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Table of Contents

1.0 Executive Summary....................................................................................................................................1 Chart: Highlights.......................................................................................................................................3 1.1 Objectives................................................................................................................................................3 1.2 Keys to Success.......................................................................................................................................4 1.3 Mission....................................................................................................................................................4 2.0 Company Summary.....................................................................................................................................5 2.1 Start-up Summary...................................................................................................................................6 Table: Start-up Funding............................................................................................................................6 Chart: Start-up...........................................................................................................................................7 Table: Start-up...........................................................................................................................................7 .......................................................................................................................................................................7 2.3 Company Locations and Facilities..........................................................................................................8 2.4 Company Values.....................................................................................................................................8 3.0 Products.......................................................................................................................................................9 3.1 Product Description................................................................................................................................9 3.2 Competitive Comparison......................................................................................................................10 3.3 Macro-environment...............................................................................................................................10 3.4 Technology............................................................................................................................................11 3.5 Future Products.....................................................................................................................................11 3.6 Fulfillment.............................................................................................................................................11 4.0 SWOT Analysis........................................................................................................................................11 4.1 Strengths................................................................................................................................................11 4.2 Weaknesses...........................................................................................................................................12 4.3 Opportunities.........................................................................................................................................12 4.4 Threats...................................................................................................................................................12 5.0 Market Analysis Summary.......................................................................................................................12 5.1 Market Segmentation............................................................................................................................13 Chart: Market Analysis (Pie)..................................................................................................................14 Table: Market Analysis...........................................................................................................................14 5.2 Target Market Segment Strategy..........................................................................................................14 5.2.1 Market Trends................................................................................................................................14 5.2.2 Market Growth...............................................................................................................................15 5.2.3 Market Needs.................................................................................................................................15 5.3 Industry Analysis..................................................................................................................................15 5.3.1 Competition and Buying Patterns..................................................................................................15 5.3.2 Main Competitors..........................................................................................................................15 6.0 Strategy and Implementation Summary...................................................................................................16 6.1 Value Proposition..................................................................................................................................17 6.2 Competitive Edge..................................................................................................................................17 6.3 Sales Strategy........................................................................................................................................17 6.3.1 Sales Forecast.................................................................................................................................18 Table: Sales Forecast..........................................................................................................................18 Chart: Sales Monthly..........................................................................................................................18 6.4 Marketing Strategy................................................................................................................................18 6.4.1 Service Provision...........................................................................................................................19 Page 1

Table of Contents

6.4.2 Pricing Strategy..............................................................................................................................19 6.4.3 Promotion Strategy........................................................................................................................19 6.4.4 Distribution Strategy......................................................................................................................22 6.4.5 Product Marketing.........................................................................................................................23 6.4.6 Product Packaging.........................................................................................................................23 6.5 Corporate Social Responsibility...........................................................................................................23 7.0 Production Summary.................................................................................................................................24 7.1 Suppliers................................................................................................................................................24 7.2 Receiving...............................................................................................................................................24 7.3 Storage...................................................................................................................................................24 7.4 By-Products...........................................................................................................................................25 8.0 Management Summary.............................................................................................................................25 8.1 Management Team................................................................................................................................25 8.2 Personnel Plan.......................................................................................................................................26 Table: Personnel......................................................................................................................................26 8.3 Training.................................................................................................................................................26 8.4 Feedback and Control...........................................................................................................................27 9.0 Financial Plan............................................................................................................................................27 9.1 Important Assumptions.........................................................................................................................28 Table: General Assumptions...................................................................................................................28 9.2 Break-even Analysis.............................................................................................................................28 Table: Break-even Analysis....................................................................................................................28 Chart: Break-even Analysis....................................................................................................................29 9.3 Projected Profit and Loss......................................................................................................................29 Table: Profit and Loss.............................................................................................................................30 9.4 Key Financial Indicators.......................................................................................................................30 Chart: Benchmarks..................................................................................................................................31 9.5 Expense Forecast...................................................................................................................................31 9.6 Projected Cash Flow.............................................................................................................................32 Table: Cash Flow....................................................................................................................................32 Chart: Cash..............................................................................................................................................33 9.7 Projected Balance Sheet........................................................................................................................34 Table: Balance Sheet...............................................................................................................................34 9.8 Business Ratios.....................................................................................................................................34 Table: Ratios...........................................................................................................................................35 10.0 Controls...................................................................................................................................................36 10.1 Contingency Planning.........................................................................................................................36 Table: Sales Forecast.........................................................................................................................................1 ...........................................................................................................................................................................1 Table: Personnel................................................................................................................................................2 Page 2

.................................3 Table: Profit and Loss...........8 Page 3 ............................................................................................................................................................................................................................................................................................................................4 ......................6 ................................Table of Contents ...................7 Table: Balance Sheet.............................5 Table: Cash Flow...........................................................................................................................................................................................................................................................................................................................................................2 Table: General Assumptions....................................................................................................................................................................................................................................................

They will be of extremely high quality to ensure customer satisfaction. public relations and direct marketing. which will be bestowed by the communities in which we function. However these prices will also take into consideration the cost of production and distribution so as to ensure that we remain viable and operational. Botswana. system and process must have the objective of improving the flexibility and response of the whole company. particularly between marketing and manufacturing. As Sedibeng Breweries prospers and grows. C and S). P. Y. The corporate or managerial segment will constitute those managers. with manufacturing being employed as a strategic weapon. Sedibeng is primarily targeting a market share of 6% to attain sales of approximately $1. including where to find it. these communities will continue to benefit from both the value created by Sedibeng Breweries and its behavior as a corporate citizen. The working class will range from the miners. Initial plans are to produce three main lines of products primarily focusing on X. Our marketing strategy will be based mainly on ensuring customers know what need the product(s) is able to fulfill. every promotion. Our target markets will primarily constitute the corporate and working class who appreciate good quality traditional beer. To prosper there is need for Sedibeng to be flexible and responsive. Our primary goal will be to establish and strengthen our license to trade. Our products will be positioned very carefully. 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. This is a relatively new business in its start-up phase having been incorporated recently. events. Page 1 . From product concept to goods dispatch we intend to ensure that every policy and procedure. The marketing effort will convey the sense of quality and satisfaction in every picture. We will ensure that our products' prices take into consideration people's budgets. want to put aside their ties and jackets after hours and/or on weekends to drink good traditional beer.0 Executive Summary Sedibeng Breweries is a medium-scale brewery that is located in the growing industrial centre of Selebi Phikwe. details of which are provided in the marketing section of the following plan. and that these people appreciate the product(s) and know that it exists. Hence we intend to implement a market penetration strategy that will ensure that we are well known and respected in our respective industry. to delight customers by providing them with what they want. supported by impeccable service to our customers. There is a need for interaction between all functional areas. and making the right product and information available to the right target customer. good quality brew. if the organization is to realize its full potential. The common bond will be the appreciation of a good-quality traditional brew able to fulfill their thirst.Sedibeng Breweries 1. and every publication. when they want it and before the competition. easily accessible in the urban areas. who constitute a large portion of the market. We are on the brink of penetrating a lucrative market in a rapidly-growing economy. In the long term Internet marketing shall also be undertaken. and Z beer (which comes in different flavors: B. yet extremely viable areas where the market is appreciative of readily available. Our promotional strategy will involve integrating advertising. These products will be sold in different sized containers ranging from the 250 ml ginger beer to the 500 ml traditional beer. who though aware of their image and reputation. to administrative personnel appreciative of good quality traditional beer. Sedibeng Breweries will pride itself on its production ability. personal selling.5 million in our initial year. These products shall be extensively distributed to remote.

and by having enthusiastic. These elements will differentiate us from our competitors and contribute towards the development of a sustainable competitive advantage. so as to retain their invaluable expertise and to ensure job satisfaction and enrichment through delegation of authority. and strive to achieve optimal productivity. capable and empowered people interacting with our customers. We shall strive to attain our primary goal. at the right time if we are to ensure optimum growth. Our customers are assured of products that have been produced using the highest quality standards. but also encourage gatherings and sharing of fun. we realizing that we have to be in constant touch with our stakeholders to ensure market knowledge at all times.a mutually beneficial relationship. For example. By encouraging all employees close to our customers to think tactically about what Sedibeng Breweries service offerings should be. We intend to provide a quality brew that will not only be refreshing and pleasurable.Sedibeng Breweries competitive prices. while realizing each employee's full potential. such as our ability to relate to consumers. Our compensation will include health care. its high standards of quality and its adaptability to changes in the market and in the method of its practice. As an equal opportunity employer. We intend to develop our team so that our people can grow as the company grows-. Page 2 . we build the competitive advantage of being able to meet our customers' needs better than anyone else. We intend to compensate our personnel well. Also. which is to develop and strengthen our license to trade. groups and plants for hard work and production so as to instill a sense of fun and promote the maintenance of high standards. Awards will be given out to outstanding individuals. in the right place. these communities will continue to benefit from both the value created by Sedibeng and its behavior as a corporate citizen. generous profit sharing. We need the right people. we intend to build our management team correctly. corporate culture and commitment. we respect the diversity and human rights of our people. Sedibeng Breweries intends to provide the customer with more than just a traditional brew. 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. management style. 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. This is the nature of the channels we deal with. As Sedibeng Breweries prospers and grows. As we grow we want to grow right. plus a minimum of three weeks vacation. bestowed by the communities in which we function.

