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THE MEAT SHOPPE

TABLE OF CONTENTS
1.0 Executive Summary ................................................................................................................................. 2 1.1 Objectives ................................................................................................................................... 3 1.2 Mission .......................................................................................................................................... 3 1.3 Keys to Success ...................................................................................................................... 3 2.0 Company Summary ................................................................................................................................... 4 2.1 Company Ownership ............................................................................................................. 4 2.2 Start-up Summary .................................................................................................................. 4 Table: Start-up ................................................................................................................................ 5 3.0 Products.......................................................................................................................................................... 6 4.0 Market Analysis Summary ................................................................................................................... 7 4.1 Market Segmentation............................................................................................................ 7 4.2 Target Market Segment Strategy .................................................................................. 8 4.3 Industry Analysis .................................................................................................................... 9 5.0 Strategy and Implementation Summary ...................................................................................... 10 5.1 Competitive Edge.................................................................................................................. 10 5.2 Marketing Strategy .............................................................................................................. 10 5.3 Sales Strategy......................................................................................................................... 11 5.4 Milestones ................................................................................................................................. 12 Table: Milestones ......................................................................................................................... 12
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THE MEAT SHOPPE


6.0 Management Summary ......................................................................................................................... 13 6.1 Personnel Plan........................................................................................................................ 13 Table: Personnel ................................................................................ Error! Bookmark not defined. 7.0 Financial Plan ............................................................................................................................................ 13 7.1 Start-up Funding ................................................................................................................... 14 Table: Start-up Funding ................................................................ Error! Bookmark not defined. 7.2 Important Assumptions ........................................................... Error! Bookmark not defined. 7.3 Break-even Analysis ............................................................... Error! Bookmark not defined. 7.4 Projected Profit and Loss ................................................................................................ 14 7.5 Projected Cash Flow ........................................................................................................... 14 7.6 Projected Balance Sheet .................................................................................................. 14 7.7 Business Ratios ...................................................................................................................... 15
1 .0 E X E C UT IV E S UM M A R Y Overview La Chevre is a startup specialty butcher shop to be launched in the coming year. It will sell a wide menu of meats to customers including medium- and high-income residents, as well as high-income residents of neighboring towns, and high-end caterers. The Company La Chevre established as a limited liability company owned by its three co-founders. The store will be managed and directed by Mr. Ovais Aslam, the companys founding Director & Chief Operations Officer, and Imran Khan, the concept builder, founding Director and Chief Executive Director, an experienced industrialist.

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Products and Service La Chevre will sell packaged fresh lamb/goat meat, packaged poultry meat. The products will be purchased from suppliers within a 100-mile radius of the store to have minimal impact on the environment and to maintain product freshness. Products will be purchased as whole animals and butchered from abattoirs or external small meat plants/vendors and shall be cut/packaged into patterns at the store by trained butchers. The sales staff will offer suggestions of substitutions or help customers fulfill their orders through special orders in order to make sure all customers leave satisfied. The Market The meat and poultry industry is a growing segment of Indian agriculture. Total Indian meat consumption was 55% red meat (beef, veal, lamb, pork, and mutton), 8.2% fish, and 36.8% poultry in 2007. Meat is sold through retail establishments including restaurants, grocery stores, and butcher shops. Competition Competitors for La Chevre fall into the following categories: Grocery Stores - 7 stores in greater city area Big box retailers (Wal-Mart and Costco) Butcher shops (Red's Meats and Bay Avenue Butchers)

La Chevre will establish its competitive edge through the expertise of its founders. Imran Khan brings with him existing relationships with the best suppliers of livestock/meat as well as an understanding of the craft of meat product marketing. Coupled with Mr. Ovais Aslam's understanding of food service management, sales record in business to business sales, and financial acumen, the pair will have an edge over the town's other butcher shops and grocery stores within its niche market. Financial Considerations Funding for the launch of the business will be provided primarily by equity from the two partners. Each will contribute in equal share from their savings to launch the business. The Page 2

remainder of financing will be made up in temporary credit card debt taken on by the two founders and accounts payable from delayed payments on start-up costs. The business seeks a business loan to finance the purchase of the equipment needed. The business will reach positive cash flow in its 8th month of operation, allowing for expedited repayment of its loan obligations, as well as for dividends to owners paid. Projected Revenue will top $XXXXX and profit will reach about $XXXX in the third year of operation.

