Thorougly Business Plan

7/30/2019 Thorougly Business Plan

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Business Planfor

PSC Distribution Limited


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Table of Contents

1.0 Executive Summary...................................................................................................... ...........................1Chart: Highlights.............................................................................................. ...........................2

1.1 Objectives........................................................................................................... ...........................31.2 Keys to Success ................................................................................................. ...........................4

2.0 Company Summary...................................................................................................... ...........................42.1 Company Ownership .......................................................................................... ...........................52.2 Start-up Summary............................................................................................... ...........................5

Table: Start-up................................................................................................ ...........................5Chart: Start-up ................................................................................................ ...........................6

3.0 Products....................................................................................................................... ...........................64.0 Market Analysis Summary ............................................................................................ ...........................6

4.1 Target Markets ................................................................................................... ...........................74.2 Industry Analysis................................................................................................. ...........................8

4.2.1 Competitive Analysis .............................................................................. ...........................95.0 Strategy and Implementation Summary........................................................................ .........................10

5.1 SWOT Analysis................................................................................................... .........................105.1.1 Strengths ............................................................................................... .........................115.1.2 Weaknesses .......................................................................................... .........................12

5.1.3 Opportunities ......................................................................................... .........................125.1.4 Threats .................................................................................................. .........................13

5.2 Competitive Edge ............................................................................................... .........................135.3 Marketing Programs ........................................................................................... .........................145.4 Sales Strategy .................................................................................................... .........................15

5.4.1 Sales Forecast....................................................................................... .........................15Table: Sales Forecast............................................................................ .........................16Chart: Sales Monthly.............................................................................. .........................16Chart: Sales by Year.............................................................................. .........................17

5.5 Milestones .......................................................................................................... .........................17Table: Milestones............................................................................................ .........................17Chart: Milestones............................................................................................ .........................18

6.0 Management Summary ................................................................................................ .........................19


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Table of ContentsTable: Sales Forecast........................................................................................................ ...........................1

Table: Personnel................................................................................................................ ...........................2Table: Profit and Loss........................................................................................................ ...........................3Table: Cash Flow..........................................................................................................................................4Table: Balance Sheet....................................................................................................................................5


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1.0 Executive Summary

PSC/Sea Angel will be a joint venture to manufacture and distribute Sea Angel, one of the

green industrys leading all-purpose products. The product is among the most diverse in theindustry as it can be used for a variety of household and industrial level cleaning projects but

without the harmful toxins that can be found in many of the more traditional products thathave for so long been staples in homes throughout the North American region.

PSC has secured the rights to be the exclusive distributor of the Sea Angel product. Thecompany will be headquartered in Vancouver, British Columbia, Canada with fulfillment operations

in Toledo, Ohio. The initial targets for the Sea Angel products will consist of green janitorialcompanies, green advocates, daycare fac ilities for children and elderly adults and simple

homemakers. These 4 groups will give the product coverage in all areas and hold the potentialto yield respectable revenue streams for many years to come as the operation continues to

evolve.

From a personnel perspective, the PSC/Sea Angel venture will be headed by ChristopherWong. Mr. Wong is an accomplished professional with a strong business acumen holding anMBA from Queens University, a Diploma of Finance from the British Columbia Institute of

Technology and he is also a Certified Management Accountant. The management structurewill be lean in the early years with executives and key team members being added as the

needs of the business dictate.

The Sea Angel product is part of the so-called Green Movement; a move towards personal

and planet preservation that has become one of the most dynamic this or any other generation

has ever seen. Millions of persons worldwide have begun to take notice of the manner in whichtheir lives and the way they live them actually contribute to the well-being of their planet.One of the ways that they have begun to proactively preserve the planet is through the use

of products like Sea Angel. The product is 100% natural; a claim only a handful of greencompetitors can make Sea Angel is also among the lowest priced green cleaners in the


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1.1 Objectives

Sea Angel Corporate Objectives

1. Become the recognized market leader in the eco-friendly cleaner space. One of the

long-term corporate objectives is for PSC/Sea Angel to become one of the recognized marketleaders in the eco-cleaning space. The company envisages doing this through prompt

customer service, a fair price point, creative marketing and a stellar product line.

2. Develop safe alternatives to traditional cleansers. Traditional cleansers are filled with

toxins and fumes that are extremely harmful not only to the environment but to also to theconsumer. One of the corporate goals will be to continue to evolve and expand responsibly

offering products that yield the optimal results for the environment and the consumer.

3. Product Diversity/Cost Effectiveness. Sea Angel products are already among thelowest priced in the industry but plans are to make the product even more cost effective by

developing an all in one cleanser that is safe for all household needs.

4. Champion Environmental Preservation. Through each product, advertisement and

opportunity that the organization is afforded, Sea Angel wants to champion the need for allcitizens to work diligently to preserve our planet. To achieve this end, the organization will be

involved in a variety of worthy causes that raise awareness regarding this extremely worthycause.

Sea Angel Marketing Object ives

1. Increase brand awareness. The hallmark of any strong brand is consistency. Sea Angelwill work diligently to develop a consistent marketing message that will in turn translate into a

brand that has the potential of being a market leader.


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1.2 Keys to Success

What follows is a list of the keys to success for PSC/Sea Angel.

1. Effective Internet marketing. The Internet will be the primary driver of sales as there willnot be a standalone storefront dedicated to the product line. Effective Internet marketing

from SEO to compelling email messages to strategically placed banner advertisement; allphases must work cohesively to maximize the effort.

