XYZ Spirits,
LLC
Business Plan
June 2018
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TABLE OF CONTENTS
1. Executive Summary ................................................................................................................. 4
2. Company Overview ................................................................................................................. 5
2.1. Mission Statement ............................................................................................................. 5
2.2. Company Description ....................................................................................................... 5
2.3. Capital Requirements ....................................................................................................... 6
2.4. Growth Strategy ................................................................................................................ 6
3. The Products.............................................................................................................................. 7
3.1. Product Line Overview & Strategy ................................................................................ 7
3.2. XYZ Vodka ......................................................................................................................... 7
3.3. XYZ Whiskey .................................................................................................................... 7
3.4. XYZ Rum ........................................................................................................................... 7
3.5. Pricing Strategy ................................................................................................................. 7
4. The Market ................................................................................................................................ 8
4.1. Target Market Analysis .................................................................................................... 8
4.1.1. Target Consumer Profile ........................................................................................... 8
4.1.2. Grocery Stores ............................................................................................................ 8
4.1.3. Drug Stores ................................................................................................................. 8
4.1.4. Liquor Stores ............................................................................................................... 8
4.1.5. Mass market retailers ................................................................................................ 8
4.1.6. Restaurants ................................................................................................................. 8
4.1.7. Bars/Nightclubs .......................................................................................................... 8
4.2. U.S. Vodka Market Analysis ............................................................................................ 9
4.2.1. Figures & Trends ........................................................................................................ 9
4.2.3. Industry Analysis ..................................................................................................... 10
4.3. U.S. Whiskey Market Analysis ...................................................................................... 10
4.3.1. Figures & Trends ...................................................................................................... 10
4.3.2. Industry Analysis ..................................................................................................... 11
4.4. U.S. Rum Market Analysis ............................................................................................. 12
4.4.1. Figures & Trends ...................................................................................................... 12
4.5. Europe Alcohol Spirits Market Analysis ..................................................................... 12
4.6. Profile of Direct Competitors ......................................................................................... 12
4.6.1. Diageo ........................................................................................................................ 12
4.6.2. Constellation Brands ............................................................................................... 12
4.6.3. Bacardi Limited ........................................................................................................ 13
4.6.4. Pernod Ricard ........................................................................................................... 13
4.6.5. Suntory Holdings Limited ...................................................................................... 14
4.7. Competitive Analysis ..................................................................................................... 14
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5. Marketing Plan ........................................................................................................................ 15
5.1. Marketing Overview & Strategy ................................................................................... 15
5.2. Branding Strategy ............................................................................................................ 15
5.3. Internet Marketing .......................................................................................................... 15
5.4. Print Advertising ............................................................................................................. 15
5.5. Public Relations ............................................................................................................... 15
5.6. Affiliate Marketing .......................................................................................................... 15
5.7. TV Advertising ................................................................................................................ 15
6. Operational Plan ..................................................................................................................... 16
6.1. Operational Overview .................................................................................................... 16
6.1.1. Hours of Operation .................................................................................................. 16
6.1.2. Legal Structure ......................................................................................................... 16
6.1.3. Growth Plan .............................................................................................................. 16
6.2. Manufacturing ................................................................................................................. 16
6.3. Packaging & Labels ......................................................................................................... 16
6.4. Inventory Management .................................................................................................. 16
6.5. Computer Hardware & Software .................................................................................. 16
6.6. Legal & Insurance ........................................................................................................... 16
6.7. Accounting ....................................................................................................................... 16
6.8. Licenses & Permits .......................................................................................................... 16
7. Management & Staff ............................................................................................................... 17
7.1. Executive Management .................................................................................................. 17
7.1.1. John Doe, Chief Executive Officer ......................................................................... 17
7.1.2. John Doe, Chief Operating Officer ........................................................................ 17
7.1.3. John Doe, Chief Financial Officer .......................................................................... 18
7.2. Board & Advisors ............................................................................................................ 18
7.2.1. John Doe, Chairman of the Board .......................................................................... 18
8. Financing & Growth Strategy ............................................................................................... 19
8.1. Capital Requirements ..................................................................................................... 19
8.2. Risk Analysis .................................................................................................................... 19
9. Financials ................................................................................................................................. 20
9.1. Sales ................................................................................................................................... 20
9.1.1. Sales Assumptions ................................................................................................... 20
9.1.2. Sales Projections ....................................................................................................... 22
9.2. Expenses ........................................................................................................................... 22
9.2.1. G & A Expenses ........................................................................................................ 22
9.2.2. Marketing Expenses ................................................................................................ 23
9.2.3. Staff Headcount & Salaries ..................................................................................... 23
9.3. Pro-Forma Financial Statement Annual Summaries .................................................. 24
9.3.1. Pro-Forma Income Statement ................................................................................. 24
9.3.2. Pro-Forma Statement of Cash Flows ..................................................................... 25
9.3.3. Pro-Forma Balance Sheet ........................................................................................ 25
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1. EXECUTIVE SUMMARY
Problem: No existing alcohol product
on the market has been designed to
REMOVED INFO.
Solution: XYZ Spirits, LLC produces
whiskey, vodka, and rum that has
been carefully crafted to REMOVED
INFO and are the first-of-its-kind.
Products: The products are a unique
blend of alcohol and REMOVED
INFO. The products were invented
by an internationally acclaimed team
of scientists over several years.
Company: XYZ Spirts, LLC will
launch with 3 products: XYZ Vodka,
XYZ Whiskey, and XYZ Rum, which
are respectively vodka, whiskey, and
rum products. The products will
come in the following five sizes: 50
ml, 200 ml, 375 ml, 750 ml, and 1 L.
Target Consumer: XYZ Spirts, LLC’s
target consumer profile will be men
and women between the ages of 21
and above, sports fans, and
REMOVED INFO.
Target Market: XYZ Spirits, LLC will
target grocery stores, mass market
retailers, drug stores, and liquor
stores in the U.S., Canada, Europe,
and potentially additional markets.
The Market: U.S. Vodka industry
was $3.7 billion in 2017. The U.S.
whiskey and bourbon distillery
market was $3.0 billion in 2016.
Revenue in the North America Rum
segment was $3.6 billion in 2018.
Marketing: XYZ Spirits, LLC’s
marketing campaign will include
distribution partnerships, Internet
marketing, print advertising, public
relations, celebrity endorsement,
industry trade shows, TV
advertising, and promotions.
Financing: XYZ Spirits, LLC seeks
$12,000,000 of which an estimated
$500,000 will be for capital
expenditures and the remaining
$11,500,000 will be for working
capital. XYZ Spirts, LLC owners have
invested $x.x million into XYZ Spits,
LLC.
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2. COMPANY OVERVIEW
2.1. MISSION STATEMENT
XYZ Spirts, LLC’s mission is to
become the leading U.S. and global
producer of liquor products that
REMOVED INFO.
2.2. COMPANY DESCRIPTION
XYZ Spirits, LLC (herein also referred
to as “XYZ”) was established as a
limited liability company in ABC in
January 2018 and is owned and led by
John Doe. XYZ Spirits produces
whiskey, vodka, and rum that
REMOVED INFO. XYZ’s products
are the first of its kind.
XYZ’s products are a unique blend of
alcohol and REMOVED INFO. In
addition, the products REMOVED
INFO. The products were invented
by an internationally acclaimed team
of scientists with several years of
research and development and are
manufactured in the United States.
XYZ will promote its products via
distribution partnerships, sales,
celebrity/influencer endorsement,
internet marketing, television
advertising, print advertising, event
sponsorships, industry trade shows,
promotions, and public relations.
