GCTT Business Plan I

Giraffe Coffee and Tea Traders, LLC.

BUSINESS PLAN

Contacts

Jackson N. Kanampiu Jim McKee3542 S. Kittredge St - D 5684 Kipling Parkway - 101

Aurora, CO 80013 Arvada, Colorado [email protected] [email protected]

Mobile (303)974-8424 Mobile (303) 808-1596

www.GiraffeCoffeeandTeaTraders.com

This document contains confidential and proprietary information belongingexclusively to Giraffe Coffee and Tea Traders, LLC. Therefore, reader agrees

not to disclose it without the express written permission of Giraffe Coffee and Tea Traders, LLC.

CONFIDENTIAL DOCUMENT, PROPERTY OF GIRAFFE COFFEE AND TEA TRADERS, LLC.

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Table of Contents Page

Executive Summary 3

Company Description 5

Market Analysis 6

Organization & Management 11

Product Line & Service 18

Marketing & Sales Management 29

Funding Request 30

Financials 32

Appendix 43

Index 51


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Part 3: Executive Summary

Company Profile

Giraffe Coffee and Tea Traders, LLC. Is a new business providing high-quality, full service distribution of imported natural and organic green coffee beans and tea products for sale to the public. A full service roasting facility will be developed to establish private label and proprietary roasted coffees for wholesale and retail coffee and tea products for the public. Coffee products will be offered in retail consumer packaging of 12 ounce eco-friendly coffee bags under the brand name of GIRAFFE COFFEE ROASTERS. The specialty tea will be offered in eco-friendly loose tea tin and individual tea bags under the name of GORILLA SPECIALTY TEAS. The coffees and teas will be available to the Foodservice Industry supporting coffee roasters, coffee houses, restaurants, hotels, convenience stores, as well as available to the natural and organic grocery Industry. Clients will be able to purchase all of the products offered by GIRAFFE COFFEE AND TEA TRADERS, LLC. direct and through the online website.

Ownership/Management

The principals are Jackson Kanampiu and Jim McKee.

Jackson Kanampiu

Jackson has over 30 years of experience in the coffee industry, guarantees exceptional coffee quality. Kanampiu brings the experience of processing coffee from tree to the cup. A coffee expert by profession, and Q grader, his extensive background in the coffee industry has allowed him to gain a discriminatory taste for what makes the best coffees. He has furthered this knowledge in producing world class coffee in a warehouse environment. His solid track record of success in creating superior coffee blends is illustrated by a significant increase in sales.

Areas of expertise:

Coffee Taster and Sensory Specialist Generic Coffee Executing superior roasting profile Clean coffee grading, classification, color, size, and formation analysis Clean coffee bulking and blending Wet and drying process Dry cherry and parchment hulling Evaluating and classifying green and roasted beans Describing and documenting all types of coffee defects utilizing specific world cognate terminology. Disciplined bargaining and purchasing in the green coffee bean industry.


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Jim McKee

Jim McKee has over 30 years of experience leading operation teams’ at large public and smaller private food & beverage companies. He has extensive Management, Operations, Research and Development, and Sales. Jim implements motivational management styles with a record of building and directing highly-motivated managers, and operations personnel to consistently exceed goals and objectives with emphasis on Quality Assurance Programs. McKee is an enterprising executive and private business owner with full Profit & Loss experience and broad national experience in dynamic, relevant, successful and economically viable food sales, distribution, and manufacturing and food service operations. McKee displays superior product and packaging knowledge that, when coupled with his extraordinary skills in concept development and processing technique execution have granted him many years of compounding successes that have become the cornerstone of his success. McKee displays a strong track record of assembling and proactively leading high performance department teams that consistently deliver food and beverage products of excellence that are innovative, evoke unparalleled segment and consistently display commercial and financial success. He creates learning and working environments that ensure educational and business objectives are established and achieved utilizing high creativity, continually updated state-of-the-art methods driven by his customized business plans that are strategically conceived yielding products that deliver favorable results that always meet and often exceed the targeted goals and expectations. Specializing in food distribution and food manufacturing consultations providing conceptual, operational, diligence, evaluation and management development services to a variety of food service, distribution, retail, and manufacturing clients. Provides substantial due diligence and analytical analysis for investment segment clients. Clients include international, regional and independent restaurant distribution and food manufacturing/further-processing companies. Food Service clients include virtually every segment of the industry including fine dining, casual theme, family, QSR, bakery café, food distribution and institutional food service. Manufacturing Clients include privately owned regional processors and major national and international corporate FDA and USDA manufacturers. Clients included Black Angus Restaurants; Steak ‘n Shake, Hard Rock Café, Planet Hollywood, Marie Callender’s Restaurant Bakeries, Boulder Ice Cream, Old Chicago Pizza, Rock Bottom Restaurant Breweries, ChopHouse Brewery, Woody’s Wood Fired Pizza, Fiona’s Granola, and Fogo de Chao. Darden (Olive Garden, The Capital Grille, LongHorn Steakhouse, and Red Lobster). Brinker (Maggiano’s, and Chili’s).


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Capital & Equity

At this time we are actively seeking equity capital from private and public investors. We are planning to arrange financing for roasting facility, office build out, FF&E (Furniture Fixtures and Equipment, inventory and day to day operations financing.

Product Introduction

We plan to distribute our first products within 30-60 days of finalizing financial arrangements, and establishing the distribution warehouse, offices, and roasting facility.

Sales Projection

Sales projections for Giraffe Coffee and Tea Traders, LLC. are estimated to begin at approximately $1,834,803 the first year, increasing to approximately $3,401,639 in year 2 with the addition of the Giraffe Private Label Retail and Wholesale Roasting facility. Approximately $4,020,657 in year 3. Years 3 and 4 increase dramatically due to large national roaster adding significant Arabica green coffee purchases projected at $4,339,695. Year 5 adds an additional national roaster with strong retail presence and private label sales bringing sales of $6,499,074. National Foodservice distributors will see the value of the organic all natural coffee for a valuable offering to the food industry. The national Foodservice distribution companies will also have the ability to contract with Giraffe private labeling for the Foodservice distribution companies.

Distinguishing Characteristics

Distinguishing characteristics of our business will be offering full service distribution of imported natural and organic green coffee beans and tea products for sale to Foodservice distributors and retail clientele. The initial first year will be focused on establishing the green coffee bean sales and distribution platform to serve Local, national, and regional retail roasters. Specialized coffee products, providing superior customer service through a combination of extraordinary coffee and tea expertise, comprehensive management, accurate sales and distribution, provision of high-quality coffee, and innovative products.

In particular, what uniquely sets us apart is that we are an environmentally friendly company. Giraffe Coffee and Tea Traders, LLC. offers exclusive innovations to better serve our clientele by reducing our carbon footprint. Our roasting and packaging machines are eco-friendly, and our groundbreaking products are produced using energy efficient equipment and eco-friendly packaging materials.

Objectives


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To operate a successful coffee and tea Import and national distribution services in Denver, Colorado, Los Angeles, California, and Miami, Florida.

Developing and implementation of an eco-friendly roasting, packaging, and warehouse.

Employing three employees the first year.

To obtain a minimum of 50 regular clients in the two coastal and one central region markets the first year of operation.

Achieve first year gross sales of $1,834,803.

Maintain an average gross margin of 30 percent.

To produce a projected gross profit of at least $550,440 by the end of the first year of operation.

Mission

Giraffe Coffee and Tea Traders, LLC. will become a recognized, and reputable importer, distributor and roaster of natural and organic specialty coffees and teas for coffee roasters, coffee and tea brokers, national Foodservice distributors and the natural and organic grocery distributors throughout the United States. Giraffe Coffee and Tea Traders, LLC. will developed strong relationships with key clientele so we will be viewed as indispensable partners, rather than just another supplier. We will work closely with our clientele to recommend product assortment unique for their wholesale and retail base, appropriate stocking levels, pricing and display assortments, as well as promotional ideas and material to increase sales. Giraffe Coffee and Tea Traders, LLC. will seek out and work with the manufacturers we represent to deliver the most innovative and exciting products possible to the clientele we serve. We are not only selling high-quality products, but also superior service all the time keeping our eyes on the sustainability and growth of our farming partners. To offer organic and natural coffee and teas with no exceptions to our commitment to these two characteristics. Our objective is to establish a fair and stable agreement to purchase green beans and specialty teas by exclusive relationships and partnerships. Directly purchasing from the farm co-ops and that will maintain a high standard of consistency and quality for our clientele in United States and Europe.

