the growing industrial centre of Selebi Phikwe, Botswana.

This is a relatively new business in its start-up phase having been incorporated recently. We are on the brink of penetrating a lucrative market in a rapidly-growing economy. The current trend towards an increase in the number of entrepreneurs and competition amongst existing companies presents an opportunity for Sedibeng Breweries to penetrate the market. Our products will be positioned very carefully. They will be of extremely high quality to ensure customer satisfaction, supported by impeccable service to our customers. Our primary goal will be to establish and strengthen our license to trade, which will be bestowed by the communities in which we function. As Sedibeng Breweries prospers and grows, these communities will continue to benefit from both the value created by Sedibeng Breweries and its behavior as a corporate citizen. Initial plans are to produce three main lines of products primarily focusing on X, Y, and Z beer (which comes in different flavors: B, P, C and S). These products will be sold in different sized containers ranging from the 250 ml ginger beer to the 500 ml traditional beer. These products shall be extensively distributed to remote, yet extremely viable areas where the market is appreciative of readily available, good quality brew. To prosper there is need for Sedibeng to be flexible and responsive, to delight customers by providing them with what they want, when they want it and before the competition. From product concept to goods dispatch we intend to ensure that every policy and procedure, system and process must have the objective of improving the flexibility and response of the whole company. There is a need for interaction between all functional areas, particularly between marketing and manufacturing, if the organization is to realize its full potential, with manufacturing being employed as a strategic weapon. Our marketing strategy will be based mainly on ensuring customers know what need the product(s) is able to fulfill, and making the right product and information available to the right target customer. Hence we intend to implement a market penetration strategy that will ensure that we are well known and respected in our respective industry. We will ensure that our products' prices take into consideration people's budgets, and that these people appreciate the product(s) and know that it exists, including where to find it. However these prices will also take into consideration the cost of production and distribution so as to ensure that we remain viable and operational. The marketing effort will convey the sense of quality and satisfaction in every picture, every promotion, and every publication. Our promotional strategy will involve integrating advertising, events, personal selling, public relations and direct marketing. In the long term Internet marketing shall also be undertaken, details of which are provided in the marketing section of the following plan. Our target markets will primarily constitute the corporate and working class who appreciate good quality traditional beer. The working class will range from the miners, who constitute a large portion of the market, to administrative personnel appreciative of good quality traditional beer. The corporate or managerial segment will constitute those

managers, who though aware of their image and reputation, want to put aside their ties and jackets after hours and/or on weekends to drink good traditional beer, easily accessible in the urban areas. The common bond will be the appreciation of a goodquality traditional brew able to fulfill their thirst. Sedibeng is primarily targeting a market share of 6% to attain sales of approximately $1.5 million in our initial year. Sedibeng Breweries will pride itself on its production ability, competitive prices, its high standards of quality and its adaptability to changes in the market and in the method of its practice. It is important to recognize that we do not intend that our tangible resources alone will make us potent competitors but more so our intangibles, such as our ability to relate to consumers, management style, corporate culture and commitment. These elements will differentiate us from our competitors and contribute towards the development of a sustainable competitive advantage. We intend to compensate our personnel well, so as to retain their invaluable expertise and to ensure job satisfaction and enrichment through delegation of authority. Our compensation will include health care, generous profit sharing, plus a minimum of three weeks vacation. As an equal opportunity employer, we respect the diversity and human rights of our people, and strive to achieve optimal productivity, while realizing each employee's full potential. Awards will be given out to outstanding individuals, groups and plants for hard work and production so as to instill a sense of fun and promote the maintenance of high standards. By encouraging all employees close to our customers to think tactically about what Sedibeng Breweries service offerings should be, and by having enthusiastic, capable and empowered people interacting with our customers, we build the competitive advantage of being able to meet our customers' needs better than anyone else. Sedibeng Breweries intends to provide the customer with more than just a traditional brew. We intend to provide a quality brew that will not only be refreshing and pleasurable, but also encourage gatherings and sharing of fun. Our customers are assured of products that have been produced using the highest quality standards. As we grow we want to grow right. Initially pursuing organic development and expansion we intend to undertake vertical integration in the future so as to be in total control of our raw materials and goods dispatch. For example, we realizing that we have to be in constant touch with our stakeholders to ensure market knowledge at all times. This is the nature of the channels we deal with. Also, we intend to build our management team correctly. We need the right people, in the right place, at the right time if we are to ensure optimum growth. We intend to develop our team so that our people can grow as the company grows-- a mutually beneficial relationship. We shall strive to attain our primary goal, which is to develop and strengthen our license to trade, bestowed by the communities in which we function. As Sedibeng Breweries prospers and grows, these communities will continue to benefit from both the value created by Sedibeng and its behavior as a corporate citizen.

1.1 Objectives
Our business strategy will revolve around the need to provide quality brew to our various target customers, in the process fully satisfying their needs. This shall be undertaken through the implementation of high quality control standards and technological innovations, as well as the recruitment of a professional production and sales team, and the production of good quality marketing material designed to cater for various kinds of customers. This marketing material shall be professionally done so as to be reflective of our intended image and reputation. We shall position ourselves as a quality manufacturer that strives to provide quench fulfillment, enjoyment, reliability and a good image. We intend to establish a good rapport with all the relevant stakeholders. With time we intend to establish our presence on the World Wide Web, which will increase the knowledge of our products to the various market segments we shall be targeting. Web presence is a natural objective in reaching the appropriate potential customers. Well-done brochures, company profiles and business cards often has a triggering effect on clients contemplating on ordering our products. Hence this will undoubtedly generate increased sales of our products. Our objectives will revolve around the following guiding principles:
• • • • •

Provision of a great work environment, treating each other with respect and dignity. Apply high-quality standards of excellence to all business processes. Develop enthusiastically-satisfied customers all of the time. Contribute positively to our communities and our environment. To continuously formalize and measure cross-functional working communication so as to ensure that the various departments work harmoniously towards attainment of company objectives. To instill a culture of continuous improvement in beating standards of customer satisfaction and efficiency.

2 Keys to Success The keys to Sedibeng Breweries success will undoubtedly be effective market segmentation through identification of several niche markets and implementation strategies. Along these lines the company intends to implement advertising. Ultimately we intend to create a stable business platform that will create prosperity for all those involved in the business venture at all levels. and ultimately the organization as a whole. 1. We recognize that Corporate commitment to success should lead to the survival and prosperity of the products. Adherence to Stringent Values and Principles: Sedibeng needs to acknowledge the fact that the financial and strategic management of the business will ultimately determine its prosperity and success.• Fully commit to supporting growth and development in the economy. We intend to establish an excellent distribution network that will enable us to rapidly respond to customers' orders. This is so as to meet the needs and standards of our customers.3 Mission . Hence we intend to adhere to stringent values and principles that will enable such to be achieved. Loyalty and Dedication: The loyalty and dedication of our employees shall be essential to the prosperity of the organization. Assembly Technology: To ensure quality brewed beverages it is essential to utilize the latest and most efficient assembly technology. and maintain. Hence our key success factors will include the following: Excellence in Fulfilling the Promise: We intend to produce and provide products of uncompromised quality to our customers. and be available in remote areas our competitor has not yet exploited. Keeping abreast with technological developments will ensure we gain. a competitive advantage utilizing the latest production techniques. and to uplift unemployed Botswanans who are prepared to participate in this venture. Marketing Know-how: In an increasingly competitive market there is need to aggressively market our business so as to be continuously at the top of our prospective and current client's minds. Effective and Efficient Distribution Network: The importance of such cannot be overemphasized in our line of business. Our advertising marketing strategies will rotate around. 1. personal selling and direct marketing strategies aimed at the target markets.

We seek a fair and responsible profit. as well as affordable prices depending on the market. Interested stakeholders will be able to observe the brewing process during the day and will be offered guided educational tours of the brewing facility. Hence our value proposition is to sell the benefit of refreshness and enjoyment to our various consumers at reasonable prices. in which our employees are fairly compensated and encouraged to respect the customer and the quality of the product we produce. enjoyable and sociable environment through the provision of refreshing high-quality brews. and to fairly compensate owners and investors for the money and risk. Internally we intend to create and nurture a healthy. . This will assist in our penetrating the regional and international markets.Sedibeng Breweries intends to create a pleasant. and we want every dollar spent on our products to be well spent. The brewery will house four stainless steel vessels whose shiny finish will be highlighted by the flood lights on the ceiling. and to uphold superb quality at all levels of production. We are sensitive to the taste. enough to keep the company financially healthy for the short and long term. However this will occur after we have established ourselves on the local market. In addition follow-up will be mandatory so as to ensure customer satisfaction and make any improvements as recommended by the customers in future. look and feel of good beer. It will focus initially on providing and satisfying two kinds of markets: • • Corporate Class: This will constitute all those people in middle and top managerial positions who appreciate good quality traditional beer. Hence we intend to assist in the creation of a welcoming and relaxed ambiance reflective of people enjoying themselves. To satisfy all our customers and stakeholders. respectful and enjoyable office and plant environment. The above is well summarized in our mission statement which goes as follows: Our mission is to carefully attend to detail in the hygiene in all our brews. Working Class: This will range from the miners who constitute a large portion of the market to administrative personnel appreciative of good quality traditional beer. We also intend to obtain ISO 9000 certification from the South African Bureau of Standards (SABS) so that our products are internationally recognized and approved. intentions of which we have in future. Sedibeng Breweries intends to focus on the brewing process and the brewery itself. We intend to provide the best possible value to our customers who care about quality products at affordable prices. creative. Company Summary Sedibeng Breweries is a relatively new company providing high quality alcoholic and non-alcoholic beverages in the local market.

