Unplugged Budz - Business Plan

Unplugged BudzBusiness Plan

3/11/2014

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Contents

Executive Summary.........................................................................................................................5

The Company...................................................................................................................................6

The Mission..................................................................................................................................6

The Vision....................................................................................................................................6

Goal..............................................................................................................................................6

Strategies to Accomplish Our Goal..........................................................................................6

Company Overview.....................................................................................................................7

Corporate Social Responsibility...................................................................................................7

Management....................................................................................................................................8

Chief Executive Officer...............................................................................................................8

Job Description.........................................................................................................................8

Bio............................................................................................................................................8

Chief Financial Officer................................................................................................................8

Job Description.........................................................................................................................8

Bio............................................................................................................................................8

Chief Operations Officer..............................................................................................................9

Job Description.........................................................................................................................9

Bio............................................................................................................................................9

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Staffing.....................................................................................................................................9

Vice President of Marketing......................................................................................................10

Job Description.......................................................................................................................10

Bio..........................................................................................................................................10

Vice President of Sales..............................................................................................................10

Job Description.......................................................................................................................10

Bio..........................................................................................................................................11

Organizational Structure............................................................................................................12

Future Organizational Structure.................................................................................................15

Risk Factors................................................................................................................................16

S.W.O.T. Analysis....................................................................................................................18

BCG Growth-Share Matrix........................................................................................................20

Operations......................................................................................................................................21

Production Outsourcing.............................................................................................................21

Vendors..................................................................................................................................21

Inventory Production..................................................................................................................25

Inventory Management System (Operation plan)......................................................................25

Marketing.......................................................................................................................................29

Target Market Analysis..............................................................................................................29

Demographics............................................................................................................................29

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Promotional Campaign..............................................................................................................33

Capital Budget...............................................................................................................................39

Sales Plan.......................................................................................................................................40

Sales projections........................................................................................................................41

Projection for Year-2014........................................................................................................41

Annual Projections.....................................................................................................................45

Projections for Year-2015......................................................................................................45

Financial Projections.....................................................................................................................47

Appendix: A...................................................................................................................................48

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Executive Summary

Unplugged Budz will be the most competitive distributor of ear buds in Southern California. Consumers who purchase our product will be exposed to a revolutionary new way of experiencing audio output from their electronic devices; with the ability to make phone calls and listen to music from the same wireless set of ear buds.

The uniqueness of being able to connect to a phone/MP3 music library while not actually being wired to the device makes our device not only different, but extremely convenient in a world that is so forcibly connected. The small size makes it easy to store in your pocket or bag and because it does not contain the extra wire, it is less likely to be tangled or damaged during use and travel.

The convenience that we provide shows in the activities that that can be performed using Unplugged Budz. From exercising up to 30 feet from your phone without having a cord interfering with your workout, or even to using when driving. Because of the fact that the buds connect to your phone via Bluetooth, they are perfectly suitable for making and receiving phone calls from your phone and answering them on the same device.

Unplugged Budz has many advantages, but one of the strongest is the team of people working for the company. We are a group of highly motivated people who understand the target market well. The team’s demographic is an accurate representation of the market, from serious students to athletes; they encompass that variety of people that Unplugged Budz would appeal to. Most importantly is the age demographic that allows them to sell on other college campuses as well as professional settings such as the corporate market.

However, the aspect of Unplugged Budz that makes our company truly unique, is the dedication to helping others. With the mission to service a local charity, House of Ruth, the business will not only receive praise from the charity, but from consumers looking to make a civic difference. Knowing all of the profits will benefit a charity will assist in making sales and gaining access to exclusive selling locations such as runs, conventions, college campuses, and corporate events.

The company is seeking $5,000 in start-up financing to begin buying inventory and to fund the marketing campaign.

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The Company

Unplugged Budz is a startup company that was formed in February of 2014. We are in the Electronics Accessories business, selling wireless Bluetooth headphones to listen to music, answer and make phone calls, or listen to the sound output of any Bluetooth enabled device. We plan to sell to a myriad of people including, but not limited to: people who exercise, people studying, people who play video games, or anyone else who has a need to listen to the audio output of their Bluetooth enabled device without the inconvenience of needing to carry it on their person.

We plan to differentiate ourselves from other similar products that dominate the ear buds business by the fact that our product is wireless, whereas most other products are reliant on a 3.9 foot cable and 3.5 mm jack. Those products similar to ours that do offer a wireless alternative to ear buds are sold at a market price of up to $80. With our product, we offer the same convenience at a fraction of the price.

Our competitive advantage revolves around the convenience that many ear buds do not currently offer, not needing to be physically connected to your Bluetooth enabled device. Our secondary advantage is that we, as a group, are an integrated part of the demographics for the target market of our product.

The Mission

The mission of Unplugged Budz is to provide an innovative and convenient listening experience through reliable wireless ear buds. Additionally, as a socially responsible organization, we are dedicated to contributing to our community by enriching the lives of others through our charitable donations.

The Vision

To become a leading provider of wireless audio listening devices in California.

Goal

To become a $500,000 company by the end of 2016.

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Strategies to Accomplish Our Goal

1) Introduce new complementary products such as Portable Speakers, Bluetooth Receivers, and Over the Ear Bluetooth Headphones.

2) Having sales representations in Northern California, San Diego, East Bay, and Sacramento.

3) Be on the lookout for any new complementary products in the market that has a potential to be added to our product offerings.

Company Overview

Company Name Type of Industry Organizational Objectives

Strategies to Accomplish Organizational Objectives

Unplugged Budz Electronic Accessories

1) Establish a High Quality Reputation

2) Maximize Charitable Donations

3) Provide High Quality Customer Service

a) Providing reliable products via partnerships with high quality suppliersb) Continuing research to ensure we are only offering the latest developed products.

a) Meet and exceed our sales goals.b) Promoting our charity along with our products.

a) We will offer an exchange policy with no questions asked on all defective items.b) On time delivery of all purchased products.

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Corporate Social Responsibility

Unplugged Budz is committed to corporate social responsibility though the support of House of Ruth. A Claremont Non-Profit, House of Ruth is an organization dedicated to assisting women and children victimized by domestic violence.

House of Ruth

Our secondary target market is people who wish to donate to charities that assist victims of domestic violence. Unplugged Budz will be donating all profits to the House of Ruth Organization in Pomona. In our survey consisting of 1022 respondents, 72% said that they are more inclined to purchase our product knowing that our profits will benefit a charity. in the United States one in four women experience domestic violence, approximately 1.3 million victims each year. The health cost of domestic violence is approximately $5.8 billion dollars a year. California has the highest rate of cases of domestic violence.

Summary Data

State Response

Rate

Adults

Served

Childre

n Served

Total

People

Served

Unmet

requests

for

services

Hotline

Calls

Answered

Total

People

Traine

d

Served

in

Shelter

Served in

Transitional

Housing

CA 92% 3,033 2,228 5,261 614 1,357 894 1,392 1,497

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This is not a secondary target market. Both of your identified target markets are interested in charities. This is a characteristic of your target markets.

Sue, 03/09/14,

Does the table below need to be fixed?

Management

Chief Executive Officer

Job Description

Reporting to the Board of Directors, CEO is responsible for the overall management of the corporation, ensuring the progress, the collaboration of all the key executives, the growth, and the sustainability of Unplugged Budz.

Bio

Joel Sierra is currently a junior at the University of La Verne. He is an Honors student pursuing a Bachelor of Science in Business Administration. His work experience has allowed him to work as a sales associate, an administrative assistant, and a Web and Graphic Designs Intern. As an Administrative Assistant, he worked under five academic advisors for the University of La Verne College of Business and Public Management (CBPM). This role required excellent customer service skills and high levels of organization. The Intern position with DevelopingLeaders.co was a fast-paced job that allowed him to research leadership and create brand identity for the company. Aside from paid positions, Joel has volunteered in a number of campus organizations, such as the student government, The Associated Students of the University of La Verne, and the housing government, The Residence Hall Association Through these organizations, he was exposed to various leadership opportunities and many opportunities for motivating a team.

Chief Financial Officer

Job Description

Reporting to the CEO, the CFO is responsible for ensuring the financial health of the organization in addition to managing the financial affairs of Unplugged Budz.

Bio

Dennis Miles is the CFO of Unplugged Budz. He is currently working on his Bachelor Degree in Business Administration at the University of La Verne where he has been on the Dean’s List the past three semesters. He has financial experience completing profit analysis for H&D Enterprises. Before coming to the University of La Verne, Dennis graduated from San Dimas

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High School in only three and a half years. In 2009, Dennis attended the Leadership Conference through Lead America in Dahlonega, Georgia, where he studied aeronautics and aviation.

Chief Operations Officer

Job Description

Reporting to the CEO, the COO is responsible for managing of all operational and logistical aspects of the organization including: Customer service, vender relations, purchasing, shipping and receiving.