Sedibeng Breweries Chart: Highlights Highlights $1.000 $1. This shall be undertaken through the implementation of high quality control standards and technological innovations.000.200. as well as the recruitment of a professional production and sales team. Contribute positively to our communities and our environment. enjoyment.000 $200. reliability and a good image. Develop enthusiastically-satisfied customers all of the time.400. We shall position ourselves as a quality manufacturer that strives to provide quench fulfillment. treating each other with respect and dignity. We intend to establish a good rapport with all the relevant stakeholders.000 $400.000 $0 Year 1 Year 2 Year 3 Sales Gross Margin Net Profit 1.000 $600. To continuously formalize and measure cross-functional working communication so as to ensure that the various departments work harmoniously towards attainment of company objectives. Web presence is a natural objective in reaching the appropriate potential customers. This marketing material shall be professionally done so as to be reflective of our intended image and reputation.000 $1. To instill a culture of continuous improvement in beating standards of customer satisfaction and efficiency. and the production of good quality marketing material designed to cater for various kinds of customers.000 $800. Well-done brochures. Apply high-quality standards of excellence to all business processes. company profiles and business cards often has a triggering effect on clients contemplating on ordering our products. Fully commit to supporting growth and development in the economy.000 $1. Page 3 .800.1 Objectives Our business strategy will revolve around the need to provide quality brew to our various target customers.600.000 $1. Hence this will undoubtedly generate increased sales of our products. which will increase the knowledge of our products to the various market segments we shall be targeting. With time we intend to establish our presence on the World Wide Web. Our objectives will revolve around the following guiding principles: • • • • • • • Provision of a great work environment. in the process fully satisfying their needs.

1. Page 4 . personal selling and direct marketing strategies aimed at the target markets.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. Hence we intend to adhere to stringent values and principles that will enable such to be achieved. We recognize that Corporate commitment to success should lead to the survival and prosperity of the products. as well as affordable prices depending on the market. Along these lines the company intends to implement advertising. Assembly Technology: To ensure quality brewed beverages it is essential to utilize the latest and most efficient assembly technology. This is so as to meet the needs and standards of our customers. and be available in remote areas our competitor has not yet exploited.Sedibeng Breweries Ultimately we intend to create a stable business platform that will create prosperity for all those involved in the business venture at all levels. enjoyable and sociable environment through the provision of refreshing high-quality brews. We are sensitive to the taste. 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. Keeping abreast with technological developments will ensure we gain. Loyalty and Dedication: The loyalty and dedication of our employees shall be essential to the prosperity of the organization. Our advertising marketing strategies will rotate around. Hence our value proposition is to sell the benefit of refreshness and enjoyment to our various consumers at reasonable prices. 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. and we want every dollar spent on our products to be well spent. 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. look and feel of good beer.3 Mission Sedibeng Breweries intends to create a pleasant. and to uplift unemployed Botswanans who are prepared to participate in this venture. Hence we intend to assist in the creation of a welcoming and relaxed ambiance reflective of people enjoying themselves. Effective and Efficient Distribution Network: The importance of such cannot be overemphasized in our line of business. We intend to establish an excellent distribution network that will enable us to rapidly respond to customers' orders. and maintain. We intend to provide the best possible value to our customers who care about quality products at affordable prices. 1. a competitive advantage utilizing the latest production techniques. and ultimately the organization as a whole.

and to fairly compensate owners and investors for the money and risk.Sedibeng Breweries Internally we intend to create and nurture a healthy. To satisfy all our customers and stakeholders. 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. 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. In addition follow-up will be mandatory so as to ensure customer satisfaction and make any improvements as recommended by the customers in future. It will also look for additional leverage by establishing relationships and representations with appropriate strategic allies. enough to keep the company financially healthy for the short and long term. creative. As it grows it will take on people and expand into related markets. Page 5 . and to uphold superb quality at all levels of production. The brewery will house four stainless steel vessels whose shiny finish will be highlighted by the flood lights on the ceiling.0 Company Summary Sedibeng Breweries is a relatively new company providing high quality alcoholic and nonalcoholic beverages in the local market. 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. 2. in which our employees are fairly compensated and encouraged to respect the customer and the quality of the product we produce. Interested stakeholders will be able to observe the brewing process during the day and will be offered guided educational tours of the brewing facility. We seek a fair and responsible profit. intentions of which we have in future. 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. However this will occur after we have established ourselves on the local market. This will assist in our penetrating the regional and international markets. Sedibeng Breweries intends to focus on the brewing process and the brewery itself. respectful and enjoyable office and plant environment.

This figure comes to $840.000 $0 $80. Start-up assets required and utilized included brewing plant and machinery.000 $80.000 $881.700 Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital 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 $650.000 $100.000.000 $20.700 ($41. stationery and related expenses) came to approximately $41. office furniture.700) $820.000 $840.000 $41.000 $881.700 $35. logo design. personal computers and other office equipment.700.Sedibeng Breweries 2.700 $840.000 $0 $0 $0 $20.000 Total Capital and Liabilities Total Funding $840.1 Start-up Summary Total start-up capital and expenses (including legal costs.000 $0 $861.700 Page 6 .000 $76. Table: Start-up Funding 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 $760. pick-ups.

700 Page 7 .000 $400.000 $10.000 $500.000 $800.700 $1.000 $41.000 $700 $6.Sedibeng Breweries Chart: Start-up Start-up $900.000 $20.000 $100.000 $10.000 $300.000 $0 Expenses Assets Investment Loans Table: Start-up Start-up Requirements Start-up Expenses Legal Stationery etc. 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 $80.000 $840.000 $600.000 $0 $750.000 $2.000 $200.000 $881.000 $2.000 $700.

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.Sedibeng Breweries 2. This shall be undertaken through implementation of the following company values: • • • • • • We intend to conduct our business ethically and transparently. We intend to seek mutually beneficial and enduring relationships in all the commitments that we make. We intend to be a responsible corporate citizen fulfilling our obligations as an integral member of society.3 Company Locations and Facilities At present the company plants and offices are located in the growing industrial center of Selebi Phikwe. Ultimately we intend to uphold all the above company values. We intend to provide products of uncompromising quality to meet the needs of our customers. and in the interests of all concerned stakeholders. Hence our business decisions shall give appropriate weight and consideration to social and environmental impacts. ensuring that they are straightforward and honest. transparently. Our current facilities provide offices. Page 8 . largely depending on the dictates of the market and the obtaining of a lease. X and Mr.4 Company Values Sedibeng Breweries is committed towards an open governance system whereby its activities are managed and undertaken ethically. Kasane and Palaype with intentions of establishing an additional plant in Maun or Francistown. Its fiscal year is the calendar year. plants and machinery. Y. promoting our employees and respective third parties engaged by us to do likewise. aided by the necessary finances. 2. Hence our communication shall be open and accurate. We intend to optimize the creation of wealth to provide fair reward and recognition for the contributions of our stakeholders. respecting all applicable laws.2 Company Ownership Sedibeng Breweries is a Private Limited company incorporated at the Registrar of Companies through the foresight and vision of Mr. office equipment and so on. 2. 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. in particular the communities in which we will operate. internally and externally.

as it contains protein. We have the ability to produce a long life Z that needs NO refrigeration. within the first week of production. There are three main products currently in its production line. We will also be watching for technological developments in South Africa and overseas. which can be sold from the shelf in the same fashion as Ultra Mel and similar products. allowing us to be first on the market and produce high-quality products through cost effective means. 3. or as an emergency food supply. If consumed fresh. namely X beer. Y Beer 3. Y beer and Z beer. This stems from (discussion removed for confidentiality). X Beer 2. starches. it contains only traces of alcohol. 2. The company currently produces three main lines of products.0 Products Sedibeng Breweries produces and markets several products. typically even less than that found in medication (discussion removed for confidentiality). Up to now it has only been available in two sources. it is so wholesome that a growing child is able survive on one litter of this per day. our beer has the superior flavour and texture. depending on the fermentation period after production. smooth. Y Beer This refreshing drink has the unique feature that it can be enjoyed both as an alcoholic or non-alcoholic drink. that is. whenever available. namely home prepared or more commonly bought from a shop having a fridge to keep the product refrigerated. In fact. calcium. with no rough solids. to be consumed later. Z Beer (Note: Z comes in different flavors): o o o o B P C 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. X Beer Although similar in appearance to the only other product available in the market. This is Page 9 . vitamins and other essential trace elements. as a food whilst way from home. Z Beer This traditional food product is widely consumed as a substitute for regular meals and energy booster. Our current product listing is as follows: 1.1 Product Description Sedibeng Breweries produces products of high quality and impeccable taste. 3. All three have unique properties that will enable them to excel on the market. This means that it can be bought by consumers who might not always have access to cooling or refrigeration facilities. This denies the people in rural area access to these delicious and nutritious foodstuffs.Sedibeng Breweries 3. In addition the company will select suitable products for production under license. These are: 1.