000 $80. It will also look for additional leverage by establishing relationships and representations with appropriate strategic allies. pick-ups. stationery and related expenses) came to approximately $41. logo design.700 $760. This figure comes to $840.000 $0 $0 $0 $20. personal computers and other office equipment.700 $840.700. Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets $41. 2.000 $840.000 $881.000 .000.As it grows it will take on people and expand into related markets. Start-up assets required and utilized included brewing plant and machinery. office furniture.000 Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital $20.000 $0 $80.1 Start-up Summary Total start-up capital and expenses (including legal costs.

000 Total Capital and Liabilities Total Funding Start-up Requirements Start-up Expenses Legal Stationery etc.000 $881.Planned Investment Investor 1 Investor 2 Investor 3 Investor 4 Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital $650. aided by the necessary finances.000 $881.3 Company Locations and Facilities At present the company plants and offices are located in the growing industrial center of Selebi Phikwe.000 $2. 2.000 $0 $750.700 $80. Brochures Insurance Rent Research and Development Expensed Equipment Total Start-up Expenses Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements $840. largely depending on the dictates of the market and the obtaining .700 ($41. Though it has only been in existence for seven months it realizes the potential market and opportunity for growth given implementation of the appropriate strategies. Y.700 2.700) $820.000 $2. X and Mr.000 $20.700 $35.000 $840.000 $700 $6.2 Company Ownership Sedibeng Breweries is a Private Limited company incorporated at the Registrar of Companies through the foresight and vision of Mr.000 $41.000 $10.000 $76. Kasane and Palaype with intentions of establishing an additional plant in Maun or Francistown.700 $1. Its fiscal year is the calendar year.000 $10.000 $0 $861.000 $100.

2. X Beer 2. These are: 1. internally and externally. There are three main products currently in its production line. Y Beer 3.of a lease. We intend to be a responsible corporate citizen fulfilling our obligations as an integral member of society. Through promotion and implementation of the above stated company values we believe that we will be able to attain our corporate and stakeholders' goals and objectives for the benefit of all concerned. Z Beer (Note: Z comes in different flavors): o B o P o C o S All products are periodically taken for testing to the National Food Laboratory for quality checks so as to ensure that they conform to required quality standards. Products Sedibeng Breweries produces and markets several products. Hence our business decisions shall give appropriate weight and consideration to social and environmental impacts. office equipment and so on. and in the interests of all concerned stakeholders. We intend to provide products of uncompromising quality to meet the needs of our customers. transparently. Ultimately we intend to uphold all the above company values. We intend to seek mutually beneficial and enduring relationships in all the commitments that we make. plants and machinery. ensuring that they are straightforward and honest. This shall be undertaken through implementation of the following company values: • • • • • • We intend to conduct our business ethically and transparently. We intend to optimize the creation of wealth to provide fair reward and recognition for the contributions of our stakeholders. in particular the communities in which we will operate. Our current facilities provide offices. . Hence our communication shall be open and accurate.4 Company Values Sedibeng Breweries is committed towards an open governance system whereby its activities are managed and undertaken ethically. respecting all applicable laws. promoting our employees and respective third parties engaged by us to do likewise.

it is so wholesome that a growing child is able survive on one litter of this per day. However on a broader scale our competition comes in several forms: . Z Beer This traditional food product is widely consumed as a substitute for regular meals and energy booster. y. The company currently produces three main lines of products. t. We will also be watching for technological developments in South Africa and overseas. allowing us to be first on the market and produce high-quality products through cost effective means. Hence there will be a need to strongly differentiate ourselves from these other businesses. within the first week of production. typically even less than that found in medication (discussion removed for confidentiality). smooth. Up to now it has only been available in two sources.1 Product Description Sedibeng Breweries produces products of high quality and impeccable taste. Our current product listing is as follows: 1. with no rough solids.3. our competitors are few in our main product lines. 3. This denies the people in rural area access to these delicious and nutritious foodstuffs. depending on the fermentation period after production. though dominant in the market. vitamins and other essential trace elements. s and other xx flavors that the market might want. that is. it contains only traces of alcohol. calcium. Y Beer This refreshing drink has the unique feature that it can be enjoyed both as an alcoholic or non-alcoholic drink. This stems from (discussion removed for confidentiality). Y beer and Z beer. whenever available. 3. 2. In fact. such as x. namely home prepared or more commonly bought from a shop having a fridge to keep the product refrigerated. All three have unique properties that will enable them to excel on the market. as it contains protein. starches. as a food whilst way from home. X Beer Although similar in appearance to the only other product available in the market.2 Competitive Comparison Identifying competition in terms of companies that fill the same needs that we do. If consumed fresh. namely X beer. This is available in several flavors. which can be sold from the shelf in the same fashion as Ultra Mel and similar products. our beer has the superior flavour and texture. This means that it can be bought by consumers who might not always have access to cooling or refrigeration facilities. In addition the company will select suitable products for production under license. or as an emergency food supply. to be consumed later. We have the ability to produce a long life Z that needs NO refrigeration. It is also a good product to use in school feeding schemes and similar projects. w.

as people have to choose between them as refreshments. but of a generic nature. we foresee the demand for our products especially in the resorts and lodges where it will be promoted. technological and human resources acumen. flooding and there definitely promises to be low temperatures. during the key summer season.3 Macro-environment Over the last few months abnormal weather has affected many parts of Southern Africa. Therefore with the emergence of this generation of individuals. They have a wide and established distribution network that they utilize to their advantage. This is likely to have an adverse effect on our initial financial performance. whilst the new generation of executives being more educated and aware of the global environment wants to be seen drinking something attractive and recognized by others--status recognition. Having been on the market for a relatively long period of time added to the fact that they are backed by Y Breweries' financial. Research indicates that those in the rural areas are often satisfied with the existing brew due to lack of access to other higher-quality brews. dictates that our product lines will be popular.1. Generally there is a trend toward more appealing and attractive brews as potential customers either are moving to the urban areas as a result of urbanization or are satisfied with an existing brew in their area. We intend to vigorously undertake new channel and distribution development in addition to deploying aggressive marketing strategies. strategic alliances shall assist in our attainment of goals and objectives. In addition to the country increasingly becoming a tourist destination. Private sector development has been recognized as a vital ingredient in creating employment and training opportunities. Also. market research demonstrates that the brewing industry market is growing and changing. though marginal as consumption levels may decrease slightly. including Botswana. 3. 3. It has been extraordinarily severe with heavy rainfall. which is arguably the market leader. and realizing the national goal of sustainable economic diversification. Our key advantage in competition with XX Breweries is that we are accessible in extremely remote areas. They often have access to the local and remote areas and knowledge of these areas. In addition this same market is not only more image conscious but appreciative of a quality brew as it is more selective. To this end we intend to implement a strategy that will integrate the various promotional elements or tools such that our products are well known and appreciated on the market. the appreciation of quality brews and packaging. particularly in the winter season. However the product is not constantly of high standard. At a large scale. These products being marketed in supermarkets are often advertised on an extensive basis. Through undertaking of our professional business . On a larger scale manufacturers of other beverages including soft drinks and coffees also constitute competition. Other manufacturers of traditional brews including homes and local bars will also constitute our competitors. 2. which we shall fully exploit. The most significant competition is that of XX Breweries.

through aggressive marketing and quality management we intend to become a well-respected and known entity in our respective industry. In addition. The real core value will be the provision of a thirst quenching refreshing brew. and available to the relevant target market. and maintain low production costs ultimately benefiting the consumer. consumer tastes.e. feelings and comments amongst other things). the whole of Southern Africa) and additional product areas. We foresee our strengths as the ability to respond quickly to what the market dictates and to provide quality brew in a growing market. Hence we intend to ensure that the products we produce are always of high quality and standards. 3. Our key personnel have a wide and thorough knowledge of the local manufacturing market and expertise. provided by a combination of quality ingredients. 3. suppliers and distributors who will assist in ensuring that the products are delivered timely and are of the highest quality. hard work. Keeping abreast with technological developments will ensure we gain and maintain a competitive advantage utilizing the latest production techniques.activities we foresee that it should not be too difficult to gain market acceptance provided we deliver the final product on time. SWOT Analysis We are in a highly lucrative market in a rapidly growing economy. 3. Sedibeng Breweries will broaden its coverage by expanding into additional markets (i.5 Future Products In putting the company together we have attempted to offer enough products to allow us to always be in demand by our customers and clients.4 Technology Sedibeng Breweries will strive to maintain the latest and most efficient assembly technology so as to ensure quality-brewed beverages. and at competitive prices. The most important factor in developing future products is market need. which will go towards penetrating the market. In the future.. It is critical to our effort to develop the right new products. Our understanding of the needs of our target market segments shall be one of our competitive advantages. 2. This shall be established in time as we determine our core product. We will also rely on these stakeholders for relevant information on the market situation (trends. of good quality. The key fulfillment and delivery will be provided by the principals and values of the business. However we acknowledge our weakness of a medium-sized company without a lot of .6 Fulfillment 1. We also intend to have what we call a "core product engine" that will be the foundation of future products. In doing so we will strive to ensure that it is compatible with the existing products and assembly technology. We will turn to reliable farmers. and education (in that order). good production techniques.

