.

. . . . . . .

100 Camelback Highway Anytown, AZ 12345

Telephone (800 555!"#"8

Contact$ %o&y Heath

Variety Spices, Inc.

y to Inc rea

Vari se Sal ety es and Spic Ma es, rke t Inc. Sh Busi are
*-. )( /A T*) -$ 0o -ot 0i1t 2ib3 te

'()'(*+TA (,

Variety Spices, Inc. Business Plan

Table of Contents
Executive Summary 1 Company Background 4 Identification of Market Opportunity Business History
5 4

Growt and !inancial O"#ecti$es5 %e&al Structure and Owners ip ' (o)pany %ocation and !acilities
' '

Plans for !inancin& t e Business *+pansion Organization Mana&e)ent ,ea) Or&ani.ational Structure/ Principal Stock olders / !arket "na#ysis Su))ary ,ar&et Market
0 0 $

Industry 1nalysis
0

(usto)er Profile

Ma#or (o)petitors and Participants

23

Pro#ected Market Growt and Market S are O"#ecti$es 23 %roduct & Service O''ering Product 4 Ser$ice Su))ary Product 4 Ser$ice 5ni6ueness Product 4 Ser$ice 7escriptions Patents and ,rade)arks !arketing %#an 1( (reatin& and Maintainin& (usto)ers Product Pricin& Strate&y 29 Sales and 7istri"ution Plan Pro)otional Strate&y
25 29 29 11 22 22 28 28 29

(o)petiti$e Product (o)parisons

Maintainin& Our (o))it)ent to Superior (usto)er Satisfaction 2' )inancia# %#an and "na#ysis
1*

P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute (ontents

4444

44444

Variety Spices, Inc. Business Plan

Seizing an pportunity to Increase Sales and Market Share
!"ecuti#e Su$$ary
Variety Spices, Inc. is a fi$e year old "usiness t at as speciali.ed in t e )ail>order )erc andisin& of fine 6uality spices to t e restaurant trade. , is successful "usiness as seen dra)atic &rowt o$er t e past 5 years as a result of 1)erica?s lo$e affair wit pre)iu) 6uality foods and e+otic foods and spices. Variety Spices, Inc. is plannin& t ree "usiness e+pansions=

15 enlar&in& its current product offerin&. 25 increasin& its tar&et )arket to include sales to consu)ers. 35 increasin& its current distri"ution facility to address t ese needs.
,o fulfill t ese &oals, Variety Spices needs to raise @2.5 )illion in new capital. , e "usiness was founded four years a&o "y Aody Heat . Aody, a for)er c ef for a pro)inent restaurant, identified t e need for supplyin& restaurants wit a relia"le source of 6uality fres spices. 1s a result of its success in supplyin& t e restaurant trade, )any consu)ers "e&an to learn a"out t e co)pany and "e&an to order products in considera"le $olu)e wit little e)p asis on t e part of t e co)pany. , e co)pany is located #ust outside of 1nytown, 1ri.ona. It?s pro+i)ity to t e airport and re&ional o$erni& t e+press packa&in& ser$ices ena"les t e co)pany to fulfill rapid custo)er deli$eries. , e Variety Spices product line is uni6ue "ecause of its concentration on carryin& ard to find spices, and its co))it)ent to pro$idin& e+traordinary custo)er ser$ice and 233B custo)er satisfaction.

Type of Business
Variety Spices is a )ail order and w olesale distri"utor of fine 6uality spices. , e co)pany?s stren&t in pro$idin& spices to t e restaurant trade as pro$ided an opportunity to e+pand t e )arket to include t e consu)er )arket. , e co)pany?s uni6ue ser$ice and )arketin& strate&y is a&&ressi$ely de)onstrated and )arketed.

P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e 2

Variety Spices, Inc. Business Plan

efforts on "uildin& t e )ail order "usiness and Co$p closed down t e retail outlet. C ile t is any % decision caused an Busin earnin&s s ortfall in ess year 9, sales a$e cli)"ed su"stantially in Su$ t e past two years. $ary C ile )ost of t e Variety current sales are now Spices focused on t e professional caterer was founde and t e restaurant d fi$e trade, initial direct years )arketin& tests to tar&eted consu)ers a&o a$e "een $ery and pro)isin&. as en#oye , e "usiness is d e+celle incorporated in t e state of 1ri.ona and is nt &rowt closely eld "y Ms. in sales Heat and fa)ily and )e)"ers. 1n earnin& e)ployee stock s. !or owners ip plan as t e first #ust "een esta"lis ed two in t e co)pany to years e+pand t e of opportunities for ot er operati key e)ployees. on, t e "usines s was Manage$ent run out #er#ie& of a Aody Heat , storefro President of Variety nt in 1nytow Spices, Inc., "rin&s a lifeti)e of restaurant n, 1ri.ona e+perience to t e "usiness. Prior to . 1s Variety sales foundin& s ifted Spices, s e worked fro) as a :e&ional retail Mana&er for t e sales to Marriott (orporation )ail and as a )ana&er of order t e i& ly successful and LAmbrosie p one restaurant. "usines s, t e Aack Holden is t e founder (!O of Variety s Spices. Aack as decide ser$ed as a (!O for d to two ot er successful focus )ail order startups. t eir

Prior to t es e start ups, e was t e (ont roller for Cilli a)?s > Sono )a, a natio nal speci alty retail er of i& 6uali ty kitc enw are. Sus an S)it is t e 7ire ctor of Sale s and ,ele )ark etin& . Sus an as "een instr u)e ntal in e+pa ndin & sale

s t rou& tele)arketin& and catalo& operations. Prior to Variety Spices, Susan was )ana&er of tele)arketin& at %.%. Bean and a director of sales for a w olesale unifor) co)pany. , e co)pany is currently seekin& a (*O to run t e day to day operations as Aody is e+pected to de$ote )ost of er efforts to e+pandin& t e product line offerin& and )aintainin& er role as an effecti$e co)pany spokesperson.

Product % Ser#ice and Co$petition

Variety Spices as a e+tensi$e line of fine 6uality spices, er"s, and accessories. 1s )uc as t e co)pany sells products wit i& 6uality, it?s custo)er ser$ice is second to none. It is t is co)pany 6uality t at clearly differentiates Variety Spices fro) its co)petitors and creates stron& "onds wit its custo)ers. Variety Spices custo)ers are e+tre)ely loyal and t ey are willin& to pay a price pre)iu) for t e deli$ery, 6uality and satisfaction &uarantees t at co)e wit eac order. , e co)pany pro$ides o$erni& t product deli$ery in specially desi&ned fla$or>seal packa&es for a )inor e+tra c ar&e and custo)ers can order up until '=33 PM and still