s and other xx flavors that the market might want. At a large scale. Through undertaking of our professional business activities we foresee that it should Page 10 . w. and realizing the national goal of sustainable economic diversification. 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. 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. such as x. Also. 3. 3. In addition this same market is not only more image conscious but appreciative of a quality brew as it is more selective. 2. as people have to choose between them as refreshments. 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. It has been extraordinarily severe with heavy rainfall. technological and human resources acumen. In addition to the country increasingly becoming a tourist destination.Sedibeng Breweries available in several flavors. These products being marketed in supermarkets are often advertised on an extensive basis. though marginal as consumption levels may decrease slightly. They have a wide and established distribution network that they utilize to their advantage. y. Other manufacturers of traditional brews including homes and local bars will also constitute our competitors. the appreciation of quality brews and packaging. This is likely to have an adverse effect on our initial financial performance. On a larger scale manufacturers of other beverages including soft drinks and coffees also constitute competition. Hence there will be a need to strongly differentiate ourselves from these other businesses. Having been on the market for a relatively long period of time added to the fact that they are backed by Y Breweries' financial. However the product is not constantly of high standard. market research demonstrates that the brewing industry market is growing and changing. Private sector development has been recognized as a vital ingredient in creating employment and training opportunities. Therefore with the emergence of this generation of individuals. dictates that our product lines will be popular. particularly in the winter season. Our key advantage in competition with XX Breweries is that we are accessible in extremely remote areas. However on a broader scale our competition comes in several forms: 1. The most significant competition is that of XX Breweries.2 Competitive Comparison Identifying competition in terms of companies that fill the same needs that we do. during the key summer season. 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. We intend to vigorously undertake new channel and distribution development in addition to deploying aggressive marketing strategies. It is also a good product to use in school feeding schemes and similar projects.3 Macro-environment Over the last few months abnormal weather has affected many parts of Southern Africa. which is arguably the market leader. t. including Botswana. 3. flooding and there definitely promises to be low temperatures. strategic alliances shall assist in our attainment of goals and objectives. our competitors are few in our main product lines. we foresee the demand for our products especially in the resorts and lodges where it will be promoted. but of a generic nature. which we shall fully exploit. though dominant in the market. They often have access to the local and remote areas and knowledge of these areas.

The directors intend to jointly develop business strategy and long-term plans. We foresee our strengths as the ability to respond quickly to what the market dictates and to provide quality brew in a growing market. and maintain low production costs ultimately benefiting the consumer. 4. The most important factor in developing future products is market need. the whole of Southern Africa) and additional product areas. good production techniques. provided by a combination of quality ingredients. In the future. It is critical to our effort to develop the right new products. and the threat of new competition taking aim at our niche. weaknesses.Sedibeng Breweries not be too difficult to gain market acceptance provided we deliver the final product on time. and at competitive prices. suppliers and distributors who will assist in ensuring that the products are delivered timely and are of the highest quality. Diversified market segments: ensuring the lack of dependency on one particular market. Our key personnel have a wide and thorough knowledge of the local manufacturing market and expertise.0 SWOT Analysis We are in a highly lucrative market in a rapidly growing economy.. We will turn to reliable farmers. Combination of skills in directorship. Page 11 . and education (in that order). In doing so we will strive to ensure that it is compatible with the existing products and assembly technology. which will go towards penetrating the market. through aggressive marketing and quality management we intend to become a well-respected and known entity in our respective industry. However we acknowledge our weakness of a mediumsized company without a lot of experience. 3. 3. Hence we intend to ensure that the products we produce are always of high quality and standards. Our understanding of the needs of our target market segments shall be one of our competitive advantages. The key fulfillment and delivery will be provided by the principals and values of the business. 3.1 Strengths • • • Strategic market segmentation and implementation strategies. We will also rely on these stakeholders for relevant information on the market situation (trends. feelings and comments amongst other things). 4. Sedibeng Breweries will broaden its coverage by expanding into additional markets (i.6 Fulfillment 1. consumer tastes.e.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. hard work.4 Technology Sedibeng Breweries will strive to maintain the latest and most efficient assembly technology so as to ensure quality-brewed beverages. We also intend to have what we call a "core product engine" that will be the foundation of future products. opportunities and threats. This shall be established in time as we determine our core product. of good quality. Keeping abreast with technological developments will ensure we gain and maintain a competitive advantage utilizing the latest production techniques. Below are the summarized strengths. 2. In addition. The real core value will be the provision of a thirst quenching refreshing brew. and available to the relevant target market. having wide experience in product and business know-how.

some of whom have been in existence for Page 12 .Sedibeng Breweries • • Establishment and maintenance of strong capital base. Intolerable price increases by foreign suppliers may occur. Lack of clear-cut channels of distribution. and refreshment (and integration therein). Current drive by government and specialized institutions such as the Botswana Export Development and Investment Authority towards export of locally manufactured products. through competition. This competition could emerge from a variety of given sources including: 1. This will result in implementation of modern production techniques and transfer of knowledge. Establishment on the Internet will produce technological challenges. 4. The introduction of new organizational practices and personnel who have not previously worked together presents a challenge to the company.4 Threats The present growth in the market may result in market saturation. enjoyment.3 Opportunities • • • • • Specific niche: Appreciation for high-quality brew. 4. The fiscal and monetary policies of the government geared towards maintaining growth with social justice have largely contributed towards this. Internet marketing and sales--though still in its infancy. evidenced by our economy averaging a growth rate of 7% since 1990--very high by international standards. 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. 2. 5. An aggressive and focused marketing campaign with clear goals and strategies. A limited financial base compared to the major players in the industry. Though there are breweries currently on the market. New marketing strategies and tactics by established products and companies. The new generation of individuals and families has a far greater appreciation of attractive packaging (image conscious).2 Weaknesses • • • • • Lack of a reputation in comparison to our competitors. 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. 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. especially from South Africa looking at penetrating the market. 5. Existing competition. 3. 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. 4. Increasing number of foreign firms. Other start-up companies generated by healthy economic growth nationwide. 4.0 Market Analysis Summary Today we are experiencing rapid growth in the economy of unsurpassed nature.

1 Market Segmentation Sedibeng Breweries will be focusing on the corporate and working class who appreciate good quality traditional beer. Hence we intend to implement an aggressive marketing strategy. so as to develop a strong sustainable competitive position in the market. These are potential customers who want to have an enjoyable time whilst drinking a good refreshing beverage. They do not want to waste their time making their own brew. Our initial overall target market share shall be 6% of the local market. and the target market. but appreciate a good quality brew at a reasonable price. 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. The above prognosis influenced our decision to enter the brewing industry. 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. The corporate or managerial segment will constitute those managers who though aware of their image and reputation. well supported by the other business functions. want to put aside their ties and jackets after hours and/or on weekends to drink good traditional beer. As a result we intend to implement a niche marketing strategy. to administrative personnel appreciative of good quality traditional beer. The marketing mix of the products has been carefully and strategically put together to position them in the market. We also intend to appeal to the foreign and local tourists who would be looking at experiencing traditional foods and drinks. particularly in view of XX Breweries dominance on the market. with ginger beer having a larger share than traditional beer due to its uniqueness. This share will vary with the actual products. We appreciate that entering such a market is not a bed of roses. easily accessible in the urban areas. a change from the usual beverages they often have. 5. The working class will range from the miners who constitute a large portion of the market.Sedibeng Breweries a relatively long period of time. particularly as it is monopolistic. focusing on certain target markets. we believe that there is a market need for one (ourselves in this instance) that particularly focuses on the low to medium earning individuals. 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. Page 13 .

158 759.630 813.675 793.270 112. We are choosing to compete in areas that lend themselves to local competition. and that these people appreciate the product and know that it exists.00% 2.Sedibeng Breweries Chart: Market Analysis (Pie) Market Analysis (Pie) White Collar Drinkers Blue Collar Drinkers Table: Market Analysis Market Analysis Year 1 Potential Customers White Collar Drinkers Blue Collar Drinkers Total Growth 4% 2% 2.783 108. We now are having an increasing number of people who appreciate the traditional brews whilst living in the urban areas. Regular visits will be undertaken to these areas so as to ensure that we are meeting their expectations.30% 2. including where to find it. This development is an important trend for us as it represents our target market.887 Year 2 Year 3 Year 4 Year 5 CAGR 4. every promotion.52% 5. Our strategy calls for the development of relationships with suppliers.951 834.300 117. and avoid our weaknesses.1 Market Trends Our target markets are increasingly growing towards recognizing the difference between poor quality brews and those of high quality.2 Target Market Segment Strategy Our marketing strategy will be based mainly on making the right product available to the right target customer.319 725.2.147 693. 5. Page 14 . and every publication.153 709.822 104.52% 100. The marketing will convey the sense of quality in every picture. With this in mind we intend to ensure that our packaging is respectable and attractive.652 742. We will ensure that our products' prices take into consideration peoples' budgets.729 876. There is already a sense of segment strategy in the way we define our target market.648 855. distributors and retailers to support our business. service and channel areas that match our strengths.

2. total beer and wine imports stood at 10. According to the Trade Department. ritual and ceremonial purposes and hence appeals to a vast majority of the rural population in particular. our competition will be stiff. thirst-quenching brews. At the same time we shall be differentiating ourselves from XX Breweries. the market has been growing at a steady rate of 7% per annum although it is projected to increase slightly in 1999 and 2000. 5. 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. Sedibeng Breweries intends to provide the customer with more than a drink to quench one's thirst. 5.286.Sedibeng Breweries Today's extremely stressful work environment dictates that individuals consume healthy drinks especially in the summer season.473. 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.668 liters ($281. as we intend to penetrate the low to medium earning customer.14%.000) in 1998 whilst total exports stood at 864. Specifically. According to the most recent Trade Department import statistics for beer and wine. 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. The most important factor in this market is the distribution network. 5.3 Market Needs Sedibeng Breweries will set out to provide good quality products that will help instill a jovial environment.3 Industry Analysis Industry analysis information is presented in the following subtopics.2.3. not wanting to confront XX Breweries one-on-one. Cognisance should also be taken of home brewers who represent competition on our intended market. thirst-quenching product of good quality. 5. The large market is due to the fact that opaque beer is traditional beer for most Botswana.421.56% from the previous year (1997). this presents an opportunity that we may exploit. However upon closer research we identified several niches in the market that we may exploit. In 1997 these imports had risen by approximately 66. It is consumed for social.627 liters in 1998 which represented an increase of approximately 32.3. We shall now Page 15 . 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. which has been on the market for a relatively long period of time.968 liters ($14.2 Market Growth Import statistics provide a reliable guide as to the size of the brewing industry. This brought about a total market size estimated at just over 11.363) in the same year. The quality of raw materials and assembly technology evident in our products will serve to enhance the appearance of our customers. marketing the health aspect of our beverages.1 Competition and Buying Patterns The key element in purchase decisions made at the Sedibeng Breweries customer level is the availability of an affordable.2 Main Competitors Being in a predominantly monopolistic market structure. in turn adding to their status. In general.636 liters in 1998. 5.