Increasing number of foreign firms. New marketing strategies and tactics by established products and companies. through competition. Established mass-market companies' development of new lines and vertically integrating so as to be totally in control of supplies and products being sold on the respective markets. Combination of skills in directorship. and refreshment (and integration therein). 2. enjoyment. 4. The directors intend to jointly develop business strategy and long-term plans. The new generation of individuals and families has a far greater appreciation of attractive packaging (image conscious). 3. This competition could emerge from a variety of given sources including: 1. Internet marketing and sales--though still in its infancy. having wide experience in product and business know-how.2 Weaknesses • • • • • Lack of a reputation in comparison to our competitors. 4.4 Threats The present growth in the market may result in market saturation. 4. opportunities and threats. Current drive by government and specialized institutions such as the Botswana Export Development and Investment Authority towards export of locally manufactured products. . 4. Diversified market segments: ensuring the lack of dependency on one particular market. An aggressive and focused marketing campaign with clear goals and strategies. Establishment on the Internet will produce technological challenges. The introduction of new organizational practices and personnel who have not previously worked together presents a challenge to the company.3 Opportunities • • • • • Specific niche: Appreciation for high-quality brew. Lack of clear-cut channels of distribution.experience. and the threat of new competition taking aim at our niche. A limited financial base compared to the major players in the industry. weaknesses. Below are the summarized strengths.1 Strengths • • • • • Strategic market segmentation and implementation strategies. especially from South Africa looking at penetrating the market. Existing competition. Establishment and maintenance of strong capital base.

We appreciate that entering such a market is not a bed of roses. The working class will range from the miners who constitute a large portion of the market. The current drive and emphasis by the government on diversification of the industrial base away from the minerals sector presents an opportunity for Sedibeng Breweries to make a valuable contribution towards achieving this goal. evidenced by our economy averaging a growth rate of 7% since 1990--very high by international standards. Our initial overall target market share shall be 6% of the local market. particularly in view of XX Breweries dominance on the market.1 Market Segmentation Sedibeng Breweries will be focusing on the corporate and working class who appreciate good quality traditional beer. This has been brought about by (amongst other things) the relaxation of foreign exchange policies and macro economic policies geared towards attracting foreign investors into the country. Having undertaken a thorough and comprehensive research of the market we realized that there was a need for a manufacturer that focuses on producing affordable thirst quenching brew tailored to satisfying client's needs. particularly as it is monopolistic. with ginger beer having a larger share than traditional beer due to its uniqueness. This will result in implementation of modern production techniques and transfer of knowledge. some of whom have been in existence for a relatively long period of time. Other start-up companies generated by healthy economic growth nationwide. The fiscal and monetary policies of the government geared towards maintaining growth with social justice have largely contributed towards this. and the target market. The marketing mix of the products has been carefully and strategically put together to position them in the market. to administrative personnel appreciative of good . The above prognosis influenced our decision to enter the brewing industry. Market Analysis Summary Today we are experiencing rapid growth in the economy of unsurpassed nature. We intend to provide products of extremely high quality--something that cannot be over-emphasized in the international arena with the current drive towards globalization.4. well supported by the other business functions. This share will vary with the actual products. so as to develop a strong sustainable competitive position in the market. 5. 5. we believe that there is a market need for one (ourselves in this instance) that particularly focuses on the low to medium earning individuals. Aware of the fact that we will be operating in a predominantly monopolistic market structure we intend to ensure that our marketing strategies are considerate of the importance of the fit between our products capabilities and benefits. As a result we intend to implement a niche marketing strategy. Intolerable price increases by foreign suppliers may occur. Though there are breweries currently on the market. Hence we intend to implement an aggressive marketing strategy. focusing on certain target markets.

These are potential customers who want to have an enjoyable time whilst drinking a good refreshing beverage.648 759.153 108. including where to find it.00% Blue Collar Drinkers 2% 693. We also intend to appeal to the foreign and local tourists who would be looking at experiencing traditional foods and drinks.887 2. a change from the usual beverages they often have.147 104. want to put aside their ties and jackets after hours and/or on weekends to drink good traditional beer.52% 5.783 834. but appreciate a good quality brew at a reasonable price.300 876.30% Total 2.52% 793. and avoid our weaknesses. Market Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Potential Customers Growth CAGR White Collar Drinkers 4% 100. The corporate or managerial segment will constitute those managers who though aware of their image and reputation.951 742.630 725. Our most important group of potential customers are those in the rural areas who often converge after hours to socialize and update one another on local news. service and channel areas that match our strengths. We are choosing to compete in areas that lend themselves to local competition. The marketing will convey the sense of quality in every picture. We will ensure that our products' prices take into consideration peoples' budgets.2 Target Market Segment Strategy Our marketing strategy will be based mainly on making the right product available to the right target customer. and every publication.822 813.quality traditional beer. easily accessible in the urban areas.729 2.158 4. and that these people appreciate the product and know that it exists.652 117.319 112. . They do not want to waste their time making their own brew.270 855. There is already a sense of segment strategy in the way we define our target market. every promotion.675 709.

421. 5.286. With this in mind we intend to ensure that our packaging is respectable and attractive.2. It is consumed for social. Sedibeng Breweries intends to provide the customer with more than a drink to quench one's thirst. distributors and retailers to support our business.2 Market Growth Import statistics provide a reliable guide as to the size of the brewing industry. ritual and ceremonial purposes and hence appeals to a vast majority of the rural population in particular.3.2. 5.627 liters in 1998 which represented an increase of approximately 32. The quality of raw materials and assembly technology evident in our products will serve to enhance the appearance of our customers. 5. The large market is due to the fact that opaque beer is traditional beer for most Botswana.3 Market Needs Sedibeng Breweries will set out to provide good quality products that will help instill a jovial environment. in turn adding to their status.Our strategy calls for the development of relationships with suppliers. This brought about a total market size estimated at just over 11.3 Industry Analysis Industry analysis information is presented in the following subtopics.668 liters ($281. Specifically. marketing the health aspect of our beverages.473. 5. According to the most recent Trade Department import statistics for beer and wine. total beer and wine imports stood at 10. 5. In 1997 these imports had risen by approximately 66. Today's extremely stressful work environment dictates that individuals consume healthy drinks especially in the summer season.000) in 1998 whilst total exports stood at 864. this presents an opportunity that we may exploit.14%. the market has been growing at a steady rate of 7% per annum although it is projected to increase slightly in 1999 and 2000. We intend to provide a quality brew that not only quenches one's thirst but enables one to enjoy themselves and be proud of it. imports for traditional beer stood at 310.1 Competition and Buying Patterns . According to the Trade Department. This development is an important trend for us as it represents our target market.968 liters ($14. We now are having an increasing number of people who appreciate the traditional brews whilst living in the urban areas.363) in the same year.636 liters in 1998. Regular visits will be undertaken to these areas so as to ensure that we are meeting their expectations.1 Market Trends Our target markets are increasingly growing towards recognizing the difference between poor quality brews and those of high quality.2.56% from the previous year (1997).

3. YY Breweries International. At the same time we shall be differentiating ourselves from XX Breweries. not wanting to confront XX Breweries one-on-one. XX Breweries is able to take advantage of the financial. competition in the brewery manufacturing market as a whole is not that intense (in terms of numbers) at the current time due to the dominance of XX Breweries Limited. This is mainly because it is in its maturity stage and these efforts of going international are meant to extend its product life. as we intend to penetrate the low to medium earning customer. thirst-quenching brews. management fees and dividends from its Botswana operations due to its dominance. Due to its size it enjoys an economy of scale and thus the competitive advantage of being able to offer low priced beverages in large quantities to its target markets.The key element in purchase decisions made at the Sedibeng Breweries customer level is the availability of an affordable. XX Breweries is currently the dominant domestic producers of beer. We intend to market ourselves in such a way that with time competitor customers will choose our products over competitors' on the basis of our higher quality. 5. We shall now provide a more thorough outline of our main competitors in the same strategic group as ourselves. our competition will be stiff. Cognisance should also be taken of home brewers who represent competition on our intended market. with current intentions of going beyond these borders.T Brewery Holdings Arguably the largest and most reputable manufacturer. One of XX Breweries' main products is S traditional beer. The most important factor in this market is the distribution network. YY Breweries International Africa enjoys strong cash flows in the form of royalty payments. Part of the large and extremely reputable conglomerate. including their strengths and weaknesses. sorghum and Coca-Cola products in the country. Zambia and Mozambique. XX Breweries Limited and ZZ Breweries . It is also present in the regional countries. This is particularly so considering the good distribution network that XX Breweries Limited has in place enabling them to produce products that are constantly in demand throughout the country. XX Breweries has been on the market for a considerable period of time now. S is currently mass marketed in the whole of Botswana and is popular amongst the rural and town folk. However a frailty of S is that the . including Zimbabwe. which has been on the market for a relatively long period of time. thirst-quenching product of good quality. In general. supplier and marketer of alcoholic and non-alcoholic beverages in the country. managerial and technical clout that it has through YY Breweries International.2 Main Competitors Being in a predominantly monopolistic market structure. with an overall market share of more than 95%. which will be one of our main competitor products. However upon closer research we identified several niches in the market that we may exploit.

