Business Plan for a Startup Business

Page 6 of 44

Business Plan

Natalie Woodham

Mike Hung

Lucas Griffin

Sean McDermott

Jeremy Carter

GreenIT

San Jose, California

1000 North Front Street

San Jose, California 94086

Phone: 408-Gre-enIT Fax: 408-Gre-enIT-F

GreenIT@GroceryWholesale.com

I. Table of Contents

3I.Table of Contents

4II.Executive Summary

5III.General Company Description

6IV.Products and Services

7V.Marketing Plan

26VI.Operational Plan

35VII.Management and Organization

37VIII.Financials

43IX.Capital Requirements

44X.Sources Used

Note:

*Purple lettering is related to charts/graphs

*small type is background/industry historical information

II. Executive Summary

GreenIT strives to provide quality food in environmentally friendly packaging and help decrease landfill space needed in waste management, reduce the wholesale food industrys carbon footprint and educate consumers about recycling and environmentalism, while still being profitable.

Our company goal is to provide customers an opportunity to give their buyers a chance to help save the planet and raise global awareness about the environment.

We believes that it is important to improve sustainability and is concerned with the future state of the planet, as well as providing the upmost level of food quality and wholesale distribution service for its customers.

Well market our products to higher end specialty food stores such Whole Foods and Trader Joes

Our industry is a growth industry that continues to gain market share and popularity as consumers become more and more interested in environmentalism and healthy eating. Changes in the industry, such as more competition, are long term. We plan on taking advantage of these changes by having a niche recycled packaging that incorporates many of the interests of potential consumers by providing a dual benefit for both our customers and the final buyer of the food item.

GreenITs factors of success include young, educated employees that appreciate and seek to save the environment and know the importance of recycling and can spread this message. GreenIT possesses a legal, distinctive package design that provides branding that stands out to the consumer; our company plans to copy write the packaging process and design used to manufacture the recycled packing of our food items. We plan to market the company as the original recycled food packaging company.

III. General Company Description

Mission Statement:

GreenIT strives to provide quality food in environmentally friendly packaging and help decrease landfill space needed in waste management, reduce the wholesale food industrys carbon footprint and educate consumers about recycling and environmentalism, while still being profitable.

Company Goals and Objectives:

GreenIts company goal is to provide customers an opportunity to give their buyers a chance to help save the planet and raise global awareness about the environment.

Business Philosophy, What is important to GreenIT:

GreenIT believes that it is important to improve sustainability and is concerned with the future state of the planet, as well as providing the upmost level of food quality and wholesale distribution service for its customers.

To whom we will market our products:

Well market our products to higher end specialty food stores such Whole Foods and Trader Joes.

Describe our industry. Is it a growth industry? What changes do we foresee in the industry, short term and long term? How will our company be poised to take advantage of them?

Our industry is a growth industry that continues to gain market share and popularity as consumers become more interested in environmentalism and healthy eating. The competitors in the industry continually change over the long term. We plan on taking advantage of these changes by having a niche recycled packaging that incorporates many of the interests of potential consumers and provides a dual benefit to both our customers and the final buyer of the food item.

Describe our most important company strengths and core competencies. What factors will make the company succeed? What do we think our major competitive strengths will be? What background experience, skills, and strengths do we personally bring to this new venture?

GreenITs factors of success include young, educated employees that appreciate and seek to save the environment and know the importance of recycling and can spread this message. GreenIT possesses a legal, distinctive package design that provides branding that stands out to the consumer; our company plans to copy write the packaging process and design used to manufacture the recycled packing of our food items. GreenIT plans to market the company as the original recycled food packaging company.

Legal form of ownership: Sole proprietor, Partnership, Corporation, Limited liability corporation (LLC)? Why have we selected this form?

We are a limited liability company which means we will be taxed and run as a partnership, taxed once, and employees are only responsible for their personal investment in GreenIT.

IV. Products and Services

Depth of our products:

The technical specifications of our company include receiving the food, break bulking, and repacking it in our branded, recycled packaging then distributing to our customers.

What factors will give us a competitive advantages or disadvantages?

Our competitive advantages include a strong label/logo that symbolizes our mission, recycled packaging, packaging that is made from recycled materials and a high level of food quality. Disadvantages against GreenIT include the task of getting people to make the commitment to recycle our products, the higher pricing of specialty foods, educating the general public about recycling and dealing with a smaller profit margin while calculating financials and sales goals. Also, a large part of our product relies on the availability of recycled raw materials such as plastics, aluminum and cardboard.

We plan on reducing the higher price of our products by providing coupons, advertising, in store labeling, a plan that will simultaneously market our items and increase brand visibility. The fact that we will distribute our food items to higher end stores means that the competition created by lower end priced products will be reduced by the average price of products carried in these higher end stores.V. Marketing Plan

Market research

GreenIT used secondary market research for industry information. The published information came from sources such as trade journals, newspapers, magazines, census data, and industry and demographic profiles. This type of information is available in public libraries, industry associations, chambers of commerce, from vendors who sell in our industry, and from government agencies.

Economics

Facts about our industrys market share:

What is the total size of our market?

The wholesale food distribution industry in the US includes about 35,000 companies and has annual sales over $600 billion. Some of the larger companies include SYSCO, US Foodservice, Supervalu and Nash Finch. Most of the companies in the whole sale food industry are small, with about only 1,200 companies having annual sales over $50 million and only about 50 companies having over $500 million in sales annually.

Government share in the industry:

In 2008, the federal government spent a total of $3,834,122,032 on Grocery and Related Product Wholesalers, awarding 72,153 contracts to 1,241 companies, with an average value of $3,089,542 per company.

The primary activities of companies in the Grocery Wholesale Industry are commonly divided into 4 groups:

General-line groceries wholesaling

Dry groceries

Perishable food products

Non-food products

How the industry sales are broken down:The industry sells a variety of different goods, frozen foods, dairy, poultry, fish, meat, fresh produce, baked goods, processed and prepared foods and other related items. Only about 150 of the larger companies deal with a broad line of food products, while the majority of the companies are specialized in a few products.

Figure 1-1 provides a visual aid as to how the grocery wholesale industry is broken down, above left is the 3 major areas companies chose as a focus and bottom right are the categories that are often focused on among specialty wholesale grocery distributors as of 2002.

Fig. 1-2

The Census of Wholesale Trade has classified Merchant Grocery Wholesale Distributors into three general distributions types:

General-Line Distributors - Also referred to as Broad line/ Full-Line Distributors, these are companies handling a broad line of groceries, along with health and beauty aids and household products, companies such as C&S Grocers, Supervalu, Nash Finch and Sysco. Companies that have traditionally purchased a wide range of food products from manufacturers and stocked these goods in one of their distribution centers. Most broad line distributors offer value-added services designed to meet the needs of single-store restaurants and small chains. For instance, foodservice operators without the staff to research new products and plan menus may rely on a distributor's sales representative for assistance which is sometimes provided by companies such as Sysco and U.S. Foodservice that have the resources and funds to gather the information.

Specialty Distributors or called Product Specialist - Operations primarily engaged in the wholesale distribution of items such as frozen foods, dairy products, meat and meat products, or fresh fruits and vegetables. Specialty wholesalers account for nearly half of grocery wholesale sales. Companies that do not stock a wide range of products; instead they operate in niche markets where it is necessary to have specialized knowledge about the type of product being handled or type of operator being served. For example, there are product specialists for specialty cut meats, produce, ice cream, and coffee. Market specialists serve a wide range of niche operators, such as convenience stores, hotels/motels, and club warehouses.