Bio

Clara Serrano is currently a junior at the University of La Verne pursuing her Bachelor of Science in Business Administration. Her work experience includes working as a Leasing Agent Assistant. She represented the property in an office setting and in person. Management skills were developed by organizing and processing leasing applications.

During this employment, she collected overdue rent payments from tenants through door-to-door execution. She also oversaw the property and arbitrated the duties of the maintenance personnel. In addition, she developed administrative clerical skills by addressing all questions from tenants and personnel. She exhibited leadership skills during her senior year in high school as Commissioner at Large in her Associated Student Body organization. She was in charge of ordering supplies for school events, in bulk amounts. During this role she also had the opportunity and responsibility of using the school credit card in an appropriate manner.

Staffing

The COO will have an assistant: Inventory Manager – Sandra Maas. Ms. Maas will report to the COO of any loss in inventory and/ or shortages. Only the COO and inventory manager will have access to the inventory itself. She is to fill out all proper forms and report to the COO prior to and after disturbing any inventory to salespeople.

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Vice President of Marketing

Job Description

Reporting to the CEO, the VP of Marketing is responsible for coordinating all marketing and promotional events and programs.

Bio

Esmeralda Sanchez is the Vice President of Marketing for Unplugged Budz. She is responsible for managing, coordinating, and executing marketing activities and strategies to meet and exceed company expectations. Ms. Sanchez leads and manages Public Relations, Market Research, Online Marketing, and Event Marketing.

Prior to joining Unplugged Budz, Ms. Sanchez has worked at three sales positions, of which two were retail, and the third at her family’s catering business. In sales, she has been responsible for creating effective customer relationships by understanding the needs for the success of the company. She has also worked for an advertising company, where she still has contacts, which will be useful for Unplugged Budz. In the past, Ms. Sanchez has been actively involved in community projects and organizations and has taken leadership roles in those organizations. Some of her involvement includes environmental projects and event planning. Today, she bases her community involvement around Enactus and American Marketing Association at the University of La Verne, where she is currently in the process of earning her Bachelor of Science in Business Administration.

Vice President of Sales

Job Description

Reporting to the CEO, the VP of Sales is responsible for all of the sales activities of Unplugged Budz.

Bio

Mr. Jovanni Valdez is directly responsible for the company’s revenue and helping develop plans and strategies for developing business and achieving the company’s sales goals. Prior to his current position, Mr. Valdez was clerk at The University of La Verne’s Mail Center, where he was responsible for processing outgoing mail, logging incoming student packages, and

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delivering mail to on-campus departments. His excellent organization skills helped the Mail Center become a more organized environment and were part of a major transition of logging in and delivering packages using Smart Track. Prior to ULV’s Mail Center, he was a File Clerk at the Law Offices of Solov and Teitell, where he was in charge of organizing and keeping track of files along with delivering these files to lawyers on the day of their hearings. He was also an employee at the Boys and Girls Club, where he helped oversee events that were held for children after school. Mr. Valdez is involved in activities in and outside of school. He is currently involved with Enactus, where he volunteers to help people in need by coming up with ways that will benefit them. He recently joined the American Marketing Association, AMA, where they develop ways to help big companies sell their products through a good marketing technique. Jovanni is currently working on completing his Bachelor of Science in Business Administration at the University of La Verne.

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Organizational Structure

This is the current organizational structure of Unplugged Budz. At the head of the company is

the CEO/President. Reporting to CEO are the four Vice Presidents.

Directly below the CEO is the COO. She is also taking on the position of Customer Service Manager to control any needs of our customers after purchasing the headset. She has one person working under her as the Inventory Manager.

Secondly, below the CEO is the CFO. He is taking charge of all financial matters for Unplugged Budz, with guidance from the CEO. Also below him is the Financial Manager. They will be ensuring that all numbers balance out and give updates about the current financial status of Unplugged Budz

Next is the VP of Sales, also directly below the CEO. He will oversee the coordination of meeting all the sales projections. His staffing includes a Sales Manager and an Events Planning Manager. His staffing will work to get sales made to make projections more easily achievable.

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CEO

COO

Inventory Manager

Customer Service

Manager

CFO

Accounting Manager

VP Sales

Lead Generation Manager

Sales Manager

VP Marketing

Marketing Analyst

Public Relations Manager

The final person directly below the CEO is the VP of Marketing. She will watch over the company’s actions to ensure they are consistent with the plans set out by the Marketing Plan. Her staffing includes a Public Relations Officer and a Market Research Analyst. They will make sure the company image and positioning is appropriate for the intended target market.

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Future Organizational Structure

This Organizational Chart shows the future plans for the structure of Unplugged Budz. We have optimistic and ambitious plans to grow the company forward to become more profitable.

Some notable changes are the Southern/Northern California Sales Managers. We have the vision to become very prominent in California and know that we will need teams to take hold of sales in that area. They would each have sales representatives under them that would work on commission-based salaries.

Other changes include a New Product Manager under the COO. As we continue to expand, we will start to look for other products that fit the needs of our target market, and that keep with our company vision.

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CEO

COO

Warehouse/ Inventory Manager

Shipping/Receiving Manager

Customer Service Manager

CFO

Accounts Reciveable Manager

Accounts Payable Manager

VP Sales

So Cal Sales Manager

Nor Cal Sales Manager

VP Marketing

Events Planning Manager

Market Research Manager

Public Relations Manager

New Product Manager

This future structure will help Unplugged Budz to become a major competitor in the market.

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spacing

Risk Factors

Risk factors for Unplugged Budz could occur in many forms. There is Murphy’s Law, the concept that anything that can go wrong will go wrong. Such wrongs could be within management. If the core structure of the business were to falter, it could have severe repercussions throughout the company. As a measure to prevent this from happening we interviewed each person who wanted a position and elected each person based on their interests and qualifications; To have someone who truly wants to work in a certain field and also has the best abilities to work in that field allows for the best and solid performance in management, reducing the risk of things going wrong within the company.

Product Failure:

If a product does not properly work, it can tarnish the company’s reputation of selling reliable products, and when a company’s reputation is tarnished, it can be difficult to recover. The solution to this problem is rather simple; make sure that the inventory comes from a well referenced source and that if any product that a customer were to receive was faulty, Unplugged Budz would maintain an exchange policy by replacing the faulty product with a working product for the customer and then talking to the vendor to ensure that they can get a replacement for the nonworking device. If too many products are defective, then we maintain the option to change our vendor to ensure that we have a better product at hand.

Technology, New Business, and Competition:

The three go together almost hand in hand in that the business that we are beginning is brand new to us all, it deals with the technology market, which is always rapidly growing and changing, and because the market is broad there are bound to be competitors that we will face. The advantages this company has is that even though this company is brand new, we are a student group in a program that has a positive response towards consumers; upon hearing that this is a student run group that gives all profits to a charity, many buyers feel compelled to buy. This has been shown through the response previous groups before us have had. Additionally, even though we have competition in not only this market, but with this very product, what gives us more of an advantage is the fact that our product can be provided on the spot, at a fair price, and that all profits go to a charity, giving the customer the satisfaction that not only have they bought a useful product at a good deal, but also that their purchase has helped someone else in the process. After having researched the Bluetooth headphones market, our company has seen

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Period, then new sentence

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You don’t need colons after these titles

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period

that the model we are providing is rather new, giving us a competitive advantage in that we are providing a product that is current.

Lack of Finances:

This risk can easily become a reality for many companies. If money is mismanaged or completely runs out it can sink the business. The way that Unplugged Budz can thwart this threat from ever happening is that we set up a comprehensive financial control system within our company. All monetary transactions are handled through the CFO, and the CFO alone. He will delegate how our money is used, to whom it is given to for ordering more units of our product (i.e. the COO), and will keep track of the cash flow from transaction to transaction. If funds come to a low point, the top managers will come together to see where they will acquire more funds to buy more inventory, be it through using the given profits to invest into more inventory, thus resulting in more profit and making it up in the funds used, or through any other brainstormed outcome. One person will be in control of funds, through checks and balances, one or two other people will have access to our funds and closely monitor them as well.

Security Risks:

This is a threat that will be covered through our internet presence; currently our company name is an available domain name and through allocating this cost in our Marketing plan, we will be able to make it easy for consumers to find our product on the internet just like that. By establishing a company name and domain name for a website, we can further this through other web resources like Twitter, Instagram, and Facebook. Either by establishing accounts that coincide with our name or that have similar names so that we can link people straight to our contact information and website; providing quick and easy access to us and our product at all times and thus reaching an even further range of people than word-of-mouth could help with being able to have our company recognized.

Product Delays:

When ordering from a vendor, there is always the chance of a product delay; these delays can push back the whole business plan if there is no inventory available. Unplugged Budz is equipped with dealing with this predicament through our selection of backup vendors. If our main supplier were to fall through, then we would have another local supplier with whom we would be able to deal with in order to quickly attain more products.

