Emmanuel Adewole

Live Large, Eat Nice, Stay Healthy and Achieve Your Dreams. THEFUB Business Plan A detailed outline of THEFUB business plan Lautarocepeda Table of Contents I. Non-Disclosure and Confidentiality Agreement 3 II. EXECUTIVE SUMMARY ................................... 4 The Market ......................................................................................................................................................... 4 Strategy ............................................................................................................................................................... 5 Financials ........................................................................................................................................................... 5 Service Offerings ................................................................................................................................................ 6 Positioning Statement ....................................................................................................................................... 6 Keys to Success................................................................................................................................................... 7 III. COMPANY SUMMARY...................................... 8 Start-up Summary ............................................................................................................................................. 8 Vision Statement ................................................................................................................................................ 8 Mission Statement ............................................................................................................................................. 9 Core Philosophies .............................................................................................................................................. 9 Objectives ........................................................................................................................................................... 9 Company Ownership ....................................................................................................................................... 10 Company Locations ......................................................................................................................................... 10 Company Web Address ................................................................................................................................... 10 Management..................................................................................................................................................... 11 Legal Form ....................................................................................................................................................... 11 IV. COMPANY SERVICES ...................................... 12 Service Listing .................................................................................................................................................. 12 Mobile App interface ....................................................................................................................................... 13 MARKET ANALYSIS ........................................ 16 V. TARGET MARKET .......................................................................................................................................... 16 Target Market Segment Strategy .................................................................................................................... 17 Market Trends .................................................................................................................................................. 17 Market Needs ................................................................................................................................................... 18 Service Business Analysis ................................................................................................................................ 18 Competition and Buying Patterns .................................................................................................................. 18 Pricing Pattern ................................................................................................................................................. 19 Market Changes ............................................................................................................................................... 19 Competition ...................................................................................................................................................... 19 VI. STRATEGY AND IMPLEMENTATION .............. 21 THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL SWOT ANALYSIS ............................................................................................................................................ 21 Marketing Strategy and Positioning ............................................................................................................... 22 Positioning Statement ..................................................................................................................................... 23 Promotion Strategy .......................................................................................................................................... 23 Pricing Strategy ................................................................................................................................................ 23 Sales Strategy ................................................................................................................................................... 24 Sales Forecast ................................................................................................................................................... 24 Advertising and Promotion ............................................................................................................................. 25 Social Media ..................................................................................................................................................... 25 Year Long Marketing ....................................................................................................................................... 25 Unique Selling Proposition (USP) .................................................................................................................. 26 VII. OPERATIONS ..................................................27 Legal Issues ...................................................................................................................................................... 27 Insurance Issues .............................................................................................................................................. 