2. Clearly defined marketing message. The market is being flooded with green messages

from producers claiming their products are the best. In order to be successful and remainrelevant, Sea Angel/PSC must define its message in such a way that it stands out in the

increasingly crowded green landscape.

3. Customer Satisfaction. With the competitive landscape being crowded by companies bothlarge and small, it will be imperative that PSC/Sea Angel develop an efficient customersatisfac tion model capable of promptly addressing their needs.

4. Strong branding. Consistency in messaging, packaging and performance will be the keys

to establishing a strong brand.

5. Budget management. As is the case with any startup organization, effective budget

management will be imperative. Shipping product on time, creating strong vendor relationships

and establishing a strong business credit rating will all positively impact the company budget.

6. Developing strategic alliances. Strategic alliances with other cause-oriented

organizations will allow the Sea Angel brand and message to be seen and heard outside of thecore target audience


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2.1 Company Ownership

The company is fully owned and operated by the founders. At the current time there are no

outside investors with any ownership stakes. Plans do call for the principals owners to possiblycontact outside investors regarding ownership interests as the model continues to expand and

the needs of the business dictate.

2.2 Start-up Summary

PSC currently has $200,000.00 of funds to invest in this venture. The monies on hand areenough to adequately begin the project. The goal is to continue to produce and sell enough

product to replenish the funds that are used during the day to day operations. Plans also call forthe organization to potentially pursue outside investors and venture capitalists should the need

arise.

Table: Start-up

Start-up

Requirements

Start-up Expenses

Marketing $45,000Web Development $10,000

SEO $3,000

Technology $10,000

Facili ties/Storage $8,000


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3.0 Products

Sea Angel is an all in one cleaning, bio-degradable cleaning product that is among the most

diverse on the market. Sea Angel can be used for standard household cleaning projects,personal bathing, vegetable cleaning, pet washing and an assortment of other cleaning needs.The product is among the most cost effective in the industry with four product sizes available

including 1, 2, 4 and 8 packs.


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4.1 Target Markets

The target customer base will be comprised of the following 4 groups.

1. Homemakers. Homemakers throughout the North American region have begun to embrace

the Green Movement as they realize that even the smallest effort to reduce the carbon footprintcan positively impact our planet. Homemakers on all income and soc io-economic levels will be

targeted through Sea Angel marketing efforts.

2. Elderly and Child Day Care Facilities. Sanitation is a huge issue in day care facilities

throughout the North American region as facility operators are called upon to provide a c lean,stable environment for loved ones. For this reason these types of fac ilities carry with them an

immense amount of potential for products like Sea Angel. As the Green Movement becomes moreand more prevalent in our society, ensuring that clients and potential clients that their

facilities use 100% natural products to clean environments occupied by family members standsas a very unique selling point.

3. Green Janitorial Companies. Similar to care fac ilities, eco-friendly green cleaningproducts will give any janitorial company a definite competitive edge, regardless of the market

they serve. With this thought in mind, Green Janitorial companies will be heavily targeted by SeaAngel. Chosen companies will be given samples as this could potentially lead to developing

long-term relationships and strong residual revenue streams.

4. Green Advocates. Last but certainly not least, Green Advocates will be heavily targeted

through all PSC/Sea Angel marketing efforts. They are a diverse group with every race, sex

and socio-economic background being represented. As the need to preserve our planet becomesmore and more relevant, this group continues to grow making penetrating and gaining a portionof this market share a vitally important goal.

Although each of the aforementioned groups is somewhat unique in their own right the


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4.2 Industry Analysis

Based on information gathered from the Natural Marketing Institute, 36% of persons living in

North America are classified as green consumers. That same report shows that these personsare also the most likely segment to purchase and consume environmentally and socially

responsible products. Manufacturers of natural and eco-friendly household cleaners have yet tofeel the effect of the weakening economy causing some industry experts to label green products

as recession proof. While other segments of their lives have been forced to take theproverbial, back seat, their affinity for green products seems to continue with no end in sight.

As the green product industry continues to grow, some of the larger manufacturers of cleaningsupplies have also begun to tap into the market. Clorox is the largest major brand to have

entered the market. Green Works is the Clorox green product line and features a number ofhousehold cleansers that are effective yet safe for the consumer and the environment. Other

larger manufacturers are expected to follow suit with startup organizations also joining the mixas companies both large and small begin to realize the potential that this market holds.

Corporations are also becoming more and more aware of the possibilities that are held in theGreen Movement; even those that are not necessarily associated with any type of greenproduct or service. Large organizations such as IBM, Xerox, Wal-Mart and many others have

started to cease the opportunity for strong public relations and are making an effort to jointhe move towards planet preservation through their consumption, policies and more

importantly, their actions.

