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Executive Summary

1.0 Executive Summary

A Blissful D Travelers Coffee (ABC(DTC) is a specialty beverageretailer. ABC DTC uses a system that is new to the beverage and food

service industry to provide hot and cold beverages in a convenient andtime-efficient way. ABCDTC provides its customers the ability to dropdown or stop for awhile and order (from a trained Barista) their choice of acustom-blended espresso drink, freshly brewed coffee, or other beverage.ABDTC is offering a high-quality option to the fast-food, gas station, orinstitutional coffee.

A BlissfulD Travelers Coffee offers its patrons the finest hot andcold beverages, specializing in specialty coffees, blended teas, and othercustom drinks. In addition, ABCDTC will offer soft drinks, fresh-bakedpastries and other confections. Seasonally, ABDTC will add beveragessuch as hot chocolate, frozen coffees, and more.

A BlissfulD Travelers Coffee will focus on two markets:

The Daily Commuter consists of people who are travelingto/from work, out for shopping, delivering goods or services, or just out fora drive.

The Captive Consumer- someone who is in a restrictedenvironment that does not allow convenient departure and return whilesearching for refreshments, or where refreshments stands are an integralpart of the environment such as students, reviewers, and young

professionals.A BlissfulD Travelers Coffee will penetrate the commuter and

captive consumer markets by deploying two Mobile Cafes in the mostlogical and accessible locations. The Mobile Cafes facilities are designedto dispense customer-designed, specially ordered cups of premiumcoffees in less time than required for a visit to the locally owned cafe orone of the national chains.

In addition to providing a quality product and an extensive menu ofdelicious items, to ensure customer awareness and loyalty, as well asgood publicity coverage and media support, the caf will be donating up to

1.0.85% per cup to local charities based upon customer choices.A BlissfulD Travelers Coffee financial picture is quite promising.

Since ABDTC is operating a cash business, the initial cost is significantlyless than many start-ups these days. The process is labor intensive andABDTC recognizes that a higher level of talent is required. The financialinvestment in its employees will be one of the greatest differentiatorsbetween it and ABDTC's competition. For the purpose of this pro-formaplan, the capital expenditures of facilities and equipment are financed.

A BlissfulD Travelers Coffee Page 1 of 45
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There will be minimum inventory on hand so as to keep the product freshand to take advantage of price drops, when and if they should occur.

A BlissfulD Travelers Coffee anticipates the initial combination ofinvestments and long term financing ofP32,550601,654000.01 to carry itwithout the need for any additional equity or debt investment, beyond the

purchase of equipment or facilities. This will mean growing a bit moreslowly than might be otherwise possible, but it will be a solid, financially-sound growth based on customer request and product demand.

A BlissfulD Travelers Coffee chooses to become the Mobile Cafeversion of Starbucks in metropolitan areas where people are too busy toprepare for their coffee whether for refreshment or for their relaxation,obtaining several million pesos through investment of the partners andobtain financing in the financial institutions that would allow the companyto produce 2 mobile cafe facilities per year in metropolitan communitieswithin Metro Manila with a population of over1512 million. This is thepreferred Exit Strategy of the Management Team. The danger in this is

that competitors would rise up and establish a foothold on a communitybefore--or in the midst of--the arrival ofA BlissfulD Travelers Coffee,causing a potential for a drain on revenues and a dramatic increase inadvertising expenditures to maintain market share. Knowing these riskss ---and planning for them --gives ABDTC the edge needed to make thisscenario work.

The balance sheet estimates a Net Worth of P4,000259,000861.32for the third year, cash balances of P3,61335,000207.31 and earnings ofP3,417557200,000.070, based on 1 six Mobile Cafes, it is not unrealisticto put a market value of between 52 and 65 million on the company. At

present, such companies are trading in multiples of four to 10 timesearnings, and it is simple mathematics to multiply the success ofABDTCby the number of major and smaller metropolitan areas in greater MetroManila.

Highlights


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0

1,000

2,000

3,000

4,000

2012 2013 2014

Company Projections in (thousands)

Net Worth

Sales

Net Income

(5,000,000.00)

-

5,000,000.00

10,000,000.00

15,000,000.00

20,000,000.00

25,000,000.00

30,000,000.00

35,000,000.00

2009 2010 2011

Sales

Gross Margin

Net Proft

1.1 Objectives

A BlissfulThe D Travelers Coffee has established three firm objectivesit wishes to achieve in the next three years:

1. Six fully booked Mobile Cafes by the end of the third year.2. Gross Margin of4045% or more.3. Net After-tax Profit above 2015% of Sales.

1.2 Mission

A BlissfulThe D Travelers Coffee Mission is three-fold, with each

being as integral to our success as the next.Product Mission

Provide customers the finest quality beverage in the mostefficient time and most affordable prices.

Community Mission


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Provide community support through customer involvementand promote environmental awareness.

Economic Mission

Operate and grow at a profitable rate through soundeconomic decisions.

1.3 Keys to Success

There are four keys to success in this business, three of which arevirtually the same as any foodservice business. It is our fourth key --theCommunity Mission --that will give us that extra measure of respect in thepublic eye.

1. The greatest locations - visibility, jam-packed areas (students andyoung professionals), convenient access.

2. The best products - freshest coffee beans, cleanest equipment,premium serving containers, consistent flavor.3. The friendliest servers - cheerful, skilled, professional, articulate.4. The finest reputation - word-of-mouth advertising, promotion of ourcommunity mission of charitable giving.

Company Summary

2.0 Company Summary

The A BlissfulD Travelers Coffeeee is a specialty beverage retailer.ABDTC uses a system that is new to the beverage and food serviceindustry to provide hot and cold beverages in a convenient and time-efficient way at very affordable prices. ABDTC provides its customers theability to order from a trained Barista their choice of a custom blendedespresso drink, freshly brewed coffee, or other beverage. ABDTC isoffering a high quality option to the fast-food, gas station, and institutional

coffee.

2.1 Company Ownership

The D Travelers Coffee is a General Partnership. The partnerhip isowned by Aleli Carreon, Michelle dela Cruz,Randy Mercado, NelvinEduardo, Angela Miranda and Jeanilyn Paguiriganay Santos who havedeveloped their friendship while taking their masters degree in Jose Rizal


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UniversityPamantasan ng Lungsod ng Maynila (JRUPLM) and later ondecided to put up a business which is the D TravelersA Blissful Coffeeafter taking the course Entrepreneurship under Mr. Limuel Magracia.

.

The plan requires initial cash outlay for the partners. Each partnerwould have an equal investment ofP300333,884000.67. The partnershipwould also avail borrowings through financial institutions amountingP1,3600,000.00 to support for the financial needs such as purchasing ofequipments, vehicles and other materials needed in starting up thebusiness.