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eliminate

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Period. New sentence

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Is it one or two?

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S.W.O.T. Analysis

Strengths:

Our company is comprised of talented and well-rounded individuals who each bring different skill sets as well as enthusiasm and commitment to our business, but also to provide great community service at the same time.

Another strength we have is distinctive competence. Our product is easy and convenient to use; with a simple push of button the ear buds can be hooked up to any Bluetooth compatible device and the lack of cord gives customers a hassle free listening experience from wires being tangled or unexpectedly getting caught and snatched while moving around. Along with a great product, the customer service that our company provides will be friendly and helpful; showing customers how they can set up their ear buds, even allowing them to sample a set, and giving them their contact information for any further questions after purchase.

A following strength would be the core capabilities of the company; we, unlike online companies, have our stock on-hand, taking away the wait of ordering elsewhere and thus not receiving anything for at least a week. Not only do we have this as our upper hand, but we also have an ease of returning, allowing customers to switch out a product if it were to be defective, but our company has a reassurance of defective-free products which it stands by.

Weaknesses:

One of the weaknesses of Unplugged Budz is that we are a startup company. We are putting a product out on the market that we hope will do well and will sell depending on all of the attractive factors it has, such as price, color, and features. How we are able to overcome these struggles is that we survey a large population to get an understanding of what our market wants and likes in order to more effectively sell and make a profit.

Another weakness that our company has is the lack of time. Because we are only operating for a semester, this means that the company will only be in operation for 9 weeks. This is such a short amount of time to not only build a company, but to also successfully run one that will be profitable. The way that we as a group can counter this dilemma is that we are all driven by motivation. As young entrepreneurs we want to not only do well in our course, or to pay back

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our loans and the interest upon it, but we want to ultimately be able to use our business to give back to the community by giving our profits to House of Ruth.

Opportunities:

We have some technological advances that can come to our aid if need be. The first being “The Square,” a product that can connect to any Smartphone or IPhone and after being linked up to an account, debit and credit cards can be processed. It is highly advantageous in that not all the time will a customer have cash and so with this device we are still able to make a sale to those with no cash. Another great thing about these devices is that they are free if you get them from banks and from their online retailers, or you can buy them in stores for $10 and get a mail in money back rebate on it; either way the handy device is free at the end.

Another things is that our very own product is technologically advanced, helping us beat out any competitors in the earphone industry. With the ability to cut out the connecting wire that a large majority of headphones have, we are providing a convenience that many people seek. In addition, the Bluetooth headphone/earphone market is rather new with varying models that have different features, but our advantage is that we have a product with a great look, compact storage, and the proceeds go to a charity, giving our customers a useful product that also helps them feel good about their purchase and prevent buyers’ remorse.

Threats:

Some of the threats that Unplugged Budz will face are based on selling restrictions. Wanting to reach a broad young adult based target market, we will be restricted by the size of our own University, which means that as a company we will have to branch out in order to achieve the profit level we seek. This means going to other campuses ahead of time to see if we will be allowed to make sales at other colleges and high schools as well. Alerting each place about our program and cause can have a positive impact as well.

Another threat is that in the Boston Consulting Group Growth Share Matrix we are ranked as a “Question Mark.” Question marks have potential, it is just whether or not other investors and lenders are willing to invest in them or not that will determine if they can further their success or not. With the dedication and hard work, that each member is willing to put in moving from a “Question Mark” to a “Star” is more than accomplishable for our company.

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Lastly, a threat that Unplugged Budz faces is that we have online marketing and larger companies to compete with. The advantages that we have against these companies are; faster product dispersion, proceeds go to a charity, and we sell our product for the lowest price. Our company is right there, so if a customer questions, thinking that maybe they could buy online in order to get it cheaper, our advantage is that we are right there with the product, canceling out having to pay for any shipping or handling dues. Not only this, but we are offering our product for the cheapest price of its model, and thus we can point out that they would be saving money by buying from our company

BCG Growth-Share Matrix

Question Marks:

A company that has high growth rate and low market share; they can eventually become a star company if they are financed, but it can be risky.

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Operations

Production Outsourcing

Our strategy is to identify local suppliers, preferably within a 50 mile radius because it is more convenient to be able to pick up our merchandise promptly. We will require product samples before taking part in any negotiations. In addition, online research took place to find a supplier with a similar product that had reasonable shipping time(s) and rate(s).

Vendors

Our primary supplier Electronicos is located in Los Angeles. This vendor best suits our needs because they have our product on hand. In addition, if there is delay, they are able to get our product for us within 3 days with COD terms. This vendor also has 4 different stores within the downtown Los Angeles area which allows us purchase from there if necessary. This supplier is approximately 40 minutes from La Verne. The ear buds sold at these 4 locations are the QFX brand, which comes with 3 different sized ear tips and 2 ear hooks. The QFX ear buds come in Lime Green, Red, Black, a Black and Blue checkered pattern and a Black and Red checkered pattern. The sales person offered the price of $16 per piece which is worth the expense since it is a local supplier that is able to have them on hand.

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Lime Green Product from primary vendor

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The next vendor, is the main manufacturer of the QFX product. This vendor is also an excellent choice for us because they offered to sell us the same ear buds as the first vendor but for a cheaper price and they are also local. The Qfx manufacturer is located in Vernon, California which is also approximately a 40 minute drive from La Verne. As for pricing arrangements, they were discussed via email as follows. The main manufacturer mentioned that they would sell us $3000 worth of inventory; however, it is unclear exactly how many units we will be receiving. It still has to be discussed if we are able to pick up the units or if they have to be shipped.

Black and Red checkered pattern from secondary vendor

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Our final vendor is from Wmart. This vendor suits our needs because although they have a different styled product, they come in different colors and they appear more ornate due to the wood piece on the ear buds. These wireless ear buds come in Red, White, Black, and Rose Red. The wholesale department stated that, “The more quantity you order, the more discounts we can offer to you.” Thus, we can purchase the ear buds at $11.50 per piece with free shipping within the US. The quotation we were given was to order 300 pieces for $3450 and the delivery time would be 2 – 5 business days via express FedEx. This vendor’s warehouse is located in New Jersey. Wmart will arrange the shipment after payment is submitted via a PayPal invoice. The wire between the 2 ear buds is only 13cm. The ear buds are recharged using a USB cable and it takes approximately 1 to 2 hours. The life of the battery is approximately 6 hours.

Black ear buds with decorative wood piece from third vendor

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Inventory Production

Once the loan is disbursed to the business, the Inventory department will submit its first order to the vendor in Downtown Los Angles immediately. When the order is filled, the COO and/or the Inventory Manager will personally pick up the merchandise. Upon picking up the merchandise it will be inspected for any defective ear buds.

In addition to the primary inventory, alcohol wipes will be purchased in order to avoid any sanitary concerns from customers when demonstrating our product. The alcohol wipes will be utilized to clean the ear pieces and disinfect the area that is placed into the ear. These alcohol wipes will be purchased from Uline.com for $20.00 for 4 boxes. For these wipes there is a minimum purchase quantity of 4 boxes; there are 200 wipes per box, for a total of 800 wipes to be utilized during demonstrations.

Next, we will be repackaging our merchandise during special events or during our preferred selling periods. For example our third vendor has our product in a different style and comes in different original packaging therefore we will repackage the ear buds so that they look more presentable. In another instance, when we sell to other school campuses or sell to groups we will repackage our product to give it a personal touch and/or other spiffs such as our business cards or decorations. We may not always repackage our inventory depending on the demand from our customers and events. Our repackaging supply will come from Uline.com as well. We will start off with a quantity of 1,000 clear, resealable bags for $38; thus, each carton comes with 1,000 bags. Also, it is convenient to have extra bags on hand for any repackaging mistakes.

Finally, we plan on purchasing custom decal stickers to put on the ear buds. Operations has contacted three possible decal shops that do custom orders. Custom orders will consist of the University of La Verne logo, sorority logos, fraternity logos, corporate logos, etc. They have yet to respond with terms of quotes and sizing.

Inventory Management System (Operation plan)

In order for the inventory department to keep track of each individual piece of merchandise, a spreadsheet will be utilized to track how many units we will initially purchase and then the spreadsheet will be updated at the beginning of the sales week and at the end of a sales week based on sales and new orders. This spreadsheet will help operations forecast which color(s) sell the most and which sell the least. In addition, this will help determine which color(s) need to be restocked.

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Next, there will be another form that the COO and inventory manager will fill out in order to see each individual’s personal inventory at the beginning and at the ending of a sales week.

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In addition, every member is to report to the COO and inventory assistant by Saturday. Each member will receive a hard copy of the spreadsheet form to help keep count how much inventory they check out for the week. On this form it will state the date inventory is given out, the date on which they make a sale, what color they sold, and finally a total to sum up how much inventory was sold and how much merchandise they still have on hand at the end of the sales week.

