Brewery Business Plan

Sedibeng Breweries is a medium-scale brewery located in Selebi Phikwe, Botswana. It is a new business in its start-up phase.

We are on the verge of entering a profitable market in a rapidly-growing economy. The increasing number of entrepreneurs and competition among existing companies present an opportunity for Sedibeng Breweries. Our products will be high-quality to ensure customer satisfaction, backed by excellent service. Our main goal is to establish and strengthen our license to trade, granted by the communities we serve. As Sedibeng Breweries succeeds, these communities will benefit from the value created and our responsible corporate behavior.

Initially, we will produce three main product lines, focusing on X, Y, and Z beer in various flavors (B, P, C, and S). These products will be sold in containers ranging from 250 ml to 500 ml. We will distribute them extensively to remote areas where there is a demand for readily available, high-quality brew.

To thrive, Sedibeng must be adaptable and responsive, delighting customers by providing what they want, when they want it, and beating the competition. Our policies, procedures, systems, and processes will aim to improve the company’s flexibility and response. We will promote interaction between marketing and manufacturing to maximize our potential, using manufacturing as a strategic tool.

Our marketing strategy will focus on informing customers about the product’s benefits and making it readily available to the right target audience. We will employ a market penetration strategy to establish a respected presence in our industry. The product prices will consider people’s budgets while ensuring viability. Our marketing efforts will convey quality and satisfaction through advertising, events, personal selling, public relations, direct marketing, and eventually internet marketing.

Our target markets primarily include corporate and working-class individuals who appreciate quality traditional beer. The working class consists of miners and administrative personnel, while the corporate segment comprises managers who enjoy traditional beer during their leisure time. The common thread is their appreciation for a high-quality brew. Initially, we aim for a 6% market share and approximately $1.5 million in sales for our first year. We will differentiate ourselves through our production ability, competitive prices, quality standards, and adaptability.

We acknowledge that our intangible resources, such as our ability to connect with consumers, management style, corporate culture, and commitment, will make us potent competitors, not just our tangible resources. These elements will differentiate us and create a sustainable competitive advantage.

We will compensate our personnel well to retain their expertise and ensure job satisfaction through delegation of authority. Our compensation package includes healthcare, generous profit sharing, and a minimum of three weeks of vacation. As an equal opportunity employer, we respect diversity and human rights, striving for optimal productivity and employee development. Awards will be given to recognize outstanding individuals, groups, and plants, fostering a sense of fun and maintaining high standards. By empowering employees to think tactically about our service offerings and facilitating positive interactions with customers, we will be better equipped than anyone else to meet their needs.

Sedibeng Breweries aims to provide customers with more than just a traditional brew. Our high-quality brews will refresh, bring pleasure, and encourage social gatherings. Customers can trust that our products meet the highest quality standards.

As we expand, we are committed to growing responsibly. Initially, we will focus on organic development and expansion. However, we plan to vertically integrate in the future to have control over raw materials and goods dispatch. We understand the importance of maintaining constant communication with stakeholders to stay informed about the market. Building an effective management team is crucial, and we will prioritize hiring the right people at the right time to ensure optimum growth. Our goal is to develop and strengthen our license to trade, granted by the communities we serve. As Sedibeng Breweries succeeds, these communities will continue to benefit from the value we create and our responsible corporate behavior.

Brewery Business Plan Example

Our business strategy focuses on providing quality brew to our target customers by implementing high quality control standards, technological innovations, and a professional production and sales team. We will also create good quality marketing material to cater to various customers, reflecting our intended image and reputation. We aim to position ourselves as a quality manufacturer that provides fulfillment, enjoyment, reliability, and a good image, while establishing a good rapport with stakeholders.

Over time, we plan to establish a presence on the World Wide Web to increase product awareness among target market segments. Well-done brochures, company profiles, and business cards will also trigger interest in our products, leading to increased sales.

Our objectives are guided by principles such as providing a great work environment, applying high-quality standards to all processes, developing loyal customers, contributing to the community and environment, fostering cross-functional communication, instilling a culture of continuous improvement, and supporting economic growth and development.

Ultimately, we aim to create a stable business platform that brings prosperity to everyone involved in the venture and uplifts unemployed individuals in Botswana who want to participate.

The keys to Sedibeng Breweries’ success are effective market segmentation and implementation strategies. We intend to use advertising, personal selling, and direct marketing strategies to target specific markets. Our success factors include producing uncompromised quality products, establishing an efficient distribution network, utilizing the latest assembly technology, fostering loyalty and dedication among employees, aggressively marketing our business, and adhering to stringent values and principles.

Our mission is to create a pleasant and sociable environment by providing refreshing high-quality brews. We aim to contribute to a welcoming and relaxed ambiance where people can enjoy themselves. Our focus is on offering good-tasting, affordable beer that customers perceive as valuable. Internally, we prioritize a healthy and enjoyable work environment where employees are fairly compensated and customer satisfaction is ensured through follow-up and continuous improvement. We seek fair and responsible profit to maintain the company’s financial health and compensate owners and investors.

