Assignment 3 Part 1: Operation, Technology, and Management Plan

Use the “NAB Company Portfolio” (see: Course Required Files in Week 1) for reference. Provide the following information below.

1. For year one of your NAB company’s Business Plan, complete the Income Statement, Cash Flow Projections, and Balance Sheet sections from the “Business Plan Financials” MS Excel template

2. Develop the following financial sections of your NAB Company’s Business Plan. Note: Attach the MS Word document to the discussion thread.

a. Sources and use of funds

Freshberry Drinks Inc, will fund from personal saving $80.000 and will be receiving a startup loan from family ( my parents agree to give loan with no interest to help to start new business) in the amount of $20,000 at a period of 24 months and no interest.. The company will also take out a loan from SBA( Small Business Administration) loan for $100,000 at a period of 60 months and an interest rate of 4.00%. SBA is non-profit organizations help to start-up small businesses who has financial plan and ideas. Since we don’t have operational running business currently, bank loan will be more difficult to get is because they want to see your last 3 years tax return. Also checking if you have large capital or properties to lien hold before consider loan option for business.

These funds ( SBA) and family loan will be allocated towards any startup costs accrued. These funds will be used for operating expenses ,cost of goods required and including supplies such as renting production facility, office furniture, operation equipments, Transportation Truck, marketing, utility cost, bottle and caps, labels, cartons, and all needed ingredients.

b. Plan assumptions

Lancaster is a city located in the state of Pennsylvania. It is the county seat of Lancaster County and is one of the oldest cities in the country. Lancaster County, Pennsylvania's estimated population is 542,903 with a growth rate of 0.70% in the past year according to the most recent United States census data. Lancaster County, Pennsylvania is the 6th largest county in Pennsylvania. Lancaster once served as the capital of Pennsylvania. It was also once the capital on the United States. However, it only held this role for one day. Lancaster has a population of over 59,218 residents ( zip code 17601 ). The city’s total area measures just 7.4 miles, and there is a population density of about 8,000 people per square mile.

Freshberry Drinks is targeting over 500,000 people within 15-20 miles radius of operation. Freshberry has 1 product lines of certified organic fruit/vegetable juice drinks. We will supply our ingredients from local Amish farms. They don’t use any chemical, so it will be % 100 organic juices. Local people use to shop from local farms. Our target market already has healthy life style and choice more organic drinks than average people. There is no other local juice producer/manufactory. This will give us head star for organization.

From the year 2019, Freshberry’s product lines have been a success. For the fiscal year beginning January 1st , 2019 and ending at 30 December 2019, the Gross Profit for product line will be $2,132,162. Projected Gross Profit for Fiscal year 2020 is at $3,516,070

Product Line 1:

1. Monthly Volumes = 55,000 Bottles in January

2. Month on month growth = 4%

3. Returns and allowances = 3% of gross sales

4. Unit price = $4.00 per bottle

5. COGS = 30 % of Gross Sales ($1.20 per bottle)

6. %55 of sales will be credit

7. All Credit sells have 30 days term

8. Sales made through commission agents = 50%

9. Commission to sales agents = 5%

10. Income taxes will be 25%

11. Monthly Inventory for the first year: 1 January 2019- 30 December 2019

Capital Purchases (will invest approximately $100,000 for operation equipments and loan will be cover this purchases)

. Juice Mixing and Bottling Machine (50-60 bottle per min) at $16,000 each with life of 20 years and salvage value of $1000

. NAB-FS-60 Cold Juice Press(300 gal per hour) NAB Mixers at $35,000 with a life of 20 years and salvage value of $2,000

. Labeling Machine at $2,2000 with a life of 10 years and salvage value of $400

. 24 FT Distribution Box Truck at $25,000 each with a life of 8 years and salvage value of $2,000

. 2 Computer Systems at $1,200 each with a life of 5 year and a salvage value of $200

. Computer System Upgrades at $1,000 with a life of 5 years and a salvage value of $200

. X2 Mobile Phone at $400 each with a life of 5 years and a salvage value of $50

. Landline of $30

. Fax/Copy machine at $300 with a life of 5 years and a salvage value of $50

Professional Services

. Attorney’s - $4,000

. Accountant’s -$7,200

. Management Consultant- $1,200

. Industrial Specialist - $2,400

. Technology Consultant- $3,600

Capital Investments and Loans

. Myself $80,000

. Family $20,000 to be repaid in full with no interest within 24 months

. SBA (Small Business Administration) Loan $100,000 for 5 years at 4.00% interest

c. Break-even analysis

Freshberry Drinks break-even analysis shows that average monthly average sales must be $144,367 at which sales exceed costs and we begin to make a profit from first month of 2019.

Year 1 (2019)
January	$117,906
February	$113,519
March	$113,511
April	$152,816
May	$157,072
June	$156,832
July	$158,297
August	$157,126
September	$157,118
October	$149,358
November	$149,350
December	$149,497
Monthly Average	$144,367

http://worldpopulationreview.com/us-counties/pa/lancaster-county-population/