Keys to Success


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Innovative quality products

Exceptional Coffee Expertise.

Individualized customer service - providing our clientele with what they want, when and how they want it.

Highest Quality Grade natural and organic coffee and specialty teas.

Fully integrated programs to help clientele increase sales through menu development, creative promotions, advertising, and custom marketing material.

Exclusive distribution rights to ground-breaking products not currently available in our market.

Assortment of new blends never before seen or tasted with guaranteed customer satisfaction.

State of the art coffee roasting and packaging facility focusing on environmentally friendly production standards that will not be comprised.

Private label development and production of specialty coffee and teas.

The combined experience of the principals and their team to bring competitive services and products.

Management, marketing, sales, and organization skills, high levels of customer service, and accurate distribution.

Committed to “Whatever it takes” attitude.


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Part 4: Company Description Business Statement

Giraffe Coffee and Tea Traders, LLC. specializes in sourcing, manufacturing, and marketing natural and organic specialty coffee and teas from the world’s producing countries, specifically regions of Africa. To better provide exceptional high end quality coffee and teas to the consumer. Our Raw coffee beans are to be purchased, and carefully analyzed, by an exceedingly qualified professional coffee expert and stored at our climate controlled warehouse facility in preparation for roasting, packaging, and distribution.

Company Goal

Our goal and objective is to satisfy our valued clientele. We will also offer exclusive innovations to better serve our community by reducing our carbon footprint. Our machines are eco-friendly, and our groundbreaking products are produced using energy efficient equipment.

Our Incentive

The company’s interests are to reach the coffee and tea manufacturers, retail and wholesale clientele and provide excellent specialty coffee and teas at a fair and affordable price without compromising quality.

Why specialty coffee and teas?

According to the Specialty Coffee Association of America (SCAA), in the U.S alone there are about 25,000 stores and companies with combined annual revenue of $34 billion in Specialty Coffees and a total $90 billion a year in the Coffee Industry. The top 50 companies in the nation generate more than 70 percent of the sales, and as such, they control most of the market. But there coffees are not of the highest-quality bean, there brew does not have its greatest flavor potential, and the freshness in its aroma is not carefully monitored.

More than fifty percent of all Americans drink coffee every day, and in such a large industry, controlled by key players, what Americans lack is high-quality coffee unique in taste, and aroma.

Competitive Edge

As a coffee roasting company, we can compete effectively by offering specialized products, serving local and national markets, and providing superior customer service. Our profitability will be closely linked to delivery of our high quality products, in relation to the consumer’s taste. Company Location, Facilities & Equipment

Giraffe Coffee and Tea Traders, LLC. Warehouses will be located in Miami, Florida, Denver, Colorado and Los Angeles, California. These are prime port locations with safe storage operations to provide ideal and cost effective distribution points for East Coast, Midwest, and West Coast destinations. The facilities will include approximately 2,000 square feet of warehouse rented space in each port city. The Giraffe Coffee and Tea Traders, LLC. Office will occupy approximately 2,000 square feet built for Labs, Cupping, and Office space.


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Company Ownership

Giraffe Coffee and Tea Traders, LLC. Is a Limited Liability Company certified and established in the State of Colorado with DBA’s of Giraffe Coffee Roasters, and Gorilla Specialty Teas. Primarily owned by Jackson Kanampiu, and Jim McKee.

Stocks & Shares

Giraffe Coffee and Tea Traders, LLC. will offer shares, to later be distributed as dividends to our investors. Ownership of shares will be documented by issuance of a stock certificate. Given the total amount of money invested in the business, par value of shared will be ten dollars common stock, and twenty dollars preferred stock.


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Part 5: Market Analysis

The specialty beverage industry is growing at a strong pace, with sales growth in some categories projected to grow at rates of 40% per year.

This growth offers excellent opportunities for new companies to enter this market, and we are excited about the possibilities of what Giraffe Coffee and Tea Traders, LLC. will accomplish in the United States market.

Industry Description & Outlook:

The coffee and tea markets and their various elements are what drive the coffee industry. Knowing that the economic repercussions due to the recession would be broad; there already was evidence of downward pressure on all commodity prices. Fortunately, the year ended with encouraging signs of economic recovery in many countries, along with some evidence that the impact of the crisis on coffee was less severe than anticipated. The world coffee market continued to perform positively, despite concerns over the possible effects of the world economic crisis on coffee and tea consumption. In fact, preliminary data suggest that demand has not been significantly affected by the economic downturn creating healthier and expanded markets for tea. However, some consumption patterns appear to have changed, especially the acceleration in the growth rate of consumption in the home, as opposed to more expensive drinks in coffee shops.

World Coffee Production

World coffee production for 2013 is revised down by 4.4 million bags to 146.2 million bags as reported from the International Coffee Organizations as of April 2013.

US ImportsTotal imports for 2011/2012 were 23.7 million bags and in 2013 is estimated to be down 1.5 million bags to 22.2 million bags.

U.S. Retail PricesPrices for coffee have been rising steadily. According to the U.S. Department of Labor, a 1-pound can of ground coffee sold for an average of $5.10 in the U.S. in April, up from $3.64 the year before. Over the last 12 months, the price of green, unroasted coffee on the big commodities exchanges has gone up more than 90 percent.

The U.S. coffee market is percolating, as consumers explore new ways to make and drink coffee. From individually brewed cups at home (the so-called Kcups and pods), to blended beverages on the go, the market continues to evolve, with the coffee consumer willing to explore new products.

Coffee Trade

There are two markets for coffee: the cash market and the futures market. The cash market is the market today. It is the price you would pay for coffee today if you could receive it today. The futures market is used to help determine the price for future deliveries. It is used to purchase a contract today to guarantee a future shipment of coffee. More importantly, however, the futures market for commodities like coffee is used to


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help protect against the wild variations that occur due to coffee market speculation. The latter reason will be explained in further detail through the help of an example.

Futures Market: Coffee Exchange Analysis

Assume it is currently May and assume the “C” market price for July shipment is at 95 cents/lb. Now pretend that today a coffee producer sells two units of coffee (1 unit = 37,500 lbs.) to a coffee roaster or importer for 5 cents/lb. over the “C.” The coffee traded is Class 3 (Exchange Grade) Guatemalan coffee to be shipped to New York. The 5 cents/lb. premium is paid to cover the price of storage and insurance to carry the coffee for two months (May-July) until the delivery month (July). The two parties agree on 100 cents per pound for two units of Guatemalan Class 3 coffee to be delivered in July.

Now imagine it is early July and consider two hypothetical scenarios:

1) The happy buyer / frustrated coffee producer scenario: A frost occurs July 2nd in Brazil and coffee prices skyrocket to 150 cents/lb. Due to the aforementioned contract the producer must still sell his coffee at the previously agreed upon 100 cents/lb. and therefore loses $37,500 (37,500 lbs. x 2 units x 0.50 cent loss) compared to what the seller could have received had he or she sold the coffee today.

2) The broke buyer / pleased coffee producer scenario: A frost that was expected to occur in Brazil did not and there is a huge excess of coffee on the market. Prices in July drop to 60 cents/lb. Due to the aforementioned contract the buyer must still pay 100 cents/lb. of coffee and therefore loses $30,000 compared to what he or she would have paid for the same exact coffee today.

In either case someone wins big and someone loses big. The risk is too severe for anybody whose livelihood is based upon this system. Therefore the coffee market was established to provide a system by which people could hedge against loses in the cash market.

Let’s go back to our previous example and ignore the hypothetical scenarios for now. The coffee producer produced two units (+2) of coffee and sold two units of coffee (-2). His or her net coffee volume is zero, but price gain is $75,000. The coffee buyer produced nothing, but bought two units of coffee. The buyer’s net gain of coffee is +2 units, but he or she loses $75,000. This is a somewhat mathematical look at any common purchase: an exchange of money for a product. But rather than taking the risk of facing either of the two previous hypothetical scenarios, both the buyer and seller take an extra precaution.

