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Business Plan

October, 2013

Managed by:

Eliezer Yeong, EunSung Koh, Miso Moon, Harean Park and Joshua Templeton

Students at Grace International School - Chiang Mai, Thailand

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Table of Contents

I. The Opportunity/Company Overview ........................................................................... 3

II. Industry Analysis ....................................................................................................... .. 4

Market Need ……………….…………………………………………………………………………..…………… 4

Market Fundamentals ................................................................................................ 4

Unique Qualifications ................................................................................................ 5

III. Customer Analysis ...................................................................................................... 5

Customer Needs ......................................................................................................... 5

Target Customer Profile ............................................................................................. 5

IV. Competitive Analysis .................................................................................................. 6

Direct/Indirect Competitors ....................................................................................... 6

Competitive Advantage .............................................................................................. 6

V. Marketing Plan ............................................................................................................ 7

Products and Services ................................................................................................. 7

Branding and Promotions Plan ................................................................................... 8

Distribution Plan ......................................................................................................... 8

VI. Operations Plan .......................................................................................................... 9

Key Operational Processes ......................................................................................... 9

Business Milestones.................................................................................................... 9

VII. Management Team .............................................................................................. ..... 9

VIII. Financial Plan ........................................................................................................... 11

Key Assumptions.......................................................................................................... 11

Key Financial Indicators............................................................................................... 11

Financial Highlights ..................................................................................................... 11

Projected Profit .......................................................................................................... 11

Sustainability and Exit Strategy ……………………………………………………………………………… 11

IX. Appendix .................................................................................................................... 12

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Company Overview

The Opportunity

Over the past three year period, consumer demands for locally produced food products have

been skyrocketing by more than 30 percent (Specialty Food Association Highlights, 2013). Such

demands have allowed specialty food stores and farmer’s markets to set a strong foothold in the

local food networks to supply consumers with fresher and healthier food products.

In Thailand, big box retail companies such as Tesco Lotus and Big C Hypermarket provide full

grocery lines and general merchandise for customers to satisfy all their routine shopping needs in

one trip. However, such trips could often be time-consuming especially for teachers, employees

and other workers who have packed schedules. In addition, these retailers often do not provide

organic and natural products or foods to meet everyone’s palates.

World Club Land is a housing development in Chiang Mai, Thailand comprised of a tightly-knit

community of teachers, humanitarian workers, missionaries, students and other foreigners who

call Thailand home. Located in the very center of the community is Grace International School

(GIS), a Christian school that provides education for the children of missionaries and

humanitarian relief workers located in Southeast Asia. GIS enables parents from 355 families to

remain in their field of work by offering education to more than 550 students from the U.S.,

Canada, Korea, Thailand and 23 more. Due to the school’s presence, World Club Land residents

mostly consist of the GIS faculty, student body, and their families. Such a closely-packed

community creates the perfect platform for a local distribution system of fresh, healthy, locally

made food options.

The company has already received a $2500 donation from an angel investor in Seattle,

Washington for start-up costs. Additional funding is being sought to purchase inventory, increase

marketing efforts and expand operations.

Company Profile

Chiang Mai Connect (CMC) was a venture opportunity created in October 2013 by a group of high

school students enrolled in the Introduction to Business & Entrepreneurship class at GIS in Chiang

Mai, Thailand. The students have used the Network for Teaching Entrepreneurship (NFTE)

curriculum and resources to develop a business plan that would benefit the tightly-knit

community of World Club Land, the location of their school.

Even if there are markets close by, taking family trips to buy groceries can be a tedious task,

especially for teachers and staff members who are busy working in school and with children’s

extracurricular activities. Our business allows customers to save time and eat healthy by

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providing an on-campus specialty food market. In addition to that, CMC supports students, staff

and local farmers who operate small businesses. Structured as a non-profit subsidiary of GIS, we

exist to help facilitate the sale of their specialty food items through our shop while also keeping

all profits within school. An added benefit to society is to reduce air pollution by lessening the

number of times families must drive to markets to purchase food.

Location

Grace International School (GIS)

178/832 Muu7 Chiang Mai-Hod Road,

T. Nong Khwai, A. Hang Dong

Chiang Mai 50230, Thailand

Company Mission Statement

The mission of our business is to serve our customers by providing a local distribution system of

student, staff and ministry food items that enables the broader community to access these

natural and organic food options in a convenient ordering and delivery platform.