Research gathered from the Nielsen Company says that by the year 2010, the green product

industry will drive $400 billion dollars worth of sales with most green cleaning manufacturers

predicting healthy growth for many years to come. A number of factors are driving thisseemingly unstoppable surge in consumption including the increased education of consumersas well as the heightening health and safety concerns surrounding conventional cleaning

products. The media can also be credited with furthering the Green cause as it has affordedorganic and natural cleaners a great deal of exposure over the course of the last decade Most


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4.2.1 Competitive Analysis

What follows is an analysis of some of the major competitors that Sea Angel will face in the

green cleaning market. They are as follows:

1. Green Works. Green Works is the powerful natural household cleaning line developed byClorox. The line features all of the staples including detergents, glass cleaners and household

disinfectants. The products are made of bio-degradable ingredients and have been found to bejust as effective and in some cases more effective than traditional cleaning products. Theproducts are 95% natural and plans are to continue working to develop products that improve

the quality of consumer lives while preserving the planet. In addition to their stellar line ofproducts, Green Works has also leveraged the Clorox name to develop a network of st rategic

alliances including Good Housekeeping, the USEPA and the Sierra Club, an organization that hasbeen on the forefront of earth preservation for over 100 years. The greatest strength of the

Green Works brand would be the resources and name recognition that are a part of the Cloroxbrand. By the same token, that name can also be viewed as a negative as the Clorox brand

over the course of history has been so closely aligned with toxic products that continue toharm the planet. This fact can make it somewhat difficult to accept their claim that they arein fact concerned about its well-being when that line (bleaches, harsh cleansers) continues to

be a cornerstone of their business model.

2. Citra-Solv. Citra-Solv has been a mainstay on the green cleaning market for over 20years as they were one of the first to offer products of this kind. Based in Connect icut, Citra-Solv was built on the business philosophy that says consumers should have the right to high-

quality, effective cleaning products that do not harm the environment. All Citra-Solv products

are made from renewable resources that are known to have minimal, if any, impact on theenvironment. The product line is quite extensive and features all-purpose cleaners,dishwashing liquid, clothes detergent, a window and glass cleaner, a wood cleaner, spot

removers, drain and pipe cleaners and air fresheners. Part of the Citra-Solv marketing strategyis to develop products that smell so fresh and clean that consumers actually look forward to


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4. Method. Sold primarily in Target stores nationwide, Method is a fragranced natural cleanerthat has developed a loyal following in a relatively short period of time. The broad product line

with simple packaging and vibrant colors are refreshing and tie in well to the overall theme of thebrand which is to offer safe solutions for the planet as well as todays consumer. In additionto cleaning supplies for the home, Method also offers a product line for personal care including

bar soaps, facial cleansers and lotions making it one of the more versatile green brands in themarketplace. Beyond cleaning supplies, the company is totally devoted to saving the planet

with ongoing efforts that include forest plantings, use of electric energy by resources such aswind and water and a host of other eco-friendly practices. All product packaging is made from

100% recycled plastics and all products are made from natural ingredients such as bamboo,corn and coconut oil. The strength of Method is that aside from cleaning supplies, thecompany seems to be totally sold out to the Green Movement with projects and initiatives that

extend far beyond the household. Their most glaring weakness comes in their distributionmodel. Even though Method products can be found in a number of stores throughout the nation,

they are still primarily sold in Target, which limits their potential to penetrate the market.

5. Planet. Developing powerful products that clean the home but are friendly to theenvironment; that is the core mission of Planet. All of the products that comprise the Planet

family are hypo-allergenic and 100% bio-degradable, free from animal ingredients with none ofthe test ing being done on animals. Planet products are only sold online with no major retaildistribution agreement being pursued any time in the near future. From a strength

perspective, Planet has been in the green cleaning industry for the better part of 20 years a factthat gives them credibility with their target audience. The greatest weakness of the Planet

business model would have to be the size of their product line. Relative to others in the greencleaning marketplace such as Method, Green Works and Citra-Solv, Planet has a very smallproduct line consisting of only 7 products.

5.0 Strategy and Implementation Summary


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5.1.1 Strengths

1. Versatility. From simple home cleaning uses such as bathing, dish and clothes washing to

more difficult outdoor jobs including grease and oil stains, the Sea Angel product is versatile withthe ability to adequately handle all.

2. Higher Profit Margin. Low production costs for Sea Angel leads to a higher profit margin andincreased annual revenues.

3. Management Structure. The PSC management structure is lean, lacking bureaucratic

levels that can sometimes st ifle progress.

4. Internet expertise. The PSC team is contains skilled Internet marketers; a must for a

business of this type where a large part of the revenues will be derived via Internet sales.

5. Green product: The Green Movement has taken the world by storm as more and moreconsumers begin to realize and more important ly, accept their role in maintaining our planet. The

fact the Sea Angel is a green product and has received the Singapore Green Label, one of thehighest honors that can be given to a product is a huge plus.

6. Cost Relative to competitors: In any economy, product cost is a factor but in a recessedeconomy the likes of which our world is currently mired in cost looms even larger. Sea Angel ismuch more cost effective than most of the products that have comparable uses, in some

cases as much as 33%.


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5.1.2 Weaknesses

1. Name recognition: While the uses of the product are varied and testimonials speak to its

effectiveness, Sea Angel is relatively new, niche-oriented product which could make capturingmarket share difficult.

2. Niche product. Sea Angel is a niche product and while going green has definitely becomemore of the norm over the course of the last decade, a great deal of work still needs to bedone before these products are universally used and accepted.

3. Pricing. Pricing determines profit. One of the chief challenges and weaknesses of the PSCmodel is defining the optimal price point for the products which in turn will lead to healthy

revenue streams.

4. Paradigms standing in the way of acceptance. Many consumers have a long-standingrelationship with brands. Regardless of the manner in which Sea Angel can positively impact

their wallets and the environment, these persons may be reluctant to switch brands.

