Team members: Mai Viet Bach (2T22) Tran Viet Quang (2T20)School: Catholic Junior CollegeWorkshop Date attended: 24th May 2014

Table of Contents1. Executive summary31.1 Mission31.2 Key to success32. Company summary32.1 Company Ownership32.3 Start-up Summary32.4 Company locations and facilities43. Products53.1 Products description53.2 Product benefits73.3 Competitive comparison73.4 Sourcing83.5 Product Distribution83.6 SWOT Analysis94. Market analysis104.1 Market segmentation104.2 Target market analysis115. Strategy and Implementation135.1 Marketing strategy135.2 Marketing programs135.3 Pricing strategy165.4 Sales Strategy166. Financial Plan176.1 Start-up Funding176.2 Important Assumptions186.3 Break-even Analysis196.4 Projected Profit and Loss196.5 Projected Cash Flow206.6 Projected Balance Sheet217. Evaluation227.1 How to measure success?227.2 Future plan22

1. Executive summaryCurrently there is an increasing trend in Vietnam, specifically in Ho Chi Minh City, to engage in body-building. Reasons for this trend are numerous: aesthetics, health, esteem-building, etc. As such, supplementary drinks, such as protein shake, also experience increasing demand without any sign of cooling down, as individuals who want to keep fit or build their ideal body can achieve their goals more efficiently with such products. Despite the facts, there are presently no such complementary products to cater to the increasing need in Vietnam. Hence, Protein Quake seeks to be the first specialty beverage retailer in Vietnam to relieve the growing body-builders community with protein rich drinks that are not only tasty, but also healthy and affordable.

1.1 MissionWe adopt a three-pronged approach with 3 main missions:- Product mission: provide customers with the best quality protein shakes that help them to achieve their athletic goals.- Community mission: promote a healthy lifestyle and popularise the use of protein shake, making it not only a supplement drink but also a healthy drink that is suitable for anybody.- Economic mission: Operate and grow at a profitable rate through sound economic decisions.

1.2 Key to successThere is still a lack of knowledge of the people on the benefits of protein shakes. Hence, this is a gap in the market that we need to exploit. As a pioneer in the industry, it is important to have:1. An outstanding marketing campaign to introduce the new products into the market and to let the people understand the benefits of protein shakes2. The best products: freshest ingredients and best tasting protein shakes.3. The greatest locations: visibility, high traffic pattern, near the biggest gyms.4. Best customers service: a team of knowledgeable nutritionists who are able to give advice on which type of drink to take.5. Close collaboration with gyms to promote our products.

2. Company summaryThe Protein Quake is a specialty beverage retailer. It provides a new products to the customers in an economical and convenient way as well as giving advice on the protein shake and diet. The products are not only tasty but also healthy and helps build up and maintain muscle as well as lose weight.

2.1 Company OwnershipProtein Quake ownership is shared equally between Tran Viet Quang of Ha Noi and Mai Viet Bach of Vung Tau, Vietnam

2.2 Start-up SummaryProtein Quake start-up expenses and fundings are shown below. All of the prerequisite services and goods will be acquired within Vietnam, with local service and insurance rate already taken into account.Majority of the expenses are in legal services, rent and start-up assets, which include blenders, seating, lightings, decorations, etc. The opening day cash on hand balance will be $500.It should be noted that the cost of marketing has not been accounted for, asit is not a basic requirement.

Start-up

Requirements

Start-up Expenses

Legal$1,000

Stationery$50

Insurance$84

Rent$2,900

Sales Personnel$588

Other$50

Total Start-up Expenses$4,672

Start-up Assets

Cash Required$500

Other Current Assets$580

Long-term Assets$1,570

Total Assets$2,650

Total Requirements$7,322

2.3 Company locations and facilitiesThe first Protein Quake outlet will be located on Hai Ba Trung st, District 3, Ho Chi Minh City. This is the most optimal location available we can find in the CBD area. Within its 500 metres radius are 3 major gyms - Gym Cali Wow, Be You Centre, and Pure Gym, and 3 additional small gyms. Furthermore, the rent, at $2900 per month, is not too expensive despite being in the CBD.