Industry Analysis

Market Need

Our company provides our customers with high quality goods at reasonable prices. They are

easily obtainable because we are within the GIS community, where most of our target customers

live or work. Most customers can come to our store in less than five minutes by a car. They can

get our products when they come to GIS as well. Since our business will be run by students from

GIS for the school fundraiser, the customers are likely to buy our products to help the school. Our

business not only benefits the customers, but also GIS as a whole.

Market Fundamentals

CMC is competing against other companies from the specialty foods industry market. The

specialty foods industry is one of the fastest growing industries in this world. As more and more

people are being concerned about their health and food, this industry grows as well, without

showing any sign of decline. Specialty food sales have been skyrocketing since 2010 by more than

30 percent in three years and the total sales in 2012 reached $85.83 billion (Specialty Food

Association Highlights 2013). The boom in this industry was triggered by the increasing number of

natural food retailers, supermarkets and gourmet stores.

According to the Specialty Food Association, Kefir probiotic yogurt, a product in which CMC sells

on behalf of a GIS PE teacher, is among the fastest-growing categories of the specialty foods

industry with sales of $2.3 billion in 2012 within the United States. The Greek style yogurt, also

sold by a staff member, is one of the fastest-rising products worldwide. According to the Business

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Insider, Greek yogurt represents 19% of all yogurt sales in the United States, and it’s individual

sales have tripled in the past three years. Another major growth industry in terms of both

production and consumption is 100% arabica coffee beans. It is a product offering of CMC from a

local Thai coffee farmer. According to U.S. business and technology news website, Business

Insider, the global coffee industry placed second next to the oil industry, and is worth over $100

billion worldwide. As a major income earner in Thailand, these high quality coffee beans are

distributed worldwide and in local Thai markets. Kombucha tea, yet another product provided by

a GIS staff, has also had a great profit margin worldwide. The sales for the kombucha market also

grew 27% in 2011 to approximately $370 million according to the SPINS, a market research and

consulting firm for the National Products Industry. It is expected to reach $500 million in 2015

with such significant growth.

Unique Qualifications

With a large variety of products from various small companies, our company can provide the

customers with high quality goods at competitive pricing. The transportation fee will also be

minimal due to the fact that the company is located inside the GIS building, the core of World

Club Land. The company can benefit many people within this community with our motives and

services, which differ from any other competing companies.

Customer Analysis

Customer Needs

There are around 45 teachers at GIS and around 25 of those teachers have children who attend

GIS. Most of those teachers don’t have the time to take a shopping trip to a store or a local

market. CMC can help make teachers’ busy lives less stressful by providing a distribution system

that is reliable and efficient.

Target Customer Profile

CMC’s target customers are parents of the GIS community and others who live close to or in

World Club Land. People who don’t have the time to travel to the store or to the market because

they are at work would greatly benefit from our business. Our company will allow parents who

come to pick their children up from school to shop right on campus and pick up the goods they

need before going home. According to the GIS Registration Office, there are currently around 545

students, out of which 350 are secondary students (7-12 grade.) This equals to 355 families who

have the potential to buy from our store instead of traveling long distances to other markets.

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According to an article from US News in 2012, there were 40,000 foreigners living in Chiang Mai,

Thailand. In 2013, Chiang Mai ranked 78th place with 1,604,600 foreign visitors (Global

Destinations Cities Index). Our target market can be expanded by letting people know of the

availability of fresh food products.

Competitive Analysis

Direct Competitors

Mom and Pop Coffee Shops

CMC’s direct competitors are companies located within and around the GIS community. These

companies include mom and pop bakery and coffee shops such as Danisa’s and Sojo’s Cafe. These

companies have obtained and established strong reputations and brand names within the

community. Some weaknesses that Danisa’s and Sojo’s Cafe face are the lack of product variety.

Another weakness is that both cafes lack a proficient delivery system. On top of this, unlike CMC,

Danisa’s and Sojo’s lack organic and nutritious food options.

Indirect Competitors

Big Box Grocers

Indirect competitors of CMC include big box grocers such as Tesco Lotus, Big C and Makro. These

businesses are located throughout Asia, have established strong reputations and brand name

recognition. The weakness of these businesses is that they are far from the GIS community and

World Club Land. Furthermore, they have limited natural and organic food options.