5. Website. The current Sea Angel website, while filled with valuable product information, lacksa clear direction and can at t imes be rather difficult to navigate. Since a large portion of sales

are forecasted to come via the Internet, a more user-friendly, stronger website that reflects

that of a market leader could possibly be developed and deployed.


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5.1.4 Threats

1. Competition from larger competitors. As the Green Movement continues to unfold and

take shape, larger competitors with a great deal more resources with their own line of greenproducts will pose a threat to whatever market share Sea Angel is able to secure. According

to a recent study entitled, The State of Green Business 2009, going green is a great PR movefor the larger cleaning product manufacturers. The move can also cause problems for companies

regardless of size as the green movement has come under a great deal of scrutiny as some ofthe products that are developed do not necessarily match up to the green standards.

2. Price Stigma. Green products tend to cost more and even though consumers are currently

saying that price will not be a deterrent regardless of the state of the economy, research showsthat price does continue to weigh heavily on their minds.

5.2 Competitive Edge

Price is the major competitive advantage that the Sea Angel line of products holds over its

competition. Research shows that the chief concern among green cleaning product consumers isthe higher price that they are sometimes asked to pay. 44% of persons surveyed said that eventhough the world is in the midst of a deep recession, they plan to continue their green cleaning

consumption patterns as long as it is fiscally possible. A further strain on consumer budgets

could prompt them to either revert back to their prior cleaning products or seek more costeffective green cleaners, the likes of which can be found in the Sea Angel product portfolio.


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5.3 Marketing Programs

The Internet will be the primarily tool that is used to carry the Sea Angel marketing message.

From SEO (Search Engine Optimization) campaigns to Google Ad-word and PPC initiatives, themost powerful communications tool ever developed will be leveraged to the fullest to drive

awareness, interest and ultimately revenues. What follows is a list of the marketing programsthat will be used to enhance the Sea Angel/PSC brand and drive awareness.

1. Facebook.com, Twitter.com. Social networking has taken the Internet by storm and in theprocess, become a valuable outlet for companies to deliver their marketing message. With well

over half a billion persons logging onto these 2 social networking websites on a daily basis, it isimperative that PSC/Sea Angel develop a social networking presence that allows the organization

to leverage the potential of the Facebook.com and Twitter.com communities.

2. SEO (Search Engine Optimization). Search Engine Optimization campaigns will enhance thepotential of the company website. Google ad-word and PPC (pay per click) campaigns will alsobe utilized as part of the larger Internet marketing campaign.

3. Green Greetings. Email marketing is an incredible way to stay connected with the core

audience. Email marketing also has a strong viral component as oftentimes recipients are proneto pass information that they receive on to others in their personal networks, giving the message

life and legitimacy. To stay connected to the core audience and drive brand loyalty, SeaAngel/PSC will develop a messaging campaign entitled, Green Greetings to be distributed ona monthly basis. The greetings will be filled with valuable information concerning Sea Angel, new

product releases, news concerning the organization and also give updates on the Green

Movement as well as tips on planet preservation. A signup portal will be added to the homepageof the website that allows users to submit their personal information including their emailaddresses.

4 Direct Mail Research shows that direct mailings are still an effective way to reach


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PSC Distribution Limitedcelebrated in recent history, there are a number of other worthy causes that Sea Angel and PSC

could partner with to raise the companies profile. Some of those causes and groups that have afocus on personal and environmental improvement that could potentially become strategic

partnerships are listed below.

1. Susan G. Komen Breast Cancer Foundation. The Susan G. Komen Breast CancerFoundation has been on the forefront of the fight to cure breast cancer for over 25 years.

Partnering with this organization will be an excellent PR and marketing move as it will allow SeaAngel/PSC to leverage the strength of the Komen brand to gain entry with their core.

2. World Vision. World Vision is an international organization that was founded with the goal of

eradicating poverty and injustice throughout the world. One of the worlds strongest faith-basedorganizations, World Vision has a noble cause and a loyal following.

3. National Arbor Day Foundation. One of the worlds largest and oldest earth preservationorganizations. The National Arbor Day Foundation plants millions of trees annually replenishing

nature that has been devastated by man.

4. AIDS Healthcare Foundation. The AIDS Healthcare Foundation is focused on raisingawareness regarding the most dangerous epidemic of the 21st century through testing,

education and a variety of preventive methods.

5. American Cancer Society. The ACS is a volunteer based, national organization dedicated

to eliminating cancer through education, research, advocacy and service.

6. American Obesity Association. With childhood obesity gaining headlines throughout thenation, a partnership with an organization of this kind could prove to be quite beneficial. The

added bonus of this relationship would be the opportunity to gain access to the youngersegment of the market; educat ing them on the need to preserve their planet while possiblydeveloping long-term brand loyalties with Sea Angel products.


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Table: Sales Forecast

Sales Forecast

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Sales

1 pack $65,375 $137,000 $184,900 $588,000 $1,825,000

2 pack $70,819 $147,600 $178,900 $545,000 $1,540,000

4 pack $204,803 $267,800 $337,500 $1,200,800 $2,875,000

8 pack $174,023 $235,400 $303,800 $1,678,900 $3,540,900

Total Sales $515,020 $787,800 $1,005,100 $4,012,700 $9,780,900

Direct Cost of Sales FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Production $76,110 $124,500 $144,000 $172,000 $185,300

Shipping $23,295 $28,000 $35,600 $54,300 $62,000

Packaging $20,490 $23,400 $25,400 $31,200 $34,560

Storage $8,004 $8,000 $8,000 $8,000 $8,000

Miscellaneous $15,460 $22,100 $24,500 $32,000 $33,500

Web Development $0 $5,000 $5,000 $5,000 $5,000

SEO $0 $2,000 $2,000 $2,000 $2,000

Technology $10,000 $5,000 $5,000 $5,000 $5,000

Travel $0 $0 $0 $0 $0

Subtotal Direct Cost of Sales $153,359 $218,000 $249,500 $309,500 $335,360


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5.5 Milestones

The milestone chart gives critical dates and assignments for PSC/Sea Angel.

