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Ardi's Document
Ardi's Document
1. EXECUTIVE SUMMARY
2. COMPANY SUMMARY
3. PRODUCT
8. FINANCIAL PLAN
Executive Summary
The Products
Earthly Clean sells a complete line of non-toxic, environmentally friendly
cleaning supplies for all possible household uses. Earthly Clean is finalizing a
contactual agreement with a major cleaning supply manufacturer for the
production of a complete line of private label products. Product prices will be
quite competitive since Earthly Clean is buying direct from the manufacturer.
Another feature of this relationship which is of significant value to Earthly Clean
is the willingness of the manufacturer to allow Earthly Clean to place orders as
small as $150 (540000 UGX). This will assist Earthly Clean in their goal of
efficient inventory management. Products that will be part of the initial product
line include: all purpose soap, bathroom cleaner, basin/tub and tile cleaner,
detergent, window cleaner, bleach, laundry liquid and a variety of different air
fresheners. Earthly Clean is able to offer competitively priced products that are
of the highest quality.
The Market
Earthly Clean will sell products to two customer segments. The first segment are
individual consumers who are purchasing the products for personal (household)
use. These individuals are environmentally conscious consumers who are
looking for non-toxic cleaners for their home. demographics for this group are
younger, politically liberal people who are interested in making an individual
contribution to the betterment of our environment.
The second target segment is a select group from within the first segment of
individual customers. Some of these individuals will be recruited to become
distributors of Earthly Clean products. A distributor is a person who sells the
Earthly Clean products on their own to their own set of customers. This segment
is taken from the actual consumers that purchase and use products. This creates
a sales force that passionately believes in the products that they sell. The
distributors that make up this segment receive a sales commission if they are
able to recruit new distributors who then make sales. This is how the MLM
business model works. Earthly Clean sells to consumers, some of those
consumers then become distributors earning revenue for Earthly Clean as well
as themselves. If these new distributors attract more people to sell, they then
make money on their specific sales as well as money on everything that their
recruited sales people sell.
Earthly Clean is a new business that channels individuals' passion for making a
positive contribution to the environment and the ability to make money while
sharing this passion with friends and colleagues. By carefully using the efficient
multi-level marketing business model, Earthly Clean will quickly generate
sustainable revenue. Sales forecasts indicate that sales for years two and three
respectively will be $90,000 and $125,000. Net profit for the same years will
reach 4.19% and 8.66%.
1.1 Mission
1.2 Objectives
To create a profitable company that sells environmentally friendly
cleaning products.
Design an organization that compensates individuals for sales made by
other people that they recruit.
Design a more efficient marketing machine that does away with the
inefficient traditional distribution systems.
Company Summary
Earthly Clean has been founded by Ardi. The company exists to distribute
environmentally friendly cleaning supplies through an efficient, networking
distribution system.
Storage space: This will be used for the storage of product inventory.
While Earthly Clean could get away with a smaller space such as a closet
in Ardi's home, he is able to achieve costs breaks by purchasing larger
quantities and will take these discounts and place the inventory in
storage.
Service provider fees: Earthly Clean has incurred both accountant and
attorney fees in the set up of the business. The accountant will set up the
PeachTree accounting system and the attorney will develop and register
the business formation as well as draft some sale agreements for
distributors.
Computer system: The computer system will be used for
correspondence, accounting purposes as well as to develop marketing
and sales information. The system will include a laptop computer, printer,
fax/scanner, and a broadband Internet connection. Earthly Clean will use
Microsoft Office and PeachTree Accounting as their preferred software.
Assorted types of paper and stationery: Personalized with a logo,
return addresses, etc. for catalogs, and brochures.
Assorted office furniture and accessories: The office will be located in
Ardi's house.
Start-up Funding
Start-up Expenses to Fund $9,140
Start-up Assets to Fund $40,860
Total Funding Required $50,000
Assets
Non-cash Assets from Start-up $5,000
Cash Requirements from Start-up $35,860
Additional Cash Raised $0
Cash Balance on Starting Date $35,860
Total Assets $40,860
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $20,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $20,000
Capital
Planned Investment
Family & Friends $20,000
D. McGregor $10,000
Additional Investment Requirement $0
Total Planned Investment $30,000
Loss at Start-up (Start-up Expenses) ($9,140)
Total Capital $20,860
Total Capital and Liabilities $40,860
Total Funding $50,000
Start-up
Requirements
Start-up Expenses
Professional service providers $4,000
Paper products $250
Website development $2,000
Storage rental $165
Expensed Equipment - Computer system $2,500
Insurance $75
Rent $150
Total Start-up Expenses $9,140
Start-up Assets
Cash Required $35,860
Other Current Assets $0
Long-term Assets $5,000
Total Assets $40,860
Total Requirements $50,000
Products
Earthly Clean sells a wide range of private label environmentally friendly
cleaning products. All products are designed to be effective at cleaning, yet easy
and non-toxic on the environment. Earthly Clean has contracted with a large
national producer of environmentally friendly products to manufacture these
products with the Earthly Clean private label. This vendor was chosen because of
their quality products as well as their flexibility in offering low minimum orders
($150). The following are the initial products that Earthly Clean will offer. As the
company grows they will consider adding new items to the product list as
demanded by the market:
Distributors
A distributor is an individual consumer who is interested in also selling the
products. In the world of MLM, the sellers are called distributors because they
are essentially doing the activities that a distributor would do in a more
traditional distribution channel. These individuals have a passion for the product
and the time to sell the product to their friends.
89% of the people will take on the role of distributor in addition to their
already existing part or full time employment.
They see the chance of selling Earthly Clean as an opportunity to do
something that they are passionate about (positive environmental
actions) as well as a means of making supplemental income.
87% of the distributors will have the goal of signing up more distributors
and establish an additional source of revenue.
4.2 Target Market Segment Strategy
The two enumerated customer segments are particularly attractive because they
represent people who are most likely to be consumers of environmentally
friendly cleaning supplies. The individual consumers have a sensitive
perspective toward the environment and are looking for a way that they can
have a positive impact on the environment. Recognizing that so many traditional
cleaning agents are toxic for the environment, it then becomes relatively easy for
the individuals to make a positive contribution. This attitude follows the slogan
"think globally, act locally." Buying these products allows them to do their part.
The distributors are individual consumers who have an even stronger conviction
and belief in the products as well as the time to sell the products and find
potential people to recruit into the distribution effort. To be a distributor does
not require a huge sacrifice of time, the majority of distributors will have full-
time jobs in addition to marketing Earthly Clean. This makes the job of
distributor all that more attractive, the person is able to balance their already
existing job with another source of revenue and personal satisfaction.
Financial Plan
The following section will outline important financial information.
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 5.00% 5.00% 5.00%
Long-term Interest Rate 5.00% 5.00% 5.00%
Tax Rate 18.00% 18.00% 18.00%
Other 0 0 0