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The Spontaneous Spoonful

Enhance your packaged products' appeal with COLLAPSIBLE PLASTIC SPOONS!

No more hassle for consumers to pack spoons for eating on the go! Consumer hesitation eliminated-Packaged food enjoyment can be instantaneous!

Ideal for:
Yogurt cups Applesauce cups Pudding cups Individual cereal packages Instant soup mix cups ... And so many more!

Spoon Features:
Compact Design Collapsible and Sturdy Food-Safe Plastic Ideal for Incorporation Into/Onto Existing Packaging/Lids Reasonably Low Price

Contact Spontaneous Spoonful at (269) 123-4567 for more information!

I. Executive Summary
Initiating production of a revolutionary innovation and distributing it in an unprecedented manner to prospective consumers is the core, essential endeavor of my proposed business. After overcoming challenges to emerge from my current undeveloped, static state of business, I will manufacture a collapsible plastic spoon, which I will supply to food packaging industries in order to facilitate the incorporation of this novel convenience into individually sized food packages, such as yogurt cups, applesauce cups, pudding cups, and even small cereal packages, instant soup mix cups, and a myriad of other types of food packages. This service--supplying food packaging industries with this product--is unprecedented and thus will be (directly) unrivaled, and the product itself is similar to only a few obscure models of utensils that have been produced and incorporated into food packaging by separate companies internally. Therefore, consumers of packaged foods who will be second-hand consumers of my spoons will readily try and appreciate the convenience afforded by these spoons. By purchasing food packages to which my unique spoons are already attached, these consumers will save time that would otherwise be used in purchasing spoons separately and also in locating or obtaining the spoons when they consume their packaged food products or plan to consume them later--for instance, to pack a lunch. Due to their compact design, my spoons will also minimize the space necessary for transporting these necessary utensils in a clean manner along with the food packages in a packed lunch or snack. Finally, when my spoons are already affixed to food packages, the hassle of remembering to pack spoons is eliminated, as is the more provoking possibility of forgetting spoons and rendering oneself unable to politely, practically consume the packaged food. As packaged products in general have demonstrated, consumers are eager to invest in conveniences and benefits like these, which save time space, and thought-processing exertion in a fast-paced society. Beyond this conceptual idealism, my manufacturing process is feasible and quantifiable in realistically estimated dollar amounts for the physical necessities of business operation. For a loan returned over a 15year payment term at a 5% interest rate, the necessary $238,400 borrowed for capital equipment/facilities will be paid back in monthly installments, and after these and the business's monthly operating expenses are met, I will gain a profit of approximately $2,600 per month if I sell all of the 260,000 spoons I am able produce during that month. Funds necessary for this promisingly innovative venture, then, are relatively minimal, so the risk involved is less consequential for a lender or other professional approving and allowing me to enact my plan. In the Southwest Michigan area, I have already located an affordable, ideal facility to house my spoonproducing equipment. Local proximity to companies such as Mooville, a small dairy in Nashville, Michigan, and the major Kelloggs and Post cereal plants in Battle Creek, Michigan, ensures potential local consumers of my product for an enhanced probability of success, added ease of business initiation/ contract pursuit, and ease of developing awareness regarding my product. And enlisting in the guidance Battle Creek's Center for Entrepreneurship will ensure the proper maturation of my business concept: My ideas can principally be more thoroughly researched and revised, and then immediately applied with the Center's practical and professional insight. In this way, The Spontaneous Spoonful, once it is realized in the near future, will join the ranks of profitable entities. Hesitation in supporting this proposal is unfounded: my unprecedented business pursuit with such an innovative product is a promising concept, as I have pointed out in listing its benefits and feasibility. Supplying collapsible spoons to industries for incorporation in their individually-sized food packages is a freshly unearthed, bold prospect that has great potential to thrive and flourish!