Since the producer sold two units of coffee at 100 cents/lb., he or she would also place an order for two units of coffee at the same time for 100 cents/lb. Therefore the producer maintains his or her 2-unit surplus of coffee, but has made no money.

Since the coffee buyer bought two units of coffee at 100 cents/lb., he or she would also sell two units of coffee at the same exact time for 100 cents/lb. Therefore the coffee buyer or roaster has a zero net gain of coffee and a zero loss of cash.

No one has gained or lost anything at this point. The coffee producer sold his coffee and bought somebody else’s coffee for the same price. The coffee buyer (roaster or importer) sold some coffee only to buy back an equivalent coffee at the same price. However, the coffee producer prefers money rather than coffee in


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payment for his or her coffee, and the coffee buyer does not really have any coffee to sell since he or she is not a producer. Then why did this somewhat backwards-sounding transaction occur?

Imagine again a scenario 1 change in the market. A frost occurs on July 2nd and coffee prices skyrocket to 150 cents/lb. However, this time the producer is both pleased and disappointed (i.e. unaffected) by the change in the market. The producer again loses $37,500 compared to what could have been made had he or she sold the coffee today (early July), but since the producer also acted as a buyer and bought two units of coffee at 100 cents/lb. he or she made $37,500. The total loss is zero. Now consider the coffee importer. Again the importer is happy since they profited $37,500 from their purchase, but since they also sold coffee at 100 cents/lb. versus the 150 cents/lb. they could get today they also lost $37,500. The same result will occur for scenario 2. Neither the coffee producer nor the coffee importer was affected by the variation in the market.

When the coffee producer feels the time is right, he or she can then sell the extra two units of coffee to finally turn a cash profit, and during the course of one of these transactions the coffee importer must not sell coffee so that they may finally have the surplus of coffee that they need to distribute it to the coffee roasters. These transactions will typically occur on the cash market and not the futures market. Only 1% of the future contracts that are actually made take place.

This is the general idea of how a market works.

1) The price set in May of 95 cents/lb. of coffee for a July shipment was not determined arbitrarily. The price is determined in the following manner: hedgers and investors gather in the trading area (“the pit”) of the New York Coffee Exchange (NYCE) where an open outcry auction system occurs. Hedgers can place bids to buy or offers to sell coffee until the buyer and seller mutually agree on a price (called “price discovery”). This is how the price at that moment is fixed and explains the fluctuations seen throughout the day.

2) Trading takes place from 9:15 AM to 1:32 PM (EST) M-F.

3) Deliver months are March, May, July, and September. This is why the nearest neighboring delivery month is used to set the current cash price.

4) The basis is the difference between today’s price and the futures price for the nearest deliver month. For instance in our example the buyer bought the coffee for a 5 cent premium in May over the July futures price. This extra five cents is called the basis and is used to pay for the storage and insurance during the two months before it is shipped. As it gets closer to July the future price and current cash market price converge since storage and insurance are no longer an issue.

5) The price also depends on where the coffee is shipped. New York shipment is at par with the NYCE price for that month. New Orleans and Miami demand a 1.25 cents/lb. discount, whereas San Francisco shipment has a discount of 0.75 cents/lb. The seller determines the delivery point.

6) The quality of coffee also affects the premium or discount paid for a coffee. There are five classes of coffee:

a) Class 1 Specialty Coffee – 0-5 defects.

b) Class 2 Premium Grade – 6-8 defects.


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c) Class 3 Exchange Grade – 9-23 defects. This is the grade traded on the NYCE. Class 1 and 2 demand premiums to this price, whereas Class 4 and 5 coffees demand discounts.

d) Class 4 Below Standard Grade – 24-86 defects.

e) Class 5 Off Grade – More than 86 defects.

7) The producing country also determines the differential paid. Costa Rica, El Salvador, Guatemala, Kenya, Mexico, New Guinea, Nicaragua, Panama, Tanzania, and Uganda are at par (basis). Colombia has a differential of plus 200 points (2 cents/lb.). Honduras and Venezuela have differentials of minus 100 points. Burundi, India, and Rwanda deliver at discounts of 300 points, whereas Dominican Republic, Ecuador, and Peru deliver at minus 400 points.

Our company will focus its efforts on specialty coffees in the category 0-5 defects to offer exclusive blends roasted to perfection. That is the coffee harvested from a well-nourished and properly nurtured tree. This category contains high density beans, standard moisture content, and true color reflecting the maturity of the beans.

Target Market: Our target market is directed to the specialty coffee and tea consumers who occupy 30% of the market. We will specialize in offering coffees and teas to the Foodservice Industry supporting coffee roasters, coffee houses, restaurants, hotels, convenient stores, and the natural and organic grocery industry. Our goal is to provide high-quality coffee rich in taste and aroma along with exclusive customer service. While the market is already sizeable, this industry continues to grow. The sales potential in this market is unlimited.

Giraffe Coffee and Tea Traders, LLC. Will focus on the business segment of the above mentioned wholesale and retail operators. We will offer quality products at competitive prices, first class service, and strong sales support. It is most often these small owner-operated businesses that are neglected by larger suppliers and are forced to service themselves. It is also these smaller businesses who could most greatly benefit from marketing services, sales support, and full service product delivery on a more intimate level with the customer. Giraffe Coffee and Tea Traders, LLC. plans to expand our target market depending on the responses from our clientele in relation to our products and services..

Characterized Coffee and Teas: What is specialty coffee? As defined by Erna Knutsen, “it is special, geographic, microclimate produced beans, with unique flavor profiles.” Underlying this idea of coffee appellations was the fundamental premise that specialty coffee beans would always be well prepared, freshly roasted, and properly brewed. This was the craft of the specialty coffee industry that has been slowly evolving. Large companies like Starbucks, Caribou, and Peets Coffee & Tea, offer premium grade coffees in large numbers where small mistakes in screening, or larger mistakes in the selection of packaging, or the storage conditions prior to shipping, can bleed the coffee of its true potential. We guarantee properly developed flavor and careful packaged goods provided with the best customer service. Teas are no different and require total development separate from our coffees. No cross contamination will occur since our two products are stored and warehoused at a common 52 degrees but separate spaces.


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Part 6: Organization & ManagementOrganizational Structure

Giraffe Coffee and Tea Traders, LLC. is owned and managed by Jackson Kanampiu and Jim McKee the founding partners, whose individual areas of expertise cover the functional aspects of the business.

Responsibilities

Jackson Kanampiu will solely be responsible for the sourcing of all coffee beans and teas. As well he will be key to the negotiations and purchasing of these products. Quality control, which include Raw beans analyst, organic sensory tasting, Creating new blends and accounting for quality assurance as well as roasting, and packaging of all coffee and tea related items. As well as securing customer accounts.

Jim McKee will be responsible for company image, finance, sales, marketing, and distribution management. Clientele service, accounting, receiving, shipping, general administration of the business, and day to day operations.

Support Staff

The support staff at the warehouses, roasting facility will report to Jackson Kanampiu who will coordinate the functions of the warehouse. Jim McKee will responsible for office personnel and coordinate sales and customer representatives, deliveries and as well as receiving and shipping product and monitoring of the warehouse inventories.

Employment Prospects in the United States

Giraffe Coffee and Tea Traders, LLC. will have a team of committed associates who empower each other so that the customer's expectations can be exceeded. Our goal is to offer career opportunities, advancement opportunities and a level of income and benefits that is competitive within the region and job classification. It is our long-term goal to become a preferred employer within our niche of the beverage distribution industry.


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Management Team

Personnel PlanPERSONNEL – GENERALInitially we expect to be able to handle business needs with Jackson Kanampiu, Jim McKee, (one) In House Account Representative. As business continues to grow, we intend to hire additional employees one at a time and pay premium, over market labor rates to attract and retain quality help. These positions will be in sales and future roasting facility.

