Business Plan – Final

Business Plan – Final
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Executive summary
The start-up is called Lamar Rene’ and will make money by producing and selling of all natural, organic champagnes. The product is made with fresh fruits and is a non-alcoholic version of typically alcoholic drinks for instance cocktails and beers. The start-up company would be based in Washington DC area and the products would first be marketed and distributed throughout Washington DC suburbs. In the health-conscious world of today, a lot of people are cutting their consumption of alcohol. There has been an upward trend in sales of non-alcoholic beverages worldwide, with a projected revenue growth of 4.3% growth in revenue from 2014 to 2020. The non-alcoholic beverage market is a $175 billion industry. The demand for fresh, healthier alternatives is driving expansion of non-alcoholic beverage retailing; hence there is need for alcohol-free beverages. The competitive advantage of Lamar Rene’ is that its drinks would be 100% organic and 0.00% alcohol by volume. This firm will have matrix organization structure. This structure facilitates the utilization of very specialized personnel and equipment. The key executive managers include Melinda Cates and CEO and President, Mark Calaway as Marketing Manager, and Glen Jacobs as Engineering Manager. The start-up will use distributors/ wholesalers. Direct sales model will also be used. Direct Sales Model entails bypassing the traditional sales channels to target the end-customers. The method will include company-owned stores. Given that this is a new product, penetration pricing would be utilized. With regard to the financials, In the first year, the net profit is expected to be $5.595 million. Cash at the end of the first year would be $5,560,300. Furthermore, cash at the end of the first year would be $5,560,300.

Business Plan – Final
A business plan for a start-up business clarifies the business idea and defines the company’s long-term objective. Moreover, a business plan offers a blueprint for running the company in addition to a series of benchmarks for checking the progress against (Brad, 2014). This paper provides a draft of my Business Plan as well as an Income Statement that contains the financials of my business plan for my start.
1.0 Company description
The name of the start-up company is Lamar Rene’ Inc. It would be involved in production and marketing of an all natural, organic champagnes. This product is made with fresh fruits and is a non-alcoholic version of typically alcoholic drinks for instance cocktails and beers. As alcohol-free beverages, they would be produced yeast free to ensure the product is 0.00% alcohol by volume. It is worth mentioning that beverages that have labels stating the actual alcohol by volume help people from unknowingly becoming drunken drivers or inebriated (Roche, 2014). The organic beverages would be made using the best raw materials: organic fruits including passion fruit juice, mango juice, organic pineapple juice, and organic apple fruit juice. The start-up company would be based in Washington DC area and the products would first be marketed and distributed throughout Washington DC suburbs. My new brand called Alvaro will consist of two variants of non-alcoholic malt drinks, annex passion and annex mango, for which the company will seek to secure a wider customer base in the domestic sector of this new brand.
2.0 Industry Analysis and Trends
In the health-conscious world of today, a lot of people are cutting their consumption of alcohol. A survey conducted by the National Institute of Health revealed that 35 percent of all adults in America lead alcohol-free lifestyles and a lot of these individuals choose to do so thanks to health reasons (Tlapa, Miller & Washington, 2010). Whether marketed as soft drinks or non-alcoholic beers, Roche (2014) reported that malt-based and organic drinks are projected to grow as a category in the next few years. The consumption of organic and healthy non-alcoholic drinks is likely to rise. To further highlight that there are health concerns among consumers is that manufacturers are increasingly producing zero-sugar drinks given the concerns about the impact of sugar on obesity (MarketWatch, 2015). There has been an upward trend in sales of non-alcoholic beverages worldwide, with a projected revenue growth of 4.3% growth in revenue from 2014 to 2020 (Release Wire, 2015). There is a considerable potential to market non-alcoholic beverages on their health credentials to a wider audience (Mirasgedis et al., 2014). There is a growing number of smart consumers who are more informed and aware of the negative health effects of alcoholic beverages and artificial drinks, and are increasingly concerned with the processed foods and drinks and their sugar contents. The non-alcoholic beverage market is a $175 billion industry. The demand for fresh, healthier alternatives is driving expansion of non-alcoholic beverage retailing (Fry & Kim, 2015).
3.0 Target Market
Many times, social events mean discomfort for those who do not consume alcohol who often find it hard to fit in as various alcoholic beverages oil the conversation and the mingling. Taking water or soft drinks would often attract tense small talk or discomfort (Sohrabvandi et al., 2010) but this would change considerably when the product of my start-up company is launched. The target market for the alcohol-free organic beverages produced and marketed by my start-up company mainly includes people who do not consume alcohol. Specifically, the target audience includes urban young people aged 16 – 30 years since the product has the alluring appeal to cater for this broad age range. Alvaro would be a premium style beverage that would complement the elite lifestyle in the Washington DC area. The beverages would be sold in a wide range of places including places where alcoholic beverages are sold. The product, Alvaro, is a classy alternative for non-alcohol drinkers or those who do not want to drink alcohol.
4.0 Competition
Competitors mainly include soft drink producers and companies that make alcohol-free beer. The existing brands of non-alcoholic beverages that pose a threat to Lamar Rene’s Alvaro include the following brands of non-alcoholic beer: Miller Sharp’s, O’Doul’s Premium, Beck’s non-alcoholic, O’Doul’s Amber, Bitburger Dive, St. Pauli N.A., and Coors Non Alcoholic. According to critics and reviewers of non-alcoholic beverages, these aforementioned non-alcoholic beverages are not organic and some of them have metallic taste. Furthermore, although some of them are labelled as non-alcoholic, they have content of alcohol in them, albeit a little amount. For instance, Clausthalers have 0.5% alcohol by volume whilst Miller Sharp’s, Bitbunger Dive and Buckler have 0.45% alcohol by volume (Roche, 2014).