Business Plan Contents

II. Description of the Company .................................................................................................... 4 III. Proposed Business Strategies ................................................................................................ 4 IV. Product to Be Provided............................................................................................................. 5 V. Management and Ownership of Business ........................................................................ 5 VI. Marketing Analysis ....................................................................................................................... 5
Competition .................................................................................................................................................. 5 Market Analysis............................................................................................................................................. 6

VII. Legal ................................................................................................................................................. 6 VIII. Financial Analysis Financing and Loans .......................................................................... 7
Facility Purchase and Remodeling Costs ($105,000) .................................................................................... 7 Equipment Needs and Costs ......................................................................................................................... 7 Total Proposed Loan ..................................................................................................................................... 7 Monthly Operating Expenses ........................................................................................................................ 8 Break-Even Analysis ...................................................................................................................................... 8 FYE 2010 Budget ......................................................................................................................................... 10 Alternative Options for More Optimal Production ..................................................................................... 10 Future Funding Needs ................................................................................................................................. 10

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II. Description of the Company

Description of Business
Seizing new grounds of opportunity, my original business concept is centered on a modern innovation with marked potentiala disposable and foldable, or collapsible, plastic spoon for small (especially cupshaped) portions of packaged food. These new spoons will be an added convenience to packaged products, and their novelty is bound to spark interest in a companys product. My product will foster onthe-go enjoyment of packaged foods. My facilities, which will primarily consist of spoon-making plastic injection machines and the necessary peripheral equipment, will provide packagers with an alreadymanufactured enhancement to their products. An extended possibility would be to eventually offer the product in large quantities (on the basis of appeal due to its compact design) to cafeterias, or possibly, in more individualized packages, to the general public, which would probably meet with stiffer competition from the existing ordinary plastic cutlery companies. Since the conception of my business idea, I have noticed that the collapsible spoon idea has already been implemented on an Asian product--a can of "congee" breakfast food. A collapsible plastic spoon snaps onto a plastic lid which fits on the can of congee. However, I know of no business (except my own proposed venture) which supplies ready-made collapsible spoons to food-packaging companies, so I anticipate no direct competition.

III. Proposed Business Strategies

To initiate my business, I plan to first consult the Center for Entrepreneurship in Battle Creek. The advice from this center will refine my ideas and direct me with practical steps I can currently take to effect the birth and growth of this business. My concept will be manifested through such steps' implementation.

Advertising
At first, my business will seek to secure contracts directly by personally meeting with a few large or several small local companies who wish to stimulate an interest in their products. Kelloggs and Post are two such advantageously local corporations with small/individually sized, 'on-the-go' food (breakfast cereal) packaging initiatives that could benefit from the inclusion of my product. Direct contact with these companies would conveniently establish the proposal of a contract with them. Endeavors to offer my product to local companies will benefit the local economy by encouraging these companies' products, providing their products with an added appeal while providing my business with the opportunity to test consumers' approval and demand in the market on a smaller scale before deciding whether or not to take the initiative and additional risk necessary for the possible venture of eventual business expansion. If I, in fact, enlarged my facilities at some point in the future, submitting advertisements to technical journals supplied to target a greater variety of food-packaging companies would publicize my company's existence to this much broader target audience. A website would also effectively increase awareness and thus interest in my product.

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IV. Product to Be Provided

The Spontaneous Spoonful supplies food-packaging companies with its innovative product, the collapsible plastic spoon, to be incorporated into the food packaging for greater consumer appeal. Consumers will, as a result, be able to enjoy packaged foods, such as cereal, yogurt, or applesauce, immediately. Food-packaging companies will desire my collapsible spoons because it will give their products this marketable advantage of being immediately consumable--spontaneously!

V. Management and Ownership of Business

In this business venture, I aim to be the sole owner. To operate my spoon-making machines, a full-time worker per machine at any given time during production, I estimate, will be necessary during the primary stage of relatively small-scale production. Since two machines are capable of producing a sufficient quantity of my product for the small companies, or limited number of companies, with whom I initially intend to conduct business, only two machine operators per shift will be absolutely essential in my business until it expands. Plastic loading and packaging the spoons in large quantities for delivery will require the skills of at least two full-time, minimum-wage employees, (aided intermittently by the machine operators when they are not otherwise occupied). In addition to these staff members, two parttime secretarial staff members must be employed in order to work once a week to pursue contracts/contact other companies and to manage legal/technical/financial affairs (such as ensuring compliance with safety standards and contract regulations). Occasionally, a professional financial, legal, or business advisor's opinion may be sought on these matters and compensated with due funds, but the skills and knowledge possessed by these two secretarial staff will ideally preclude much of this necessity. In order to commence this business venture, it would be wise to further my research, locate funding sources, and gain professional advice from the Center for Entrepreneurship to strengthen and solidify my plans. This renders my ideas imminently feasible.