27 Human Resources ............................................................................................................................................ 27 Process and Production ................................................................................................................................... 27 Risk Assessment............................................................................................................................................... 28 VIII. FINANCIAL PLAN .......................................... 30 Important Assumptions .................................................................................................................................. 30 Financial Outline ............................................................................................................................................. 30 Start-up Costs................................................................................................................................................... 30 Projected Expenses .......................................................................................................................................... 31 Sales Forecast ................................................................................................................................................... 31 Projected Cash Flow ........................................................................................................................................ 32 Projected Profit and Loss ................................................................................................................................ 34 Break-even Analysis......................................................................................................................................... 35 THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Non-Disclosure and Confidentiality Agreement The undersigned, hereby agrees that all financial and other information that is has and will receive concerning THEFUB is confidential and will not be disclosed to any other individual or entity without prior written consent. The Information shall remain the property of THEFUB and shall be returned to THEFUB promptly at its request together with all copies made thereof. It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to THEFUB. Recipient acknowledges that no remedy of law may be adequate to compensate THEFUB for a violation of this Agreement and Recipient hereby agrees that in addition to any other legal or other rights that may be available in the event of a breach hereunder, THEFUB may seek equitable relief to enforce this agreement in any court of competent jurisdiction. This is a business plan. It does not imply an offering of securities. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL EXECUTIVE SUMMARY THEFUB is a technology-based food and beverage establishment structured to help ease and simplify the process of home cooking through provision of nutritional and healthy eating patterns specially designed for each individual and household. We are a technology-based food establishment With the daily increase in the trouble of making and following a well packed grocery list due to increased work time and stress, coupled with indecisiveness brought about by increased shopping varieties, we offer a simplified platform that helps users spend the least amount of time while shopping, as we offer them just and only the right feature fitted for their needs and budgets. We will simplify things better for customers by making sure that our platforms are rid of unnecessary features for customers which reduces the stress and time spent on grocery shopping. In recent times, study shows that there has always been a missing revenue stream for chefs, restaurants and food delivery services, coupled with the financial burden and operational stress restaurants and food delivery services incur due to heavy infrastructure setup and difficult product sourcing. This problem has been largely dealt with our provision for chefs and restaurants to earn a certain commission based on the number of people that uses their content. The Market Food hubs are increasingly growing in popularity in Canada as an alternative marketing option for smaller producers, processors and distributors. And recently, it has been growing at a rapid rate for offering a customized feeding menu for customers. Increasingly, consumers are demanding healthy, nutritious and high quality locally grown food, at their convenience and personalized taste. And even the large retail chains are cashing in on the local food movement by showcasing locally grown produce and processed foods in their brick and mortar stores and online platforms. There is a high reduction in consumers who visit the farmers market in recent times due to busy schedules, distance, and other personal life priorities. This has given a great growth momentum to the Food hub industry. Food hubs provide marketing services, consumer education, branding and market development, sales guide, grocery shopping helps and speedy delivery. It helps strengthen the ability to satisfy food demands in the market; wholesale, retail and end consumers. The food hub model is strongly established in the U.S. and increasingly gaining popularity and users in Canada, with several communities identifying food hubs as an important component of sustainable food systems. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Strategy Our main thrust of strategy is to lever our e-commerce platform and friendly usability into higher profits through sales volume discounted prices and larger customer database. We have a deep comprehension of the underlying needs of the consumers and so, we offer them what they really need in a satisfying platform. THEFUB will position itself as the premier user-friendly and customer centered food hub in every local downtown area. We will do this by providing customers, clients and partners with the best services and deals, at reasonable prices in a well-designed platform. Our e-commerce store will provide the best shopping deals coupled with diverse sales program we will implement. Our customers and users will enjoy the friendly-themed platform will provide, which is tailored to their specific needs. Many food service and food hub establishments have tried to create friendly and customer-retaining platforms, but have failed in the area of personalizing user experience. Our customers will enjoy our standard menu fare, along with their uniquely created menus so that we can better take advantage of customer-retention and stay current with the industry trends. Financials THEFUB’s financials are conservative yet quite bright. Once the E-commerce platform is launched, and we start signing up customers, we will quickly gain momentum, generate appreciable sales, and a solid customer base for the success of our second platform; mobile applications. Our mobile applications will help give us a solid financial footing, as it helps in generating a huge customer base at a relatively low operating cost – a bright pointer to financial positivity. We will be creating a new service category with our mobile application, developing an existing service category with our e-commerce platform. This will help us leverage on our first mover status in the mobile application service category, while generating from an existing service category as well. Revenue for year one is carefully projected to be $350,000 and a net profit of $120,000, climbing to $1, 700,000 and net profit of $650,000 in the second year, and finally scaling to $5,000,000 and net profit of $2,000,000 in the third year. Our operating costs for the e-commerce and mobile application platform has been carefully kept on the low to allow for more profitability and business growth. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Financial Forecast(Canadian Dollar) 6,000,000 6,000,000 5,000,000 4,000,000 3,500,000 4,000,000 3,000,000 2,500,000 2,000,000 2,000,000 1,000,000 1,000,000 40% 50.00% 58% 0 Year 1 Sales Year 2 Gross margin Net profit Year 3 Service Offerings THEFUB’s services make the process of cooking at home as easy as possible. We also inspire and encourage people to cook more of their weekly meals at home with enough nutritional information, while spending less. We will be accomplishing this through our mobile application, which learns about eating habits and patterns, health status and then generate a meal plan based on the knowledge learnt. This meal plan is designed and tailored to fit precisely what each customer needs and want. The app then further helps users by suggesting closest grocers to them while comparing prices of the various grocers around them and those with delivery system. Our e-commerce platform helps users to navigate easily through the stressful shopping process, and helps users get the best premium kitchenware deals. This platform serves majorly for our company as a primary source of income and a good source of generating a large base of target market. Positioning Statement THEFUB strives to position itself as the number one food hub where customers and stakeholders in food service establishment easily get the best they need. Due to demand aggregation and cross platform mode of operation, our strategy will produce reduced food cooking and service cost for customers and food industry stakeholders. This will help multiply consumer acceptance, increase customer base and generating more revenue to all parties involved. There are two kinds of companies, those that work to try to charge more and those that work to charge less; we will be the second. This places customer database over profits at the surface level. However, recent study THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL shows that companies with this differentiation strategy of larger database generates higher revenue which turns to higher net profit margin in the long run. Keys to Success Over the years, business successes are more associated with more than just financial figures and other key business decisions capable of driving business growth. We will make sure we ensure an outstanding financial status above the normal industry standards. The following are basic key to our business success:  Building repeat business with every user by establishing a unique standard for food and service quality.  Hiring and retaining top-notch staff through a highly competitive wage structure, employee development and work-life balance programs.  Close proximity with customers and end users.  Building a customer-cantered and satisfying platform that can be navigated by anyone.  Developing successful relationships with chefs, restaurants and delivery companies.  Inspiring customer retention through constant innovations and application of customer feedbacks. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL COMPANY SUMMARY THEFUB is a technology-based food and beverage establishment structured to help ease and simplify the process of home cooking through provision of nutritional and healthy eating patterns specially designed for each individual and household. We are a technology-based food establishment With the daily increase in the trouble of making and following a well packed grocery list due to increased work time and stress, coupled with indecisiveness brought about by increased shopping varieties, we offer a simplified platform that helps users spend the least amount of time while shopping as we offer them just and only the right feature fitted for their needs and budgets. We will simplify things better for customers by making sure that our platforms are rid of unnecessary features for customers which reduces the stress and time spent on grocery shopping. In recent times, study shows that there has always been a missing revenue stream for chefs, restaurants and food delivery services, coupled with the financial burden and operational stress restaurants and food delivery services incur due to heavy infrastructure setup and difficult product sourcing. This problem has been largely dealt with our provision for chefs and restaurants to earn a certain commission based on the number of people that uses their content. Start-up Summary In the early days of the conception of the business, I have over time spent tangible funds perfecting the model and the starting the development of the platforms. The founder; Lautaro Cepeda has personally invested a seed funding of $15,000 for the realization and success of THEFUB. A sum of $10,000 is needed to launch a large ad-campaign for Christmas, Boxing Day, and New Year resolutions. I am also looking to hire people to run maintenance on the platforms as well as handle order fulfilments and product entries for the store alongside myself. Start-up costs and initial financing are shown on the following table. Start-up Recurring Expenses (Monthly) Price Shopify Platform Cost 140 Shopify Apps 1oo Vision Statement To be the leading user-friendly food platform across the globe. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Mission Statement Our Mission is to enhance a quality, healthy and budget-friendly food community where everyone gets the resources needed to start cooking and also understand how easy the process can be with the right tools. We endeavor to:  Provide user-friendly platform  Provide quality, healthy and budget-friendly food menu to users  Provide the best premium kitchenware deals to our cross-platform users  To be customer-centric – making sure each customer’s needs are satisfied. Core Philosophies  Customer/Client Satisfaction: We are in business primarily for our customers and client’s satisfaction. This will be further propagated with hub friendliness and service gratitude.  Innovation: We are in a competition with our yesterday’s standard, to keep giving customers the best experience.  Integrity: Integrity is our operational beacon, with clients and stakeholders  Top Expertise: Hiring and retaining quality staffs for efficiency and effectiveness in pursuit of increased productivity with consideration for cost, quality and user satisfaction  Speed: We understand that the business of the 21st century is speed based, and will function accordingly.  