At the end of the week Operations has to coordinate with Sales and Finance to make sure all calculations are accurate.

Returning inventory: Suppliers have confirmed that they will exchange any defective products for new items.

As for our company, when a sale is made and any customer wants to receive an exchange, then we will do so in a timely manner. The appropriate salesperson has to retrieve the product and report to Operations and explain the dilemma. Operations will then take action to try and fix the problem in order to avoid any type of fraud. Operations will then precede to callback the item and redistribute an effective item within 1 to 2 days. Once, an item is opened, it cannot be resold. Salesmen are to keep it and then give it back to operations. Operations will contact manufacturer and receive an exchange.

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Marketing

I. Marketing

A. Target Market Analysis

a. Target Markets1. College Students

Our first target market consists of college students, ages 19-25, within a 10 mile radius of the University of La Verne. Market research shows that college students spend $13 billion1 per year on electronics with 94% of them having cell phones, 97% having laptops, and 25% having tablets2. Research also shows that college students have a significant interest in charitable causes since up to 75% of them donate to charity and 65% do volunteer work3. Moreover, we have an in-depth understanding of this target market because we are part of this market.

Unplugged Budz will have promotional influence over private and state schools, expanding our market of students to 35,146, as listed below. We have selected these schools, aside from our own university, due to their nearby location and their demographics. We will have contact with these students through events, promotions, and advertisements on their campuses.

University of La VerneUndergrads 2,499Grads 2,474Gender Female (60%) Male (40%)

1 http://www.dailyfinance.com/2009/09/24/college-students-spending-less-on-clothing-more-on-electronics/

2 College Student Spending Habits-http://www.nationwide.com/college-student-spending-habits-infographic.jsp

3 Charitable Giving: 75% Of Millennials Donated Money To Causes In 2011-http://www.huffingtonpost.com/2012/06/12/charitable-giving-millennial-generation_n_1590389.html

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?????

http://www.huffingtonpost.com/2012/06/12/charitable-giving-millennial-generation_n_1590389.html

http://www.nationwide.com/college-student-spending-habits-infographic.jsp

Average Age 20Race/Ethnicity 28% White 50% Hispanic/Latino 5% Black/African American 6% Asian

California Polytechnic University, PomonaUndergrads 20,542Graduates 1,614Gender Female (43%) Male (57%)Average Age 22Race/Ethnicity 25% White 40% Hispanic/Latino 2% Black/African American 10.7% Asian

Claremont McKenna CollegeUndergrads 1,316Gender Female (48%) Male (52%)Average Age 20Ethnicity/Race 44% White 11% Hispanic/Latino 4% Black/African American 11% Asian

Pomona CollegeUndergrads 1,612Gender Female (48%) Male (52%)Average Age 20Ethnicity/Race 45% White 15% Hispanic/Latino 6%Black/African American 12% Asian

ScrippsUndergrads 986Gender Female (100%)Average Age 19Ethnicity/Race 51% White 8% Hispanic/Latino 3% Black/African American 17% Asian

Harvey Mudd CollegeUndergrads 807Gender Female (47%) Male (53%)Average Age 20Ethnicity/Race 47% White 9% Hispanic/Latino 1% Black/African American 22% Asian

Pitzer CollegeUndergrads 1,081Gender Female (60%) Male (40%)

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Average Age 20Ethnicity/Race 49% White 15% Hispanic/Latino 5% Black/African American 6% Asian

Keck Graduate UniversityGraduates 88Gender Female (36%) Male (64%)

Claremont Graduate UniversityGraduates 2,127Gender Female (51%) Male (49%)

2. Non-Traditional College Students

Our second target market consists of non-traditional college students within 30 miles of the University of La Verne, ages 26-64. This target market consists of friends, family, relatives, professors, President Devorah Lieberman, and anyone who uses electronic devices. In the United States, this age group spends an average of $600 annually on electronic devices4. Aside from how much money this age group spends on electronic devices, we also know how many of them donated to some type of organization in the last year: 86% of 30-49 year olds and 87% of 50-64 year olds.

Unplugged Budz will have promotional influence over the city of La Verne, which consists of a total population of 31,3485. We will also have contact with this target market through the promotional events we have designed for target this market.

b. Positioning Statement

Unplugged Budz is committed to providing comfortable and fully-functional products at affordable prices in order to maintain competitive advantage.

1.Survey Results and Analysis

Before officially conducting a survey, our team members did anecdotal research of their own by introducing the product to family and friends. These findings allowed us to get an understanding of our target market and how much they would spend. Overall, it was decided

4How America Spends on Electronics- http://mashable.com/2011/12/01/electronics-spending-infographic/ 5 Census Bureau- http://quickfacts.census.gov/qfd/states/06/0640830.html

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that this product would be of high demand and profitable. Then, Unplugged Budz developed an official survey via surveymonkey.com as well as face-to-face in classrooms at the University of La Verne, Bishop Amat High School, and Our Lady of Lourdes in Montclair. This helped us further understand our target market and create a marketing plan. As of February 23, 2014, we collected data from 841 Surveymonkey surveys and 181 face-to-face surveys for a total of 1,022 surveys. These survey results are presented below. Please note that some questions were not answered.

1. Age [972 responses]a. 10-14 1b. 15-18 217c. 19-25 331d. 26-45 249e. 46-64 150f. 65+ 24

2. Gender [1,016 responses]a. Male 35.5%b. Female 64.5%

3. Ethnicity/Race [1,016 responses]a. African American 6.2%b. Asian 10.3%c. Hispanic 45.5%d. Pacific Islander 2.2%e. White/Caucasian 37.3%f. Other 5%

4. What type of earphones do you use/prefer?a. Wireless 18.1%b. Headphones 17%c. Earphones 49.6%d. None 15.3%

5. If you do not use an earpiece, why not? [Out of the 38% who answered]a. I do not have a phone/mp3 6.2%b. They are uncomfortable to carry or use 41.2%c. They are too complicated to use 5.2%d. I just prefer not to 48.9%

6. If you do/did have earpieces, what would you use them for? (Check all that apply)a. Exercising 70.3%b. At work 25.0%c. Studying 45.7%d. Commuting 30.8%

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e. Using the phone (talk, application usage, video streaming, listening to music) 67.8%

7. How much would you spend on Bluetooth earphones? [978 responses]a. $25-$30 66.5%b. $31-$35 15.4%c. $36-$40 17.9%

8. What color would you prefer? [1,017 responses]a. Green 15.6%b. Red 14.7%c. Black 51.4%d. Black and Blue Checkered 12.3%e. Red and Black Checkered 5.8%

9. Knowing that all profits will benefit a charitable cause, are you more inclined to purchase a pair of Bluetooth earphones? [1,022 responses]

a. Yes 72.5%b. No 27.5%

For additional detailed charts of collected data, refer to Appendix B.

2. Motivations i. College Student, ages 19-25

a. College students who are cost conscious will be willing to purchase these earphones because they are being sold at $25.

b. Our survey revealed that 77% of college students use their earphones during exercise. These wireless earphones will appeal to these students because they will be able to exercise without having to be directly connected to the phone.

c. The simple, tangle-free design of the earphones allow for comfort. Our survey revealed that 49% of students use these earphones while studying and for entertainment.

d. These earphones are equipped with a microphone that will allow users to answer phone calls. This will appeal to the average busy student who is always on-the-go.

e. The unique selection of colors will give these young adults the ability to express their personality and make them look trendy.

f. Purchasing our product offers students a way of donating to charity.

2. Non-traditional College Student, ages 26-64a. Adults who are cost conscious will be attracted to the low price

of $25.

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b. Our survey reveals that 75% of this age group uses earphones during exercise, thus, our single-wire design will also be appealing to that percentage.

c. Adults who are always on-the-go are able to answer phone calls through our Bluetooth earphones.

d. Oftentimes, adults prefer not to use technology-related products because they are too complicated to work with. These earphones connect through Bluetooth very easily.

e. Purchasing the product offers adults a way of donating to charity.

Significant characteristics of both of our target markets identified in our survey are that 73% use earpieces for exercise, 46% are Hispanic, and 68% are female. These important factors helped guide us in developing our promotional plan.

c. Competition

Brand Name Place of Sale Features PriceBeats by Dr. Dre Retail

ElectronicsNoise Cancelling, excellent sound quality

$120-$400

Plantronics Backbeat GO

Retail Electronics

Lightweight, sporty, voice call

$35-$80

Supersonic Wireless Earbuds

Retail Electronics

Clear sound, lightweight, voice call, 4 hour battery

$22-$30

1. Competitive Advantage

Unplugged Budz has competitive advantage in the industry because of four significant benefits: features, price, no traveling to shop nor shipping costs, and the ability to donate to a charity. Our earphones give the customer the ability to listen to audio on their phone, while being able to take any calls through a built-in microphone near the mouth. With our earphones, the user has an accessible remote with an answer button, volume buttons, pause/play button, and a channeling button, that lays just above the shoulder for easy access. These

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earphones have a battery life of 6 hours. The user is able to determine the amount of battery left on their phone screen.