2.2 Start-up Summary

A BlissfulThe D Travelers Coffee's start-up expenses total justP381600,654000.00..The majority of these funds- -roughly P4500,000 --will be used to build the first facility, pay deposits, and provide capital for

one month of operating expenses. Another P1580,000 will be used for theinitial inventory and other one-time expenses. The D TravelersA BlissfulCoffee anticipates the need for roughly P30250,000.00 in operating capitalfor the first few months of operation.


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Start-up

One Time Requirements BeforeStart-Up

Advertising & Promotions430,000

.00

Deposits for Utilities

10,7,0

00.00

Licenses & Permits1000,000

.00

Vehicle Finance630,000654.00

Prepaid Insurance105,00

0.00

Salary & Wages15064,00

0.00

Office Rent/Mortgage6015,00

0.00

Other Startup Costs230,000

.00

TOTAL START UP EXPENSES 450381,00654.000

START-UP ASSETS

Start Up Inventory1580,000

.00

Cash (Working Capital)430,000

.00

Current Assets

Tools & Supplies2550,,0

00.00Non Current Asset

Furniture & Fixtures 16085,00

0.00Machines & Equipment 4300,000. b/


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00

Mobile VansTruck1,70600,00

0.002,2601,985

,000.00

TOTAL ASSETS 2,50220,00

0.00

TOTAL REQUIREMENTS 2,950601,0

00654.00

START UP FUNDING

Start-up Expenses to Fund450381,000654.00

Start-up Assets to Fund2,50220,00

0.00

Total Funding Required 2,950601,0

00654.00

Assets

Non-cash Assets from Start-up2,310,000190,000.00

Cash Requirements from Start-up430,000

.00Inventory 150,000

Total Assets 2,50220,00

0.00


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Liabilities and Capital

LiabilitiesCurrent Borrowing 50,000

Long-term Liabilities1,7600,000

.00Accounts Payable (OutstandingBills) -Other Current Liabilities -

Total Liabilities 1,750600,0

00.00

Capital 75620,00

0.00

Total Capital and Liabilities 2,50220,00

0.00

d/ Capital STATEMENT Planned InvestmentRandy MercadoAleli Carreon,Capital

333,884.67 300,000

Michelle dela CruzNelvin Eduardo,Capital

300,00033,884.67

Angela MirandaJeannilynPaguirigan, Capital

333,884.66 300,000

Jay Santos, Capital 300,000Additional Investment Requirement -

Less: Start up Expenses(450381,6

54.000)

Total Capital 750,00620,000.00

a/ P30,654.00/ month, each customized vans cost P800,000.00.

b/ computers/cash register130,000.0

0

coffee maker/coffee brewer100,000.0

0

Ref36,000.0

0

Others34,000.0

0


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TOTAL 300,000.0

0

c/OPERATION Mobile Cafe Team

3 Barista60,000.0

0

3 Driver/Assitant30,000.0

0

Store Manager18,000.0

0Subtotal

MANAGEMENT

General Manager25,000.0

0

Sales and Marketing Personnel11,000.0

0Accounting/OfficeAdministrator/Payroll

11,000.00

Warehouse Inventory Clerk9,000.0

0

Total Payroll164,000.0

0

Total People 12

Start-up Graph


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-

500,000.00

1,000,000.00

1,500,000.00

2,000,000.00

2,500,000.00

Expense Assets Investments Loans

Start Up Graph

0

500

1,000

1,500

2,000

Funding

Longterm Loans

Capital

Contribution

Short term loans

0

500

1,000

1,500

2,000

2,500

Funding Requirements

Capital Assets

Start up e xpenses

Other Assets

Inventory

Cash

2.3 Company Locations and Facilities

The D TravelersA Blissful Coffee will strategically locate to Makati,Ortigas, University Belt and LRT/MRT areas. Basically each Mobile Cafwill be covering two areas one will be assigned in Ortigas-Makati areasand the other one will be assigned to the busy streets of University belt


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and LRT/MRT stations. Two mobiles cafes will be added throughout themetropolitan area each year.

The demographic and physical requirements for a Mobile Cafes locationare:

Visible from roadway. Easy entry with light if less than 30,000 cars.

Established retail shops in area.

Areas must consist of busy persons (student, commuters andyoung professionals)

Products

3.0 Products

The D Travelers CoffeeA Blissful Coffee provides its patrons the finest hot

and cold beverages, specializing in specialty coffees and custom blendedteas. In addition, ABDTC will offer select domestic soft drinks, , I sodas,fresh-baked pastries, and other confections. Seasonally, ABDTC will addbeverages such as hot chocolate, frozen coffees, seasonal tea such asginger tea during Christmas and more.

3.1 Product Description

ABDTC provides its customers, two (2) Mobile Cafes, the ability to customorder a coffee beverage that will be blended to their exact specifications.Each of Baristas are trained in the fine art of brewing, blending, andserving the highest quality hot and cold beverages, with exceptionalattention to detail.

Besides coffees, D TravelersA Blissful Coffee will offer teas, sodas,frozen coffee beverages, seasonal specialty drinks, pastries, and otherbaked goods. Through the website and certain locations, ABDTC willmarket premium items such as coffee mugs, T-shirts and sweatshirts, ballcaps, and more.

3.2 Competitive Comparison

D TravelersA Blissful Coffee considers itself to be a player in the retail

coffee house industry. However, it knows that competition for its productsrange from soft drinks to milkshakes to adult beverages.


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The D TravelersA Blissful Cofffee primary competition will come fromthree sources:

National coffee houses such as Starbucks, Seatlles Best andGloria Jeans

Locally owned and operated cafes such Figaro Fast food chains and convenience stores such as Mrs. Fields, 7-

Eleven stores, Mini-stop, Mister Donut and Dunkin Donuts.

What will make D TravellersAB Coffee stand out from all its competitorsare two things:

The D TravellersA Blissful Coffee will be providing products in the mostconvenient and efficient way available at two Mobile Cafes. Thisseparates ABDTC from the competition in that its customers won't need tofind a parking place, wait in a long line, jockey for a seat, and clean up the

mess left by a previous patron.The second differentiator is that ABDTC will focus on providing asignificant benefit to the community through a possible 1.085%contribution to customer-identified Commuters, schools, or otherinstitutions.

3.3 Sourcing

ABDTC purchases its coffees from Nestle, Phils and locally producedcoffee beans from in Batangas and Benguet. DTABC also has wholesalepurchasing agreements for other products with major brands namely

Lipton Inc., San Miguel Corporation, Goldilocks, Red Ribbon, CWUCakes and Coca Cola Corporation..

The Mobile Cafes are manufactured and equipments are supplied byALJENMIC Industries. ABDTC computer equipment and Internetconnectivity is provided by PLDT Telecommunications.

3.4 Technology

ABDTC delivery system is based on its technology. ABDTC is using state-of-the-art, two-sided, door to door to provide convenience and efficiencyfor its clientele.

DTABC has also designed as state-of-the-art Mobile Cafes that will bedeployed from time to time on high school and college campuses,corporate campuses, and at special events and business establishmentsparticularly in Makati and Ortigas.