Not only will we train our employees to deliver excellent service, we will give them the flexibility to respond creatively to client requests in order to satisfy market trends. In addition, we will continually monitor our clients' level of satisfaction with our service through surveys and other convenient feedback opportunities.

To ensure our personnel are meeting our expectations, we will hold a minimum of Bi-Weekly meetings with all employees so that results can be reviewed and future plans can be discussed. At least twice a year, a refresher course will be required on product knowledge and how to exceed our customer's expectations.

ACCOUNT REPRESENTATIVES In order to deliver high quality, personalized service we will carefully select all employees - with extra attention given to inside account representatives, delivery personnel, and who will deal directly with clientele. We will carefully review references not just from past employers or manufacturers, but also from retailers whom these account representatives have served. We will also make sure that each employee understands our way of delivering quality service to each customer. We will have immediate back-up support available by phone from our office for more difficult service issues. We will also give employees enough latitude so that they can respond immediately to almost any customer request or complaint - which in this industry usually means granting immediate credit for damaged merchandise, and adding additional merchandise to an order.


Jim McKeeCEO

Jackson KanampiuPresident

Taster/GraderRoasting

Warehousing

Finance/SalesMarketing

Customer Service

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Personnel Plan

POSITION Year 1 Year 2 Year 3Jackson Kanampiu √ √ √

Jim McKee √ √ √Inside Account Rep 1 2 2

Administration 1 1Roasting 1 1 1

Packaging 1 1 2Sales 1 1 2

Warehouse 1 1 1Personnel Added 0 2 2

Total People 7 9 11

Part 7: Products & Service

Products


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Giraffe Coffee and Tea Traders, LLC. will provide a first-class distribution to coffee roasters, coffee and tea brokers, coffee houses , restaurants, hotels, convenient stores and the natural and organic grocery companies throughout the United States. Our services will include invaluable trade resources, effective promotional programs, custom-designed marketing material, informative monthly newsletters, training and product demonstrations, as well as information on the latest market trends in the coffee/tea specialty beverage industry. Giraffe proprietary coffee (3 brand facings under Giraffe Coffee Roasters), and tea (2 brand facings under Gorilla Specialty Teas. 1 loose tea in custom tin, and 1 tea bag ).

Product & Service Description

PRODUCT DESCRIPTIONGiraffe Coffee and Tea Traders, LLC. will carry a variety of quality products that will enable us to provide premium coffee and teas to the retail markets, coffee roasters, coffee and tea brokers, coffee houses , restaurants, hotels, convenient stores and the natural and organic grocery companies throughout the United States.

Our underlying philosophy in selecting products is to choose lines that will bring consistent quality, competitive prices, and product satisfaction to our clientele. We have personally researched and sampled each of the following products that we offer to ensure the quality we guarantee.

Giraffe Green Coffee Whole Beans Giraffe Coffee Roasters Coffee Blends Gorilla Specialty Teas Loose and Packaged Teas

Giraffe Coffee and Tea Traders, LLC. will make these same products available through our high quality, full service delivery - bringing these products directly to their doorstep at a competitive price.

SERVICE DESCRIPTIONAn important component of our business is not just our products, but our service. In addition to our full service delivery, the following are other important service elements that we will offer to our clientele:

Ideas to help our clientele increase sales through menu development, creative promotions, co-op advertising, and much more.

Custom designed marketing material (i.e., promotional pieces for retail and wholesale clientele). Distribute a monthly newsletter/brochures featuring the latest coffee and tea trends, new industry

equipment, breaking trade news, promotional ideas, new creative recipes, and upcoming events. Samples of the latest product releases - with eye-catching point-of-sale to advertise new items to the

end consumer.

Competitive Edge

KEY COMPETITIVE STRENGTHSAs a coffee roasting company, Giraffe Coffee and Tea Traders, LLC. will compete effectively by offering specialized products, serving a local and national market, and providing superior customer service. Our profitability will be closely linked to delivery of our high quality products, in relation to the consumer’s taste. We are better positioned than our main competitors to take advantage of the increasing demands of coffee and specialty teas because we focus exclusively on high-quality coffee equaled with distribution and customer service.


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KEY COMPETITIVE WEAKNESSESOur primary weakness is that we are a new business competing largely against established suppliers. To significantly build sales, we must not just find new clientele - we must take clientele away from existing suppliers. However by offering a superior selection of coffee and teas, new groundbreaking coffee blends to the market, and focusing on high-quality service and full service delivery, we feel will can quickly establish accounts and build strong relationships.

Sales Literature

Sales literature to be distributed to both current and potential clientele will include business cards, brochures, fliers, newsletters, as well as other print media such as print advertisements.

Sourcing

Giraffe Coffee and Tea Traders, LLC. will purchase its coffee and tea directly from coffee and tea mills the various regions of the world but initially focusing on Africa. This will eliminate the broker or "middle man, thus allowing us to operate on a 30% profit margin, while providing our clientele with competitive prices. We will also offer complimentary products purchased from the following.

We will source our Raw Green Bean Coffees and Teas from the following countries of origin:

East Africa Latin America Asia Central America North America

Kenya Guatemala Indonesia Mexico Hawaii

Tanzania Costa Rica India Jamaica

Ethiopia Colombia Papua New Guinea

Rwanda Brazil

Burundi El Salvador

ZambiaPanama Peru

Uganda

Technology

To streamline the efficiency of our distribution methods, Giraffe Coffee and Tea Traders, LLC. plans to use the latest in cutting edge technology in roasting, delivery services, offices, and warehouses.


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We will also offers exclusive innovations to better serve our community by reducing our carbon footprint. Our machines are eco-friendly, and our groundbreaking products are produced using energy efficient equipment.

Customer service associates will be equipped with tools that will reduce field expenses, decrease day's sales outstanding, and increase worker efficiency. Features can be used in or out of the warehouse and include managing returns and collections; adjusting item price, profit or margin; applying promotional items to an account; streamlining orders; tracking inventory; reducing out-of-stocks; and providing sales history reports. All inventory accountability will be in “real time” to insure accurate inventory for our sales team.

Sales associates will have the necessary tools to provide them with flexibility in the field such as lap top computer, smart phone, and real time access to the Giraffe inventories through company software. This will provide availability to current clientele as well as prospective clients.

Warehouse associates will have hand held scanners to maintain real time inventory for raw, finished product, and packaging materials. The warehouse provides a vital role updating and maintaining current inventories for Customer Service, Sales, and Production associates.

Future Products and Services

Giraffe Coffee and Tea Traders, LLC. plans to expand our target market depending on the responses from our clientele in relation to our products and services.

The first year of business, Giraffe Coffee and Tea Traders, LLC. will open its roasting facility, and warehouses for production and distribution. Products will be available for purchase by both our wholesale clientele as well as retail consumers purchasing product for their specific business.

Giraffe Coffee and Tea Traders, LLC. will attend the annual national SCAA (Specialty Coffee Association of America) trade shows. In addition we will attend the East and West Coast Fancy Food Trade Shows. These trade shows will allow clientele the opportunity to sample products, talk to our principals and sales associates to learn about new products and services, review marketing material, and network with our business partners and potential clientele. Ultimately to develop purchasing agreements and makes sales at these various trade shows.

Part 8: Marketing & Sales Management

Sales and Marketing

The unique aspects of our business include high-quality Specialty Coffee and Tea Grades, individually selected for quality assurance, and exorbitant full service distribution. Our strategy is to focus our efforts on the market for small specialty coffee retailers, and coffee roasters throughout the United States.

By focusing our efforts and energy on these areas, we expect to quickly develop and maintain a leadership position. Giraffe Coffee and Tea Traders, LLC. key personnel will stay in contact with our clientele, and will be able to respond to changes in this market much faster than our competitors.

Giraffe Coffee and Tea Traders, LLC. will offer the best, personalized service in the marketplace and offer new and unique coffee products with guaranteed customer satisfaction. We intend to insure that every one of our


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clientele receives excellent service. Our approach will be simple but direct, “What Ever It Takes”. We will go out of our way to make sure that our clientele know that they truly matter to us. Their success is our priority. Sales personnel and in-house account representatives, who deal with clientele, will be seasoned veterans of food & beverage distribution industry. These key individuals will be given wide latitude for insuring that clientele are always satisfied.