&et as t e co)pany )o$es &uarant into t e consu)er eed )arket. ne+t Variety Spices day deli$ery.currently sells o$er 853 spice products, , e a$era&e er"s and order accessories. , is today is nu)"er will increase "y 85B as we &o after @22' and t is t e consu)er )arket. a$era&e 1ppro+i)ately 43B of t e co)pany?s sales as "een are deri$ed fro) 83 of increasi t ese products includin& ite)s like n& &raduall pre)iu) $anilla, y o$er saffron, specialty t e past curries, and a ran&e of t ree c ili peppers. years. , e co)pany as Ce e+pect entered into a&ree)ents t at t e wit t ree )a#or food a$era&e "ook aut ors to license sale recipes wit eac spice order t at is sold. Variety will Spices as "e&un to decline sli& tly test )arket a spice of t e )ont
P:OP:I*,1:; 7o <ot 7istri"ute I<!O:M1,IO<= Pa&e +

Variety Spices, Inc. Business Plan

licensed recipes. 1 s)all portion of t ese packa& spice of t e )ont e t at products pro$ide )inor include royalties to t e aut ors. s prepare 'inancial d b(ecti#es spices Variety Spices as an and a&&ressi$e !i$e ;ear fres Plan t at pro#ects an er"s annuali.ed sales &rowt alon& rate of 93B wit wit co))ensurate t ese increases in profita"ility.

pera ting Perfor $anc e

Dall nu)"ers in @333E

83 38 83 32 83 33 20 00 20 0/ ,-

<et Inco)e
Gross Profit

<et Sales

p e r a 'unds ti *e+ue n sted g and P ,se of e Procee ds rf , e o a)ount of funds r needed is $@2.5 )illion a w ic will fund t e n followin& c acti$ities= e ) i g h li g h t s
<et Sales Gross Profit <et Inco)e

t we recei$e t e e6uity infusion of @2.5 )illion dollars.

, e a" o$ e pla n as su )e s t a

Item .e/uested
Increase distri1ution spaces and 'und ne2 inventory !odernize ne2 'aci#ity and purc3ase ne2 inventory contro# system %roduce ne2 consumer oriented cata#og and create mai#ing

"mount 0eeded
533F 953F 433F

P: O P: I* ,1 :; I< !O : M1 ,I O <= 7o <o t 7i stri "ut e

Pa &e (

Variety Spices, Inc. Business Plan

Item .e/uested
4ire ne2 CEO, ot3er senior sta'' and 5ota#

"mount 0eeded
853F 2.5M

Variety Spices is seekin& an e6uity partner to fund t is new e+pansion. , e proposed owners ip t at will e+ist after t e financin& is as follows= -ame 6 o7 8ha2e1 9 +:3ity be7o2e 7inancing 45 45 10 9 +:3ity a7te2 7inancing 30 30 # '2ice 'ai&

%o&y Heath Heath .amily T231t )the2 ;ey +mployee1 <ent32e capitali1t

450,000 450,000 100,000

100,000 100,000 50,000

500,000

33

1,500,000

!"it
, e )ana&e)ent of Variety Spices is co))itted to t e &rowt plan as outlined in t is plan. Variety Spices, Inc. as plans for a pu"lic stock offerin& in year 4 of t is proposal. , e plan pro#ects earnin&s of @2.8 )illion in year 9 and sales of @25 )illion. Cit a 99B pro#ected sales &rowt in year 4 and pro#ected earnin&s 2.' )illion, we esti)ate a co)pany $aluation of @8/ )illion. Cit t is &rowt , t e e6uity partner?s return on in$est)ent will "e -5 per year co)pounded.

Co$pany Background
Identification of Market pportunity

Variety Spices esti)ates t at t e do)estic )arket for &eneral spice sales is &rowin& "y a"out 23B per year. Howe$er, Variety Spices?s ser$ed )arket is &rowin& at a rapid clip of around 43B per year. , ere are t ree i)portant consu)er trends t at are fuelin& t e core restaurant and caterer se&)ent of Variety Spices?s "usiness=

14 1 continuin& de)and "y restaurant consu)ers for fres food, spices and er"s. 24 Increased de)and for Me+ican, 1sian and ot food dis es. , e trend toward
t ese food styles is continuin& and "eco)in& )ainstrea). , ese spices represent an i)portant se&)ent of Variety Spices?s "usiness.

34 (onsu)ers want to e+peri)ent wit new fla$ors and foods. , is trend started in
t e early -3s and is ere to stay. (onsu)ers want to purc ase spices directly and Variety Spices is poised to e+ploit t is opportunity.
P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e 4

Variety Spices, Inc. Business Plan

14 In our
(oi ncid ent wit t es e cust o)e r pref ere nce tren ds, t er e are i)p orta nt purc asi n& tren ds and de) and s w i c a$ e e)e r&e d t at play to t e stre n&t s of Vari ety Spic es. , e se are= core resta urant and cater er )ark et, "uyer s are less conce rned wit cost t an wit relia"i lity, fres ness and ti)ely deli$e ry. !ro) t e "e&in nin&, Variet y Spice s as focus ed on pro$id in& t ese $alue adde d ser$ic es. In t e past year, we e)p asi.e d )ore ti)ely deli$e ry.

24 Purc
ase

r s w a n t t o s e l e c t f r o ) a w i d e $ a r i e t y o f p r o d u c t s . ,

e Varie ty Spic es prod uct fa)il y is t e )ost e+pa nsi$e in t e "usin ess.

34 In

t e consu) er se&)ent , purc as ers want to a$e a selectio n of &ift products to purc as e. 1s a result, t e co)pan y as recently launc e d its Spice of t e Mont (lu".

Business )istor y
Variety Spices was founded fi$e years a&o "y Aody Heat . 1s a restaurant )ana&er for a pro)inent 1ri.ona restaurant, Aody disco$ered an opportunity to supply t e restaurant trade

wit y trade )a&a.ines and i& "usiness "e&an to 6uality flouris . In 2009, t e spices, co)pany decided to er"s close t e retail outlet and and focus its efforts on ot er t e )ail order "usiness related e+clusi$ely. product s. Prior Aody wisely understood t at its custo)ers were to startin& purc asin& ser$ice, con$enience, and t e "usines relia"ility as )uc as s, Aody t ey were pleased wit in$esti& t e 6uality of t e products fro) Variety ated Spices. 1s a result, t e t e opportu co)pany in$ested ea$ily in custo)er nity ser$ice and went t e and confir) e+tra )ile in )akin& it ed t at easy to do "usiness wit Variety Spices, inc. t is )arket It was t e first co)pany was not to pro$ide a full line of "ein& 6uality spices, t e first ser$ed to offer o$erni& t efficient deli$ery at a )odest surc ar&e and t e first ly. Initially to offer an unconditional started )oney "ack &uarantee. In 2005, t e ware ouse as a retail was strea)lined, outlet, dra)atically reducin& Variety t e ti)e to fill an order > Spices t is ena"led t e "e&an co)pany to )ake a to &uarantee to fill all rapidly orders for o$erni& t e+pand deli$ery for any order its placed up until ' PM of sales t e pre$ious day. "y word of C ile t e co)pany )out . focused on t e restaurant trade and In its second professional caterers, it year of "e&an to recei$e operati unsolicited "usiness on in fro) consu)ers w o 2008, "e&an to read a"out Variety Variety Spices in local Spices and national recei$e pu"lications. 1n entrepreneurial profile d fa$ora" on Aody Heat in a pro)inent "usiness le co$era )a&a.ine resulted in &e in o$er 2333 orders fro) se$eral its readers ip. Variety industr Spices decided to

acti$el y test t e consu )er )arket wit so)e test )ailin& s and t e results were $ery positi$ ely recei$e d. Variety Spices as disco$ ered t at its

sales success as "een dri$en "y &ood pu"lic relations and custo)er referrals. , e co)pany intends to for)ali.e pro&ra)s o$er t e ne+t 2/ )ont s to e+ploit t ese findin&s.