The . the aim being to obtain an initial order and fully satisfy the customer from then on. • • • We are currently building image and awareness through consistency and distinctiveness in our product provision. We are a relatively new company and hence must focus on certain kinds of products with certain kinds of consumers. We are focusing advertising on several key media.5 million to $34. According to the audited results. The target customers will include key decision-makers in the retail and supermarket chains who often order or recommend on behalf of the whole organization.5 million. We intend to always have a relatively heavy personal selling component to our marketing strategy as previously discussed. which is debilitating when its intentions are export. This will be the key. All criteria from price competitiveness to staff attitudes are to be initially measured six-monthly. trategy and Implementation Summary Our marketing strategy emphasizes focus. Turnover grew by 42% whilst operating profit is up 60% from $21.product does not maintain freshness for a long period. Establishment XX Breweries XX Breweries XX Breweries XX Breweries Location Gaborone Lobatse Francistown Gaborone Employment Size 100+ Employees 50-99 Employees 100+ Employees 100+ Employees XX Breweries In Botswana Recent financial results from T Brewery Holdings indicate that the organization as a whole has continued to perform exceptionally well on the back of a buoyant Botswana economy. resulting in turnover growth of 12%. For the 12 months to 31 March 2000. Initially Sedibeng Breweries will focus on the local market and in the remote and previously inaccessible areas where there is a large market for our products. volume growth exceeded nonmining GDP growth by more than 2%. Hence we intend to always be active in personal relationships with clients and strategic allies keeping abreast of their needs and wants. Hence Sedibeng intends to take advantage of this weakness. higher volumes and turnover coupled with greater productivity and stringent cost controls translated into excellent earnings growth. We intend to achieve growth by creating a more enthusiastic customer culture than that of our competitors. and then on a more regular basis as time goes on. which can then generate revenue. We intend to focus on delivering quality products that in turn produce good referrals. Hence the form of growth that shall be initially pursued will be that of organic growth mainly due to limited resources and the need to instill confidence in our products. With this in mind we strongly believe that there is an extremely lucrative market we may exploit.

it does not penetrate the remote areas as much as we intend to. 6. 6. This form of consistent measurement of strategic goals will ensure that the organization remains focused on its goals and objectives. customer orientation and traditional high-quality brew through stringent quality control. the selling process will depend on personal selling and advertising to lure and inform potential clients about the products we offer and the benefits of consuming our products.1 Value Proposition Our value proposition is offering our customers refreshness and enjoyment at reasonable prices ensuring peace of both body and mind. enjoyment and fulfillment to the customers. Although XX Breweries dominates the local market. 6. This value proposition shall be communicated through advertisements. by working on key objectives and better coordination of marketing efforts. Though we shall be serving different market segments we intend to focus on (discussion removed for confidentiality).1 Sales Forecast The sales forecast monthly summary is included below. It should be noted that as we become established and known on the market we project sales to increase at a faster rate than the initial year. and referrals that emphasize how the company is able to provide refreshment. Our marketing does not intend to affect the perception of need as much as knowledge and awareness of the product categories. .3. not the product. For the short term at least. Market the company.3 Sales Strategy We intend to focus on improving our implementation. sales literature and catalogues. 3.results will go down to depot level and be compared with the overall target. making any necessary adjustments where need be. Ensure customer satisfaction. 6. 2. Market the benefit. 4. Hence we intend to: 1.2 Competitive Edge Our competitive edge will be our dominance of access to previously remote areas. personal selling. The annual sales projections are included later in the plan. Develop long relationships.

1 Service Provision The service aspect of Sedibeng Breweries marketing mix shall constitute an important element in delivering total quality. 6. The establishment of a rapport and understanding between our customers and ourselves is going to be an ongoing processes.612.545 $1.167 $1. In terms of promotion.149 $295.174 $820.011. In price. We shall follow-up with our clients on a regular basis so as to ensure they are satisfied with our products and delivery times.466.4.765 $650.4 Marketing Strategy One core element of our marketing strategy will be that of differentiation from our competitors.551 $325. .400 $1.712 $527.683 $580. Market penetration through lower prices shall be undertaken where need be. we intend to sell our company as a differentiated strategic ally. As such we intend our customer service to be key to the retention of customers.769 $278.211 $343.584 $192.629 Year 3 $812. we intend to offer extremely reasonable prices in comparison to the competition and we need to be able to sustain that.441 6.118 $155.Sales Forecast Year 1 Sales X Beer Y Beer Z Beer Total Sales Direct Cost of Sales X Beer Y Beer Z Beer Subtotal Direct Cost of Sales $659.985 $171.546 $306. while premium pricing will be the case of the upper-end of the market.106 $364.439 $406. not just our products. This is mainly because we intend our customers not to be one-time buyers but regular order seekers.806.026 Year 2 $725.383 $455.975 $903. This is due to the high degree of exposure our competitors already have.072 $1.144 Year 1 Year 2 Year 3 $369.

Hence our prices shall be as follows: (discussion removed for confidentiality). This will also assist in the establishment of customer loyalty. promotional expenses are high in order to generate customer attention and knowledge of our products existence. the promotional tools and messages may vary slightly to match the intended market. frequency and actual products. as well as our own costs. complimentary slips and stickers. We will make sure that we charge for the product. every promotion and every publication. so as to forecast their demands and establish long beneficial relationships. Hence we intend the price will accommodate the mark ups prevailing in the industry. Since we shall be targeting different segments. so as to ensure that the salaries we pay to assure good workmanship is balanced by the price we charge. This is particularly so in the case of products which are also produced by our competitors. However in all cases the marketing will convey the sense of quality. Promotional campaigns will seek to promote the 'sharing aspect' of the beer. To be competitive in the market we intend to offer discounts to customers making bulk orders. including promotional material such as pens. Customer service shall be enhanced through infrastructure support in the form of merchandising and credit facilities. refreshness and health in every picture. We intend to spread the word about our business through the following: Advertising . in addition to the distribution of the products. workmanship and delivery with our aim being to achieve a gross profit margin of at least 30% in our initial years of operation. We intend our income structure to match our cost structure. customers drinking these products in groups.2 Pricing Strategy Initially our prices will not be under our control but dictated by the market conditions prevailing at the particular time.4. However we realize that we must charge appropriately for the quality and work we shall be providing. which are in competition with the industry. All in all we intend our prices to be extremely competitive on the market. 6. In such a market we cannot afford to appear in. as they are often representing a scale for consumers. 6. We intend to leverage our presence using quality brochures and other sales literature. second-rate material that make our products look less than they are. Due to the fact that our products are in the introductory phase on the market. or produce. developing internal consistency and prepare it to confront any radical changes that may arise. Our promotional activities shall be focused towards driving the organization's overall strategy relentlessly. in terms of size.We intend to implement database marketing whereby we shall be targeting customers based on their previous purchases. and alternative distribution facilities where possible and viable.4.3 Promotion Strategy Our promotion strategy will be based primarily on informing potential customers of our existence and making the right information available to our target customer.

introducing ourselves onto the market. ideas. which hopefully shall convert into market share. Communicating such achievements often gives customers a feeling that they can rely on the product. Such fairs serve as important eye openers for both potential customers and ourselves. A constant look out will also be made of any special editions in the local newspapers. In collaboration with this we also intend to place news stories and features in magazines and newspapers to keep stakeholders updated on the latest developments and to increase awareness. At this we intend to invite potential customers. and contacts will serve as a fertile ground for the blooming of healthy trade relationships and partnerships. Public Relations Recognizing that we are relatively new on the market there will be a need to organize an event. of grandeur nature. The organization aims to participate in trade shows and quality taste tests. the company believes its products should be advertised and promoted in an honest and ethical manner that respects the values of our consumers' societies. and other telephone directories. We also intend to participate at the Botswana International Trade Fair (BITF) in August so as to expose our business to potential customers and suppliers. Whilst we are committed to providing products of uncompromising quality to meet the needs and expectations. and of consistent high quality. which may provide an opportunity to advertise. With time it shall be necessary for us to participate in regional trade shows and fairs such as the South African Exhibition Show so as to gain awareness and ultimately orders from outside the country. and other stakeholders so as to penetrate the market. This is so as to instill awareness and knowledge of our existence in the market place. The exchange of technologies. Contacts Botswana.In view of the fact that we are entering a market largely dominated by XX Breweries Limited which has an approximate market share of approximately 95% (as previously discussed) we intend to undertake extensive advertising of our products in addition to our brand name--company name. An example of a trade show we intend to participate at is BITEC. and this builds strong customer loyalty. We also plan to have a major festival initially in Selebi Phikwe. including the Minister of Industry and Commerce. senior officials. The aim of this exhibition is to provide a conducive environment for companies to display their products in a specialized exhibition. appropriately named. for example through being chosen #1 at a taste test. Examples include the Boccim Business Directory which will require us being members of Boccim. but if a particular product were to gain recognition. the organization will be able to take advantage of this in all its promotional campaigns. Hence the need to ensure that our products are constantly available to our target market. Events These are increasingly becoming important as more firms establish in the country and hence the need to be known. adding leverage to its reputation and image. Not only will these increase awareness of the products. Botswana--a review of commerce and industry. that . Undoubtedly this would add confidence and pride in our staff complement as their hard work would be recognized often at the highest levels.