Miscellaneous Distributors - or referred to as System distributors are companies primarily engaged in the wholesale distribution of a narrow range of dry groceries such as canned foods, coffee, bread, or soft drinks. Foodservice wholesalers serve a customer base that consists mostly of chain restaurants with centralized purchasing and established menus. Individual operators within the chain may not require the value-added services provided by a broad line or specialty distributor and may not inquire about information of new products or assistance in developing and preparing new menu items.

Classification of GreenIT Merchant Grocery Wholesale Distribution:

GreenIt is going to be a mix of Miscellaneous Distributors and Specialty Distributors that will primarily focus on products that can be packaged in recycled material and can be deposed of through recycling. These products will promote saving the earth, recycling and sustainability. The main products will be on dry groceries, such as canned goods, boxed packaging goods, liquids either in canned, plastic or paper packaging. Products such as bottled water, bottled nutritional drinks, canned soups, canned vegetables and boxed snacks will be our staple items.

Market Breakdown of Grocery Store/Customers:

According to a report released from the U.S. Food Marketing System. The top ten grocery stores dominated almost 50 percent of the overall market and represented $728.7 billion in sales. According to the Report, the leading grocery stores in 2002 were Wal-Mart, Kroger, Costco Wholesale, Albertsons, Safeway, Sam's Clubs, Ahold Retail, Super-Value, Publix, and Fleming, leaving the remaining market share to other smaller retailers. The report found that the largest grocery markets were in California, Texas, Florida, New York, Pennsylvania, Ohio, Illinois, North Carolina, Michigan, and Georgia.

Grocery wholesalers and distributors claim more that 50 percent of the complete grocery and related product sales. Manufacturers sales offices and branches account for 25 percent, while brokers and agents account for 19 percent of sales, as shown in figure 1-3.

Fig. 1-3

GreenITs market share and sales:

The US specialty food store industry includes about 20,000 stores with combined annual revenue of $20 billion. Major players include Whole Foods Market and Trader Joe's. The industry is fragmented with the 50 largest companies account for less than 50 percent of sales.We will focus on small market share due to the fact that 50 of the largest distributors hold about 50 percent of the total market. We will push for a market share of LESS than 1 % as a start-up company for the first five year and a growth rate of 3% for those years. On year five we will reevaluate our goals in relationship to the market share growth of the past and will also factor in the conditions of the current economy

Shift of history of current demand in target market:

Beginning in the late 1980's, a massive wave of consolidation started in the U.S. food brokerage industry, and didn't end until about 7 years ago. Industry demand changes due to shifting consumer food tastes, but is limited by the 1 percent annual US population growth. The profitability of individual companies depends on popular products, contracts with large customers, and efficient operations. Smaller companies can compete effectively by specializing in specific products or market niches. Specialty and natural foods niche categories usually ran by independent brokers have historically tended to do better than the large, national mega-brokers or wholesales. Small companies can also be effective in the import of foreign specialties. Large distributors have a cost advantage by buying in quantity, but need to operate a more complicated distribution network.

History of growth trends, trends in consumer preferences:

Growth of the food wholesale industry has continued to climb, mainly in the retail sector.

Grocery wholesale sales to retail food operations, such as supermarkets and convenience stores, totaled $282 billion in 2002, the most recent year of data, or 45 percent of the total grocery wholesale sales volume. This is up from 40 percent in 1997.

Restaurants and other foodservice companies are also major customers of wholesalers. Sales to these firms accounted for $118 billion in 2002, or 19 percent of all sales of groceries and related products by all food wholesalers, down from 22 percent in 1997. While retail grocery outlets and foodservice companies compete for the consumers food dollar, wholesalers that distribute to the foodservice industry and to food retail outlets do not compete directly with each other for these customers.

Figure 1-1 breaks down the five top categories by percentage of who is buying from food wholesalers or type of outlet.

Fig. 1-1

Examples of the end buyers from the outlet are as follows:

Exports - to foreign countries

Foodservice - to restaurants and fast food establishments

Retailers - to grocery stores, supermarkets, superstores and convenient stores

Government - to schools, military and administrative facilities

Other Wholesalers - to other wholesalers which than sold to any of the above types of outlets

Others - private venues, parties or individual companies

Growth potential and opportunity for a business of our size:

The grocery industry trend is one that commonly buys out other smaller distributors as a way to expand and grow into new territories and regions.

Barriers to entry faced when entering the market, some of the typical barriers are as follows:

TAXATION - At 8.25%, California has the highest state sales tax, which can total up to 10.75% with local sales tax included, such as the Bay Area Rapid Transit district tax. The capital, Sacramento has a combined 8.75% sales tax rate, and the largest city of Los Angeles has a combined 9.75% sales tax rate. In grocery stores, unprepared food items are not taxed but vitamins and all other items are. Rather than taxing the sale of lump quantities, for instance each time it is sold. From manufacturer to wholesaler to consumer, it is only taxed on the consumer final product end. California Board of Equalization (BOE) does require a sellers and resellers to have permits to sell tangible goods, which also regulates county, state and local district sales tax, failure resulting in misdemeanors. There are also city and county business tax requirements, general businesses in San Jose requires to pay $150 for up to eight employees and $18 for each additional employee. Oakland requires $1.20 per $1000 in gross receipt retail sales.

Theses cost cannot be avoided in some regions, because it is vital to be located near the majority of grocery stores, which are located in the denser populations. It is an important part of keeping other costs to a minimum such as transportation. In other regions we may avoid these costs by analyzing the cost v. benefit gained of have the centers located outside city limits and making decision based on the results. It is a cost of business that is sometimes required to be successful in these regions. REGULATION - The Department of Health Services (DHS) has been inspecting California processed food firms since 1907 to ensure the safety of the food supply in California. In 1986, legislation was passed requiring any person engaged in the manufacturing, packing, labeling, or holding (warehousing) of processed food in the State of California to register annually with the Department of Health Services (DHS), Food and Drug Branch (FDB). The registration acts as a firms basic health permit, to legally manufacture or warehouse food at the wholesale level. Currently, the registration fee is set based on the size of the facility, number of employees, and the activities conducted at the facility (manufacturing or warehousing). The registration fees pay for statutorily mandated inspections of food facilities performed by FDB investigators. Investigators examine a firms complete production and quality assurance system including such areas as, qualifications of responsible personnel, use of food additives, color additives, preservatives, and other chemicals; control of critical production parameters, and methods of product storage, labeling, and advertising. Failure to register could lead to arrest, civil penalties, and / or the embargo of all food products at the unregistered establishment.

COST STRUCTURE The major demand on capital structure is the building and warehousing for the goods and the trucks used for transportation if they are not subcontracted out from a third party. The cost of equipment and products (materials) are other major costs of establishing a new grocery wholesale company. CAPITAL AND LABOR INTENSITY The labor intensity in the grocery industry is usually below average with the majority of the work force focusing on the logistic and management of processes. Some costs related to transportation such as truck drivers will also require a higher level of capital. TECHNOLOGY AND SYSTEMS The fast changing advancements of today technology are constant challenges for the grocery wholesale industry. It is difficult to get companies to transition from current technologies to new and improved ones, due to the cost and time that is required to implement any changes.

INDUSTRY VOLATILITY The first obstacle to overcome will be entry to the customers (retail grocery stores), due to a lack of industry delivery history. The customers lack of experience of our processes and efficiency procedures will be major obstacles that will be focused on immensely in the beginning and into the future of the company. GLOBALIZATION - Canada exported a value of $2.5 million in food into the United States. Thailand was second, with $1.8 million, followed by Mexico with $659,321, China with $640,776, and Chile with $491,247. The increasing number of grocery distributors from foreign suppliers penetrating the United States has made the opportunities for market share for domestic wholesale suppliers smaller.