We also aim to obtain ISO 9000 certification to gain international recognition and penetrate regional and international markets. However, our first priority is establishing ourselves in the local market. Our mission is summarized as follows: to uphold superb quality and satisfy all our customers and stakeholders.

Sedibeng Breweries is a new company that provides high-quality alcoholic and non-alcoholic beverages in the local market. Our focus is on the brewing process and the brewery itself. The brewery features four stainless steel vessels displayed under ceiling flood lights, and interested stakeholders can observe the brewing process and take guided educational tours.

Initially, we will target two markets: the corporate class, consisting of middle and top managerial positions who appreciate traditional beer, and the working class, including miners and administrative personnel who also appreciate traditional beer. As we grow, we will expand into related markets and seek strategic alliances for additional leverage.

Our start-up capital and expenses, including legal costs, logo design, stationery, and related expenses, amounted to approximately $41,700. We also invested in brewing plant and machinery, pick-ups, office furniture, personal computers, and other equipment, totaling $840,000.

Brewery Business Plan Example

Start-up Funding

Start-up Expenses to Fund: $41,700

Start-up Assets to Fund: $840,000

Total Funding Required: $881,700

Assets:

Non-cash Assets from Start-up: $760,000

Cash Requirements from Start-up: $80,000

Additional Cash Raised: $0

Cash Balance on Starting Date: $80,000

Total Assets: $840,000

Liabilities and Capital:

Liabilities:

Current Borrowing: $20,000

Long-term Liabilities: $0

Accounts Payable (Outstanding Bills): $0

Other Current Liabilities (interest-free): $0

Total Liabilities: $20,000

Capital:

Planned Investment:

Investor 1: $650,000

Investor 2: $76,700

Investor 3: $35,000

Investor 4: $100,000

Additional Investment Requirement: $0

Total Planned Investment: $861,700

Loss at Start-up (Start-up Expenses): ($41,700)

Total Capital: $820,000

Total Capital and Liabilities: $840,000

Total Funding: $881,700

Start-up

Requirements

Start-up Expenses

Legal: $1,000

Stationery etc.: $2,000

Brochures: $2,000

Insurance: $700

Rent: $6,000

Research and Development: $20,000

Expensed Equipment: $10,000

Total Start-up Expenses: $41,700

Start-up Assets

Cash Required: $80,000

Start-up Inventory: $10,000

Other Current Assets: $0

Long-term Assets: $750,000

Total Assets: $840,000

Total Requirements: $881,700

Company Ownership

Sedibeng Breweries is a Private Limited company incorporated at the Registrar of Companies through the foresight and vision of Mr. X and Mr. Y. Its fiscal year is the calendar year. Though it has only been in existence for seven months, it realizes the potential market and opportunity for growth given implementation of the appropriate strategies, aided by the necessary finances.

Company Locations and Facilities

At present, the company plants and offices are located in the growing industrial center of Selebi Phikwe, Kasane, and Palaype with intentions of establishing an additional plant in Maun or Francistown, largely depending on the dictates of the market and the obtaining of a lease. Our current facilities provide offices, plants, machinery, office equipment, and so on.

Company Values

Sedibeng Breweries is committed towards an open governance system whereby its activities are managed and undertaken ethically, transparently, and in the interests of all concerned stakeholders.

This shall be undertaken through implementation of the following company values:

– We intend to conduct our business ethically and transparently, respecting all applicable laws.

– We intend to be a responsible corporate citizen fulfilling our obligations as an integral member of society. Hence our business decisions shall give appropriate weight and consideration to social and environmental impacts.

– We intend to provide products of uncompromising quality to meet the needs of our customers.

– We intend to seek mutually beneficial and enduring relationships in all the commitments that we make, ensuring that they are straightforward and honest. Hence our communication shall be open and accurate, internally and externally.

– We intend to optimize the creation of wealth to provide fair reward and recognition for the contributions of our stakeholders.

– Ultimately, we intend to uphold all the above company values, promoting our employees and respective third parties engaged by us to do likewise.

Through promotion and implementation of the above-stated company values, we believe that we will be able to attain our corporate and stakeholders’ goals and objectives for the benefit of all concerned, in particular the communities in which we will operate.

Products

Sedibeng Breweries produces and markets several products. There are three main products currently in its production line. These are:

1. X Beer

2. Y Beer

3. Z Beer (Note: Z comes in different flavors):

– B

– P

– C

– S

All products are periodically taken for testing to the National Food Laboratory for quality checks so as to ensure that they conform to required quality standards.

Product Description

Sedibeng Breweries produces products of high quality and impeccable taste. The company currently produces three main lines of products, namely X beer, Y beer, and Z beer. All three have unique properties that will enable them to excel on the market. We will also be watching for technological developments in South Africa and overseas, allowing us to be first on the market and produce high-quality products through cost-effective means. In addition, the company will select suitable products for production under license.