1.1 O B JE CT I VE S
La Chevre will measure its success by its ability to achieve the following objectives: 1. Build sales to $XXXXX annually within three years. 2. Receive 60% of sales through advance orders, either by phone or Internet, with 40% of sales through walk-up traffic. 3. Achieve cash flow break-even within six months. 4. Become profitable by the second year of operation.

1.2 M IS S I ON
La Chevre is a specialty butcher shop, which seeks to serve the highest quality meats, cut to customer specifications, and become the foremost specialty meats provider in the greater Locality area.

1.3 K E YS

TO

S U C CE SS

La Chevre must follow these principles in order to achieve success in its market: 1. Maintain high quality standards for its suppliers and continuously monitor this quality. 2. Preserve meats in optimal conditions to maintain freshness while in the store. 3. Maintain excellence in the skill of butchering meats through hiring, training, and supervision of staff. Page 3

4. Listen carefully to customer needs and respond with custom-cut products, whether in person, over the phone, or through Internet orders.

2 .0 C OM P A N Y S UM M A R Y A startup specialty butcher shop, La Chevre plans launching its outlets in this year. It will sell mutton and lamb meat along-with poultry. Upon further developments, the store will sell meats such as buffalo beef, quail and duck meat, and other such special meat items. Customers will include medium- and high-income residents of Locality, as well as highincome residents of neighboring towns, and high-end caterers and restaurants. The Companys Pan India stores will be managed and directed, by Mr. Ovais Aslam, an experienced marketer of consumer products and Mr. Imran Khan, an experienced project development entrepreneur, with the abilities of establishing successful business ideas. Mr. Imran Khan will serve as the company's CEO and Mr. Ovais Aslam as the company's COO.

2.1 C OMP A N Y O W NER SH IP


La Chevre established as a limited liability company has 51% ownership distributed among the founding directors. The Directors will share in management responsibilities with decisions being formulated at the board meetings of the company.

2.2 S T AR T - U P S UMM A RY
The following summary table shows the projected start-up costs over the three months prior to the store's opening. Start-up expenses for La Chevre include 1. Initial insurance premiums covering both general liability and product liability, as well as business renter's insurance, 2. Rent for 1 month's security and 2 months to allow for build-out of the retail space, 3. Pre-launch marketing to cover flyers, a direct mail campaign, and advertisements in local papers, the development of a website with e-commerce capabilities to take orders and sell meats directly. 4. And the normal legal expenses for consultation and permitting.

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Inventory on-hand at any given time must be low as all meats must be kept extremely fresh and so will be ordered on a weekly basis or even more often. Other current assets include office and store furniture, shelving, a computer, phone system, and tools. Long-term assets include the refrigerator unit for the shop, refrigerated display cases, window displays, store fixtures, a refrigerated delivery van, and additional investments in improvements to the retail location. A significant amount of cash is required to fund the first year of operations until the business reaches break-even. T A BL E : S T AR T - U P

Start-up

Requirements

Start-up Expenses Legal Stationery etc. Insurance Rent Pre-Launch Marketing Website Development Total Start-up Expenses Rs.3.50,000 Rs.50,000 Rs.15,000 Rs. 40,000 Rs. 50,000 Rs. 20,000 Rs.5,25,000

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Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Rs.1,25,000 Rs.1,00,000 Rs.0,75,000 Rs.2,00,000 Rs.5,00,000

Total Requirements

Rs.10,25,000

3.0 Products La Chevre will provide the following products on a regular basis: Domestic Lamb: Chop Flank Leg

Free-Range Poultry: Chicken Kiev Chicken Cordon Bleu Cutlet Kebab

Special specified cuts, catered in accordance to customer requirement; prepared, and packaged in front of the customer.