and other such prizes to individuals who answer questions correctly. especially considering the fact that we are still a relatively new firm in the market. Hopefully visitors will leave impressed and confident in our products. Still in the infancy idea stage we have in mind the hosting of a 'fest' whereby guzzlers of our brews as well as first-timers are encouraged to drink as much as possible whilst enjoying themselves. Direct Marketing This will be used. In addition we intend to pursue educational sponsorship for the less advantaged but promising young individuals in the community. adding to the possibility of positive referrals. to long term as we plough back into the society we operate in. Homes for the under privileged will be also be built in the medium. bags. but only to a limited extent. Our efforts on community service will show that the company has its community at heart. In the case of telemarketing it will involve our targeting potential customers/distributors of our products and informing them of our existence and the products we offer. Hence the name 'October fest' might be appropriate. In addition the sales person will listen to client's needs at close hand. In cases where there is the opportunity of obtaining a large order it may be necessary for the top management to go out personally.maintains and promotes Botswana culture. We may then arrange for an . Personal Selling This shall be undertaken in the form of sales calls whereby a sales person will go out to potential customers and distributors informing them what products we are able to offer them. This is likely to be held in the hottest month of the year (October) when people are often extremely thirsty. Close analysis shall also be undertaken of the consumption patterns of the respective communities. This will constitute some of our corporate social responsibility details of which are provided in the respective section. This will also enable our business name and products to be better known by the respective communities. These same tours will also be arranged with prospective clients/order-takers. This will assist in the recognition and appreciation of our company in the surrounding community especially. This is so as to increase awareness of our facilities and products and also showing confidence in our production process and standards. Proceeds of such festivities are to be donated to charities. in the form of telemarketing and informing potential customers and obtaining referrals where possible. This will ensure that our products are customized as much as possible to the surrounding community's needs and wants. Brewery tours shall also be arranged with interested stakeholders including school children and college students. We also intend to experiment with a road show in the various often-neglected remote areas giving out caps. that is whether they prefer larger or smaller containers. contributing towards the establishment of a good and reputable image. so as to ensure that the product is delivered timely and that it is the right product as demanded by the surrounding community. However we are extremely confident that these road shows if well planned will be a success as they encourage community participation.

eliminate rework and waste. firm size and narrow conceptualization of our business domain. We intend to ensure that our breweries are located close to our major distribution centers not only to minimize costs but also to enable our products to be easily available. However this will require adequate planning and research so as to establish a professionally done website. in the different markets nationwide. as both large and small organizations look at obtaining the best deal possible.4. Hence our messages will influence the buying decision of prospective customers and distributors by emphasizing our unique selling proposition.4. and commitment to a leadership position in our respective markets. In all the above we intend to communicate our ability to manufacture good quality brews that will satisfy the customers needs.) 6. This shall be undertaken through coordination and logical integration of our distribution operations.appointment with the respective decision-maker/order-maker. with the intention being to lure them into ordering one or more of our product lines. To attain low lead-times we intend to (discussion removed for confidentiality). All the above promotional tools shall be well integrated and utilized in tandem so as to maximize their effect. By engaging and establishing good relationships with shebeen owners we intend our products to be readily available to our target market. we can overcome the traditionally binding constraints of resource base. In terms of actual delivery for every vehicle the daily fuel used. Retail Distribution Channels (discussion removed for confidentiality). (Discussion removed for confidentiality.4 Distribution Strategy We believe that through our obsession for improvement. repairs and maintenance costs must be recorded and compared with the set standard. 6. apart from the obvious time factor.5 Product Marketing . and persuade prospective buyers that we are different from our competitors. Internet Marketing The increasing growth of the Internet as an information source provides an opportunity that we may exploit. which is increasingly becoming of importance in view of the dynamic environment. This will mainly serve foreign customers and other stakeholders including potential investors. This is particularly so in view of the increasing investment and global trade amongst countries. We aim to reduce cycle time for key processes. and optimize our human resources utilization. in the best condition. Trade Channels: • • Wholesale Distribution Channels (discussion removed for confidentiality). kilometers driven. More often than not these organizations will seek out potential clients over the Internet due to the cost of transport and accommodation.

which is not being produced by any of the other breweries at the moment.4. However depending on the dictates of the market. there might be need to introduce new product packs. This will come out in our advertising. Rather we intend to fund several projects that belong to. 6. Hence we intend to ensure that we are flexible if such changes are to occur. As time progresses we intend to have packaging that enables the container to be used for other purposes after beer consumption. and will be driven by. If we contribute to development in a sustainable way. including refreshment and enjoyment of top-quality brews. family and/or colleagues.6 Product Packaging Our product packaging shall be of utmost importance. for example keeping water and being able to be deposited to retailers. Whenever the project comes up against a new challenge. However. Continuous improvement on packaging will also be undertaken so as to maintain. We intend to focus on the individual or group who want to enjoy themselves through the consumption and sharing of refreshing healthy beverages. we need to support projects that communities bring to us. if not improve product appeal. we intend to be continually looking out for opportunities that we may exploit. we will be expected to fix it. initially targeting a market share of 6%. not wanting to limit our horizons in the initial period. as it will definitely influence our potential customers on whether to try out our products or not. 6. A specific example is the X ml T beer pack.5 Corporate Social Responsibility Sedibeng Breweries intends to be involved in a wide range of social responsibility engagement programs to invest back into the community in which we operate. and will be forced to stay in a situation where we have to look after the same few projects forever. Our product marketing's most important challenge will be the problem of being accepted and appreciated on the market as a provider of quality products. rather than strictly creating our own solutions for our communities. Hence we intend to not only meet customers' expectations but to exceed them. As such we shall ensure that it is not only attractive to consumers but also hygienic. representing an opportunity to be realized. We intend to sell the opportunity to enjoy oneself amongst friends. the community and become sustainable. the former of which we have identified as already being done. This is because if we impose our solution and drive a project it is an artificial response. However. delivery and collateral such as sales literature and business cards. In all cases we intend to provide a thorough understanding and appreciation of the products to the customer and the benefits of consuming them. In the medium to long term we intend our product packaging to also be recyclable and hence more environmentally friendly--a continuous improvement process. and the risk is that the project will then always 'belong' to us. Currently the products are served in X ml and Y ml packs. Through our social responsibility program we can assist in improving peoples lives. before we commit ourselves to .Our product marketing will emphasize the benefits of consuming our products.

We also intend to ensure that the suppliers we engage are committed and reliable so as not to let down the final consumer in terms of the quality of the product and time of delivery. This shall be undertaken through working closely with suppliers to ensure uninterrupted deliveries. This shall be undertaken through the engagement of modern production techniques using up-to-date assembly technology. 2. Community (discussion removed for confidentiality).2 Receiving Recognizing that the receiving of our raw materials is an essential element in our entire business. including x and y. However as we are committed to fair terms of trade and promotion of local business we intend to engage local suppliers. we assist and sometimes may form partnerships so as to increase capacity. 4. 5. Hence raw materials. may be sourced from local communal and commercial farmers avoiding intermediaries so as to minimize costs. By the undertaking the above we will optimize our productivity given our available resources.1 Suppliers Currently the company obtains the vast majority of its raw materials from South African suppliers. We know that we cannot address all the development needs of our society. Through the use of economies of scale we aim to maintain low input and production costs. quality products. 3. Production Summary Our production system shall strive to attain service excellence in addition to manufacturing safe. Environment (discussion removed for confidentiality). communities are involved and the projects will be able to become self-sustaining. Health (discussion removed for confidentiality). We intend to be involved in the following activities: 1. 7. ultimately benefiting the final consumer. Hence we intend to establish good rapport with all our suppliers and hence long mutually beneficial business relationships. we intend to ensure that it is done by responsible persons who will be present .projects we intend to ensure that skills will be transferred. Education (discussion removed for confidentiality). Arts and Culture (discussion removed for confidentiality). This will also result in low production costs being attained by the company. Where we can. 7. This may be undertaken through (discussion removed for confidentiality). In order to improve productivity in our plants we intend to reduce waste and duplication in our breweries by streamlining administrative functions and promoting and instilling a business culture that focuses on the teamwork rather than individual productivity. faster payments and lower risks of payment default. The major advantages of doing so being higher margins.

Consonant with its efforts to create added value by employees. that is. initially done at least once a week. The stock principle of First In First Out (FIFO) shall be implemented. addressing strong and trusted: o Internal communication. clean and pest free manner. issued to production. we plan to utilize by-products whenever possible. Whenever stock is taken out it shall be recorded on a separate stock or bin card.4 By-Products Sedibeng Breweries intends to utilize every resource it has to the fullest possible extent. . During the actual off loading the receiving bay personnel will mass check on at least X% of the consignment. Management Summary Sedibeng Breweries shall evaluate the jobs it provides. o External communication. opening and closing stock taken.during off loading to check the quantity and condition of the consignment. Non-confirming raw materials in terms of quality will only be approved with the consent of the managing director who would have undertaken further analysis of it. This will ensure that our resources are fully utilized. However not wanting to pollute the environment. training and group initiatives. Hence our human resources strategy will revolve around: • • • • Communicating openly and transparently. savings and other specific successes. and our community at large. paying competitive remuneration packages against market benchmarks to employees for their agreed and set out tasks. 7. Adoption of a good remuneration policy aimed at developing our people through employee benefits. Should any deviations arise these must be explained. o Stakeholder inclusivity. Responding and promoting human rights issues. We realize that there shall be a lot of by-products that will be produced from our production of the main product lines. Stock takes and reconciliations shall be undertaken on a regular basis. such as equity in the workplace and in community relations. losses. 7. the implementation of an effective performance management system. Maintaining preventative health and safety structures for employees and support for surrounding communities. Sedibeng Breweries seeks to negotiate the provision of incentive pay delivery mechanisms against achievement of agreed targets relating to accomplishment in the areas of productivity enhancement. with reconciliations of raw materials issued to the brewery.3 Storage It shall be the policy of the company to ensure that all raw materials are stored in a secure.