-ro&th and 'inancial b(ecti#es

Variety Spices?s 5 year )arketin& plan pro#ects an o$erall &rowt rate of 85B &rowt in sales for eac of t e ne+t fi$e years w ile earnin&s are e+pected to &row at 83B in t e first two years and t en e+pand to 93B in t e followin& t ree years.
P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute
Pa&e 6

Variety Spices, Inc. Business Plan

. /ear Sale s , e co)pany is 'ore currently or&ani.ed as an S corporation, "ut cast plans to c an&e to a (
Dall nu)"ers in 333E

t e pri)ary s are olders of Variety Spices, oldin& 033,333 of t e 2,333,333 outstandin& s ares. , e c arter aut ori.es t e issuance of 2,333,333 s ares class 1 co))on stock.

corporation in t e ne+t fiscal year startin& Aanuary 8333.

Basic Spices Hot Spices Co$pany *+otic Spices and Specialty0ocation G Gift 'acilities ,otal Sales

Variety Spices?s pri)ary operations are in 0egal 1nytown, 1ri.ona. , e Struc current distri"ution facility is appro+i)ately ture 85,333 s6uare feet, and and is located on &ne (a)el"ack Hi& way. rship , e ad)inistrati$e offices are located H Varie )ile away at an ty e+ecuti$e park also on Spic (a)el"ack Hi& way. es is , e distri"ution facilities incor and ad)inistrati$e porat offices are currently ed in leased. , e lease for t e t e distri"ution facility state co)es due in ' )ont s of and new space as 1ri.o "een identified to na. replace t e cra)ped Aody ware ouse and support Heat our new "usiness o"#ecti$es. and t e Cit t e e+pansion Heat plans to )o$e into t e consu)er )arket, t e fa)il co)pany plans to y increase t e ware ouse trust space "y 53B to satisfy fa)il our in$entory y are re6uire)ents and

additio will "e electronically nal connected to t e sta&in& ad)inistrati$e offices. It area for is pro#ected t at t e asse) ad)inistrati$e offices, "lin& w ic are a"out 4,533 and s6uare feet, offer fillin& enou& e+cess and orders. underutili.ed space to 1 )eet t e needs of t e near"y co)pany durin& t e facility ne+t fi$e years. O$er to t e 85B of t e space is e+istin& currently su"let "y ware o anot er tenant t at as use a one year lease. as "een identifie Plans for d. , is 'inancing the new Business facility will "e !"pansion outfitte , e @2,533,333 e+pansion will "e d wit ad$anc financed wit an e6uity place)ent. ed in$ento 1s descri"ed in t e e+ecuti$e su))ary, ry control t e issuance of 533,333 new s ares and distri"u will pro$ide t e tion in$estor wit a 99B syste) e6uity interest in t e s and it co)pany.

P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute

Pa&e *

Variety Spices, Inc. Business Plan

. /ear Sales 'orecast

1all nu$bers in 23334

@43,333

@95,333

@93,333

@85,333

@83,333

@25,333

@23,333

@5,333

@3 8333 8332 8338 8339 8334

rganization
Many of Variety Spices?s key e)ployees a$e "een wit t e co)pany for o$er t ree years > t e years in w ic Variety Spices focused its "usiness on t e )ail order "usiness e+clusi$ely and ac ie$ed stron& financial &rowt . Cit t e e+ception of Aody Heat , all of t e )ana&e)ent a$e stron& "ack&rounds in runnin& distri"ution oriented "usinesses.

Manage$ent Tea$
Below is a su))ary of Variety Spices?s )ana&e)ent tea)?s "ack&round and e+perience Aody Heat , 9- D( air)an of t e Board and !ounderE Prior to foundin& Variety Spices, Ms. Heat was t e restaurant )ana&er for %?1)"rosie. Before %?1)"rosie, Aody worked as a re&ional )ana&er for t e Marriott (orporation in t eir restaurant and franc ise operation. Aack Holden, 45 D( ief !inancial OfficerE. Before Variety Spices, Aack as ser$ed as a (!O for two ot er successful )ail order startups. , e )ost recent co)pany was purc ased "y S)it G Hawken. Prior to t ese startups e was t e (ontroller for Cillia)?s>Sono)a, a national specialty retailer of i& 6uality kitc enware. Aack as an MB1 in !inance fro) (olu)"ia 5ni$ersity. Susan S)it , 98 D7irector of Sales and ,ele)arketin&E . Susan as "een instru)ental in e+pandin& t e sales t rou& tele)arketin& and catalo& operations. Prior to Variety Spices, Susan was senior )ana&er of tele)arketin& at %.%. Beane and a director of sales for a w olesale unifor) co)pany. S e olds a "ac elors de&ree in "usiness fro) <ort western 5ni$ersity.
P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e

Variety Spices, Inc. Business Plan

A a y H a r t n e t t , 9 / D 7 i r e c t o r o f O p e r a t i o n s E . M r . H a r t n e t t

as i)ple)ented ad$anced distri"ution and in$entory control syste)s for a nu)"er of successful w olesale distri"ution co)panies. Most recently, e ser$ed as Operations Mana&er for P( Care ouse. He was credited t ere wit i)pro$in& t eir order fulfill)ent w ic elped t e co)pany recei$e an o$erall award for custo)er satisfaction. Mr. Hartnett as a Masters 7e&ree in %o&istics fro) t e 5ni$ersity of :oc ester. 7onna Harrin&ton, 45, DOffice Mana&erE for Variety Spices, as "een instru)ental in de$elopin& a pool of office workers, distri"ution staff and tele)arketers . Prior to #oinin& Variety Spices, s e spent t e last ten years raisin& t ree c ildren. Before t is career respite, 7onna was Office Mana&er for

s ipal e Stockholders $ Aody Heat and er e parents fa)ily trust r currently own )ost of a lt e 2,333,333 outstandin& s ares of lVariety Spices class 1 co))on stock. Here o are t e details= c a l f i r ) s . S are older <a)e <u)"er of S ares 453,333 453,333 53,333 85,333 85,333 2,333,33 3

Aody Heat Heat !a)ily ,rust DAody?s parentsE Aack Holden Susan S)it Aay Hartnett ,otal

rga nizati onal Struc ture

, e Cit t e issuance of c art "elow an additional outlines 533,333 s ares, t e Heat fa)ily will still t e or&ani. old a controllin& ational interest at '3B. structur 1fter t e issuance of e at t e new s ares, t e Variety e6uity owners ip Spices, percenta&es will Inc. appro+i)ately "e as follows= Aody Heat
( air)an ,o Be Hired !a)ily (*O

Aody Heat G '3B

Aack Holden (!O

15 Ot er
Mana&e)ent and Fey *)ployees -B

Princ

25 Outside
In$estor 99B
7o <ot 7istri"ute
Pa&e 7

P:OP:I*,1:; I<!O:M1,IO<=

Variety Spices, Inc. Business Plan

Market 5nalysis
Su$$ar y
Variety Spices as concentrated on t e sales of pre)iu) spices and er"s to t e restaurant and professional caterer trade. C ile t e o$erall )arket for spice and er" sales e+ceeds 8 "illion dollars, t e pre)iu) )arket t at Variety Spices as tar&eted is considera"ly s)aller, "ut it is &rowin& su"stantially. Variety Spices?s plans to e+pand into t e consu)er se&)ent of t is )arket and its efforts to "etter ser$e t e international )arket will yield t e co)pany wit t e "est &rowt opportunities.