3. Products3.1 Products descriptionThe Protein Quake provides its customers with a varieties of protein smoothies. Here is an example of different recipes:

Plain shake: Fig.3.1: Bland protein shake

Blend fruit shake:

Fig.3.2: Chocolate and blended strawberry protein shake

Chocolate peanut butter:

Fig 3.3: Chocolate peanut butter protein shake

Besides having different tastes, we also have a varieties of products with different effects on the body, for example, gain weight, build muscles, burn fat.

In short, we will have our customers first choose their desired type of protein (they can be recommended by our nutritionists at the outlet) then they will choose the flavour. The flavours are named after the most famous bodybuilders.

Fig 3.3: Example of a menu

All the protein shakes will be served in our own cup with our logo on it which is portable, convenient and stylish.

Besides serving the drink, we also have a team of well-trained nutritionists who can recommend which type of protein and drinks the customers should take. We will also be the retailer of ON protein powder to diversify our products.3.2 Product benefitsProtein shake will help people going to gym to utilise their exercises. For bodybuilder, it is the fast absorbing protein that helps them to gain muscle in the golden window period (one hour after gym). According to bodybuilding.com[footnoteRef:1], without adequate protein, our bodies can't put together the structures that make up every cell, tissue, and organ, nor can it generate the biochemical substances needed for cardiovascular function, muscle contraction, growth, and healing. Without an adequate amount of protein our muscles would not heal up as quickly and could therefore lead to overtraining your muscle which could lead to injury. [1: http://www.bodybuilding.com/fun/proteinshakebenefits.html]

Drinking a protein shake as a meal replacement can help you cut calories, says Mayo Clinic nutritionist Katherine Zeratsky, which leads to eventual weight loss. In a study conducted at Ulm University in Germany, subjects who consumed high-protein meal replacements, such as shakes, lost more weight and fat mass than subjects who simply followed a reduced-calorie diet. One possible reason for the tie between protein shakes and weight loss is the increased satiety that shakes can provide. According to a 2008 article published in the American Journal of Clinical Nutrition, protein is more effective at producing lasting fullness than carbohydrates or fat.

3.3 Competitive comparisonNo other business in Vietnam specifically caters to the protein smoothies market. Hence, the Protein Quake has no direct competitor.

CompetitorHomemade protein shakeOther drinks sold inside or near the gymsDifferent cafes nearby

DescriptionProtein powder can be easily purchased from dinhduongcaocap.vn which is the main retailer of protein shake in VietnamInside the gyms, there is a bar to sell drinks. The drinks sold are bottled drinks, for example, Coca-Cola, Pepsi, green tea and sport drinksOutside the gyms, there are also small retailer of bottled drink.

They are popular cafes such as Trung Nguyen Coffee Capuccino and Urban Station Smoothie and Soda. Trung Nguyen Coffee and Urban Station are major beverage retailers in downtown Ho Chi Minh City, with each having more than 32 outlets within the city and 8000 units sold per day

StrengthEconomical to make protein shake this way. 30% of the people going to gym bring along a protein shakeConvenient to buy these drinks.Convenient to go into any of these cafes

WeaknessNot convenient. Some people we have interview inside the gym are just too busy to be making protein shake on their own. Furthermore, plain protein powder does not taste good due to the lack of flavour

None of them contains any amount of protein. These drinks contain mostly sugar which is not preferred by the people as they are unhealthy and fattening

There is no drink option available that specifically caters to help people going to gym to maximise their exercises

Fig 3.1: Competition matrix analysis

Based on figure 3.1, it is clear that the Protein Quake has a competitive edge against its competitors. Two things that makes it stand out from its competitors:

1/ The Protein Quake will be providing products in the most convenient and efficient way available by setting up a small outlet (like a bubble tea shop) near to the gyms.2/ The products are healthy and supplement the athletic activities, unlike the soft drinks or cafe which has no complementary effects on the workout.3.4 SourcingThe Protein Quake purchases its protein powder from BOCCI Vietnam (240 V Vn Tn, Q.5, H Ch Minh, Vietnam) which is one of the two authorised direct distributors of Optimum Nutrition protein.