Table: Milestones


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6.0 Management Summary

PSC/Sea Angel plans to incorporate a traditional corporate reporting structure consisting of a

CEO, COO and CFO. Departments that will comprise the body of the organization includemarketing, manufacturing, accounting/finance and distribution. What follows is a listing of the

job and departmental duties of each.

CEO. Christopher Wong will act as CEO for PSC/Sea Angel. In his role as CEO he will beresponsible for developing the short and long-term vision for the organizat ion. Mr. Wong will alsobe called upon to develop, manage and maintain outside vendor and strategic relationships.

From a management and reporting perspective, all other personnel on the executive level willreport directly to the CEO.

COO. The COO will be charged with managing and directing the day to day operations of the

organization. This person will be a key dec ision-maker in the areas marketing and distributionas these two functions will be key business drivers. The COO will need to be equal parts f lexible,creative, capable of excelling in a fast-paced environment and decisive with the ability to handle

multi-stage assignments. The COO will also manage all auxiliary departments including marketing,manufacturing and distribution.

CFO. From a fiscal perspective, the CFO will be the eyes and ears of the organization

managing costs while constantly seeking ways to positively impact the organizations bottomline. The CFO will also be responsible for all managing all financial reporting matters including endof year taxes, audits and payroll.

Marketing. Marketing will be responsible for developing the overall marketing message of the

organization while staying attuned to any changes in the marketplace that could enhance thebrand. Persons that are selected to be a part of the marketing team must be espec ially

proficient in Internet marketing as this (the Internet) will be the primary medium that will be usedto drive sales


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6.1 Personnel Plan

During the initial start-up phases, personnel plans call for PSC/Sea Angel to maintain a lean team

consisting only of executives and possibly a virtual assistant capable of handling simple officeactivities. As the business grows, other departments and employees will be brought into the

organization including marketing, f inance, accounting and customer support.

Table: Personnel

Personnel Plan

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

CEO $13,200 $35,000 $41,000 $46,000 $54,000

COO $10,800 $29,300 $36,500 $41,200 $49,800

CFO $10,200 $26,500 $31,200 $36,400 $43,500

Adm in istration $6,600 $15 ,000 $21,000 $26 ,500 $29,200

Total People 4 7 9 12 12

Total Payroll $40,800 $105,800 $129,700 $150,100 $176,500

7.0 Financial Plan

The PSC/Sea Angel financial plan is listed on the following pages.

7.1 Start-up Funding


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Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $121,000

Start-up Assets to Fund $200,000

Total Funding Required $321,000

Assets

Non-cash Assets from Start-up $0

Cash Requirements from Start-up $200,000

Addit ional Cash Raised $0Cash Balance on Starting Date $200,000

Total Assets $200,000

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabili ties $0

Accounts Payab le (Outstanding Bi ll s) $0

Other Current Liabili ties (interest-free) $0

Total Liabili ties $0

Capital

Planned Investment

Owner $0

Investor $0

Addit ional Investment Requi rement $321,00 0

Total Planned Investment $321,000

Lo ss a t Start-up (Start-up Expense s) ($121,000)

Total Capital $200,000


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7.3 Projected Profit and Loss


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Table: Profit and Loss

Pro Forma Profit and Loss

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Sales $515,020 $787,800 $1,005,100 $4,012,700 $9,780,900

Direct Cost of Sales $153,359 $218,000 $249,500 $309,500 $335,360

Other Costs of Sales $0 $0 $0 $0 $0

Total Cost of Sales $153,359 $218,000 $249,500 $309,500 $335,360

Gross Margin $361,661 $569,800 $755,600 $3,703,200 $9,445,540

Gross Margin % 70.22% 72.33% 75.18% 92.29% 96.57%

Expenses

Payroll $40,800 $105,800 $129,700 $150,100 $176,500

Marketing/Promotion $51,492 $78,780 $100,510 $401,270 $978,090

Depreciation $0 $0 $0 $0 $0

Web Development $2,400 $5,000 $5,000 $5,000 $5,000

SEO $950 $2,000 $2,000 $2,000 $2,000

Technology $6,000 $10,000 $10,000 $10,000 $10,000

Payroll Taxes $6,120 $15,870 $19,455 $22,515 $26,475

Storage Fees $8,004 $8,000 $8,000 $8,000 $8,000

Total Operating Expenses $115,766 $225,450 $274,665 $598,885 $1,206,065

Profi t Before Interest and Taxes $245,895 $344,350 $480,935 $3,104,315 $8,239,475

EBITDA $245,895 $344,350 $480,935 $3,104,315 $8,239,475

Interest Expense $0 $0 $0 $0 $0

Taxes Incurred $73,769 $103,305 $144,281 $931,295 $2,471,843

Net Profit $172,126 $241,045 $336,655 $2,173,021 $5,767,633Net Profit/Sales 33.42% 30.60% 33.49% 54.15% 58.97%