Competitive Advantage

Location

Chiang Mai is home to 40,000 expatriates. An expatriate is a person who makes their primary

residence outside their native country. CMC has established its services for the expatriate

community specifically at GIS. It is located inside the school campus in which 90.7% of the 545

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students, 355 families and 62 staff are expatriates. The expatriate community is convenienced by

this location because the school acts as a hub for the social, athletic and extracurricular activities

of south Chiang Mai. CMC has a competitive advantage because in addition to its easily accessible

campus it has an inherent volume of foot traffic based on school related activities and broader

visiting Chiang Mai international school activities. CMC caters to foreigner’s tastes through the

large variety of foreign specialty food items sold.

Socially Responsible

CMC offers a sales platform that other companies simply cannot match. CMC services the

working class. Its products meet the needs of working parents, students, GIS Staff and Thai locals.

The company’s product portfolio consists of 64% student-run businesses. The other 36% is from

GIS Staff, family-owned businesses and local Thai-owned businesses. CMC also supports students

that are raising funds for school trips. These school trips include sports, music and Model United

Nations trips. Helping other businesses is only a part of CMC’s social responsibility.

Robust Customer Contact Information

CMC is unlike any other business model because it operates through free to low cost marketing

avenues. CMC’s relationship with GIS gives it complete access to the school’s contact database.

This grants CMC with student telephone numbers, emails, parents’ numbers and emails and

addresses for delivery purposes. It also allows GIS to interact with other regional schools

including Chiang Mai International School, Prem Tinsulanonda International School, Christliche

Deutsche Schule Chiang Mai, Lanna International School Thailand, Varee International School,

Nakornpayap International School through sports related events. CMC also has the ability to

access the international GIS Weekly newsletter for promotional services.

Marketing Plan

Product and Services

Suppliers Product Cost (THB converted to USD)

Kristi Fain (Grade 11) Apple Sauce $1.45 (16 oz.)

Michael Minner (Grade 12) Sausages $8.70 (35 oz.)

Nolan/Alex Flaa (Grade 11) Bagels $0.58 each

Elli Boyer (Grade 12) Roasted Coffee Beans $4.35 (8.8 oz.)

Caleb Hambrice (Grade 9) Strawberry Jam $2.90 (10 oz.)

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Tim Coughlin (Staff) Granola $4.35 per bag (16 oz.)

Chip Rowe (Grade 12) Peanut Butter $2.32 (350ml)

$4.64 (775ml)

Brian Elliot (Staff) Kefir Probiotic Yogurt $2.90 (8 oz.)

Brian Elliot (Staff) Kombucha Tea $2.03 (14 oz.)

Brian Elliot (Staff) Greek Yogurt $2.90 (8 oz.)

Carol Moon (Grade 12) Honey $4.35 (35 oz.)

Carol Moon (Grade 12) Kimchi $2.90 (35 oz.)

Northern Farm (Local Farm) Ground Beef $0.84 (100g piece)

$1.25 (150g piece)

Eliezer Yeong (Grade 12) Moringa Nutritional Supplement $1.45 (50 unit package)

The list provided above only indicates the initial product offerings of CMC. New items are being

sought out to expand our product offerings.

Branding and Promotions Plan

CMC’s daily mission is to maintain availability for products produced from small student-run

businesses, staff-run businesses and local Thai mom and pop meat and produce businesses. The

company’s vision is to provide homemade, fresh and socially conscious products. CMC receives its

name because it connects the expatriate community together; CMC promotes community.

To cut down on business and marketing costs, CMC uses social media to promote itself. Social

media powerhouses such as Facebook are used to reach our customers. Facebook groups are

used utilized to post information about CMC. The web is also utilized through CMC’s e-commerce

site. Email marketing directs CMC’s information to non-Facebook users. Printing is completely

avoided in promotion due to print costs.

Distribution Plan

Customers will pre-order their products online on our e-commerce web site or physically at GIS

and will come and pick them up or have their orders delivered. The e-commerce web site will be

running at all times. We will sell products five times a week, Monday through Friday.

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Operations Plan

Key Operational Processes

Location and Accessibility

Our company will operate one facility in World Club Land, Chiang Mai. Customers can either

telephone, email or order products online. A master list of products and purchase prices is

available upon request or could easily be accessed through our online website at

www.chiangmaiconnect.com. Customers can order and pick up the products themselves or pay

an additional cost of 30 baht ($0.97) for home delivery within World Club Land. The cost for

delivery to further destinations will be 50 baht ($1.61). Customers could also simply drop by our

market and purchase products without having made a previous order. Our operating hours will

be from 3:30 p.m. to 5:00 p.m from Monday through Friday. Deliveries will only be available on

Friday. Our company will accept Thai Baht only, as money exchanges will result in additional

taxes.