We will develop and nurture the company as community. We intend to enhance our capacity to attract and retain people of quality. Sedibeng Breweries recognizes that our employees contribute fundamentally to the company's long-term prosperity. Our compensation will include health care.000 $42. We do not intend to be overly hierarchical.000 $40. plus a minimum of three weeks vacation.000 $15.000 $52.200 $19.000 $19. we respect the diversity and human rights of our people.8.000 $12. and strive to achieve optimal productivity.000 $36.000 $12.000 $48. while realizing the full potential of each employee.000 $48.2 Personnel Plan We intend to compensate our personnel well.000 $12. will enable the business to realize its goals and objectives. has wide expertise and broad knowledge of the products and markets. which if well planned for.000 $12. generous profit sharing.000 $36.000 $15.000 . mainly comprising of the shareholders. Daily management will consist of Mr. Awards will be given out to outstanding individuals.000 $12. As an equal opportunity employer.000 $12. Personnel Plan President and CEO Operations Manager Marketing Manager Brewmaster Brewmaster Office Manager Bottler #1 Bottler #2 Bottler #3 Packager #1 Year 1 Year 2 Year 3 $48.000 $15. We also intend to minimize if not totally eliminate the number of isolated incidents of intimidation in the workplace.000 $52.000 $15. 8. and Mr.000 $36. The company intends to respect its community and treat all employees well.1 Management Team The management team.000 $36. groups and plants for hard work and production so as to instill a sense of fun into the work and promote the maintenance of high standards.000 $36. through benefits such as housing and family education grants.000 $48. This is because the health of our people is an integral element of employee well-being at work and at home.000 $12. market share and productivity will provide additional impetus. corporate bodies. G in dealing with government. to retain their invaluable expertise and to ensure job satisfaction and enrichment through delegation of authority. so as to ensure that production and distribution are not materially affected and sound relationships are maintained between employee and employer and between employees as a whole. B in the role of technical and operations. Employee health shall be of extreme importance.000 $36.000 $40. Management's ongoing initiatives to drive sales. and public relations.000 $12. Management style will reflect the participation of the shareholders. Compliance with relevant legislation is a minimum target in our organization.200 $22.

is customer focused. Internal training will not only include product and technical aspects. This will ensure that our personnel are exposed to the latest production techniques and are able to set their standards. This is of particular importance in view of the AIDS epidemic that has grappled the country and continent as a whole to unparalleled levels. Such a culture will enhance innovativeness and creativity in turn leading to job satisfaction and enrichment. We will encourage our employees to put forward any suggestions they might have regarding the improvement of any of the company's functions--an open door philosophy.000 15 $331. making sure that the employee understands the goals of the firm. or benchmark.3 Training In-house training shall be continuous with regular external training being undertaken particularly following any new developments in the market.000 $12. but also expand to give much greater knowledge of customers.Packager #2 Packager #3 Packager #4 Shipper #1 Shipper #2 Total People Total Payroll $12. market trends. using these organizations standards. time management amongst other such variables. . Hence we intend to promote and maintain good labor relations.000 $12. We intend to use employee satisfaction surveys to shape the business.000 $15. such as YY Breweries. We intend to conduct health education sessions for groups and individuals on health risks in the workplace.000 $15. Important notices and developments will be continuously communicated to employers so as to keep them abreast of developments and promoting a sense of belonging and oneness in the organization.000 $15.000 8.000 $12.000 $12. which is so essential if we are to gain and maintain a competitive advantage. 8. motivation and discipline procedures are keys to the growth of the organization. We acknowledge the fact that successful recruiting.4 Feedback and Control 1. Courses on brewing will be undertaken primarily in South Africa. This is so as to ensure that we are continuously able to anticipate our markets needs--a proactive approach.000 15 $12.000 15 $15.000 $12. preferably with the established and reputable firms.200 $331. This will encourage employees to become entrepreneurial and customer responsible. balanced with lifestyle education and employee assistance programs that incorporate rehabilitation and counseling in a range of illnesses and social or personal problems.000 $12.000 $12. new technology aids. 3. proud of their work and work as a team. in addition to unifying staff in customer focus and values. products.000 $15.200 $383. 2. strong morale and high quality work per employee.000 $12.

without major recession. and conservative cash flow and financial management.00% 10. Respect for realistic forecasts. Compatibility in this regard means: • • • • Fundamental respect for giving our customers value.00% 10. In turn we intend to ensure that our investors are compatible with our growth plan. but not a factor we can influence easily.00% 25. and for maintaining a healthy and congenial workplace. The monthly assumptions are included in the appendix. most of which are shown in the following table as annual assumptions. Therefore we need to develop a permanent system of receivables financing systems. Hence they tend to have a certain degree of financial authority.42% 25.Financial Plan We want to finance growth mainly through cash flow and equity.1 Important Assumptions The financial plan depends on important assumptions.42% 0 0 0 9. and personnel burden are based on conservative assumptions. The most important factor in our case is collection days. Willingness to follow the company and contribute valuable input to strategy and implementation decisions. Cash flow as first priority. We assume. We can't push our customers hard on collection days.00% 25.00% 10. management style and vision. tax rates. We recognize that this means we will have to grow more slowly than we might like.2 Break-even Analysis . General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Year 1 Year 2 Year 3 1 2 3 10. because they are extremely sensitive and will normally judge us on our terms.00% 10.00% 10. profits third. using a well-coordinated accounting department. 9. of course. particularly with the bulk order customers. we recognize that collection days are critical. Interest rates. Some of the more important underlying assumptions are: • • We assume a strong economy. From the beginning. growth second. that there are no unforeseen changes in economic policy to make our products immediately obsolete.

and gross margin higher.040 9. As with the break-even. including salaries and wages.000 the first year to more than $1. Our cost of sales should be much lower.000 the second. This will be representative of a net profit margin of approximately 7%. which though may not seem that impressive is relatively good for a start-up firm in our line of business. we are projecting very conservatively regarding cost of sales and gross margin. . water and electricity. With fixed costs of approximately $41.806.000 in the third year. insurance amongst others. The following chart and table summarize our break-even analysis. Break-even Analysis Monthly Revenue Break-even $93.466. We will thus aim to ensure that our sales levels are running comfortably above break-even. Profits are calculated to be around $152. with sales increasing from more than $1. We don't really expect to reach break-even until several months into the business operation.Our break-even analysis will be based on running costs.273 Assumptions: Average Percent Variable Cost 56% Estimated Monthly Fixed Cost $41. that is costs we shall incur in keeping the business running.3 Projected Profit and Loss Our projected profit and loss is shown on the following table.612.000 before tax the first year during the start-up phase of this business. Hence many fixed costs shall be included in these costs. and approximately $1. than in this projection.040 per month at the outset (a bare minimum). we need to bill approximately $93.000to cover our costs. rent.

680 $0 $492.040 $4.260 $242. We do not want to let our average collection days get above 30 under any circumstances.007 $222.535 $10.59% 9. because of the relationship with our clients.011.975 $645.Pro Forma Profit and Loss Year 1 Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % $1.000 $49.200 $36.00% $1.144 $1.800 $4.4 Key Financial Indicators The following benchmark chart indicates our key financial indicators for the first three years.75% $331.460 $0 $59.441 $794.000 $52.806. .450 $0 $562.552 7.520 $5.207 $1. Collection days are very important.020 $113.444 $232.612.200 $2.200 $56.051 44.072 $709.026 $820.550 $212.410 $37.690 $57.200 $2.227 9.000 $10.571 $162. This could cause a serious problem with cash flow.00% Year 2 Year 3 $1.480 $152. We foresee major growth in sales and operating expenses.752 $158.400 $4.292 $4.81% $383.072 $0 $903.703 44.800 $49. However.680 $0 $497.441 $0 $1. we recognize that we cannot control this factor easily.200 $54.466.646 $5.200 $2.000 $37.700 $10.011.255 9. because our working capital situation is chronically tight.771 $2.000 $59.00% Expenses Payroll Sales and Marketing and Other Expenses Depreciation Leased Equipment Utilities Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales $331.033 $173.631 $39.557 44. and a bump in our collection days as we spread the business during expansion.629 $903.975 $0 $820.

and function expenses (including lunches and dinners with interested stakeholders). Detailed monthly numbers are included in the appendix.6 Projected Cash Flow Cash flow projections are critical to our success. advertising expenses. further marketing programs and the expansion of those in existence at the time will be undertaken. which we shall in turn reinvest. 9. As our market share increases and capital is generated.5 Expense Forecast Initial marketing expenses are relatively high as we seek to become known on the market. . to ensure market development. Once these programs will start generating revenue for the business.9. However it should be noted that they do not take into account the required capital injection. This will be brought about by the development of sales literature.

414 $0 $437.769.479 $1.934 $1.000 $1.510.838) $36.309.698 $231.407 $90.507 $821.533 $342.329 $305. VAT.769. HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance Year 2 Year 3 $366.033 ($43.266 $0 $0 $0 $0 $0 $0 $0 $1.179.162 $0 $20. and strong financial position.833 $1.867 .287 $152.688 $1.7 Projected Balance Sheet The balance sheet shows healthy growth of net worth.533 9.846 Year 2 $0 $0 $0 $0 $0 $0 $0 $1.245.033 $331.584.470 Year 3 $331.309.157 $1.584.530.188. The three-year estimates are included in the appendix.000 $1.756 $0 $531.628. VAT. Pro Forma Balance Sheet Year 1 Assets Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Year 2 Year 3 $36.200 $977.265.628.200 $1.846 $451.679 $54.317.470 $0 $0 $0 $0 $0 $0 $77.167 $90.195 Year 1 $0 $0 $0 $0 $0 $0 $0 $1.047 $0 $725.205 $231.162 $277.000 $0 $0 $0 $0 $0 $1.614 $135. HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax.195 $403.266 $1.536 $1.831 $123.689 $1.Pro Forma Cash Flow Year 1 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax.266 $141.679 $383.329 $0 $0 $0 $0 $0 $0 $0 $1.181.