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7.4 Projected Cash Flow


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Table: Cash FlowPro Forma Cash Flow

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Cash Received

Cash from Operations

Cash Sales $515,020 $787,800 $1,005,100 $4,012,700 $9,780,900

Subtotal Cash from Operations $515,020 $787,800 $1,005,100 $4,012,700 $9,780,900

Addit ional Cash ReceivedSales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0

New Other Liabil i ties (interest-free) $0 $0 $0 $0 $0

New Long-term Liabil ities $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0

Sales of Long-term Assets $0 $0 $0 $0 $0

New Investment Received $0 $0 $0 $0 $0

Subtotal Cash Received $515,020 $787,800 $1,005,100 $4,012,700 $9,780,900

Expenditures FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Expenditures from Operations

Cash Spending $40,800 $105,800 $129,700 $150,100 $176,500

Bill Payments $275,200 $431,606 $530,708 $1,594,990 $3,660,286

Subtotal Spent on Operations $316,000 $537,406 $660,408 $1,745,090 $3,836,786

Addit ional Cash Spen t

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

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0

Other Liabil ities Principal Repayment $0 $0 $0 $0 $0Long-term Liabili ties Principal Repayment $0 $0 $0 $0 $0

Purchase Other Current Assets $0 $0 $0 $0 $0

Purchase Long-term Assets $0 $0 $0 $0 $0


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7.5 Projected Balance Sheet

The tables that follow outline the projected PSC/Sea Angel balance sheet.


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Table: Balance Sheet

Pro Forma Bal ance Sheet

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Assets

Current Assets

Cash $399,020 $649,414 $994,106 $3,261,716 $9,205,830

Other Current Assets $0 $0 $0 $0 $0

Total Current Assets $399,020 $649,414 $994,106 $3,261,716 $9,205,830

Long-term Assets

Long-term Assets $0 $0 $0 $0 $0

Accumulated Deprecia tion $0 $0 $0 $0 $0

Total Long-term Assets $0 $0 $0 $0 $0

Total Assets $399,020 $649,414 $994,106 $3,261,716 $9,205,830

Liabil ities and Capital FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Current Liabilities

Accounts Payab le $26,894 $36 ,243 $44 ,280 $138,870 $315,351Current Borrowing $0 $0 $0 $0 $0

Other Current Liabili ties $0 $0 $0 $0 $0

Subtotal Current Liabil ities $26,894 $36,243 $44,280 $138,870 $315,351

Long-term Liabili ties $0 $0 $0 $0 $0

Total Liabili ties $26,894 $36,243 $44,280 $138,870 $315,351

Paid-in Capital $321,000 $321,000 $321,000 $321,000 $321,000

Retained Earnings ($121,000) $51,126 $292,172 $628,826 $2,801,847

Earnings $172,126 $241,045 $336,655 $2,173,021 $5,767,633Total Capital $372,127 $613,172 $949,826 $3,122,847 $8,890,479

Total Liabili ties and Capital $399,020 $649,414 $994,106 $3,261,716 $9,205,830


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Table: RatiosRatio Anal ysis

FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Industry Profi le

Sales Growth 0.00% 52.96% 27.58% 299.23% 143.75% 7.67%

Percent of Total Assets

Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 21.76%

Total Current Assets 100.00% 100.00% 100.00% 100.00% 100.00% 72.03%

Long-term Assets 0.00% 0.00% 0.00% 0.00% 0.00% 27.97%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabil i ties 6.74% 5.58% 4.45% 4.26% 3.43% 33.23%

Long-term Liabili ties 0.00% 0.00% 0.00% 0.00% 0.00% 20.58%

Total Liabili ties 6.74% 5.58% 4.45% 4.26% 3.43% 53.81%

Net Worth 93.26% 94.42% 95.55% 95.74% 96.57% 46.19%

Percent of Sal es

Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Gross Margin 70.22% 72.33% 75.18% 92.29% 96.57% 30.10%

Sel li ng, General & Administrati ve Expenses 36.80% 41.73% 41.68% 38.13% 37.60% 19.86%Advertising Expenses 10.00% 10.00% 10.00% 10.00% 10.00% 3.50%

Profit Before Interest and Taxes 47.74% 43.71% 47.85% 77.36% 84.24% 1.35%

Main Ratios

Current 14.84 17.92 22.45 23.49 29.19 1.80

Quick 14.84 17.92 22.45 23.49 29.19 0.99

Total Debt to Total Assets 6.74% 5.58% 4.45% 4.26% 3.43% 58.11%

Pre-tax Return on Net Worth 66.08% 56.16% 50.63% 99.41% 92.68% 4.20%

Pre-tax Return on Assets 61.62% 53.02% 48.38% 95.17% 89.50% 1.76%

Addit ional Ratios FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Net Profit Margin 33.42% 30.60% 33.49% 54.15% 58.97% n.a

Return on Equity 46.25% 39.31% 35.44% 69.58% 64.87% n.a


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7.7 Long-term Plan

The business model that PSC Distribution Limited is developing is sound and based on solid

business principles. Research shows that the green industry is primed for continued healthygrowth trends over the course of the next decade. With industry growth comes the potential

for business growth which could ultimately make the PSC/Sea Angel venture a very attractiveopportunity for the right investor or investor group. A possible sale would only be entertained

once the business reaches a gross revenue level of no less than $10 million per year. If a

suitable investor is not found, the principal ownership group would focus on developing abusiness capable of producing between $10-$50 million in annual revenues.