Management and Personnel

Our management will not be paid a salary. As a non-profit company, we will not distribute any

profits to individuals. All profits will be used to cover expenses and the remainder will stay within

the class funds. Twenty one students who are enrolled in the Introduction to Business &

Entrepreneurship Class will take turns selling Monday through Friday. Students who have a

driver’s license will make all the deliveries on Friday after school at 3:05 p.m.

Past Accomplishments and Milestones

August 2013 - Beginning of school year/Entrepreneurship class

September 2013 - Seed donation of $2,500 secured from class sponsor

October 2013 - Concept created and business plan written

January 2014 - Anticipated launch date of CMC

Management Team

Management Team Members

Eliezer Yeong - CEO

Mr. Yeong’s leadership experience ranges from managing school activities as the President of the

Class of 2014 (consisting of 68 students) and organizing 11th Grade Timothy Project Boys’ Bible

Study. His exceptional communication skills have been displayed during the 2013 Chiang Mai

Model United Nations (MUN) at PTIS, when he received Honorable Mention for Best Speech.

EunSung Koh - Director of Finance

Ms. Koh has held leadership positions as the Vice President and Treasurer of the Class of 2014

which helped develop her financial skills. She also has received an Excellence Award in AP

Statistics along with Distinguished Christian High School Award in Leadership in May 2013.

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Miso Moon - Director of Marketing

Ms. Moon has regularly engaged in leadership and volunteer positions as the House of Love

Ministry Leader, Chiang Mai Mission Church Youth Group Leader and Agape Home Ministry

Group Member.

Harean Park - Director of Operations

Ms. Park has planned and organized activities as the Events Coordinator in Student Council as

well as the Youth Group Vice President in Chiang Mai Mission Church.

Josh Templeton - Director of Sales

Mr. Templeton has been instrumental in organization of sales. His money management skills have

been proven through his work experience as a Class Officer and Snack Bar Associate at GIS from

2011 to present.

Board of Advisors

Jorge Ang - Chief Executive Officer (First Win-All Industrial)

Mr. Ang has spent over 20 years building and forming the company First Win-All Industrial. The

Ang Family has been in the footwear industry for over 4 generations. First Win-All Industrial is in

the Top 5 leading footwear manufacturers in the Philippines. Mr. Ang oversees over 80

employees and his company exports to countries such as Guam, Taiwan and Japan.

Tim Coughlin - Entrepreneur/Teacher (Grace International School)

Mr. Coughlin developed sales and customer service experience working as a sales representative

for software developer Intuit. Mr. Coughlin has also held a position as a supply chain analyst for

aerospace manufacturer Boeing where he was responsible for inventory management on the 737

program final assembly division. During his time at Boeing, Mr. Coughlin also worked in the

finance division. Currently, Mr. Coughlin works at GIS as a business and personal finance teacher.

Eng Yeong - Finance Manager (Overseas Missionary Fellowship)

Mr. Yeong has developed an efficient system for OMF’s Regional Account Center. Mr. Yeong has

been managing this area of the organization for 7 years. Before his key role at OMF, Mr. Yeong

worked payroll for worldwide advertising agency BBDO. At the moment, Mr. Yeong is managing a

cafe called Upper Crust. Mr. Yeong is an experienced finance manager, entrepreneur, and

businessman.

Roger R. Blier - Chief Executive Officer & Co-Founder (Passport Unlimited)

Roger Blier has been the CEO and Co-Founder of Passport Unlimited for over 25 years. Due to

Roger’s vision, his Passport Corporate program includes big companies such as Microsoft,

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Hewlett-Packard, Apple, Intel and several other organizations and companies. Blier is currently

working in the savings business and was a founder and CEO of EmployeeSavings from 1997 to

1999, a company which gained more than $35 million in venture capital financing. In 1981 to

1997, Roger was the president and CEO of another company, Blier and Associates, Inc. At this

company he developed and launched programs for Texaco, Inc., ExxonMobil, Chevron

Corporation and the Shell Oil Company.