Marketing Strategy

Our basic marketing strategy is to work with clientele on a one-to-one basis to ensure their supply needs are being met and help develop unique marketing programs for each of them. We intend to prioritize coffee and tea quality as well as customer service and make them key components of our marketing programs. We believe that providing our clientele with what they want, when and how they want it, is the key to repeat business and positive word-of-mouth advertising. We want to develop close working relationships with our clientele, and to establish permanent accounts. It is for this reason that we will overwhelmingly emphasize in-person sales calls to build accounts.

We will closely integrate all of our marketing and sales efforts to project a consistent image of our company and a consistent positioning of our products and services. We will build this image around our name "Giraffe Coffee and Tea Traders, LLC." and emphasize to clientele the high-quality coffee, tea and services behind this name. The company web site will be monitored and updated weekly providing update and current information about our coffees and teas and the global issues affecting the market prices.

To support our marketing initiatives and product knowledge, we will attend regional and national conventions and trade shows to ensure we are offering the most up-to-date market trend information. The two national trade shows we will attend and have a professional booth to solicit new business and update current clientele with our company’s product offerings. These two national tradeshows are vital for the company’s exposure and to build new clientele and advanced sales contracts.

Target Market: Our target market is directed to the specialty coffee consumers who occupy 30% of the market. We will specialize in offering specialty coffees and teas for coffee roasters, coffee and tea brokers, coffee houses, restaurants, hotels, convenient stores and the natural and organic grocery companies throughout the United States. Our goal is to provide high-quality coffees and teas rich in taste, aroma, and body along with exclusive customer service. These industries continue to grow. The sales potential in these markets are unlimited.

Giraffe Coffee and Tea Traders, LLC. will target the coffee roasters, coffee and tea brokers, coffee houses , restaurants, hotels, convenient stores and the natural and organic grocery companies throughout the United States. We are planning to offer quality products at competitive prices, first class service, and strong sales support. Attention to the small owner-operated businesses that are neglected by larger suppliers and are forced to service them. It is also these smaller businesses who could most greatly benefit from marketing services, sales support, and full service product delivery on a more intimate level with the customer. Giraffe Coffee and Tea Traders, LLC. will expand our target market depending on the responses from our clientele in relation to our products and services..


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Promotion Strategy

Relationships are the key to success in the distribution business. Personal selling will remain our most important means of promotion for the first two years of business. Giraffe Coffee and Tea Traders, LLC. has identified several other means of advertising and publicity.

Giraffe Coffee and Tea Traders, LLC. will send news releases to local and national media and press, as well as trade magazines to have the companies unique products and company feature coverage in front of the eyes of our clientele - as well as the end consumer. We will produce a few generic press releases about the products we are distributing for our clientele to use toward publicity coverage for their businesses in local and national publications such as the Denver Post, Barista, Roasters Guild, and SCAA (Specialty Coffee Association of America), Food Arts, and other local and national magazines. We will also hand out informative brochures full of information about our business’s services and products.

We shall have a monthly newsletter for current or potential clientele. This newsletter will highlight new and current trends in the industry, upcoming conventions and trade shows, offer promotions and special deals, discounts, as well as provide new recipes, fun tips, and other information that can be used to their advantage. We will also highlight not just our products, but also display ideas and success stories of other business in the industry.

On a more aggressive advertising effort, Giraffe Coffee and Tea Traders, LLC. will feature advertisements in the Yellow Pages, Business Journal, and the company’s website www.GiraffeCoffeeandTeaTraders.com . Our most effective advertisement tool will be our web page, which will feature all the companies history and information, products, our services, and much more all convenient for the customer to access.


http://www.GiraffeCoffeeandTeaTraders.com/

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Distribution Strategy

The first fiscal quarter, Giraffe Coffee and Tea Traders, LLC. will operate one warehouse located in one of the following cities: Los Angeles, California, Houston, Texas, and or Miami, Florida. The first year we will expand into the New Jersey port for a North East port warehouse.

We will have a Giraffe Coffee and Tea Traders delivery van for local deliveries in each of the cities that may justify deliveries from our roasting facility and warehouses.

Sales Strategy

Distribution sales are dependent on repeat business, therefore the sales strategy for Giraffe Coffee and Tea Traders, LLC. is based on personal, consistent sales contact, with great emphasis on high quality coffee products, and customer service and relations. Because we are a new distributor, we understand that we will have to prove our worth to our clientele in order to earn their respect and business. The quality and fair pricing will provide windows of opportunity since the roasters and brokers rely on both of these factors. We will become the preferred importer of African Coffees and Teas.

Giraffe Coffee and Tea Traders, LLC. will begin operations with inside account representative, who will be responsible for providing full service and delivery to current clientele, but also make sales calls for potential new business. The inside account representative will receive a base salary, with commission on qualified sales, as well as bonuses for new acquired business. Product orders can be placed in a number of ways to help facilitate the process:

Phoned Orders: Clientele can easily phone orders into our office, up until 2:30 p.m. of the afternoon prior to their scheduled delivery day or date product will be shipped.

Faxed Orders: Clientele can fax in a completed product order sheet, with the same deadline as phoned orders.

Tel-Sell: Clientele may choose to have a representative from the office call to check product quantities and assist them in placing their order.

Online Orders: Clientele can order their products online easily accessible and recommended.

Sales Forecast

As indicated in the table, our sales are forecasted to increase rapidly, with an annual growth rate of approximately 25-30%.


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24


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Sales Forecast

Year 1 Year 2 Year 3

Sales

Food Distributors (Packaged) $75,714 $126,190 $252,380

Coffee & Tea Brokers (Green Bulk) $214,281 $306,115 $437,307

Regional Roasters (Green Bulk) $458,976 $521,563 $592,685

National Roasters (Green Bulk) $1,071,432 $2,428,571 $2,714,285

Coffee & Tea Consulting $14,400 $19,200 $24,000

Total Sales $1,834,803 $3,401,639 $4,020,657

Direct Cost of Sales Year 1 Year 2 Year 3

Food Distributors (Packaged) $52,999 $88,333. $176,666.

Raw Green Beans $1,221,282 $2,279,374 $2,620,993

Subtotal Direct Cost of Sales $1,274,281 $2,367,707 $2,797,659

Gross Profit $560,522 $1,033,932 $1,222,998

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Breakthroughs

Breakthroughs

Breakthroughs Start Date End Date Budget Manager Department

Market/Trade Research 07/2013 08/2013 $450 JM Marketing

Logo Design/Marketing 07/2013 08/2013 $1,200 JM Marketing

Complete Business Plan 07/2013 08/2013 $1,000 JM Marketing

Product/Pricing Comparison 07/2013 07/2013 $0 JK/JM Marketing

Organization Memberships 07/2013 09/2013 $1,600 JK Marketing

LLC Filing / DBA’s 07/2013 07/2013 $150 JM Marketing

Licensing 08/2013 08/2013 $205 JM Marketing

Secure Product Line 07/2013 07/2013 $0 JK/JM Marketing

Research/Secure Financing 07/2013 07/2013 $0 JK/JM Marketing

Warehouse Selection/Build out 08/2013 08/2013 $3,288 JK/JM Marketing

Warehouse Equipment 09/2013 09/2013 $11,900 JM Operations

Leasehold Improvements 09/2013 09/2013 $10,000 JK/JM Operations

Delivery Vehicle Selection (Leased) 07/2013 10/2013 $27,000 JM Operations

Hire Inside/Outside Sales Personnel 05/2014 05/2014 $36,000 JK/JM Sales

Office Equipment/Computer/Supplies 08/2013 09/2013 $12,000 JM Operations

Order Beginning Inventory 09/2013 11/2013 $75,000 JK/JM Operations

Press Releases/Advertising 09/2013 09/2013 $400 JM Marketing


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SCAA/Fancy Food Show 09/2013 09/2013 $40,000 JK/JM Sales

Travel/Entertainment (Kenya) 11/2013 11/2013 $14,000 JK/JM Sales

Receiving/Shipping 09/2013 09/2013 $1,100 JK/JM Operations

Office FF&E (Conference/Offices) 09/2013 09/2013 $12,600 JK/JM Operations

Coffee/Tea Sample Rooms 09/2013 09/2013 $2,000 JK/JM Operations

Cupping Laboratories (Coffee/Tea) 09/2013 09/2013 $36,975 JK/JM Operations

Roasting/Packaging 10/2013 10/2013 $407,000 JK/JM Operations

Cupping Laboratories (Coffee/Tea) 09/2013 09/2013 $36,975 JK/JM Operations

Totals $


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Part 9: Funding Request (Start Up Costs)

Start-up Summary


Start-up

Requirements

Start-up ExpensesLegal Business Formation $250Business Plan $200Office and Warehouse Lease Deposit $5,800Insurance (first month) $500Utilities (first month) $900Research & Development $1,200Advertising $1,200Marketing $1,200Personnel $35,000Business/Office Supplies $1,550Computer Systems $10,000Phone System $2,500Communication Lines $360Trade Show (Winter Fancy Food Show) $12,000

Total Start-up Expenses $71,460.