VI. Marketing Analysis

Directly, my targeted market consists of food-packaging companies.

Competition
To my knowledge, no company currently supplies such collapsible plastic spoons to food-producing and -packaging companies, so with a patent secured, I would not have significant competition until another company could modify or surpass my design and compete with my production capability. However, similar plastic designs such as the ordinary plastic silverware produced by companies like Dixie, an already-existing type of collapsible spoon on a relatively obscure product, and collapsible, disposable plastic drinking straws attached to a certain brand of packaged beverages remain as possible, though minimally aggressive, sources of competition. Yet since there is no direct existing competition, due to the fact that this idea's opportunity has not largely been realized and developed, my product has a greater probability of success.

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Market Analysis
The fact that no direct competition with my product is foreseen (because of my product's practically unprecedented nature) minimizes conflict that could excessively challenge my business as it initially develops. Certainly, no companies would compete with mine firsthand in supplying food-packaging companies with utensils. Second-hand competition, however, is possible, resulting from the necessity of appealing to the interests of the ultimate consumers of my product--the consumers of packaged foods. Yet this competition, too, is probably minimal. Aside from (the probably negligible competitive effects of) a few privately contained companies which produce food packages with similar collapsible plastic spoon or straw designs, solely companies producing ordinary plastic cutlery have potential to threaten the survival and success of my business. In other words, only the already-available ordinary plastic spoons sold separately from individually packaged food containers are a viable alternative to consumers of packaged food products. Among these consumers are busy parents, youth, and working individuals who have already demonstrated their willingness and even desire to pay for convenience, which my product would afford if incorporated into packaged food products. An existing illustration of this demand or desire for convenience, Hamburger Helper, which consists primarily of inexpensive noodles and a prepared spice combination, is successfully sold at a significantly higher price than the summed values of its individual contents if they had been purchased separately. A consumer must add other more-expensive ingredients to this package (and, of course, labor and time) to complete a meal, but this does not seem to deter him or he --as evidenced by the fact that, as stated, Hamburger Helper continues to be profitable--from enjoying the benefit of this prepared product in the brief time/effort/thought of planning, decision-making, and preparation he or she saves. Clearly, consumers cheerfully condescend, concerning cost, to compensate for convenience afforded them by such prepared products--that is, they are willing to pay the price for added speed and ease. Therefore, in my case, even though people could buy ordinary plastic spoons, probably at a cheaper price, the added effort of remembering to pack spoons with the packaged foods, ensuring the necessary space is available to do so, and actually taking the time to pack utensils when planning to eat 'on-the-go' or packing a lunch complicates daily life enough that they might eagerly try my alternative option of already-attached, foldable plastic spoons on their food product packages. Ramifications of widespread use of my product could include increased convenience of more healthy snacking and eating--consumers feeling free to conveniently choose, for example, to quickly grab a yogurt cup, applesauce cup, individually-sized cereal box, or other more nutritious foods over resorting to a candy bar or greasy fast food. Whether or not this effect would be observed, however, increased convenience of consuming packaged foods requiring utensils will result in a broader choice range of food options compatible with a busy lifestyle or will save time for those who had previously sacrificed it to maintain a preferred diet of certain packaged foods.

VII. Legal
Legally, this venture will be organized as a sole proprietorship, so that after paying employees' salaries, the profits will be received solely by the owner (my intended role). Thus, the owner will exercise her executive decision to utilize these profits in maintaining and/or eventually expanding the business, or simply for personal gain. To operate as the business, "The Spontaneous Spoonful," it would be wise to trademark my business name and logo with the U.S. Patent and Trademark Office. (If I did not trademark the name, I would at least have to file with the county clerk for a "Doing Business As" name for a fee of $10 to $50.) Because of the innovative nature of my product, I will also have to apply for a patent at the

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U.S. Patent and Trademark Office to ensure the copyright of my collapsible spoon's design. Other legal considerations would be inspections of the manufacturing facility, liability issues if they arise, and the legal work regarding salary payment, benefits packages, and contracts with food-packaging companies.