Of the leading competitors, the “Plantronics Backbeat Go” earphones also have a built-in microphone near the mouth with a remote lying above the shoulder, but sell at $35 or more. The “Supersonic Wireless Earbuds” and other similar versions of these “earbuds” are sold starting at $20. However, unlike our version of wireless earphones, the design of these “earbuds” places the microphone at the ear, which gives the person at the other end of the call poor sound resolution. Also due to their design, all of the buttons are placed at the ear, making it difficult for the user to access those buttons, sometimes forcing her/him to have to remove the earphones. “Beats by Dr. Dre” are sold starting at $120 for their excellent sound quality. However, these do not appeal to our target markets because they are costly and are not designed for exercise activities nor are they comfortable due to the fact that they are bulky. Lastly, “Beats” headphones do not have a built-in microphone for talking.

Neither of these competitive products offers the benefit of donating to a charity. Additionally, in order to purchase these products, one would have to either drive to a store or order these earphones online, which eventually gives up time and money.

B. Promotional Campaign

a. Sales Promotions

Our research of domestic violence has provided us with incredible statistics that can help us educate our communities and grasp their attention. This gives us the advantage of selling at almost any event due to the interesting facts that will grab their attention. No matter where we are, we will always display an informative poster that will include an overview of the House of Ruth and statistics of domestic violence.

Unplugged Budz will offer discounts to groups and President Devorah Lieberman. These groups can be on-campus student organizations and student organizations at other campuses. We will conduct raffles and contests to invite people to our booth and “Like” or “Follow” us on our social networks. The prizes of these raffles would

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be earphone pouches or a sports arm band. In a scenario where sales are low, we will offer the product at a discount by promoting “Happy Hour: 2 for $48” at the end of the week during the afternoon.

1. Easter

During the week of Easter, Unplugged Budz will be selling in front of the Campus Center, on-campus. We will decorate our table with Easter decorations that will attract customers and we will offer Easter candy to our customers. At our table, every customer will have the opportunity to make their own Easter treat bag and greeting card for a child at the House of Ruth. This will give everyone a connection to our charity by bringing a smile to a child who is going through a difficult time. We will promote this event through flyers beginning the week before, through Leo FM, and on our social networks.

2. Cinco de Mayo

At the University of La Verne, 50% of the students are Hispanic. Also, 45% of our survey was completed by Hispanics. Using these demographics, we have concluded that a Hispanic event would be a successful turnout. On Cinco de Mayo, Unplugged Budz will host their weekly campus sale’s event in front of Campus Center. This event will generate customers because we will decorate our table with Mexican artifacts. This includes giving away Mexican candy and Pan Dulce.

3. Mother’s Day

Considering that 60% of University of La Verne students are females and 45% of our survey results were from females, Unplugged Budz will host a Women’s Day. Not only does this allow us to promote our charity, who helps battered women, this also allows us to target the market through Mother’s Day. The week of Mother’s Day, Unplugged Budz will give a carnation flower to every female customer. We will promote this event using statistics of domestic violence on our flyers and at the event.

b. Social Media

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We will promote our company on Facebook. We will ask our family, friends, and customers to “Like” our Facebook page. By encouraging them to do so, they will attract their friends to see our page and, eventually, our product. Via Facebook, we can offer customer support by answering questions, posting videos, and detailed information about our product, company, events, and charity. According to zephoria.com, the most common age demographic on Facebook is 25-34.6 Fortunately, 28% Twenty-eight percent of the people who completed our online survey belong to this age group.

We will also promote our company on Twitter. Twitter gives us an advantage in delivering information fast and easy. According to Digital Market Ramblings7, 29% of people ages 15 to 34 use Twitter. This age group makes up for more than 50% of the people who answered our survey. We will promote the hashtag, “#unplugyourself”.

6 Cite APA http://zephoria.com/social-media/top-15-valuable-facebook-statistics/ 7 http://expandedramblings.com/index.php/march-2013-by-the-numbers-a-few-amazing-twitter-stats/#.Uw58JPldUrU

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http://expandedramblings.com/index.php/march-2013-by-the-numbers-a-few-amazing-twitter-stats/#.Uw58JPldUrU

http://expandedramblings.com/index.php/march-2013-by-the-numbers-a-few-amazing-twitter-stats/#.Uw58JPldUrU

http://zephoria.com/social-media/top-15-valuable-facebook-statistics/

Unplugged Budz has also created an Instagram page to best share photos and short videos of our product. Via Instagram, Unplugged Budz will post unique pictures of our product and the various colors we carry, creating a complete photo library where our customers can understand the design of our product. According to Digital Market Ramblings8,70% of Instagram users log in at least once per day, making it an efficient method of advertising our product. We will promote the hashtag “#unplugyourself”.

YouTube will be our destination for videos. We will offer easy to follow guides that will help users connect their earphones with their phones. Additionally, we will upload videos that advertise the various ways our Bluetooth earphones can benefit the consumer in their daily life.

8 http://expandedramblings.com/index.php/important-instagram-stats/#.Uw5-z_ldUrU

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http://expandedramblings.com/index.php/important-instagram-stats/#.Uw5-z_ldUrU

c. Personal Selling

The members of Unplugged Budz will spend most of the time selling and promoting individually. Every member will network with their contacts on and off campus. The VP of Marketing and VP of Sales will work together to educate the rest of the team on effective ways of selling by showing videos and conducting mini workshops with all managers.

Additionally, our company will take turns selling at events taking place on campus and in surrounding cities. On campus, Unplugged Budz will target the students by working with the Campus Activities Board and the Associated Students of the University of La Verne so that the company can sell at their events and as well as schedule new events. Unplugged Budz will host individual, weekly selling events outside the Campus Center, library, gymnasium, and cafeteria, as these are the most frequented student spots. Off campus, Unplugged Budz has planned events that are targeted to our target market. These events include fun runs, any charity walks, runner’s meets, biker’s meets, and sports games. These selling events have been carefully thought out, as we have taken into consideration of the demographics in our survey results. This, for example, means targeting events that are made for women, since 64% of our responses were from women, and Hispanics, since 45% of the responses belong to this ethnic group. For a complete calendar of events, please see Appendix B.

d. Advertising

Unplugged Budz wants to be recognized on campus. Unplugged Budz will turn to Leo FM, the University of La Verne’s Radio Station, as a source for advertising our events that will be held on campus. Through radio announcements, students will briefly learn about our company and

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when and where they can purchase on campus. These announcements will be scheduled weekly, as our on-campus events are scheduled weekly. Our list of calendar events will be given to the student associated body so that every event can posted on the school calendar, which is widely distributed on campus and many students see it. Additionally, there will be flyers that advertise our events that will include the date, time, and location of the events. Depending on the themes of each event, flyers will be designed to attract a certain market. These flyers will be distributed throughout campus in places like the cafeteria, the Campus Center, the gym, and in dormitory halls. Unplugged Budz will attract people at events by use of a banner and some giveaways as mentioned in the Sales Promotion section.

e. Public Relations

Campus Times, the University of La Verne’s newspaper, will have articles about the product and the charity to which the company will be donating the profits so that we can introduce our product to the campus community. This will allow us to reach both target markets because the newspaper is also read by school visitors, professors, faculty, and alumni. Every week, we will be posting pictures of staff, students, alumni, and faculty wearing their Unplugged Budz on our social networks and on a photo album on our website. To promote off-campus events, Unplugged Budz will utilize the Claremont-La Verne Patch. The Patch is an innovated way of learning about and participating in events in the Claremont-La Verne area via their website, Claremont-laverne.patch.com. Furthermore, this site will help us gain access to our second target market, non-traditional college students, ages 26-64.

Because Public Relations is about keeping a positive company image, Unplugged Budz will promote social corporate responsibility all the time. One way we will show this is by giving purple awareness ribbons to our customers. These ribbons will make every customer feel a closer connection with our charity and feel good about their purchase. Another way of promoting our charitable work is by having our customers be a part of what we will call “Love Shouldn’t Hurt” cards. Through this engagement, donors will write their name and/or a message on a card that officially records their contribution to this cause. These donor cards will be in the shape of a heart and will be collected in a nicely decorated box that will be given to House of Ruth.

f. Pricing Strategy

Unplugged Budz will make an effort to provide an affordable product for our target markets. Out of the 1,022 people surveyed 69.5% said that they would pay $25-$30 for a pair of Bluetooth earphones. By selling our product at $25, we believe that it will bring in the most profit for our charity, make it affordable for college students and give us a competitive advantage. These same earphones are sold by the manufacturer (QFX) at approximately $50 each and for $30 at other

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retail stores. Due to lower disposable income levels, our college student target market needs products offering high quality at a reasonable price.