The ingredients (e.g. fruits, chocolate) are bought from Co-op Marts (189C Cng Qunh, Q.1, H Ch Minh, Vietnam) every day to ensure the daily freshness.

The cups and straws are manufactured by Gia Thanh Co., Ltd (1085 T Quang Bu, Q.8, H Ch Minh, Vietnam)

Other necessary kitchen accessories are bought from barista.vn.

3.5 Product DistributionTaking into consideration that all of our ingredients can be found within the city (refers to Section 3.4 Sourcing), a preferred means of transport would be vans. Ingredients will be taken from wholesalers to points of sales, where transactions on cash basis will be made with customers on the spot.

A supply run will be made once a week, with the exception of milk and fruits being once a day. At the inception of the business, owners may transport the milk and fruits from supermarkets to point of sales themselves to reduce fixed costs.

3.6 SWOT AnalysisThe following SWOT Analysis presents the strengths, weaknesses, opportunities and threats of our products, which will become the groundwork we use to design and organise our marketing plan.3.6.1 Strengths1. First to tap into an increasing demand. As mentioned above in Chapter 4, there is a strong demand for protein shake as complementary sport drinks. Protein Quake currently has no direct competitors, as established in Section 3.3. Alternatives such as energy drinks, soft drinks, tea, etc., however, have no complementary effects to body-building or body-maintaining.

2. Convenience. We offer quick, convenient and efficient methods in delivering our products. Instead of having to make protein shake beforehand, customers can now visit our outlets at strategically convenient locations (Section 2.3).

3. Higher Quality. as our products are made and consumed on the spot, any possible degradation of protein due to exposure to air over extended periods of time is minimised, which is frequently a major issue with home-made protein shake. Furthermore, plain protein shake does not have an appeal to taste, which can be significantly alleviated by our use of fruits and other condiments.

4. Greater benefits to body-building. The golden window period for drinking a protein shake is immediately following one's resistance or weight training workout. This is when one's muscles have been broken down from exercising and in desperate need of protein to rebuild[footnoteRef:2]. This benefit can be a major selling point of our protein products. [2: http://www.answerfitness.com/211/time-drink-protein-shakes-fitness-nerd/]

3.6.2 Weaknesses1. The lack of expertise in marketing know-hows can be a problem, as additional resources may have to be expended to cover the lack of expertise through training or hiring.

2. There is possible time lag to educate our customers of the benefits of protein shake to body-building.3.6.3 Opportunities1. Increasing interest in body-building among youths (as established in 4.2.1 Market Trend). Such trend allows opportunities for growth and further expansion.

2. Most of the years profits can be expected to be made in January and from June to August, as students are relieved from schools and universities for extended periods of time, prompting additional marketing efforts during these periods prime to capitalise on the possible increase in free time among the target customers.3.6.4 Threats1. As our business grows, our idea may be copied and replicated. The low cost barrier of entry may exacerbate the problem. Thus, this issue further emphasises the need for effective marketing to differentiate ourselves from possible future direct competitors. It is also possible that we may turn our business into a franchise to differentiate ourselves from the rest.

4. Market analysis 4.1 Market segmentationThe Protein will focus on 3 market segments: people who frequently go to the biggest gyms, people who go to other gyms and people who are interested in healthier drink choices.

People who frequently go to the biggest gyms are concentrated in the 6 gyms. (the number of traffic is based on what we have asked the personnel in each gym)GymDescriptionEstimated traffic per day

Gym Cali Wow(28 L Lai &Tng 5 Parkson Hng Vng)The most famous gym in Ho Chi Minh city with dance classes, body building classes, yoga, sauna massage1000-1200

Get Fit Gym (lu 3 Ta nh H3 384 Hong Diu Q.4)the second biggest with dance classes, body building classes, yoga, sauna massage similar to Gym Cali Wow800

Lan Anh Gym(291 Cch Mng Thng 8, Qun 10. TPHCM)Oldest gym in Ho Chi Minh city900-1200

Pure Gym (168 V Th Su)Smaller gyms but facilities are better500

Be You Center (200 L Lai and 127/135 in Bin Ph)Similar to Gym Cali Wow. 1500 for 2 outlets

The Gym (Parkson Flemington)Premium gym500

People who go to these 6 biggest gyms are people with higher income as the gym membership is about $500 to $700 a month. They are often businessman, foreigners who work in Ho Chi Minh City and children of the wealthier people. They should have no financial problem spending on our products as one bottle of water in these gyms costs almost as much as our protein shake and they are willing to pay for it.