BRAND RECOGNITION It is not uncommon for larger distributors to contract with manufacturers in order to put their own name on product labels. This is done so that a level of service becomes associated with brand that is controlled by the wholesale company rather than the manufacturer. GreenIT may also employ this technique to expand its market coverage so resource can be diverted to other efforts. Change in the Industry, shift to retail owned wholesale distribution center:

The number of grocery retail stores own their distribution centers is increasing, which makes it difficult for private distribution companies to survive or enter the market with success.

In the late 1990s the industry faced diminished sales growth. In 1997, the top 50 wholesale grocery giants reported sales of $81.1 billion, compared to $81 billion the previous year. One reason for the stagnation was competition from vertically integrated grocery retailers such as The Kroger Co. and Safeway Inc., which was caused by their size. They were able to buy goods directly from manufacturers as well as to make many of their own private label products, rather than relying on other distributors for goods.

The retail food store wholesaling sector continues to undergo important structural changes. In 2003, the Nations largest grocery wholesaler, Fleming, divested the bulk of its operations shortly after its largest customer, Kmart, filed for bankruptcy protection and ended its supply contract with Fleming. Following the divestitures, the share of general-line grocery merchant wholesale sales accounted for by the top four wholesalers fell from 34 percent in 2001 to 27 percent in 2004, a result of the consolidation of the wholesale industry. As consolidation in food retailing increases, manufacturers and large retailers that are offering a broad assortment of items have found it more beneficial to negotiate directly with each other, reducing the power and influence of traditional wholesalers. Self-distribution has become one of the preferred methods of vertical coordination for large grocery chain stores, mainly those with 11 or more stores.In 2001, 82 percent of chain stores had their own distribution centers.

Given uncertainty about the ability of independent retailers to compete with the larger chains, some of the largest grocery wholesalers are placing greater emphasis on owning retail operations. This is illustrated by Supervalus purchase of Albertsons in 2006, or the second largest grocery wholesaler purchasing the third largest grocery retailer.

Change in technology:

Food wholesalers lead both in the economic and technological advancements of the wholesale industry by their continued focus on innovation and cost reduction to increase the small margins that they make on their products.

The wholesale distribution industry leads the way in productivity technologies that automate activities like order processing, billing, inventory control, delivery and route scheduling, as well as automated warehouse management. Adopting these technological advances has allowed the productivity within the industry to outpace the entire non-farm business sector as measured by output per hour.

RFID technology:

Radio frequency identification (RFID) technology is becoming used more frequently by larger wholesale distributors with warehouses. RFID tags coupled with a satellite and receiver system allow wholesalers to keep track of the goods they have in stock and through transit to ensure delivery.

Change in government regulations:

President Obama has supported the Employee Free Choice Act. This act will make it easier for unions to form. If it passes, the cost of working with newly formed unions could place added financial pressure on already struggling distributors. Whether this legislation passes in 2009 or not, it is clear that the current administration is pushing for unionization and labor laws. It would be wise for those wholesale distribution companies not currently unionized to strategize how they might respond to potential labor disputes and examine their current labor policies to determine if unionization is likely.

GreenIT will also be Certified in CFS (California Food Safety Certified/Certified Professional Food Manager) to show we have an understanding of how to care for and handle foods properly. The costs are less than $150 per test.

Covers:

Food hazards

Food borne illnesses

Employee health Potentially hazardous foods Receiving standards

Cooling/reheating

Fresh/frozen food

Meats/poultry/seafood

Milk and dairy/fruits and vegetables

Processing food

Safe cooking and holding temperatures

Bacteria growth

Cleaning and sanitizing

Pest control

Facilities

Water supply

Hazard Analysis

Change in the economy:

Despite the current economic recession in the United States, wholesale distribution has continued to be the life blood of manufactures with industry growth that has outpaced growth in GDP. However, the industry is not immune from the current economic recession. Most manufacturers continue to rely on wholesale distribution to deliver goods to their customers because they can offer greater service to their customers due to their local presence, quick response and flexibility.Distributors generally experience relatively low margins with average operating margins across product types ranging from 2%-5%. During periods of economic recession it is particularly important that distributors pay close attention to key performance indicators on a regular basis.

What after-sale services we will give? Some examples are delivery, warranty, support, follow-up, and refund policy.

GreenIT sale/service is going to use online linked system that track the product from point of manufacturing, to shipping, to delivery in the stores. The products and materials that are return will use the same systems. Refunds for damaged products claims must be within a week of receiving at loading dock of Whole Foods and Trader Joes or other grocery stores. Some of the industry standard systems are created by Creative Systems Corporation, Ramp Systems and EBE Technologies. Their systems support staff, improves efficiency interfaces, dispatch, and automation, and are designed specifically to streamline businesses. The systems enable businesses to integrate their customers and partners together for quicker, easier and a more cost effectively interaction.Customers

Targeted customers, their characteristics, and their geographic locations, otherwise known as their demographics.

The end consumer of GreenIT products is a cost-conscious, health-conscious label-reader who is not tied to national brand names. Pat St. John, Trader Joes vice president of marketing says that Trader Joe's shoppers fall into several sometimes overlapping types: There's the frugal foodie looking for the next new thing; the iconoclast who resents "customer loyalty cards" and dislikes big-box retailers; the health-conscious, ecologically sensitive parent seeking organic and pesticide-free foods, environmentally friendly cleaning supplies and wholesome snacks; child-free working couples and singles who favor the convenience foods packaged just right for one or two; and a whole lot of people who like to indulge in luxuries like flowers, candy, cheese, wine and Greek yogurt. For Whole Foods, the company describes its customers as 28 percent of shoppers defined as those who work to change eating habits promoted by health concerns and interest in self-care. These individuals that actively seek out health and nutritional information and are younger to middle aged, with medium to high household incomes.

This graph represents the end consumer of the GreenIT food products.

Most important customer groups and their demographic profile:

Age

Younger to middle aged, average age of consumer is 36 years old

Gender

Both

Location

Coastal Areas

Income level

Median Household income:$63,554

Social class and occupation

Middle Class to Upper Middle Class

Education

Based on a Nielsen study, 55% of the customers of Whole Foods possess a bachelors degree or higher

For business customers, the demographic factors are:

Industry (or portion of an industry)

Specialty foods portion of the grocery industry

Location

Mostly coastal areas

Quality, technology, and price preferences

Higher end specialty health and organic foods

Competition (2)

San Jose Distribution

Can fruit, fruit juices

2055 S 7th St Ste ASan Jose, CA 95112408-292-9100 History

71 plus years warehousing and transportation experience

3 pantry warehousing logistics and transportation since 1977

Established in 1956 when agriculture was at its prime

Houses food computers and consumer goods and paper products

Make Up

200,000 square feet

Green Friendly Energy Efficient motion detector activated fluorescent lighting

Single story with cement flooring

24 hour monitoring

Food Grade sanitation, FDA Registered

State health Certified

Pick /Pack Fulfillment

Front line for over 20 years

History of customer weights from 100 to 44000 SKUs

-Repackage

-Rebuild

-UCC labeling

-Same day shipping

Instant order status receipt status inventory shipment and inventory replenishment tracking

Our supply costs are steady

C&S Wholesale Grocers Inc.

Stats

One of the largest food whole sellers and the US

53,000 grocery products

7 distribution centers on twelve states

History

Founded in 1918 Mass.

-Formed when growing urban population demanded more varied grocery products

- Independent companies came together to for cooperatives to increase buying power

- Provided companies to provide larger orders and to benefit the economy of scales

Following World War II started supplying to military bases

-Currently supplies 19 bases

1958 shifted from independent retailers to chain stores

1988 developed self-managed teams

-Improvement in productivity and lower costs.We will compete for certain items that are listed below:

We will compete with the competition by really pushing how our packaging is environment friendly. Our brand will be our selling point. The product is the same but the backing of our name will be what makes us stand out. Our name represents honesty, integrity and we a guarantee that our packing is Go Green 100 percent.

