Business plan. Wine Corporation Inc.

Transcription

1 Business plan Wine Corporation Inc. Wine industry Consumer good Retail market All data in this Business plan have been changed. All the figures and year data as well as market locations have been changed. The figures market red in the financials have been changed and do not show any real figures. Wine Corporation Inc. does not exist. The market data as well as the source of the market data has also been changed. The competitor analysis has also been changed and do not show the real situation on the market. All the red market figures, text and data are just examples and have to be changed. Please do consider that data, figures and text explanations could be wrong and do not in any case show the reality. Contact Founder s name Company s name Address City, State, Country Tel: Fax: wine@corporation.com

2 Introduction The contents of this document are confidential, proprietary and only for the use of Wine Corporation, its shareholders, its partners, and investors. Any reproduction or use of the business plan or any part of it or of any information contained herein requires the prior written consent of Wine Corporation. This business plan does not constitute any offer to sell, or an invitation to purchase any shares in, or any underlying assets of Wine Corporation; nor will it form a part of any investment decision or any decision to enter into a contract of sale or purchase. Proprietary and Confidential Wine Corporation, All Rights Reserved. 1

3 Executive summary Wine Corporation try it before you buy it. Wine Corporation is based at the in. Wine Corporation was founded on November 17 th 2010 in. The know-how of Wine Corporation includes a proprietary coding system which creates a new sales-channel for fragmented products. The first application is in the wine market. Industry overview The world wide consumption of wine is a 100 billion dollar annual business in which Europe represents about 60 billion. 1 US alone is a 4.7 billion USD market. The market is divided into the on and off-trade retail sectors. The on-trade refers to consumption in public, whereas the off-trade refers to home consumption. European wine consumption is currently undergoing a market shift with increasing home consumption. This trend in consumer wine consumption habits obviously concerns big European wine distributors, restaurant owners, and others who must change their saleschannel strategy to keep up with market trends, or risk losing market share to those who adapt more effectively. Business opportunity How many times have you chosen a bottle of wine at the retail store, returned home, had dinner with some friends, and ended up really disappointed with your choice? At the retail store there is a buying opportunity for consumers to purchase wine. However, there is an enormous number of wines to select from. This leads to frustration for the average consumer. The Horeca sector (restaurants, hotels and cafes) presents a tasting opportunity. However, because wine is a fragmented product, and labeled differently in the retail than in the restaurant, consumers have difficulty finding restaurant wine in the retail stores. Also, getting the wine from the shop to their home is often challenging and inconvenient for consumers due to the bulky and heavy cartons or cases of wine. There exists an opportunity for a new sales-channel to answer the increasing demand for home consumption, convenient home delivery and smart buying, assuring that you like the wine you are purchasing. Business process Wine Corporation links the trying opportunities of the Horeca sector, with the buying opportunities of the traditional wine retailer through an easy, fast and convenient purchasing solution. Wine Corporation gives the customer the opportunity to buy the wine they tried at a restaurant through a simple coding system. This system designates the wine, distributor and restaurant. The wine is then delivered to the customer s home after having been ordered by the customer via mobile phone or Internet. The commercial offer of Wine Corporation is to sell the wine only found in restaurants using multiple distributors for access to their inventory, and restaurants as point of sales. The types of wine available for purchase are medium to high quality red and white wines of all origins in cartons of 6 or 12 bottles. The labels will remain the same as those found at the restaurant; however Wine Corporation branding will be used by the distributor when sending the order to the final customer. In return for their collaboration, Wine Corporation gives both the restaurant and distributor a portion of the generated profit. 1 BusinessWeek Online (October 24, 2000) Proprietary and Confidential Wine Corporation, All Rights Reserved. 2

4 Target market The target market is a combination of our market focus and the customer profile. The target customer is years old, well educated, and with an above average income. He is technically diversified and tends to impulse buy. He is also a wine enthusiast who is status conscious, yet likes to switch between different styles. The market focus is medium to high quality red and white wine, both domestic and imported. The intended point of sale is trendy and upscale restaurants in cosmopolitan cities. Competitive advantages Wine Corporation connects the real world with the virtual world, and by doing so, enjoys the following advantages over its competitors: Does NOT require the expense of a store (no shelf-space) No warehouse, thus no stock Less personnel expense than a typical wine store Presence and trial in restaurants makes the website easy to find Revenue sharing with players in the value chain promotes active participation There are two types of competitors in this market: direct, and indirect. The direct competitors are those who are focused on the same target market, and are selling wine in the on-trade, such as Mövenpick. The indirect competitors are those selling wine in the off-trade, either through traditional retail channels, Internet or e-marketing. Indirect competitors include and. Value creation for the participants Wine Corporation centralizes all participants in the value chain, resulting in a new saleschannel. The concept developed by Wine Corporation creates value for all participants: customers, wine distributors and restaurants. Customers can finally have delivered to their homes the wine they enjoyed at the restaurant that is not available in retail stores. At the same time, restaurants and wine distributors both generate additional revenue. Status of the business The major milestones include a Letter of Intent from a large US wine distributor, and a Letter of Recommendation and collaboration project with the of. The planned market entry is Q The technology development and calling center can be ready for operation within four weeks of funding. A complete corporate identity including promotional material is ready for launch. The team The management team consists of individuals with backgrounds in new product development, wine and hospitality, venture capital and finance and management of innovation. There are currently 11 people actively involved with Wine Corporation. Strategy & realization plan The market entry will serve as a proof of concept. It includes signing on a total of 30 restaurants in, and by Q This will be accomplished through presentations made by management to the restaurant owners, and the already strong network that exists between the distributors and restaurants. The next phase, market roll-out, will consist of increasing the total number of US restaurants during The third phase, European expansion, will be done in parallel with the market roll-out phase, and targets as the second market. Proprietary and Confidential Wine Corporation, All Rights Reserved. 3