Start-up AssetsCash Required $ 9,800Start-up Inventory $75,000Other Current Assets $24,000

Long-term Assets $455,875

Total Assets $564,675

Total Requirements $636,135

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Start-up expenses for Giraffe Coffee and Tea Traders, LLC. total $71,460, and include expenses such as legal, marketing, lease deposit, computer systems, principals salaries for the first 90 days of operations ,etc. Start-up assets include $9,800 in initial cash requirements, $24,000 in short term assets (office furniture, refrigeration equipment), and $75,000 in starting inventory. The long-term assets are based on the coffee cupping lab, roasting, packaging, and warehouse/dock equipment. The warehouse/dock will require an electric fork lift that is not included in assets since it is recommended to lease this piece of equipment. These start-up costs will be financed through investments and small-business loans. The details of the start-up summary are included in the following tables.

Start-up Funding

Start-up Expenses to Fund $71,460Start-up Assets to Fund $564,675Total Funding Required $636,135

AssetsNon-cash Assets from Start-up $616,535Cash Requirements from Start-up $9,800Additional Cash Raised $0Cash Balance on Starting Date $9,800Total Assets $626,335

Liabilities and Capital

LiabilitiesCurrent Borrowing $626,135Long-term Liabilities $0Accounts Payable (Outstanding Bills) $0Other Current Liabilities (interest-free) $0Total Liabilities $626,135

CapitalCONFIDENTIAL DOCUMENT, PROPERTY OF GIRAFFE COFFEE AND TEA TRADERS, LLC.

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Planned InvestmentInvestor 1 $626,135Other $0Additional Investment Requirement $0Total Planned Investment $626,135

Loss at Start-up (Start-up Expenses) ($71,460)Total Capital $554,675.

Total Capital and Liabilities $626,135

Total Funding $636,135

Long-Term Assets:

Cupping LabProbat BRZ Test Roaster/Dust Collector $14,650Mahlkoenig 6-lb. Grinder $4,450Scale Test G/lb. $450Bench Scale 30-lb. $300Floor Scale – Coffee Bag $325Bunn HW2 Hot Water Dispenser $300Agitron Roast Color Analyzer $9,500Ohaus MB Moisture Analyzer $3,000Cupping Table $2,000Testing Utensils/Cups/Tools $2,000

Total Cupping Lab $36,975

Roasting RoomJoper 60 Kilo Cast Iron Roaster $74,000Oxidizer After Burner 800 Catalytic $52,500Destoner/Conveyor $14,000Ditting KF 1800 Coffee Grinder 600-780-lb./hr. $6,000Bucket Elevator $6,000Coffee Mixer – Flavor $5,000Installation: Estimated $8,000

Total Roasting Room $165,500

Packaging RoomStand Up Coffee Vacuum Sealer $9,000Bag in Bag Hotel Overwrap Sealer 3”-14” W $98,800Pillow Vertical Form –Fill Sealer 2.5-6” W – 3-8”L $125,000Band Sealer $5,500Box Sealer, 3M $3,200.


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Total Packaging Room $241,500

Warehouse/DockPallet Racks $6,000Floor Pallet Jack $1,500Scissor Bag Lift $1,300Floor Scale 10,000-lbs. with (2) ramps $2,550Platform Scale 330-lbs. $550

Total Warehouse/Dock $11,900

Total Long-Term Assets $455,875

Part 10: Financials

Financial Plan

Giraffe Coffee and Tea Traders, LLC. projects the gross margin to be at approximately 25-30 percent. Sales projections for FY2013 are at $1,834,803 increasing to $3,401,639 in FY20014 and $4,020,657 in FY20015. Cash-flow analysis, balance sheet, business ratio, break-even analysis, and other financial details are shown in the appendix.

Important Assumptions

General assumptions for this plan are on the following table.

General Assumptions

Year 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 7.00% 7.00% 7.00%

Long-term Interest Rate 6.00% 6.00% 6.00%

Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0


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Break-even Analysis

The following table and chart illustrate our break-even analysis. With our fixed costs estimate of approximately $15,000 per month, operating on average at a 25% profit margin, we will need to sell 67,666 units to break-even in a month. Fixed costs include our warehouse lease, vehicle leases, utilities, insurance, payroll, and an estimation of other running costs.


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Break-even Analysis

Monthly Revenue Break-even $75,055

Assumptions:

Average Percent Variable Cost 79%

Estimated Monthly Fixed Cost $15,993


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Projected Profit and Loss

The following table and charts show the projected profit and loss. Monthly projections are included in the appendix.

(New Graph)

(New Graph)


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(New Graph)


36

Pro Forma Profit and LossYear 1 Year 2 Year 3

Sales $1,834,803 $3,401,639 $4,020,657Direct Cost of Sales $1,274,281 $2,367,707 $2,797,659

Total Cost of Sales $1,274,281 $2,367,707 $2,797,659

Gross Margin $560,522 $1,033,932 $1,222,998Gross Margin % 30.54% 30.39% 30.41%

ExpensesPayroll $211,840 $400,000 $464,000Other $0 $0 $0Depreciation $0 $0 $0Rent $33,096 $34,260 $35,460Utilities and Phone $7,200 $7,500 $7,800Insurance $6,000 $6,300 $6,500Payroll Burden $14,064 $15,300 $16,575Leased Equipment (Delivery Vehicles) $12,000 $12,600 $13,200

Leased Equipment (Warehouse) $3,000 $3,000 $3,000Leased Equipment (Other) $2,400 $2,400 $2,400Fuel (delivery) $12,000 $12,500 $13,000Advertising / Promotion $3,600 $3,600 $3,600Professional Services $2,400 $2,200 $2,600Miscellaneous (office supplies, etc) $2,400 $2,700 $3,000


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Total Operating Expenses $191,917 $204,360 $217,635

Profit Before Interest and Taxes $283,186 $341,387 $409,272EBITDA $283,186 $341,387 $409,272Interest Expense $6,560 $4,720 $2,800Taxes Incurred $69,354 $84,167 $103,312

Other IncomeInterest Income $0 $0 $0Other Income Account Name $0 $0 $0Total Other Income $0 $0 $0

Other ExpenseAccount Name $0 $0 $0Other Expense Account Name $0 $0 $0Total Other Expense $0 $0 $0

Net Other Income $0 $0 $0Net Profit $207,271 $252,500 $303,160Net Profit/Sales 9.30% 9.87% 10.33%

Projected Cash Flow

The following table shows cash flow for the three years, and the chart illustrates monthly cash flow in the first year. Monthly cash flow projections are included in the appendix.