FactorGreenITStrengthWeaknessTrader JoesWhole Foods

ProductsSoup/Canned Goods

Cereal

Drinks Soups/Canned Goods

Cereals

BeveragesSoups/Canned Goods

Cereals

Beverages

PriceSoup

Cereal

Canned Goods

Drinks N/AN/A

QualityExcellent ExcellentExcellent

SelectionSelective SelectiveSelective

ServiceGood GoodGood

Reliability100% 100%100%

StabilityVery VeryVery

ExpertiseSustainability Advance Advance

Company ReputationGood Good Good

LocationCalifornia CaliforniaCalifornia

AppearanceEnvironmentally Friendly They back the ProductHealth Conscious

Sales MethodPersonal Sales Personal SalesPersonal Sales

Credit PoliciesStandard StandardStandard

AdvertisingCoupons, Labeling, Web Page, Commercials Frequent Flyer

E-commerceWeb Page

Image3 markets in CA NationalNational

Competitive advantage/disadvantage:

Our competitive advantage is the backing of our name and brand. The only disadvantage of our products is the specific and limited categories of products, because we will be specializing in only a few areas of the food industry. However this product specialization will also be an advantage and work in our favor. We will be able to focus and perfecting the quality and delivery of our products.

Being a new company that is not well known in the industry and not an established company is one disadvantage that must be overcome. Companies such as Trader Joes offer a wider varied of foods and drinks, which will be one of our biggest competitors. They are a company similar to ours focusing sale on food items, while Whole Foods will give us competition in the drink market.

Niche

GreenIT provides a sustainable, recyclable product that provides a dual benefit to both the supplier and the end consumer.

Strategy

Marketing Strategy Niche:

Our niche is very focused on the consumer. As a result, our marketing efforts will be directed at the consumer. In order to experience success, our company and our products have to gain a positive reputation. We realize that our niche will not appeal to all consumers. Since we will focus heavily on those consumers that have a higher income and have shown a history of being environmentally conscious, we will use advertising channels that go directly to them. As a startup company we cannot afford advertise to the wrong markets. A major tool we will use in identifying our target market is demographics consulting. This will help us determine what will be the most effect marketing strategies, and which areas will produce the most sales.

Promotional Budget

Estimated advertising and marketing budget combined just over a $100,000 yearly during the start up phase of the company. Throughout the years of growth GreenIT plans to grow the advertising and marketing budget by 10% of sales each year based on its next years sales.

Pricing

The Environmental Defense Fund is an organization that partners with companies all over the world to find practical environmental solutions. The EDF has agreed to start a joint project with GreenIt to improve Californias recycling and landfill systems. GreenIt packaging will donate 5% of the sales price for every item it sells toward this project. Even better yet, the EDF has agreed to match whatever funds we raise. If we meet our sales goals of 1 million dollars, GreenIt and the EDF will have donated 7,575 dollars each to the project. This, along with our increased costs from producing easily recyclable packaging, will put GreenIts products in the higher price range compared to our competitors.

Environmental Defense FundWe do not expect our customers to make their decisions based on price. Our product offers an opportunity for our customers to get involved with environmental conservation while doing their weekly shopping. Our customers will have a sense of pride when purchasing our products because they know they are doing something to benefit the environment.

Proposed Location:

Location criteria affects on our customers:

We have three distribution centers in Los Angeles, Sacramento, and San Francisco (Bay Area). Our distribution center is located next to the recycling centers, so we can keep our costs low and the savings will trickle down to our customers. Also our customers do not need to come to our place for business, since we deliver what they need. The locations are consistent with our image and advocate recycling. The competition is located throughout the country; our specific location caters to our local concentrations at our current level of distribution. (see layout for details of design)

Is our location important to our customers?

Our locations are not so important to our customer, because we distribute and deliver the product to our customers.Distribution Channel:

How GreenIT will sell - products and services?

We are wholesale distributors and deliver the food with recycled package to our customers, and the customer will sell it in their retail store, like Whole Foods and Trader Joes. As owners, we will visit potential customers who fit our target market acting as a direct sales force.Sales Forecast

GreenIT will strive for at least $1 million in sale for the first five years, than will evaluate the market in the fifth year to be current with the market standards and the changes in the company due to growth. We strive to increase sales by 3% on previous years sales.

We will use a quantitative method of forecasting called exponential smoothing in which well use a weighted average based on a previous forecast plus a percentage of the forecast error.

GreenIT sales forecast: Ft = Ft-1 + error (actual sales previous forecast)

Footnote Error is minimal, not applied in formula

Error - .0000000001 (added back into forecast)

Period 1 1 million sales

Year 1Forecast 1 mil

Actual 1 mil

Year 2Forecast 1 mil (.03)1 mil + 30,000 increase in sales

Year 3Forecast 1,030,000(.03)= $1,060,900 in sales

Year 4Forecast 1,060,900(.03)= 1,092,727

Year 5Forecast 1,092,727(.03)=1,125,508

VI. Operational Plan

Production

Production techniques and costs - located closely to the recycling centers, uniform materials/product to maintain low costs.

Quality control - RFID, lean operation, vary Reduction (little variation)

Customer service - location as an advantage, focusing on Relationship building (higher quality of service) Inventory control - RFID, SKUs, Worldport for tracking of goods while in processing and delivery Product development - Will stick to core group of products to help focus on customers needs (on time delivery) rather than spending resources on R & D efforts.Location

Close to recycling center

Easy access for delivery trucks

Good view from the road

GreenIT will have facilities located closely to recycling centers, to maintain minimum transportation cost of shipping of raw materials. The facilities will also be located in the areas of California where the density of population is the highest, San Francisco, Los Angles and Sacramento, so we have more store (customers) to each with the lowest cost of transportation of the finished goods.

Physical requirements:

Type of building Steel/brick warehouse with steel roof to reduce cost of maintenance and replacement (such as shingles) (see layout proposal for details of design) Zoning - Commercial for the warehouse location Power and other utilities - Standard utilities Detailed description of size of facility - multiple-occupancy buildingEstimate size of warehouse space is around 25,000 square feet, multiple-occupancy building Warehousing space. Wholesalers in multiple-occupancy buildings need parking space for both trucks and cars. Adequate parking for trucks for shipping and receiving operations would be on the side of the building while directly in front of the facilities will be for management, sale and visitors.

Fork lifts

GreenIT will use Sit-Down Counterbalanced Electric Forklifts and a Single-Deep Racking System to increased warehousing usage and accessibility for inventory. GreenIT will use these types of forklifts because of their speed, safety, lift capacity (4000lbs to 6000lbs) and height reach. The forklift will be electrically powered to avoid the required ventilation systems of Butane and gasoline forklifts.

Access:

Is it important that our location be convenient to transportation or to suppliers?

Yes, so we will not lose potential business due to the convenience factor. The locations will be close to the freeway or major highway.Construction:

Minimal costs for remodeling, we will rent or lease building of warehousing.Business hours: 8:00am 5:00pm

Warehouse hours: 5:00am 9:00 pm earlier and later hours to avoid congested traffic and help reduce the hours to delivery and the related costs associated with transportation of goods.

Facility Layout:

The facilities will have this basic layout, with office area, quality control area, R & D area, inventory area, order picking area, loading and receiving areas, and a parking a in back with minimal visitor parking in front. The layout below provides as an example of all given areas, but is not accurate in actual size of each area.Legal Environment

Licensing and Permits - Certified in California Food and Safety for added assurance to consumers (retailers). Processed food registration, California Health and Safety Code requires businesses that manufacture, repack, label, or warehouse processed food products to register with the California Department of Public Health Food and Federal Drug Bureau. This registration serves as the basic heath permit for wholesale manufacture or warehousing of processed foods in California.