5 Financials Income statement Q Sales Gross Profit EBIT Net inc ome Free Cash Flow Net Asset Value CHF Fig. 1. Financial summary Cash requirements An investment of USD is needed for the proof of concept in Q and Q This will be used for developing the technology, legal fees, salaries, and operational expenses such as the calling center and administration. Wine Corporation is valued at 8 Million USD. This valuation will be discounted by 50% for the seed round of financing, due to the fact that it is before proof of concept. Investment opportunity Innovative concept Dedicated management team Low investment, fast returns generates sales quickly Able to attract top talent and partners with limited funds Good network and partnership Proprietary and Confidential Wine Corporation, All Rights Reserved. 4

6 1 Business opportunity How many times have you been chosen a bottle of wine at the retail store, returned home, had dinner with some friends, and ended up really disappointed with your choice? Like a book s cover, a wine s label does not tell the story. Wine consumption is divided into on-trade: Horeca (hotels, restaurants and cafes), and off-trade: wine retailers for home enjoyment. The wine retail store, or off-trade sector, offers a buying opportunity. But, selecting a bottle of wine places the consumer in an environment where choice is extremely difficult. The retail shelves are packed with many different types of wine which all have limited stock. Moreover, these wines come from numerous geographical regions, appellations, and chateaux. The different vintage years can also cause significant variations in quality and taste, and production quantities are limited. Because tasting is the single most important element in selecting a bottle of wine, and because the opportunity for trying wine is limited to a few occasions, such as expositions, infrequent store trials, or a visit to the vineyard, choosing a good bottle of wine is made even more difficult. Consequently, tasting is replaced with marketing, labeling, and other less significant wine selection criteria. Personal preference and previous tasting experience play a minor role in the choice; and, this whole scenario often leaves the consumer overwhelmed and frustrated. And, ultimately unhappy with their choice when they actually drink the wine. European wine consumption is currently undergoing a market shift with increasing home consumption. This trend in consumer wine consumption habits obviously concerns big European wine distributors, restaurant owners, and others who must change their saleschannel strategy to keep up with market trends, or risk losing market share to those who adapt more effectively. Therefore, there exists an opportunity for a new sales-channel to fill this gap. 1.1 The concept Wine Corporation is a value-added sales-channel that offers consumers a simple, convenient and fast purchasing and home delivery solution via a patent pending coding concept. It links the trying opportunities of the Horeca sector with an instantaneous and easy buying solution, giving customers the opportunity to purchase restaurant wines to enjoy later at their leisure in their own homes. The customer can order the wine directly at the restaurant using mobile phone, or later using Internet. The wine is delivered to the customer s home in cases of 6 or 12 within one week by a third party logistics provider. The participating distributors contribute warehousing and access to wine normally reserved for restaurants. The restaurants act as the point of sales, and are used to promote and implement the concept with customers. Wine Corporation creates value for all participants: customers, distributors and restaurants. This is accomplished through an attractive profit sharing plan. The Wine Corporation infrastructure is also used later on to generate repeat business through promotions in collaboration with the restaurants and distributors. 1.2 Unique selling proposition Wine Corporation is a better method of being introduced to new wine, because the wine goes through a series of pre-selections by the distributor and restaurant. Normally, restaurants take special care in picking out their wine, because serving high quality wine can attract customers. Wine Corporation also benefits the client by increasing the interest the restaurant has in making the wine choice a satisfactory one, as the restaurant will potentially make more money if the client enjoys the selection, and decides to order through Wine Corporation. Proprietary and Confidential Wine Corporation, All Rights Reserved. 5