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The products will be purchased from suppliers within a 100-mile radius of the store to have minimal impact on the environment through trucking costs and to maintain product freshness. Products will be purchased as whole animal carcass and butchered in the store by trained butchers. They will be sold while fresh. While products may be replenished within a few days, there is the possibility of certain items running out because of high sales and going out of stock until new shipments may arise. The sales staff will offer suggestions of substitutions or help customers fulfill their orders through special orders in order to make sure all customers leave satisfied.

4.0 Market Analysis Summary The Indian Agriculture & Husbandry Institute provides the following statistics about the meat industry: Goats - Sheep constitute a very important species of livestock in India, mainly because of their short generation intervals, higher rates of prolificacy, and the ease with which the goats as also their products are marketed. They considered very important for their contribution to the development of rural zones and people. The local initiatives to promote quality labels and innovative products for cheeses, meat, and fibers could help goats in keeping a role for sustainable development in an eco-friendly environment all over the world. However, the future of the goat and sheep industry as a significant economic activity will also be very dependent on the standards of living in the countries where there is a market for the goat products. The country is largest exporters of sheep - goat meat to the world. The country has exported 11,908.39 MT of sheep - goat meat to the world for the worth of Rs. 25,318.88 crores during the year 2010-11. Meat is sold through retail establishments including restaurants, grocery stores, and butcher shops. Independent butcher shops have decreased in number over the last ten years, as sales of meet have fallen slightly and moved increasingly to grocery stores and big box retailers. However, this has created an opportunity for specialty butcher shops in markets, which provide only basic options through these larger retailers.

4.1 M ARK ET S EG ME NT AT I O N

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Locality potential customers are divided into the following groups as shown in the market analysis table: Locality High-Income Households: Annual household income of over Rs 10,00,000 in Locality (80% of which consist of two adults). Locality Medium-Income Households: Annual household income of Rs. 600,000 to Rs. 800,000 in Locality (50% of which consist of two adults and 50% of which consist of one adult). Neighboring Town High-Income Households: Annual household income of over Rs.400,000 in the five towns bordering Locality (80% of which consist of two adults). Caterers: Upscale catering businesses in a 15-mile radius of Locality. Restaurants: Upscale restaurants in a 15-mile radius of Locality.

4.2 T ARG ET M AR KET S EG ME NT S T R ATEG Y


Market segmentation for La Chevre is based on the specific market opportunity in the Locality area. While low-income households are perfectly content with purchasing the meat options at local grocery stores and big box retailers, households with a greater level of disposable income are interested in expanding their options for home cooked meats. Furthermore, these customers entertain in their homes largely than low-income households and prefer to offer high quality or rarer meat options at these events. It is expected that customers from neighboring towns will be more likely to travel to Locality if they have higher levels of disposable income to allow for the time and gas expense of this travel. For this reason, high-income households will be targeted at first in neighboring towns. Caterers, especially those serving high-end corporate and private events, and upscale restaurants seek high-quality specialty meats at wholesale prices. La Chevre will sell in bulk to catering businesses and restaurants at a substantial discount from retail prices, while still allowing for margin. Caterers and restaurants will be required to order in advance to allow for specialty orders of meats and not deplete the products available at the retail location for immediate purchase. Page 8

4.3 I N D US TR Y A N AL YS I S
The Indian Agriculture & Husbandry Institute provides the following analysis: "The meat industry is unique because it relies on live animals as its raw materials. Within livestock production, there is a classic, livestock price cycle. Prices rise and fall as producers raise more animals in response to high prices or low supply, and then cease producing when livestock inventories become high and prices fall. At the low points in the livestock price cycle, some livestock producers have called for reviews of meat packing industry structure to determine if the structure may be causing a price decline. Each review has found that industry structure is not to blame for livestock prices. Rather, the basic laws of supply and demand most often are the cause." Despite, and in fact because, of these changes, there is a growing need for sales of specialty meats to the niche market who can afford and desire them, as they are no longer served well by grocery stores and large retailers. 4 .3.1 C OM PE T IT I ON
AND