XYZ’s target consumer profile will be
men and women that are 21 years old
or above, sports fans, and REMOVED
INFO. XYZ will target grocery stores,
mass market retailers, drug stores,
liquor stores, bars & nightclubs in the
U.S., Canada, Europe, and Asia.
In compliance with U.S. and Canada
law, XYZ will sell its products to
multiple distributors throughout the
U.S. and Canada. As XYZ expands
marketing and sales on an
international basis, XYZ will identify
and partner with distribution
companies in Europe and potentially
additional countries.
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2.3. CAPITAL REQUIREMENTS
XYZ seeks to raise $12,000,000 of
which an estimated $695,000 will be
used for capital expenditures and the
remaining $11,305,000 will be
available for working capital to
support marketing, operations, and
inventory.
2.4. GROWTH STRATEGY
Phase 1 (Month 1-12):
Target Market: U.S. and Canada
Marketing Initiatives:
▪ Launch marketing in U.S. and
Canada
▪ Establish distribution
partnerships
▪ Promote social media pages
▪ Garner positive reviews from
customers
Operations:
▪ Hire and train staff and
management
▪ Maintain efficient operations
▪ Become valued members of the
community by engaging in
events
Phase 2 (Month 13-24):
Target Market: U.S., Canada, and
Europe
Marketing Initiatives:
▪ Increase marketing in U.S. and
Canada
▪ Launch marketing in Europe
▪ Establish additional distribution
partnerships
Operations:
▪ Improve operational efficiency by
maximizing output and
minimizing input
▪ Hire and train additional staff
▪ Continue to engage with the
community
Phase 3 (Month 25-36):
Target Market: U.S., Canada, Europe,
Asia, and South America
Marketing Initiatives:
▪ Increase marketing in the U.S.,
Canada, and Europe
▪ Launch marketing in Asia and
South America
▪ Establish additional distribution
partnerships
Operations:
▪ Improve operational efficiency
▪ Hire and train additional staff
▪ Continue to engage with the
community
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3. THE PRODUCTS
3.1. PRODUCT LINE OVERVIEW &
STRATEGY
XYZ will launch with three products:
XYZ Whiskey, XYZ Vodka, and XYZ
Rum.
The products will come in the
following five sizes: 50mL, 200mL,
375mL, 750mL, 1 L
3.2. XYZ VODKA
XYZ Vodka has been
distilled from high
quality grains and
REMOVED INFO. The
vodka is REMOVED
INFO. XYZ Vodka has
been crafted with
REMOVED INFO.
3.3. XYZ WHISKEY
XYZ Whiskey has
been blended with
high quality
bourbon
REMOVED INFO to
give the core
whiskey flavor,
smoothness and rich taste. XYZ
Whiskey has been crafted with a
proprietary blend of REMOVED
INFO.
3.4. XYZ RUM
XYZ Rum has
been crafted by
fermenting and
then distilling high
quality molasses
and using
REMOVED INFO
in its blend.
3.5. PRICING STRATEGY
XYZ will maintain very competitive
pricing and projects the following
pricing at the wholesale level for its
products:
▪ XYZ Vodka 50 ml = $x.xx
▪ XYZ Vodka 200 ml = $x.xx
▪ XYZ Vodka 375 ml = $xx.xx
▪ XYZ Vodka 750 ml = $xx.xx
▪ XYZ Vodka 1 L = $xx.xx
▪ XYZ Whiskey 50 ml = $x.xx
▪ XYZ Whiskey 200 ml = $x.xx
▪ XYZ Whiskey 375 ml = $xx.xx
▪ XYZ Whiskey 750 ml = $xx.xx
▪ XYZ Whiskey 1 L = $xx.xx
▪ XYZ Rum 50 ml = $x.xx
▪ XYZ Rum 200 ml = $x.xx
▪ XYZ Rum 375 ml = $xx.xx
▪ XYZ Rum 750 ml = $xx.xx
▪ XYZ Rum 1 L = $xx.xx
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4. THE MARKET
4.1. TARGET MARKET ANALYSIS
4.1.1. TARGET CONSUMER PROFILE
XYZ’s target consumer profile
includes:
▪ Everyone aged 21 and above.
▪ Sports fans
4.1.2. GROCERY STORES1
There are 38,441 supermarkets in the
U.S.2 The largest supermarkets and
grocery stores in the U.S. are
respectively: Kroger, Albertson’s,
Ahold USA, Publix Super Markets,
H-E-B Grocery Co., Walmart Stores,
Inc. (Neighborhood Market), and
Whole Foods Markets.
4.1.3. DRUG STORES
There are approximately 67,000 drug
stores/pharmacies in the U.S. 3 The 5
leading drug store chains are
Therespectively: Walgreens Boots
Alliance, CVS Health Corporation,
Express Scripts, Inc. Walmart Stores,
Inc., and Rite Aid Corporation.4
4.1.4. LIQUOR STORES5
There are 69,534 liquor stores in the
U.S.
4.1.5. MASS MARKET RETAILERS
There is currently a total of 33,742
mass merchandise and dollar stores
in the U.S. There are over 11,453
Walmart stores across the U.S. There
are 663+ Costco locations across the
U.S. with over 700 million
subscribing members. Kroger is the
3rd largest Mass Market Retailer in
the U.S. with over 2,625 stores.6
4.1.6. FULL-SERVICE RESTAURANTS
The current number of full-service
restaurants is 31,480.7
4.1.7. BARS/NIGHTCLUBS8
In 2017, the number of establishments
in the bars, taverns and nightclub
industry in the United States was
forecasted to reach 62,602.
1 “Largest Grocery Stores & Supermarkets in
the U.S. in 2016”; Statista; 2018 2 “Number of Supermarkets & Grocery Stores in
the U.S. from 2011 to 2016”; Statista; 2017 3 “Pharmacies in the U.S.”; Wikipedia; 6/2018 4 “The 5 Largest Drug Stores in the U.S.”; NPI;
June 28, 2016 5 “Liquor stores in the U.S.”; Manta; 2018
6 “Sizing up the Competition for Costco & Other
Warehouse Clubs”; Market Realist; January
2016 7 “Number of restaurants in the U.S. from 2011
to 2017”; Statista; 2018 8 “Bar & Nightclub Industry – Statistics &
Facts”; Statista; 2018
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4.2. U.S. VODKA MARKET
ANALYSIS9
4.2.1. FIGURES & TRENDS
The Vodka Distilleries industry has
experienced impressive growth in both
revenue and establishments over the
five years to 2017. Consumers have
increasingly gravitated toward
alcoholic beverages that offer high
quality, “craft”- based ingredients, and
a new class of regional
vodka distillers has
emerged to satisfy this new
consumer trend. As a
result, industry revenue
has increased at an
annualized rate of 6.0% to
$3.7 billion over the five
years to 2017,
while the number
of industry
enterprises has
increased at a
sharp annualized
rate of 28.3% to 212
distilling
companies over
the same period. The wide range of
available vodkas is expected to yield an
additional 6.0% revenue increase in
2017. Over the five years to 2022, the
Vodka Distilleries industry is
anticipated to grow at an annualized
rate of 4.5% to $4.6 billion.
9 “Vodka Distilleries in the US”; IBISWorld;
October 2017
During the five-year period, the
industry will benefit from expected
increases in per capita expenditure on
alcohol and disposable income, which
will drive demand for more high-value
industry goods. Nevertheless,
consumers of vodka have historically
demonstrated a degree of brand
loyalty, particularly to
brands that are imported
from distilleries across the
world. Many of the
industry’s most widely
consumed brands,
including Finlandia,
Stolichnaya, Grey Goose
and Absolut, are
not produced by
US distilleries and
are therefore major
competitors to
domestic vodka
brands. Total
imports of vodka
are expected to
increase at an annualized rate of 3.1%
over five years to 2022, which will put
increased pressure on industry
demand.