VIII. Financial Analysis

Financing and Loans
My plastic spoon business seeks to borrow less than $250,000. This loan must be repaid by the end of 15 years at the rate of 5% interest per year. If $500 of prize money is awarded for my proposal, this amount can be used to repay my loan more quickly than spoon production and sales can alone. This will reduce the total interest that would accumulate on the loan. Or, more directly, some of the plastic could be purchased with the $500, instead of incorporating that price into the loan. This, also, would reduce the total loan and interest.

Facility Purchase and Remodeling Costs ($105,000)

In Southwest Michigan, a suitable facility and property of former industrial use is available for only $100,000. Purchasing this existing facility is a markedly more resourceful option than its alternative, which is building a new facility to house my manufacturing equipment, and in my situation, this expenseminimizing action is quite practical. Assuming that this factory building is adequately equipped with a heating/cooling system, plumbing, electric circuitry, and other primary necessities, purchasing this existing facility will also eliminate the expense of much of the peripheral equipment to my spoon-making machines that would otherwise need to be purchased separately. If the facility and its equipment are out of compliance with current safety codes, in a state of disrepair, or otherwise in need of renovation or remodeling, about $5,000 will be a sufficient allowance for this work, in my estimations.

Equipment Needs and Costs

Capital investment necessary for my business before it can begin production includes the following list of facilities, machines, packaging equipment, peripheral equipment, etc., whose costs comprise most of the amount I would need to secure from the bank, or an adventurous investor or philanthropist, in a loan. In addition to this, I will need to borrow money to purchase my first months supplies for manufacturing my product.

Total Proposed Loan

Mortgage/Loan Building and Property Shelving and Office Supplies 2 Plastic Injection machines (with custom molds) Renovation/Updates/Inspection 6 Conveyors Bulk Plastic and Packaging Supplies for the First Months Operation Total $100,000 $500 $80,000 $5,000 $48,000 $4,900 $238,400

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Monthly Operating Expenses

Personnel
2 Part-Time Secretarial Employees 4 Minimum-Wage Employees 2 Machine Operators 1 Engineer (on-call 2nd shift ) Benefits Total $120 $2,700 $3,600 $6,000 $2,000 $14,420

Other Monthly Operating Expenses

Monthly Loan Payment Heating/Cooling Water Machine Electricity Consumption Machine Maintenance and Repair Allowance Insurance Bulk Plastic Packaging Supplies Trash and Other Utilities Internet Total $1,886 $800 $200 $8,020 $2,000 $1,300 $2,400 $50 $200 $75 $16,931

Break-Even Analysis
According to my estimates and calculations, my monthly expense total is $31,351.00 for the salaries of all my personnel, the operation and upkeep of my machines and equipment, the raw materials necessary to produce my product, and the remaining costs necessary for my businesss successful operation. Consequently, I will need to sell my unique collapsible plastic spoons for about fourteen cents each. This estimate was obtained by compiling several cost estimates after consultation with other businessmen/ employees of related fields and after research on plastic prices, weight of plastic spoons, etc. After this consultation and other research, I calculated my expenses using the following assumptions. Both of the plastic injection machines will be able to produce 12 spoon pieces per minute, which translates to 6,500 spoon pieces per machine in an eight-hour day of work. If two plastic pieces formed separately by both of these machines are fit together to form a finished foldable spoon, then this quantity is also the total number of spoons that will be produced in an eight-hour shift. In order to make my cost per spoon more reasonable by maintaining the fixed capital amount yet increasing production, I have