There are other small gyms such as Nikko Fitness Club, Landmark Health Club Caravelle Fitness, InterContinental - Health & Fitness Centre, Trung tm TDTM Dng Ngc, Diamond Health Club, Vincharm Health Club, NutriFort Fitness, Huy Long Gym, Kryoga Vit Nam, Gym Sc Khe Vit, Mommy Health Club, Pure Gym, gym Ton Thng and gym nh Ph Thnh.

All these gyms are located in the District 1, 2, 3, all of which are close to the CBD. A good estimation of the combined traffic of the local gyms is 5000 per day, which is expected to be much higher during the summer break, from June to August. The frequent customers have an average income of $2000 a month. They are often professionals, workers. A large proportion is also the students whose parents will pay for their fees.

The third group is the people with interest in a healthier drink. We have done a survey on 79 people and out of them, 13 are interested in healthier drinks than Coca-Cola and Pepsi. That equates to approximately 16.5% of the young population. Given the young population of Ho Chi Minh City is 3,216,600, we may estimate a tentative number of 530,739 people interested in a healthy drink. Since our sample size is comparatively much smaller, it is appropriate to assume that only about 5000 people may become potential customers due to the currently low publicity level of protein shakes.

Fig 4.1: Market segments

4.2 Target market analysisProtein Quake main target is people who frequently go to gyms and want to build muscles or lose weight fast by using supplement. 4.2.1 Market trendAccording to Womens Health Vietnam[footnoteRef:3], the number of gyms in Ho Chi Minh City almost double form 2012 to 2014. This shows the trend of increasing interest of people in keeping fit and a healthy lifestyle. Increasing number of people going to gyms also means the expansion of market is huge. [3: http://www.womenshealthvn.com/nao-cung-tap/khoi-dong/phong-gym-moc-len-nhu-nam-chat-luong-ra-sao]

The graph is shown by Google trend[footnoteRef:4]. It reflects the increasing number of searches on protein shake in recent years from 2011 to now. [4: http://www.google.com.sg/trends/explore#q=Protein%20shake]

Hence, by notifying the trend in the increase in gyms in Ho Chi Minh City, increase in interest of people in protein shake, it is certain that it is an untapped market of people demanding protein shakes in Ho Chi Minh City.

4.2.2 Market growthAccording to industry statistics, consumption of sport nutrition is going to grow rapidly in the next 3 years with the expected increase of 6.8% from 2012 to 2017.

Another trend can be identified in the case study of Amino Bar (a protein cafe bar). It was founded in Singapore in 2010 and now it has 3 outlets in Somerset, Velocity and One-north. Currently, Amino Bar is expanding into the USA. Although the market in Singapore is different from that of Vietnam, Ho Chi Minh City has a large population of 8,190,775 which is even greater then Singapores (5,399,200), proving a larger group of potential customers.

Furthermore, based on the increasing sales of one of our indirect competitor (Hoa Huong Duong Energy Drink Ptd) in recent years, beverage industry is expanding in Ho Chi Minh City as people are spending more on drinks.4.2.3 Market needsHo Chi Minh City is a thriving city, probably the most economically developed in Vietnam with 9.5% GDP growth last year. Having more disposable income, people are more willing to pay to have their aesthetic look and thus more are going to gym (as seen in the surge of number of gyms mentioned earlier).

A problem with a developing society is that people are having less free time, thus there is a need to maximise the time they spend in the gym, thus they need to use supplement drink like protein shake.