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4.2.3. INDUSTRY ANALYSIS
The Vodka Distilleries industry exhibits
a moderate level of market share
concentration, with the top four
companies expected to account for
57.8% of revenue in 2018. The
industry’s market share concentration
has significantly increased over the past
five years, as some of the industry’s
largest players have expanded their
presence in the industry through
mergers and acquisitions (M&S). More
importantly, however, is how some of
the industry largest players have grown
their brands over the past five years.
Both Deep Eddy and Fifth Generation’s
Tito’s Vodka have experienced
impressive growth during the period,
due in large part to changing consumer
preferences. As a result, industry
market share concentration has
expanded substantially from 33.1% in
2013.
Another significant component of the
industry’s concentration over the past
five years is the decline of industry
imports. Imports experienced a
significant decline over the past five
years, as a result of the boom in
domestic craft vodka distillers and
changing consumer preference.
10 “Whisky & Bourbon Distilleries in the US”;
IBISWorld; October 2017
4.3. U.S. WHISKEY MARKET
ANALYSIS10
4.3.1. FIGURES & TRENDS
The past five years have demonstrated
remarkable change for the Whiskey and
Bourbon Distilleries industry, not only
from the industry’s most dominant
distillers, but also from an emerging
class of independent micro distillers
from across the country. Although
industry household brands, such as Jim
Beam, Evan Williams, Jack Daniel’s and
Wild Turkey, have all invested in major
production facilities and new artisanal
stills, it is the growing class of craft
distilleries that provided the industry
with its recent boost.
Massive growth from independent
newcomers, like Kings County, Ole
Smoky and Catoctin Creek, has
contributed to a projected annualized
revenue growth of 6.2% during the
same period, reaching $3.0 billion.
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Passionate drinkers of whiskey are
more prone to purchase premium
whiskey, but the emerging
independent brewers in this industry
still must establish themselves as
legitimate contenders in the industry.
IBISWorld anticipates industry revenue
to increase at an annualized rate of 1.4%
rate over the five years to 2021, reaching
$3.2 billion.
4.3.2. INDUSTRY ANALYSIS
In 2018, the Whiskey and Bourbon
Distilleries industry is expected to
experience a moderate level of market
share concentration, with the four
largest industry operators accounting
for an estimated 57.3% of the industry.
While most of these companies
experienced a gradual rise in their
respective market shares over the past
five years, the increasing popularity of
local, independent craft distilleries
prohibited stronger growth. To combat
the growing popularity of these smaller
establishments, major distillers have
consolidated to achieve more
significant market share, including
Beam Suntory Inc. and Brown- Forman
Corp.
The remainder of the industry’s market
share is spread out over regional and
local brands. These operators have
smaller distilleries, most of which will
not expand beyond their regional or
niche markets. Still, there are fewer
such players compared with the wine
and beer industries. This is because
microbreweries and wineries are
relatively easy to set up, but distilleries
are more tightly regulated and
experience stricter tax rates due to the
higher alcohol content of their product.
However, demand for craft distilleries
is escalating. As a result, the industry is
experiencing an influx of enterprises.
The top global players in the Distilleries
industry are constantly buying and
selling brands among each other,
leading to considerable reallocation of
market share and brands in the
Whiskey and Bourbon Distilleries
industry. For example, in one of the
industry’s largest acquisitions to date,
Japanese food and beverage producer
Suntory purchased Jim Beam for $13.6
billion. These heavy acquisitions and
brand trading strategies are expected to
continue over the five years to 2023,
with the major players focusing their
positioning within their respective
niche markets.
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4.4. U.S. RUM MARKET ANALYSIS
4.4.1. FIGURES & TRENDS
Revenue in the Rum North America
segment is estimated to US $3.6 billion
in 2018. The market is expected to grow
annually by 0.2% (CAGR 2018-2021). In
the market for Rum, volume is expected
to amount to 173.0ML by 2021. The
average volume per person in the
market for Rum amounts to 0.5L in
2018. 11
The rise of the rum cocktails is a
successful trend, with the popularity of
concoctions such as mojito and Mai-tai
contributing greatly in the growth and
development of the rum market. A
great example is Havana Club – a rum
brand leader. It continues to focus its
marketing messages around lifestyle
and cocktails on social media and at
consumer events with great success.12
4.5. EUROPE ALCOHOL SPIRITS
MARKET ANALYSIS13
Revenue in the Spirits segment
amounts to US$43,458m in 2018. The
market is expected to grow annually by
1.9% (CAGR 2018-2021). In the
Alcoholic Drinks market, 4% of total
revenue will be generated through
online sales by 2021. The market for
Spirits is expected to show a volume
growth of 0.5% in 2019.
11 “Rum – North America”; Statista Market
Forecast; 2018
The average volume per person in the
market for Spirits amounts to 5.3L in
2018. The average price per unit in the
market for Spirits amounts to US$15.58
in 2018.
4.6. PROFILE OF DIRECT
COMPETITORS
4.6.1. DIAGEO
▪ Year Founded – 1997
▪ Headquarters – United
Kingdom
▪ Types of liquor – Scotch,
whiskey, gin, vodka, rum,
bourbon, and tequila
▪ Revenues – $15.3B (2017)
▪ Overview
o Was the world’s largest
distiller until being
overtaken in 2017
o Sells products in over 180
countries
o Has offices in approx. 80
countries
o Over 30,000 employees
o Brands include Smirnoff,
Johnnie Walker, Baileys, and
Guinness
12 “A Rum Business – Market Trends in 2017”;
Wild West; February 20, 2017 13 “Europe Spirits Highlights”; Statista; 2018
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4.6.2. CONSTELLATION BRANDS
▪ Year Founded – 1945
▪ Headquarters – New York, USA
▪ Types of liquor – Wine, beer,
scotch, whiskey, gin, vodka,
rum, bourbon, and tequila
▪ Revenues – $7.32B (2017)
▪ Overview
o World leader in premium
wine
o More than 100 wines, beers,
and spirits
o Owns approximately 40
facilities
o Employs 9,000 people
o Acquired by Svedka in
March 2007 for
approximately US$384
million
4.6.3. BACARDI LIMITED
▪ Year Founded – 1862
▪ Headquarters – Cuba
▪ Types of liquor – Scotch,
whiskey, gin, vodka, rum,
bourbon, and tequila
▪ Revenues – $5.5B (2017)
▪ Overview
o Largest privately held,
family-owned spirits
company in the world
o Bacardi Limited refers to the
Bacardi group of companies,
including Bacardi Int’l
Limited
o Over 200 brands/labels
o Employs 6,000 people
o Manufactures at 29 facilities
in 16 markets on 4 continents
and sells in more than 150
countries
4.6.4. PERNOD RICARD
▪ Year Founded – 1975
▪ Headquarters – France
▪ Types of liquor – Scotch,
whiskey, gin, vodka, rum,
bourbon, and tequila
▪ Revenues – $9.8B (2017)
▪ Overview
o World’s 2nd largest wine &
spirits seller
o Acquired distilled beverage
division and many holdings
from Seagram
o Over 18,000 employees
O Major legal battle with The
Havana Club brand
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4.6.5. SUNTORY HOLDINGS LIMITED
▪ Year Founded - 1899
▪ Headquarters - Japan
▪ Types of liquor – Scotch,
whiskey, gin, vodka, rum,
bourbon, and tequila
▪ Revenues – $1.19B (2017)
▪ Overview
o Make sandwiches and soft
drinks, as well as liquor
o 1 of the largest makers of
distilled beverages in the
world
o 1 of 1st Asian companies to
use a U.S. celebrity (Bill
Murray) for marketing
o Acquired Beam, Inc (2014)
4.7. COMPETITIVE ANALYSIS
Diageo is one of the world's leading
premium drinks businesses with a
collection of brands that include spirits,
beer, and wine; though, it still a
relatively young company. None of
Diageo’s products are focused on
REMOVED INFO.