Industr y 5nalysis

15 , e si.e of t e o$erall spice )arket in t e 5nited States is esti)ated at @8

Billion dollars annually. , e portion of t e specialty spice and er" )arket t at Variety Spices currently ser$es is @53,333,333. Of t is )arket, a"out '3B is ser$ed "y local retailers

25 Variety Spices as captured rou& ly 83B of t e w olesale distri"ution )arket for

specialty spices and er"s.

35 C ile t e o$erall spice and er" )arket as "een &rowin& at a"out 23B per
year, t e specialty )ail order "usiness as "een &rowin& at 53B a year and t e sales at Variety Spices a$e &rowin& at -5B or a"out 53B faster t an t e torrid pace of t e t is )arket.

45 ,o continue its rapid &rowt , Variety Spices is also plannin& to increase its sales
to (anada, Me+ico and %atin 1)erica. Variety Spices e+pects to recei$e a"out 23B of its sales fro) international )arkets w ere t e &rowt is outpacin& t at of t e do)estic )arket.

Target Market
Variety Spices?s traditional )arket as "een t e pre)iu) restaurant and upscale caterer )arket. Variety Spices also plans to e+pand its tar&et )arket to t e upscale, serious, at o)e cook for two reasons= "usiness in t is se&)ent now accounts for 25B of t e co)pany?s net re$enue and t ere as "een al)ost no )arketin& focus placed on t is "usiness. In early )arketin& tests, t e order response rates e+ceeded our e+pectations "y wide )ar&ins and t ese custo)ers a$e already "e&un to reorder.

Custo$er Profile
.estaurant & 5rade , e typical Variety Spices restaurant trade custo)er as t ese c aracteristics= 1$era&e ;ears in "usiness= 5 Median :estaurant sales= @/33,333 Predo)inantly ur"an esta"lis )ents ( ef is t e purc aser Prefers to purc ase "y p one
P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e $

Variety Spices, Inc. Business Plan

Purc asers= 95B Consu mer Custo mer 1 $ e r a & e a & e = 4 8 !e)ale Purc asers= '5B *)ployed as= *+ecuti$eI Housewife ;ears of cookin& e+perience= 25 years !re6uency of restaurant $isits= t ree ti)es a )ont Own t eir own o)e

M e Ma(or d iCo$petitors and a Participants n C ile t ere are se$eral spice and er" )ail order o fulfill)ent ouses, u Variety Spices is t e s only co)pany t at e carries a ro"ust line of products. Here are o of t e lso)e co)panies t at d currently co)pete us or will iwit co)pete in t e n c consu)er )arket o place. ) Competitor 1 = a retail e =outlet located in <ew Me+ico t at )arkets @ its line of ot peppers and ot sauces 3 t rou& a direct ,)arketin& catalo&. 3 C ile t e co)pany 3 does )arket to 3 restaurants and consu)ers, t eir M current e)p asis is a lt e consu)er )arketplace. , eir e catalo& is not $ery professional and as

a )edi ocre reput ation wit t eir custo )ers.

st national c ain t at )arkets products to t e restaurant trade. Stren&t s are focused on "asic non>peris a"le foodstuffs. , ey do carry spices "ut t ey are of "ulk 6uality and t ere is little Compet e)p asis on t is itor 2: a product line. retail <onet eless, t ey store re)ain an i)portant located co)petitor since t ey on t e a$e a direct sales *ast force t at calls on (oast, t eir clients. t at caries a Competitor 4= , is "road s)all distri"utor focuses on t e ran&e distri"ution of of $anilla and $anilla spices. "ean products. It relies C ile )ost of t eir on its "usiness is location w olesale to and "outi6ue and i)a&e natural food stores, for its t ey a$e "e&un to folksy )arket t eir li)ited appeal. product line to , e consu)ers usin& 6uality lists fro) t e )a#or of food )a&a.ines. spices Competitor 5= t is is reasonaupscale cookery catalo& carries a "ly &ood, li)ited selection of "ut t eir spices and er"s and ser$ice would represent is poor serious co)petition in t e consu)er and )arket place if t ey t eir prices e+pand t eir product are i& offerin&. for w at t ey Pro(ected offer. Market -ro&th Com petit or 3= Per aps t e lar&e

and Market Share b(ecti#es

Variety Spices e+pects t at its traditional restaurant and caterer )arket will continue to

&row at a 43B rate w ile its s are of t e )arket will increas e o$er ti)e

due to its co)petiti$e products and i& er le$el of ser$ice. In t e consu)er )arket, t e co)pany e+pects to &row )uc faster t an t e pro#ected )arket &rowt rate since it will "e )akin& su"stantial )arketin& in$est)ents in t is area.
I<!O:M1,IO<= 7o <ot 7istri"ute
Pa&e 1-

P:OP:I*,1:;

Variety Spices, Inc. Business Plan 1s we stated in t e su))ary, t ere are se$eral trends t at are fuelin& t e &rowt of "ot of t ese )arkets. , ese include t e followin&=

15 an o$erall trend "y diners and at o)e cooks to e+perience e+otic spices and
fla$ors.

25 an increased focus on fres ness J Variety Spices &uarantees t e fres ness of its
products and date sta)ps t eir "lendin& dates.

35 a stron& &rowt rate "y restaurants and interest "y consu)ers in t e food types
D1sian and ot er ot foodE t at re6uire t e types of spices t at Variety Spices is well known for.

Product % Ser#ice

ffering

Product % Ser #ice Su$$ar y

Variety Spices carries o$er 853 spices and er"s products. *ac product co)es in a $ariety of prepacka&ed si.es t at are pro$ided to us "y our suppliers. , e products can "e "roken down in se$eral product cate&ories=

15 Basic Spices= , is cate&ory includes spices like specialty peppercorns,

cinna)on, sea salts, and "ay lea$es. , is cate&ory represents appro+i)ately 43B of our unit $olu)e and a"out 93B of profits since t ey are co)petin& a&ainst co))ercially a$aila"le e6ui$alents.

25 Hot Spices= Gi$en 1)erica?s lo$e affair wit

ot food, our line of peppers, c ili powder, and (a#un products as "eco)e a fast &rowt product area. , is se&)ent represents 83B of product sales

35 (urries and 1sian Spices= , is line of 1sian products was introduced 2/ )ont s
a&o and it now represents 25 B of total product sales.