Financial Plan

Assumptions

The following assumptions were made when preparing the financial projections for CMC:

● 5% monthly increase of sales units from Month 2 to 5 (print marketing & word of mouth)

● 25% increase in sales units after launch of website in Month 2

● Drastic decrease in units sold in Month 6, 7, 18 and 19 due to summer vacation

● 10% decrease after the two months of summer vacation (Month 10), flat line growth in all

subsequent months

● Sales price increase by 4% in Year 2 due to inflation

● The suppliers will give CMC 10% discount for buying their goods in bulk

● All financial information has been converted from Thai Baht to US Dollars using the

currency rate - 31.03Baht (updated 17th October 2013).

Key Financial Indicators

The most important factor to CMC’s anticipated growth is the consistent influx of expatriates

living in Chiang Mai driving continued demand for fresh, healthy specialty foods.

Financial Highlights

● Break Even Point in Month 17 (Month 5 of Year 2) of operations

● Net profit margin of -8% in Year 1 and 14% in Year 2

● Net income of -$509.69 in Year 1, $945.33 in Year 2, and $958.46 in Year 3

● 1% Revenue growth from Year 1 to Year 2 and 3

Projected Profit

According to the 5-Year Income Statement Projections, CMC will end Year 5 with a revenue total

of $6,971.96 and operating expenses total of $5,986.72, resulting in a year-end net income of

$985.25. The cumulative net income is projected to reach $3,351.11 by Year 5.

Sustainability and Exit Strategy

The daily operations and profits made in CMC will remain within the company and be rolled on to

the next business class.

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Appendix

Chiang Mai Connect Draft 1.0

5 Year Income Statement Projection(THB converted to USD)

Year Year Year Year Year

1 2 3 4 5

REVENUE

Apple Sauce (16 oz) 388.27$ 393.66$ 399.12$ 404.66$ 410.28$

Sausages (kg) 1,164.80$ 1,180.97$ 1,197.36$ 1,213.98$ 1,230.83$

Bagels (each) 388.27$ 393.66$ 399.12$ 404.66$ 410.28$

Coffee Beans (8.8 oz) 608.87$ 617.32$ 625.89$ 634.58$ 643.39$

Strawberry Jam (10 oz) 197.66$ 200.41$ 203.19$ 206.01$ 208.87$

Granola (16 oz) 582.40$ 590.48$ 598.68$ 606.99$ 615.41$

Peanut Butter (350ml) 316.26$ 320.65$ 325.10$ 329.61$ 334.19$

Peanut Butter (775ml) 316.26$ 320.65$ 325.10$ 329.61$ 334.19$

Kefir Probiotic Yoghurt (8 oz) 194.13$ 196.83$ 199.56$ 202.33$ 205.14$

Honey (kg) 465.92$ 472.39$ 478.94$ 485.59$ 492.33$

Moringa Supplement Pills (50 pills) 97.07$ 98.41$ 99.78$ 101.16$ 102.57$

Kimchi (kg) 271.79$ 275.56$ 279.38$ 283.26$ 287.19$

Burger Patty (Each 100g piece) 224.93$ 228.05$ 231.21$ 234.42$ 237.68$

Burger Patty (Each 150g piece) 418.39$ 424.20$ 430.09$ 436.06$ 442.11$

Kombucha Tea (14 oz) 135.89$ 137.78$ 139.69$ 141.63$ 143.60$

Greek Yoghurt (8 oz) 194.13$ 196.83$ 199.56$ 202.33$ 205.14$

Delivery Fee 632.91$ 641.69$ 650.60$ 659.63$ 668.79$

- - - - -

Revenue 6,597.94$ 6,689.52$ 6,782.37$ 6,876.52$ 6,971.96$

1% 1% 1% 1%

COST OF GOODS SOLD 4,434.63$ 4,496.18$ 4,558.59$ 4,621.87$ 4,686.02$

GROSS MARGIN 2,163.31$ 2,193.33$ 2,223.78$ 2,254.65$ 2,285.94$

Gross Margin % 33% 33% 33% 33% 33%

OPERATING EXPENSES

Operating Expenses 2,673.00$ 1,248.00$ 1,265.32$ 1,282.89$ 1,300.69$

41% 19% 19% 19% 19%

Operating Income (509.69)$ 945.33$ 958.46$ 971.76$ 985.25$

Net Margin -8% 14% 14% 14% 14%

Interest Income 0% - - - - -

Interest Expense - - - - -

Depreciation - - - - -

Net Income (509.69)$ 945.33$ 958.46$ 971.76$ 985.25$

Net/Net Margin -8% 14% 14% 14% 14%

Cumulative Net Income (Loss) (509.69)$ 435.64$ 1,394.10$ 2,365.86$ 3,351.11$

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