(New Graph)


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Pro Forma Cash FlowYear 1 Year 2 Year 3

Cash Received

Cash from OperationsCash Sales $2,229,652 $2,558,584 $2,936,137Subtotal Cash from Operations $2,229,652 $2,558,584 $2,936,137

Additional Cash ReceivedNon Operating (Other) Income $0 $0 $0Sales Tax, VAT, HST/GST Received $0 $0 $0New Current Borrowing $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0New Long-term Liabilities $0 $0 $0Sales of Other Current Assets $0 $0 $0Sales of Long-term Assets $0 $0 $0New Investment Received $0 $0 $0Subtotal Cash Received $2,229,652 $2,558,584 $2,936,137

Expenditures Year 1 Year 2 Year 3

Expenditures from OperationsCash Spending $93,757 $102,000 $110,500Bill Payments $1,826,094 $2,457,050 $2,556,178Subtotal Spent on Operations $1,919,851 $2,559,050 $2,666,678

Additional Cash SpentNon Operating (Other) Expense $0 $0 $0Sales Tax, VAT, HST/GST Paid Out $0 $0 $0Principal Repayment of Current Borrowing $24,000 $24,000 $24,000Other Liabilities Principal Repayment $0 $0 $0Long-term Liabilities Principal Repayment $0 $0 $0Purchase Other Current Assets $0 $0 $0Purchase Long-term Assets $0 $0 $0Dividends $0 $0 $0Subtotal Cash Spent $1,943,851 $2,583,050 $2,690,678


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Net Cash Flow $285,801 ($24,466) $245,459Cash Balance $295,601 $271,134 $516,594

Projected Balance Sheet

The projected balance sheet is shown in the following table, with monthly projections in the appendix.

Pro Forma Balance SheetYear 1 Year 2 Year 3

Assets

Current AssetsCash $295,601 $271,134 $516,594Inventory $358,198 $410,929 $471,438Other Current Assets $18,750 $18,750 $18,750Total Current Assets $672,549 $700,813 $1,006,782

Long-term AssetsLong-term Assets $0 $0 $0Accumulated Depreciation $0 $0 $0Total Long-term Assets $0 $0 $0Total Assets $672,549 $700,813 $1,006,782

Liabilities and Capital Year 1 Year 2 Year 3

Current LiabilitiesAccounts Payable $385,728 $185,492 $212,300Current Borrowing $71,000 $47,000 $23,000Other Current Liabilities $0 $0 $0Subtotal Current Liabilities $456,728 $232,492 $235,300

Long-term Liabilities $0 $0 $0Total Liabilities $456,728 $232,492 $235,300

Paid-in Capital $25,000 $25,000 $25,000Retained Earnings ($16,450) $190,821 $443,321Earnings $207,271 $252,500 $303,160Total Capital $215,821 $468,321 $771,482Total Liabilities and Capital $672,549 $700,813 $1,006,782

Net Worth $215,821 $468,321 $771,482

Business Ratios


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The table shows projected business ratios.

Ratio AnalysisYear 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 14.75% 14.76% 0.00%

Percent of Total AssetsInventory 53.26% 58.64% 46.83% 0.00%Other Current Assets 2.79% 2.68% 1.86% 100.00%Total Current Assets 100.00% 100.00% 100.00% 100.00%Long-term Assets 0.00% 0.00% 0.00% 0.00%Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 67.91% 33.17% 23.37% 0.00%Long-term Liabilities 0.00% 0.00% 0.00% 0.00%Total Liabilities 67.91% 33.17% 23.37% 0.00%Net Worth 32.09% 66.83% 76.63% 100.00%

Percent of SalesSales 100.00% 100.00% 100.00% 100.00%Gross Margin 21.31% 21.33% 21.35% 0.00%Selling, General & Administrative Expenses 8.61% 8.17% 7.51% 0.00%Advertising Expenses 0.00% 0.00% 0.00% 0.00%Profit Before Interest and Taxes 12.70% 13.34% 13.94% 0.00%

Main RatiosCurrent 1.47 3.01 4.28 0.00Quick 0.69 1.25 2.28 0.00Total Debt to Total Assets 67.91% 33.17% 23.37% 0.00%Pre-tax Return on Net Worth 128.17% 71.89% 52.69% 0.00%Pre-tax Return on Assets 41.13% 48.04% 40.37% 0.00%

Additional Ratios Year 1 Year 2 Year 3Net Profit Margin 9.30% 9.87% 10.33% n.aReturn on Equity 96.04% 53.92% 39.30% n.a

Activity RatiosInventory Turnover 10.91 5.23 5.23 n.aAccounts Payable Turnover 5.73 12.17 12.17 n.aPayment Days 27 46 28 n.aTotal Asset Turnover 3.32 3.65 2.92 n.a

Debt RatiosDebt to Net Worth 2.12 0.50 0.30 n.aCurrent Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity RatiosNet Working Capital $215,821 $468,321 $771,482 n.aInterest Coverage 43.17 72.33 146.17 n.a

Additional RatiosAssets to Sales 0.30 0.27 0.34 n.aCurrent Debt/Total Assets 68% 33% 23% n.aAcid Test 0.69 1.25 2.28 n.a


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Sales/Net Worth 10.33 5.46 3.81 n.aDividend Payout 0.00 0.00 0.00 n.a

Part 11: Appendix

Sales Forecast

Month 1

Month 2

Month 3

Month 4

Month5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11Month 12


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Sales

Espresso Syrups 0% $14,322 $16,470 $18,941 $21,782 $25,049 $28,807 $33,128 $38,097 $43,811 $50,383 $57,940 $66,632

Chocolate & Caramel Sauces 0% $10,465 $12,034 $13,839 $15,915 $18,303 $21,048 $21,048 $24,205 $27,836 $32,011 $36,813 $42,335

Specialty Beverage Mixes 0% $8,626 $6,363 $3,759 $4,006 $4,242 $4,732 $7,887 $10,498 $21,167 $30,347 $34,899 $40,134

Energy Drinks 0% $1,530 $1,760 $2,023 $2,327 $2,676 $3,077 $3,539 $4,070 $4,680 $5,382 $6,190 $7,118

Concentrated Milk 0% $1,530 $2,924 $3,520 $4,245 $5,128 $6,360 $7,914 $9,882 $12,379 $15,556 $19,604 $24,774

Paper Supplies 0% $51,400 $47,414 $43,114 $45,849 $51,378 $58,075 $68,506 $85,766 $123,777 $177,815 $202,120 $230,071

Marketing 0% $700 $805 $910 $1,015 $1,155 $1,295 $1,470 $1,680 $1,890 $2,170 $2,450 $2,765

Total Sales $88,573 $87,770 $86,106 $95,139 $107,931 $123,394 $143,492 $174,198 $235,540 $313,664 $360,016 $413,829

Direct Cost of Sales

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11Month 12

Espresso Syrups $11,908 $13,694 $15,748 $18,110 $20,827 $23,951 $27,544 $31,675 $36,426 $41,890 $48,174 $55,400

Chocolate & Caramel Sauces $8,441 $9,707 $11,163 $12,837 $14,763 $16,977 $19,524 $22,453 $25,821 $29,694 $34,148 $39,270

Specialty Beverage Mixes $6,496 $4,866 $2,981 $3,192 $3,401 $3,802 $6,168 $8,145 $16,035 $22,852 $26,280 $30,222

Energy Drinks $1,260 $1,449 $1,666 $1,916 $2,204 $2,534 $2,914 $3,352 $3,854 $4,433 $5,097 $5,862

Concentrated Milk $1,308 $2,509 $3,022 $3,646 $4,405 $5,465 $6,804 $8,499 $10,651 $13,389 $16,880 $21,339

Paper Supplies $38,550 $35,560 $32,335 $34,387 $38,534 $43,556 $51,379 $64,325 $92,833 $133,361 $151,590 $172,554

Marketing $250 $288 $325 $363 $413 $463 $525 $600 $675 $775 $875 $988

Subtotal Direct Cost of Sales $68,213 $68,073 $67,240 $74,451 $84,546 $96,749 $114,858 $139,049 $186,297 $246,395 $283,045 $325,635


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Personnel Plan

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Jennifer Smith 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500


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Sales/Delivery (Salary) 0% $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700

Sales/Delivery (Commission) 0% $170 $192 $216 $240 $268 $300 $336 $379 $429 $493 $565 $649

Delivery/Warehouse Personnel 0% $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700

Administration 0% $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560 $1,560

Total People 4 4 4 4 4 4 4 4 4 4 4 4

Total Payroll $7,630 $7,652 $7,676 $7,700 $7,728 $7,760 $7,796 $7,839 $7,889 $7,953 $8,025 $8,109