45 *+otic= , is line includes products like saffron, and specialty and ard to find
$anilla "ean products. , e $olu)e of t ese products is lower t an ot er products, "ut t eir i& ticket ite)s elp to account for 25B of total product sales.

55 Specialty and Gifts= %ast year we "e&an to offer oliday &ift "askets and our
Spice>of>t e>Mont (lu". It as "een $ery successful and its launc as e+ceeded our i& e+pectations. Our clu" includes a specialty spice wit se$eral recipes for its use. Initial fi&ures are su&&estin& stron& de)and fro) t ese custo)ers for reorder of t e spices included in t e )ont ly deli$ery.

Product % Ser #ice ,ni+ueness

, e followin& are uni6ue features of t e Variety Spices products=

15 !res ness is a"solutely &uaranteed. Ce only use t e i& est 6uality spices. 25 Orders recei$ed up until '=33PM on t e day of order are &uaranteed for deli$ery
in t e continental 5S for only @8.33 additional.
P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e 11

Variety Spices, Inc. Business Plan

15 P 25 1ll spices and

r o d u c t s a r e p a c k a & e d i n d i s t i n c t i $ e f l a $ o r > s e a l p a c k a & i n & .

er"s co)e wit recipes fro) leadin& cook "ook aut ors.

35 (usto)
ers can return any product wit in 93 days for any reason w atsoe $er and t eir )oney will "e refunde d in full. Our return rate is way "elow ot er )ail order return rates at .5B.

45 Our
custo )ers prefe r t e con$ enien ce of order in& fro) t eir o)e or place of "usin ess w er e t eir need s are clearl

y u n d e r s t o o d .

ion of t e new concept Spice>of>t e>Mont (lu" w ic as recei$ed $ery positi$e feed"ack in its early )arketin&. , e followin& are descriptions of t e Variety Spices products= 7hole Spanish *ose$ar y 0ea#es 8 , is is t e co)pany?s top sellin& product. , e new crop of Spanis rose)ary was $ery low yieldin&, "ut it as a )ost "eautiful fra&rance. Its sa$ory, )inty fra&rance )akes it perfect for any nu)"er of )eat and soup dis es. Many of our custo)ers are also findin& t at rose)ary pro$ides an e+cellent pairin& wit a $ariety of fis dis es. 8ash$ir Saffron 8 ,o produce 2 pound of saffron, it is necessary to and pick -3,333 flowers and t en carefully re)o$e, also "y and, t ree sti&)as fro) eac flower. C ile it is t e )ost e+pensi$e spice "y wei& t, it is also one of t e )ost potent. Fas )ir saffron is

Prod uct % Ser #i ce 6esc riptio ns

Variety Spices carries o$er 853 spice and er" product s. *ac of t e spices are )eticul ously descri" ed in t e Variety Spices catalo& w ic is attac e d. Ce a$e include d descript ion for two of our leadin& spices "elow and a descript

r e c o & n i . e d " y i t s l o n & , ) o i s t d a r k

nth Club 8 , e idea to produce t is product was presented "y one of t e cook"ook aut ors t at licenses er recipes for Variety Spices products. In )any ways, t e product is co)para"le to ot er product of t e )ont clu"s like "eer or fruit. Howe$er, "y includin& recipes, we a$e differentiated t e product to t e e+tent t at t e packa&e "eco)es a $ery welco)e &ift eac ti)e it arri$es at t e recipient?s o)e

r Product e d Co$parisons , ere are se$eral s tco)petitors as pre$iously outlined. r , e Variety Spices a n product line as t e d followin& ad$anta&es s o$er its co)petitors= . S p i c e 9 o f 9 t h e 9 M o

Co$petiti#e

15 Variety
Spices as lon& ter) relation s ips wit t e i& est 6uality pro$ide rs of spices fro) all corners of t e world. Since

w e " u y i n " u l k , w e c a n p r o $ i d e i & l y c o ) p e t i t i $ e p r i c e s f o r t

e "est product s t at a custo) er can find.

25 it is
t e only sup plier t at as a "roa d ran& e of spic es and er" s. , e clos est co) petit or carri es 293 prod ucts as opp ose d to t e 853 prod ucts t at Vari ety Spic es curr entl y carri es.

35 it is t e
only supplie r of spices t at &uaran tees

f r e s n e s s . 1 l l o f

t e spices carry a date w en t ey were "lende d. Most spices are s ippe d wit in 2 week of t eir "lendin &.
I<!O:M1,IO<= 7o <ot 7istri"ute
Pa&e 1+

P:OP:I*,1:;

Variety Spices, Inc. Business Plan

15 fro) t e "e&innin&, Variety Spices as dedicated its resources to superior

custo)er ser$ice. Our in$est)ent in irin& e+perts in t e )ail>order "usiness and our purc ase of ad$anced order entry syste)s as yielded i& accolades fro) our custo)ers.

25 t e co)pany?s location ne+t to a re&ional o$erni& t ser$ice u" pro$ides a key

ad$anta&e o$er our co)petitors in t at we can &uarantee o$erni& t s ip)ent for any order placed "efore '=33PM.

Patents and Trade$arks

, e co)pany as no current patents or patents pendin&.

Marketing Plan
Creating and Maintaining Custo$ers
Variety Spices as worked ard to de$elop a reputation for i& 6uality and stron& ser$ice in t e )ail order "usiness. Our custo)ers tend to "e successful, i& >end restaurants and caterers w o understand t e i)portance of i)a&e, 6uality and ser$ice. 1s a result, once we ac6uire a custo)er, our retention rate is 6uite i& . Moreo$er, our e+istin& custo)ers are t e second leadin& source of new custo)ers. Variety Spices )ails a 6uarterly catalo& to its professional and restaurant trade custo)ers. Cit t e e+pansion of Variety Spices?s )arket into t e consu)er space, t e ac6uisition of custo)ers will "eco)e )ore costly, "ut ulti)ately will fuel su"stantial &rowt for t e co)pany.

Product Pricing Strategy

Variety Spices uses a )arket>"ased approac to pricin&. Variety Spices prices its products at a sli& t pre)iu) to ot er suppliers. It #ustifies t is pricin& pre)iu) wit its wide ran&e of product offerin&, its custo)er ser$ice and t e no>6uestions>asked )oney "ack &uarantee. , e typical custo)er is a eit er a pre)iu) restaurant, caterer or serious at o)e cook. C ile pricin& is a concern to t ese custo)ers, t ey are )ore interested in 6uality, con$enience, and relia"ility. , e )arket>"ased pricin& approac utili.ed "y Variety Spices works as follows. , rou& )arket analysis and custo)er feed"ack, Variety Spices arri$es at a tar&et price per product fro) w ic a tar&et profit is su"tracted to deri$e a tar&et cost. If necessary, Variety Spices uses a $alue approac to assure t at t e cost of eac spice product is appropriate to pro$ide sufficient profit wit out sacrificin& 6uality.