C. Monitoring

Our marketing team will work very closely with our sales team. The marketing team has provided the sales team with a calendar of events by which sale projections have been made. Every week, the sales team will provide us with sales numbers that will determine how effective our marketing strategies are. If, for some reason, sales are lower than what they are supposed to be, the marketing team will need to re-evaluate the marketing strategies by adding more effective events.

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Capital Budget

The budget set forth will allow Unplugged Budz to operate for the next fiscal year. The capital budget will give management’s best estimates on what they feel will allow us to fund our future expenses and growth. Although this may change due to unexpected events our assumptions are as follow:

Our initial purchase of inventory will be for roughly 200 units of Bluetooth heads sets at $16 giving a total of $3200. This will be paid in cash to our primary vendor in Los Angeles.

Along with the initial purchase of inventory we will also be buying alcohol pads to clean each ear piece as customers test our product. We will receive these alcohol pads from Uline.com at a cost of $20 for 4 boxes giving us around 800 alcohol pads which we believe will cover the period of sales. In addition we are purchasing custom packaging from Uline.com to handout at many of our events. These packages will run us $38 for 1000 units which we have forecasted will cover sales at our events.

As for salaries this is 100% non-for profit company with all of our proceeds going to the House of Ruth a local charity that helps prevent and rehabilitate victims of domestic violence.

We also have to incur an over-head fee of 15% which will be $3.75 for each unit sold this will be covered from the markup of the 400 units we are projected to sell throughout the semester.

We will also incur traveling expenses when purchasing and picking up the product. We have set a price of $.55 per mile to cover for gasoline cost for those who have to travel for the company. We predict that in all we should travel around 300 miles for all company activities which would come out to $165 in expenses.

As for the events that we are going to be selling at, since we are donating all of our proceeds to charity most of our booths will be compensated which will save us a lot of expenses that we can now put towards growing our company.Given that we get the full line of credit of $5000 our cost of operations will be around $3323 leaving a budget of $1677 to put towards future marketing or promotional plans and as a backup in case of unexpected expenses.

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Sales Plan

Projection for Year-2014As outlined in the Marketing section of the business plan, Unplugged Budz is targeting people who own Bluetooth compatible phones/MP3 players. Our target population involves 35,146 college students along with 31,348 population of a neighboring city, giving us a total target population of 66,494. According to our survey, 72% of people are more inclined to purchase our product knowing that they will be helping a charitable cause; from this we project that 47,875 people will be inclined to buy our product based on our survey data.

Considering that we are a start up company and do not have much experience, and we have a time constraint, we knew that 72% would not be attainable, therefore we used additional research to formulate our sales forecast. According to the Diffusion of Innovations process developed by academician Everett Rogers, an estimate of 2.5% of all of the people purchasing the product will be the very first to do so. Even with that number, we knew it would be still be too high for us to attain, based on our circumstances. We also reviewed sales from previous student companies who sold electronics and the amount students and the general population spends on electronics annually. Therefore, we determined that 400 units sold to .84% of our entire target market would be a realistic forecast.

Given the various colors of earphones available from our supplier, Unplugged Budz will be selling Black, Red, Green, Blue/Black Checkered and Red/Black Checkered. Based on survey data, each Bluetooth earphone piece will be selling for $25.

Most-Likely Scenario9

Our 10-week selling period will take place March-May. Due to the fact that Spring Break occurs during the first two weeks of our selling period, we anticipate that sales will lag. The majority of our sales will occur in the following eight weeks. If Unplugged Budz sells to approximately 0.84% of the target population (47,875) the 400 units goal will be reached.

The assumptions we used to project weekly sales are based on the calendar of events according to the marketing plan.

Below are tables that show the Most Likely forecast of units and sales.

9Furneaux, B. (2013 May 16). Diffusion of Innovation Theory

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Units change weekly based on events where we will be selling.Units are based on popular colors found from survey data.

Best-Case Scenario

Unplugged Budz projects to sell very well during the 10-week period. Our marketing team would have come up with many more events that will boost our sales to allow us to order more inventory. Here we project to reach 1.05% of the target population, selling a total of 500 pieces.

Below you will find tables that show the best forecast of units and sales.

Units change weekly based on events at which we sell.Units are based on popular colors found from survey data.

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Worst-Case Scenario

Unplugged Budz projects to reach 0.63% of the target market, selling 300 units. Our first weeks would be really slow, sales would not increase and inventory would have a low turnover. We would not reach our set goals because events would be cancelled due to unexpected circumstances, some colors would not be selling at all, and we forecasted incorrectly leaving us to sell the majority during the last two weeks.

Below you will find tables that show the worst forecast of units and sales.

Units change weekly based on events at which we sell.Units are based on popular colors found from survey data.

Values BlackBlue-Checkered Green

Red-Checkered Red Grand Total

Sum of Cash 6 5 3 3 4 21Sum of Credit 4 5 7 7 8 31

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Sales Monitoring

We will monitor sales by creating a Pivot Table that will show us the products that were sold, using cash or credit, and what colors were sold. This Pivot Table will be updated weekly via excel and sent to our COO and CFO electronically. Each sales person will keep track of his or hers sales, note them and report the sales to the Vice President of Sales through email by Saturday of every week

Annual Projections for 2015

In 2015, we plan on maximizing our profits by selling more units than we did in 2014. Our average units sold in a 10-week period, was 40 pieces. If we multiply 40 pieces by 53 weeks in the year-2015, we would plan on selling 2,120 units, 1,720 more units than last year. Here we are given more holidays and events to attend, making our product easier to sell. We would still sell our product at $25 and will be making revenues of $53,000.

Below are tables that show the Most Likely forecast of units and sales.

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Units change monthly based on events at which we sell.Units are based on popular colors found from survey data.

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Financial Projections

Projected Income StatementsIncome Statements will be created at the end of each week and will show our revenue and expenses along with how much money we make each week.Below is the Most Likely projected Income Statement for Unplugged Budz. The Revenue line is based on the sales forecast multiplied by the selling price of $25. The Cost of Goods Sold line is based on the sales forecast multiplied by the company’s cost of $16. The travel expense comes from the 80 miles to pick up the product times the standard $0.55 per mile. The Square fee is 2.75% per sale. We are assuming 30% of our sales will be done through the Square. The SGA expense includes a 15% overhead fee on all sales. The interest is calculated at 5.25% for 9 weeks on $3,700.

Unplugged BudzINCOME STATEMENT

Most Likely Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Total

Units Sold 30 33 50 42 41 43 47 46 37 31 400 REVENUE 750.00 825.00 1,250.00 1,050.00 1,025.00 1,075.00 1,175.00 1,150.00 925.00 775.00 10,000.00

Cost of Goods Sold 480.00 528.00 800.00 672.00 656.00 688.00 752.00 736.00 592.00 496.00 6,400.00

GROSS PROFIT 270.00 297.00 450.00 378.00 369.00 387.00 423.00 414.00 333.00 279.00 3,600.00

Marketing 200.00 50.00 - 22.00 200.00 - 100.00 - 28.00 - 600.00 Travel 44.00 - - - - 44.00 - - - - 88.00 Square Fee 6.19 6.88 10.31 8.94 8.25 8.94 9.63 9.63 7.56 6.19 82.50 S G A 112.50 123.75 187.50 157.50 153.75 161.25 176.25 172.50 138.75 116.25 1,500.00 TOTAL EXPENSES 842.69 708.63 997.81 860.44 1,018.00 902.19 1,037.88 918.13 766.31 618.44 8,670.50

EBIT (92.69) 116.38 252.19 189.56 7.00 172.81 137.13 231.88 158.69 156.56 1,329.50 Interest Expenses 3.74 3.74 3.74 3.74 3.74 3.74 3.74 3.74 3.74 - 33.62 NET PROFITS (EBT) (96.42) 112.64 248.45 185.83 3.26 169.08 133.39 228.14 154.95 156.56 1,295.88

Below is the Best Case projected Income Statement.

The Revenue line is based on the sales forecast multiplied by the selling price of $25. The Cost of Goods Sold line is based on the sales forecast multiplied by the company’s cost of $16. The travel expense comes from the 80 miles to pick up the product times the standard $0.55 per mile. The Square fee is 2.75% per sale. We are assuming 30% of our sales will be done through the Square. The SGA expense includes a 15% overhead fee on all sales. The interest is calculated at 5.25% for 9 weeks on $4,600.