The problem is:1/ People forget, feel lazy or have no time to make their protein shake (in our survey with the gyms, only about 30% of people going to their gyms bring along their shakes)2/ Protein shakes do not taste good (I have tried to make it myself)

In addition, the recommended or usual intake of protein of an average person is too meagre as said by authoritynutrition.com[footnoteRef:5], we should take in 91 grams instead of 56 grams per day for an average male. Hence, not only people who go to gym but everyone else needs to take extra protein. [5: http://authoritynutrition.com/how-much-protein-per-day]

Hence, Protein Quake exists to provide customers with the best quality protein shakes that help them to achieve their athletic goals in a convenient and simple way.5. Strategy and Implementation 5.1 Marketing strategyFirstly, the Protein Quake is placed at a location near to the biggest gyms mentioned before which leads to high visibility and great ease of access for all people going to these gyms. The outlet will be very unique and eye-catching with our mascot Mr Protein Quake in front of the outlet to introduce about our company and give out pamphlets.

Second, the Protein Quake will have an outstanding marketing campaign aiming to:1/ Inform the people of protein shakes, their benefits and our brand2/ Persuade them to buy our protein shakes3/ Encourage brand loyalty

Third, the Protein Quake will rely on building relationship with the gyms. By giving collaborating with the gyms, we can access the need of each member of the gyms. We will also give away samples and they will give their word of mouth to other people going to gyms.

5.2 Marketing programs5.2.1. To Inform

Distinctive logo:

In the middle of the logo is Mr Protein Quake who is our mascot. He is a cartoon-like character of a cup of protein shake which represents the products that we sell. He also has bulky triceps which represents the benefits of the protein shakes. Behind him is the dawn which represents the beginning of a new hero (a new franchise).

E marketing:We will have our own website, Facebook, Twitter and Instagram to publicise our brand as well as our product to update our event and promotions. However, as there is a lack of general knowledge of protein, we will also have our Youtube page featuring Mr Protein Quake.

Mr Protein Quake will be the main character in the YouTube channel. In the videos, he will talk about the benefits of protein shakes and why people should lead a fit and healthy lifestyle. A video will be out every week. Some of the ideas of the videos are the workouts and how to make protein shakes yourself.

This approach is the main part of our marketing campaign as there is no YouTube page in Vietnam that provides a guide on how to exercise and make protein shakes. There are other pages on YouTube which do the same thing, however, only 30% the population of Vietnam are proficient in English.

The YouTube page can be foreseen as a success as YouTube is becoming more popular in Vietnam in recent years with the rise of loggers such as JVevemind (1,482,645 subscribers), Huyme (363,824 subscribers), Pho (1,001,546 subscribers)... We will also collaborate with them to earn more subscriber for our YouTube channels.

A case study of this would be Mike Changs six packs short-cut, he began making YouTube videos teaching people how to do exercises. Then he earned more subscribers and now he is owning his own brand of protein shake powder. This proves that a YouTube channel can really boost up a business, especially when few people know about protein shakes

A link to our YouTube channel together with Facebook and Twitter page will be printed on every cup we sell.

A gigantic launching event:

2 weeks before the launching event, we will put up posters inside the gyms and give away pamphlets and vouchers to inform people going to these gyms.

We will have a big launching event in which we will give out free samples near to our outlet and outside every gym. The event will be fun, energetic and memorable so that people can have an idea of a brand that is aiming to encourage people to have a healthy and fit lifestyle.

5.2.2. To persuade them and increase brand loyalty

Promotion with gym membership:

We will collaborate with the gyms to give 10% discount to the gym members. By doing this, we are directly persuading our main target group to buy our protein shakes. We will also have a group of loyal customers who are the long-term members of these gyms to be our customers. We also encourage people to go to the gyms and exercise which is in line with our missions.

To get to our market, we will also make visits to the gyms to give away free samples and pamphlets once a month. And, for every cup sold, a portion is returned to the gyms. It becomes a tremendous, painless way for the gyms to gain a financial reward while providing a pleasant and fulfilling benefit to our customers.

Loyalty card:

We will give a loyalty card to every customer who buy our products. Every time, they buy our products, they will earn one point. Every time they bring a friend to buy our products they will also earn a point. When they have garnered 10 points, they can use these points to participate in a wheel spinning to get a prize. A list of prizes will be a free drink, a protein bar, an energy bar...