3.5 Future Products


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As seasons change, ABDTC will be offering products that will enhancesales and satisfy its customers' desires. During summer months, ABDTCwill subsidize lower hot beverage sales with frozen coffee drinks, as wellas soft drinks, and other cold beverages. ABDTC will also have specialbeverages during holiday seasons, such as hot choco, hot ginger (salabat)partner with bibingka during Simbang Gabi on Christmas season andshakes during Summer.

ABDTC primary desire will be to listen to its customers to ascertain whatthey are looking for most, and make the best effort to provide it all.

Market Analysis Summary

4.0 Market Analysis Summary

DTABC will focus on two markets:

1. The Daily Commuter- someone traveling to or from work, outshopping, delivering goods or services, or just out for a drive.2. The Captive Consumer- someone who is in a restrictedenvironment that does not allow convenient departure and return whilesearching for refreshments, or where refreshments stands are anintegral part of the environment.

4.1 Market Segmentation

ABDTC will focus on two different market segments: Commuters andCaptive Consumers. To access both of these markets, the commuters,

and captive consumer.

Commuters are defined as any one or more individuals in a motorizedvehicle traveling from point "A" to point "B." ABDTC greatest concentrationwill be on commuters heading to or from work, or those out on their lunchbreak.

Captive Consumers would include those who are tethered to a campusenvironment, or in a restricted entry environment that does not allow freemovement to and from. Examples would include college and reviewcampuses, where there is limited time between classes, and corporatecampuses where the same time constraints are involved, but regarding

meetings and project deadlines, and special events --such as carnivals,fairs or festivals --where there is an admission price to enter the gate, butexiting would mean another admission fee, or where refreshments are anintegral part of the festivities.

The following chart and table reflect the potential numbers of venuesavailable for the Mobile Cafes and what growth could be expected in thosemarkets over the next five years. For a conservative estimate of the


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number of Captive Consumers this represents, multiply the total number ofvenues in the year by 2,000. As an example, in the first year, DTravelersA Blissful Coffee is showing that there are a total of 582 venuesat which we might position a Mobile Cafe. That would equate to a CaptiveConsumer potential of 1,164 million.

Similarly, there are well over64,500,000 commuters in the metropolitanarea, as well as visitors, vacationers, and others. It can also be assumedthat these commuters do not make only one purchase in a day, but inmany cases, two and even three beverage purchases.

The chart reflects college campuses, special events, hospital campuses,business establishments and various charitable organizations. A segmentthat is not reflected in the chart (since it would skew the chart so greatly) isthe number of corporate campuses in the metropolitan area. There areover 4,436 corporate facilities that house more than 500 employees, givingus an additional 2,218,000 prospective customers, or total of 2,582locations at which we could place a Mobile Cafe.

Market Analysis (Pie)


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Business

Establishments

School Campuses

Trade shows/Special

Events

Government

Offices/NGOs

Others

Market Analysis

201201 201302 201403 201504 201605

Potential Customers

BusinessEstablishmentSchoolCampuses

8035 3981 4482 8350 8455

BusinessEstablishmentSchoolCampuses

2588 8826 2788 2788 8828

Trade Shows/SpecialEventsCommuters

7715 1677 177 1877 2077

GovernmentOffices/NGOsGolf Course

1599 1599 1599 1599 1599


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Special EventsOthers 1043 1144 1245 1446 1547

362 369 376 384 392 2.01%

Hospital Campuses 100 100 100 100 100

Total 849100 858107 867115 877124 887133


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4.2 Target Market Segment Strategy

ABDTC's target market is the mobile individual who has more money thantime, and excellent taste in a choice of beverage, but no time to linger in acafe. By locating the mobile caf high visibility areas in business

establishments and campuses , this unique--and abundant--consumer willseek D TravelersA Blissful Coffee out and become a regular customers.

To penetrate the target market for the Mobile Cafes, these units will dowhat they were designed to do. D TravelersA Blissful Coffee will take thecafe to the customer! By using the community support program DTC ABCis instituting, arrangements will be made to visit a college campus, or acorporate campus once or twice a month (Even visit these facilities forspecial games, tournaments, recruiting events, or corporate open houses).And, for every cup or baked goods sold, a portion is returned to thecollege campuses and business establishment. It becomes a tremendous,painless way for the institution to gain a financial reward while providing a

pleasant and fulfilling benefit to their students or employees.

4.2.1 Market Needs

The United StatesPhilippines is a very mobile society. With theintroduction of the automobile, we became a nation that thrived on thefurther freedom of going where we wanted when we wanted. It has onlygotten worse.There are over 250 million men, women and children inAmerica, half of whom are too old, too young, or too poor to drive anautomobile. Yet, there are more licensed vehicles in the country thanpeople. aAnd that mobility has created a unique need in our society.

Our market is made up of consumers who have busy schedules, a desirefor quality, and disposable income. As much as they would like theopportunity to sit in an upscale coffee house and sip a uniquely blendedcoffee beverage and read the morning paper, they don't have the time.However, they still have the desire for the uniquely blended beverage asthey hurry through their busy lives.

4.2.2 Market Trends

Nearly tenwenty years ago, a trend towards more unique coffees began to

develop in the PhilippinesU.S. There had always been specialty coffeestores, such as Gloria Jeans and others, but rich people began to buyespresso machines for their homes and offices, and people began to havecoffee tastings. Then espresso bars began to appear and, inevitably,along came Starbucks ... the quintessential bastion of the upwardly mobileprofessional who wanted to take control over how their beverage wouldtaste and smell.


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When measuring head-to-head, direct competitors, we have found thatthere are none in the metropolitan area. D TravelersA Blissful Coffee willbe the first double-sided, drive-thru coffee house in the metropolitan area.However, there is still significant competition from traditional coffee housesand other retailers.

National Chains:Starbucks, the national leader, had revenues in fiscal year 2000 of P1.3million. That is an increase of 32% over fiscal year 1999. Starbucks plansto increase revenues to over P1.8 million from 2000 retail outlets by 2010.

Panera had revenues of $151 million from corporate owned stores and$350 million from franchised locations in fiscal year 2000. This fiscal yearrevenue was an increase in 28.9% on a per store basis versus fiscal year1999.

D TravelersA Blissful Coffee believes it has a significant competitiveadvantage overStarbucks and otherthese chains because of the followingbenefits:

Accessibility/Availability More Substantial Customer Service Community Benefit Mobility Selection Higher Product Quality

Local Cafes:The toughest competitor forD TravelersA Blissful Coffee is theestablished locally owned cafe. ABDTC knows the quality and pride thatthe local cafe has in the product purchase by their customers. Any localcafe has a customer base that is dedicated and highly educated. Thequality of beverages served at an established cafe will surpass any of theregional or national chains.