5 million to $34. YY Breweries International. 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. According to the audited results. 6. Hence Sedibeng intends to take advantage of this weakness. management fees and dividends from its Botswana operations due to its dominance. One of XX Breweries' main products is S traditional beer. resulting in turnover growth of 12%. XX Breweries is currently the dominant domestic producers of beer. supplier and marketer of alcoholic and non-alcoholic beverages in the country. Zambia and Mozambique. 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. It is also present in the regional countries. Turnover grew by 42% whilst operating profit is up 60% from $21. YY Breweries International Africa enjoys strong cash flows in the form of royalty payments. which will be one of our main competitor products. with an overall market share of more than 95%.0 Strategy and Implementation Summary Our marketing strategy emphasizes focus. This is mainly because it is in its maturity stage and these efforts of going international are meant to extend its product life. XX Breweries is able to take advantage of the financial. We are a relatively new company and hence must focus on certain kinds of products with certain kinds of consumers. This will be the key. For the 12 months to 31 March 2000. volume growth exceeded non-mining GDP growth by more than 2%. sorghum and Coca-Cola products in the country. which is debilitating when its intentions are export. managerial and technical clout that it has through YY Breweries International. XX Breweries has been on the market for a considerable period of time now.5 million. including Zimbabwe. With this in mind we strongly believe that there is an extremely lucrative market we may exploit. with current intentions of going beyond these borders. including their strengths and weaknesses. Initially Sedibeng Breweries will focus on the local market and in the remote and previously Page 16 . However a frailty of S is that the product does not maintain freshness for a long period. higher volumes and turnover coupled with greater productivity and stringent cost controls translated into excellent earnings growth.Sedibeng Breweries provide a more thorough outline of our main competitors in the same strategic group as ourselves. Part of the large and extremely reputable conglomerate. S is currently mass marketed in the whole of Botswana and is popular amongst the rural and town folk. XX Breweries Limited and ZZ Breweries .T Brewery Holdings Arguably the largest and most reputable manufacturer.

not the product. 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. 3. Although XX Breweries dominates the local market. 4. the selling process will depend on personal selling and advertising to lure and inform potential clients about the products we offer Page 17 . by working on key objectives and better coordination of marketing efforts. which can then generate revenue.3 Sales Strategy We intend to focus on improving our implementation. Hence we intend to always be active in personal relationships with clients and strategic allies keeping abreast of their needs and wants. For the short term at least. • We intend to achieve growth by creating a more enthusiastic customer culture than that of our competitors. it does not penetrate the remote areas as much as we intend to. This value proposition shall be communicated through advertisements. We intend to always have a relatively heavy personal selling component to our marketing strategy as previously discussed. 6. Market the benefit. Ensure customer satisfaction. the aim being to obtain an initial order and fully satisfy the customer from then on. enjoyment and fulfillment to the customers. 6. The target customers will include key decisionmakers in the retail and supermarket chains who often order or recommend on behalf of the whole organization. Develop long relationships. • • We are currently building image and awareness through consistency and distinctiveness in our product provision. personal selling. The results will go down to depot level and be compared with the overall target. and referrals that emphasize how the company is able to provide refreshment.1 Value Proposition Our value proposition is offering our customers refreshness and enjoyment at reasonable prices ensuring peace of both body and mind. 6.2 Competitive Edge Our competitive edge will be our dominance of access to previously remote areas. All criteria from price competitiveness to staff attitudes are to be initially measured six-monthly. Hence we intend to: 1. We are focusing advertising on several key media. We intend to focus on delivering quality products that in turn produce good referrals. Market the company. 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. and then on a more regular basis as time goes on. Though we shall be serving different market segments we intend to focus on (discussion removed for confidentiality). sales literature and catalogues.Sedibeng Breweries inaccessible areas where there is a large market for our products. 2. making any necessary adjustments where need be.

383 $325.000 $120.466.400 $1.769 $278. The annual sales projections are included later in the plan. In terms of promotion.3.167 $1.174 $1.551 $155.000 $140.545 $1.000 $160.000 $60.765 $650.144 Year 3 $455.806.106 $171. 6.211 $343.439 $295.000 $20.000 $180.026 Year 1 $369.1 Sales Forecast The sales forecast monthly summary is included below. we intend to sell our company as a differentiated strategic ally. 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.985 $820.149 $364.584 $903.000 $80.683 $580. not just Page 18 .712 $527.975 $725. Table: Sales Forecast 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. Our marketing does not intend to affect the perception of need as much as knowledge and awareness of the product categories.Sedibeng Breweries and the benefits of consuming our products.000 $0 Month 1 Month 3 Month 5 Month 7 Month 9 Month 11 Month 2 Month 4 Month 6 Month 8 Month 10 Month 12 X Beer Y Beer Z Beer 6.072 $812.118 $192.011.629 Year 2 $406.000 $100.000 $40.441 Year 2 Year 3 Chart: Sales Monthly Sales Monthly $200.612.546 $306.4 Marketing Strategy One core element of our marketing strategy will be that of differentiation from our competitors.

Our promotional activities shall be focused towards driving the organization's overall strategy relentlessly. developing internal consistency and prepare it to confront any radical changes that may arise. or produce. second-rate material that make our products look less than they are. However in all cases the marketing will convey the sense of quality. frequency and actual products.4. All in all we intend our prices to be extremely competitive on the market. 6. We will make sure that we charge for the product.4. as they are often representing a scale for consumers. We intend to implement database marketing whereby we shall be targeting customers based on their previous purchases.4. As such we intend our customer service to be key to the retention of customers. This is mainly because we intend our customers not to be one-time buyers but regular order seekers. Market penetration through lower prices shall be undertaken where need be. This will also assist in the establishment of customer loyalty.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. which are in competition with the industry. the promotional tools and messages may vary slightly to match the intended market. we intend to offer extremely reasonable prices in comparison to the competition and we need to be able to sustain that. In such a market we cannot afford to appear in. We shall follow-up with our clients on a regular basis so as to ensure they are satisfied with our products and delivery times. We intend to leverage our presence using quality brochures and other sales literature. Since we shall be targeting different segments. Customer service shall be enhanced through infrastructure support in the form of merchandising and credit facilities. so as to forecast their demands and establish long beneficial relationships. in addition to the distribution of the products. in terms of size. every promotion and every publication. The establishment of a rapport and understanding between our customers and ourselves is going to be an ongoing processes. 6. customers drinking these products in groups. However we realize that we must charge appropriately for the quality and work we shall be providing.1 Service Provision The service aspect of Sedibeng Breweries marketing mix shall constitute an important element in delivering total quality. while premium pricing will be the case of the upperend of the market.2 Pricing Strategy Initially our prices will not be under our control but dictated by the market conditions prevailing at the particular time. 6. Promotional campaigns will seek to promote the 'sharing aspect' of the beer.Sedibeng Breweries our products. as well as our own costs. refreshness and health in every picture. We intend our income structure to match our cost structure. workmanship and delivery with our aim being to achieve a gross profit margin of at least 30% in our initial years of operation. so as to ensure that the salaries we pay to assure good workmanship is balanced by the price we charge. Hence our prices shall be as follows: (discussion removed for confidentiality). including promotional Page 19 . and alternative distribution facilities where possible and viable. To be competitive in the market we intend to offer discounts to customers making bulk orders. This is due to the high degree of exposure our competitors already have. In price. This is particularly so in the case of products which are also produced by our competitors. Hence we intend the price will accommodate the mark ups prevailing in the industry.

Contacts Botswana. the company believes its products should be advertised and promoted in an honest and ethical manner that respects the values of our consumers' societies. for example through being chosen #1 at a taste test. which hopefully shall convert into market share. Due to the fact that our products are in the introductory phase on the market. which may provide an opportunity to advertise. and of consistent high quality. Undoubtedly this would add confidence and pride in our staff complement as their hard work would be recognized often at the highest levels. and this builds strong customer loyalty. promotional expenses are high in order to generate customer attention and knowledge of our products existence. and other telephone directories. The aim of this exhibition is to provide a conducive environment for companies to display their products in a specialized exhibition. We intend to spread the word about our business through the following: Advertising 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. Not only will these increase awareness of the products. An example of a trade show we intend to participate at is BITEC. adding leverage to its reputation and image. 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. Events These are increasingly becoming important as more firms establish in the country and hence the need to be known. A constant look out will also be made of any special editions in the local newspapers. The organization aims to participate in trade shows and quality taste tests. Communicating such achievements often gives customers a feeling that they can rely on the product. The exchange of technologies. Hence the need to ensure that our products are constantly available to our target market. ideas. complimentary slips and stickers. but if a particular product were to gain recognition. Whilst we are committed to providing products of uncompromising quality to meet the needs and expectations. Botswana--a review of commerce and industry. 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. Examples include the Boccim Business Directory which will require us being members of Boccim. the organization will be able to take advantage of this in all its promotional campaigns. This is so as to instill awareness and knowledge of our existence in the market place. Page 20 . Such fairs serve as important eye openers for both potential customers and ourselves.Sedibeng Breweries material such as pens. and contacts will serve as a fertile ground for the blooming of healthy trade relationships and partnerships.