Sales and 6istribution Plan

Variety Spices as t ree )a#or tar&eted )arkets=

14 :estaurants 24 Professional caterers 34 , e serious at o)e cook

,op ,ier 1ccount Mana&e)ent
, e co)pany does not a$e any direct sales people and relies on its )arketin& acti$ities to fuel t e sales acti$ity. Prior to 2005, all sales acti$ity was t rou& in"ound custo)er orders. In K8,
P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e 1(

Variety Spices, Inc. Business Plan

t ese accounts. 1 specific tele)arketin& 2005, sales a&ent as "een assi&ned to eac of t e co)pa t ese top tier accounts. , e results of t is ny se&)e initiati$e a$e "een nted its $ery positi$e= accoun ts "y 15 Sales to t ese sales top tier $olu)e accounts a$e and i)pro$ed 83B in a nine )ont "e&an period out"ou nd tele)a 25 (usto rketin& )er to its ser$ic top tier e as i)pro custo) $ed ers. dra) <ot aticall surprisi y. , e n&ly, custo t e top )er 83B of co)pl our aints custo) a)on ers & t e repres top ented tier al)ost accou 53B of nts is t e '3B sales less $olu)e t an . wit 5nder our t e ot er directio accou n of nts. Susan S)it , a skilled w oles ale sales )ana& er, t e tele)a rketin& sales staff initiate d out"ou nd calls to

35 (usto)er
referrals fro) t e top tier accounts a$e dou"led.

(onsu)er Sales
O$er t e past t ree years, consu)ers a$e accounted for a"out 25B of t e co)pany?s total sales. In K9, 2000, Variety Spices plans to launc a new catalo& directed at t is )arket se&)ent. , e new

consu) recent )ont s, Variety er Spices as introduced catalo& an Internet Corld Cide will Ce" site w ere"y e)p as custo)ers can order i.e products, pro$ide product feed"ack, ask s t at 6uestions, purc ase will "e products, and &et )arkete custo)er ser$ice. , e d co)pany is $ery e+cited e+clusi$ a"out t e prospects of ely to electronic co))erce. t is , e Ce" site as t e new followin& features= custo) er 15 7 &roup. at , e a pool of " tele)ar as ketin& e reps will of "e split "y line er of "s "usines a s since n our d e+perie sp nce as ic de)ons es trated t t e at purc as all in& o differen w ces s "etwee t nt e e two co custo) ns er u types. ) Ce er e+pect to to se i)ple) ar ent an c out"oun a d n tele)ar d ketin& le effort to ar top n consu) a er " purc as o ers ut "e&inni co n& in ) 8333. In )

o n u s e s a n d p o p u l a r r e c i p e s .

"l en ds, fla$ ori n& s, so up "a ses , an d dri ed pro du ce.

35 Virtual
co)) unity of seriou s at o)e cooks includi n&= c at sessio ns and recipe discus sion )ailin & lists.

25 V
i r t u a l c a t a l o & o f s p i c e s , s p i c e

45 1n
asso ciate s pro& ra) w e re"y linki n& to t e co) pan y?s Ce" site asso ciate s can earn co)

) i s s i o n i n c o ) e . V a r i e t y S p i c e s p a y s 2 3 p e r c e n t o n a l l s a l e s

ori&i nati n& fro) an asso ciate ?s we" site.

Sales Incenti$es
, e tele)arketin& representati$es are )easured "y and recei$e incenti$es "ased on t e followin& &oals=

15 nu
)" er of cus to) er refe rral s > t e rep res ent ati$ es are enc our a&e d to ask for refe rral s

25 accuracy
order takin&

of

35 custo)er
satisfaction )easure)ent

45 a"ility

to successfully sell featured products

P:O ,1:; 7o <ot 7istri"ute P:I* I<!O:M1,IO<= Pa&e 14

Variety Spices, Inc. Business Plan

approac . It uses a istorical &rowt )odel of Seaso its own "usiness and nality esti)ates additional sales &rowt "ased on , e co)pa increased )arketin& acti$ities. ny?s sales are Pro$otional rat er season Strategy al since Variety Spices as successfully used t e t e restaur followin& )arketin& ant )et ods to pro)ote trade its na)e and products as a to its tar&et audience= predict a"le 6irect Marketing 9 slowdo Variety Spices?s pri)ary wn in source of re$enue is t e t rou& its catalo& su))e )ailin&s. !our catalo&s r a year are created and )ont s )ailed to e+istin& . Ce custo)ers and trade e+pect lists t at are purc ased fro) selected sources. t at oliday <ew catalo& )ailin&s sales are t e pri)ary )et od durin& of ac6uirin& new custo)ers. (usto)er t e ( rist referrals are t e second )ost i)portant )et od. )as season By ac6uirin& new will add custo)ers t rou& direct )ailin&s, Variety yet Spices e+pands its anot er opportunity to &enerate season e$en )ore custo)ers ality t rou& additional factor custo)er referrals. 1ll as t e direct )ailin&s refer co)pa custo)ers to t e ny co)pany we" site, enters 1n e+a)ple direct t e consu )arketin& )er works eet is )arket. attac ed in t e Variety !inancial Spices forecas 1ttac )ent s owin& t e "reak> ts its sales e$en analysis of a usin& a test )ailin& t at si)ple, was successfully intuiti$e concluded early "ut effecti$ t is year. e Trade Sho&s =

Variety Spices display s its produc ts and catalo &s at se$era l re&ion al restaur ant trade s ows and will "e&in to tar&et consu )er s ows in !; 8333. , e co)pa ny purc a sed a porta"l e trade "oot last year and it s ould )eet our needs for t e ne+t 9 years. 1t trade s ows, we offer a special offer to first ti)e "uyers . ,rade s ows a$e pro$ed to "e a $ery succes sful )arket in& tool. 1t

an a$era&e cost of @23,333 per s ow, we a$e a$era&ed @28,533 in product sales at eac s ow and ninety B of t e custo)ers w o take ad$anta&e of t e first ti)e offer "eco)e repeat "uyers. In 8333, we will attend t e 1spen !ood and Cine !esti$al and we will also conduct a contest for t e winnin& recipe for c ili wit t e )a&a.ine. Trade rganizations = Variety Spices is a c arter "usiness )e)"er of a presti&ious trade or&ani.ation for t e restaurant trade. 1s a c arter "usiness )e)"er, t e co)pany is allowed to )ail infor)ation to t e )e)"ers four ti)es annually. Variety Spices sponsors re&ional e$ents in t eir cookin& c allen&e pro&ra). , is in$est)ent is s)all and it pro$ides t e co)pany wit access to key influencers. 0icensing 5gree$ents = In 2005, Variety Spices entered into licensin& a&ree)ents wit t ree well known cook "ook aut ors. 5nder t ese a&ree)ents, Variety Spices as t e ri& t to pu"lis and distri"ute specific recipes alon& wit its spice and er" products. , ese aut ors pro$ide &reat credi"ility to our product line and t ey also pro$ide reasons to purc ase t e spices= &reat recipes t at use t e). , e recipes are )odified to )ention t e specific spices and )easure)ents fro)

Variety Spices, t e co)pany Spices. as instituted a pro&ra) t at pro$ides incenti$es to t e *ef er a tele)arketin& staff for new referrals and to 'rie t e e+istin& custo)er. nd % C en a custo)er refers a friend w o *ef er a purc ases fro) Variety Spices t ey busi can earn discounts, nes free &ifts and ot er s9 incenti$es. Since e+isti 5d#ertising 9 Variety n& Spices conducts no custo i)a&e ad$ertisin& "ut )er does selecti$ely place referr s)all direct )arketin& als ad$ertise)ents in trade are )a&a.ines. Seasonal an ad$ertisin& is also i)por planned for t e tant consu)er se&)ent to sourc pro)ote t e Spice of e of t e Mont catalo&. new , ese s)all 24/ pa&e "usin ad$ertise)ents are ess planned for t e , e for <ew ;orker, Gour)et, Variet !ood G Cine and Bon y 1ppetit.