Bacardi Limited is the largest privately
held spirits company in the world;
though, XYZ will have a competitive
advantage over Bacardi as none of
Bacardi’s 200 brands are REMOVED
INFO like XYZ.
Constellation Brands is a leading liquor
brand with a wide range of beer, wine,
and liquor products. XYZ will have a
competitive advantage due to its
competitive pricing, superior quality,
and REMOVED INFO.
Pernod Ricard is a French company that
produces distilled beverages. Much
like Diageo, Pernod Ricard has a greater
variety of products compared to XYZ;
however, XYZ’s focus and dedication to
REMOVED INFO.
Suntory Holdings Limited is one of the
oldest companies in the distribution of
alcoholic beverages in Japan. XYZ’s
sole focus on REMOVED INFO alcohol
will yield a competitive advantage to
XYZ, as Suntory also focused on food
and drinks.
As XYZ will be the only company in the
world that produces alcohol with
REMOVED INFO and will pursue an
aggressive marketing campaign, it
should be able to establish itself as the
leader within this segment of the
alcohol industry and penetrate the U.S.
and global vodka, rum, and whiskey
markets.
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5. MARKETING PLAN
5.1. OVERVIEW & STRATEGY
XYZ will implement a dynamic
marketing campaign to drive
business growth and maximize
branding within the liquor
production and distribution industry.
5.2. BRANDING STRATEGY
XYZ will build credibility in the
liquor production and distribution
industry while focusing the branding
strategy on REMOVED INFO. XYZ
will assess the market based upon its
geographic location and the
competitive landscape.
5.3. INTERNET MARKETING
XYZ’s Internet marketing will
include display advertising, search
engine marketing (Google, Bing,
others), PPC advertising, social
media, and video marketing to
promote XYZ’s liquor products to
potential and existing customers as
well as consumers. XYZ will ensure
that XYZ’s website and articles will
be found upon searches related to
liquor. XYZ’s search engine
optimization efforts will include link
building, blog commenting, social
network marketing, and article
marketing. XYZ will maintain a
profile on Facebook, Instagram, Twitter,
Pinterest, and other social media.
5.4. PRINT ADVERTISING
XYZ will utilize print advertising in
magazines that appeal to its
demographic. Examples of such
magazines in the U.S. that XYZ can
advertise in are:
▪ XYZ Magazine
▪ XYZ Magazine
▪ XYZ Magazine
▪ XYZ Advocate
▪ XYZ Magazine
▪ XYZ Advocate
▪ XYZ Magazine
5.5. PUBLIC RELATIONS
XYZ will be featured in magazine
articles, newspaper articles, TV news,
and online articles.
5.6. AFFILIATE MARKETING
XYZ will send marketing materials to
bars, restaurants, and other
establishments to spread brand
awareness and word-of-mouth
referrals from bartenders, servers,
cashiers, and others.
5.7. TELEVISION ADVERTISING
XYZ will utilize TV advertising on
regional and national channels that
appeal to its demographic. An
emphasis will be placed on TV
advertising during sporting events.
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6. OPERATIONAL PLAN
6.1. OVERVIEW
6.1.1. HOURS OF OPERATION
XYZ will conduct normal hours of
business operations, which will be
from 9AM to 6PM on Monday to
Friday.
6.1.2. LEGAL STRUCTURE
XYZ was established as a limited
liability company in the state of ABC.
6.1.3. GROWTH PLAN
Upon growth, XYZ will move to a
larger office.
6.2. MANUFACTURING
All three of the Company’s distilled
spirts products will be manufactured
by XYZ in ABC, which is a leading
distilled spirits manufacturer.
6.3. PACKAGING & LABELS
After being manufactured, the
distilled spirits will be delivered to
ABC, which will package and labels
the Company’s three types of
distilled spirits products.
6.4. INVENTORY MANAGEMENT
XYZ’s staff and management will
maintain a sufficient and reasonable
stock of supplies to conduct day-to-
day business. XYZ’s electronic
logistic system will track inventory.
6.5. COMPUTER HARDWARE &
SOFTWARE
XYZ will obtain the essential
computer hardware and software
systems to support operations
including inventory management
systems, payroll administration
programs, sales management tools,
managerial accounting, and financial
analysis and reporting, as well as
performance management.
6.6. LEGAL & INSURANCE
XYZ will retain the services of a
corporate attorney to handle all legal
matters related to the operation of the
business including contract
administration, employment, and
corporate business issues. XYZ will
obtain the required insurance and
permits to manage the risks are
associated with this type of business.
6.7. ACCOUNTING
XYZ will outsource all accounting
responsibilities to a full-time
accountant and CPA, who will
produce monthly reports for A/P,
A/R, payroll, and operational
expenses.
6.8. LICENSES & PERMITS
XYZ has a business license from the
city of ABC and a Seller’s permit from
the ABC Board of Equalization.
17 | P a g e
7. MANAGEMENT & STAFF
7.1. EXECUTIVE MANAGEMENT
7.1.1. JOHN DOE, CHIEF EXECUTIVE
OFFICER
REMOVED INFO
7.1.2. JOHN DOE, CHIEF
OPERATING OFFICER
REMOVED
INFO
18 | P a g e
7.1.3. JOHN DOE, CHIEF FINANCIAL
OFFICER
REMOVED INFO
7.2. BOARD & ADVISORS
7.2.1. JOHN DOE, CHAIRMAN OF
THE BOARD
REMOVED INFO
19 | P a g e
8. FINANCING & GROWTH STRATEGY
8.1. CAPITAL REQUIREMENTS
XYZ seeks to raise $12,000,000 of
which an estimated $695,000 will be
used for capital expenditures and the
remaining $11,305,000 will be
available for working capital to
support marketing, operations, and
inventory.
XYZ’s owners have already invested
$x.x million into XYZ, which includes
REMOVED INFO.
8.2. RISK ANALYSIS
XYZ is a start-up company and will
be managed by a group of
professional and seasoned business
owners. The risks associated with
this venture are related to future
uncertainties in the liquor industry
and fall within the medium risk
segment of the investment spectrum.
Management believes that given the
current trends in the economy that
there will be strong demand for the
products that XYZ delivers to the
marketplace.
While there can be no guarantees that
XYZ will be able to effectively
manage the business risks associated
with the economic cycle,
management is very confident that it
will be able to effectively increase
revenues throughout time.
