Business Description

We create chocolate dipped fruit arrangements to bring happiness in all lifes occasions. Our purpose is to start up with a production point and online sales to direct customers and to the corporate sector.

We address to: B to B (business to business) - gifts/ events/ catering B to C (business to clients) gifts/ events

1. Business Description
Goals and Milestones

Building a local shop network with a national franchise system Creating a mass product: packed dipped chocolate fruits

Opening the first shopping point in a wealthy area with a highly purchasing potential within a year Ex: Old Center area

Finding a way to automate the process

2. Products and Services

Products: Fresh dipped chocolate fruit arrangements: - advantages: premium product, sophisticated, impressive, unique - For special events: weddings/ birthday parties (custom arrangements) - Gifts

Packed dipped chocolate fruits: - advantages: affordable, easy to transport, elegant - Gift boxes for special people (direct customers & corporate)

2. Products and Services

Services: - Customers have the possibility to choose some of the ingredients, the toppings, the products design ideal for corporate gifts/ weddings etc. - Delivery services (custom products and messages) ideal for special days (ex. Valentines Day/ 8th of March/ Easter/ Christmas etc) and birthdays Customers are attracted by: - The innovative idea - The freshness of the fruits - The thought of eating a healthy sweet ( a easy way to convince children to eat fruits and avoid heavy sweets)

3. The Marketing and Sales

A. Market Research and Analysis
Direct Competition Chocolate Fruits Arad Indirect Competition Pastry Shops www.aranjamentefructe.ro www.beautiful-decor.ro www.buchetedelicioase.ro adrianareteteculinare.blogspot.ro Pastry Shops from HoReCa system Secondary Market Direct Customers Market testing We had a positive feedback from the people we invited to taste our products. We reached a high number of likes on our Facebook page.

3. The Marketing and Sales

B. Competition
Strengths Weaknesses

First company to prepare very well the launch (advertising), can be positioned as the first on the market
Innovative design Continuous feedback from consumers

Budget
Keeping products fresh solutions with impact on the number of delivered orders

SWOT
Opportunities Increasing demand for new and innovative products as gifts Increase in online eCommerce

Threats

Idea, devices and human resources can be replicated Request for product exceeds production so other competitors can satisfy it Mechanism for keeping products fresh can be very expensive

3. The Marketing and Sales

C. Selling to the Market
Advertising Online communication through own site and online advertising (Google AdWords and Facebook Ads) Social networks (Facebook, Twitter, Pinterest, eForums etc.) Glass cases placed in Business Centers Stickered Cars Packaging Public Relations Organizing special events Media Releases, Articles in newspapers and magazines that fit the profile Blogging Night club, weddings sampling Delivering the goods and services In maximum 48 hours since receiving the orders confirmation (recommended: directly from the production point to the final consumer)

3. Marketing Buget
Type of expense
Website (online eShop) development Social Media management (12 m budget) Feedback processing (12 m budget) Rent for Glass cases placed in Business Centers (30 centers at EUR 200 rent for periods of 2-3 days) Print advertising (500 eur/month for first 6 months; EUR 200/month afterwards) Fairs -6 /year; EUR 700 / fair

Cost w/o VAT

10,000.00 3,600.00 3,000.00

6,000.00
4,200.00 4,200.00

Location Facilities: - Special equipments (refrigerated display case at the production point) - Production point - situated in a central/semi-central location in Bucharest Suppliers: - Fresh fruits suppliers - Chocolate suppliers - Packaging suppliers Transportation Factors: - Two delivery cars with a cooling system providing the appropriate temperature in order for the products to maintain their freshness

Operations

Quality Control: -We will collaborate only with suppliers that can ensure us about the products term of validity
Labor supplies: - We will employ only qualified people to whom we will offer all the conditions and appropriate facilities in order to maximize their work

5. Operations Buget
Type of expenses w/o VAT
Company's set-up costs and authorizations 1,500.00 Fit-out cost of the production facility (refurbish, refrigerator display case) 10,000.00 2 Delivery cars with refrigerators in operational leasing / EUR 30,000 acquisition price; 594 / monthly installment Cooler for events and promotion 6,000.00 Rent for the production space / month 1,000.00

6. Management &HR
Management : one manager( one of the shareholders) Education& Experience EMBA graduate; experience with other businesses developed in marketing and in online sales Employees Production - 5 employees, out of which 2 qualified and with relevant experience and 3 with minimum experience Drivers 2 employees with experience in a similar job Education - Secondary education In peak periods (Winter Holidays, Valentines Day, March) temporary production employees

6. Management &HR
Legal Structure: SRL People: 1 manager, 2 drivers and 5 permanent production employees Reward/compensation : salaries and bonuses for employees Manager no salary Organizational structure

Manager

Drivers

Production

COSTS BUDGET
Type of expenses

Recruitment and initial employment expenses (medical tests, PSI training, uniforms, etc.)
Gross Salaries - drivers Gross Salaries - Workers - qualified Gross Salaries - Workers - unqualified