Our current product listing is as follows:

1. X Beer

Although similar in appearance to the only other product available on the market, our beer has the superior flavor and texture, smooth, with no rough solids. This stems from (discussion removed for confidentiality).

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2. Y Beer

This refreshing drink has the unique feature that it can be enjoyed both as an alcoholic or non-alcoholic drink, depending on the fermentation period after production. If consumed fresh, that is, within the first week of production, it contains only traces of alcohol, typically even less than that found in medication (discussion removed for confidentiality).

3. Z Beer

This traditional food product is widely consumed as a substitute for regular meals and energy booster, whenever available. Up to now, it has only been available in two sources, namely home-prepared or more commonly bought from a shop with a fridge to keep the product refrigerated.

This denies the people in rural areas access to these delicious and nutritious foodstuffs. In fact, it is so wholesome that a growing child is able to survive on one liter of this per day, as it contains protein, starches, calcium, vitamins, and other essential trace elements. We have the ability to produce a long-life Z that needs NO refrigeration, which can be sold from the shelf in the same fashion as Ultra Mel and similar products. This means that it can be bought by consumers who might not always have access to cooling or refrigeration facilities, to be consumed later, as food while away from home, or as an emergency food supply. This is available in several flavors, such as x, y, w, t, s, and other xx flavors that the market might want. It is also a good product to use in school feeding schemes and similar projects.

Competitive Comparison

Identifying competition in terms of companies that fill the same needs that we do, our competitors are few in our main product lines, though dominant in the market. Hence there will be a need to strongly differentiate ourselves from these other businesses. However, on a broader scale, our competition comes in several forms:

1. The most significant competition is that of XX Breweries, which is arguably the market leader. Having been on the market for a relatively long period of time added to the fact that they are backed by Y Breweries’ financial, technological, and human resources acumen. They have a wide and established distribution network that they utilize to their advantage. Our key advantage in competition with XX Breweries is that we are accessible in extremely remote areas. We intend to vigorously undertake new channel and distribution development in addition to deploying aggressive marketing strategies. Also, strategic alliances shall assist in our attainment of goals and objectives.

2. Other manufacturers of traditional brews including homes and local bars will also constitute our competitors. They often have access to the local and remote areas and knowledge of these areas. However, the product is not constantly of high standard, which we shall fully exploit.

3. On a larger scale, manufacturers of other beverages including soft drinks and coffees also constitute competition, but of a generic nature, as people have to choose between them as refreshments. These products being marketed in supermarkets are often advertised on an extensive basis. To this end, we intend to implement a strategy that will integrate the various promotional elements or tools such that our products are well known and appreciated on the market.

Macro-environment

Over the last few months, abnormal weather has affected many parts of Southern Africa, including Botswana, during the key summer season. It has been extraordinarily severe with heavy rainfall, flooding, and there definitely promises to be low temperatures, particularly in the winter season. This is likely to have an adverse effect on our initial financial performance, though marginal as consumption levels may decrease slightly.

At a large scale, market research demonstrates that the brewing industry market is growing and changing. Generally, there is a trend toward more appealing and attractive brews as potential customers either are moving to the urban areas as a result of urbanization or are satisfied with an existing brew in their area. Research indicates that those in the rural areas are often satisfied with the existing brew due to a lack of access to other higher-quality brews, whilst the new generation of executives being more educated and aware of the global environment wants to be seen drinking something attractive and recognized by others–status recognition. In addition, this same market is not only more image conscious but appreciative of a quality brew as it is more selective. Therefore, with the emergence of this generation of individuals, the appreciation of quality brews and packaging dictates that our product lines will be popular.

Private sector development has been recognized as a vital ingredient in creating employment and training opportunities, and realizing the national goal of sustainable economic diversification. In addition to the country increasingly becoming a tourist destination, we foresee the demand for our products especially in the resorts and lodges where it will be promoted. Through undertaking our professional business activities, we foresee that it should not be too difficult to gain market acceptance provided we deliver the final product on time, of good quality, and at competitive prices.

Technology

Sedibeng Breweries will strive to maintain the latest and most efficient assembly technology so as to ensure quality-brewed beverages and maintain low production costs ultimately benefiting the consumer. Keeping abreast with technological developments will ensure we gain and maintain a competitive advantage utilizing the latest production techniques.

Future Products

In putting the company together, we have attempted to offer enough products to allow us to always be in demand by our customers and clients. The most important factor in developing future products is market need. Our understanding of the needs of our target market segments shall be one of our competitive advantages. It is critical to our effort to develop the right new products. We also intend to have what we call a "core product engine" that will be the foundation of future products. This shall be established in time as we determine our core product. In the future, Sedibeng Breweries will broaden its coverage by expanding into additional markets (i.e., the whole of Southern Africa) and additional product areas. In doing so, we will strive to ensure that it is compatible with the existing products and assembly technology.

Fulfillment

The key fulfillment and delivery will be provided by the principals and values of the business. The real core value will be the provision of a thirst-quenching refreshing brew, provided by a combination of quality ingredients, good production techniques, hard work, and education (in that order). Hence we intend to ensure that the products we produce are always of high quality and standards and available to the relevant target market.