By doing this, we encourage our customers to come back to our outlet to buy the protein shakes. We also incentivize them to spread the words and invite more friends to buy our products

Free advice from professional nutritionists (to be implemented in the second year due to lack of funds)

One thing that differentiate our brand is the free consultation with our nutritionist. A team of nutritionist will be stationed at our outlet to give out advice to our customers about which type of protein and diet they should take to achieve their goals.

By doing this, we provide them with extra customer service and thus differentiate our brand and prevent potential competitor.

5.2.3. To remindTaking advantage of the SEA GAME in June 2015 (which is well received by the Vietnamese audience). We will launch an event called Gym n Drink.

In the day before the start of SEA GAME (4 June), we will send 2 vans to go around the city and to different gyms. One van will carry a portable gym inside which is separated by clear, transparent glass so that the public can see the people exercising inside the portable gym. Another van will be giving away free samples of our protein shake.

The portable gym will definitely attract the attention of the people and show how people can exercise anywhere. Materials will also be given out to show the important of exercising and protein shakes.

In this event, we will work closely with the biggest gym to let them publicize their brand as well as sharing the cost.

Gymn Drink can be a shocking event for the people as it is the first time they see a portable gym separated by glass wall. This will increase the visibility of our brand and again create an image of a fun and energetic brand.

5.3 Pricing strategy

Protein Quake products will be offered at the following prices:

ProductsUnit Price

Protein Shake (All Types) with Milo/Milk$2.06

Protein Shake (All Types) with a Variety of Fruits$2.06

Optimum Nutrition Whey Protein 900g$50.09

Protein Shake is sold at price point of $2.06 (equivalent to VND35,000). This price is comparable to our indirect competitors price.

Competitors ProductsUnit Price

Trung Nguyen Coffee Cappuccino$2.35

Urban Station Smoothie and Soda$2.06

(Trung Nguyen Coffee and Urban Station are major beverage retailers in downtown Ho Chi Minh City, with each having more than 32 outlets within the city and 8000 units sold per day)

At price point $ 2.06, customer are much less likely to deem our products prices as unreasonable.Price for Optimum Nutrition Whey Protein is placed at standard retailers price point.5.4 Sales StrategyThere will be several sales strategies put into place, including posting specials on high-profit items. The barista will also hand out free drink coupons to those who purchase more than 5 cups at once. The Protein Quake will also develop window sales techniques such as the baristas asking if the customer would like a pack of protein powder along with their drink.5.4.1 Sales ForecastUnit sales are projected based on sale report of two indirect competitors, Hoa Huong Duong Energy Drink Ltd and beverage sales of three different gyms. It is reasonable to estimate that the growth of sales in Year 2 is 20% and that in Year 3 is 10%, assuming that there is no additional outlets opened in this period.For purposes of projection, sales of product is expected to rise in June, July and August, as this is the summer break period for both high school and university students; the two main driving force behind sales in this period. The sales forecast also assumed that a marketing campaign is launched in this period to capitalise on the strong influx of students.

57 percent of sales will go to our company (the retailer), with 25 percent to wholesalers, 10 percent to sales employees and 8 percent to the designers.