The competitive edge D TravelersA Blissful Coffee has on the local cafesis based on the attributes of:

Accessibility/Availability More Substantial Customer Service Community Benefit Mobility Selection Higher Product Quality Supply Discounts Mobile Cafe


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Consistent Menu Community Benefit Quality Product

Fast Food and Convenience Stores:

These are two industries where D TravelersA Blissful Coffee willexperience a certain level of competition. The national fast food chainsand national convenience store chains already serve coffee, soda, andsome breakfast foods. The national fast food chains obviously know thebenefits and value to customers of drive-thru. ABDTC knows that withinthe specialty coffee and tea market, the quality of the products sold will bemuch greater than what can currently be purchased at fast food andconvenience stores. The addition of domestic soda sales for these storesis a large part of revenue. ABDTC knows the quality of our products, alongwith the addition of domestic soda, gives it a competitive edge over fastfood and convenience stores.

Other competition:

A BlissfulD Travelers Coffee knows that once it has entered the marketand established a presence, others will try to follow. However, ABDTCbelieves that the corporate missions and even the organizational designwill be imitated, but never duplicated. ABDTC will constantly evaluate itsproducts, locations, service, and corporate missions to ensure that itremains a leader in the specialty beverage industry.

Strategy and Implementation Summary

5.0 Strategy and Implementation Summary

D TravelersA Blissful Coffee will penetrate the commuter and captiveconsumer markets by deploying Mobile Cafes in the most logical andaccessible locations. The Mobile Cafes are designed to handle two-sidedtraffic and dispense customer-designed, specially ordered cups ofspecialty beverages in less time than required for a visit to the locallyowned cafe or one of the national chains.

D TravelersABC has identified its market as busy, mobile people whosetime is already at a premium, but desire a refreshing, high qualitybeverage or baked item while commuting to or from work or school.

In addition to providing a quality product and an extensive menu ofdelicious items, to ensure customer awareness and loyalty, as well aspositive public and media support, D TravelersABCwocould be donatingup to 1.085% of revenue from each cup sold in individual Mobile Cafes tothe charities of the customers' choice.

5.1 Strategy Pyramids


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A Blissful CoffeeD Travelers strategy is to show people that ABDTC hasan excellent product, convenient accessibility, and with a communitybenefit. To execute on this strategy, ABDTC is placing the Mobile Cafes ateasily accessible locations throughout the metropolitan area. ABDTC ispricing its product competitively and training the production staff to beamong the best Baristas in the country. Then, through coupons anddisplay ads at the locations, ABDTC will involve the customers incommunity support efforts by explaining that a portion of their purchaseprice will be donated to a charity of their choiceosing.

In so doing, ABDTC has:

1. Provided a customer with a quality product at a competitive price.2. Provided the customer with a more convenient method for obtainingtheir desired product.3. Demonstrated how ABDTC appreciates their loyalty and patronageby donating money to their personal cause.

5.2 Value Proposition

D Mobile CafesA Blissful Coffee facilities provide a substantial valueproposition in that the customer does not have to find a parking place, exitthe vehicle, stand in line to order, wait for the beverages ahead of him tobe produced, pay a premium price for average product, find a place to sit,clean up the previous patron's mess, then enjoy their coffee ... assumingthey have sufficient time to linger over the cup.

ABCD Travelers concept is that the customer drives up, places the order,

receives a high quality product at a competitive price, and drives away,having wasted little time in the process.

D TravelersCustomeris also providing a significant community value bytopatronizing ABDTC. For every purchase a customer makes from us,ABDTC will donate up to 1.085% of the sale to the local charity selectedby the customer.

5.3 Competitive Edge

D Travelers competitive edge is simple. DTC provides a high qualityproduct at a competitive price in a Mobile Cafes environment that saves

time.

5.4 Marketing Strategy

First and foremost, D' TravelersA Blissful will be placing its Mobile Cafesin locations of very high visibility and great ease of access. They will belocated on high traffic commuter routes and close to shopping facilities inorder to catch customers going to or from work, or while they are out for


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lunch, or on a shopping expedition. The Mobile Cafes are very unique andeye-catching, which will be a branding feature of its own.

D' TravelersABC will be implementing a low cost advertising/promotioncampaign which could involve drive-time radio, but not much more.

D' TravelersABC will rely on building relationships with schools, charitiesand corporations to provide significant free publicity because of itscommunity support program. By giving charitable contributions to theseinstitutions, they will get the word out to theirstudents/faculty/employees/partners about ABDTC. Word of mouth hasalways proven to be the greatest advertising program a company caninstill. In addition, the media will be more than willing to promote thecharitable aspects ofABDTC and provide the opportunity for moreexposure every time ABDTC writes a check to another organization.

5.4.1 Positioning Statements

For busy, mobile people whose time is already at a premium, but desire arefreshing, high quality beverage or baked item while commuting to orfrom work or school as easy as ABC..

5.4.2 Pricing Strategy

D TravelersA Blissful Coffee pricing will be comparable to the competition,but with the value-added feature of immediate, mobile service and

convenience.

5.4.3 Promotion Strategy

The long-range goal is to gain enough visibility to leverage the product lineinto other area in Metro Manila and generate inquiries from potentialinventors. To do that, D' TravelersA Blissful Coffee needs:

Public relations services at more or less 2150,000 per month for thenext year intended to generate awareness of editors and productinformation insertions, reviews, etc. It is anticipated that the school

fundraising program will generate a fair amount of publicity on its ownand will, perhaps, minimize- -or even eliminate --the need for apublicist. Advertising at 10,000 per month concentrating on drive time radio.D' TravelersABC will experiment with different stations, keeping carefultrack of results. As with the school fundraising program, ABDTCexpects the facilities and signage to be a substantial portion of our


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advertising. However, in the start-up phase, ABDTC needs to letpeople know where to look for the facilities.

5.4.4 Distribution Strategy

D' TravelersA Blissful Coffee will locate Mobile facilities in high trafficareas of the city where it knows working commuters will be passing.

D' TravelersABC will make arrangements for the Mobile Cafes to be at asmany schools, businesses, and events as possible every year, so that newcustomers, those who come in from areas where ABDTC may not have aDrive-thru facility, can be reached and those who didn't have the time tostop off that morning at their favorite Travelers Coffee.

5.4.5 Marketing Programs

Distinctive Logo:

"Papo" is a very happy and conspicuous sun. The sun is one of infinitemental pictures. The sun touches every human being every day.Obviously, ABDTC wants to touch every customer every day. That is whythe use of the sun lends itself to being the corporate identifier. Papo isalready an awarding winning logo. Papo won in the New Artist Category ofthe 2001 Not Just Another Art Director's Club (NJAADC).

Distinctive Buildings:

ABCDTC is using diner style buildings for its Mobile facilities. ABDTC hasworked closely with the manufacturer to make the mobile distinctive, sothat it is easy to recognize, and functional.