We will turn to reliable farmers, suppliers, and distributors who will assist in ensuring that the products are delivered timely and are of the highest quality. We will also rely on these stakeholders for relevant information on the market situation (trends, consumer tastes, feelings, and comments amongst other things).

SWOT Analysis

We are in a highly lucrative market in a rapidly growing economy. We foresee our strengths as the ability to respond quickly to what the market dictates and to provide quality brew in a growing market. In addition, through aggressive marketing and quality management, we intend to become a well-respected and known entity in our respective industry. Our key personnel have a wide and thorough knowledge of the local manufacturing market and expertise, which will go towards penetrating the market. However, we acknowledge our weakness of a medium-sized company without a lot of experience and the threat of new competition taking aim at our niche. Below are the summarized strengths, weaknesses, opportunities, and threats.

Strengths:

– Strategic market segmentation and implementation strategies.

– Diversified market segments: ensuring the lack of dependency on one particular market.

– Combination of skills in directorship. The directors intend to jointly develop a business strategy and long-term plans, having wide experience in product and business know-how.

– Establishment and maintenance of a strong capital base.

– An aggressive and focused marketing campaign with clear goals and strategies.

Weaknesses:

– Lack of a reputation in comparison to our competitors.

– The introduction of new organizational practices and personnel who have not previously worked together presents a challenge to the company.

– Establishment on the Internet will produce technological challenges.

Opportunities:

– Specific niche: Appreciation for high-quality brew, enjoyment, and refreshment (and integration therein).

– The new generation of individuals and families has a far greater appreciation of attractive packaging (image-conscious).

– Current drive by government and specialized institutions such as the Botswana Export Development and Investment Authority towards export of locally manufactured products.

– Internet marketing and sales–though still in its infancy.

– Increasing number of foreign firms, especially from South Africa looking at penetrating the market.

Threats:

– The present growth in the market may result in market saturation, through competition. This competition could emerge from a variety of given sources including:

– Established mass-market companies’ development of new lines and vertically integrating so as to be totally in control of supplies and products being sold on the respective markets.

– Intolerable price increases by foreign suppliers may occur.

Market Analysis Summary

Today we are experiencing rapid growth in the economy of unsurpassed nature. This has been brought about by (amongst other things) the relaxation of foreign exchange policies and macroeconomic policies geared towards attracting foreign investors into the country. The fiscal and monetary policies of the government geared towards maintaining growth with social justice have largely contributed towards this, evidenced by our economy averaging a growth rate of 7% since 1990–very high by international standards.

The current drive and emphasis by the government on diversification of the industrial base away from the minerals sector presents an opportunity for Sedibeng Breweries to make a valuable contribution towards achieving this goal. This will result in the implementation of modern production techniques and the transfer of knowledge. Having undertaken a thorough and comprehensive research of the market, we realized that there was a need for a manufacturer that focuses on producing affordable thirst-quenching brew tailored to satisfying clients’ needs. Though there are breweries currently on the market, some of whom have been in existence for a relatively long period of time, we believe that there is a market need for one (ourselves in this instance) that particularly focuses on the low to medium earning individuals. We intend to provide products of extremely high quality–something that cannot be overemphasized in the international arena with the current drive towards globalization. The marketing mix of the products has been carefully and strategically put together to position them in the market.

Aware of the fact that we will be operating in a predominantly monopolistic market structure, we intend to ensure that our marketing strategies are considerate of the importance of the fit between our product’s capabilities and benefits and the target market, so as to develop a strong sustainable competitive position in the market. As a result, we intend to implement a niche marketing strategy, focusing on certain target markets, particularly in view of XX Breweries’ dominance on the market. Our initial overall target market share shall be 6% of the local market. This share will vary with the actual products, with ginger beer having a larger share than traditional beer due to its uniqueness.

We appreciate that entering such a market is not a bed of roses, particularly as it is monopolistic. Hence we intend to implement an aggressive marketing strategy, well supported by the other business functions. The above prognosis influenced our decision to enter the brewing industry.

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Market Segmentation

Sedibeng Breweries will be focusing on the corporate and working class who appreciate good quality traditional beer. The working class will range from the miners who constitute a large portion of the market to administrative personnel appreciative of good quality traditional beer. The corporate or managerial segment will constitute those managers who though aware of their image and reputation, want to put aside their ties and jackets after hours and/or on weekends to drink good traditional beer, easily accessible in the urban areas.

Our most important group of potential customers are those in the rural areas who often converge after hours to socialize and update one another on local news. These are potential customers who want to have an enjoyable time whilst drinking a good refreshing beverage. They do not want to waste their time making their own brew but appreciate a good quality brew at a reasonable price.

We also intend to appeal to the foreign and local tourists who would be looking at experiencing traditional foods and drinks, a change from the usual beverages they often have.