00% Year 2 12.36% 1.14% 92.00% 7.33% 0.342.22% 49.78% 100.342.80% 69.16% 0.445.60% .00% 50.700 ($41.50% 10.010. Ratio Analysis Year 1 Sales Growth Percent of Total Assets Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling.60% 10.20% 100.552 $1.46% 12.227 $1.00% 34.807 $1.90% 49.255 $1.267 $1.14% 0.19% 1.034 9.00% 37.70% 24.492 $0 $92.00% 44.000 $0 $166.16% 85.00% 36.233 $0 $103.700 $230.67% 23.700) $113.Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth $750.00% 14.10% 2.48% 0.00% 44.00% 7.64% 10.168.00% 49.298 $103.00% 14.177.86% 5.33% 92.15% 100.00% 20.107 $173.492 $938.207 $92.60% 26.10% 100.84% 100.000 $10.177.76% 0.807 $1.400 $1.261.400 $729.261.15% 57.655 $0 $166.41% 100.700 $71.00% Year 3 Industry Profile 4.298 Year 2 $750.600 $719.70% 50.655 $20.86% 100.85% 100.552 $1.207 Year 1 $750.000 $20.23% 10.00% 44.200 $739.034 $1.655 $938.68% 10.233 $0 $0 $103.267 Year 3 $146.445.600 $1.30% 1.00% 34.52% 0.30% 0.492 $0 $0 $92.20% 30.56% 13.168.00% 42.010.800 $1.60% 23.233 $938.000 $30.00% 7.84% 24. General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes 0.552 $1.16% 62.80% 30.8 Business Ratios The table below shows our business ratios.852 $158.00% 10.00% 7.

98 1.91 7.31% 16.29 $439.a $270.62 1.96 87 7. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout 2.35 0.96 88 6.Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Inventory Turnover Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab.a n.a 0.a n.59% 12. The introduction of quality catalogues and sales literature will enable Sedibeng Breweries to market to potential customers.00 0.00 n.00 n.00 0.75 4.00 0.a n.78 7% 0.33% 18.88 14.80 14% 0. With this in mind we intend our marketing programs to expand accordingly.90% 12.17 39 1.79% Year 1 7.80 7% 2.24% 5.a n. to Liab.91% 1.a n.70% n.a n.752 76.a n.90% 8.a n.a Controls The local brewing market has been growing steadily over the last few years due to increases in people's disposable income and opening of the economy.14% 17.75% 11.00 0.56 7.97 12.a n.25 3.73% Year 2 9. Throughout the year we intend to undertake regular evaluations of our marketing programs so as to ensure that we are in-line with our intended objectives.00 n.a 3.28 7.16% 14. a presence on the Internet and participation in regional trade shows will be key milestones to expanding sales and marketing potentials through the utilization of new channels and identification of potential customers.25 n.07% Year 3 9.96 56 10.01 $622.67 27 1.22 1.28 3.16 1.20% 16.634 0.38 0.207 212.42 50.81% 13.24 1.54% 7. We project sales to increase accordingly. With time.17 28 1.08 1.03 5. though slightly slower as we establish a reputation for ourselves.a n.67 1.03 12.a n.05% 16.45 0.a 0.a n. In summary we intend to undertake the following: .08 1.

000 $1.000 $1.600 $27.390 $6.143 $25.000 $3.600 $27.000 $1.000 $1. we intend to be able to say no to special deals that take us away from the target focus and are unprofitable.000 $4. Market segment focus: We intend to have the discipline to maintain the market segment focus.000 $1.000 $1.000 $3.600 $1. Though Botswana overall is rather secure on the labor front in terms of strikes we intend to have in place a mechanism that will ensure that were this to occur the negative effects would be minimized.000 $1.000 $1.585 $80.000 $1.348 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $16.000 $3.000 $3.000 $1.805 $52. to track results of the business plan and make sure that we implement.000 $4.000 $1.000 $3.875 $94.732 $34.000 $1.000 $3.400 $17.000 $1.000 $1.000 $1.000 $4.732 $98.432 $175.000 $1.000 $1.759 Month 9 Month 10 Month 11 Month 12 $64.293 $76.000 $3. Another possibility is the introduction of a new company(s) in our niche.000 $4.464 $36. Hence the need to undertake aggressive marketing and networking.868 $17.000 $1.000 $1.000 $1.000 $4.000 $1.600 $1.000 $1.000 $1.600 $27.000 $3.000 $1. Tracking and follow-up: We intend to have the discipline.000 $68.000 $3.000 $1.1.000 $1.488 $13.000 $1.571 $20.000 $3.000 $1. as an organization.000 $1. 3.000 $1.530 $102.000 $3.000 $3.722 $21.600 $1.000 $1.600 $1.473 $40.600 $1.000 $1.000 $1. An established beverage manufacturer may begin targeting to our target market niche.707 $25.239 $18.000 $1. 2.000 $3.000 $1.181 $63.600 $1.463 $18.400 $12.600 $27.664 $35.000 $1.143 $142.171 $14. We might be able to avoid the straight competition with the major companies by focusing more on the previously mentioned products.000 $1.000 $1.000 $1.000 $1.536 $112.542 $49.951 Month 8 $61.254 $37.000 $1.000 $1.000 $3.000 $4.000 $1.214 $38.000 $1.286 $51.570 $28.000 $4.000 $1.328 $30. 2.902 $23.000 $1.000 $4. However further research and analysis into the above is still being undertaken.976 $14.000 $1.600 $1.000 $1.600 $27. We intend to watch our results very carefully.000 $3.600 $27.000 $1. We may need to drop production of certain products if we cannot get the margin up or material becomes difficult to obtain.157 $72.600 $1.000 $1.000 $1.000 $1.000 $30.600 $27.219 $85.000 $4.000 $1.000 $3.000 $1.902 $27.000 $1.142 Month 7 $54.600 $27.000 $1.000 $1. Saying no: Though difficult initially.000 $1.000 $3.000 $1. 3.233 $25.000 $1.000 $1.066 $200.000 $3.000 $3.334 $33.000 $3.195 General Assumptions .000 $1.125 $38.600 $1.000 $4.000 $1.714 $13.829 $44.858 $72.000 $1.341 $50.000 $3.345 $33.878 $43.366 Month 4 $42.000 $4.951 $7.732 $16.600 $1.000 $1.021 $79.000 $1.000 $1.210 $18.000 $1.000 $1.000 $3.003 $19.000 $4. Appendix Sales Forecast Month 1 Sales X Beer Y Beer Z Beer Total Sales Direct Cost of Sales X Beer Y Beer Z Beer Subtotal Direct Cost of Sales Personnel Plan President and CEO Operations Manager Marketing Manager Brewmaster Brewmaster Office Manager Bottler #1 Bottler #2 Bottler #3 Packager #1 Packager #2 Packager #3 Packager #4 Shipper #1 Shipper #2 Total People Total Payroll 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $4.585 $27.600 $9.000 $1.000 $1.600 $27.000 $1.000 $1.722 $21.000 $1.000 $4.331 Month 2 $32.600 $27.083 $10.171 $121.000 $3.000 $90.000 $1.000 $1.000 $4.000 $4.000 15 15 15 15 15 15 15 15 15 15 15 15 $27.000 $1.000 $21.800 $32.428 Month 3 $38.000 $1.000 $1.429 $27.000 $4.000 $1. 10.958 $90.000 $3.000 $3.561 $60.000 $4.000 $3.000 $4.000 $1.600 $1.000 $3.317 $36.1 Contingency Planning 1.519 $12.000 $47.000 $1.784 $162.000 $3.000 $1.000 $1.585 $40.000 $4.000 $1. Hence the need for commitment in our work and striving of total quality in our organization.000 $1.000 $4.000 $1.966 $20.909 $58.571 $71.683 $57.000 $3.357 $107.000 $3.000 $4.000 $40.000 $1.000 $1.000 $1.000 $4.000 $1.600 $24.000 $3.077 Month 5 $46.399 $23.000 $1.000 $1.000 $1.010 $10.000 $1.000 $1.000 $3.000 $1.000 $1.600 $1.600 $27.512 $23.551 $15.000 $3. 4.000 $1.000 $1.200 $17.000 $1.000 $3.000 $3.937 $11.000 $4.000 $1.415 $30.000 $1.000 $1.413 $65.000 $3.600 0% 0% 0% $29.984 $136.787 Month 6 $48.000 $1.000 $1.000 $1.000 $1.