Attentiveness: We will be attentive to our customers, clients and staffs to allow for maximum growth and satisfaction. Objectives In accordance with our success philosophy, we aimed top excellence at product and service quality, market dominance, and financial status. Our objectives are aimed at excellence in terms of market leadership, service quality, financial health and stability these objectives are summarized below:  We aim to be the foodhub/Foodcommunity in Canada  Provision of the best foodhub services at the best prices coupled with exceptional customer services.  Cash flow self-sufficiency by the end of the first year  Repayment of all forms of debt from original financing by the end of first year.  Achievement of relative Prime Cost Ratios lower than 65%  Availability of services in all the states of Canada by the end of the third year. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Company Ownership At the initial stage, THEFUB is a company fully owned by Lautaro Cepeda. The company will run as a sole proprietorship business, and is open to partnership from investors or corporate organizations as it grows for the purpose of expansion. Company Locations THEFUB will start as a home-based run business. Our major operations and platform development will be carried out at a strategic location that drives awareness, sales and market understanding in British Columbia, Sooke, Canada. This location is perfect for our business as it is filled with both homes, restaurants and delivery service companies. As we grow to dominate the market and as well expand to other territories, we might set up an operational base outside this current region to aid business growth and smooth operations. Company Web Address The prototype link for our website is Thefub.ca. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Management People are the single most important element in our operations. For the company’s success, we value everyone that is linked with our business; the managers, staffs, clients, partners and customers. In our early years, THEFUB will run as a sole proprietorship, led by Lautaro Cepeda, the founder of THEFUB. He is a seasoned in-person salesman. He was the number one salesperson in his Australian Hello New sales company. He’s experienced with team management and co-working. He is a constant business learner and works constantly to get the business idea to a successful stage through diverse learning and improvement approaches and study funnels. He also intelligently invested in a $2000 course on drop-shipping and advertising products through Facebook and Google, as well as many more sales funnels. He carefully outsources the development of the platforms of the company to the best engineers, while closely monitoring and providing innovative insights alongside. Legal Form THEFUB will be organized as a proprietorship at early stages, owned and managed by Lautaro Cepeda. THEFUB will be fully incorporated with the government of Canada, and will be operated in accordance with the laws of the state. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL COMPANY SERVICES There is a growing society problem in Canada and many other developed countries – making a grocery list. As simple as this process sounds, it takes many hours and sometimes days to complete this process, yet they end up unsatisfied with the list they make. Due to increased work life commitment, many struggle to make the right choices when making a grocery list, and struggle more getting the best deals at budget-friendly prices, with little or no stress about delivery. Chefs, Restaurants and Foodies complain often about a missing revenue which is quite difficult to attain due to customer platform. Online food delivery services have as well been characterized with high service charge due to high infrastructure setup and difficult product sourcing. Many companies have tried solving these problems by creating a food hub to promote home cooking, help navigate grocery shopping and delivery services. However, all these companies glamorize their platforms with many unnecessary and almost wrong features to simplify grocery shopping. These companies have made their offering totally about them and what they have to offer, rather than the customers and their personal varying needs. At THEFUB, we have created a well-designed platform to solve all these food hub industry related problems. We created a platform that helps users spend the least amount of time within the app. Our platform also offers them just and only the right feature to help simplify the grocery shopping process. Our platform helps those who create meal plan and recipes gain a service commission based on the number of people who use their created content, which solves the difficulty of service charge faced by this category. In order to simplify and reduce cost for customers, THEFUB utilizes existing infrastructure of delivery systems and various pickup locations. This helps reduces total price to be paid by customers and also helps us keep our operating cost near zero, which will easily drive revenue generation. Service Listing E-Commerce: This is the first service we will be offering as a company. This is to promote awareness, generate operating cost, drive sales, and gather large customer database. The ecommerce will be linked to the food hub, providing discounts for registered users of the food hub, which drives sales and profitability from both platforms. Food Hub: The food hub is our major service provision to the customers. Our food hub services will be carried out through a seamless, optimized and user-friendly mobile application. This app will learn about people’s eating habits and generate a meal plan based on that knowledge. This meal THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL plan is placed inside a template that can be customized to fit precisely what users want. The user then receives a shopping list based on their configured meal plans. This list will be purchasable with price comparison between the nearest grocers that offer delivery or pickup services. Mobile App interface Below are pictures of the simple and easy to operate mobile app interface we are creating: THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL MARKET ANALYSIS Canada is home to some major players in the global food industry. The Canada food industry comprises of many food and beverage retailers, manufacturers, processors, and service delivery companies. In 2017, Canada retail sales of food and beverage stores amounted to over 120 billion Canadian Dollar. There are over 9,434 food and beverage stores in Ontario, Canada, with over 5,477 Grocery stores in Ontario, Canada. The most important factor when it comes to choosing food products in Canada is price. There are numerous Canadian consumers who constantly make an effort to buy locally grown food. These consumers make a large percentage of the buying patterns in the Canadian food industry, with their population making over 35% of the total population of Canada. About 40% Canadian consumers strongly agree that it’s important to know where their food comes from and recently believe in home cooking. About 16% of Canadian population buys groceries online according to a survey carried out in November 2019 by ProdegeMR. And about 53% of those who don’t currently buy online are willing to try buying online in the future. Food sales in supermarkets and grocery stores reached an all-time high in 2018 when revenues totaled around 84.13 billion Canadian dollars in that year. British Columbia ranked third in grocery stores sales after Quebec and Ontario. In Canada recently, recent survey suggests that free shipping and delivery entices over 55% of the populace to purchase their groceries through e-commerce channels. TARGET MARKET We have the following main markets: Geographically  Canada  United States of America  Asia  Europe  Australia We will be starting in the Canadian market, then expand after business growth to the US, as well as some Asian and European Countries, as well as Australia. Demographically  New Senior University Students.  