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Best Case Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Total

Units Sold 41 47 64 46 49 54 58 53 42 46 500.00 REVENUE 1,025.00 1,175.00 1,600.00 1,150.00 1,225.00 1,350.00 1,450.00 1,325.00 1,050.00 1,150.00 12,500.00

Cost of Goods Sold 656.00 752.00 1,024.00 736.00 784.00 864.00 928.00 848.00 672.00 736.00 8,000.00

GROSS PROFIT 369.00 423.00 576.00 414.00 441.00 486.00 522.00 477.00 378.00 414.00 4,500.00

Marketing 200.00 50.00 - 22.00 200.00 - 100.00 - 28.00 - 600.00 Travel 44.00 - - - - 44.00 - - - - 88.00 Square Fee 8.25 9.63 13.20 9.63 10.31 11.00 11.69 11.00 8.94 9.63 103.26 S G A 153.75 176.25 240.00 172.50 183.75 202.50 217.50 198.75 157.50 172.50 1,875.00 TOTAL EXPENSES 1,062.00 987.88 1,277.20 940.13 1,178.06 1,121.50 1,257.19 1,057.75 866.44 918.13 10,666.26

EBIT (37.00) 187.13 322.80 209.88 46.94 228.50 192.81 267.25 183.56 231.88 1,833.74 Interest Expenses 4.64 4.64 4.64 4.64 4.64 4.64 4.64 4.64 4.64 - 41.80 NET PROFITS (EBT) (41.64) 182.48 318.16 205.23 42.29 223.86 188.17 262.61 178.92 231.88 1,791.94

Below is the Worst Case projected Income Statement.

The Revenue line is based on the sales forecast multiplied by the selling price of $25. The Cost of Goods Sold line is based on the sales forecast multiplied by the company’s cost of $16. The travel expense comes from the 80 miles to pick up the product times the standard $0.55 per mile. The Square fee is 2.75% per sale. We are assuming 30% of our sales will be done through the Square. The SGA expense includes a 15% overhead fee on all sales. The interest is calculated at 5.25% for 9 weeks on $3,000.

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Worst Case Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Total

Units Sold 22 25 33 30 35 34 37 33 30 21 300 REVENUE 550.00 625.00 825.00 750.00 875.00 850.00 925.00 825.00 750.00 525.00 7,500.00

Cost of Goods Sold 352.00 400.00 528.00 480.00 560.00 544.00 592.00 528.00 480.00 336.00 4,800.00

GROSS PROFIT 198.00 225.00 297.00 270.00 315.00 306.00 333.00 297.00 270.00 189.00 2,700.00

Marketing 200.00 50.00 22.00 200.00 100.00 28.00 600.00 Travel 44.00 44.00 88.00 Square Fee 4.81 4.81 6.88 6.19 7.56 6.88 7.56 6.88 6.19 4.13 61.88 S G A 82.50 93.75 123.75 112.50 131.25 127.50 138.75 123.75 112.50 78.75 1,125.00 TOTAL EXPENSES 683.31 548.56 658.63 620.69 898.81 722.38 838.31 658.63 626.69 418.88 6,674.88

EBIT (133.31) 76.44 166.38 129.31 (23.81) 127.63 86.69 166.38 123.31 106.13 825.13 Interest Expenses 3.03 3.03 3.03 3.03 3.03 3.03 3.03 3.03 3.03 - 27.26 NET PROFITS (EBT) (136.34) 73.41 163.35 126.28 (26.84) 124.60 83.66 163.35 120.28 106.13 797.87

Below is the projected Annual Income Statement.

The Revenue line is based on the sales forecast multiplied by the selling price of $25. The Cost of Goods Sold line is based on the sales forecast multiplied by the company’s cost of $16. The travel expenses come from the 80 miles to pick up the product times the standard $0.55 per mile. The Square fee is 2.75% per sale. We are assuming 30% of our sales will be done through the Square. The SGA expense includes a 15% overhead fee on all sales. The interest is calculated at 5.25% on $38,000.

53


June 1, 2014 to May 31, 2015

Units Sold 2,120 REVENUE 53,000.00

Cost of Goods Sold 33,920.00

GROSS PROFIT 19,080.00

Marketing 3,000.00 Travel 500.00 Square Fee 437.25 S G A 7,950.00 TOTAL EXPENSES 45,807.25

EBIT 7,192.75 Interest Expenses 1,995.00 NET PROFITS (EBT) 5,197.75

Projected Cash Flow Statements

Cash Flow Statements will be created at the end of each week and will show all of the cash activity for that week.

Below is the Most Likely projected Cash Flow Statement for Unplugged Budz.

Our sources of cash will be sales and the Line of Credit. Collections of Accounts Receivable are calculated by assuming that we will collect 70% of that week’s credit sales and the remaining 30% during the next week. Inventory will be purchased at the beginning of Week 1 and Week 6. The loan will be paid back at the end of week 9.

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Unplugged BudzCASH FLOW STATEMENT

Most Likely Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Total

STARTING CASH BALANCE - 808.58 1,449.22 2,472.67 3,330.50 3,989.76 1,646.84 2,532.23 3,496.37 568.32

SOURCES OF CASHCash Sales 525.00 575.00 875.00 725.00 725.00 750.00 825.00 800.00 650.00 550.00 7,000.00 Collections of AR 150.00 250.00 350.00 325.00 300.00 325.00 350.00 350.00 300.00 300.00 3,000.00 Line of Credit 3,700.00 - - - - - - - - - 3,700.00 TOTAL CASH INFLOWS 4,375.00 825.00 1,225.00 1,050.00 1,025.00 1,075.00 1,175.00 1,150.00 950.00 850.00 13,700.00

CASH OUTFLOWSInventory 3,200.00 - - - - 3,200.00 - - - - 6,400.00 Marketing 200.00 50.00 - 22.00 200.00 - 100.00 - 28.00 - 600.00 Travel 44.00 - - - - 44.00 - - - - 88.00 Square Fee 6.19 6.88 10.31 8.94 8.25 8.94 9.63 9.63 7.56 6.19 82.50 S G A 112.50 123.75 187.50 157.50 153.75 161.25 176.25 172.50 138.75 116.25 1,500.00 Interest 3.74 3.74 3.74 3.74 3.74 3.74 3.74 3.74 3.74 - 33.62 Loan Repayment 3,700.00 TOTAL CASH OUTFLOWS 3,566.42 184.36 201.55 192.17 365.74 3,417.92 289.61 185.86 3,878.05 122.44 12,404.12

CHANGE IN CASH 808.58 640.64 1,023.45 857.83 659.26 (2,342.92) 885.39 964.14 (2,928.05) 727.56 1,295.88 ENDING CASH BALANCE 808.58 1,449.22 2,472.67 3,330.50 3,989.76 1,646.84 2,532.23 3,496.37 568.32 1,295.88

Below is the Best Case projected Cash Flow Statement.



Best Case Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Total

STARTING CASH BALANCE - 1,114.36 2,048.84 3,340.99 4,332.22 5,158.52 2,221.37 3,337.54 4,448.15 724.06

SOURCES OF CASHCash Sales 725.00 825.00 1,120.00 800.00 850.00 950.00 1,025.00 925.00 725.00 800.00 8,745.00 Collections of AR 200.00 350.00 430.00 400.00 375.00 375.00 425.00 400.00 350.00 450.00 3,755.00 Line of Credit 4,600.00 - - - - - - - - - 4,600.00 TOTAL CASH INFLOWS 5,525.00 1,175.00 1,550.00 1,200.00 1,225.00 1,325.00 1,450.00 1,325.00 1,075.00 1,250.00 17,100.00

CASH OUTFLOWSInventory 4,000.00 - - - - 4,000.00 - - - - 8,000.00 Marketing 200.00 50.00 - 22.00 200.00 - 100.00 - 28.00 - 600.00 Travel 44.00 - - - - 44.00 - - - - 88.00 Square Fee 8.25 9.63 13.20 9.63 10.31 11.00 11.69 11.00 8.94 9.63 103.26 S G A 153.75 176.25 240.00 172.50 183.75 202.50 217.50 198.75 157.50 172.50 1,875.00 Interest 4.64 4.64 4.64 4.64 4.64 4.64 4.64 4.64 4.64 - 41.80 Loan Repayment - - - - - - - - 4,600.00 - 4,600.00 TOTAL CASH OUTFLOWS 4,410.64 240.52 257.84 208.77 398.71 4,262.14 333.83 214.39 4,799.08 182.13 15,308.06

CHANGE IN CASH 1,114.36 934.48 1,292.16 991.23 826.29 (2,937.14) 1,116.17 1,110.61 (3,724.08) 1,067.88 1,791.94 ENDING CASH BALANCE 1,114.36 2,048.84 3,340.99 4,332.22 5,158.52 2,221.37 3,337.54 4,448.15 724.06 1,791.94

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Below is the Worst Case projected Cash Flow Statement.