Capital Expenditures: Cost
Machine Tooling 500,000
Packaging Design 75,000
Marketing Materials Design 35,000
Website Design 10,000
Computer Hardware & Software 25,000
Office Furniture 50,000
Total capital expenditures 695,000
Working capital:
Marketing expenses 6,250,000
G&A expenses 2,805,000
Inventory 2,250,000
Total working capital 11,305,000
Total capital requirements 12,000,000
Table 1
XYZ Spirits, LLCCapital Requirements
20 | P a g e
9. FINANCIALS
9.1. SALES
9.1.1. SALES ASSUMPTIONS
Year 1 Year 2 Year 3 Year 4 Year 5
Drug Stores: 15.0% 10.0% 6.0% 4.0% 3.0% monthly growth rate
# of Drug Store Bottles Sold 60 62.5 65.0 67.5 70.0 turns/store
XYZ Vodka 200 ml - Drug Stores 16.0% 16.0% 16.0% 16.0% 16.0% of Drug Store bottles sold
XYZ Vodka 375 ml - Drug Stores 16.0% 16.0% 16.0% 16.0% 16.0% of Drug Store bottles sold
XYZ Vodka 750 ml - Drug Stores 20.0% 20.0% 20.0% 20.0% 20.0% of Drug Store bottles sold
XYZ Vodka 1 L - Drug Stores 15.0% 15.0% 15.0% 15.0% 15.0% of Drug Store bottles sold
XYZ Vodka 200 ml - Drug Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Drug Store bottles sold
XYZ Vodka 375 ml - Drug Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Drug Store bottles sold
XYZ Whiskey 750 ml - Drug Stores 5.0% 5.0% 5.0% 5.0% 5.0% of Drug Store bottles sold
XYZ Whiskey 1 L - Drug Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Drug Store bottles sold
XYZ Rum 200 ml - Drug Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Drug Store bottles sold
XYZ Rum 375 ml - Drug Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Drug Store bottles sold
XYZ Rum 750 ml - Drug Stores 5.0% 5.0% 5.0% 5.0% 5.0% of Drug Store bottles sold
XYZ Rum 1 L - Drug Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Drug Store bottles sold
100.0% 100.0% 100.0% 100.0% 100.0%
Grocery Stores:
# of Grocery Stores 15.0% 10.0% 6.0% 4.0% 3.0% monthly growth rate
# of Grocery Store Bottles Sold 62.5 65.0 67.5 70.0 72.5 turns/store
XYZ 200 ml - Grocery Stores 16.0% 16.0% 16.0% 16.0% 16.0% of Grocery Store bottles sold
XYZ Vodka 375 ml - Grocery Stores 16.0% 16.0% 16.0% 16.0% 16.0% of Grocery Store bottles sold
XYZ Vodka 750 ml - Grocery Stores 20.0% 20.0% 20.0% 20.0% 20.0% of Grocery Store bottles sold
XYZ Vodka 1 L - Grocery Stores 15.0% 15.0% 15.0% 15.0% 15.0% of Grocery Store bottles sold
XYZ Whiskey 200 ml - Grocery Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Grocery Store bottles sold
XYZ Whiskey 375 ml - Grocery Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Grocery Store bottles sold
XYZ Whiskey 750 ml - Grocery Stores 5.0% 5.0% 5.0% 5.0% 5.0% of Grocery Store bottles sold
XYZ Whiskey 1 L - Grocery Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Grocery Store bottles sold
XYZ Rum 200 ml - Grocery Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Grocery Store bottles sold
XYZ Rum 375 ml - Grocery Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Grocery Store bottles sold
XYZ Rum 750 ml - Grocery Stores 5.0% 5.0% 5.0% 5.0% 5.0% of Grocery Store bottles sold
XYZ Rum 1 L - Grocery Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Grocery Store bottles sold
100.0% 100.0% 100.0% 100.0% 100.0%
Mass Market Retail Stores:
# of Mass Market Retail Stores 15.0% 10.0% 7.0% 4.0% 2.5% monthly growth rate
# of Mass Market Retail Store Bottles Sold 57.5 60.0 62.5 65.0 67.5 turns/store
XYZ Vodka 200 ml - Mass Market Retail Stores 16.0% 16.0% 16.0% 16.0% 16.0% of Mass Market Retail bottles sold
XYZ Vodka 375 ml - Mass Market Retail Stores 16.0% 16.0% 16.0% 16.0% 16.0% of Mass Market Retail bottles sold
XYZ Vodka 750 ml - Mass Market Retail Stores 20.0% 20.0% 20.0% 20.0% 20.0% of Mass Market Retail bottles sold
XYZ Vodka 1 L - Mass Market Retail Stores 15.0% 15.0% 15.0% 15.0% 15.0% of Mass Market Retail bottles sold
XYZ Whiskey 200 ml - Mass Market Retail Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Mass Market Retail bottles sold
XYZ Whiskey 375 ml - Mass Market Retail Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Mass Market Retail bottles sold
XYZ Whiskey 750 ml - Mass Market Retail Stores 5.0% 5.0% 5.0% 5.0% 5.0% of Mass Market Retail bottles sold
XYZ Whiskey 1 L - Mass Market Retail Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Mass Market Retail bottles sold
XYZ Rum 200 ml - Mass Market Retail Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Mass Market Retail bottles sold
XYZ Rum 375 ml - Mass Market Retail Stores 4.0% 4.0% 4.0% 4.0% 4.0% of Mass Market Retail bottles sold
XYZ Rum 750 ml - Mass Market Retail Stores 5.0% 5.0% 5.0% 5.0% 5.0% of Mass Market Retail bottles sold
XYZ Rum 1 L - Mass Market Retail Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Mass Market Retail bottles sold
100.0% 100.0% 100.0% 100.0% 100.0%
Liquor Stores:
# of Liquor Stores 15.0% 10.0% 6.0% 4.0% 3.0% monthly growth rate
# of Liquor Store Bottles Sold 40.0 41.0 42.0 43.0 44.0 turns/store
XYZ Vodka 50 ml - Liquor Stores 10.0% 10.0% 10.0% 10.0% 10.0% of Liquor Store bottles sold
XYZ Vodka 200 ml - Liquor Stores 12.5% 12.5% 12.5% 12.5% 12.5% of Liquor Store bottles sold
XYZ Vodka 375 ml - Liquor Stores 14.0% 14.0% 14.0% 14.0% 14.0% of Liquor Store bottles sold
XYZ Vodka 750 ml - Liquor Stores 16.0% 16.0% 16.0% 16.0% 16.0% of Liquor Store bottles sold
XYZ Vodka 1 L - Liquor Stores 12.5% 12.5% 12.5% 12.5% 12.5% of Liquor Store bottles sold
XYZ Whiskey 50 ml - Liquor Stores 2.5% 2.5% 2.5% 2.5% 2.5% of Liquor Store bottles sold
XYZ Whiskey 200 ml - Liquor Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Liquor Store bottles sold
XYZ Whiskey 375 ml - Liquor Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Liquor Store bottles sold