General Assumptions

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate

8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%


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Long-term Interest Rate

8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%

Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales $88,573 $87,770 $86,106 $95,139 $107,931 $123,394 $143,492 $174,198 $235,540 $313,664 $360,016 $413,829

Direct Cost of Sales $68,213 $68,073 $67,240 $74,451 $84,546 $96,749 $114,858 $139,049 $186,297 $246,395 $283,045 $325,635

Hidden Row $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $68,213 $68,073 $67,240 $74,451 $84,546 $96,749 $114,858 $139,049 $186,297 $246,395 $283,045 $325,635

Gross Margin $20,360 $19,697 $18,866 $20,688 $23,385 $26,645 $28,634 $35,149 $49,243 $67,269 $76,971 $88,194

Gross Margin % 22.99% 22.44% 21.91% 21.74% 21.67% 21.59% 19.96% 20.18% 20.91% 21.45% 21.38% 21.31%

Expenses

Payroll $7,630 $7,652 $7,676 $7,700 $7,728 $7,760 $7,796 $7,839 $7,889 $7,953 $8,025 $8,109

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0


46

Rent $2,758 $2,758 $2,758 $2,758 $2,758 $2,758 $2,758 $2,758 $2,758 $2,758 $2,758 $2,758

Utilities and Phone $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600

Insurance $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Payroll Burden 15% $1,145 $1,148 $1,151 $1,155 $1,159 $1,164 $1,169 $1,176 $1,183 $1,193 $1,204 $1,216

Leased Equipment (Delivery Vehicles)

$1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Leased Equipment (Warehouse)

$250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250

Leased Equipment (Other)

$200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Fuel (delivery) $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Advertising / Promotion $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

Professional Services 15% $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Miscellaneous (office supplies, etc)

$200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Total Operating Expenses $15,783 $15,808 $15,835 $15,863 $15,895 $15,932 $15,973 $16,023 $16,080 $16,154 $16,237 $16,333

Profit Before Interest and Taxes

$4,578 $3,889 $3,030 $4,825 $7,490 $10,713 $12,661 $19,126 $33,163 $51,116 $60,735 $71,861

EBITDA $4,578 $3,889 $3,030 $4,825 $7,490 $10,713 $12,661 $19,126 $33,163 $51,116 $60,735 $71,861

Interest Expense $620 $607 $593 $580 $567 $553 $540 $527 $513 $500 $487 $473

Taxes Incurred $1,187 $821 $609 $1,061 $1,731 $2,540 $3,030 $4,650 $8,162 $12,654 $15,062 $17,847

Other Income

Interest Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Income Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0


47

Total Other Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Expense

Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Expense Account Name $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Other Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Other Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit $2,770 $2,462 $1,828 $3,184 $5,192 $7,620 $9,090 $13,950 $24,487 $37,962 $45,186 $53,541

Net Profit/Sales 3.13% 2.80% 2.12% 3.35% 4.81% 6.18% 6.34% 8.01% 10.40% 12.10% 12.55% 12.94%

Pro Forma Cash FlowMonth

1Month

2Month

3Month

4Month

5Month

6Month

7Month

8Month

9Month

10Month

11Month 12

Cash Received

Cash from OperationsCash Sales $88,573 $87,770 $86,106 $95,139 $107,931 $123,394 $143,492 $174,198 $235,540 $313,664 $360,016 $413,829Subtotal Cash from Operations

$88,573 $87,770 $86,106 $95,139 $107,931 $123,394 $143,492 $174,198 $235,540 $313,664 $360,016 $413,829

Additional Cash ReceivedNon Operating (Other) Income

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales Tax, VAT, HST/GST Received

0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Other Liabilities (interest-free)

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0CONFIDENTIAL DOCUMENT, PROPERTY OF GIRAFFE COFFEE AND TEA TRADERS, LLC.

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term LiabilitiesSales of Other Current Assets

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Long-term Assets

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Investment Received

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received

$88,573 $87,770 $86,106 $95,139 $107,931 $123,394 $143,492 $174,198 $235,540 $313,664 $360,016 $413,829

Expenditures Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11Month 12

Expenditures from OperationsCash Spending $7,630 $7,652 $7,676 $7,700 $7,728 $7,760 $7,796 $7,839 $7,889 $7,953 $8,025 $8,109

Bill Payments $2,607 $78,184 $77,442 $76,236 $92,651 $106,626 $122,274 $147,608 $181,556 $257,760 $334,299 $348,850Subtotal Spent on Operations

$10,237 $85,836 $85,118 $83,936 $100,379 $114,386 $130,070 $155,447 $189,445 $265,713 $342,324 $356,959

Additional Cash SpentNon Operating (Other) Expense

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales Tax, VAT, HST/GST Paid Out

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Principal Repayment of Current Borrowing

$2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Other Liabilities Principal Repayment

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities Principal Repayment

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0


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Current AssetsPurchase Long-term Assets

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Spent $12,237 $87,836 $87,118 $85,936 $102,379 $116,386 $132,070 $157,447 $191,445 $267,713 $344,324 $358,959

Net Cash Flow $76,336 ($66) ($1,012) $9,203 $5,552 $7,008 $11,422 $16,751 $44,095 $45,951 $15,692 $54,870

Cash Balance $86,136 $86,071 $85,059 $94,262 $99,813 $106,821 $118,243 $134,994 $179,089 $225,039 $240,731 $295,601

Pro Forma Balance SheetMonth 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9Month 10Month 11 Month 12

Assets Starting Balances

Current AssetsCash $9,800 $86,136 $86,071 $85,059 $94,262 $99,813 $106,821 $118,243 $134,994 $179,089 $225,039 $240,731 $295,601Inventory $75,000 $75,034 $74,880 $73,964 $81,896 $93,001 $106,424 $126,344 $152,954 $204,926 $271,034 $311,349 $358,198

Other Current Assets

$18,750 $18,750 $18,750 $18,750 $18,750 $18,750 $18,750 $18,750 $18,750 $18,750 $18,750 $18,750 $18,750

Total Current Assets $103,550 $179,920 $179,701 $177,773 $194,908 $211,564 $231,995 $263,337 $306,698 $402,765 $514,823 $570,830 $672,549

Long-term AssetsLong-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Assets $103,550 $179,920 $179,701 $177,773 $194,908 $211,564 $231,995 $263,337 $306,698 $402,765 $514,823 $570,830 $672,549

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9Month 10Month 11 Month 12

Current LiabilitiesAccounts Payable $0 $75,600 $74,919 $73,163 $89,114 $102,578 $117,390 $141,641 $173,052 $246,632 $322,728 $335,549 $385,728

Current Borrowing $95,000 $93,000 $91,000 $89,000 $87,000 $85,000 $83,000 $81,000 $79,000 $77,000 $75,000 $73,000 $71,000

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0


50

Current LiabilitiesSubtotal Current Liabilities

$95,000 $168,600 $165,919 $162,163 $176,114 $187,578 $200,390 $222,641 $252,052 $323,632 $397,728 $408,549 $456,728

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Liabilities $95,000 $168,600 $165,919 $162,163 $176,114 $187,578 $200,390 $222,641 $252,052 $323,632 $397,728 $408,549 $456,728

Paid-in Capital $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000

Retained Earnings ($16,450) ($16,450) ($16,450) ($16,450) ($16,450) ($16,450) ($16,450) ($16,450) ($16,450) ($16,450) ($16,450) ($16,450) ($16,450)

Earnings $0 $2,770 $5,232 $7,060 $10,244 $15,436 $23,056 $32,146 $46,096 $70,583 $108,545 $153,731 $207,271Total Capital $8,550 $11,320 $13,782 $15,610 $18,794 $23,986 $31,606 $40,696 $54,646 $79,133 $117,095 $162,281 $215,821

Total Liabilities and Capital

$103,550 $179,920 $179,701 $177,773 $194,908 $211,564 $231,995 $263,337 $306,698 $402,765 $514,823 $570,830 $672,549

Net Worth $8,550 $11,320 $13,782 $15,610 $18,794 $23,986 $31,606 $40,696 $54,646 $79,133 $117,095 $162,281 $215,821


51

Part 12: Index

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Documents

GCTT Business Plan I