Health, workplace, or environmental regulations - Water Supply used in food processing must be from an approved water system. In rural areas where water is provided by a well or springs, water must be from a source approved by domestic water permit issued by Environmental Health Specialist. Waste deposal of service will take care of waste removal.

Special regulations - Must meet FDA standards of all packaged food products such as canned goods and bottled water. Zoning or building code requirements - Commercial or Industrial District Insurance coverage - Property, Employee, Fire, Accidental Injury/Liability, possibly shipping insurance on trucks/goods (transportation) if they are not contracted out by a third party Trademarks, copyrights - GreenIT name and logo (as seen on page 1/cover of business plan)Personnel

We will have the 5 owners, 1 manager in each distribution facility overseeing the 3 major locations during the start up phase of company. We will outsource accountants and lawyers and have 2 internal trucks and 2 drivers and 2 forklift operators for each of the distribution centers facility.

Where and how we will find the right employees:

Head hunters and personal interviews by owners will be used to find the right employees for our GreenIT. We will look for people with experience in the current industry.

Pay structure:

Hourly for truck drivers and labor with bonuses for on time delivery and salary for the owners and managers.

Training methods and requirements:

GreenIT will use an Intranet system module for training of office employees. We will also use a Mentor System for first year employees lead by owners and managers. We will also have an Internship program training potential managers that will manager new facilities that will open with future growth. We will use an internal audit system to monitor employee performance and productivity. We will install internal CAR system to correct procedural inefficiencies and improvements.

Schedules and written procedures:

We will use the Worldport scheduling systems for transportation. Worldport will be connected to our website so customers can view their shipment schedule and status. The procedures for specific tasks will be accessible through the intranet system.

For certain functions, will we use contract workers in addition to employees:

Lawyers, accountants, consultants, and possibly temp services will be outsourcers as the needed.

Inventory

What kind of inventory will we keep:

Raw materials:Recycled materials plastics/metals/paper goods that are going in to the finished goods/packaging

Supplies: Finished recycled materials for packaging of goods

Finished goods:Boxes, cans, bottles Average Inventory Value at Cost = (Starting Inventory + Ending Inventory)/2

AIVC = (724,998 + 383,248) / 2 = 554,123

Rate of Turnover = (Cost of Goods Sold)/(Average Inventory Value at Cost)

Rate of Turnover = 360,499 / 554,123 = 0.65 Seasonal buildups: May have more demand in the summer months than other times of the year, for drinks and during holiday periods.

Suppliers - 2 types Recycled Materials Waste Management - California

Products for our use:

Through its facilities, Waste Management and WM Recycle America can handle a broad range of recyclable commodities, the material that GreenIT will reuse include metals, plastics and fibers such as office paper, newspaper and cardboard.

By recycling more than 257,000 tons of plastics annually, enough energy is saved to power almost 130,000 houses for one year. Waste Management processed more than 214,000 tons of metals last year.

The table below gives the breakdown of common recycled materials useable for GreenITs products.

Type of plastic polymerPropertiesCommon Packaging Applications

Polyethylene Terephthalate (PET, PETE)Clarity, strength, toughness, barrier to gas and moisture.Soft drink, water and salad dressing bottles; peanut butter and jam jars

High Density Polyethylene (HDPE)Stiffness, strength, toughness, resistance to moisture, permeability to gas.Milk, juice and water bottles; trash and retail bags.

Polyvinyl Chloride (PVC)Versatility, clarity, easing of blending, strength, toughness.Juice bottles; cling films; PVC piping

Low Density Polyethylene (LDPE)Ease of processing, strength, toughness, flexibility, ease of sealing, barrier to moisture.Frozen food bags; squeezable bottles, e.g. honey, mustard; cling films; flexible container lids.

Polypropylene (PP)Strength, toughness, resistance to heat, chemicals, grease and oil, versatile, barrier to moisture.Reusable microwaveable ware; kitchenware; yogurt containers; margarine tubs; microwaveable disposable take-away containers; disposable cups and plates.

Polystyrene (PS)Versatility, clarity, easily formedEgg cartons; packing peanuts; disposable cups, plates, trays and cutlery; disposable take-away containers;

Other (often polycarbonate or ABS)Dependent on polymers or combination of polymersBeverage bottles; baby milk bottles; electronic casing.

Food Manufacturers -

GreenITs packaging will use multiple suppliers for increased product market coverage. It will give us the ability to reach a wider range of end users (personal consumers), while also increasing the bottom line. We will also provide our services to any company that would like to explore the marketing and sales opportunities that come with packaging their product in our recycled materials. GreenIT is going to use companies that emphases going green, sustainability, recycling, natural, health and environmentally friendly such as companies the below.

Kasha Company (acquired by Kelloggs Company in 2000) - La Jolla, California

General Mills - Lodi, California

Mars Incorporated- Carson, California

Reliability/standards will be based on government/industry regulations for both supplier types.

Credit Policies

Do we plan to sell on credit?Yes, we plan to sell on credit. Do we really need to sell on credit? Is it customary in our industry and expected by our clientele?No, since we are the starting business, its better not sell on credit. And it would only benefit seller to have enough working capital, but if seller didnt payoff bill on time, we will have problem for our working capital. However, if we can providing a convenient array of payment options to our customer, it would stimulate business and give company a competitive edge. A good credit policy should help us attract and retain good customers, without having a negative impact on our cash flow. What policies will we have about who gets credit and how much?We are planning to let good credit and long-term relationship customer to get credit. How much credit will give is depend on the quantity of customers order. How to check the creditworthiness of new applicants.We will become a member of our local Credit Bureaus. Credit Bureaus provide us with the resources to check out all our applicants, and the latest up-to-date procedures and policies most companies are using. As well many offer seminars on credit and collection techniques. What terms will we offer our customers; that is, how much credit and when is payment due?We will use option-terms credit. This type of credit permits a customer to charge up to a limit and pay within thirty days of the billing date without penalty. We can assign a carrying charge for any amount not paid within that time period and release additional credit as payments are made. We will offer a relatively low amount of credit at first. If our customer pays us as agreed over a period of time, we can increase that customer's credit limit. Will we offer prompt payment discounts?Yes, we will offer prompt payment discount. The bill will deduct 2 percent from the face amount of the bill before ten days passed. By offer prompt payment discount will encourage our customers to make early payment. Managing our Accounts Receivable

Receivables Aging Table:

TotalCurrent30 Days60 Days90 DaysOver 90 Days

Accounts Receivable Aging100%50% due to high risk50% due to the short life of food productsExtend with built relationshipExtend with built relationshipN/A

Policy for dealing with slow-paying customers:

When do we make a phone call?We will make a phone call at 15th of each month to remind our slow-paying customers in order to let them have enough time to get ready to pay the bill. When do we send a letter?We will send a letter at 25th of each month as second remind our slow-paying customers in order to notify them the bill is due soon. When do we get our attorney to threaten?If our slow-paying customers did not pay prior or at due date without any earlier notification, we will get our attorney to send penalty notice when more than three days overdue. Managing Our Accounts Payable:

Do our proposed vendors offer prompt payment discounts?