The Fund-raising and Catering Trailer:

The Mobile Cafe will be a key marketing tool. The exposure ofthese unitswill provide value that cannot be measured in peso. D' TravelersABC willnegotiate visits with the Mobile Units at schools, hospitals, corporations

http://bp2.blogger.com/_H9zarD59LDA/SCh4GOZwNWI/AAAAAAAAAic/iqs_eXEWjEs/s400/sun.jpghttp://bp2.blogger.com/_H9zarD59LDA/SCh4GOZwNWI/AAAAAAAAAic/iqs_eXEWjEs/s400/sun.jpg

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and other entities. In the case of schools and certain corporations, aportion of all sales made while on their campus could go to a program oftheir choice. The organization would promote its presence to theirconstituency and encourage them to frequently buy from the Mobile Cafesestablishments so that their charitable cause is nurtured. This will givethose patrons an opportunity to taste the products and become a regularcustomer of the Mobile Cafes. The Mobile Cafes will also be appearing atcommunity events such as fairs, festivals, and other charitable events.

Advertising and Promotion:

In the first two years, D' TravelersA Blissful Coffee plans to spend1070,000 on advertising and promotion, with the programs beginning inJanuary, after the opening of the first Mobile Cafes. This would not beconsidered a serious advertising budget for any business, but ABDTCfeels the exposure will come from publicity and promotion, so most of thefunds will be spent on a good publicist who will giveet the word of mouthadvantage out about the charitable contribution program and how it works

in conjunction with a particular establishmentthe website. ABDTC alsobelieves that word-of-mouth advertising and free beverage coupons will bebetter ways to drive people to the first and second locations.

In the thirdsecond year, D' TravelersABC is increasing the budget to43200,000, since it will need to promote several locations, with particularemphasis on announcing these openings and all the other locations.ABDTC will continue to use publicity as a key component of the marketingprogram, since ABDTC could be contributing to local schools andcharities.

In the fourththird year, D TravelersABC will increase its advertising and

promotion budget to 50890,000, with the majority of the advertising budgetbeing spent on drive time radio. As in the previous years, ABDTC will getsubstantial publicity from the donation to local schools and charities.

5.5 Sales Strategy

There will be several sales strategies put into place, including postingspecials promos on high-profit items at the Mobile window. The Baristaswill also hand out free drink coupons to those who have purchased acertain number of cups or something similar. ABDTC will also developwindow sales techniques such as the Baristas asking if the customer

would like a fresh-baked item with their coffee.

5.5.1 Sales Forecast

In the first year, D' TravelersA Blissful Coffee anticipates having twoMobile Cafes locations in operation. The first location will open in the thirdmonthJanuary of this plan and be fully operational beginning on the31rdst week of January. The second Mobile Cafes will open two six


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months later. ABDTC is building in a certain amount of ramp-up for eachfacility while commuters become familiar with its presence. The MobileCafes will generate approximately P6, 254,2901,000.0,000 in revenue.

In the second year, D TravelersABC will add two more Mobiles and, in thethird year, DTC ABC will add an additional two Mobile facilities. The

addition of these facilities will increase the revenue from a total of overP192, 425.282,500,000 in the second year and just over P3,8417,557.6900,000 in the third.

In addition to the Mobile Cafes, D Travelers will deploy two mobile units inthe first quarter of the first fiscal year. DTC expects this mobile unit togenerate P7, 500 monthly, at an average price of P70, which will generategross revenues of approximately P6, 300,000.00

In the first quarter of the second fiscal year, D Travelers will deploy a thirdand fourth mobile unit. DTC expects all four mobile units to generate grossrevenue of P15, 725,430.00 in the second year. In the third fiscal year,

with an additional fifth and sixth mobile units deployed, TDP expects tosee P31, 974,390.00 in gross revenue.

DA Travelers Blissful Coffee is also showing revenue from the commerceportion ofitsourwebsite, where it will sell "A Blissful CoD TravelersCoffee" t-shirts, insulated coffee mugs, pre-packaged coffee beans, andother premium items. ABDTC is not expecting this to be a significant profitcenter, but it is an integral part of the marketing plan -- as a function ofdeveloping our brand and building product awareness.

Total first year unit sales should reach revenues ofP6, 254,290500.,000.The second year will see unit sales increase to a little over

9,471,1401,300,000, or P15, 725,430.00. The third year, with the additionof such a significant number of outlets, we will see unit sales increase to16,248,960over 2,000,000, equating to gross sales revenue ofP331,974800,390000.00.


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Sales Monthly

Sales Forecast

5.5.2 Sales Programs

Corporate Tasting Events-ABDTC plans to host tasting events forcustomers on a quarterly basis. Each quarter, at the introduction of eachseason, ABDTC will be adjusting its menu to reflect the changes in theflavors served.

Drink Coupons- At fundraising events for schools and corporate events,

we will be giving away drink coupons as door prizes or awards. Thisencourages the person to come in for their free beverage and bring afriend or buy a baked item or a package of our premium coffee. TheMobile Cafes units will be distributing coupons for special menu items ornew product introductions.

Chamber of Commerce and Professional Memberships- Because ofthe need to sell the Mobile Cafe services, ABDTC will be an activeparticipant in the Regional Chamber, local Chambers of Commerce,Foodservice Associations, and Specialty Beverage Associations. Theexposure and education that these organizations provide is outstanding,but equally important are the contacts and opportunities made available

for deploying a Mobile Cafecaf - -or even two --at a special event.

5.6 Strategic Alliances

D TravelersA Blissful has and will continue to depend heavily on ouralliance with Nestle, Phils and locally produced coffee beans in Batangasand Benguet, as well as our alliances with the Mobile Cafe manufacturersand consumable products providers. However, we will always be looking


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for better quality products, more favorable pricing, or more timely deliveryfrom other potential alliances.

We also consider the schools, non-profit organizations, and evencorporations who host one of our Mobile Cafes as a strategic alliances,since they are providing exposure to our products and we are providing

them a financial benefit.

5.7 Milestones

The Milestone table reflects critical dates for occupying headquarters,launching the first Mobile Cafes units. D TravelersA Blissful Coffee alsodefines our break-even month, our website launch and subsequent visitorinteraction function, and other key markers that will help us measure oursuccess in time and accomplishment.

Milestones

Milestones

Milestone Start Date End Date Budget

Ocular Visit119/3025/201108

129/0130/201108 10,000

Mobile Unit Setup1210/051/201108

121/061/201108

1,7600,000.00

Purchase Furniture & Fixture120/120/201108

121/155/2008

18500,000.00

Purchase Machine & Equipment120/120/201108

121/155/201108

4300,000.00

Purchase Tools & Equipment120/1020/201108

121/15/201108 510,000.00

Hiring of Manpower120/155/201108

12/203/201108 20,000

Advertising and PromotionalActivity

121/2115/200811

121/3115/201108 430,000.00

Web site launching023/01/201209

027/021/201209 10,000

Management Summary

6.0 Management Summary

D TravelersA Blissful Coffee is a relatively flat organization. Overhead formanagement will be kept to a minimum and all senior managers will be"hands-on" workers. There is no intention of having a top-heavyorganization that drains profits and complicates decisions.