Therefore, people who are trying to avoid consuming alcohol for whatever reason for instance the person is in recovery, is going to drive, is pregnant, or the person just does not want alcohol in his or her system right now may end up unknowingly consuming a beverage that has alcoholic content. This would be different compared to the non-alcoholic beverages that would be produced and marketed by my start-up company. Lamar Rene’ drinks would be 0.00% alcohol by volume. Other than the abovementioned non-alcoholic beer producers and marketers, other noteworthy competitors for the product of my start-up company include soft drink companies such as Pepsi and Coca-Cola, which have an extensive assortment of non-alcoholic beverages and are actually 2 of the world’s largest makers and marketers of soft drinks.
5.0 Strategic Position and Risk Assessment
The relative position of a company in its industry matters for performance. According to Parch and Rubinson (2011), strategic positioning essentially reflects choices made by a firm with regard to the type of value it would create and how that value would be created in a different way than its competitors. Lamar Rene’ will compete on low cost basing on cost leadership. Cost leadership entails balancing price with acceptable quality. Relative cost would be shifted in the favour of the company in order to attain competitive advantage. Consumers would perceive Lamar Rene’s products as very healthful, high-quality, inexpensive, suitable for all ages, and the product would also be related to happiness and joy. This perception of Lamar Rene’s brand by the consumers would translate into a high level of loyalty and would make buying decisions more automatic (Parch & Rubinson, 2011). Lamar Rene's products will be reasonably priced with marketing highlighting both high quality and reasonable pricing to enable customers get value for money. The following are the potential risks that would be encountered with the product:
5.1 Risk of non-compliance to safety standards
Due to concerns about the health implications of non-alcoholic beverages especially those containing sugars, regulatory authorities are highly strict and manufacturers are expected to demonstrate that their products are healthy. Regulators need to ensure the health safety of consumers and put in place relevant regulations for which producers in the foods, drink and beverage industry have to abide by (Rayner et al., 2013). Safety regulation is necessary and Lamar Rene’ start-up will have to comply will all the relevant regulations although this may mean a higher cost implication. Since Lamar Rene’ beverages would be natural and organic, no artificial elements or additives would be added and all necessary efforts would be undertaken to ensure there is no contamination during processing.
5.2 Risk of inadequate and intermittent supply of raw materials and high cost of raw materials
Lamar Rene' Inc. will need to procure fresh fruits from fruit farmers to make the organic alcohol-free beverages. However, the changing weather patterns mean that this start-up company is unlikely to have continuous and consistent access to the required raw materials all the time even if they are imported. There is also a risk that there will be a rise in the cost of raw materials since the supply of raw materials may not adequately meet the demand. This might also exert pressure leading to higher costs on business operations resulting in higher prices. To minimize the risks, it would be important to strengthen relationships with suppliers as they are better placed to provide information on likely shortages of mangos, apples, pineapples, peaches, passion fruits and other raw materials.
6.0 Marketing Plan and Sales Strategy
The product would be advertised using the label Alcohol-Free or Non-Alcoholic. Alcohol is generally a psychoactive drug and using these labels would mean that the products are appropriate to recovering alcoholics, to those who are driving, to pregnant women, and to those who do not want alcohol in their system (Rayner et al., 2013). For the first six months of the company being in business, I will start marketing and selling in my local community in a radius of 25 miles from where I live. This will give me time to perfect my product and learn from actual customers. The product would be sold in outlets and stores located in the main population centers across the Washington DC area including Alexandria, Forestville, Arlington, Congress Heights, Burke and Silver Springs.
The product would be marketed through a multi-channel approach. This will entail marketing online, through dealers and though catalog. It is notable that multichannel marketers often attain the greatest success given that consumers however and whenever they like are inclined to spend more and even shop more (Arnold, 2015). In essence, traditional direct marketing would be employed in addition to online sales. Furthermore, online advertisements, direct-response television spots, as well as Email solicitations which link to Lamar Rene’s website would be the tactics employed. Moreover, the products would be advertised on social media platforms such as Twitter, Facebook and LinkedIn as well as on local newspapers and magazines in the Washington DC area.
Public relations usually play an important role in launching a service or a product (Blank, 2013). Therefore, when launching Alvaro, media relations tactics would be used to win interviews, to place articles, to get coverage by letting the press to review my product, and to hold a launch event. The more opportunities I would have to present the new Alvaro product to the target market comprising 16-30 year-olds, the more people would know this product and become interested in buying and consuming it. The results from all media would be monitored and within the initial weeks and months, I would be prepared to adjust my campaign in order to make the most of what is working best.
Lamar Rene' Inc will rely on two distribution channels to improve visibility and sales of its product: wholesalers/distributors, and direct sales team as part of direct to end-user. As the company expands, there would be a need for wider distribution through more wholesalers, while the direct sales teams would market the products locally whilst creating awareness. Even though there will still be e-marketing, this will be the first instance where some consumers compare prices. Selling directly to the online wholesalers and end-customers will also increase sales for the Lamar Rene' Inc Alvaro champagne.
The rationale for direct to end users distribution is that the sales team sells directly to distributors for the larger clients. The distributors in this case are the restaurants and sports venues, while the sales team will also be stationed in sportin...