XYZ Whiskey 750 ml - Liquor Stores 4.5% 4.5% 4.5% 4.5% 4.5% of Liquor Store bottles sold
XYZ Whiskey 1 L - Liquor Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Liquor Store bottles sold
XYZ Rum 50 ml - Liquor Stores 2.5% 2.5% 2.5% 2.5% 2.5% of Liquor Store bottles sold
XYZ Rum 200 ml - Liquor Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Liquor Store bottles sold
XYZ Rum 375 ml - Liquor Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Liquor Store bottles sold
XYZ Rum 750 ml - Liquor Stores 4.5% 4.5% 4.5% 4.5% 4.5% of Liquor Store bottles sold
XYZ Rum 1 L - Liquor Stores 3.5% 3.5% 3.5% 3.5% 3.5% of Liquor Store bottles sold
100.0% 100.0% 100.0% 100.0% 100.0%
E-Tailers:
# of E-Tailer Bottles Sold 15.0% 10.0% 6.0% 4.0% 3.0% monthly growth rate
XYZ Vodka 375 ml - E-tailers 25.0% 25.0% 25.0% 25.0% 25.0% of E-tailer bottles sold
XYZ Vodka 750 ml - E-tailers 30.0% 30.0% 30.0% 30.0% 30.0% of E-tailer bottles sold
XYZ Vodka 1 L - E-tailers 25.0% 25.0% 25.0% 25.0% 25.0% of E-tailer bottles sold
XYZ Whiskey 375 ml - E-tailers 6.5% 6.5% 6.5% 6.5% 6.5% of E-tailer bottles sold
XYZ Whiskey 750 ml - E-tailers 8.0% 8.0% 8.0% 8.0% 8.0% of E-tailer bottles sold
XYZ Whiskey 1 L - E-tailers 8.0% 8.0% 8.0% 8.0% 8.0% of E-tailer bottles sold
XYZ Rum 375 ml - E-tailers 6.5% 6.5% 6.5% 6.5% 6.5% of E-tailer bottles sold
XYZ Rum 750 ml - E-tailers 8.0% 8.0% 8.0% 8.0% 8.0% of E-tailer bottles sold
XYZ Rum 1 L - E-tailers 8.0% 8.0% 8.0% 8.0% 8.0% of E-tailer bottles sold
100.0% 100.0% 100.0% 100.0% 100.0%
Food Service:
# of Food Service Stores 15.0% 10% 6.0% 4% 3.0% monthly growth rate
# of Food Service Bottles Sold 15.0 16.0 17.0 18.0 19.0 turn per store
XYZ Vodka 1 L - Food Service 67.0% 67.0% 67.0% 67.0% 67.0% of Food Service bottles sold
XYZ Whiskey 1 L - Food Service 16.5% 16.5% 16.5% 16.5% 16.5% of Food Service bottles sold
XYZ Rum 1 L - Food Service 16.5% 16.5% 16.5% 16.5% 16.5% of Food Service bottles sold
100.0% 100.0% 100.0% 100.0% 100.0%
Bars/Nightclubs:
# of Bars/Nightclubs 15.0% 10.0% 6.0% 4.0% 3.0% monthly growth rate
# of Bar/Nightclub Bottles Sold 40 42.5 45 47.5 50 turns per store
XYZ Vodka 1 L - Bars/Nightclubs 67.0% 67.0% 67.0% 67.0% 67.0% of Bar/Nightclub bottles sold
XYZ Whiskey 1 L - Bars/Nightclubs 16.5% 16.5% 16.5% 16.5% 16.5% of Bar/Nightclub bottles sold
XYZ Rum 1 L - Bars/Nightclubs 16.5% 16.5% 16.5% 16.5% 16.5% of Bar/Nightclub bottles sold
21 | P a g e
Drug Store Revenues:
XYZ Vodka 200 ml - Drug Stores $5.00 $5.13 $5.25 $5.38 $5.52 per bottle sold
XYZ Vodka 375 ml - Drug Stores $9.50 $9.74 $9.98 $10.23 $10.49 per bottle sold
XYZ Vodka 750 ml - Drug Stores $17.00 $17.43 $17.86 $18.31 $18.76 per bottle sold
XYZ Vodka 1 L - Drug Stores $19.00 $19.48 $19.96 $20.46 $20.97 per bottle sold
XYZ Whiskey 200 ml - Drug Stores $6.00 $6.15 $6.30 $6.46 $6.62 per bottle sold
XYZ Whiskey 375 ml - Drug Stores $10.50 $10.76 $11.03 $11.31 $11.59 per bottle sold
XYZ Whiskey 750 ml - Drug Stores $18.00 $18.45 $18.91 $19.38 $19.87 per bottle sold
XYZ Whiskey 1 L - Drug Stores $21.00 $21.53 $22.06 $22.61 $23.18 per bottle sold
XYZ Rum 200 ml - Drug Stores $5.50 $5.64 $5.78 $5.92 $6.07 per bottle sold
XYZ Rum 375 ml - Drug Stores $10.00 $10.25 $10.51 $10.77 $11.04 per bottle sold
XYZ Rum 750 ml - Drug Stores $17.50 $17.94 $18.39 $18.85 $19.32 per bottle sold
XYZ Rum 1 L - Drug Stores $19.50 $19.99 $20.49 $21.00 $21.52 per bottle sold
Total Drug Store Revenues
Grocery Store Revenues:
XYZ Vodka 200 ml - Grocery Stores $5.00 $5.13 $5.25 $5.38 $5.52 per bottle sold
XYZ Vodka 375 ml - Grocery Stores $9.50 $9.74 $9.98 $10.23 $10.49 per bottle sold
XYZ Vodka 750 ml - Grocery Stores $17.00 $17.43 $17.86 $18.31 $18.76 per bottle sold
XYZ Vodka 1 L - Grocery Stores $19.00 $19.48 $19.96 $20.46 $20.97 per bottle sold
XYZ Whiskey 200 ml - Grocery Stores $6.00 $6.15 $6.30 $6.46 $6.62 per bottle sold
XYZ Whiskey 375 ml - Groery Stores $10.50 $10.76 $11.03 $11.31 $11.59 per bottle sold
XYZ Whiskey 750 ml - Grocery Stores $18.00 $18.45 $18.91 $19.38 $19.87 per bottle sold
XYZ Whiskey 1 L - Grocery Stores $21.00 $21.53 $22.06 $22.61 $23.18 per bottle sold
XYZ Rum 200 ml - Grocery Stores $5.50 $5.64 $5.78 $5.92 $6.07 per bottle sold
XYZ Rum 375 ml - Grocery Stores $10.00 $10.25 $10.51 $10.77 $11.04 per bottle sold
XYZ Rum 750 ml - Grocery Stores $17.50 $17.94 $18.39 $18.85 $19.32 per bottle sold
XYZ Rum 1 L - Grocery Stores $19.50 $19.99 $20.49 $21.00 $21.52 per bottle sold
Total Grocery Store Revenues
Liquor Store Revenues:
XYZ Vodka 50 ml - Liquor Stores $3.00 $3.08 $3.15 $3.23 $3.31 per bottle sold
XYZ Vodka 200 ml - Liquor Stores $5.00 $5.13 $5.25 $5.38 $5.52 per bottle sold
XYZ Vodka 375 ml - Liquor Stores $9.50 $9.74 $9.98 $10.23 $10.49 per bottle sold
XYZ Vodka 750 ml - Liquor Stores $17.00 $17.43 $17.86 $18.31 $18.76 per bottle sold
XYZ Vodka 1 L - Liquor Stores $19.00 $19.48 $19.96 $20.46 $20.97 per bottle sold
XYZ Whiskey 50 ml - Liquor Stores $3.50 $3.59 $3.68 $3.77 $3.86 per bottle sold
XYZ Whiskey 200 ml - Liquor Stores $6.00 $6.15 $6.30 $6.46 $6.62 per bottle sold
XYZ Whiskey 375 ml - Liquor Stores $10.50 $10.76 $11.03 $11.31 $11.59 per bottle sold
XYZ Whiskey 750 ml - Liquor Stores $18.00 $18.45 $18.91 $19.38 $19.87 per bottle sold
XYZ Whiskey 1 L - Liquor Stores $21.00 $21.53 $22.06 $22.61 $23.18 per bottle sold
XYZ Rum 50 ml - Liquor Stores $3.25 $3.33 $3.41 $3.50 $3.59 per bottle sold
XYZ Rum 200 ml - Liquor Stores $5.50 $5.64 $5.78 $5.92 $6.07 per bottle sold
XYZ Rum 375 ml - Liquor Stores $10.00 $10.25 $10.51 $10.77 $11.04 per bottle sold