1,000 2X 500/month 2X 1,000month 3X 500/month

Christmas and Easter bonuses (vouchers) Temporary employees in December, February and March

1,000/year
2X500/month

7. Financials
Max capacity - Average orders Price/unit COGS/unit Gross units/day units/day with VAT with VAT Margin 96 48 10.00 3.72 63% 48 24 25.00 5.35 79%

Fruit box Fruit arrangements

Month 0

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14

Net cash end of period before VAT Net cash cumulated before VAT VAT payable VAT deductible VAT credit/debit Net cash after VAT cumulated

(42,180) (7,907) (4,720) (82) 9,195 9,195 9,567 17,664 8,699 23,933 14,882 9,567 8,699 (50,087) (54,807) (54,888) (45,693) (36,498) (26,931) (9,268) (569) 23,364 38,246 47,813 56,512 7,680 7,680 627 1,254 2,508 5,017 5,017 5,017 9,406 5,017 9,406 9,406 5,017 5,017 1,286 1,297 1,653 2,366 2,366 2,294 3,710 2,462 3,710 3,710 2,294 2,462 8,339 8,382 7,527 4,876 (2,651) (2,723) (5,697) (2,555) (5,697) (5,697) (2,723) (2,555)

(50,087) (54,807) (54,888) (45,693) (39,149) (29,654) (14,964) (3,123) 17,667 32,550 45,091 53,958

P&L 1 year
Month 1 Jun-13 Real orders (% of Capacity) Fruit box - Units sold Fruit arrangments - Units sold Fruit box - Sales Fruit arrangments - Sales revenues Total sales Fruit box - COGS Fruit arrangments - COGS Total COGS Salaries Utilities (electricity,water) Gas Marketing Operational profit Outsourced accountant Utilities (internet,phone) Rent Leasing cars Total overheads Profit before tax Income tax Net profit 10% 144 72 1440 1800 3240 536 385 921 4500 300 1000 2170 -5651 372 50 1240 594 2256 -7907 0 -7907 Month 2 Jul-13 20% 288 144 2880 3600 6480 1071 770 1842 4500 300 1000 1302 -2464 372 50 1240 594 2256 -4720 -4720 Month 3 Aug-13 40% 576 288 5760 7200 12960 2143 1541 3684 4500 300 1000 1302 2174 372 50 1240 594 2256 -82 -82 Month 4 Sep-13 80% 1152 576 11520 14400 25920 4285 3082 7367 4500 300 1000 1302 11451 372 50 1240 594 2256 9195 0 9195 Month 5 Oct-13 80% 1152 576 11520 14400 25920 4285 3082 7367 4500 300 1000 1302 11451 372 50 1240 594 2256 9195 9195 Month 6 Nov-13 80% 1152 576 11520 14400 25920 4285 3082 7367 4500 300 1000 930 11823 372 50 1240 594 2256 9567 9567 Month 7 Month 8 Dec-13 Jan-14 150% 2160 1080 21600 27000 48600 8035 5778 13813 5500 300 1000 1798 26189 372 50 1240 594 2256 23933 6269 17664 80% 1152 576 11520 14400 25920 4285 3082 7367 4500 300 1000 1798 10955 372 50 1240 594 2256 8699 8699 Month 9 Month 10 Month 11 Month 12 Feb-14 Mar-14 Apr-14 May-14 150% 2160 1080 21600 27000 48600 8035 5778 13813 5500 300 1000 1798 26189 372 50 1240 594 2256 23933 23933 150% 2160 1080 21600 27000 48600 8035 5778 13813 5500 300 1000 1798 26189 372 50 1240 594 2256 23933 9050 14882 80% 1152 576 11520 14400 25920 4285 3082 7367 4500 300 1000 930 11823 372 50 1240 594 2256 9567 9567 80% 1152 576 11520 14400 25920 4285 3082 7367 4500 300 1000 1798 10955 372 50 1240 594 2256 8699 8699 Year 1 14,400 7,200 144000 180000 324000 53568 38520 92088 57000 3600 12000 18228 141084 4464 600 14880 7128 27072 114012 18242 95770

Conclusions
Positive cash flow after 3 months Initial investment recovered in less than 1 year Sales after 1 year of EUR 325,000 Net profit after 1 year of EUR 95,000 Rate of return after 1 year 169%
Proposed financing

Financial requirments Initial investment(set-up costs, web site, fit-out and equipments) Working capital (first 3 months) Total needs

42,000 Owners's equity 15,000 57,000 Total financing

57,000
57,000

8.Risks and Rewards

Risks Low entry barriers risk of competition Action plan - be the first on the market - use marketing to obtain fast awareness and market share - create a brand - develop relationship s with customers (corporate clients, retailers, hotels) - be ready to expand production capacity - expand through shops network - focus on quality and service (on time delivery) Operations failure not able to timely respond to orders Action plan - Use flexible workforce (part time) in case of overloads - Increase workforce in peak periods (Winter Hollydays, Valentines day, March) - Increase production facility easily duable due to low initial investment required - Management system of orders min 1 day for a delivery; min 2 days for large orders; prioritize loyal customers