Worst Case Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Total

STARTING CASH BALANCE - 765.66 1,239.07 1,905.41 2,511.70 3,044.86 1,313.45 1,989.11 2,680.46 280.74

SOURCES OF CASHCash Sales 375.00 450.00 575.00 525.00 600.00 600.00 650.00 575.00 525.00 375.00 5,250.00 Collections of AR 125.00 175.00 225.00 225.00 275.00 250.00 275.00 250.00 225.00 225.00 2,250.00 Line of Credit 3,000.00 - - - - - - - - - 3,000.00 TOTAL CASH INFLOWS 3,500.00 625.00 800.00 750.00 875.00 850.00 925.00 825.00 750.00 600.00 10,500.00

CASH OUTFLOWSInventory 2,400.00 - - - - 2,400.00 - - - - 4,800.00 Marketing 200.00 50.00 - 22.00 200.00 - 100.00 - 28.00 - 600.00 Travel 44.00 - - - - 44.00 - - - - 88.00 Square Fee 4.81 4.81 6.88 6.19 7.56 6.88 7.56 6.88 6.19 4.13 61.88 S G A 82.50 93.75 123.75 112.50 131.25 127.50 138.75 123.75 112.50 78.75 1,125.00 Interest 3.03 3.03 3.03 3.03 3.03 3.03 3.03 3.03 3.03 - 27.26 Loan Repayment - - - - - - - - 3,000.00 - 3,000.00 TOTAL CASH OUTFLOWS 2,734.34 151.59 133.65 143.72 341.84 2,581.40 249.34 133.65 3,149.72 82.88 9,702.13

CHANGE IN CASH 765.66 473.41 666.35 606.28 533.16 (1,731.40) 675.66 691.35 (2,399.72) 517.13 797.87 ENDING CASH BALANCE 765.66 1,239.07 1,905.41 2,511.70 3,044.86 1,313.45 1,989.11 2,680.46 280.74 797.87

Below is the Annual projected Cash Flow Statement.

56


June 1, 2014 to May 31, 2015

STARTING CASH BALANCE -

SOURCES OF CASHCash Sales 37,100.00 Collection of AR 11,125.00 Line of Credit 38,000.00 TOTAL CASH INFLOWS 86,225.00

CASH OUTFLOWSInventory 35,000.00 Marketing 3,000.00 Travel 500.00 Square Fee 437.25 S G A 7,950.00 Interest 1,995.00 Loan Repayment - TOTAL CASH OUTFLOWS 48,882.25

CHANGE IN CASH 37,342.75 ENDING CASH BALANCE 37,342.75

Projected Balance Sheets

Balance Sheets will be created at the end of each week as a snapshot of how the company is doing at that time by comparing the assets to the liabilities and equity.

Below is the Most Likely projected Balance Sheet for Unplugged Budz.

The Accounts Receivable at the end of each week is the 30% of credit sales that has not yet been collected.

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Unplugged BudzBALANCE SHEET

Most Likely Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10

ASSETSCash 808.58 1,449.22 2,472.67 3,330.50 3,989.76 1,646.84 2,532.23 3,496.37 568.32 1,295.88 Inventory 2,720.00 2,192.00 1,392.00 720.00 64.00 2,576.00 1,824.00 1,088.00 496.00 - Accounts Receivable 75.00 75.00 100.00 100.00 100.00 100.00 100.00 100.00 75.00 - TOTAL ASSETS 3,603.58 3,716.22 3,964.67 4,150.50 4,153.76 4,322.84 4,456.23 4,684.37 1,139.32 1,295.88

LIABILITIESAccounts Payable - - - - - - - - - - Line of Credit Payable 3,700.00 3,700.00 3,700.00 3,700.00 3,700.00 3,700.00 3,700.00 3,700.00 - - TOTAL CURRENT LIABILITIES 3,700.00 3,700.00 3,700.00 3,700.00 3,700.00 3,700.00 3,700.00 3,700.00 - -

EQUITYRetained Earnings (96.42) 16.22 264.67 450.50 453.76 622.84 756.23 984.37 1,139.32 1,295.88

TOTAL LIABILITIES & EQUITY 3,603.58 3,716.22 3,964.67 4,150.50 4,153.76 4,322.84 4,456.23 4,684.37 1,139.32 1,295.88

Below is the Best Case projected Balance Sheet for Unplugged Budz.



Best Case Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10

ASSETSCash 1,114.36 2,048.84 3,340.99 4,332.22 5,158.52 2,221.37 3,337.54 4,448.15 724.06 1,791.94 Inventory 3,344.00 2,592.00 1,568.00 832.00 48.00 3,184.00 2,256.00 1,408.00 736.00 - Accounts Receivable 100.00 100.00 150.00 100.00 100.00 125.00 125.00 125.00 100.00 - TOTAL ASSETS 4,558.36 4,740.84 5,058.99 5,264.22 5,306.52 5,530.37 5,718.54 5,981.15 1,560.06 1,791.94


EQUITYRetained Earnings (41.64) 140.84 458.99 664.22 706.52 930.37 1,118.54 1,381.15 1,560.06 1,791.94

TOTAL LIABILITIES & EQUITY 4,558.36 4,740.84 5,058.99 5,264.22 5,306.52 5,530.37 5,718.54 5,981.15 1,560.06 1,791.94

Below is the Worst Case projected Balance Sheet for Unplugged Budz.


58


Worst Case Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10

ASSETSCash 765.66 1,239.07 1,905.41 2,511.70 3,044.86 1,313.45 1,989.11 2,680.46 280.74 797.87 Inventory 2,048.00 1,648.00 1,120.00 640.00 80.00 1,936.00 1,344.00 816.00 336.00 - Accounts Receivable 50.00 50.00 75.00 75.00 75.00 75.00 75.00 75.00 75.00 - TOTAL ASSETS 2,863.66 2,937.07 3,100.41 3,226.70 3,199.86 3,324.45 3,408.11 3,571.46 691.74 797.87


EQUITYRetained Earnings (136.34) (62.93) 100.41 226.70 199.86 324.45 408.11 571.46 691.74 797.87

TOTAL LIABILITIES & EQUITY 2,863.66 2,937.07 3,100.41 3,226.70 3,199.86 3,324.45 3,408.11 3,571.46 691.74 797.87

Below is the Annual projected balance sheet.


May 31, 2015

ASSETSCash 37,342.75 Inventory 1,080.00 Accounts Receivable 4,775.00 TOTAL ASSETS 43,197.75

LIABILITIESAccounts Payable - Line of Credit Payable 38,000.00 TOTAL CURRENT LIABILITIES 38,000.00

EQUITYRetained Earnings 5,197.75

TOTAL LIABILITIES & EQUITY 43,197.75

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Appendix: A

Gender and Color

Row Labels Black

Black-Red Checkered

Blue-Black Checkered Green Red (blank)

Grand Total

Female 318 33 73 126 106 656Male 204 26 53 33 44 360(blank) 1 1Grand Total 523 59 126 159 150 1017

Count of Price

Row Labels Total$25-$30 652$31-$35 151$36-$40 175(blank)Grand Total 978

Age and Price Summary

Row Labels 6515-18

19-25

26-45

46-64 (blank)

Grand Total

$25-$30 13 138 243 168 86 4 652$31-$35 4 39 38 36 33 1 151$36-$40 7 40 50 45 31 2 175(blank)Grand Total 24 217 331 249 150 7 978

Total Response for Earphone Usage

Row LabelsCount of Exercising

Count of At Work

Count of Using the Phone

Count of Studying

Count of Commuting

65 7 2 15 2 9

Female 5 2 10 2 4

Male 2 5 5

60

15-18 157 53 171 138 76

Female 92 26 96 78 40

Male 64 26 75 59 35

(blank) 1 1 1 1

19-25 256 96 229 212 107

Female 178 58 160 144 67

Male 78 38 69 68 40

26-45 197 74 168 87 80

Female 132 49 108 60 50

Male 65 25 60 27 30

46-64 98 29 103 25 40

Female 71 24 73 19 23

Male 27 5 30 6 17

(blank) 3 1 6 3 2

Female 3 1 5 3 2

Male 1

Grand Total 718 255 692 467 314Percentage: 70.3% 25.0% 67.8% 45.7% 30.8%

Total Response: 1021

Appendix B

List of Projected Sales Event

Date Name of Event Location, TimeMarch 24 Intramural Volleyball Gym, 10pmMarch 26 Intramural Volleyball Gym, 10pmMarch 28 Softball game Pomona-Pitzer, 2pmMarch 31 Sell to students Front of LibraryApril 5 Relay For Life Claremont Colleges, 11amApril 9 “Let’s Talk Business” lunch Front of Campus CenterApril 11 Sell at YMCA East Los Angeles, 5pmApril 14 Easter sale on campus Davenport, 5pmApril 22 Earth Day TBAApril 27 College of Business and TBA

61

Public Management Annual Picnic

April 29 Game Day The Lawn, 11am-1pmMay 3-4 Relay For Life Track Field, 9amMay 5 Cinco de Mayo Sale on

campusFront of Campus Center11am-1pm

May 7 Sell to students Front of Campus CenterMay 10 Fleet Feet runners meet Rancho Cucamonga, 8am

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Documents

Unplugged Budz - Business Plan