. Xiu Xian Tea Main Store Location 308 Washington Ave So Kent, WA 98032 Phone: 206-409-1876 1-800-304-1845 robert@xiuxiantea.com www.xiuxiantea.com UBI: 601 628 180 Business Plan & Valuation Kent Store, Kent Washington Established September 2005 June 13, 2013 Founding Members Robert Carlson Owner, Manager & Founder Mako Carlson Owner, Manager & Founder Other Parties Hunan Tea Co. Main Supplier ( Hunan, China ) Mr. Li Tea Accessories Supplier ( Shanghai, China) Xiao Li Consultant & Supplier ( Shanghai, China ) Hong Mei Supplier ( Anhui, China ) Jet Lee Supplier ( Shanghai, China ) Kamjove Supplier ( Beijing, China ) Wang Mei Xi Supplier ( Beijing China ) Best Fixtures Furniture Mfg. ( Seattle, WA ) Prepared By Robert Carlson - Owner............................
Page 2 1.0 EXECUTIVE SUMMARY... 3 1.1 OBJECTIVES... 3 1.2 VISION... 3 1.3 MISSION... 3 1.4 KEYS TO SUCCESS... 8 2.0 COMPANY SUMMARY... 8 2.1 COMPANY OWNERSHIP... 9 2.2 COMPANY LOCATIONS AND FACILITIES... 9 3.0 SERVICES... 9 3.1 PRODUCT DESCRIPTION... 9 3.2 COMPETITIVE COMPARISON... 9 3.3 SALES... 10 3.4 FULFILLMENT... 10 4.0 MARKET ANALYSIS SUMMARY... 10 4.1 Business Participants... 10 5.0 STRATEGY AND IMPLEMENTATION SUMMARY... 10 5.1 COMPETITIVE EDGE... 10 5.2 MARKETING STRATEGY... 11 5.3 SALES FORCAST... 11 6.0 MANAGEMENT SUMMARY... 11
Page 3 1.0 Executive Summary The original idea for the tea shop was first decided by Robert & Mako Carlson during a vacation trip to Shanghai China in April of 2005. We visited some very unique tea shops that purely specialize in the tea industry and best practices in the way of selling Chinese Loose Leaf tea. Meetings with several employees and owners of the tea shops & companies has had a profound impression to the success of a unique tea shop here in the pacific NW. Robert Carlson, an entrepreneur in the software industry and Mako Carlson, skilled in International business, accounting and speaks 3 languages fluently, Mandarin, Japanese & English are the perfect ingredient to make this business successful. Robert is a native of the Seattle area of 43 years and Mako has settled here as a permanent resident of Kent Wa. Start up investment $50,000.00 for known expenses. Additional private investment during company growth. Robert & Mako have provided approximate initial investments of $150,000.00. Projected sales and profits for the Total years of operation are summarized below starting at our first year selling tea & accessories with a 30% increase for the 2nd year and 50% for the 3rd year. Note: an obvious decline since the economic collapse from 2008. The spike of increased income from 2008 through 2010 was due to the 2 nd store we opened in Bellevue, but was then sold in 2010. So our income of the single store in Kent, WA is still higher than 2007 income, the year just prior to adding the 2 nd stores income (2007) Year Sales($) Costs ($) Income($) 2005 18,000.00 6,000.00 12,000.00 2006 90,000.00 80,000.00 10,000.00 2007 100,000.00 45,000.00 55,000.00 2008 189,120.00 125,520.00 63,600.00 2009 241,646.00 53,575.00 188,071.00 2010 163,608.00 118,919.00 44,689.00 2011 128,184.00 74,048.00 54,136.00 2012 107,421.00 50,000.00 55,922.00 2013 39,985.00 14,998.00 24,987.00 This is the actual Income vs. Expense to date (2005-2013) Actual Income vs. Expense
Page 4 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Gross 18000 90000 100000 189120 241646 163608 128184 107421 39985 Expense 6000 80000 45000 125520 53575 118919 74048 50000 14998 Income 12000 10000 55000 63600 188071 44689 54136 55922 24987 Totals Gross: $1,071,356.00 Expense: $568,060.00 Income: $503,296.00 Message to Buyers: NOTE: If the new owners added Coffee, snacks, Pastries this would add the potential to possibly more than double the income. There are no other Coffee shops near with the exception of Starbucks inside Safeway which most patrons we have learned over the years do not go inside to Starbucks due to the inconvenience. The company is specializing in providing a combination of very unique tea and tea accessories. Offering the highest quality of loose leave Chinese tea imported directly from China. Providing specialized tea serving techniques, detailed education about tea and the best traditional and unique practices in customer service. 1.1 Objectives 1. Revenues of $100,000.00 the third year based on sales of tea and avg. Approaching $200,000.00 in our fifth year of operation. 2. Establish a strong presence to the general public about the health benefits of tea. 3. Educate Americans in all aspects of tea types, how to serve tea and when. 4. Increase net profit to 200% by the fifth year of operations. 5. Continue to build on our dynamic web site for the public to learn about and purchase our tea products. 1.2 Vision To become a recognized leader in the tea industry based on unique and special practices of how to educate and serve customers tea. To create a strong interest to the general public about the fascinating health benefits and long history of tea.