Sales Forecast

Year 1 Year 2 Year 3

Unit Sales

Protein Shake (All Types) with Milo/Milk24,783 30,979 34,077

Protein Shake (All Types) with a Variety of Fruits27,200 34,620 38,082

Optimum Nutrition Whey Protein 900g933 1,166 1,283

Total Unit Sales52,916 66,765 73,442

Unit Prices Year 1 Year 2 Year 3

Protein Shake (All Types) with Milo/Milk$2.06 $2.06 $2.06

Protein Shake (All Types) with a Variety of Fruits$2.06 $2.06 $2.06

Optimum Nutrition Whey Protein 900g$50.09 $50.09 $50.09

Sales

Protein Shake (All Types) with Milo/Milk$51,053 $63,817 $70,199

Protein Shake (All Types) with a Variety of Fruits$56,032 $71,317 $78,449

Optimum Nutrition Whey Protein 900g$46,734 $58,405 $64,265

Total Sales$153,819 $193,539 $212,913

Direct Unit Costs Year 1 Year 2 Year 3

Protein Shake (All Types) with Milo/Milk$0.88 $0.88 $0.88

Protein Shake (All Types) with a Variety of Fruits$0.77 $0.77 $0.77

Optimum Nutrition Whey Protein 900g$36.06 $36.06 $36.06

Direct Cost of Sales

Protein Shake (All Types) with Milo/Milk$21,881 $27,352 $30,087

Protein Shake (All Types) with a Variety of Fruits$20,810 $26,487 $29,136

Optimum Nutrition Whey Protein 900g$33,648 $42,052 $46,271

Subtotal Direct Cost of Sales$76,340 $95,891 $105,494

6. Financial PlanThe financial prospects for Protein Quake is quite promising. Since Protein Quake is a pioneer in the market, the business is expected to grow fast due to high existing, untapped demand. Investment will play a major role in financing our growth and cushioning the initial losses.We hope to expand to other outlets by Year 3 when we most likely have repaid most of the initial debts. However, for the purpose of this financial plan, we assume that there will be no additional outlets within 3 years. 6.1 Start-up FundingThe majority of our funding forstart-up requirementswill come from short-term loans from VPBank and/or Agribank, as both banks are well known for charging a lower interest rate and higher amount of loanable fundsfor entrepreneurs. Furthermore,as the maximum loanable fundsat both banks is at $9412, after the required start-up cost of $7322, there is a $2090 cushion for unexpected overhead costs.

Other current liabilities include but not limited to: Taxes Insurance Start-up StocksThe owners of Protein Quake has gathered an additional funding of $500 to support the company for the first few months. We hope to able to secure an investment of $30,000, which will be paid out in dividends of 2% per month after the firstyear.Start-up Funding

Start-up Expenses to Fund$4,672

Start-up Assets to Fund$2,650

Total Funding Required$7,322

Assets

Non-cash Assets from Start-up$2,150

Cash Requirements from Start-up$500

Additional Cash Raised$31,363

Cash Balance on Starting Date$31,863

Total Assets$34,013

Liabilities and Capital

Liabilities

Current Borrowing$7,322

Long-term Liabilities$0

Other Current Liabilities (interest-free)$863

Total Liabilities$8,185

Capital

Planned Investment

Owner$500

Investor$30,000

Total Planned Investment$30,500

Loss at Start-up (Start-up Expenses)($4,672)

Total Capital$25,828

Total Capital and Liabilities$34,013

Total Funding $38,685

6.2 Important AssumptionsThe financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are: 1. A quick-growth economy, without major recessionor overheating.2. There are no unforeseen changes in public health perceptions of its general products.3. No additional outlets are opened within the assessed period.4. Access to equity capital and financing sufficient to maintain its financial plan as shown in the tables.Additionally, Tax rate for private businesses is expected to drop from 22% to 20% in 2016. The interest rate is estimated based on public statements from VPBank and Agribank.6.3 Break-even AnalysisOur break-even analysis is summarized by the following chart and table.The Average Per-Unit Revenue and Variable Cost are calculated based on the individual price, cost and weightage of each selling items to the total revenue and cost.We need at least $10,778 in sales to make cover all monthly expenses. That is approximately $360 in sales per day, or 124 units sold per day to sustain business.Break-even Analysis

Monthly Units Break-even3,708

Monthly Revenue Break-even$10,778

Assumptions:

Average Per-Unit Revenue$2.91

Average Per-Unit Variable Cost$1.44

Estimated Monthly Fixed Cost$5,429

6.4 Projected Profit and LossThere are a multitude offactors and considerationto include when determining projected profit and loss. Net Profit in the first year may be punctured by the high cost of penetrative marketing. However, if we can still make positive net profit by the end of Year 1, there is a good chance that we can repay initial short-term loans in Year 2 and further expand in Year 3.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales$153,819 $193,539 $212,913