At the zenith ofthis three-year plan, there will be three "Executive"positions: chief operating officer (General Manager for Operation), chieffinancial officer (Accounting/ Office-Administrator/Payroll), chief


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information officer / director of marketing (Sales and Marketing Personnel).There will be other mid-management positions, such as store managersfor every Mobile units, and a facilities manager to oversee themaintenance and stocking of the Mobile Cafes, as well as overseeing themaintenance and replacement of equipment in the Mobile Cafes facilities.

6.1 Organizational Structure

The organization will be a relatively flat one, since the majority ofpersonnel are involved in production and there will be a relatively lowheadcount in management.

There are three functioning groups within the company: Production, Salesand Marketing, and General and Administrative. For purposes of this plan--and to show the details of adding senior level management - ABC -DTravelers has broken management down as a separate segment, but it isan integral part of the General and Administrative function.

Production involves the Baristas, or Customer Service Specialists, who willbe manning Mobile Cafes and blending the beverages for the customers.Sales and Marketing will handle the promotion and scheduling of theMobile Cafes, as well as the Community Contribution program. Generaland Administrative manage the facilities, equipment, inventory, payroll,

and other basic, operational processes.

6.2 Management Team Gaps

D TravelersA Blissful Coffee knows that it is going to require severalquality management team members over the next three years, beginningwith a district manager for every fourMobile Units. This person willoversee the quality of product, the training of the Baristas, the inventory


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management, and customer satisfaction. Ideally, as D TravelersABCgrows, it will be able to promote from within for this position. This individualwill be responsible for the operation oftheup to fourMobile units underhis/her management. They will be required to visit between locations andpossibly even join administrative personnel on training or marketing travel.Clearly, as the need arises, these individuals will ideally be selected fromthe Mobile Cafe team.

By the beginning of the third year, D Travelers will hire three key seniormanagers. They are: a chief financial officer, a chief information officer,and a director of marketing. The role of each of these individuals will bediscussed in subsequent sections of this plan.

6.3 Personnel Plan

D TravelersABC expects the first year to be rather lean, since there willonly be two locations and two mobile units --none of which will be

deployed for the entire year. The total headcount for the first year,including management, administrative support, and customer service(production), will be 12 with a total payroll of P1,000968,000.00.

The second year, with the addition of two mobile units, D Travelers willadd customer service personnel, as well as a store manager and someadditional support staff at headquarters, including an Inventory Clerk, andadministrative support. The headcount will increase in the second year to21, with a payroll of13,7600,000.

The third year will see the most dramatic growth in headcount, due to theaddition of two mobile units. In the third year, there will also be an increase

ofoverhead cost over the previous year. Total payroll for the third yearwill be P24,500 891,2000.00. A significant increase in the chief financialofficer, a chief information officer, and a director of marketing. There willalso be a fifth and sixth store, and a corporate events sales executive.Total personnel will reach 27.

The chief financial officer will be brought on to oversee the increase innumbers of retail outlets and to manage a dramatically more detailed P&Lstatement and to manage the Balance Sheet. The chief information officerwill be brought in to help us with the deployment of a Point-of-Salecomputerized cash register system that will make tracking and managing

receipts and charitable contributions more robust. Ideally, this individualwill have a large amount of point of sale and Internet experience.Specifically, how to tie in POS systems to the Internet and inventorycontrols. Also, knowledge in establishing technology guidelines for thecompany and franchisees in the future. This individual will also be addedin fiscal year three.


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The director of marketing will be charged with managing the relationshipswith advertising agencies, public relations firms, the media, and ourwebsite.


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Personnel

Personnel Plan

201209 201310 20114OPERATION

Mobile Cafe Team

Barista720,000.

001,209,6

00.001,555

,200.00

Driver/Assistant360,000.

001,008,0

00.001,512

,000.00

Store Manager216,000.

00259,2

00.00302,

400.00

Subtotal1,296,000.00 2,476,800.00 3,369,600.00

MANAGEMENT

General Manager300,000.

00360,0

00.00480,

000.00Sales and MarketingPersonnel

132,000.00

316,800.00

369,600.00

Accounting/OfficeAdministrator/Payroll

132,000.00

316,800.00

369,600.00

Warehouse InventoryClerk

108,000.00

129,600.00

302,400.00

Subtotal672,000.

001,123,200.00

1,521,600.00

Total Payroll1,968,000.

003,600,000.00

4,891,200.00

Total People12.00

21.00 27.00


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FinancialPlan

7.0 Financial Plan

The D Travelers Coffee's financial picture is quite promising. Since DTC isoperating a cash business, the initial cost is significantly less than manystart-ups these days. The process is labor intensive and DTC recognizesthat a higher level of talent is required. The financial investment in itsemployees will be one of the greatest differentiators between it and DTC'scompetition. For the purpose of this pro-forma plan, the mobile cafe arefinanced. These items are capital expenditures and will be available forfinancing. There will be a minimum of inventory on hand so as to keep the

product fresh and to take advantage of price drops, when and if theyshould occur.

The D Travelers Coffee anticipates the initial combination of investmentsand long-term financing of P2,601,654.01 to carry it without the need forany additional equity or debt investment, beyond the purchase ofequipment or facilities. This will mean growing a bit more slowly than mightbe otherwise possible, but it will be a solid, financially sound growth basedon customer request and product demand.

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which areshown in the following table. The key underlying assumptions are:

The D Travelers Coffee assumes a slow-growth economy, withoutmajor recession. The D Travelers Coffee assumes of course that there are nounforeseen changes in public health perceptions of its generalproducts.


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The D Travelers Coffee assumes access to equity capital andfinancing sufficient to maintain its financial plan as shown in the tables. The Travelers Coffee will assume equal pricing for every unit ofcoffee and other beverages.

General Assumptions2009 2010 2011

Plan Month 1 2 3

Current Interest Rate 9.00% 9.00% 9.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 0.00% 0.00% 0.00%

Other 0 0 0

7.2 Key Financial Indicators

The following chart shows changes in key financial indicators: sales, grossmargin, operating expenses, collection days, and inventory turnover. Thegrowth in sales exceeds 151.43% on the second year and 50.82% on thethird year. DTC expects to keep gross margin above the 40% projected forthe first year, but it doesn't anticipate anything higher than 41%, since ourpayroll expenses will increase substantially as it grows into new areas andfaces new competition.

The projections for inventory turnover show that DTC will maintain arelatively stable amount of inventory in its headquarters warehouse so thatit has no less than two weeks of inventory on hand, but no more than three

weeks, in order to keep products fresh. The only time it would considerholding larger stores of inventory is if there was some catastrophic eventthat could cause a dramatic rise in the price of its coffees or teas.

Benchmarks


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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011

Inventory Turnover

Operating Expenses

Gross Margin

Sales

7.3 Break-even Analysis

To arrive at the average monthly fixed costs, The D Travelers Coffeecalculated the fixed costs for the Mobile Cafes to be P234,941.67. Usingthe average price per unit, less the average cost per unit, divided into thefixed costs of operation, DTC concludes that we will need at least 7524.66units per month to reach break-even at P526,726.20 per month.