XYZ Rum 750 ml - Liquor Stores $17.50 $17.94 $18.39 $18.85 $19.32 per bottle sold
XYZ Rum 1 L - Liquor Stores $19.50 $19.99 $20.49 $21.00 $21.52 per bottle sold
Total Liquor Store Revenues
Mass Market Retailer Revenues
XYZ Vodka 200 ml - Mass Market Retailers $5.00 $5.13 $5.25 $5.38 $5.52 per bottle sold
XYZ Vodka 375 ml - Mass Market Retailers $9.50 $9.74 $9.98 $10.23 $10.49 per bottle sold
XYZ Vodka 750 ml - Mass Market Retailers $17.00 $17.43 $17.86 $18.31 $18.76 per bottle sold
XYZ Vodka 1 L - Mass Market Retailers $19.00 $19.48 $19.96 $20.46 $20.97 per bottle sold
XYZ Whiskey 200 ml -Mass Market Retailers $6.00 $6.15 $6.30 $6.46 $6.62 per bottle sold
XYZ Whiskey 375 ml -Mass Market Retailers $10.50 $10.76 $11.03 $11.31 $11.59 per bottle sold
XYZ Whiskey 750 ml - Mass Market Retailers $18.00 $18.45 $18.91 $19.38 $19.87 per bottle sold
XYZ Whiskey 1 L - Mass Market Retailers $21.00 $21.53 $22.06 $22.61 $23.18 per bottle sold
XYZ Rum 200 ml -Mass Market Retailers $5.50 $5.64 $5.78 $5.92 $6.07 per bottle sold
XYZ Rum 375 ml -Mass Market Retailers $10.00 $10.25 $10.51 $10.77 $11.04 per bottle sold
XYZ Rum 750 ml -Mass Market Retailers $17.50 $17.94 $18.39 $18.85 $19.32 per bottle sold
XYZ Rum 1 L -Mass Market Retailers $19.50 $19.99 $20.49 $21.00 $21.52 per bottle sold
Total Mass Market Retailer Revenues
E-tailer Revenues
XYZ Vodka 375 ml - E-tailers $9.50 $9.74 $9.98 $10.23 $10.49 per bottle sold
XYZ Vodka 750 ml - E-tailers $17.00 $17.43 $17.86 $18.31 $18.76 per bottle sold
XYZ Vodka 1 L - E-tailers $19.00 $19.48 $19.96 $20.46 $20.97 per bottle sold
XYZ Whiskey 375 ml - E-tailers $10.50 $10.76 $11.03 $11.31 $11.59 per bottle sold
XYZ Whiskey 750 ml - E-tailers $18.00 $18.45 $18.91 $19.38 $19.87 per bottle sold
XYZ Whiskey 1 L - E-tailers $21.00 $21.53 $22.06 $22.61 $23.18 per bottle sold
XYZ Rum 375 ml - E-tailers $10.00 $10.25 $10.51 $10.77 $11.04 per bottle sold
XYZ Rum 750 ml - E-tailers $17.50 $17.94 $18.39 $18.85 $19.32 per bottle sold
XYZ Rum 1 L - E-tailers $19.50 $19.99 $20.49 $21.00 $21.52 per bottle sold
Total E-Tailer Revenues
Food Service Revenues
XYZ Vodka 1 L - Food Service $19.00 $19.48 $19.96 $20.46 $20.97 per bottle sold
XYZ Whiskey 1 L - Food Service $21.00 $21.53 $22.06 $22.61 $23.18 per bottle sold
XYZ Rum 1 L - Food Service $19.50 $19.99 $20.49 $21.00 $21.52 per bottle sold
Total Food Service Revenues
Bar/Nightclub Revenues:
XYZ Vodka 1 L - Bars/Nightclubs $19.00 $19.48 $19.96 $20.46 $20.97 per bottle sold
XYZ Whiskey 1 L - Bars/Nightclubs $21.00 $21.53 $22.06 $22.61 $23.18 per bottle sold
XYZ Rum 1 L - Bars/Nightclubs $19.50 $19.99 $20.49 $21.00 $21.52 per bottle sold
Total Bar/Nightclub Revenues
Total Revenues
Cost of Goods Sold 47.5% 45.0% 45.0% 45.0% 45.0% of sales
Cost of Distribution 12.0% 11.5% 11.0% 10.5% 10% of sales
Cost of Freight 3.5% 4.0% 4.5% 5.0% 5.0% of sales
22 | P a g e
9.1.2. SALES PROJECTIONS
9.2. EXPENSES
9.2.1. G & A EXPENSES
Year 1 Year 2 Year 3 Year 4 Year 5
Sales (Bottles Sold):
# of Drug Store Bottles Sold 69,604 273,592 678,862 1,239,635 1,925,301
# of Grocery Store Bottles Sold 43,503 170,995 424,289 774,772 1,243,261
# of Mass Market Retail Store Bottles Sold 34,802 136,796 339,431 619,817 930,693
# of Liquor Store Bottles Sold 52,203 201,911 493,480 888,405 1,361,463
# of E-Tailer Bottles Sold 10,151 38,303 91,385 183,885 370,013
# of Food Service Bottles Sold 10,876 43,775 110,968 206,606 326,614
# of Bar/Nightclub Bottles Sold 58,003 232,553 587,476 1,090,419 1,719,019
Revenues:
Total Drug Store Revenues $907,810 $3,657,534 $9,302,289 $17,411,098 $27,717,560
Total Grocery Store Revenues $567,381 $2,285,959 $5,813,931 $10,881,936 $17,898,576
Total Liquor Store Revenues $251,721 $258,014 $264,464 $271,076 $277,853
Total Mass Market Retailer Revenues $187,812 $330,181 $338,436 $346,897 $355,569
Total E-Tailer Revenues $360,346 $770,978 $1,885,428 $3,888,697 $8,020,443
Total Food Service Revenues $1,351,188 $4,627,303 $11,981,732 $22,795,369 $36,834,739
Total Bar/Nightclub Revenues $1,125,990 $4,627,303 $11,981,732 $22,795,369 $36,834,739
Total Revenues $4,752,248 $16,557,271 $41,568,012 $78,390,442 $127,939,478
Cost of Sales:
Cost of Goods Sold $2,257,318 $7,450,772 $18,705,605 $35,275,699 $57,572,765
Cost of Distribution $570,270 $1,904,086 $4,572,481 $8,230,996 $12,793,948
Cost of Freight $166,329 $662,291 $1,662,720 $3,527,570 $6,396,974
Total Cost of Sales $2,993,916 $10,017,149 $24,940,807 $47,034,265 $76,763,687
Gross Margin $1,758,332 $6,540,122 $16,627,205 $31,356,177 $51,175,791
XYZ Spirits, LLC
Table 2
Sales Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Wages & salaries 432,000 737,850 1,111,781 1,205,062 1,370,636
Payroll expense 34,560 59,028 88,943 96,405 109,651
Benefits 25,920 44,271 66,707 72,304 82,238
Liability insurance 71,284 248,359 623,520 1,175,857 1,919,092
Legal & consulting 120,000 150,000 180,000 207,000 227,700
Supplies 18,000 22,500 27,000 31,050 34,155
Telephone & communications 30,000 37,500 45,000 51,750 56,925
Utilities/Internet 12,000 15,000 18,000 20,700 22,770
Travel 60,000 75,000 90,000 103,500 113,850
Meals & entertainment 30,000 37,500 45,000 51,750 56,925
Auto mileage expenses 30,000 37,500 45,000 51,750 56,925
Total general & administrative expenses $863,764 $1,464,508 $2,340,951 $3,067,128 $4,050,867
General & Administrative Expenses
XYZ Spirits, LLC
Table 3
23 | P a g e
9.2.2. MARKETING EXPENSES
9.2.3. STAFF HEADCOUNT & SALARIES
Year 1 Year 2 Year 3 Year 4 Year 5
Marketing materials 12,500 13,800 15,180 15,939 16,337
Internet marketing 900,000 1,125,000 1,350,000 1,552,500 1,707,750
Print advertising 900,000 1,125,000 1,350,000 1,552,500 1,707,750