Yes, we will receive a 2 % deduction from the face amount of the bill before ten days passed.Payables Aging Table:Total Current30 Days60 Days90 DaysOver 90 Days

Accounts Payable Aging100%50% due to high risk50% due to the short life of food productsExtend with built relationshipExtend with built relationshipN/A

VII. Management and Organization

GreenIT will run in a vertical management system, from the top down. The 5 equal share owners will oversee and be the decision makers of all aspect of the business. We will employee one manager in each of the 3 distribution centers. Each of the centers will have 4 distinct areas of operation that the manager will oversee, finished goods operations, supplies of food products, coordination of recycled materials and packaging and coordination of transportation of both processes and products. They will manager 2 forklift operators and 2 truck drivers, while coordinating operations within their facility in an effort to have a smooth run location. The manager will be responsible for the shipping using a computer based system (example Worldport) that is linked to coordinate trucking.

5 Owners

Sacramento

San Francisco (Bay Area)

Los Angeles

Manger

Manager

Manager

Finished Goods

Finished Goods

Finished Goods Food Goods

Food Goods

Food Goods Recycled Goods

Recycled Goods

Recycled Goods

Transportation

Transportation

Transportation

Professional and Advisory Support

Board of directors:Five board of directors (Owners), no stock, no investors Attorney:

Hire as needed, specialized in area Accountant: :

Hire as needed, private firm, outsourced Human Resources:Owners/outsourced Insurance agent: Outsourced Banker:

Commercial Loans

Consultant or consultants: Hire as needed Mentors and key advisors: Dr. Daniel Parris

VIII. Financials

Cash Flow Statement

GreenIT

Fiscal Year Begins:

1/1/2009

PRE-STARTUP ESTIMATE

2010

2011

2012

2013

2014

2015

2016

2017

2018

Total Item EST

Cash on Hand (Beginning of Yr

500,000

2,994,520

4,576,449

6,700,376

9,382,562

12,639,755

16,489,204

20,948,677

26,036,476

31,771,450

CASH RECEIPTS

Cash Sales

500,000

999,998

1,029,998

1,060,898

1,092,725

1,125,506

1,159,271

1,194,050

1,229,871

1,266,767

6,968,395

Collections from Credit Accounts

500,000

999,999

1,514,998

2,045,446

2,591,809

3,154,562

3,734,198

4,331,222

4,946,158

5,579,541

14,541,011

Bank Loan (Cash)

2,500,000

-

-

-

-

-

-

-

-

-

2,500,000

TOTAL CASH RECEIPTS

3,500,000

1,999,997

2,544,995

3,106,344

3,684,533

4,280,068

4,893,469

5,525,272

6,176,029

6,846,309

24,009,406

Total Cash Available (before cash out)

4,000,000

4,994,517

7,121,444

9,806,720

13,067,095

16,919,823

21,382,673

26,473,949

32,212,505

38,617,758

24,009,406

CASH PAID OUT

Purchases Total (5% Increase Each Yr Merchandise)

225,000

236,250

248,063

260,466

273,489

287,163

301,522

316,598

332,427

349,049

1,831,952

Purchases (recycled materials 30%)

67,500

70,875

74,419

78,140

82,047

86,149

90,456

94,979

99,728

104,715

549,586

Purchases (food products 70%)

157,500

165,375

173,644

182,326

191,442

201,014

211,065

221,618

232,699

244,334

1,282,366

Gross Wages (2*25,000)

50,000

50,000

50,000

50,000

50,000

50,000

50,000

50,000

50,000

50,000

350,000

Bonuses

25,000

25,000

25,000

25,000

25,000

25,000

25,000

25,000

25,000

25,000

175,000

Salary (75000*1+2*35000)

145,000

145,000

145,000

145,000

145,000

145,000

145,000

145,000

145,000

145,000

1,015,000

Payroll Taxes ((B22+B20)*0.11+B218*0.20)

21,450

21,450

21,450

21,450

21,450

21,450

21,450

21,450

21,450

21,450

150,150

Outside Services (Worldport, per year 3LP Central company, $750 monthly)

9,000

9,000

9,000

9,000

9,000

9,000

9,000

9,000

9,000

9,000

63,000

Supplies (Office & Operations)

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

35,000

Repairs & Maintenance

10,000

10,000

10,000

10,000

10,000

10,000

10,000

10,000

10,000

10,000

70,000

Advertising & Marketing

110,000

103,000

106,090

109,272

112,551

115,927

119,405

122,987

126,677

n/a

776,244

Car, Delivery & Travel

-

-

-

-

-

-

-

-

-

-

-

Accounting & Legal (startup 100,000/10yrs)

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

5,000

35,000

Telephone ($100 monthly*employees 1+2+2)

500

500

500

500

500

500

500

500

500

500

3,500

Utilities

12,000

12,000

12,000

12,000

12,000

12,000

12,000

12,000

12,000

12,000

84,000

CFSC (1people*$150)

150

150

150

150

150

150

150

150

150

150

1,050

Trucks & Trailers ($50,000 per pair/10yrs)

10,000

10,000

10,000

10,000

10,000

10,000

10,000

10,000

10,000

10,000

100,000

Forklifts ($20kper,new*2)

4,000

4,000

4,000

4,000

4,000

4,000

4,000

4,000

4,000

4,000

40,000

Racking (cost $50-80 per pallet spot, 3 levels high)

11,850

11,850

11,850

11,850

11,850

-

-

-

-

-

59,250

Building Improvements ($20,000)

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

2,000

20,000

Misc Expenses

31,497

31,497

31,497

31,497

31,497

31,497

31,497

31,497

31,497

31,497

220,479

General Liability, Worker Comp, etc.

1,000

1,000

1,000

1,000

1,000

1,000

1,000

1,000

1,000

1,000

7,000

Taxes (region/local)

150

150

150

150

150

150

150

150

150

150

1,050

Patent (idea)

1,000

1,000

1,000

1,000

1,000

1,000

1,000

1,000

1,000

1,000

10,000

Trademark (logo)

200

200

200

200

200

200

200

200

200

200

2,000

Copyright (Name)

40

40

40

40

40

40

40

40

40

40

400

Goodwill

7,575

7,575

7,575

7,575

7,575

7,575

7,575

7,575

7,575

7,575

75,750

Loan payment (n30, pv2,500,000, i/y8)

222,068

222,068

222,068

222,068

222,068

222,068

222,068

222,068

222,068

222,068

1,554,476

Capital purchase (lease building $.32 per sq ft*25000sq ft)

96,000

96,000

96,000

96,000

96,000

96,000

96,000

96,000

96,000

96,000

672,000

Owners' Salary/Withdrawal

-

100,000

103,000

106,090

109,273

112,551

115,927

119,405

122,987

126,677

646,841

TOTAL CASH PAID OUT

1,005,480

418,068

421,068

424,158

427,341

430,619

433,995

437,473

441,055

444,745

2,873,317

Cash Position (end of year)

$2,994,520

4,576,449

6,700,376

9,382,562

12,639,755

16,489,204

20,948,677

26,036,476

31,771,450

38,173,013

ESSENTIAL OPERATING DATA (non cash flow information)

Sales Volume (dollars)

-

999,998

1,029,998

1,060,898

1,092,725

1,125,506

1,159,271

1,194,050

1,229,871

1,266,767

6,468,395

Inventory on hand (eom)

-

724,998

383,248

391,521

399,805

408,090

416,363

424,611

432,819

440,971

Depreciation

32,965

32,965

32,965

32,965

32,965

32,965

32,965

32,965

32,965

32,965

329,650

Outstanding Loan Amount

2,477,932

2,454,099

2,428,358

2,400,559

2,370,536

2,338,111

2,303,092

2,265,271

2,224,425

2,180,311

Interest on loan @ 8%

200,000

198,235

196,328

194,269

192,045

189,643

187,049

184,247

181,222

177,954

Opening Day Balance Sheet

1/01/2009

Assets

Current Assets

Cash in Bank

$ 3,500,000

Accounts Receivable

500,000

Inventory:

Recycled Materials

67,500

Food Products

157,500

Prepaid Expenses:

Insurance:

General Liability, Worker Comp, etc

1,000

Accumulated Depreciation

(329,650)

Total Current Assets

3,896,350

Fixed Assets

Machinery & Equipment:

Trucks & Trailer (100,000 per pair)

10,000

Racking (cost $50-80 per pallet spot)

11,850

Fork Lifts ( $20,000 per unit, new)

4,000

Furniture & Fixtures/Supplies

5,000

Leasehold Improvements

2,000

Total Fixed Assets

32,850

Other Assets

Goodwill

7,575

Patent

1,000

Copyright

40

Trademark

200

Total Other Assets

8,615

Total Assets

$ 3,937,815

Liabilities & Net Worth

Current Liabilities

Accounts Payable (Loan Yearly Payment Total)

$ 222,068

Payroll Taxes Payable

21,450

Regional/ Local Taxes Payable

150

Loan Interest Payable

200,000

Accrued Expenses:

Gross Wages

50,000

Bonus

25,000

Salary

145,000

Advertising & Marketing

110,000

Telephone

500

Utilities

12,000

CFSC

150

Repairs & Maintenance, General cost

10,000

Accounts & Legal

5,000

Outside Services (Worldport)

9,000

Misc Expenses

31,497

Capital purchase (lease building .32 per sq ft*25,000)

96,000

Total Current Liabilities

937,815

Long-term Liabilities

Bank Loans Payable (greater than 12 months)

2,500,000

Total Long-term Liabilities

2,500,000

Total Liabilities

$ 3,437,815

Owners' Equity

Paid-In Capital by owners

500,000

Total Owner Equity

500,000

Total Liabilities & Owners Equity

$ 3,937,815

Opening Day Financial Ratios

1/01/2009

GreenIT

Working Capital

$ 2,958,535

Working capital simply shows whether a company is making or losing money, and is used by lenders to evaluate whether a

company can survive hard times. It should always be a positive number. Loan agreements often specify how much working

capital the borrower must maintain.

Current Ratio

4.15

The current ratio measures financial strength. The number of times current assets exceed current liabilities shows the company's

solvency. It answers the question, "Does my business have enough current assets to meet the payment schedule of current liabilities

with a margin of safety?" In general, a strong current ratio is two or more. Of course, this will depend on the type business and the

type of the current assets and current liabilities. A very high current ratio might mean that cash on hand isn't being used efficiently.

Quick Ratio

4.06

The quick ratio measures a company's liquidity by looking only at a company's most liquid assets and dividing them by current

liabilities. It helps determine whether a business can meet its obligations in hard times. "Quick" assets are cash, stocks and bonds,

and accounts receivable (all current assets on the balance sheet except inventory). Quick ratios between. 50 and 1. 0 are usually

considered satisfactory if receivables collection is not expected to slow.

Breakeven Analysis

GreenITOpening Day 1/01/2009

PRE-STARTUP ESTIMATE20102011201220132014201520162017

Cost Description

Variable Costs

Cost of Goods Sold$ -360,499371,314382,454393,927405,745417,917430,455443,369

Inventory724,998383,248391,521399,805408,090416,363424,611432,819440,971

Raw Materials225,000236,250248,063260,466273,489287,163301,522316,598332,427

Direct Labor50,00050,00050,00050,00050,00050,00050,00050,00050,000

Fixed Costs

Salaries (fixed-payroll taxes)$ 166,450166,450166,450166,450166,450166,450166,450166,450166,450

Supplies5,0005,0005,0005,0005,0005,0005,0005,0005,000

Repairs & maintenance10,00010,00010,00010,00010,00010,00010,00010,00010,000

Advertising110,000103,000106,090109,272112,551115,927119,405122,987126,677

Car, delivery and travel---------

Accounting and legal5,0005,0005,0005,0005,0005,0005,0005,0005,000

Rent96,00096,00096,00096,00096,00096,00096,00096,00096,000

Telephone500500500500500500500500500

Utilities12,00012,00012,00012,00012,00012,00012,00012,00012,000

Insurance1,0001,0001,0001,0001,0001,0001,0001,0001,000

Taxes 150150150150150150150150150

Depreciation Expense(32,965)(32,965)(32,965)(32,965)(32,965)(32,965)(32,965)(32,965)(32,965)

Outside Services 9,0009,0009,0009,0009,0009,0009,0009,0009,000

CFSC 150150150150150150150150150

Trucks & Trailers 10,00010,00010,00010,00010,00010,00010,00010,00010,000

Forklifts4,0004,0004,0004,0004,0004,0004,0004,0004,000

Racking 11,85011,85011,85011,85011,850----

Building Improvements 2,0002,0002,0002,0002,0002,0002,0002,0002,000

Patent 1,0001,0001,0001,0001,0001,0001,0001,0001,000

Trademark 200200200200200200200200200

Copyright 404040404040404040

Goodwill7,5757,5757,5757,5757,5757,5757,5757,5757,575

Miscellaneous expenses31,49731,49731,49731,49731,49731,49731,49731,49731,497

Principal portion of debt payment200,000198,235196,328194,269192,045189,643187,049184,247181,222

Owner's draw-100,000103,000106,090109,273112,551115,927119,405122,987

Total Fixed Costs$ 650,447741,681745,865750,078754,315746,718750,978755,237759,483

Total Variable Costs

Breakeven Sales level$ 657,017749,173753,399757,655761,934754,260758,564762,865767,154

Break-Even Analysis continuedPRE-STARTUP ESTIMATE20102011201220132014201520162017

of $1,000,000 sales

Variable Costs %

0.0%35.0%35.0%35.0%35.0%35.0%35.0%35.0%35.0%

51.2%16.2%16.2%16.2%16.1%16.0%15.8%15.7%15.5%

29.3%29.8%30.4%31.0%31.6%32.2%32.8%33.5%34.1%

19.5%18.9%18.4%17.8%17.3%16.8%16.3%15.9%15.4%

100%100%100%100%100%100%100%100%100%

Nine Year Profit Projection

GreenIT

200920102011201220132014201520162017

Sales $ 999,998 1,029,998 1,060,898 1,092,725 1,125,506 1,159,271 1,194,050 1,229,871 1,266,767

Cost of Goods Sold - 360,499 371,314 382,454 393,927 405,745 417,917 430,455 443,369

Gross Profit $ 999,998 669,498 689,583 710,271 731,579 753,526 776,132 799,416 823,399

Operating Expenses

Salary (Office & OH $ 220,000 220,000 220,000 220,000 220,000 220,000 220,000 220,000 220,000

Payroll (taxes) 21,450 21,450 21,450 21,450 21,450 21,450 21,450 21,450 21,450

Outside Services 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000

Supplies (off. & oper.) 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000

Repairs/ Maintenance 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

Advertising 110,000 103,000 106,090 109,272 112,551 115,927 119,405 122,987

Car, Delivery and Travel - - - - - - - - -

Accounting and Legal 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000

Building Lease 96,000 96,000 96,000 96,000 96,000 96,000 96,000 96,000 96,000

Telephone 500 500 500 500 500 500 500 500 500

Utilities 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000

Insurance 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Taxes (real estate) 150 150 150 150 150 150 150 150 150

Interest 200,000 198,235 196,328 194,269 192,045 189,643 187,049 184,247 181,222

Depreciation Expense (32,965) (32,965) (32,965) (32,965) (32,965) (32,965) (32,965) (32,965) (32,965)