From a pure personnel standpoint, the current corporate structure will not support the types of

revenue streams discussed above. In order to reach those levels, a much more structuredreporting and executive system will have to be put into place and maintained. This structure may

ultimately include a dedicated field sales force of some kind, a function that PSC/Sea Angelhas chosen not to employ at this time. As far as marketing and promotions go, the only toolthat is currently forecasted to be in use is the Internet. However, to reach the next plateau

of revenue ($10-$50 million) other sources must be strategically factored into the PSC/Sea Angelmarketing mix including television (infomercials), radio and aggressive print advertisements.

Production expansion is another area that will need to be addressed if PSC/Sea Angel is to reachthe $10-$50 million level. The current product line consists of 4 products but if the desiredrevenue levels are to be achieved a much more robust suite of product offerings will have to

be developed. Products that are developed will adhere to the same standards that have madeSea Angel among the market leaders in the green industry. A strong research and development

team will be put into place along with marketing professionals capable of analyzing the needs ofthe market so that products that are in fact developed are actually serving a defined need in the

marketplace.


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Appendix

Page 1

Table: Sales Forecast

Sales Forecast

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Sales

1 pack $4,500 $4,700 $4,900 $4,900 $5,100 $5,408 $5,570 $5,730 $5,900 $6,079 $6,201 $6,387

2 pack $5,200 $5,304 $5,410 $5,500 $5,720 $5,800 $5,895 $6,020 $6,300 $6,500 $6,530 $6,640

4 pack $14,800 $15,255 $15,560 $16,010 $16,490 $16,900 $17,228 $17,573 $17,924 $18,462 $19,015 $19,586

8 pack $12,975 $13,235 $13,500 $13,770 $14,045 $14,326 $14,612 $14,904 $15,202 $15,506 $15,816 $16,132

Total Sales $37,475 $38,494 $39,370 $40,180 $41,355 $42,434 $43,305 $44,227 $45,326 $46,547 $47,562 $48,745

Direct Cost of Sales Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Production $5,300 $5,430 $5,550 $5,750 $6,300 $6,400 $6,450 $6,600 $6,800 $6,990 $7,200 $7,340

Shipping $1,300 $1,450 $1,560 $1,680 $1,810 $1,890 $2,005 $2,105 $2,210 $2,305 $2,400 $2,580

Packaging $1,200 $1,320 $1,440 $1,540 $1,620 $1,700 $1,820 $1,910 $1,940 $1,950 $2,000 $2,050

Storage $667 $667 $667 $667 $667 $667 $667 $667 $667 $667 $667 $667

Miscellaneous $1,000 $1,100 $1,200 $1,200 $1,175 $1,280 $1,310 $1,340 $1,400 $1,435 $1,500 $1,520

Web Development $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

SEO $0 $0 $ 0 $0 $ 0 $0 $ 0 $0 $0 $ 0 $0 $ 0

Technology $833 $833 $837 $833 $833 $833 $833 $833 $833 $833 $833 $833

Travel $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Direct Cost of Sales $10,300 $10,800 $11,254 $11,670 $12,405 $12,770 $13,085 $13,455 $13,850 $14,180 $14,600 $14,990


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Appendix

Page 2

Table: Personnel

Personnel Plan


CEO $0 $0 $0 $0 $0 $0 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200

COO $0 $0 $0 $0 $0 $0 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800

CFO $0 $0 $0 $0 $0 $0 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700

Administration $0 $0 $0 $0 $0 $0 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100

Total People 4 4 4 4 4 4 4 4 4 4 4 4

Total Payroll $0 $0 $0 $0 $0 $0 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800


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Appendix

Page 3

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $37,475 $38,494 $39,370 $40,180 $41,355 $42,434 $43,305 $44,227 $45,326 $46,547 $47,562 $48,745

Direct Cost of Sales $10,300 $10,800 $11,254 $11,670 $12,405 $12,770 $13,085 $13,455 $13,850 $14,180 $14,600 $14,990

Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $10,300 $10,800 $11,254 $11,670 $12,405 $12,770 $13,085 $13,455 $13,850 $14,180 $14,600 $14,990

Gross Margin $27,175 $27,694 $28,116 $28,510 $28,950 $29,664 $30,220 $30,772 $31,476 $32,367 $32,962 $33,755

Gross Margin % 72.52% 71.94% 71.41% 70.96% 70.00% 69.91% 69.78% 69.58% 69.44% 69.54% 69.30% 69.25%

Expenses

Payroll $0 $0 $0 $0 $0 $0 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800

Marketing/Promotion $4,291 $4,291 $4,291 $4,291 $4,291 $4,291 $4,291 $4,291 $4,291 $4,291 $4,291 $4,291

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Web Development $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

SEO $0 $0 $0 $150 $100 $100 $100 $100 $100 $100 $100 $100

Technology $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $1,020 $1,020 $1,020 $1,020 $1,020 $1,020

Storage Fees $667 $667 $667 $667 $667 $667 $667 $667 $667 $667 $667 $667

Total Operating Expenses $5,658 $5,658 $5,658 $5,808 $5,758 $5,758 $13,578 $13,578 $13,578 $13,578 $13,578 $13,578

