Coffee Export Business Plan

Table of Contents
1.0 Executive Summary .................................................................................................................... 1

Chart: Highlights .......................................................................................................................... 1
1.1 Objectives.................................................................................................................................... 2
1.2 Mission .......................................................................................................................................... 2
1.3 Keys to Success ........................................................................................................................ 2
2.0 Company Summary ..................................................................................................................... 2
2.1 Company Ownership ............................................................................................................... 2
2.2 Company History ...................................................................................................................... 2
Table: Past Performance ........................................................................................................... 3
Chart: Past Performance ........................................................................................................... 4
2.3 Company Locations and Facilities ...................................................................................... 4
3.0 Products ........................................................................................................................................... 4
3.1 Competitive Comparison ....................................................................................................... 4
3.2 Sales Literature ......................................................................................................................... 5
3.3 Sourcing ....................................................................................................................................... 5
3.4 Technology .................................................................................................................................. 5
3.5 Future Products ......................................................................................................................... 5
4.0 Market Analysis Summary ........................................................................................................ 5
4.1 Market Segmentation ............................................................................................................. 6
Table: Market Analysis ............................................................................................................... 6
Chart: Market Analysis (Pie) .................................................................................................... 7
4.2 Industry Analysis ...................................................................................................................... 7
4.2.1 Competition and Buying Patterns .............................................................................. 7
4.2.2 Main Competitors ............................................................................................................. 8
4.2.3 Industry Participants ....................................................................................................... 8
4.2.4 Distribution Patterns ....................................................................................................... 8
5.0 Strategy and Implementation Summary ............................................................................ 9
5.1 Competitive Edge ..................................................................................................................... 9
5.2 Strategy Pyramid...................................................................................................................... 9
5.3 Marketing Strategy .................................................................................................................. 9
5.3.1 Promotion Strategy ....................................................................................................... 10
5.3.2 Distribution Strategy ..................................................................................................... 10
5.3.3 Marketing Programs ...................................................................................................... 10
5.3.4 Positioning Statement .................................................................................................. 10
5.3.5 Pricing Strategy............................................................................................................... 10
5.4 Sales Strategy ......................................................................................................................... 11
5.4.1 Sales Forecast.................................................................................................................. 11
Table: Sales Forecast ........................................................................................................... 11
Chart: Sales Monthly ............................................................................................................ 12
Chart: Sales by Year ............................................................................................................. 12
5.4.2 Sales Programs ............................................................................................................... 12
5.5 Strategic Alliances.................................................................................................................. 13
5.6 Milestones.................................................................................................................................. 13
Table: Milestones ....................................................................................................................... 13
Page 1
Table of Contents
Chart: Milestones ....................................................................................................................... 13

6.0 Management Summary ............................................................................................................ 13
6.1 Management Team ................................................................................................................ 14
6.2 Management Team Gaps..................................................................................................... 14
6.3 Personnel Plan ......................................................................................................................... 15
Table: Personnel ......................................................................................................................... 15
7.0 Financial Plan ............................................................................................................................... 15
7.1 Break-even Analysis .............................................................................................................. 16
Chart: Break-even Analysis ................................................................................................... 16
Table: Break-even Analysis.................................................................................................... 16
7.2 Important Assumptions ....................................................................................................... 17
Table: General Assumptions .................................................................................................. 17
7.3 Key Financial Indicators ....................................................................................................... 17
Chart: Benchmarks.................................................................................................................... 17
7.4 Projected Profit and Loss ..................................................................................................... 18
Chart: Gross Margin Monthly................................................................................................. 18
Chart: Gross Margin Yearly .................................................................................................... 18
Table: Profit and Loss ............................................................................................................... 19
Chart: Profit Monthly ................................................................................................................ 20
Chart: Profit Yearly .................................................................................................................... 20
7.5 Projected Cash Flow .............................................................................................................. 21
Table: Cash Flow ........................................................................................................................ 21
Chart: Cash .................................................................................................................................. 22
7.6 Projected Balance Sheet ...................................................................................................... 23
Table: Balance Sheet ................................................................................................................ 23
7.7 Business Ratios ....................................................................................................................... 23
Table: Ratios ................................................................................................................................ 24
Table: Sales Forecast ......................................................................................................................... 1
Table: Personnel ................................................................................................................................... 2
Table: Personnel ................................................................................................................................... 2
Table: Profit and Loss ......................................................................................................................... 3
Table: Profit and Loss ......................................................................................................................... 3
Table: Cash Flow .................................................................................................................................. 5
Table: Cash Flow .................................................................................................................................. 5
Table: Balance Sheet .......................................................................................................................... 6
Table: Balance Sheet .......................................................................................................................... 6
Table: General Assumptions ............................................................................................................ 7
Table: General Assumptions ............................................................................................................ 7
Page 2
Silvera and Sons, Ldta
1.0 Executive Summary
Silvera & Sons prepares green Arabica coffee beans grown in Brazil for exportation to American
specialty roasters and sells to wholesalers on the Brazilian market. We will expand production
capacity from 72,000/60kg bags per year to 120-160,000/60kg per year. Our coffee stands out
from that of the competition. We prepare the top five percent, in terms of quality standards, of
all Arabica beans on the market. Our customers seek this product as it provides them with a
point of differentiation to specialty roasters. In the past six years, demand for our coffee has
exceeded the amount we are able to supply and we have been forced to refuse requests for
larger shipments.
We predict growth of thirty percent in the first year with sales exceeding ($BRL) expectations.
In year three the plant will run at maximum capacity and based on the current price of coffee
we expect excellent profits ($BRL). We have positive indicators from current importers that the
additional amount of beans will be sold.
Our keys to success are:
1. Establishing and maintaining working relationships and contractual agreements with