Direct Cost of Sales$76,340 $95,891 $105,494

Other Costs of Sales$0 $0 $0

Total Cost of Sales$76,340 $95,891 $105,494

Gross Margin$77,479 $97,648 $107,419

Gross Margin %50.37% 50.45% 50.45%

Expenses

Payroll$6,720 $7,251 $7,828

Marketing/Promotion$20,900 $4,300 $4,300

Depreciation$120 $350 $1,020

Rent$34,800 $34,800 $34,800

Utilities$600 $750 $1,000

Payroll Taxes$469 $508 $782

Other$1,540 $1,694 $1,863

Total Operating Expenses$65,149 $49,653 $51,593

Profit Before Interest and Taxes$12,330 $47,995 $55,826

EBITDA$12,450 $48,345 $56,846

Interest Expense$877 $847 $406

Taxes Incurred$2,520 $9,430 $11,084

Net Profit$8,934 $37,719 $44,336

Net Profit/Sales5.81% 19.49% 20.82%

6.5 Projected Cash FlowOur projected cash flow is outlined in the following chart and table. Dividends for investors are paid out in Year 2 at 2% of $30,000 per month, i.e. $600 monthly. The initial investment of $30,000 will help us greatly not only in cushioning initial losses in Year 1, but also in allowing opportunities for expansion in Year 3.

Pro Forma Cash Flow

Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales$153,819 $193,539 $212,913

Subtotal Cash from Operations$153,819 $193,539 $212,913

Additional Cash Received

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

Subtotal Cash Received$153,819 $193,539 $212,913

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending$144,765 $155,470 $167,557

Subtotal Spent on Operations$144,765 $155,470 $167,557

Additional Cash Spent

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

Principal Repayment of Current Borrowing$176 $176 $7,176

Dividends$0 $7,200 $7,200

Subtotal Cash Spent$144,941 $162,846 $181,933

Net Cash Flow$8,878 $30,693 $30,980

Cash Balance$40,741 $71,433 $102,413

6.6 Projected Balance SheetThe table below outlines the projected balance sheet.Pro Forma Balance Sheet

Year 1 Year 2 Year 3

Assets

Current Assets

Cash$40,741 $71,433 $102,413

Other Current Assets$580 $580 $580

Total Current Assets$41,321 $72,013 $102,993

Long-term Assets

Long-term Assets$1,570 $1,570 $1,570

Accumulated Depreciation$120 $470 $1,490

Total Long-term Assets$1,450 $1,100 $80

Total Assets$42,771 $73,113 $103,073

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Current Borrowing$7,146 $6,970 ($206)

Other Current Liabilities$863 $863 $863

Subtotal Current Liabilities$8,009 $7,833 $657

Long-term Liabilities$0 $0 $0

Total Liabilities$8,009 $7,833 $657

Paid-in Capital$30,500 $30,500 $30,500

Retained Earnings($4,672)($2,938)$27,580

Earnings$8,934 $37,719 $44,336

Total Capital$34,762 $65,280 $102,416

Total Liabilities and Capital$42,771 $73,113 $103,073

Net Worth$34,762 $65,280 $102,416

7. Evaluation7.1 How to measure success?Success will be measured based on whether short-term and long term goals are met.7.1.1. Short-term Goals:1. Make a normal or supernormal net profit by the end of Year 1.2. Ensure that actual sales from June to August reach the projected sales of 6,125 units per month through effective marketing, product quality and differentiation. Achieving the second goal is imperative in keeping business in the black.7.1.2. Long-term Goals:1. Expand with at least 3 new outlets by Year 32. Create a body-building culture within the city to promote greater health and self-esteem, especially among the youth.7.2 Future planAs the season changes, the Protein Quake will be offering products that will enhance sales and satisfy its customers' desires. In the hotter seasons, the Protein Quake will extend its products into protein ice-cream. The Protein Quake will also have special menus for holidays for example protein egg nog during Christmas.

In the long run, to further diversify our products, we will also sell protein and energy bars along with protein-rich food like sandwiches or protein cake.

The Protein Quake's primary aim will be to listen to its customers to ascertain what they are looking for most and provide it.

21 | Page