Brewery Business Plan Example

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

Potential Customers Growth

White Collar Drinkers 4% 100,147 104,153 108,319 112,652 117,158 4.00%

Blue Collar Drinkers 2% 693,675 709,630 725,951 742,648 759,729 2.30%

Total 2.52% 793,822 813,783 834,270 855,300 876,887 2.52%

5.2 Target Market Segment Strategy

Our marketing strategy focuses on providing the right product to the right customer. We consider customers’ budgets and ensure they are aware of our product and where to find it. Our marketing conveys quality through visuals, promotions, and publications. We compete locally in areas that match our strengths and avoid our weaknesses.

We aim to develop relationships with suppliers, distributors, and retailers to support our business. Regular visits to these areas will ensure we meet their expectations.

5.2.1 Market Trends

Our target markets are recognizing the difference between poor quality brews and high quality ones. This trend is in line with our target market. More people are appreciating traditional brews while living in urban areas. We will ensure our packaging is respectable and attractive.

Today’s stressful work environment creates a demand for healthy drinks, especially in the summer season. We can market the health aspect of our beverages.

5.2.2 Market Growth

Import statistics indicate a steady growth rate of 7% per annum in the brewing industry. In 1998, total beer and wine imports stood at 10,421,968 liters ($14,473,000), and total exports stood at 864,668 liters ($281,363). This resulted in a total market size estimated at just over 11,286,636 liters in 1998. Specifically, imports for traditional beer stood at 310,627 liters, representing an increase of approximately 32.56% from the previous year (1997).

5.2.3 Market Needs

Sedibeng Breweries aims to provide good quality products that create a jovial environment. Our brews not only quench thirst but also enhance enjoyment and pride. Opaque beer is traditional for most Botswana residents, serving social, ritual, and ceremonial purposes.

5.3 Industry Analysis

Key criteria in purchase decision-making are the availability of affordable, thirst-quenching products of good quality and a strong distribution network. XX Breweries Limited dominates the market with a well-established distribution network.

5.3.2 Main Competitors

Competition in the brewery manufacturing market is not intense due to the dominance of XX Breweries Limited. However, we aim to differentiate ourselves by targeting low to medium earning customers and offering higher quality brews. Our main competitors in the same strategic group are XX Breweries and ZZ Breweries – T Brewery Holdings.

XX Breweries is the largest manufacturer, supplier, and marketer of alcoholic and non-alcoholic beverages in the country. It enjoys an economy of scale and a dominant market share. However, one of their main products, S traditional beer, has freshness issues that we can capitalize on.

6.0 Strategy and Implementation Summary

Our marketing strategy emphasizes focus on certain products and consumers. Initially, we will focus on the local market and remote areas with a large target market. We will build image and awareness, focus on delivering quality products, and use advertising to reach our audience.

6.1 Value Proposition

Our value proposition offers refreshment and enjoyment at reasonable prices, ensuring peace of mind. We market the benefits, aim for customer satisfaction, develop long relationships, and promote the company’s reputation.

6.2 Competitive Edge

Our competitive edge lies in our dominance of previously remote areas, customer orientation, and high-quality brews through stringent quality control. We differentiate ourselves from XX Breweries by serving different market segments.

6.3 Sales Strategy

We will improve our implementation by working on key objectives and better coordination of marketing efforts. Our selling process will depend on personal selling and advertising to inform potential clients about our products and their benefits. We aim to increase knowledge and awareness of our product categories.

6.3.1 Sales Forecast

Please refer to the monthly sales forecast summary below. As we become established and known in the market, we project sales to increase at a faster rate than the initial year.

Brewery Business Plan Example

Sales Forecast
Year 1 Year 2 Year 3
Sales
X Beer $659,712 $725,683 $812,765
Y Beer $527,769 $580,546 $650,211
Z Beer $278,545 $306,400 $343,167
Total Sales $1,466,026 $1,612,629 $1,806,144
Direct Cost of Sales Year 1 Year 2 Year 3
X Beer $369,439 $406,383 $455,149
Y Beer $295,551 $325,106 $364,118
Z Beer $155,985 $171,584 $192,174
Subtotal Direct Cost of Sales $820,975 $903,072 $1,011,441

6.4 Marketing Strategy

Our marketing strategy will differentiate us from competitors. We will sell our company as a strategic ally, not just our products. We will offer reasonable prices compared to our competition and aim to sustain them. Market penetration through lower prices will be used where necessary, while premium pricing will be used for the upper-end of the market.

6.4.1 Service Provision

Our customer service will be key to retaining customers. We will regularly follow up with clients to ensure their satisfaction. We will implement database marketing to target customers based on their previous purchases, forecast their demands, and establish long-term relationships. Customer service will be enhanced with infrastructure support such as merchandising and credit facilities.

6.4.2 Pricing Strategy

Initially, our prices will be dictated by market conditions. However, we will charge appropriately for quality and workmanship. Discounts will be offered to customers making bulk orders to encourage customer loyalty. Our prices will be competitive in the market.