Page 5 1.3 Mission We will achieve our objectives and vision by: Providing our customers with great satisfaction and education about tea and it s long history. Always keeping and making our tea business better with the highest quality tea & tea products and best of management strengths and imagination. Develop strategic alliances or joint venture partnerships where necessary in order to meet and exceed our customer s expectations and to meet or beat our objectives. 1.4 Keys to Success 1. Provide professional quality customer friendly service. 2. Develop a follow-up strategy to gauge satisfaction with all customers. 3. Implement and maintain a quality control and assurance policy. 4. Train and maintain competent and diverse employees for exceptional customer service. 5. Maintain a secure and stable open relationship with the best of Asian tea wholesalers. 6. Competent understanding of management and the retail industry. 2.0 Company Summary Xiu Xian Tea will specialize in exotic and traditional Asian tea s, such as Chinese loose leaf tea, oolong tea, flower tea and many others. In addition, larger amounts of income will be directly from the sales of the unique tea accessories such as tea-cups, tea-sets, tea-plates, tea-tools, tea-kettles, etc... 2.1 Company Ownership Xiu Xian Tea was created in 2005 by Robert & Mako Carlson. Robert & Mako privately own the company and current assets 100%. While there is a few private investors involved, the business will remain 100% owned by Robert & Mako Carlson. 2.2 Company Locations and Facilities August 15 th of 2006 we moved to a new location near Safeway with 1200 SF of retail space in Kent, Washington. We have a dedicated fax line and have installed a PC for high-speed Internet using DSL. We have dinning tables, a long bar for display and service. The store also has very high quality custom designed cabinetry and shelving. There are 2 bathrooms, and a small office in the back of the store. We have a commercial dish washer, 2 sinks, 2 microwave ovens, 1 cash register and an additional dedicated PC for our gift/loyalty card program. We have also recently added a 3 rd PC for our new Powerpoint / 30 LCD display system to help educate our customers.