This will ensure that our products are customized as much as possible to the surrounding community's needs and wants. adding to the possibility of positive referrals. At this we intend to invite potential customers. We also intend to experiment with a road show in the various often-neglected remote areas giving out caps. to long term as we plough back into the society we operate in. and other such prizes to individuals who answer questions correctly. This will constitute some of our corporate social responsibility details of which are provided in the respective section. appropriately named. This will assist in the recognition and appreciation of our company in the surrounding community especially. and other stakeholders so as to penetrate the market. These same tours will also be arranged with prospective clients/order-takers. especially considering the fact that we are still a relatively new firm in the market. of grandeur nature. In addition the sales person will listen to client's needs at close hand. that is whether they prefer larger or smaller containers. This is likely to be held in the hottest month of the year (October) when people are often extremely thirsty. In cases where there is the opportunity of obtaining a large order it may be necessary for the top management to go out personally. so as to ensure that the product is delivered timely and that it is the right product as demanded by the surrounding community. 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. including the Minister of Industry and Commerce. Proceeds of such festivities are to be donated to charities. bags. In addition we intend to pursue educational sponsorship for the less advantaged but promising young individuals in the community. Homes for the under privileged will be also be built in the medium. contributing towards the establishment of a good and reputable image. Hopefully visitors will leave impressed and confident in our products. This will also enable our business name and products to be better known by the respective communities. Hence the name 'October fest' might be appropriate. 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. This is so as to increase awareness of our facilities and products and also showing confidence in our production process and standards. that maintains and promotes Botswana culture. Our efforts on community service will show that the company has its community at heart. 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. introducing ourselves onto the market. Brewery tours shall also be arranged with interested stakeholders including school children and college students. We also plan to have a major festival initially in Selebi Phikwe. However we are extremely confident that these road shows if well planned will be a success as they encourage community participation. senior officials. Close analysis shall also be undertaken of the consumption patterns of the respective communities. Page 21 .Sedibeng Breweries Public Relations Recognizing that we are relatively new on the market there will be a need to organize an event.

Retail Distribution Channels (discussion removed for confidentiality).4 Distribution Strategy We believe that through our obsession for improvement.Sedibeng Breweries Direct Marketing This will be used. This is particularly so in view of the increasing investment and global trade amongst countries. firm size and narrow conceptualization of our business domain. All the above promotional tools shall be well integrated and utilized in tandem so as to maximize their effect. 6. 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. which is increasingly becoming of importance in view of the dynamic environment. Hence our messages will influence the buying decision of prospective customers and distributors by emphasizing our unique selling proposition. and commitment to a leadership position in our respective markets. To attain low lead-times we intend to (discussion removed for confidentiality). as both large and small organizations look at obtaining the best deal possible. kilometers driven. and persuade prospective buyers that we are different from our competitors. eliminate rework and waste. (Discussion removed for confidentiality. Trade Channels: • • Wholesale Distribution Channels (discussion removed for confidentiality). In terms of actual delivery for every vehicle the daily fuel used. in the best condition. This shall be undertaken through coordination and logical integration of our distribution operations. However this will require adequate planning and research so as to establish a professionally done website. in the different markets nationwide. we can overcome the traditionally binding constraints of resource base. 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. By engaging and establishing good relationships with shebeen owners we intend our products to be readily available to our target market. More often than not these organizations will seek out potential clients over the Internet due to the cost of transport and accommodation. apart from the obvious time factor. in the form of telemarketing and informing potential customers and obtaining referrals where possible. repairs and maintenance costs must be recorded and compared with the set standard. We may then arrange for an appointment with the respective decision-maker/order-maker. but only to a limited extent. and optimize our human resources utilization.) Page 22 . with the intention being to lure them into ordering one or more of our product lines. Internet Marketing The increasing growth of the Internet as an information source provides an opportunity that we may exploit. We aim to reduce cycle time for key processes. In all the above we intend to communicate our ability to manufacture good quality brews that will satisfy the customers needs.4. This will mainly serve foreign customers and other stakeholders including potential investors.

We know that we cannot address all the development needs of our society. We intend to sell the opportunity to enjoy oneself amongst friends. not wanting to limit our horizons in the initial period. Hence we intend to not only meet customers' expectations but to exceed them. we need to support projects that communities bring to us. This will come out in our advertising. as it will definitely influence our potential customers on whether to try out our products or not. we assist and sometimes may form partnerships so as to increase capacity. However. for example keeping water and being able to be deposited to retailers. 6. and the risk is that the project will then always 'belong' to us. A specific example is the X ml T beer pack.5 Product Marketing Our product marketing will emphasize the benefits of consuming our products. we will be expected to fix it. family and/or colleagues. if not improve product appeal. However depending on the dictates of the market. there might be need to introduce new product packs. In all cases we intend to provide a thorough understanding and appreciation of the products to the customer and the benefits of consuming them. the community and become sustainable. Through our social responsibility program we can assist in improving peoples lives. We intend to focus on the individual or group who want to enjoy themselves through the consumption and sharing of refreshing healthy beverages. initially targeting a market share of 6%. 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. This is because if we impose our solution and drive a project it is an artificial response. which is not being produced by any of the other breweries at the moment. Currently the products are served in X ml and Y ml packs. As such we shall ensure that it is not only attractive to consumers but also hygienic. In the medium to long term we intend our product packaging to also be recyclable and hence more environmentally friendly--a continuous improvement process. Whenever the project comes up against a new challenge. and will be forced to stay in a situation where we have to look after the same few projects forever. delivery and collateral such as sales literature and business cards. 6. As time progresses we intend to have packaging that enables the container to be used for other purposes after beer consumption. Page 23 . Continuous improvement on packaging will also be undertaken so as to maintain. including refreshment and enjoyment of top-quality brews.4. Hence we intend to ensure that we are flexible if such changes are to occur.Sedibeng Breweries 6. representing an opportunity to be realized. communities are involved and the projects will be able to become self-sustaining. If we contribute to development in a sustainable way. However. before we commit ourselves to projects we intend to ensure that skills will be transferred. the former of which we have identified as already being done. Rather we intend to fund several projects that belong to.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. Where we can.4.6 Product Packaging Our product packaging shall be of utmost importance. and will be driven by. we intend to be continually looking out for opportunities that we may exploit. rather than strictly creating our own solutions for our communities.

Stock takes and reconciliations shall be undertaken on a regular basis. 7. During the actual off loading the receiving bay personnel will mass check on at least X% of the consignment. This shall be undertaken through working closely with suppliers to ensure uninterrupted deliveries. 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. Health (discussion removed for confidentiality). However as we are committed to fair terms of trade and promotion of local business we intend to engage local suppliers. ultimately benefiting the final consumer. This may be undertaken through (discussion removed for confidentiality).0 Production Summary Our production system shall strive to attain service excellence in addition to manufacturing safe. Environment (discussion removed for confidentiality). Education (discussion removed for confidentiality). Page 24 . The stock principle of First In First Out (FIFO) shall be implemented.1 Suppliers Currently the company obtains the vast majority of its raw materials from South African suppliers. Nonconfirming 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.3 Storage It shall be the policy of the company to ensure that all raw materials are stored in a secure. quality products.2 Receiving Recognizing that the receiving of our raw materials is an essential element in our entire business. Hence we intend to establish good rapport with all our suppliers and hence long mutually beneficial business relationships. initially done at least once a week. 7. we intend to ensure that it is done by responsible persons who will be present during off loading to check the quantity and condition of the consignment. Hence raw materials. 4. clean and pest free manner. Community (discussion removed for confidentiality). By the undertaking the above we will optimize our productivity given our available resources. including x and y. 7. The major advantages of doing so being higher margins. 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.Sedibeng Breweries We intend to be involved in the following activities: 1. Whenever stock is taken out it shall be recorded on a separate stock or bin card. 3. may be sourced from local communal and commercial farmers avoiding intermediaries so as to minimize costs. 7. This will also result in low production costs being attained by the company. This shall be undertaken through the engagement of modern production techniques using up-to-date assembly technology. 5. 2. Through the use of economies of scale we aim to maintain low input and production costs. Arts and Culture (discussion removed for confidentiality).