6.4.3 Promotion Strategy

Our promotion strategy will inform potential customers of our existence and provide the right information to our target market. Promotional campaigns will convey quality, refreshness, and health. We will use quality brochures, sales literature, and promotional materials to leverage our presence. Promotional expenses will be high to generate customer attention and knowledge.

Our promotion activities will include:

Advertising: We will extensively advertise our products in addition to our brand name through various channels.

Events: We will participate in trade shows and quality taste tests to increase awareness and leverage recognition.

Public Relations: We will organize events and place news stories and features in magazines and newspapers to keep stakeholders updated.

Personal Selling: Sales calls will be used to inform potential customers and distributors about our products.

Direct Marketing: Telemarketing will be used to inform potential customers and obtain referrals.

Internet Marketing: We will establish a professional website to target foreign customers and potential investors.

All promotional tools will be integrated and utilized to maximize their effect.

6.4.4 Distribution Strategy

We will coordinate and integrate our distribution operations to reduce cycle time, eliminate waste, and optimize resource utilization. Our breweries will be located close to major distribution centers for cost efficiency and to ensure availability of our products. We will establish good relationships with shebeen owners to make our products readily available to our target market.

6.4.5 Product Marketing

Our product marketing will emphasize the benefits of consuming our products, including refreshment and enjoyment. We will focus on individuals or groups who want to enjoy themselves through the consumption and sharing of our beverages. We will provide a thorough understanding and appreciation of our products to the customer.

6.4.6 Product Packaging

Our product packaging will be attractive and hygienic. We will aim for packaging that can be used for other purposes after beer consumption. We will continuously improve our packaging to maintain or improve product appeal.

6.5 Corporate Social Responsibility

We will be involved in a wide range of social responsibility programs to invest back into the community. We will support projects brought to us by the community and ensure skills transfer and sustainability. Our activities will include community, education, health, environment, and arts and culture initiatives.

Production Summary

Our production system will strive for service excellence and manufacturing safe, quality products. We will engage modern production techniques and reliable suppliers to minimize costs and ensure high product quality and timely delivery.

7.1 Suppliers

We will engage local suppliers to support fair terms of trade and promote local business. We aim to maintain low input and production costs through economies of scale and efficient sourcing.

7.2 Receiving

Responsible personnel will ensure proper receiving of raw materials, checking quantity and condition. Non-confirming raw materials will only be approved with further analysis by the managing director.

7.3 Storage

Raw materials will be stored securely, clean, and pest-free. Regular stock takes and reconciliations will be performed using the FIFO principle. Deviations will be explained and addressed.

7.4 By-Products

We will utilize by-products to ensure full resource utilization and minimize environmental impact.

Management Summary

We will provide competitive remuneration packages to employees and negotiate incentive pay mechanisms based on agreed targets. Our human resources strategy will focus on communication, transparency, and stakeholder inclusivity.

8.1 Management Team

The management team has wide expertise and knowledge of the products and markets. Daily management will be handled by Mr. B (technical and operations) and Mr. G (government, corporate bodies, and public relations).

8.2 Personnel Plan

We will compensate our personnel well to retain their expertise and ensure job satisfaction through delegation of authority. Our compensation will include health care, generous profit sharing, and a minimum of three weeks’ vacation. As an equal opportunity employer, we respect the diversity and human rights of our people and strive for optimal productivity while realizing each employee’s full potential. Awards will be given for outstanding work and production to promote high standards and a sense of fun. Our employees play a fundamental role in our long-term prosperity, and we aim to attract and retain quality people through benefits like housing and education grants for families.

Employee health is of extreme importance as it contributes to well-being at work and home. Compliance with relevant legislation is a minimum target. We aim to minimize isolated incidents of intimidation in the workplace to ensure production and distribution are not affected and maintain sound relationships between employer and employee.

The personnel plan is outlined in the table below:

Personnel Year 1 Year 2 Year 3
President and CEO $48,000 $48,000 $52,000
Operations Manager $48,000 $48,000 $52,000
Marketing Manager $36,000 $36,000 $42,000
Brewmaster $36,000 $36,000 $40,000
Brewmaster $36,000 $36,000 $40,000
Office Manager $19,200 $19,200 $22,000
Bottler #1 $12,000 $12,000 $15,000
Bottler #2 $12,000 $12,000 $15,000
Bottler #3 $12,000 $12,000 $15,000
Packager #1 $12,000 $12,000 $15,000
Packager #2 $12,000 $12,000 $15,000
Packager #3 $12,000 $12,000 $15,000
Packager #4 $12,000 $12,000 $15,000
Shipper #1 $12,000 $12,000 $15,000
Shipper #2 $12,000 $12,000 $15,000
Total People 15 15 15
Total Payroll $331,200 $331,200 $383,000

Training will be continuous, both in-house and externally, to anticipate market needs and maintain a competitive advantage. Courses on brewing will be undertaken with reputable firms like YY Breweries to expose personnel to the latest techniques. Internal training will expand to provide greater knowledge of customers, market trends, and new technology. Health education sessions will address workplace risks and lifestyle education, particularly important in view of the AIDS epidemic. Good labor relations, strong morale, and high-quality work per employee will be promoted.