500 $850 $200 $400 $350 $3.133 $14.612) ($8.00% 10.763 ($3.140 $0 $41.687 $34.040 ($9.759 $142.951 $136.232 $167 $9.000 $4.452 4.040 ($12.000 $4.140 $0 $41.585 $40.952 $167 $1.600 $71.005 $3.295 ($6.57% 15% Month 1 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax.140 ($11.600 $54.600 $4.708) $21.500 $850 $200 $400 $350 $3.715 $91.734) -3.215 $27.00% $41.00% 25.805 $52.223 $27.718 $7.763 $27.479) ($2.299) $10.00% 0 Month 9 10.612 Month 11 $0 $0 $0 $0 $0 $0 $0 $171.00% 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $65.134 $19.40% $27.000 $4.973 $48.122 $102.508 $21.00% 25.500 $850 $200 $400 $350 $3.612 $50.331 $71.140 $0 $41.500 $850 $200 $400 $350 $3.128 ($13.00% $77.210 17.000 $68.000 $68.600 $4.068 $27.422 44.500 $850 $200 $400 $350 $3.215 ($6.536 $112.242 $89. HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $16.623 $151.223 $13.600 $4.190 $80.040 $19.519 $53.040 $21.291 $0 $0 $0 $0 $0 $0 $0 $30.398 $17.000 $4.923 $27.468 $167 $3.040 $12.004 $20.722 $27.00% $31.000 $4.548 Month 9 $0 $0 $0 $0 $0 $0 $0 $143.648) $48.600 $129.623 $130.140 $0 $41.040 $6.722 $143.858 $162.140 $0 $41.35% $27.505 $102.140 $0 $41.000 $66.668 $167 $5.742 $14.00% $47.225 10.963 $167 $11.600 $103.500 $850 $200 $400 $350 $3.833 $127.000 $4.348 $36.805 $52.647 ($8.000 $90.000 $90.428 44.600 $4.099 $167 $7.077 $102.00% 10.37% $27.140 $0 $41.226 44.697 $64.492 $23.683 $57.000 $4.036 $167 $1.231) $59.040 $47.919 $77.040 $354 $1.00% 25.561 Month 6 $0 $0 $0 $0 $0 $0 $0 $107.00% 25.163 $130.00% $45.00% $37.439 Month 4 $0 $0 $0 $0 $0 $0 $0 $89.140 $0 $41.113 $9.841 $21.762) $167 ($2.068 $2.040 $4.00% 10.289 44.204 $59.600 $4.600 $2.015 2.737 $35.561 44.00% $71.162 Starting Balances Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 .615 $121.600 $4.133 $0 $0 $0 $0 $0 $0 $0 $104.054 $27.00% 10.93% $27.562 13.00% 0 Month 7 7 10.660 $36.00% $62.040 ($3.00% 0 Month 12 9 10 11 12 10.00% 10.723) -13.500 $850 $200 $400 $350 $3.00% 10.00% 30.561 $30.00% 0 Month 4 4 10.394 44.683 $57.295 $27.000 $4.504 $0 $0 $0 $0 $0 $0 $0 $130.536 $112.718 $0 $0 $0 $0 $0 $0 $0 $130.66% $27.504 $20.502 $36.540 $82.00% $60.658 44.439 $25.468 $105.600 $4.548 $40.326 $29.021 $175.047 $98.858 44.687 Month 7 $0 $0 $0 $0 $0 $0 $0 $114.561 $60.333 Month 1 $0 $0 $0 $0 $0 $0 $77.000 $4.Month 1 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Pro Forma Profit and Loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Month 2 2 10.000 $47.366 $94.600 $123.990 $107.00% 0 Month 6 6 10.140 $0 $41.734) $14.040 $30.15% $27.732 $98.195 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $36.000 $47.16% $27.776 $97.521 $22.600 $77.484 $4.00% 25.00% 25.342 $49.174 44.00% $53.600 $93. VAT.691 $157.215) $7.227 $43.428 $85.293 $76.000 $4.291 $14.916 $35.818 $22.864 $171.787 $107.00% 25.151 $70.294) ($11.786 $70.00% 10.600 $4.618 $13.140 $0 $41.204 $0 $0 $0 $0 $0 $0 $0 $102.600 $75.00% 0 1 10.249 $31.142 44.00% 0 10.973 $0 $0 $0 $0 $0 $0 $0 $82.00% 0 10.00% Month 10 Month 11 10.113 $47.500 $850 $200 $400 $350 $3.727 $114.00% $0 $0 $0 $0 $0 $0 $0 $16.017 $0 $0 $0 $0 $0 $0 $0 $121.916 Month 8 $0 $0 $0 $0 $0 $0 $0 $127.561 $60.732 $98.500 $850 $200 $400 $350 $3.617 $27.102 $6.695 $104.857 $1.585 $80.333 $0 $16.186 $5.140 $0 $41.227 Month 10 $0 $0 $0 $0 $0 $0 $0 $151.445) ($7.00% 10.738) ($8.600 $76.984 $167 $4.00% 0 Month 8 8 10.00% 25.951 0.488 $77.502 $0 $0 $0 $0 $0 $0 $0 $157.00% $88.20% $27.382 $37.585 $40.00% 10.000 $96.339 7.93% $27.238 11.600 $4.490 $21.199 $107.923 ($18.600 $102.017 $150.204 $167 $47 $140 0.27% $27.087 $121.334) -10.153 44. HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax.413 $16.500 $850 $200 $400 $350 $3.528 $30.600 $68.00% 10.00% 0 Month 3 3 10.00% 25.326 $0 $0 $0 $0 $0 $0 $0 $95.939 $26.600 $4.293 $76.195 $28.161 15.841 $0 $0 $0 $0 $0 $0 $0 $98.600 $4.00% 25.500 $850 $200 $400 $350 $3.162 Pro Forma Balance Sheet Month 1 Assets Current Assets Cash $80.017 $10.617 $995 $21.000 $4.629) $167 ($911) ($2.000 $4.508 $0 $0 $0 $0 $0 $0 $0 $150.500 $850 $200 $400 $350 $3.040 $36.939 Month 5 $0 $0 $0 $0 $0 $0 $0 $97.00% 10.490 Month 2 $0 $0 $0 $0 $0 $0 $0 $70.140 $27.958 $200.647 $27.585 $80.333 $17.00% 25.00% Expenses Payroll Sales and Marketing and Other Expenses Depreciation Leased Equipment Utilities Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales Pro Forma Cash Flow $27.492 Month 3 $0 $0 $0 $0 $0 $0 $0 $77.140 $0 $41.323 $95.722 ($6.485) $29.796) $66.44% $27.951 Month 12 $27.619 $17.633 $19. VAT.142 $121.746 44.398 $0 $0 $0 $0 $0 $0 $0 $105.444) $167 ($3.600 $4.00% 0 Month 5 5 10.128 $27.

900 $1.700) ($1.841 Month 4 $750.500 $741.000 $9.961 $20.845) $895.086.798 $225.000 $5.200 $750.700 ($41.000 $0 $88.184) $885.000 $0 $119.700) ($15.619 $948.000 $0 $166.723) $811.209 $880.951 $0 $220.619 $118.155 $909.000 $0 $204.700 ($41.655 $0 $166.700 ($41.000 $750.407 $750.294 $88.720 $938.765 $0 $119.550 $747.010.209 $68.131 $0 $94.146 $1.250 $745.720 $20.496 $881.700 ($41.800 $743.650 $750.529 $0 $118.364 $74.029.000 $0 $90.805 $0 $345.700 ($41.700) $51.000 $4.131 $20.150 $904.000 $8.434 $108.700) $12.326 $277.359 $0 $94.700) $113.Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth $0 $10.280 $190.909 $115.000 $840.175 $0 $110.209 $964.005.700) ($18.448 $57.700) ($16.000 $0 $118.244 $0 $285.177.491 $938.171 Month 3 $750.342 $146.181 $124.816 $980.000 $861.119.177.209 Month 2 $750.414 $0 $437.700 ($41.056) $880.552 .984 $84.350 $750.000 $0 $20.330 $1.044.585 $0 $216.900 $980.010.088 $99.265 $0 $72.552 $1.944 $65.999 $0 $235.000 $0 $94.175 $938.146 $1.277 $904.141 $75.841 $878.944 $953.148 $1.175 $885.175 Month 6 $750.181 $975.961 $0 $85.000 $0 $85.750 $975.000 $73.655 $20.700 ($41.491 $20.381 $909.619 $925.700) ($8.950 $744.000 $840.650) $878.119.000 $0 $110.381 $98.296 $63.181 $948.390 $0 $379.277 $52.207 $895.636) $881.000 $0 $20.720 $0 $138.000 $0 $72.721 $132.122 $0 $261.171 $878.500 $750.000 $0 $144.961 $938.000 $3.976 $1.765 $938.131 $938.634 $20.000 $850 $749.000 $10.000 $2.700 $748.317 $0 $229.342 $1.529 $938.000 $1.700 ($41.000 $5.100 $744.634 $938.496 Month 5 $750.319 $20.000 $7.816 $90.359 $938.634 $0 $144.998 $40.831 $123.877 $65.155 $99.342 $975.700 ($41.900 $1.001 $0 $301.000 $0 $138.359 $20.207 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $0 $20.800 $1.000 $0 $93.529 $20.086.350 $740.700 ($41.552 $1.447 $100.597 Month 1 $750.650 $742.000 $48.746 $154.946 $206.765 $20.029.976 $1.050 $750.810 $52.400 $746.005.364 $975.600 $966.265 $938.700) $28.700) $0 $820.175 $20.400 $249.936 $44.350 $74.655 $938.700) ($18.241 $145.000 $0 $750.350 $966.275 $169.597 $811.700 ($41.244 $0 $155.000 $820.491 $0 $88.148 $1.381 $925.700) ($11.700 ($41.000 $6.450 $964.200 $739.000 $0 $94.044.319 $861.319 $0 $93.700) $78.265 $20.700 ($41.791) $878.300 $953.330 $1.