Profit Before Interest and Taxes $21,517 $22,036 $22,458 $22,702 $23,192 $23,906 $16,642 $17,194 $17,898 $18,789 $19,384 $20,177

EBITDA $21,517 $22,036 $22,458 $22,702 $23,192 $23,906 $16,642 $17,194 $17,898 $18,789 $19,384 $20,177

Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Taxes Incurred $6,455 $6,611 $6,737 $6,811 $6,958 $7,172 $4,993 $5,158 $5,369 $5,637 $5,815 $6,053

Net Profit $15,062 $15,425 $15,721 $15,891 $16,234 $16,734 $11,649 $12,036 $12,529 $13,152 $13,569 $14,124

Net Profit/Sales 40.19% 40.07% 39.93% 39.55% 39.26% 39.44% 26.90% 27.21% 27.64% 28.26% 28.53% 28.98%


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Appendix

Page 4

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $37,475 $38,494 $39,370 $40,180 $41,355 $42,434 $43,305 $44,227 $45,326 $46,547 $47,562 $48,745

Subtotal Cash from Operations $37,475 $38,494 $39,370 $40,180 $41,355 $42,434 $43,305 $44,227 $45,326 $46,547 $47,562 $48,745

Additional Cash Receive d

Sales Tax , VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received $37,475 $38,494 $39,370 $40,180 $41,355 $42,434 $43,305 $44,227 $45,326 $46,547 $47,562 $48,745

Expenditures Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Expenditures from Operations

Cash Spending $0 $0 $0 $0 $0 $0 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800

Bill Payments $747 $22,435 $23,088 $23,671 $24,316 $25,140 $25,672 $24,873 $25,411 $26,017 $26,615 $27,214

Subtotal Spent on Operations $747 $22,435 $23,088 $23,671 $24,316 $25,140 $32,472 $31,673 $32,211 $32,817 $33,415 $34,014

Additional Cash Spent

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

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Spent $747 $22,435 $23,088 $23,671 $24,316 $25,140 $32,472 $31,673 $32,211 $32,817 $33,415 $34,014

Net Cash Flow $36,728 $16,059 $16,282 $16,509 $17,039 $17,294 $10,833 $12,554 $13,115 $13,730 $14,147 $14,731

Cash Balance $236,728 $252,787 $269,069 $285,578 $302,617 $319,911 $330,744 $343,298 $356,412 $370,142 $384,289 $399,020


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Appendix

Page 5

Table: Balance Sheet

Pro Forma Balance Sheet


Assets Starting Balances

Curren t Assets

Cash $200,000 $236,728 $252,787 $ 269,069 $285,578 $ 302,617 $319,911 $ 330,744 $343,298 $ 356,412 $ 370,142 $ 384,289 $ 399,020

Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Current Assets $ 200 ,0 00 $23 6,728 $2 52,78 7 $2 69,06 9 $2 85 ,57 8 $3 02 ,61 7 $ 319 ,9 11 $ 330 ,7 44 $34 3,298 $35 6,412 $37 0,1 42 $38 4,2 89 $ 39 9,0 20

Long -term Assets

Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Accumulated Depr eciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Assets $200,000 $236,728 $252,787 $269,069 $285,578 $302,617 $319,911 $330,744 $343,298 $356,412 $370,142 $384,289 $399,020

Liabilities and Capital Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Current Liabilities

Accounts Payable $0 $21,666 $22,30 0 $22,86 1 $23,47 9 $24,28 3 $24,843 $24,027 $24,545 $25,131 $25,708 $26,287 $26,894

Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Current Liabilities $0 $21,666 $22,300 $22,861 $23,479 $24,283 $24,843 $24,027 $24,545 $25,131 $25,708 $26,287 $26,894

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Liabilities $0 $21,666 $22,300 $22,861 $23,479 $24,283 $24,843 $24,027 $24,545 $25,131 $25,708 $26,287 $26,894

Paid-in Capital $321,000 $321,000 $321,000 $321,000 $321,000 $321,000 $321,000 $321,000 $321,000 $321,000 $321,000 $321,000 $321,000

R eta in ed Ea rn in gs ( $1 21 ,0 00 ) ( $1 21 ,0 00 ) ( $1 21 ,0 00 ) ( $1 21 ,0 00 ) ( $1 21 ,0 00 ) ( $ 12 1,0 00 ) ( $1 21 ,0 00 ) ( $ 12 1,0 00 ) ( $1 21 ,0 00 ) ( $ 12 1,0 00 ) ( $ 12 1,0 00 ) ( $ 12 1,0 00 ) ( $ 12 1,0 00 )

Earnings $0 $15,062 $30,487 $46,208 $62,099 $78,334 $95,068 $106,717 $118,753 $131,282 $144,434 $158,003 $172,126

Total Capital $200,000 $215,062 $230,487 $246,208 $262,099 $278,334 $295,068 $306,717 $318,753 $331,282 $344,434 $358,003 $372,127

Total Lia bil itie s a nd Ca pital $ 200 ,0 00 $23 6,728 $2 52,78 7 $2 69,06 9 $2 85 ,57 8 $3 02 ,61 7 $ 319 ,9 11 $ 330 ,7 44 $34 3,298 $35 6,412 $37 0,1 42 $38 4,2 89 $ 39 9,0 20

Net Worth $200,000 $215,062 $230,487 $246,208 $262,099 $278,334 $295,068 $306,717 $318,753 $331,282 $344,434 $358,003 $372,127

Documents

Thorougly Business Plan