Daily management will consist of Mr. Consonant with its efforts to create added value by employees. o Stakeholder inclusivity. and Mr.1 Management Team The management team. Page 25 . Adoption of a good remuneration policy aimed at developing our people through employee benefits. We will develop and nurture the company as community.Sedibeng Breweries with reconciliations of raw materials issued to the brewery. Responding and promoting human rights issues. training and group initiatives. The company intends to respect its community and treat all employees well. such as equity in the workplace and in community relations. and public relations. losses. which if well planned for. mainly comprising of the shareholders. the implementation of an effective performance management system. issued to production. G in dealing with government. and our community at large. Maintaining preventative health and safety structures for employees and support for surrounding communities. paying competitive remuneration packages against market benchmarks to employees for their agreed and set out tasks. 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. will enable the business to realize its goals and objectives. However not wanting to pollute the environment. savings and other specific successes. We realize that there shall be a lot of by-products that will be produced from our production of the main product lines. o External communication. has wide expertise and broad knowledge of the products and markets. We do not intend to be overly hierarchical.4 By-Products Sedibeng Breweries intends to utilize every resource it has to the fullest possible extent. Management style will reflect the participation of the shareholders. Hence our human resources strategy will revolve around: • Communicating openly and transparently. we plan to utilize by-products whenever possible.0 Management Summary Sedibeng Breweries shall evaluate the jobs it provides. This will ensure that our resources are fully utilized. opening and closing stock taken. addressing strong and trusted: o Internal communication. Should any deviations arise these must be explained. • • • 8. market share and productivity will provide additional impetus. B in the role of technical and operations. 7. Management's ongoing initiatives to drive sales. that is. 8. corporate bodies.

000 $36. and strive to achieve optimal productivity.000 $36. through benefits such as housing and family education grants. Sedibeng Breweries recognizes that our employees contribute fundamentally to the company's long-term prosperity. using these organizations standards.000 $15. We intend to enhance our capacity to attract and retain people of quality.000 $12.000 $48.000 15 $383.000 $19. generous profit sharing. or benchmark.000 $19.000 $12.000 $12.000 $12.000 $12.000 $12. Our compensation will include health care. This is because the health of our people is an integral element of employee well-being at work and at home.000 $40.000 $12.000 8.200 $12. which is so essential if we are to gain and maintain a competitive advantage.000 $12.000 $15.000 $52.200 Year 2 $48.000 $15.000 $36. This is so as to ensure that we are continuously able to anticipate our markets needs--a proactive approach.000 $12.000 $12.000 $36. We also intend to minimize if not totally eliminate the number of isolated incidents of intimidation in the workplace. to retain their invaluable expertise and to ensure job satisfaction and enrichment through delegation of authority.000 $36.000 $12.000 $15. preferably with the established and reputable firms.000 $15. Table: Personnel Personnel Plan Year 1 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 $48.000 $12.000 $12. Awards will be given out to outstanding individuals.000 15 $331. while realizing the full potential of each employee. As an equal opportunity employer.000 $15.200 Year 3 $52. Compliance with relevant legislation is a minimum target in our organization.2 Personnel Plan We intend to compensate our personnel well.000 $15.000 $12.000 $15.200 $12. Internal training will not only include product and technical aspects.3 Training In-house training shall be continuous with regular external training being undertaken particularly following any new developments in the market. This will ensure that our personnel are exposed to the latest production techniques and are able to set their standards.000 $40.000 $42. 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.000 $36. but also expand to give Page 26 . 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 $15.000 $22.000 $12.Sedibeng Breweries 8. such as YY Breweries.000 $12.000 15 $331. plus a minimum of three weeks vacation. we respect the diversity and human rights of our people.000 $48. Courses on brewing will be undertaken primarily in South Africa. Employee health shall be of extreme importance.

Compatibility in this regard means: • • • • Fundamental respect for giving our customers value. strong morale and high quality work per employee. Therefore we need to develop a permanent system of receivables financing systems. particularly with the bulk order customers. Hence they tend to have a certain degree of financial authority. new technology aids. Page 27 . 2. proud of their work and work as a team. balanced with lifestyle education and employee assistance programs that incorporate rehabilitation and counseling in a range of illnesses and social or personal problems. because they are extremely sensitive and will normally judge us on our terms. Willingness to follow the company and contribute valuable input to strategy and implementation decisions.0 Financial Plan We want to finance growth mainly through cash flow and equity. 3. using a well-coordinated accounting department. We recognize that this means we will have to grow more slowly than we might like. The most important factor in our case is collection days. products. making sure that the employee understands the goals of the firm. 9.Sedibeng Breweries much greater knowledge of customers. Hence we intend to promote and maintain good labor relations. Respect for realistic forecasts. In turn we intend to ensure that our investors are compatible with our growth plan. growth second. in addition to unifying staff in customer focus and values. is customer focused. time management amongst other such variables.4 Feedback and Control 1. 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. This is of particular importance in view of the AIDS epidemic that has grappled the country and continent as a whole to unparalleled levels. We intend to conduct health education sessions for groups and individuals on health risks in the workplace. We acknowledge the fact that successful recruiting. 8. We intend to use employee satisfaction surveys to shape the business. and for maintaining a healthy and congenial workplace. market trends. We can't push our customers hard on collection days. management style and vision. 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. Cash flow as first priority. motivation and discipline procedures are keys to the growth of the organization. This will encourage employees to become entrepreneurial and customer responsible. Such a culture will enhance innovativeness and creativity in turn leading to job satisfaction and enrichment. and conservative cash flow and financial management. profits third.

and personnel burden are based on conservative assumptions. rent.42% 0 9. Table: General Assumptions General Assumptions Year 1 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 1 10. Table: Break-even Analysis Break-even Analysis Monthly Revenue Break-even Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost 56% $41. With fixed costs of approximately $41.00% 10.00% 0 Year 3 3 10. we need to bill approximately $93. of course.00% 25. The monthly assumptions are included in the appendix. We will thus aim to ensure that our sales levels are running comfortably above break-even.00% 10.Sedibeng Breweries 9.040 per month at the outset (a bare minimum).273 Page 28 . Interest rates. Hence many fixed costs shall be included in these costs.000to cover our costs.2 Break-even Analysis Our break-even analysis will be based on running costs. without major recession. that there are no unforeseen changes in economic policy to make our products immediately obsolete. that is costs we shall incur in keeping the business running.00% 10.00% 25. insurance amongst others. tax rates. including salaries and wages. We assume. most of which are shown in the following table as annual assumptions. From the beginning.1 Important Assumptions The financial plan depends on important assumptions. We don't really expect to reach break-even until several months into the business operation. Some of the more important underlying assumptions are: • • We assume a strong economy. water and electricity. we recognize that collection days are critical. The following chart and table summarize our break-even analysis.040 $93. but not a factor we can influence easily.00% 25.42% 0 Year 2 2 10.

000 $0 ($10.000 $20.000 $100. This will be representative of a net profit margin of approximately 7%.000 $10.000 $120.000 $160. and approximately $1.000 in the third year.000 the first year to more than $1. Profits are calculated to be around $152.000 before tax the first year during the start-up phase of this business. we are projecting very conservatively regarding cost of sales and gross margin. Our cost of sales should be much lower. with sales increasing from more than $1.000 9. Page 29 .000) ($20.000 $200.612.000) ($40.466.000 $50. As with the break-even. than in this projection.000 $140.000) $0 $40.000 $30.000 $80. and gross margin higher.000 $40.3 Projected Profit and Loss Our projected profit and loss is shown on the following table.000 $60.000 the second.Sedibeng Breweries Chart: Break-even Analysis Break-even Analysis $60.806.000 $220.000) ($30.000 $180.000 $20. which though may not seem that impressive is relatively good for a start-up firm in our line of business.

and a bump in our collection days as we spread the business during expansion.200 $2.520 $5.072 $0 $903.040 $4.00% 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 $331.000 $59.752 $158.260 $242.444 $232.771 $2.026 $820.000 $37.00% Year 3 $1.441 $0 $1.557 44.227 9.410 $37. we recognize that we cannot control this factor easily.4 Key Financial Indicators The following benchmark chart indicates our key financial indicators for the first three years.59% 9.000 $52.051 44. Page 30 .400 $4. However.255 9.466. We foresee major growth in sales and operating expenses.975 $645.690 $57. because our working capital situation is chronically tight.200 $2.Sedibeng Breweries Table: Profit and Loss Pro Forma Profit and Loss Year 1 Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % $1.007 $222.200 $36.552 7.703 44.011.011.646 $5.020 $113.81% $383.450 $0 $562.000 $10. We do not want to let our average collection days get above 30 under any circumstances.806.207 $1.612.200 $2.550 $212.00% Year 2 $1.75% $331.800 $4. Collection days are very important.200 $54.975 $0 $820.200 $56.571 $162.480 $152.700 $10.680 $0 $497.033 $173.535 $10.292 $4. because of the relationship with our clients. This could cause a serious problem with cash flow.441 $794.631 $39.460 $0 $59.800 $49.000 $49.680 $0 $492.072 $709.144 $1.629 $903.

0 Year 1 Year 2 Year 3 0. This will be brought about by the development of sales literature. which we shall in turn reinvest. Page 31 . to ensure market development. As our market share increases and capital is generated. advertising expenses.5 Expense Forecast Initial marketing expenses are relatively high as we seek to become known on the market. further marketing programs and the expansion of those in existence at the time will be undertaken.Sedibeng Breweries Chart: Benchmarks Benchmarks 1. Once these programs will start generating revenue for the business.0 Sales Operating Expenses Inventory Turnover Gross Margin% Collection Days 9. and function expenses (including lunches and dinners with interested stakeholders).