B U Y ING P A TTE R N S

Competitors for La Chevre fall into the following categories: Small Butcher Meat Shops Food Mart Retailers

Small Butcher Meat Shops provide basic meat options at relatively low prices. They are chosen by customers interested in buying meat along with all of their grocery and food needs, and not traveling far from their home. These customers will sacrifice some quality and options for price and convenience. Food Mart retailers serve clients interested in the lowest price and able to sacrifice some convenience (longer waits and longer travel times) for the lowest price. They offer meats of the same range of options and quality Indirect competitors (and potential competitors) include restaurants, as consumers interested in specialty meats may choose to eat out instead of cook the meal themselves. Page 9

5 .0 S T R A TE G Y

AND

I M P L E M E NT A T IO N S U M M AR Y

To implement its plan, La Chevre will attempt to: 1. Establish its retail location by signing a lease once funding is secured. 2. Begin by targeting high-income residents of Locality and the surrounding towns, as well as medium-income residents of Locality and business customers (upscale caterers and restaurants). 3. Business customers and retail customers will be grown as separate revenue streams, but will reinforce each other. 4. Specially cuts prepared and packaged as fresh chilled meat produce for the export market.

5.1 C OMP ET I TI VE E DG E
La Chevre will establish its competitive edge through the expertise of its founders. Imran Khan brings with him existing relationships with the best suppliers of meat as well as an understanding of the craft of meat processing and packaging. Coupled with Ovais Aslam's understanding of food service management, sales record in business to business sales, and financial acumen, the pair will have an edge over the town's other meat shops and grocery stores within its niche market.

5.2 M ARK ET I NG S TR A TEG Y


The marketing strategy of La Chevre is to establish anticipation of the store's opening in the community so that it can hit the ground running with retail sales immediately upon launch. To that end, the following tactics will be used: Direct mail of flyers to a select list of 5,000 high-income households. Advertisements in local newspapers and magazines. Flyers in the downtown area around the site of the store. Launch of the website in anticipation of opening. Yellow Pages listing.

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To market to businesses, La Chevre will join the local Chamber of Commerce and Food Provider organizations to network and market to other members. After opening, the following tactics will be used going forward: Direct mail to additional households with higher incomes. Search engine marketing via local Google ads. Email newsletter-describing developments in meat offerings to business customers and certain households.

5.3 S AL E S S TR A TEG Y
The sales strategy for the business includes both retail sales and business sales strategies. Retail sales will be based on the marketing of the store and its location, explained in the marketing plan section. At an operational level, orders will be taken in person by clerks working the floor of the store (two on duty at any given time), or by the office clerk over the phone or Internet. Orders for specific cuts will be transmitted from these clerks to the butchers on duty who will prepare the cuts. They will be packaged, priced, and prepared for sale by the floor clerks. Customers will be greeted with a standard greeting and served to meet their satisfaction with the greatest care taken to provide quick service to walk-in customers. A machine will give numbers to waiting customers so they can be served in an orderly fashion. Waiting customers will have a few seats in the store to sit in while waiting. The business sales strategy relies on prospecting by COO Ovais Aslam to establish sales to caterers and restaurants. He will research, contact, and present to these businesses, drawing on his past sales experience. As a partner of the business, he will work to maximize this revenue stream to increase profits, rather than be-cause of commissions on sales. 5 .3.1 S AL E S F OR E C A ST The sales forecast table represents the business scaling up sales quickly in the first year as the community recognizes the high quality of its products and as in-roads are made with the dozens of area caterers and restaurants. Page 11

Retail sales will be the greatest driver of sales growth and represents the best margins for the business, with a 100% markup over cost. Special orders are more expensive to provide, but will provide a vital line of business that will encourage high-income customers to use the store. Their cost of sales will be 60% of sales. Products sold to businesses will be sold at lower rates, but costs will also be reduced through bulk ordering and the ease of working with businesses in an ongoing way. The cost of sales to businesses will be 60% as well. This category, including both catering and restaurant sales, will represent a larger portion of sales than retail sales. The presence of the store and the brand name it establishes will allow caterers and restaurants to advertise the fact that they purchase their meats from La Chevre without any fear, as customers will see it as a mark of quality.