New Homeowners THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL  New Couples/Parents  New Restaurants Market Segments Restaurants 12% University Students 18% Couples/Parent s 40% Homeowners 30% Target Market Segment Strategy Our major market segment strategy is based on “planning globally, acting locally”, a marketing mix that will help us focus on every segment of our market target and growing thereby.  For the New Senior University students, we will focus on helping them set up for cooking and guide them through healthy eating habit and cooking. This will be done through social media marketing, word-of-mouth recommendations, business discounts with a record of fast delivery.  For new homeowners, we will help them set up a great kitchen, by offering them discounted kitchenware deals when they subscribe for our food hub services. This category has a potential of providing large volume sales to us all through the year. Satisfaction of this group will provide a vital long-term revenue stream. We plan to do specific target marketing through flyers, business discounts, billboards, and creating a record of fast delivery.  For New couples and parents, we will help them set up their homes with the best deals, helping them set up and cook the best meals that fits their health and taste lifestyle.  For Restaurants, we will Partner with them to help them drive sales and help those just setting up their restaurant business. Market Trends One of the most important recent trends in the food and e-commerce industry is the rise of interest in consuming healthier foods and getting the best deals on products at a fast rate. The best known example of this is the move toward home cooking classes, rise in e-commerce trading and food hubs THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL growth. THEFUB realizes that there is a significant percentage of the population of Canada that are demanding more and more of these trends. We are well positioned to take advantage of this change. People are focusing on eating healthy and staying true to recommended foods, for this very reason we moved to satisfy every customer having any food restrictions by offering them personalized chefs and menu options fit for their safety. Market Needs As stated before, many customers increasingly desire to cook and learn to cook various dishes and recipes at home that will appeal to their aesthetic tastes and provided in their comfortable setting. In addition, they desire a memorable dining experience that provides them with the chance to relax and bond after the day. All of this needs to be delivered to the customer with the least amount of hassle. Furthermore, customers will also need a store that can help them get the needed cooking wares at discounted prices, and nutritious groceries at a fast and budget-friendly price. Service Business Analysis The food and e-commerce industry is highly fragmented and competitive. Each company within this field has low capital costs and low margins, which create high intensity of competition. There also exists a very high degree of rivalry among firms due to the perceived overcapacity in this field. The larger companies often have cost advantages due to economies of scale that allow them to out-compete smaller rivals. The barriers to entry and exit are very low in both industries. The large number of competitors in this fields means that the pricing for such services are very competitive. The only way to have an advantage in this industry is either a low-cost leadership principal applied aggressively to all aspects of the business or to differentiate the entire customer experience through better and more unique menu options, e-commerce products and to build up customer relations to a point where the switching costs are raised. Competition and Buying Patterns  Easy usability is critical to sales success.  Time is of the essence - Order and delivery timeline is very important. We will make use of fast delivery service companies in order to keep our customers and promote our service rating. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL  Price is very sensitive, and we will strive as much as possible to keep low prices in our food hub platform, while maintaining credible price for our e-commerce – many target customers mistrust low prices in an online store.  Quality of service matters. If the price isn't too high and the service is good, we'll have growth through repeat business.  Focus is an advantage; focusing on major moving target and local, healthy foods will draw customers from the competition. Pricing Pattern The pricing pattern is a pivotal decision for the food business, in Canada, other countries and continents. The population highly considers price as a major buying pattern. For the food hub market, low prices are highly considered. However, ridiculously low prices are an off point in the e-commerce for many in the country. When the prices are too low in the E-commerce industry, mistrust tends to rise. Market Changes Food prices can fluctuate substantially. Kitchenware prices are often times stable, however it changes as over a period of time. Food hub subscription and service delivery charges are somewhat stable all-round the year, which helps retain customers and subscribers. Competition There are major competitors in the Canadian food Industry with some major global players contributing to the market. There are also some major market in the e-commerce (Kitchenware) industry in Canada. The food hub industry is also filled with some major players who has gathered business over time, however has many glitches in their mode of operation. Some of these brands are:  Yummly Positive: Has great on boarding. Simple, clean and well formatted platform. Negative: Availability of only recipes and shopping list. User-interface and look not generally accepted Web Address: www.yummly.com  Side Chef Positive: Has great design. Simple colors used. Speed. Has a search, cook book (saved recipes) etc. Negative: Too many features (irrelevancies) THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Web Address: www.sidechef.com We’ve done a great deal of study on our competitors and understand their operation advantages and glitches. We will leverage on this glitch and provide better services to attract customers. Apart from the competitive and growing industry, the local competitors within a ten-mile radius seems to be less concentrated. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL STRATEGY AND IMPLEMENTATION Our main thrust of strategy is to leverage our e-commerce platform and friendly usability into higher profits through sales volume discounted prices and larger customer database. We have a deep comprehension of the underlying needs of the consumers and so, we offer them what they really need in a satisfying platform. THEFUB will position itself as the premier user-friendly and customer centered food hub in every local downtown area. We will do this by providing customers, clients and partners with the best services and deals, at reasonable prices in a well-designed platform. Our e-commerce store will provide the best shopping deals coupled with diverse sales program we will implement. Our customers and users will enjoy the friendly-themed platform will provide, which is tailored to their specific needs. Many food service and food hub establishments have tried to create friendly and customer-retaining platforms, but have failed in the area of personalizing user experience. Our customers will enjoy our standard menu fare, along with their uniquely created menus so that we can better take advantage of customer-retention and stay current with the industry trends. At THEFUB, we believe that our platforms will provide job opportunities both for the entry level applicant as well as for the part-time worker searching for flexibility in job hours. We will pay our employees a competitive salary and believe we can do so by meticulously keeping our operational cost low. We will be proactive with our employees by scheduling regular performance reviews, and provide bonuses and other incentives to motivate our staff for the development of the company. We will also stay updated with the latest industry marketing trends. In addition to our online platforms, we will also have a Facebook, Instagram, Pinterest pages, and utilize other social media to our business advantage. We will offer a loyalty club and birthday club which recent reports indicate increases earnings as much as 15%. SWOT ANALYSIS Strengths  User-friendly interface  Partnerships and Networks with chefs, restaurants, delivery service companies, and organizations.  Dual revenue and customer base platform. Weaknesses  Recruiting and retaining top-notch staffs in early years of operation  Tight margins resulting in some little errors THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Opportunities  Little barriers to entry allows for immediate business opportunities  Little Competition in the country  Increased wants for local produce and home cooking. Threats  Rising operating and staffing costs  Building/maintaining sales volume  Supermarkets, convenience stores and established food hubs  Consumers that believe that meals at home are costlier than those prepared in restaurants. Marketing Strategy and Positioning We realize the success of THEFUB will have to be achieved by doing more than a food hub, and providing personalized friendly services. We will utilize a marketing plan to build customer traffic. At THEFUB we will continually strive to win more customers by being proactive rather than reactive in our marketing efforts and stay current with popular industry trends. We will achieve these goals by using the following among many others:  Database: Our food hub will begin its campaign by marketing to our existing database of customers through our e-commerce platform. We will email fliers announcing our mobile application grand launching. We will continually update our database through our partnership with restaurants, nutritionists, grocery stores and delivery services. THEFUB will aggressively seek to build a database of our users, both on the e-commerce and food hub platform. All users and platform visiting guests will be included in the database so they can participate in our promotions such as birthday or anniversary and frequent user program, which is proven to boost sales through customer retention. We will respect our users and platform guest privacy by confidentially protecting personal information we collect.  Loyalty Program/Birthday Program: We will offer a birthday/loyalty club providing a complimentary menu list and discounted prices on both our platforms. Recent study has shown that this simple technique can increase revenues as much as 15% due to repeat business.  Community Presence: We will also be active in the local community and we plan to take an active role by participating, sponsoring, and donating to the community, which helps brand image and awareness, which are market and sales booster.  Partnerships: We will also strive to develop rapport with local businesses, social associations, religious organizations, as a quick and comfortable grocery shopping choice. In the THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL future, we plan on establishing a marketing campaign to call on these bodies, using them to reach people, showcasing our platform and educating potential customers on why they should deal with us and how to easily navigate their ways on the platforms. Positioning Statement We strive to position ourselves as the number one food hub where customers and stakeholders in food service establishment easily get the best they need. We will be known as the first food hub that allows for user-customization. Due to demand aggregation and cross platform mode of operation, our strategy will produce reduced food cooking and service cost for customers and food industry stakeholders. This will help multiply consumer acceptance, increase customer base and generating more revenue to all parties involved. Promotion Strategy Mailers and flyers will be used to advertise our launch and sales promotions that will help bring in customers. Major news and blog platforms will be used to advertise and promote our services. The use of social media to create anticipation, and awareness will also be fully employed in order to get the technological inclined ones which are mostly youths. Our e-commerce platform will have a blog, which will be used to educate and drive sales. This blog will also be used to promote awareness, SEO ranking and easy internet visibility. One fortunate aspect of our industry is that once a potential customer gets into the platform, the chances of purchase are very high as long as enjoyable service is offered. So, the promotional plan will be to draw people in to our platforms and then seek to provide them with a superior customer experience. Pricing Strategy At THEFUB, cost accounting is important, since the profitability of individual transactions can vary significantly on both platforms. We will take advantage of our excellent positive relationship with our partners and clients and will also constantly update our platforms and menu options to take advantage of seasonality for example in local produce items. We will also closely monitor our operating and labor cost, and slim down excesses in order to charge less. As a new start-up we can currently control employee cost by providing work-term flexibility, hiring committed and enthusiastic personnel who will work for low and reduced wages. A lot of our platform development will be outsourced which will help us cut down in-house operating cost, which will definitely help us in charging low and credible prices for our services. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Our pricing strategy will focus on providing high quality personally tailored customer services. Because of this, we expect to be able to charge averagely for our services compared to other platforms, as long as the customers agree that the service being rendered is better, hereby generating larger customer base which aids expansion, revenue and gross-profit generation. Sales Strategy Customer service is of the utmost importance. Customer surveys estimate that only 1 in 20 customers that have a problem on a platform will report or give feedbacks about it. It will be our goal to provide a wonderful user-friendly platform with superior customer service. Training programs will include teaching materials to train our employees about service timelines, customer perception and how to handle guest complaints. The Management team will conduct periodic staff meetings intended to review policy, increase guest satisfaction and to keep a general line of communication between staff and management. Our most important sales strategy is to develop repeat business. Every customer who comes in contact with our platform has to want to return. To that end, we will offer some of the more established sales strategies such as discount cards, special menu days, and a regularly changing menu. THEFUB intends to keep accurate track of what types of menu options and goods sell well and to create a program of customer feedback through surveys. With this information we will be able to tailor our services to fit customers’ needs better, and therefore encourage repeat business to boost sales. Sales Forecast The following table and charts illustrate the sales forecast. After diligent planning and research, we're sure this is a manageable forecast. Sales Forecast Year 1 Year 2 Year 3 Sales (CAD) (CAD) (CAD) E-commerce (Kitchenware) 100,000 560,000 1,800,000 Food Hub (Service Charge) 20,000 90,000 200,000 Total Sales 120,000 650,000 2,000,000 THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Chart Title- - Year 1 Year 2 Year 3 E-commerce Food Hub Advertising and Promotion As any new establishment, THEFUB also need advertising to get customers to our platform. Before we begin spending big on public media advertising, we plan to focus majorly on our target audience first. We will test out some advertising medium out in the first months of operation, carrying out an evaluation monthly to determine which medium suits us best. After a period of 12 months, we will focus our advertising strength on where our major target market frequents, to cut down expenses and increase advert productivity. Social Media Social media offers a way to build a strong online presence for our business, which in turn would establish brand loyalty with existing customers and attract potential customers. Social media marketing campaign offers our business the opportunity to sell products and services. We plan to utilize Facebook, twitter, Pinterest, Stumbleupon, and Instagram. These platforms will piece together online conversations and images and help build and online identity for our business, which will in turn increase our search engine optimization ranking. This will also be used to measure business growth and marketing success. Year Long Marketing The food industry advertising and marketing strategy must be dynamic, changing with the seasons from the busy holidays to the slow seasons in between. We will develop yearlong marketing and sales plans to keep sales up all year round. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Unique Selling Proposition (USP) THEFUB will be able to offer food hub services at low prices, and as well help in the cooking process through our special and discounted kitchenware sales. Our major strength is in our price charge and user-friendly interface. Our food hub services are special as we will allow customers to subscribe to their favorite chef or restaurants, and not just stereotypically assign them a chef or restaurants. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL OPERATIONS Legal Issues THEFUB will be registered and incorporated in accordance with the laws of the country of Canada. We will further make sure that asides incorporation problem, we will settle Trademark security problems, Copyright protection issues, Transaction issues and privacy issues. These issues are the most common issues faced by e-commerce and online businesses in Canada. Insurance Issues Our business has low risk rate and so we won’t need to spend much on insurance. In the first and second year, our insurance cost will be almost zero, while as we expand geographically and industrially in the third year, we will begin to explore good insurance companies that are best for our company. We will make use of General liability insurance at the inception, and as we get assets and properties, we will make sure we make use of property insurance. Since we are starting with little or no employees, we will not need to make use of Workers’ Compensation insurance. This will only be paid for as our employees list expands. Human Resources At THEFUB, most of our operations and maintenance will be outsourced, save for few which will be carried out by the management and later employees. Currently our app development is been carried out by Aether Automation. Many other operations like blog post writing, site maintenance and upgrade will be outsourced. We will keep employment list low in order to allow for profitability. Process and Production Our service processes are simplified to give customers the best experience. Major Service process for the food hub are explained below: User Journey-. User wants to make a shopping list for the upcoming week User opens app Enters preferences Receives custom meal plan Can edit / switch recipes to meal plan if unsatisfied Creates shopping list based on their meal plan Closes app THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL 8. User is reminded to cook meals they have planned for. User Flow (New User) 1. 2. 3. 4. Splash / Loading Page (Possibly a company intro page) Question 1, 2 and 3 Meal Plan Results User Flow (User selects from choices presented) 1. User looks through breakfast, lunch and dinner recipes. 