Break-even Analysis


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Break-even Analysis Break-even AnalysisBreak-even Analysis Break-even Analysis

Average Monthly UnitsBreak-even

Average Monthly UnitsBreak-even

7,524.66

Average Monthly RevenueBreak-even

Average Monthly RevenueBreak-even

526,726.20

Assumptions:Assumptions

:

Per-Unit RevenuePer-Unit

Revenue 70.00

Per-Unit Variable Cost Per-Unit Variable Cost 41.78Estimated Monthly FixedCost

Estimated Monthly FixedCost

234,941.67

7.4 Projected Profit and Loss

The D Travelers Coffee is expecting some dramatic growth in the nextthree years, reaching P6,254,290.00 in sales and a 46.00% Gross ProfitMargin by the end of the first year. Expenses during the first year will beroughly P3,553,031.66, leaving a Net After-tax loss of (P741,775.66).

The total operating cost of 56.81% & which include commissions for salesefforts, the single largest expenditures in the first year expenses for rents,

equipment leases, utilities, and the payroll burden for all employees.

Sales increase by nearly 151% in the second year, due to the addition oftwo more Mobile units and two more Mobile Cafes, reaching a total ofP15,725.430.00, with a Gross Profit Margin of 44.00%. Although operatingexpenses double in the second year, The D Travelers Coffee will be ableto realize a Net After-tax profit of P192,425.28 or 1.83% of sales. In thatsame year, DTC will make charitable contributions of P190,951.65.

The third year is when The D Travelers Coffee has the opportunity tohave additional two units of Mobile Caf which will give them a total sixunits of mobile Cafe additional which will drive sales to P31,974,390.00

and, even with a 31% increase in operating expenses, help reach a GrossProfit Margin 41.00%. Several expenses take substantial jumps this year--donations increasing from P190,951.65 to P388,260.45--and DTC will beadding several key management team members. These increases, as wellas those for increased equipment leases and rents, leaving a Net After-taxprofit of P3,417,557.69, or 1114% of sales.

Profit and Loss 2009 2010 2011


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Pro Forma Profit andLoss

Sales6,254,290.

0015,725,43

0.0031,974,390.00

Direct Costs of Goods3,395,186.

008,873,63

5.5018,842,051.25

Gross Margin2,859,104.

006,851,79

4.5013,132,338.75

Gross Margin % 46% 44% 41%Operating Expenses

Sales and MarketingExpensesAdvertising/Promotion

174,226.65

438,065.55

890,715.15

Donations75,944.

95190,95

1.65388,260.45

Sales and Marketingand Other Expenses

87,560.06

220,156.02

447,641.46

TOTAL SALES ANDMARKETINGEXPENSES

337,731.66

849,173.22

1,726,617.06

General andAdministrative

Expenses

Salaries and Wages1,968,000.

003,600,00

0.004,891,

200.00

Payroll Taxes688,800.

001,260,00

0.001,711,

920.00

Depreciation198,500.

00368,50

0.00539,500.00

Rent180,000.

00192,00

0.00210,000.00

Utilities84,000.

00144,00

0.00240,000.00

Insurance60,000.

00108,00

0.00180,000.00

Others36,000.

0042,000.00

72,000.00

TOTAL GENERALAND

3,215,300.00

5,714,500.00

7,844,620.00


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ADMINISTRATIVEEXPENSESTotal OperatingExpenses

3,553,031.66

6,563,673.22

9,571,237.06

Profit Before Interestand Taxes

(693,927.66)

288,121.28

3,561,101.69

Interest Expense47,848.

0095,696.00

143,544.00

Taxes Incurred - - -

Net Profit(Loss)(741,775

.66)192,42

5.283,417,

557.69

Net Profit/Sales(0.12)

0.01 0.11

7.5 Projected Cash Flow

Cash flow will have to be carefully monitored, as in any business, but TheD Travelers Coffee is also the beneficiary of operating a cash business.After the initial investment and start-up costs are covered, the businesswill become relatively self-sustaining. With the exception of seasonal dips,which DTC has attempted to account for, through changes in the menuitems.

Assuming an initial investment and financing of P1.001,654.00 and with anadditional investment of 390,000 on the first year of the partners, The DTravelers Coffee anticipates no cash flow shortfalls for the first year orbeyond. March and May are the greatest cash drains, since DTC will beexperiencing the cost of second mobile unit start-up. Again, DTC seesheavier than normal drains of cash in December and January, as there willbe certain accounts payable coming due.

Cash Flow 2009 2010 2011Pro Forma Cash Flow

Cash Received

Beginning CashBalance

30,000.00

3,224.34

267,649.62

Cash from OperationsCash Sales 6,254,290. 15,725,43 31,974,


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00 0.00 390.00Subtotal Cash fromOperations

6,254,290.00

15,725,430.00

31,974,390.00

Additional CashReceivedSales Tax, VAT,HST/GST Received - - -New CurrentBorrowing - - -New Other Liabilities(interest-free)

320,000.00

350,000.00

400,000.00

New Long-termLiabilities - - -Sales of Other CurrentAssets - - -Sales of Long-termAssets - - -New InvestmentReceived

390,000.00 - -

Subtotal CashReceived

710,000.00

350,000.00

400,000.00

TOTAL CASHRECEIVED

6,964,290.00

16,075,430.00

32,374,390.00

Expenditures

Expenditures fromOperations

Cash spending3,395,186.

008,873,63

5.5018,842,051.25

Bill Payments3,420,879.

666,467,36

9.229,504,

781.06Subtotal Spent onOperations

6,816,065.66

15,341,004.72

28,346,832.31

Additional Cash SpentPrincipal Repaymentof Current Borrowing - - -Other LiabilitiesPrincipal Repayment - - -Long-term LiabilitiesPrincipal Repayment

160,000.00

320,000.00

480,000.00

Purchase OtherCurrent Assets

15,000.00

50,000.00

70,000.00


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Purchase Long-termAssets

100,000.00

110,000.00

Subtotal Cash Spent175,000.

00470,00

0.00660,000.00

TOTAL CASHEXPENDITURE

6,991,065.66

15,811,004.72

29,006,832.31

Net Cash Flow(26,775.

66)264,42

5.283,367,

557.69

Cash Balance3,224.

34267,64

9.623,635,

207.31

7.6 Projected Balance SheetThe D Travelers Coffee's projected balance sheet shows an increase innet worth to just over 192,425.28 in 2010, at which point it expects to bemaking 11.83% after-tax profit on sales of P15,725,430.00 million. Withthe present financial projections, DTC expects to build a company withstrong profit potential, and a solid balance sheet that will be asset heavyand flush with cash at the end of the third year. The D Travelers Coffeehas no intention of paying out dividends before the end of the third year,using the excess cash for continued growth.