5.4 M IL E ST O NE S
Ovais Aslam will manage all marketing and sales activities. As discussed earlier, the business's website must be completed months before opening to provide information for those who see flyers and ads prior to the launch. Search engine marketing will be an ongoing expense after the launch, and business prospecting by Ovais Aslam will be continued as needed to establish a foundation of restaurants and caterers to sell to.

T A BL E : M IL E S T ONE S

Milestone

Start Date

End Date

Budget

Manager

Department

Website Development Design Flyers and Ads Direct Mail Campaign Newspaper Ad Campaign

8/1/2012

8/10/2012 Rs.15,000 EA EA EA

Sales Sales Sales Sales


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8/15/2012 8/20/2012 Rs.2,000 8/10/2012 8/31/2012 Rs.5,000

8/20/2012 8/31/2012 Rs.35,000 EA

Search Engine Marketing Business Sales Prospecting Totals

8/20/2012 8/31/2012 Rs.10,000 EA 8/10/2012 8/31/2012 Rs.25,000 EA Rs.97,000

Sales Sales

6 .0 M AN AG E M E NT S UM M A R Y The management of La Chevre will consist of Imran Khan and Ovais Aslam as the company leading top order. Imran Khan, CEO, will design the store's floor plan, plan, and order and install all equipment purchases, establish operations procedures, providing financial inputs & management, and establish relationships with all suppliers. Ovais Aslam, COO, will manage sales, marketing, and train butchering staff and operations staff for day-to-day operations of the business. This will include training sales staff, managing all marketing programs, and being the liaise to the website developer for the business. Employees per Shoppe, will initially include a full-time sales/operations clerk, butcher and one assistant butcher.

6.1 P E RS O NN EL P L AN
The personnel forecast reflect modest raises for all staff each year. The CEO and COO will be primarily compensated through profits. It is expected that lower-level staff may turn over, but the positions will be systematized to an extent that this does not disrupt the business.

7 .0 F I N AN C I AL P L A N The business will grow after startup from its own cash flow. Significant growth is possible in the initial target markets before there is a need to take on additional staff or move to a Page 13

larger facility. These are possibilities after the first three years, as is opening an additional retail location in an area that will not compete with La Chevre' first location.

7.1 S T AR T - U P F UN D I NG
Funding for the launch of the business will be provided primarily by equity from the two partners. Each will contribute in equal share from their savings to launch the business. The remainder of financing will be made up in temporary credit taken on by the two founders and accounts payable from delayed payments on start-up costs. The business seeks a business loan to finance the purchase of the equipment needed. These assets can be held as collateral in this loan.

7.4 P R O J EC TE D P R OF IT

A ND

L OS S

Additional direct cost of sales reflects the costs of packaging, gas for deliveries, credit card transaction fees, and other direct costs of the meat preparation and order fulfillment processes. Gross margins are based on the industry markup for butchered meats. Marketing expenses will be higher in the first year to announce the opening of the firm and will drop after that. Most expenses will show small increases each year as the business will remain in less numbered location over the first three years. Profit will rise sharply over the first three years as sales are spread over these relatively stable expenses.

7.5 P R O J EC TE D C ASH F L OW
The business will pay back its current borrowing in credit card debt over the first and second years of operation, and its long-term loan over the first three years of operation, after smaller payments in the first year. Cash on hand will allow dividends to be paid to the partners in the second and third years of operation.

7.6 Projected Balance Sheet

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The balance sheet shows long-term liabilities will be paid off over the first three years and retained earnings will increase in the company, despite dividends being paid. The business will increasingly develop means to finance its own growth in future years.

7.7 B USI NESS R AT I OS

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