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Feedback and control will be achieved through employee satisfaction surveys to shape the business and ensure understanding of goals, customer focus, and teamwork. Important notices and developments will be communicated to promote a sense of belonging. Employees will be encouraged to suggest improvements, fostering innovation and job satisfaction.

We plan to finance growth through cash flow and equity, recognizing the importance of collection days, particularly with bulk order customers. We aim to develop a system of receivables financing, while ensuring compatibility between investors and our growth plan and vision.

Key financial indicators will demonstrate growth in sales, expenses, and collection days. We emphasize the importance of maintaining an average collection days of 30 or below. Our expense forecast includes initial high marketing expenses, with further programs and expansion as our market share increases.

Cash flow projections are critical to our success. We have included detailed monthly numbers in the appendix, but it should be noted that they do not take into account the required capital injection.

The projected balance sheet shows healthy growth of net worth and a strong financial position. Three-year estimates are included in the appendix.

Pro Forma Balance Sheet

Assets
Current Assets Year 1 Year 2 Year 3
Cash $36,162 $90,329 $231,533
Accounts Receivable $277,831 $305,614 $342,287
Inventory $123,414 $135,756 $152,047
Other Current Assets $0 $0 $0
Total Current Assets $437,407 $531,698 $725,867
Long-term Assets Year 1 Year 2 Year 3
Long-term Assets $750,000 $750,000 $750,000
Accumulated Depreciation $10,200 $20,400 $30,600
Total Long-term Assets $739,800 $729,600 $719,400
Total Assets $1,177,207 $1,261,298 $1,445,267

9.8 Business Ratios

The table below shows our business ratios.

Ratio Analysis
Sales Growth 0.00% 10.00% 12.00% 4.60%
Percent of Total Assets Year 1 Year 2 Year 3 Industry Profile
Accounts Receivable 23.60% 24.23% 23.68% 5.30%
Inventory 10.48% 10.76% 10.52% 0.70%
Other Current Assets 0.00% 0.00% 0.00% 24.80%
Total Current Assets 37.16% 42.15% 50.22% 30.80%
Long-term Assets 62.84% 57.85% 49.78% 69.20%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities Year 1 Year 2 Year 3
Accounts Payable $146,655 $92,492 $103,233
Current Borrowing $20,000 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $166,655 $92,492 $103,233
Long-term Liabilities $0 $0 $0
Total Liabilities $166,655 $92,492 $103,233
Paid-in Capital $938,700 $938,700 $938,700
Retained Earnings ($41,700) $71,852 $230,107
Earnings $113,552 $158,255 $173,227
Total Capital $1,010,552 $1,168,807 $1,342,034
Total Liabilities and Capital $1,177,207 $1,261,298 $1,445,267
Net Worth $1,010,552 $1,168,807 $1,342,034

Controls

The local brewing market has been growing steadily due to increases in disposable income and opening of the economy. We intend to expand our marketing programs accordingly with quality catalogues, sales literature, a presence on the Internet, and participation in regional trade shows to reach potential customers and increase sales.

Throughout the year, we will regularly evaluate our marketing programs to ensure alignment with our objectives.

In summary, our intentions are:

– Tracking and follow-up: We will track results and ensure implementation of the business plan.

Contingency Planning

We will closely monitor our results and consider dropping production of certain products if margins are low or materials become difficult to obtain. Focusing on our core products may help us avoid direct competition with larger companies.

We also recognize the possibility of an established beverage manufacturer targeting our niche market, emphasizing the need for commitment to quality in our organization.

Appendix

Sales Forecast

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
$29,399 $32,143 $38,415 $42,334 $46,254 $48,214 $54,878 $61,542 $64,286 $72,909 $79,181 $90,157
$23,519 $25,714 $30,732 $33,868 $37,003 $38,571 $43,902 $49,233 $51,429 $58,328 $63,345 $72,125
$12,413 $13,571 $16,219 $17,875 $19,530 $20,357 $23,171 $25,984 $27,143 $30,784 $33,432 $38,066
$65,331 $71,428 $85,366 $94,077 $102,787 $107,142 $121,951 $136,759 $142,858 $162,021 $175,958 $200,348

Personnel Plan:

President and CEO: Month 1-12: $4,000

Operations Manager: Month 1-12: $4,000

Marketing Manager: Month 1-12: $3,000

Brewmaster: Month 1-12: $3,000

Brewmaster: Month 1-12: $3,000

Office Manager: Month 1-12: $1,600

Bottler #1: Month 1-12: $1,000

Bottler #2: Month 1-12: $1,000

Bottler #3: Month 1-12: $1,000

Packager #1: Month 1-12: $1,000

Packager #2: Month 1-12: $1,000

Packager #3: Month 1-12: $1,000

Packager #4: Month 1-12: $1,000

Shipper #1: Month 1-12: $1,000

Shipper #2: Month 1-12: $1,000

Total People: 15

Total Payroll: $27,600

General Assumptions:

Plan Month: 1-12

Current Interest Rate: 10.00%

Long-term Interest Rate: 10.00%

Tax Rate: 30.00%

Other: 0

Pro Forma Profit and Loss:

Sales: Month 1-12: $65,331-$200,348

Direct Cost of Sales: Month 1-12: $36,585-$112,195

Other: $0

Total Cost of Sales: Month 1-12: $36,585-$112,195

Gross Margin: Month 1-12: $28,746-$88,153

Gross Margin %: 44.00%

Expenses: Payroll, Sales and Marketing and Other Expenses, Depreciation, Leased Equipment, Utilities, Insurance, Rent, Payroll Taxes, Other

Total Operating Expenses: Month 1-12: $41,040

Profit Before Interest and Taxes: Month 1-12: ($12,294)-$47,113

EBITDA: Month 1-12: ($11,444)-$47,963

Interest Expense: Month 1-12: $167

Taxes Incurred: Month 1-12: ($3,738)-$11,737

Net Profit: Month 1-12: ($8,723)-$35,210

Net Profit/Sales: -13.35%-17.57%

Pro Forma Cash Flow

Cash Received

Cash Sales

Month 1: $16,333

Month 2: $17,857

Month 3: $21,342

Month 4: $23,519

Month 5: $25,697

Month 6: $26,786

Month 7: $30,488

Month 8: $34,190

Month 9: $35,715

Month 10: $40,505

Month 11: $43,990

Month 12: $50,087

Cash from Receivables

Month 1: $0

Month 2: $1,633

Month 3: $49,151

Month 4: $53,919

Month 5: $64,242

Month 6: $70,776

Month 7: $77,199

Month 8: $80,727

Month 9: $91,833

Month 10: $102,722

Month 11: $107,623

Month 12: $121,864

Subtotal Cash from Operations

Month 1: $16,333

Month 2: $19,490

Month 3: $70,492

Month 4: $77,439

Month 5: $89,939

Month 6: $97,561

Month 7: $107,687

Month 8: $114,916

Month 9: $127,548

Month 10: $143,227

Month 11: $151,612

Month 12: $171,951

Additional Cash Received

Sales Tax, VAT, HST/GST Received: $0

New Current Borrowing

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

New Other Liabilities (interest-free)

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

New Long-term Liabilities

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Sales of Other Current Assets

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Sales of Long-term Assets

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

New Investment Received

Month 1: $0

Month 2: $77,000

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Subtotal Cash Received

Month 1: $16,333

Month 2: $96,490

Month 3: $70,492

Month 4: $77,439

Month 5: $89,939

Month 6: $97,561

Month 7: $107,687

Month 8: $114,916

Month 9: $127,548

Month 10: $143,227

Month 11: $151,612

Month 12: $171,951

Expenditures

Expenditures from Operations

Cash Spending

Month 1: $27,600

Month 2: $27,600

Month 3: $27,600

Month 4: $27,600

Month 5: $27,600

Month 6: $27,600

Month 7: $27,600

Month 8: $27,600

Month 9: $27,600

Month 10: $27,600

Month 11: $27,600

Month 12: $27,600

Bill Payments

Month 1: $2,528

Month 2: $75,122

Month 3: $54,540

Month 4: $68,323

Month 5: $71,047

Month 6: $76,695

Month 7: $77,468

Month 8: $93,615

Month 9: $103,163

Month 10: $102,623

Month 11: $123,017

Month 12: $129,691

Subtotal Spent on Operations

Month 1: $30,128

Month 2: $102,722

Month 3: $82,140

Month 4: $95,923

Month 5: $98,647

Month 6: $104,295

Month 7: $105,068

Month 8: $121,215

Month 9: $130,763

Month 10: $130,223

Month 11: $150,617

Month 12: $157,291

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out: $0

Principal Repayment of Current Borrowing

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Other Liabilities Principal Repayment

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Long-term Liabilities Principal Repayment

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Purchase Other Current Assets

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Purchase Long-term Assets

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Dividends

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Subtotal Cash Spent

Month 1: $30,128

Month 2: $102,722

Month 3: $82,140

Month 4: $95,923

Month 5: $98,647

Month 6: $104,295

Month 7: $105,068

Month 8: $121,215

Month 9: $130,763

Month 10: $130,223

Month 11: $150,617

Month 12: $157,291

Net Cash Flow

Month 1: ($13,796)

Month 2: ($6,231)

Month 3: ($11,648)

Month 4: ($18,485)

Month 5: ($8,708)

Month 6: ($6,734)

Month 7: $2,619

Month 8: ($6,299)

Month 9: ($3,215)

Month 10: $13,004

Month 11: $995

Month 12: $14,660

Cash Balance

Month 1: $66,204

Month 2: $59,973

Month 3: $48,326

Month 4: $29,841

Month 5: $21,133

Month 6: $14,398

Month 7: $17,017

Month 8: $10,718

Month 9: $7,504

Month 10: $20,508

Month 11: $21,502

Month 12: $36,162

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