P:OP:I*,1:; 7o <ot 7istri"ute I<!O:M1,IO<= Pa&e 16

Variety Spices, Inc. Business Plan Public *elations 9 Pu"lic :elations a$e pro$en to "e one of our "est )arketin& tools t e "est source for new custo)ers. %ast year, Variety Spices was featured in a pro)inent "usiness )a&a.ine and it recei$ed 2333 orders as a result of t is article. , is article and su"se6uent successful efforts in t e consu)er )arket space were instru)ental in t e co)pany?s decision to e+pand its )arket opportunity. , e co)pany e)ploys t e ser$ices of Harrold and Aee$es, a s)all west coast P: fir) t at speciali.es in t e restaurant and food ser$ices )arket. Internet = Variety Spices i)ple)ented its first o)e pa&e on t e Ce" al)ost 0 )ont s a&o. , is effort as "een refined o$er t e year to now include a full electronic catalo&, a store ouse of recipes, a custo)er order trackin& syste) and a custo)er c at foru). (usto)ers are also a"le to purc ase products $ia t e $irtual catalo&.

Maintaining

ur Co$$it$ent to Superior Custo$er Satisfaction

Variety Spices carefully )onitors suc t in&s as=

15 , e inco)in& 6uality of its suppliers > a pro&ra) was i)ple)ented t is year to

insure 233B 6uality fro) its suppliers t at placed t e "urden of inspection on Variety Spices? suppliers.

25 , e on>ti)e perfor)ance of its deli$ery ser$ices 35 , e nu)"er of custo)er co)plaints. 45 , e len&t of ti)e a custo)er is on old w ile waitin& to place an order. 55 (usto)er reco))endations > as a result of custo)er feed"ack, we i)ple)ented
se$eral c an&es in 2000 includin& new en$iron)entally friendly packa&in&. 7urin& !; 2000 and early 8333 we e+pect to )ake on&oin& i)pro$e)ents to our custo)er ser$ice, includin& t e followin&=

15 &i$in& custo)ers t e a"ility to track t eir s ip)ents online t rou& t e Internet

and t rou& a $oice acti$ated p one syste)

25 allowin& custo)ers to order products on>line and sa$e an additional 5B. 'inancial Plan and 5nalysis
5>year Inco)e State)ent
, e pro#ected operatin& results for t e fi$e year plannin& period are s own in t is section in t e inco)e state)ents. <et profits ran&e fro) @533,33 for t e year one of t e plannin& period to o$er @9 )illion "y t e fift year.

5>;ear Balance S eet

, e pro#ected financial position as of t e end of eac fiscal year in t e plannin& period are s own in t is section.

!inancial Hi& li& ts

In t is sections is a su))ary of t e forecasted financial data in t e for) of key financial ratios.
P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e 1*

Variety Spices, Inc. Business Plan

annual "ud&ets for eac of t e fi$e plannin& periods. Bot reports (as Bud&et are s own in t is section. s (as "ud&ets Break>*$en 1nalysis a$e , e )ont ly "reak> "een e$en point of a"out prepare @95/,333 in sales d usin& translates to a"out two @4,933,333 annually. for)ats= 1ccordin& to inco)e a 28 state)ent )ont pro#ections, t e co)pany will operate cas "ud&et far a"o$e t e "reak> for year e$en point for all fi$e one and years in t e plannin& period.

P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute

Pa&e 1

Variety Spices, Inc. Business Plan

Inco$e State$ent
'or the /ears :333 through :33; Dall nu)"ers in @333E .EVE0:E Gross sales %ess returns and allowan <et Sales COS5 O) S";ES ,otal (ost of Goods Sold Gross Profit D%ossE O%E."5I0< E=%E0SES Sellin& Salaries and wa&es (o))issions 1d$ertisin& 7epreciation Ot er ,otal Sellin& *+penses General G 1d)inistrati$e Salaries and wa&es *)ployee "enefits Payroll ta+es Insurance :ent 5tilities 7epreciation G a)orti.ati Office supplies ,ra$el G entertain)ent Posta&e Interest !urniture G e6uip)ent ,otal GG1 *+penses ,otal Operatin& *+penses <et Inco)e Before ,a+es ,a+es on inco)e <et Inco)e 1fter ,a+es *+traordinary &ain or loss Inco)e ta+ on e+traordinary &ain 0E5 I0CO!E >;OSS? @'3' @0/5 @2,9'' @2,04' @9,'93 +--@29,'4 4 '/ @29,5' @/,8'3 @5,92' +--1 @2-,'52 23' @2-,545 @23,'90 @',03' +--+ @88,--0 24/ @88,'92 @29,/35 @/,/8' +--( @80,--0 204 @80,5/5 @2-,05/ @22,'8+--4 @90,255 855 @9/,033 @89,4/5 @25,425

@953 @233 @-53 @9 @2 @2,834 @2,933 @853 @833 @833 @433 @'5 @5 @45 @853 @25 @25 @585 @9,8-3 @4,4-4 @/48 89' @'3'

@403 @285 @2,233 @9 @2 @2,-20 @2,433 @8-5 @885 @823 @533 @-5 @5 @45 @8-5 @25 @45 @-93 @9,/33 @5,520 @2,9/438 @0/5

@'53 @833 @2,533 @9 @2 @8,954 @2,/33 @933 @853 @823 @553 @/3 @5 @53 @933 @83 @55 @033 @4,583 @',/-4 @2,058 5/' @2,9''

@-85 @8-5 @8,933 @9 @2 @9,934 @8,533 @985 @8-5 @823 @-85 @/9 @5 @55 @985 @83 @55 @0'5 @5,549 @/,/4@8,-/3 /94 @2,04'

@-53 @433 @9,333 @9 @2 @4,254 @8,/33 @903 @803 @823 @/93 @03 @5 @'3 @943 @83 @45 @005 @',3-5 @23,880 @5,2/' 2,55' @9,'93