7 Normally, the big problem with wine tasting is that small quantities cannot be sampled, as, for example, with cheese and chocolate. The reason for this is because an open bottle must be consumed very quickly, or the quality decreases. However, through the Wine Corporation system, the customer has the tasting opportunity as part of their normal meal. Typically, a wine s taste is closely associated with both the accompanied food, people and atmosphere. Therefore, buying wine through Wine Corporation gives the consumer the best chance to make a good choice. Furthermore, Wine Corporation is a welcome tool to help busy time starved individuals search for suitable wine. This type of person is a member of a two income household, or is a wealthy individual who has cash, but limited time. It appeals to them because it is a no hassle, no stress purchasing process that takes very little effort to perform, and includes convenient home delivery. Finally, wine is an emotional product. The Wine Corporation system allows the consumer to re-live the good memories of a pleasant dining experience each time they open-up a bottle at their home which was purchased through the system. 1.3 Value creation Wine Corporation centralizes all participants in the value chain, resulting in a new saleschannel. The concept developed by Wine Corporation creates value for all participants: Customers Simple and easy purchasing opportunity Can order wine enjoyed in restaurant unavailable in retail stores Convenient home delivery Wine distributors Market differentiation tool to attract new restaurants Increase of sales with same number of sales representatives Answers the increasing demand for home consumption Statistical feedback Restaurants Marketing differentiation tool to attract and keep customers Additional revenue through profit sharing system Promotions of special menus, events and wines New opportunities for one-to-one marketing and the creation of personalized dialog Tracking of consumer preferences for optimal wine selection Publicity via Wine Corporation website, pamphlets, and inserts in each order Proprietary and Confidential Wine Corporation, All Rights Reserved. 6

8 2 Financials 2.1 Income statement Income statement Q Sales Sales growth 100,0% 1224,0% 83,1% 70,1% 87,4% COGS Gross Profit in % of sales -14,3% 25,4% 25,4% 32,5% 34,5% Total operating expense Operating income in % of sales -156,7% -2,3% 7,9% 19,6% 26,3% Other income/expenses EBITDA Depreciation EBIT Interest expense (net) Income taxes Net income in % of sales -144,4% -2,6% 7,1% 19,0% 26,0% FCF Q Cash Flow before interest Investments Working Capital Investments fixed assets Free Cash Flow Net company value CHF (for details see Appendix) Sales per restaurant Wine Corporation sales are based on the number of distributors that are signed up, the number of restaurants per distributor, and the number of orders of 6 bottles with an average of 32 USD per bottle per restaurant per year. Sales per country During the first year, Wine Corporation will concentrate on US s hotels and restaurants. Additional expansion in the 6.5 times larger (by wine drinking volume) market will take place in Q This will be followed by, then the combination of the. This expansion is forecasted in the second, third and fourth years of operations. A detailed chart which illustrates the number of restaurants and distributors per country, and the number of sales per restaurant can be found in the Appendix. Construction year Construction, as referred to in the financials, is everything required before the first sale. The large jump in sales between Q4 and year 2 is based on a full year of operation and rapid restaurant expansion gained through a German market entrance. Also, the use of an Internet site will help drive down the cost of sales, by reducing the amount of variable costs. Furthermore, repeat purchases will help generate additional sales at a lower cost. (See Appendix for a breakdown of fixed and variable costs.) Proprietary and Confidential Wine Corporation, All Rights Reserved. 7

9 2.2 Cash flow statement Cash Flow statement Net income Depreciation Interest expense (net) Income taxes Operating cash flow before WC chang /- trade receivables /- other current assets /- inventories /- accounts payables /- other current liabilities Cash generated from operations Interest paid Income taxes paid Cash flow from operating activities /- property, plant, equipment and intangibles Cash flow from investing activities Financial Investment Dividends paid Increase (decrease) in short-term finan Increase (decrease) of long-term borro Cash flow from financing activities Net increase (decrease) in cash Cash at beginning of the year Cash at end of the year Control cash flow statement An investment of USD for the seed round is needed in Q as seen in the cash flow statement. This will be used to cover the proof of concept phase in Q4 until the first round of financing which is expected in Q2 of 2002 for German expansion. This includes the technology development, legal fees, salaries and operational expenses such as consulting and calling center costs. Wine Corporation is valued at 8 million USD. This valuation will be discounted by 50% for the seed round of financing, due to the fact that it is before proof of concept. See Appendix for valuation details. We are looking for an active investor who can give us the necessary experience and knowledge in our field. 2.3 Investment opportunity Innovative and fun concept Dedicated management team Low investment, fast returns generates sales quickly Rapid Break-even Able to attract top talent and partners with limited funds Good network and partnerships Proprietary and Confidential Wine Corporation, All Rights Reserved. 8

10 2.4 Balance sheet Balance sheet Q Cash Total current assets Start-up cost Equipment Intangible assets Other non-current assets Cumulated depreciation Total fixed assets Total assets short-term debt Long-term debt Total Liabilities Share capital Paid-in capital Reserves Profit/Loss per periode Total equity capital Total Liabilities and equity Control Balance sheet Proprietary and Confidential Wine Corporation, All Rights Reserved. 9