846 Year 2 $0 $0 $0 $0 $0 $0 $0 $1.656 $383. VAT.689 $1.470 Page 32 .621.833 $1.450 $331.769.Sedibeng Breweries 9.200 $977.846 $451.536 $1.157 $1.181. 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.309.6 Projected Cash Flow Cash flow projections are critical to our success.033 ($43.309.469.238.265.456 $1.200 $1.621.838) $36.189 $131.769.000 $0 $0 $0 $0 $0 $1.195 Year 1 $0 $0 $0 $0 $0 $0 $0 $1.507 $821. VAT.317.195 $403.371 $1. Table: Cash Flow Pro Forma Cash Flow Year 1 Cash Received Year 2 Year 3 Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax.934 $1. Detailed monthly numbers are included in the appendix.000 $1.000 $1.033 $331.656 $95.584.371 $148.138.489.099 $279.351 $0 $0 $0 $0 $0 $0 $0 $1.371 $0 $0 $0 $0 $0 $0 $77.584.470 Year 3 $366.162 $0 $20.188. However it should be noted that they do not take into account the required capital injection.688 $1. 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 $0 $0 $0 $0 $0 $0 $0 $1.

000 $10.000 $60.000 $50.000 $40.Sedibeng Breweries Chart: Cash Cash $70.000) Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Net Cash Flow Cash Balance Page 33 .000 $20.000 $0 ($10.000 $30.

450 $342.351 $305.807 $102.025 $279.414 $0 $437.841 $0 $725.177.168.818 $0 $0 $88.552 $88.7 Projected Balance Sheet The balance sheet shows healthy growth of net worth.444.945 $938.945 $0 $102.207 $1.600 $719.400 $1.257.342. and strong financial position.552 $1.287 $103.000 $30.257.400 $729.552 $1.255 $1.579 9.614 $91.342.000 $20.852 $158.000 $0 $166.600 $1.000 $10.945 $0 $0 $102.700 $71.107 $173.625 $1.655 $0 $166.200 $739.655 $20.800 $1.700 ($41.207 Year 1 $750.979 $1.807 $1. Table: Balance Sheet Pro Forma Balance Sheet Year 1 Assets Year 2 Year 3 Current Assets Cash 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 $146.407 $131.625 Year 2 $750.227 $1.831 $123. The threeyear estimates are included in the appendix.655 $938.818 $938.034 $750.010.444.8 Business Ratios The table below shows our business ratios.979 Year 3 $36. Page 34 .Sedibeng Breweries 9.168.162 $277.010.034 $1.177.060 $0 $528.700) $113.700 $230.818 $0 $88.

91% 1.84% 100.01% 100.16% 14.08 1.71 1.78% Year 2 9.16% 85.54% 7.a n.96 88 8.12% 0.00% 7.99% 58.60% 26.08 1.84% 24.75% 11.00% 41.22 1.01 $622.28 3.79% 100.48 1.96 87 10.70% 24.05% 16.a n.00 n.16% 0.25 3.Sedibeng Breweries Table: Ratios Ratio Analysis 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.69% 7.38 0.60% 23.80 7% 2.67 1.20% 100.60% 2.a n.86% 100.45 0.00% 50.48% 0.80% 30.90% 49.a n.96 56 10.78 7% 1.00% 44.a n.67 27 1.80% 69.a.24% 5.10% 100.00% 37.94% 23.00 n.30% 0. to Liab.a n.30% 1.06% 18.10% 2.95 4.38 12.a Page 35 .12% 92.00% 7.a n.00% 34.16% 62.46% 12.00 0.06% 0.a 0.05 6.00% Industry Profile 4.00 0.752 76.15% 100.16 1.00% 44.35 n.70% n.a $270.17 40 1.12% 17.50% 10.90% 12.59% 12.07% Year 3 9.19% 0.36% 1.62 1.21% 49.04 7.a 0.00% 34.30% 7.81% 13.88% 5. Year 2 10.31% 16.00% 20.80 14% 0. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Year 1 n.91 7.a n.90% 8.56% 13.00% 14.00% 14.a n.a n.64% 10.92 7.24% 0.29 $439.17 28 1.634 0.00% 7.207 212.00% 49.41% 100.70% 50.20% 16.88 14.42 50.a 3.79% Year 1 7. General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes 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.00% 36.19% 1.25 n.42 12.60% 10.20% 30.06% 92.a n.00% Year 3 12.00% 7.00% 44.

Saying no: Though difficult initially.1 Contingency Planning 1. The introduction of quality catalogues and sales literature will enable Sedibeng Breweries to market to potential customers. 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. However further research and analysis into the above is still being undertaken.00 0. Tracking and follow-up: We intend to have the discipline. 3. 2.00 0. We project sales to increase accordingly.0 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.Sedibeng Breweries Dividend Payout 0. 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. Hence the need for commitment in our work and striving of total quality in our organization. With time. 2. Another possibility is the introduction of a new company(s) in our niche. With this in mind we intend our marketing programs to expand accordingly. Page 36 . as an organization. In summary we intend to undertake the following: 1. We intend to watch our results very carefully. We might be able to avoid the straight competition with the major companies by focusing more on the previously mentioned products. though slightly slower as we establish a reputation for ourselves. 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. Hence the need to undertake aggressive marketing and networking. An established beverage manufacturer may begin targeting to our target market niche. to track results of the business plan and make sure that we implement. We may need to drop production of certain products if we cannot get the margin up or material becomes difficult to obtain.a 10. we intend to be able to say no to special deals that take us away from the target focus and are unprofitable.00 n. 4. 10. 3. Market segment focus: We intend to have the discipline to maintain the market segment focus.

868 $17.233 $25.787 $48.561 Month 6 $27.732 Month 11 $44.000 $14.571 $71.171 $6.Appendix Table: Sales Forecast Sales Forecast Month 1 Sales X Beer Y Beer Z Beer Total Sales 0% 0% 0% $29.239 $90.000 Month 10 $40.428 $38.512 $17.683 Month 5 $25.210 $9.800 $15.585 $12.000 $21.805 Month 4 $23.858 $72.000 Month 7 $30.951 $36.976 $68.348 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Direct Cost of Sales X Beer Y Beer Z Beer Subtotal Direct Cost of Sales Month 1 $16.293 Month 8 $34.142 $54.415 $30.536 Month 12 $50.357 $107.366 $42.984 $136.732 $16.317 $112.530 $102.488 $40.473 $18.571 $20.600 $40.664 $17.875 $94.551 $76.399 $23.390 $21.829 $32.429 $27.542 $49.732 $24.784 $162.341 $35.200 $80.171 $121.000 Month 3 $21.902 $23.902 $20.077 $46.909 $58.181 $63.195 Page 1 .878 $43.966 $10.958 $90.463 $13.937 $57.570 $14.143 $142.722 $10.413 $65.003 $19.334 $33.464 $27.083 $47.328 $30.331 $32.714 $13.600 $11.143 $25.707 $18.021 $79.951 $61.400 $7.157 $72.519 $12.759 $64.214 $38.000 $28.286 $51.254 $37.585 Month 9 $36.066 $200.722 $98.400 $60.585 Month 2 $18.125 $38.219 $85.010 $52.432 $175.345 $33.

000 $3.000 $1.000 $1.000 $1.000 $3.000 $3.000 $1.600 $1.000 $1.000 $1.000 $1.600 $1.000 $3.600 $27.000 $1.000 $4.000 $1.000 $1.000 $1.000 $3.000 $3.000 $1.000 $4.000 $3.600 $27.000 $1.600 $27.000 $1.000 $1.000 $4.600 $27.000 $1.000 $1.000 $1.000 $3.000 $3.000 $3.000 $1.000 $1.000 $4.000 $3.000 $3.000 $3.000 $3.000 $1.000 $1.000 $1.000 $3.000 15 Month 7 $4.000 $1.000 $1.000 $1.000 $3.000 $1.000 $1.000 15 Month 3 $4.000 $1.000 $3.000 $4.000 $3.000 $3.000 $1.000 $3.000 $3.000 $1.000 $1.000 $1.000 $1.000 $1.000 $3.000 $1.000 $1.000 $1.000 15 Month 5 $4.000 $1.600 $1.000 $3.000 $1.000 $1.600 $27.000 $1.000 $1.600 $27.000 $1.000 $1.000 $1.000 $1.000 $3.000 15 Month 9 $4.000 $4.000 15 Month 6 $4.000 $1.000 $1.000 $1.000 15 Month 4 $4.000 $1.000 15 Month 12 $4.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.600 $1.000 $1.000 $3.600 $27.000 $1.000 $1.600 $1.000 $1.000 $1.000 $1.600 $1.600 $1.000 $1.000 $1.000 $1.000 $1.000 $3.000 15 Total Payroll $27.000 $1.000 $3.000 $1.000 15 Month 10 $4.000 $1.000 $1.000 $3.000 $1.000 $1.000 $1.000 $3.600 $27.000 $1.000 $1.000 $1.000 $1.000 15 Month 11 $4.000 $1.000 $3.000 $1.000 $4.000 $4.600 $27.000 $1.000 $4.600 $1.000 15 Month 8 $4.600 $27.600 Page 2 .600 $1.000 $1.000 $1.000 $1.000 $3.000 $1.000 $1.000 $1.600 $1.000 $3.000 $1.000 $1.600 $27.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $1.000 $4.000 $1.000 $1.000 $1.000 $4.000 $3.000 $3.000 $1.000 $3.000 $1.000 $4.600 $1.000 $1.000 15 Month 2 $4.Appendix Table: Personnel Personnel Plan Month 1 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 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% $4.000 $1.600 $1.000 $3.000 $1.000 $1.000 $1.