CFSC 150 150 150 150 150 150 150 150 150

Trucks & Trailers 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

Forklifts 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000

Racking 11,850 11,850 11,850 11,850 11,850 - - - -

Building Improvements 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000

Misc Expenses 31,497 31,497 31,497 31,497 31,497 31,497 31,497 31,497 31,497

Patent 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000

Trademark 200 200 200 200 200 200 200 200 200

Copyright 40 40 40 40 40 40 40 40 40

Goodwill 7,575 7,575 7,575 7,575 7,575 7,575 7,575 7,575 7,575

Total Expenses $ 716,632 707,866 709,050 710,173 711,227 700,352 701,236 702,016 576,004

Net Profit Before Tax $ 283,366 (38,368) (19,466) 98 20,352 53,174 74,896 97,400 247,395

Income Taxes (N/A) - - - - - - - - -

Net Profit After Tax $ 283,366 (38,368) (19,466) 98 20,352 53,174 74,896 97,400 247,395

Owner Draw/ Dividends - 100,000 103,000 106,090 109,273 112,551 115,927 119,405 122,987

Adj. to Retained Earnings $ 283,366 (138,368) (122,466) (105,992) (88,921) (59,376) (41,031) (22,005) 124,408

12-Month Sales Forecast

GreenIT

Fiscal Year Begins

1/1/2009

Jan 09

Feb 09

Mar 09

Apr 09

May 09

Jun 09

Jul 09

Aug 09

Sep 09

Oct 09

Nov 09

Dec 09

Annual Totals

Power Drink

cat 1 units sold

5,000

5,250

5,513

5,788

6,078

6,381

6,700

7,036

7,387

7,757

8,144

8,552

79,586

Sale price @ unit

$ 1.19

1.19

1.19

1.19

1.19

1.19

1.19

1.19

1.19

1.19

1.19

1.19

Cat 1 TOTAL

5,950

6,248

6,560

6,888

7,232

7,594

7,974

8,372

8,791

9,230

9,692

10,177

$94,707

Bottled Water

Cat 6 units sold

7,500

7,875

8,269

8,682

9,116

9,572

10,051

10,553

11,081

11,635

12,217

12,828

119,378

Sale price @ unit

$ 1.48

1.48

1.48

1.48

1.48

1.48

1.48

1.48

1.48

1.48

1.48

1.48

Cat 6 TOTAL

11,100

11,655

12,238

12,850

13,492

14,167

14,875

15,619

16,400

17,220

18,081

18,985

$176,680

Granola Bars ( box)

Cat 3 units sold

5,000

5,250

5,513

5,788

6,078

6,381

6,700

7,036

7,387

7,757

8,144

8,552

79,586

Sale price @ unit

$ 2.49

2.49

2.49

2.49

2.49

2.49

2.49

2.49

2.49

2.49

2.49

2.49

Cat 3 TOTAL

12,450

13,073

13,726

14,412

15,133

15,890

16,684

17,518

18,394

19,314

20,280

21,294

$198,168

Breakfast Bars

Cat 2 units sold

5,000

5,250

5,513

5,788

6,078

6,381

6,700

7,036

7,387

7,757

8,144

8,552

79,586

Sale price @ unit

$ 1.99

3.49

3.49

3.49

3.49

3.49

3.49

3.49

3.49

3.49

3.49

3.49

Cat 2 TOTAL

9,950

18,323

19,239

20,201

21,211

22,271

23,385

24,554

25,782

27,071

28,424

29,845

$270,254

Cereal

Cat 2 units sold

3,422

3,593

3,773

3,961

4,159

4,367

4,586

4,815

5,056

5,309

5,574

5,853

54,468

Sale price @ unit

$ 3.49

3.49

3.49

3.49

3.49

3.49

3.49

3.49

3.49

3.49

3.49

3.49

Cat 2 TOTAL

11,943

12,540

13,167

13,825

14,517

15,242

16,004

16,805

17,645

18,527

19,454

20,426

$190,095

Can Soup

Cat 5 units sold

2,753

2,891

51

54

52

55

53

56

54

57

55

58

6,187

Sale price @ unit

$ 1.09

1.09

1.09

1.09

1.09

1.09

1.09

1.09

1.09

1.09

1.09

1.09

Cat 5 TOTAL

3,001

3,151

56

58

57

60

58

61

59

62

60

63

$ 6,744

Fruit Juice (Can)

Cat 4 units sold

2,000

2,100

2,205

2,315

2,431

2,553

2,680

2,814

2,955

3,103

3,258

3,421

31,834

Sale price @ unit

$ 1.99

1.99

1.99

1.99

1.99

1.99

1.99

1.99

1.99

1.99

1.99

1.99

Cat 4 TOTAL

3,980

4,179

4,388

4,607

4,838

5,080

5,334

5,600

5,880

6,174

6,483

6,807

$63,350

Monthly totals: All Categories

$ 58,374

69,167

69,373

72,841

76,479

80,303

84,313

88,529

92,951

97,598

102,473

107,597

$999,998

IX. Capital Requirements

Assets available as collateral for a loan

The owner of GreenIT invested $100,000 cash each into the initial company.

For Raising Capital

The amount of the loan will be $2.5 million with an 8 percent interested rate. GreenIT loans will be secured with our inventory, assets and accounts receivable. Two million dollars will be used to help with the essential start up costs.

$2,000,000 breakdown$500,000 breakdown

BuildingBuilding repairs

TrucksTrucks repair

Machine and EquipmentMachine & Equipment repairs

Materials needed for production

Plastics

Metals

Card boards

Food productsStorage accidents and damages

Licensing issues

Electricity

This plan gives an idea of where our money is going in the first year. This plan makes us a strong company because it gives us a goal, which will strive to meet. Our goal is to pay the loan back between 15-25 years with an eight percent interest rate.

Collateral

House

Boat

For Investors

In the startup phase there will be no outside or public investors. A private company.X. Sources Used

Management 3320_01, Dr. Daniel Parris, PowerPoint and class room information Crown manufactures material handling equipment referred to as electric forklift,

HYPERLINK "http://www.crown.com/usa/products/usa_electric_forklift/sit_down_counterbalance/index.html" fork lift trucks,

HYPERLINK "http://www.crown.com/usa/products/usa_electric_forklift/rider_pallet_trucks/index.html" pallet trucks and more. 2002-2009 Crown Equipment Corporation, http://www.crown.com/usa/products/usa_electric_forklift/sit_down_counterbalance/index.html Emerald Packaging, Design: Melissa Laux Art Direction & Photography: Erin Jaeb Copywriter: Lorraine Sanders Programming & Technology: Chris Strobel of Iteon Consulting. http://www.empack.com/ NETSUITE, Copyright 1998 - 2009 NetSuite Inc. All rights reserved. http://www.netsuite.com/portal/industries/wholesale.shtml http://www.bls.gov/oco/cg/cgs026.htm

California Food and Safety. http://californiafoodsafety.com/faq.html Sales taxes in the United States. This page was last modified on 23 November 2009 at 02:10. Wikipedia is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization. http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States. Groceries and related products, not elsewhere classified (SIC 5149). US Industry Profile. Gale Encyclopedia of American Industries. Copyright 2005 by The Gale Group, Inc. All rights reserved. Copyright 2009 Answers Corporation. http://www.answers.com/topic/groceries-and-related-products-not-elsewhere-classified costhelper What people are paying. Copyright 2009 CostHelper.com. http://www.costhelper.com/cost/small-business/copyright.html IP Watch Dog. http://www.ipwatchdog.com/patent/provisional-patents/ Bureau of Insurance. 2006 All rights reserved.

General Liability Insurance, Cravens Warren. Site Ensemble CMS Copyright 2009 Paradigm New Media, LLC. All rights reserved. http://www.cravenswarren.com/insurance/General-Liability-Insurance/page254.html Environmental Defense Fund, Copyright 2009 Environmental Defense Fund. All Rights Reserved. 257 Park Avenue South, New York, NY 10010.