Pro Forma BalanceSheet 2009 2010 2011Assets

Current Assets

Cash3,224.

34267,649.62

3,635,207.31

Inventory210,000.

00360,000.00

431,000.00

Prepaid Rent180,000.

0065,0

00.0070,

000.00

Deposits84,000.

0030,0

00.0029,

000.00

Prepaid Insurance75,000.

0060,0

00.0040,

000.00

Other Current Assets71,154.

0111,6

54.0111,

154.01

Total Current Assets623,378.

35794,303.63

4,216,361.32


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Non Current Asset

Furniture & Fixtures85,000.

00116,500.00

159,000.00

Machines & Equipment300,000.

00330,000.00

344,000.00

Mobile Truck1,600,000.

003,200,000.00

4,800,000.00

Less: AccumulatedDepreciation

(198,500.00)

(368,500.00)

(539,500.00)

Total Long-term Assets1,786,500.

003,278,000.00

4,763,500.00

Total Assets2,409,878.

354,072,303.63

8,979,861.32

Liabilities and Capital

Current Liabilities

Accounts Payable320,000.

00350,000.00

400,000.00

Current Borrowing - - -

Other Current Liabilities - - -Subtotal CurrentLiabilities

320,000.00

350,000.00

400,000.00

Long-term Liabilities1,440,000.

002,880,000.00

4,320,000.00

Total Liabilities1,760,000.

003,230,000.00

4,720,000.00

Aleli Carreon, Capital216,626.

12280,767.88

1,419,953.78

Michelle dela Cruz, Capital216,626.

12280,767.88

1,419,953.77

Jeannilyn Paguirigan,Capital

216,626.11

280,767.87

1,419,953.77

Total Capital649,878.

35842,303.63

4,259,861.32

Total Liabilities andCapital

2,409,878.35

4,072,303.63

8,979,861.32


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Net Worth649,878.

35842,303.63

4,259,861.32

CapitalSTATEMENT

PlannedInvestment

Aleli Carreon,Capital

Michelle delaCruz, Capital

Jeannilyn

Paguirigan,Capital TOTAL

Beginning2009

333,884.67

333,884.67

333,884.66

1,001,65400

Additional130,000.

00130,0

00.00130,

000.00390,000

00

Net Loss(247,258.

55)(247,258.55)

(247,258.55)

(741,77565

End 2009216,626.

12216,6

26.12216,

626.11649,878

35

Income-201064,141.

7664,1

41.7664,

141.76192,425

28

End 2010280,767.

88280,7

67.88280,

767.87842,303.

63

Income-20111,139,185.

901,139,185.90

1,139,185.90

3,417,557.70

1,419,953.78

1,419,953.78

1,419,953.77

4,259,861.33

7.7 Business Ratios

Standard business ratios are included in the following table. The ratiosshow a plan for balanced, healthy growth. The D Travelers Coffee'sposition within the industry is typical for a heavy growth startup company.Comparing the ratios in the third year with the industry, this pro-forma planappears to be within an acceptable difference margin.

Ratios

Ratio Analysis 2009 2010 2011

Sales Growth 0.00% 151.43% 50.82%Percent of Total AssetsInventory 8.71% 8.84% 4.80%Prepaid Rent 7.47% 1.60% 0.78%Deposits 3.49% 0.74% 0.32%Prepaid Insurance 3.11% 1.47% 0.45%


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Other Current Assets 2.95% 0.29% 0.12%Total Current Assets 25.87% 19.51% 46.95%Long-term Assets 74.13% 80.49% 53.05%Total Assets 100.00% 100.00% 100.00%Current Liabilities 13.28% 8.59% 4.45%Long-term Liabilities 59.75% 70.72% 48.11%Total Liabilities 73.03% 79.32% 52.56%Net Worth 26.97% 20.68% 47.44%Percent of SalesSales 100.00% 100.00% 100.00%Gross Margin 46.00% 44.00% 41.00%Sales and MarketingExpenses 5.40% 5.40% 5.40%General and AdministrativeExpenses 51.41% 36.34% 24.53%Profit Before Interest andTaxes -11.10% 1.83% 11.14%Main Ratios

Current 1.95 2.27 10.54

Quick 0.01 0.76 9.09Total Debt to Total Assets 73.03% 79.32% 52.56%Additional Ratios

Net Profit Margin -11.86% 1.22% 10.69%Return on Equity -114.14% 22.85% 80.23%Activity Ratios

Inventory Turnover 17.41 31.14 47.64

Payment Days 172 96 63

Debt Ratios

Debt to Net Worth 2.71 3.83 1.11Current Liab. to Liab. 18.18% 10.84% 8.47%Liquidity Ratios

Interest Coverage(

14.50) 3.01 24.81


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Additional Ratios

Assets to Sales 0.39 0.26 0.28Current Debt/Total Assets 13.28% 8.59% 4.45%

Acid Test 0.01 0.76 9.09

Sales/Net Worth 9.62 18.67 7.51

7.8 Exit Strategy

There are three scenarios for the investors and management to recovertheir investment--two with significant returns on each dollar invested.

Scenario One:The D Travelers Coffee becomes extremely successful and has requestsfrom other communities for D Travelers Coffee operations to be openedthere. This opens the door for franchising opportunity. When one looks at

the wealth that has been created by the likes of McDonald's, Wendy's,Kentucky Fried Chicken, Burger King, and Taco Bell, the value offranchising a great idea cannot be dismissed. However, developing afranchise can be extremely costly, take years to develop, and bedestroyed by one or two franchisees who fail to deliver the consistency orvalue on which the founding company had built its reputation.

Scenario Two:The D Travelers Coffee chooses to become the Mobile Coffee version ofStarbucks, obtaining several million pesos through an initial public or

private offering that would allow the company to open twenty to thirtyfacilities per year in the region of the country, in both major and smallmetropolitan communities. This is the preferred Exit Strategy of theManagement Team. The danger in this is that competitors would rise upand establish a foothold on a community before--or in the midst of--thearrival of The D Travelers Coffee, causing a potential for a drain onrevenues and a dramatic increase in advertising expenditures to maintainmarket share. Knowing these risks--and planning for them--gives DTC theedge needed to make this scenario work.

Scenario Three:By the third year, the growth and community support for The D TravelersCoffee will have made the news in more than just the metropolitan area. Itcan be assumed that competitors, such as Starbucks or Figaro, SeattlessBest, will have seen the press and realized the value proposition in The DTravelers Coffee's business plan. This will make DTC an attractive targetfor buyout. The company could be purchased by a much largercompetitive concern by the end of the third year.


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Conclusion:

Of the three scenarios, the management team prefers Scenario #2. Thesame numbers would relate to a public or private offering as are used inScenario #3, but to make an offering available, there would be a dilution ofshares that would provide additional shares for sale to the new investors.

Assuming the capital acquisition described in this plan is completed, therewill be 6 units of the company in the hands of investors

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