Page 6 3.0 Services Xiu Xian Tea offers a wide variety of loose leaf tea for in store sample testing and drinking. Interested customers will be thoroughly educated in many aspects of how to make and serve tea. Unique tea tables can be purchased by the customers directly from our tea shop. We have wireless internet available. An interactive website has been published and our dynamic shopping cart was successfully launched Oct 2007. This site is serving well as an additional marketing tool. The domain name www.xiuxiantea.com was reserved and in use since the companies conception. 3.1 Product Description Loose leaf tea and unique tea accessories imported directly from China. Some other specialty teas, and other tea s that we find are of high quality and a good fit for our store may also be offered. We also added Bubble tea to our menu in early 2007. The addition of cold specialty drinks are beneficial during our slower summer months. Dispute Resolution: We offer money back guarantee for shipping of our tea products. If a product is shipped with any damages or unsatisfactory condition, we will replace it free of charge. 30 day No Refund policy has been implemented. 3.2 Competitive Comparison Xiu Xian Tea offers our customers superior service accompanied with the highest quality tea products available. We are one of the only known stores to offer the unique tea cups to the general public in the Pacific NW and possibly the entire United States. Our strategy will be structured in such a way as to develop a personal and lasting relationship with our customers. Our product is unique and will provide customers with a healthier choice of drink. We continually enforce a quality assurance and control program for all products sold from our store. This document will serve to focus on the standards which will be achieved and a means of measuring performance. In comparison, we truly do not have any competitors. We are the only known company providing the unique tea service using our personalized methods in the United States. Our tea cup vendor has plans to provide us with exclusive rights to sale the tea cups in the United States. 3.3 Sales Brochures & educational documentation has been created to provide an overview of our tea products and accessories since the beginning of operations. These documents are offered to all interested prospects and customers. Our website will be developed including a description of our products and services, contact information, our main principles and will include testimonials. Internet domain name has been registered. 3.4 Fulfillment We will turn to qualified professionals and tea connoisseurs in China without risking core values provided to our customers.
Page 7 To facilitate our strategy, strategic alliances or joint venture agreements will be developed with qualified suppliers. 4.0 Market Analysis Summary Robert & Mako have identified a unique opportunity exists to introduce a healthier alternative drink to Americans. Generally Americans drink Coffee and Alcohol related beverages. We have consulted with many of our loyal customers and we are always excited to learn that our tea-shop is one of their favorite stores. We have many testimonials posted on our web site and they are all positive in reference to our store and customer service. We have been reviewed as a very unique and best customer service tea-shop on many web sites such as: www.citysearch.com, www.teamap.com, www.judysbook.com, www.yelp.com 4.1 Business Participants YunLai Tea is a key business participant in that they will supply their highest quality of tea & tea accessories available. We also have bonding relationships created with other tea suppliers and Manufacturers in China to assure that we always have access to unique tea & tea accessories and in any quantity that we so choose to order. 5.0 Strategy and Implementation Summary Xui Xian Tea will focus on creating a very close and bonding relationship with customers. We will focus mostly on the special and traditional Chinese way of serving tea and also rare and special friendly atmosphere. 5.1 Competitive Edge Xiu Xian Tea offers the following competitive edge: Offer our unique style of serving customers. Offer a variety of unique teas from China not easily found in America. Display and offer very unique tea tables and accessories, also not found in America. Provide a truly unique and healthy atmosphere in our tea shop. Quality control and assurance program. 5.2 Marketing Strategy The marketing strategy will have 3 stages. In addition to our tea shop in Kent Washington offering unique tea & tea accessories we also offer a unique system of customer service that will keep customers coming back and generate word of mouth advertisement. Advertise on all major search engines on the internet. Flyers will be created and distributed. Gift Cards and Rewards cards have been a huge hit at our tea-shop, customers absolutely love them! We will maintain a presence in the marketplace with selective internet search engines and techniques to draw potential buyers to our store and website. The website has been set up with a powerful, state of the art, interactive shopping cart system to provide additional sales online. Launched in late 2007 and has been progressively more successful since then.
Page 8 5.3 Sales Forecast We expected sales to be inconsistent for the first year of operation. We predicted the first 3 months of operations would be slow. Revenues will be limited until we can work through the promotional exposure phase. A generic quality management plan is formulated and all office administration tasks are completed. We have persistently exceeded our predicted revenue each year since we opened. We predict our sales to exceed $200,000.00 entering into our 4 th and / or 5 th year of operations. 6.0 Management Summary Xiu Xian Tea currently has 4 employees until such time that revenues will sustain a salary for more employees. At this time Mako Carlson and Robert Carlson are handling all aspects of the business. Both are responsible to assist in the operations and management of the company. We have the combined knowledge of Western and Eastern business practices and have created a strong, stable business. As we open more stores in other cities we will continue to seek out the best of the best employees that fit the requirements of our unique shop. We now deeply acknowledge that the best of the best employees are key to the growth and continued success of Xiu Xian Tea. We are directly focused on implementing the best possible hiring and employee management system possible.