2. User selects create shopping list 3. User can view shopping list by aisle or recipes 4. (Possible) confirm button. This button could leave a button resembling a green circle icon for being active on FB. If user taps it. Menu could be view your current shopping list or start new shopping list. User Flow (User creates their choice-. User looks through breakfast, lunch and dinner recipes. User selects edit meal plan User can edit meal plan Opens edit options Slide recipe card to delete User can remove a recipe User then sees an empty recipe slot User selects empty recipe slot User can search for recipes with a search bar or filter options User selects recipe User is brought back to edit meal plan page Continue with path one 5. 6. 7. 8. Returning user opens up due to cook planned meal notification User views home screen, they view upcoming recipe card. Can choose to start new meal plan or view shopping list If start new plan is selected, current meal plan and shopping list are deleted. Risk Assessment Our business industry risk is quite low since we are not going to be handling lots of products. We are more of a service company rather than product, which are liable to more risks. The risk in our business involves moving of our kitchenware to customers and glitches that comes with user experience on mobile platforms. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL In the e-commerce industry, there are some common risks which can easily be settled by us. These risks include:  Identity and relationship nature with trading partners  Electronic processing of transactions  Privacy issues  Integrity of transactions  System reliability and dependability  Good and product return and warranties  Taxation. THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL FINANCIAL PLAN Important Assumptions The financial plan depends on important assumptions. The key underlying assumptions are:  Growth will be moderate, cash flows steady.  Sales increase at a rate of 18% in the first to second year and 32% in the third year. Sales rate keeps improving  Costs will increase at a rate of 3% to 5% per year.  Slow-growth economy, without major recession  No unforeseen changes in the popularity of business model  Access to loan and financing sufficient to fulfil campaigns and expansion plans. Financial Outline The following sections outline our financial plan:       Start-up Cost Projected Expenses Sales Forecast Cash Flow Profit and Loss Break-even analysis Start-up Costs THEFUB needs a sum of $15,000 to fully launch and get to the target market. I have invested a sum of $15,000 in the past and ready to add $5,000 to the investment. Aside this personal financing, the business still requires a sum of $10,000 for campaigns, promotions, development among many other little expenses. Startup Requirements Start-up Expenses (CAD) Business insurance (paid monthly) 120 Business license (incorporated) 80 Office Furniture 50 Computer, Printer, Fax 80 THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Accounting and Accounting system 100 Equipment and fixtures 20 Marketing 2,000 Platform development 1,500 Market entry 1,000 Total Start-up Expenses 5,000 Projected Expenses We assume a slightly higher gross margin than industry standards for Canadian food and grocery store industry, because we have multi-choice services to serve our customers which generates more than average income. Because we're new to this business, we've adjusted the profitability into normal range by adding a relatively large amount of additional un-itemized expenses. That gives us a buffer for the additional unforeseen expenses that we expect will come up. If they don't, then we'll be more profitable than normal. Our expenses have been kept relatively low to allow for profitability. Most of the expenses after launch are just maintenance services and future app development. Year 1 Year 2 Year 3 Expenses (CAD) (CAD) (CAD) Wages 1,200 1,200 1,500 Marketing, Advertising, Promotion 4,530 600 600 Credit card transaction fee 2400 6,500 12,000 Other 870 3,700 2,900 Total General Expenses 9,000 12,100 17,000 Sales Forecast We assume Sales increase at a rate of 18% in the first to second year and 32% in the third year. Sales Forecast Sales THEFUB BUSINESS PLAN Year 1 Year 2 Year 3 (CAD) (CAD) (CAD) LAUTAROCEPEDA CONFIDENTIAL E-commerce (Kitchenware) 100,000 560,000 1,800,000 Food Hub (Service Charge) 20,000 90,000 200,000 Total Sales 120,000 650,000 2,000,000 Sales Forecast - Year 1 Year 2 Year 3 Total sales Projected Cash Flow The statement of cash flow shows the incoming and outgoing cash of the business. Projected Cash Flow Year 1 Year 2 Year 3 Cash Received (CAD) (CAD) (CAD) Cash from Sales 120,000 650,000 2,000,000 Cash from Receivables 0 1,000 5,000 120,000 651,000 2,005,000 Owners Investment 5,000 0 0 Futpreneur Investment 10,000 0 0 Subtotal Cash Received 135,000 651,000 2,005,000 New long-term liabilities 0 0 0 Sales of other current asset 0 0 0 Subtotal Cash from Operations THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Sales of long-term asset 0 0 0 External Investment Received 0 0 0 Operating Expenses 9,000 12,100 17,000 Startup Cost 5,000 0 0 Loan payment (+Interest) 5, 900 5900 0 Purchase Long-term asset 0 0 0 Total Inventory Cost 6,000 App Development 0 4,000 2,000 Long-term liabilities principal repayment 0 0 0 Additional Cash Spent 0 0 0 0 0 0 Subtotal Expenditures 25,900 18,000 19,000 Net Cash Flow 109,100 633,000 1,986,000 Cash Balance 109,100 742,100 2,728,021 Expenditures Sales Tax Projected Cash flow- Year 1 Year 2 Year 3 Net Cash flow THEFUB BUSINESS PLAN Cash received LAUTAROCEPEDA CONFIDENTIAL Projected Profit and Loss The profit and loss demonstrate modest increases in revenues over the three expected years with adjustments for inflation. Pro Forma Profit and Loss Year 1 Year 2 Year 3 Sales 120,000 2,200,000 4,300,000 Subtotal Cash received 125,000 651,000 2,005,000 Investor Relations 10,000 0 0 Total Revenue 135,000 651,000 2,005,000 Total cost of sales 0 0 0 Gross Margin 135,000 651,000 2,005,00 Gross Margin% 100% 100% 100% Total General Expenses 9,000 12,100 17,000 Office Rental 0 0 0 Loan Repayment 5,900 5,900 0 Startup cost 5,000 Purchase long-term asset 0 0 0 App development 0 3,000 1,500 Total Expenses 19,900 18,000 17,000 Operating income 109,100 636,300 1,986,000 Operating Margin 89% 98% 99% EBITDA 120,000 633,000 1,986,000 Net profit before tax 94,100 632,000 1,986,000 Tax incurred (estimated at 25%) 23,525 183,280 496,500 Net Profit 70,525 448,720 1,489,500 Income Expenses THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Revenue- Year 1 Year 2 Year 3 Revenue Net Profit - - Year 1 Year 2 Year 3 Net Profit Break-even Analysis The following table and chart show our break-even analysis. Our break-even point is quite low, we are expecting to have lower than average fixed costs during the planning of this business, due to relatively low operating cost, low fixed asset acquisition, low percentage of payroll costs to overall fixed costs, lower rent, low infrastructure setup. BREAK-EVEN ANALYSIS THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL Monthly Revenue Break-even (CAD) $11,250 Assumptions: Average Percent Variable Cost 12% Estimated Monthly Fixed Cost (CAD) $1,291 Monthly Break-even- - 2 3 4 5 6 7 8 9 10 11 12 Monthly Break-even THEFUB BUSINESS PLAN LAUTAROCEPEDA CONFIDENTIAL