P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e 17

Variety Spices, Inc. Business Plan

Balance Sheet
'or the /ear !nd :333 through :33; Dall nu)"ers in @333E "SSE5S Current "ssets (as <et accounts recei$a"le In$entory ,e)porary in$est)ent Prepaid e+penses 5ota# Current "ssets )ixed "ssets %on&>ter) in$est)ents %and Buildin&s Dnet of depreciationE Plant G e6uip)ent DnetE !urniture G fi+tures DnetE 5ota# 0et )ixed "ssets 5O5"; "SSE5S ;I"BI;I5IES Current ;ia1i#ities 1ccounts paya"le S ort>ter) notes (urrent portion of lon&>ter) notes 1ccruals G ot er paya"les 5ota# Current ;ia1i#ities ;ong@term ;ia1i#ities Mort&a&e Ot er lon&>ter) lia"ilities 5ota# ;ong@term ;ia1i#ities S3are3o#dersA E/uity (apital stock :etained earnin&s 5ota# S3are3o#dersA E/uity 5O5"; ;I"BI;I5IES B EC:I5D +--@2' 2,888 533 233 833 @8,39/ @233 +--1 D@858E 2,'33 0-/ 833 933 @8,/8' @833 +--+ D@559E 8,533 2,820 933 433 @9,/'' @933 +--( D@2,349E 9,533 2,533 2,88' 533 @5,'/9 @433 +--4 D@2,'03E 4,533 9,833 2,//8 2,533 @0,908 @/33

533 833 @/33 @8,/9/

533 833 @033 @9,-8'

533 833 @2,333 @4,/''

533 833 @2,233 @',-/9

533 833 @2,533 @23,/08

@433

@533

@553

@582

@2,333

9 @439

9 @539

@553

@582

@2,333

233 @233 @2,-53 5/5 @8,995 @8,/9/

233 @233 @2,-53 2,9-9 @9,289 @9,-8'

233 @233 @2,-53 8,4'' @4,82' @4,/''

233 @233 @2,-53 4,428 @',2'8 @',-/9

233 @233 @2,-53 /,348 @0,-08 @23,/08

P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e 1$

Variety Spices, Inc. Business Plan

Balance Sheet< 5ssets and !+uity

1all nu$bers in 23334

1ssets

OwnerLs *6uity

,1+,---

,1-,---

,7,--,+,--,*,--,+---

,4,--+ -

+--(

+--4

+--+

P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e +-

Variety Spices, Inc. Business Plan

'ina ncia l )ig hlig hts

;i/uidity (urrent :atio 1cid>,est :atio ;everage 7e"t :atio 7e"t4*6uity :atio ,i)es Interest *arned E''iciency In$entory ,urno$er 1$era&e (ollection Period ,otal 1sset ,urno$er %ro'ita1i#ity Gross Mar&in :eturn on 1ssets :eturn on *6uity

Cash Budget
'or the /ear :333
Dall nu)"ers in @333E

Be&innin& cas "alance (as fro) operations ,otal 1$aila"le (as Less: (apital e+penditures Operatin& *+penses Interest 7i$idends 7e"t retire)ent Ot er ,otal 7is"urse)ents (as Surplus D7eficitE Add: S ort>ter) loans %on&>ter) loans (apital stock issues ,otal 1dditions *ndin& (as Balance

Ean @53 2,233 @2,253 @2,853 @2,3/3 2

)e 1 @930 2,233 @2,43 0

!a r @92/ 2,233 @2,42 /

"p r @982,233 @2,48 -

!a y @99' 2,233 @2,49 '

Eu n @945 2,233 @2,44 5

Eu# @954 2,233 @2,45 4

"u g @9'9 2,233 @2,4' 9

Sep @9-8 2,233 @2,48

Oct @9/2 2,233 @2,4/ 2

0ov @903 2,233 @2,40 3

Fe c @900 2,233 @2,40 0

@2,3/ 3 2

@2,3/ 3 2

@2,3/ 3 2

@2,3/ 3 2

@2,3/ 3 2

@2,3/ 3 2

@2,3/ 3 2

@2,3/ 3 2

@2,3/ 3 2

@2,3/ 3 2

@2,3/ 3 2

23 @8,942 D@2,202 E

23 @2,30 2 @92/

23 @2,30 2 @98-

23 @2,30 2 @99'

23 @2,30 2 @945

23 @2,30 2 @954

23 @2,30 2 @9'9

23 @2,30 2 @9-8

23 @2,30 2 @9/2

23 @2,30 2 @903

23 @2,30 2 @900

23 @2,30 2 @43/

2,533 @2,533 @930

@3 @92/

@3 @98-

@3 @99'

@3 @945

@3 @954

@3 @9'9

@3 @9-8

@3 @9/2

@3 @903

@3 @900

@3 @43/

P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute

Pa&e +1

Variety Spices, Inc. Business Plan

Cas3 Bud get "ctiv ity @@ )irst 1+ !ont 3s

Dall nu)"ers in @333E

C a s h B

u d g e t
' o r t h e

/ears :333 through :33; Dall nu)"ers in @333E

Be&innin& cas "alance (as fro) operations ,otal 1$aila"le (as Less: (apital e+penditures Operatin& *+penses Interest 7i$idends 7e"t retire)ent Ot er ,otal 7is"urse)ents (as Surplus D7eficitE Add: S ort>ter) loans %on&>ter) loans (apital stock issues ,otal 1dditions *ndin& (as Balance
I<!O:M1,IO<= 7o <ot 7istri"ute P:OP:I*,1:;
Pa&e ++

+--@53 29,833 @29,853 @2,853 28,0'3 28 3 3 283 @24,948 D@2,308E @3 3 2,533 @2,533 @43/

+--1 @43/ 2',933 @2',-3/

+--+ @'4/ 83,/33 @82,44/

+--( @009 8/,/33 @80,-09

+--4 @2,5-95,333 @9',5--

25,/48 ' 28 833 @2',3'3 @'4/

83,890 4 28 833 @83,455 @009

8/,333 4 28 833 @8/,82' @2,5--

94,333 9 28 833 @94,825 @8,9'8

@3 @'4/

@3 @009

@3 @2,5--

@3 @8,9'8

Variety Spices, Inc. Business Plan

Cash Budget 5cti#ity 99 . /ears

1all nu$bers in 23334

@8,533 @8,333 @2,533 @2,333 @533 @3 D@533E D@2,333E D@2,533E 1 + ( 4 6 (as Surplus D7eficitE *ndin& (as Balance

Break9!#en 5nalysis
)ixed Costs %roduct costs9 1$era&e (ost of Product !ont3#y Se##ing expenses9 Sales salaries G co))issions 1d$ertisin& Miscellaneous sellin& e+pense !ont3#y <enera# expenses9 Office salaries Supplies Miscellaneous &eneral e+pense 5ota#s 1$era&e Sellin& price per unit .esu#ts9 (ontri"ution )ar&in per unit Mont ly unit sales at "reak>e$en point Mont ly Sales 7ollars at "reak>e$en point Varia1#e Costs @9.33

@43,333 @'3,333 @23,333 @233,333 @83,333 @-3,333 @933,333

@9.33 @2/.53 @25.53 20,955 @95/,3'5

P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute Pa&e +(

Variety Spices, Inc. Business Plan

Break@Even "na#ysis

16-,-1--,-6-,-@ 6-,-% r @ 1--,-@ ! o 16-,-@ +--,-@ +6-,-@ (--,-6-,---

1--,--

16-,--

+--,-- +6-,-(--,-!ont3#y Sa#es

(6-,--

4--,--

46-,--

6--,--

P:OP:I*,1:; I<!O:M1,IO<= 7o <ot 7istri"ute

Pa&e +4