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decided to run two shifts per day, five days per week, with an average of four weeks per month, so I will produce 260,000 spoons per month, or roughly three million spoons in a year. My further major expense assumptions include those related to plastic pellets and packaging materials, employees, and machine energy consumption. Plastic, I have assumed, costs $0.85 per pound, and approximately 10 pounds are necessary to produce 1,000 spoons, so $1,105, or roughly $1,200, conservatively (accounting for waste or the possibility of underestimation in plastic weight), are necessary to produce 130,000 spoons (one shift per day per month), and twice that amount is $2,400 (for 260,000 spoons--my estimated monthly production). In order to pack these spoons in large bulk quantities, I have located used Gaylord boxes in good condition, sized 45" x 45" x 45", for $10 per 100 boxes. Each of these will hold at least 7,500 spoons, so my yearly output of 3 million spoons can be contained in 400 boxes, which will cost only $40. A generous additional allowance to compensate for possible defects or to purchase smaller boxes would certainly not need to exceed $260 to bring the total packaging budget to $300 per year, which is, on average, a mere $25 per month. To operate my machines and assemble the spoons, an engineer will be hired to work a single shift for a total of 40 hours per week, or roughly 1,600 hours per month at $5,000, and will be on-call for the second daily shift for a $1,000 monthly compensation. This engineer will be able to accomplish any necessary machine programming adjustment and diagnosis of most production problems, in addition to lending aid to the assembly process when otherwise unoccupied. For plastic loading and product assembly and packaging, two minimum-wage laborers per shift--that is, four laborers per day, earning a combined monthly salary sum of $2,700--will be reasonably adequate, especially with additional aid from one machine operator per shift, who will facilitate the assembly and packaging process when his or her machine does not require active manipulation. Together, two machine operators will earn $3,600 monthly. Finally, two part-time secretarial staff members will each work only periodically (for six hours each or so per month) for a monthly combined sum of $120 each to help manage office affairs such as pursuing contracts, ensuring legal compliance, monitoring and paying expenses, et cetera. Since my company will begin as a relatively small entity, such minimal management is probably not unrealistic. As the initiator of this business, I will naturally assume responsibility for any necessary remaining contact with companies and legal work. Benefits for my workers, I have estimated, will cost $1,000. Each month, then, wages and benefits for my all my personnel will cost $14,420. Machine energy consumption is, singly, my largest other monthly expense. I have assumed, based on similar machines' energy consumption rates, that if only one shift is run, each plastic injection machine will run at 23,040 kilowatt-hours monthly, a compressor (assumed existing in the industrial facility) will run at 239 kilowatt-hours, and each of the six conveyor belts necessary will run at 60 kilowatt-hours, as will two exhaust fans (assumed existing in the industrial facility). At eight cents per kilowatt-hour, the monthly energy consumption expenses for a single shift would total approximately $3,510. With an additional allowance for a potentially low estimate on this figure, I have budgeted $8,020 monthly for two shifts in general machine electricity consumption. Collectively, these crucial, major expenses, when added to my monthly mortgage/loan payment and other expenses listed above in my monthly budget, cause my monthly operating expenses to total $31,351. If I

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manufacture 260,000 collapsible spoons monthly, each spoon will cost about $0.1206, or just over twelve cents each. Selling each spoon at $0.14 will guarantee a profit of at least $0.015 per spoon, which becomes $45,000 per year when multiplied by three million, the number of spoons I will be capable of manufacturing and plan to sell in a year. Currently, the heavy-duty ordinary plastic cutlery's price range spans at least that of the verifiable price examples $0.07 and $0.17, so this price is not unreasonable, especially considering the fact that my innovative collapsible spoon would probably be considered more valuable than ordinary plastic spoons.

FYE 2010 Budget

Projected for an entire year in the same proportions as the my monthly operational costs, my first yearly expenses will be $376,212--comprised of $173,040 in personnel salaries and $203,172 in other expenses, of which $22,632 will be my cumulative mortgage payment for the year. In the production and sale of my product, I expect to not only meet these expenses, but also gain a profit of $45,000.

Alternative Options for More Optimal Production

In the course of my research, I have found other possible methods of operation, extensions, and improvements which could reduce the price of my product or increase its appeal, thus enhancing the probability or quantity of my business's success. Briefly, these ideas include the following: Run three shifts instead of two Automate the process by purchasing more machines instead of hiring so many workers (more capital, fewer employees) Add more machines Use recycled plastic Manufacture collapsible knives for peanut butter, jam, and similar packaged foods' lids Add coloring to the plastic

Future Funding Needs

As indicated by the list of possible extensions, as business grows with increased demand, additional business pursuits and development could be pursued. Additional machines could be purchased, necessitating the hiring of a few more employees or a switching to automation of the process by purchasing and using machines instead of manual labor for activities such as loading the plastic into the machines.