00% 25.00% 10.00% 25.00% 25.00% 10.00% 0 Month 12 12 10.00% 0 Month 10 10 10.00% 25.00% 0 Month 7 7 10.00% 10.00% 0 Month 4 4 10.00% 0 Month 11 11 10.00% 25.00% 10.Appendix Table: General Assumptions General Assumptions Month 1 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 1 10.00% 10.00% 25.00% 10.00% 25.00% 0 Month 9 9 10.00% 25.00% 0 Page 3 .00% 10.00% 10.00% 0 Month 6 6 10.00% 0 Month 3 3 10.00% 10.00% 0 Month 8 8 10.00% 30.00% 25.00% 10.00% 25.00% 0 Month 2 2 10.00% 0 Month 5 5 10.00% 10.00% 10.00% 25.

561 Month 6 $107.500 $850 $200 $400 $350 $3.140 $0 $27.500 $850 $200 $400 $350 $3.348 $112.762) $167 ($2.140 $0 $27.140 $0 $27.500 $850 $200 $400 $350 $3.805 Month 4 $94.734) -3.00% $77.140 $0 $27.683 Month 5 $102.16% $9.142 $60.732 $0 $90.000 $4.040 $41.140 $0 $27.521 $36.000 $4.858 $80.186 $5.339 7.500 $850 $200 $400 $350 $3.585 Month 9 $142.161 15.000 Month 3 $85.66% $14.600 $4.000 $0 $80.195 $0 $112.232 $167 $9.00% $45.00% $60.44% $35.Appendix Table: Profit and Loss Pro Forma Profit and Loss Month 1 Sales Direct Cost of Sales Other Total Cost of Sales $65.000 $4.585 $0 $36.000 $4.140 $0 Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred $41.040 $41.600 $4.00% $88.000 $4.40% $16.500 $850 $200 $400 $350 $3.600 $4.536 Month 12 $200.00% $62.040 $41.140 $0 $27.600 $4.000 $4.500 $850 $200 $400 $350 $3.040 $41.00% $71.000 Month 10 $162.000 $4.040 $41.334) -10.249 $31.293 Month 8 $136.015 2.561 44.629) $167 ($911) $354 $1.394 44.294) ($11.963 $167 $11.444) $167 ($3.500 $850 $200 $400 $350 $3.413 $30.102 $6.658 44.536 $0 $98.737 Net Profit Net Profit/Sales ($8.293 $0 $68.428 44.005 $6.00% Expenses Payroll Sales and Marketing and Other Expenses Depreciation Leased Equipment Utilities Insurance Rent Payroll Taxes Other 15% $27.040 $41.000 $0 $60.15% $3.382 $37.585 $0 $76.600 $4.759 $76.452 4.600 $4.428 $40.683 $0 $52.040 $41.561 $0 $57.00% $37.787 $57.040 $41.984 $167 $4.27% ($2.000 $4.000 Month 7 $121.113 $19.500 $850 $200 $400 $350 $3.951 $68.225 10.600 $4.818 $22.134 $19.204 $167 $47 $4.054 $47.174 44.331 $36.723) -13.479) ($2.238 11.500 $850 $200 $400 $350 $3.468 $167 $3.021 $90.195 Gross Margin Gross Margin % $28.140 $0 $27.000 $4.00% $53.040 $41.484 $12.00% $47.036 $167 $1.153 44.140 $0 $27.00% $41.445) ($3.738) ($9.612) ($8.20% $140 0.500 $850 $200 $400 $350 $3.57% Page 4 .040 $41.000 $4.952 $167 $1.958 $98.077 $52.140 $0 $27.210 17.805 $0 $47.142 44.600 $4.000 $4.226 44.040 $41.500 $850 $200 $400 $350 $3.000 $4.099 $167 $7.562 13.93% $27.746 44.600 $4.00% $31.742 $21.113 $47.000 $0 $40.858 44.366 $47.37% $22.422 44.600 $4.93% $4.500 $850 $200 $400 $350 $3.600 $4.618 $13.040 ($12.140 $0 $27.585 Month 2 $71.289 44.732 Month 11 $175.668 $167 $5.35% ($7.140 $0 $27.600 $4.

Appendix Page 5 .

916 $127.600 $2.199 $80.342 $49.140 $0 $0 $0 $0 $0 $0 $0 $95.00% $0 $0 $0 $0 $0 $0 $0 $16.223 $150.291 Page 6 .151 $70.691 $98.017 $129.128 $102.190 $35.600 $27.561 $107.647 $104.647 $104.923 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $30.600 $27.687 $114.600 $27.333 $0 $16.951 0.612 $171.291 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $82.492 Month 3 $0 $0 $0 $0 $0 $0 $0 $77.864 $97.548 $143.786 $30.295 $105.697 $64.000 $96.215 $130.215 $130.722 $107.600 $54.Appendix Table: Cash Flow Pro Forma Cash Flow Month 1 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax.163 $102.068 $121.722 $27.439 $25.561 $107.519 $53.128 $102.722 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $98.600 $71.528 $75.600 $27.223 $150.505 $43.951 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $27.939 $26.612 $171.068 $121.490 $21.548 $143.122 $30. VAT.468 $93.333 Month 1 $0 $0 $0 $0 $0 $0 $77.919 $77.687 $114.540 $82.439 Month 4 $0 $0 $0 $0 $0 $0 $0 $89.695 $77.492 $23.617 $157.295 $105.715 $40.623 $123.087 $70. HST/GST Received New Current Borrowing New Other Liabilities (interestfree) 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.242 $89.600 $27.600 $68.615 $103.763 $130.600 $27.323 $95.227 $151.923 $27.047 $76.763 $130.916 $127.140 $27.488 $34.490 Month 2 $0 $0 $0 $0 $0 $0 $0 $70.939 Month 5 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $97.623 $121.227 $151.857 $1.633 $19.727 $91.990 $50.333 $17.776 $77.600 $27. 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 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $16.833 $102.617 $157.600 $27. VAT.

204 ($6.718 ($3.Appendix Net Cash Flow Cash Balance ($13.133 ($6.973 $48.708) $21.619 $17.796) $66.004 $20.162 Page 7 .326 $29.841 ($8.502 $14.215) $7.398 $2.485) $59.508 $995 $21.299) $10.660 $36.017 ($6.648) ($18.734) $14.504 $13.231) ($11.

131 $20.181 $78.634 $20.841 $878.550 $747.950 $6.650) $878.936 $44.000 $750.326 $115.000 $0 $72.700) ($41.000 $750.845) $12.496 Month 5 $750.800 $7.148 $1.265 $938.700) ($18.244 $0 $155.500 $740.765 $98.810 $52.000 $0 $20.597 Month 1 $750.700) ($8.005.496 $881.359 $90.000 $1.746 $14.000 $0 $93.350 $966.650 $8.146 $1.000 $73.342 $1.209 $880.300 $953.765 $20.448 $57.700) ($18.146 $1.414 $0 $437.636) $881.330 $1.277 $904.700 $938.504 $206.017 $169.700 ($41.155 $909.765 $0 $119.700 $938.434 $108.720 $124.805 $0 $345.946 $7.800 $980.502 $249.277 $52.317 $0 $229.029.700) ($41.131 $938.207 $885.700 ($41.973 $100.723) $811.597 $811.450 $964.600 $966.381 $925.204 $48.000 $0 $20.044.700) ($41.000 $0 $90.171 $878.250 $745.500 $9.718 $190.700) ($15.944 $953.000 $2.088 $99.000 $750.359 $20.700 $938.552 Page 8 .700) ($11.044.000 $861.529 $118.491 $20.720 $0 $138.364 $74.951 $0 $220.056) $880.000 $840.155 $909.700 $938.529 $20.529 $0 $118.010.162 $277.634 $0 $144.342 $1.175 $1.655 $938.700 $748.280 $10.900 $1.000 $750.877 $65.319 $0 $93.984 $84.841 $132.700 $938.175 $1.900 $1.141 $75.976 $1.381 $28.131 $0 $94.350 $74.816 $895.491 $938.181 $975.700) ($41.791) $878.326 $36.010.175 $0 $110.999 $0 $235.050 $743.000 $0 $88.650 $739.700 ($41.029.171 Month 3 $750.700) ($41.175 $20.209 $964.700 ($41.619 $948.275 $17.181 $975.133 $145.350 $10.000 $0 $750.000 $0 $10.100 $5.005.122 $0 $261.177.407 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 $20.265 $20.700) ($16.330 $1.700) $0 $820.359 $0 $94.961 $938.634 $146.000 $750.000 $820.364 $975.200 $742.000 $5.398 $154.900 $744.000 $0 $94.319 $20.381 $925.700) ($41.700 $938.209 Month 2 $750.294 $88.319 $861.700 ($41.400 $21.350 $741.086.000 $4.721 $29.119.000 $0 $144.000 $850 $749.150 $904.000 $0 $119.998 $40.619 $51.508 $225.000 $750.909 $48.961 $20.000 $66.000 $0 $85.000 $0 $166.209 $68.700 ($41.720 $20.447 $59.244 $0 $285.655 $0 $166.961 $0 $85.655 $20.491 $0 $88.000 $0 $118.177.944 $65.976 $1.086.342 $113.619 $948.265 $0 $72.816 $895.296 $63.000 $0 $110.700 ($41.000 $0 $204.552 $885.148 $1.001 $0 $301.390 $0 $379.841 Month 4 $750.Appendix Table: Balance Sheet Pro Forma Balance Sheet Month 1 Assets Starting Balances Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Current Assets Cash 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 $750.000 $0 $138.241 $21.000 $0 $94.184) ($1.400 $746.000 $3.552 $980.585 $0 $216.119.000 $840.207 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $80.200 $744.175 $99.000 $750.750 $975.831 $123.798 $20.