Public relations 210,000 262,500 315,000 362,250 398,475
Television Advertising 2,000,000 3,750,000 4,500,000 5,175,000 5,692,500
Celebrity Endorsement 1,750,000 2,333,275 3,000,000 3,250,000 3,500,000
Total marketing & advertising $5,772,500 $8,609,575 $10,530,180 $11,908,189 $9,522,812
Marketing Expenses
XYZ Spirits, LLC
Table 4
Year 1 Year 2 Year 3 Year 4 Year 5
Chief Executive Officer 1.0 1.0 1.0 1.0 1.0
Chief Operating Officer 1.0 1.0 1.0 1.0 1.0
Chief Financial Officer 1.0 1.0 1.0 1.0 1.0
Operations Manager 0.0 1.0 2.0 2.0 3.0
Administrative Assistant 1.0 1.0 3.0 3.0 3.0
Account Executive 0.0 2.0 3.0 4.0 4.0
Accountant 1.0 1.0 2.0 2.0 2.0
Total Headcount 5.0 12.0 20.0 23.0 24.0
Staff Headcount (Year-End Totals)
XYZ Spirits, LLC
Table 5
Year 1 Year 2 Year 3 Year 4 Year 5
Chief Executive Officer $144,000 $158,400 $166,320 $170,478 $174,740
Chief Operating Officer $96,000 $105,600 $110,880 $113,652 $116,493
Chief Financial Officer $96,000 $105,600 $110,880 $113,652 $116,493
Operations Manager $78,000 $85,800 $87,945 $90,144 $92,397
Administrative Assistant $45,000 $42,000 $43,050 $42,000 $43,050
Account Executive $69,000 $72,450 $74,261 $76,118 $78,021
Accountant $51,000 $53,550 $54,889 $56,261 $57,667
XYZ Spirits, LLC
Table 6
Staff Salaries
24 | P a g e
9.3. PRO-FORMA FINANCIAL STATEMENT ANNUAL SUMMARIES
9.3.1. PRO-FORMA INCOME STATEMENT
Year 1 Year 2 Year 3 Year 4 Year 5
Revenues:
Total Drug Store Revenues $907,810 $3,657,534 $9,302,289 $17,411,098 $27,717,560
Total Grocery Store Revenues $567,381 $2,285,959 $5,813,931 $10,881,936 $17,898,576
Total Liquor Store Revenues $251,721 $258,014 $264,464 $271,076 $277,853
Total Mass Market Retailer Revenues $187,812 $330,181 $338,436 $346,897 $355,569
Total E-Tailer Revenues $360,346 $770,978 $1,885,428 $3,888,697 $8,020,443
Total Food Service Revenues $1,351,188 $4,627,303 $11,981,732 $22,795,369 $36,834,739
Total Bar/Nightclub Revenues $1,125,990 $4,627,303 $11,981,732 $22,795,369 $36,834,739
Total Sales $4,752,248 $16,557,271 $41,568,012 $78,390,442 $127,939,478
Total Cost of Sales $2,993,916 $10,017,149 $24,940,807 $47,034,265 $76,763,687
Expenses:
Marketing expense 5,772,500 8,609,575 10,530,180 11,908,189 13,022,812
General & administrative 833,764 1,427,008 2,295,951 3,015,378 3,993,942
Expenses - Total 6,606,264 10,036,583 12,826,131 14,923,567 17,016,755
Net operating income: ($4,847,932) ($3,496,461) $3,801,074 $16,432,610 $34,159,036
Depreciation 30,310 30,310 30,310 30,310 30,310
Interest earned 279,616 117,554 148,547 493,899 1,224,411
Interest expense 0 0 0 0 0
Income before taxes (4,598,625) (3,409,217) 3,919,311 16,896,200 35,353,138
Income taxes 0 0 0 0 0
Net income ($4,598,625) ($3,409,217) $3,919,311 $16,896,200 $35,353,138
Projected Income Statement
Schedule 1
XYZ Spirits, LLC
-160%
-140%
-120%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
Y1Q1
Y1Q2
Y1Q3
Y1Q4
Y2Q1
Y2Q2
Y2Q3
Y2Q4
Y3Q1
Y3Q2
Y3Q3
Y3Q4
Y4Q1
Y4Q2
Y4Q3
Y4Q4
Y5Q1
Y5Q2
Y5Q3
Y5Q4
Net Profit Margin
25 | P a g e
9.3.2. PRO-FORMA STATEMENT OF CASH FLOWS
9.3.3. PRO-FORMA BALANCE SHEET
Year 1 Year 2 Year 3 Year 4 Year 5
Cash flows from operations
Net Income: ($4,598,625) ($3,409,217) $3,919,311 $16,896,200 $35,353,138
Depreciation 30,310 30,310 30,310 30,310 30,310
Increase (decrease) in accrued liabilities 20,520 14,528 17,762 4,431 7,865
Increase (decrease) in accrued taxes 0 0 0 0 0
Increase (decrease) in accounts payable 396,840 110,653 144,115 113,545 109,578
(Increase) decrease in accounts receivable (72,847) (125,747) (241,300) (334,391) (446,125)
(Increase) decrease in inventory (414,689) (545,609) (916,466) (2,216,202) (7,574,318)
Net cash flows from operations ($4,638,491) ($3,925,082) $2,953,732 $14,493,892 $27,480,447
Cash flows from investing activities:
Capital expenditures 190,000 0 0 20,000 0
Prepaid expenses 0 0 0 0 0
Net cash flows from investing $190,000 $0 $0 $20,000 $0
Cash flows from financing:
Proceeds from issuance of debt 0 0 0 0 0
Proceeds from sale of stock 12,000,000 0 0 0 0
Debt service payments 0 0 0 0 0
Net cash flows from financing 12,000,000 0 0 0 0
Net increase (decrease) in cash 7,171,509 (3,925,082) 2,953,732 14,473,892 27,480,447
Beginning cash balance - 7,171,509 3,246,427 6,200,159 20,674,051
Ending cash balance $7,171,509 $3,246,427 $6,200,159 $20,674,051 $48,154,498
Projected Statements of Cash Flows
XYZ Spirits, LLC
Schedule 2
Year 1 Year 2 Year 3 Year 4 Year 5
Assets:
Current assets
Cash and marketable items $7,171,509 $3,246,427 $6,200,159 $20,674,051 $48,154,498
Accounts receivable 72,847 198,594 439,894 774,285 1,220,410
Prepaid expenses - - - - -
Total current assets 7,244,356 3,445,021 6,640,053 21,448,336 49,374,908
Net non-current assets: 159,690 129,381 99,071 88,762 58,452
Total assets 7,404,046 3,574,402 6,739,124 21,537,098 49,433,361
Liabilities & Shareholders' Equity
Current liabilities+B33
Accounts payable 396,840 507,493 651,609 765,154 874,731
Accrued liabilities 20,520 35,048 52,810 57,240 65,105
Accrued taxes - - - - -
Total current liabilities 417,360 542,541 704,418 822,394 939,837
Long-term Liabilities
Long-terrm debt (1) - - - - -
Total long-term liabilities - - - - -
Total Liabilities 417,360 542,541 704,418 822,394 939,837
Shareholders' equity
Common stock 12,000,000 12,000,000 12,000,000 12,000,000 12,000,000
Retained earnings (4,598,625) (8,007,842) (4,088,531) 12,807,669 48,160,807
Total shareholders' equity 7,401,375 3,992,158 7,911,469 24,807,669 60,160,807
Total liabilities and equity 7,818,735 4,534,699 8,615,888 25,630,063 61,100,644
Projected Balance Sheet
Schedule 3
XYZ Spirits, LLC