American importers and Brazilian coffee brokers and wholesalers.
2. Bringing the new facility to maximum production within three years of operation.
3. Increasing our profit margin with the use of improved technology in the new facility.
4. Effectively communicating to current and potential customers, through targeted efforts, our
position as a differentiated provider of the highest quality Arabica beans in the world.
Chart: Highlights
Page 1
1.1 Objectives
The objectives of Silvera & Sons:
 Increase production and sale from 78,000/60kg bags per year to approximately
100,000/60kg bags per year in the first year of operation at the proposed facility and reach
maximum capacity of 120,000/60kg bags per year by year three.
 Increase sales substantially in the first full year of operation.
 Establish strategic relationships with 10-15 American importers in Los Angeles, San
Francisco, & Seattle.
 Increase gross margins in the next three years.
1.2 Mission
Silvera & Sons Ltda seeks to serve coffee importers and enthusiasts by exceeding minimum
acceptable quality standards and by providing the highest quality product at the lowest possible
price. We value our relationships with current and future customers and hope to communicate
our appreciation to them through our outstanding, guaranteed product quality, personal
service, and efficient delivery. Our commitment to our customers and the country of Brazil will
be reflected through honest and responsible business.
1.3 Keys to Success
The keys to success for Silvera & Sons are:
 Establishing and maintaining working relationships and contractual agreements with

American importers and Brazilian coffee brokers and wholesalers.
 Bringing the new facility to maximum production within three years of operation.
 Increasing our profit margin with the use of improved technology in the new facility.
 Effectively communicating, to current and potential customers, our position as a
differentiated provider of the highest quality Arabica beans in the world.
2.0 Company Summary
Silvera & Sons buys and prepares raw coffee in parchment (pergamino), or coffee in its post-
harvest stage. The finished product, green Arabica coffee beans are packaged in 60kg sacks
and sold on the U.S. and Brazilian market. Our customers are primarily American importers and
Brazilian wholesalers who provide high-quality beans to the specialty roasting market.
2.1 Company Ownership
Silvera & Sons Ltda. is a private, family owned preparer and exporter of Brazilian-grown, green
Arabica coffee beans. It is owned and operated by Marco Silvera Sr. and his sons, Marco Silvera
Jr. and Antonio Silvera.
2.2 Company History
Silvera & Sons is in its sixth year of operation. The current plant has been in operation for 15
years and for 12 of those years was managed by Marco Silvera Sr. who was then an employee
of the former owner, Cafe Fina. Since the plant was purchased, Silvera & Sons has maintained
maximum production and sales. It is currently operating at maximum capacity.
Page 2
Table: Past Performance
Past Performance
1996 1997 1998
Sales $16,262,532 $17,304,066 $18,345,600
Gross Margin $2,439,380 $2,630,218 $2,814,215
Gross Margin % 15.00% 15.20% 15.34%
Operating Expenses $12,196,899 $12,631,968 $13,346,424
Inventory Turnover 12.00 12.00 12.00
Balance Sheet
1996 1997 1998
Current Assets
Cash $0 $0 $994,260
Inventory $0 $0 $355,200
Other Current Assets $0 $0 $243,936
Total Current Assets $0 $0 $1,593,396
Long-term Assets
Long-term Assets $0 $0 $521,650
Accumulated Depreciation $0 $0 $100,000
Total Long-term Assets $0 $0 $421,650
Total Assets $0 $0 $2,015,046
Current Liabilities
Accounts Payable $0 $0 $8,435
Current Borrowing $0 $0 $58,000
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $0 $0 $66,435
Long-term Liabilities $0 $0 $402,000

Total Liabilities $0 $0 $468,435
Paid-in Capital $0 $0 $525,000

Retained Earnings $0 $0 $85,985
Earnings $0 $0 $935,626
Total Capital $0 $0 $1,546,611
Total Capital and Liabilities $0 $0 $2,015,046
Other Inputs
Payment Days 0 0 60
Page 3
Chart: Past Performance
2.3 Company Locations and Facilities
The Silvera & Son's main warehouse and office is located in Ouro Fino. The warehouse has the
capacity to prepare approximately 6,000 60kg bags of exportable coffee beans. The proposed
new warehouse and preparation facility site is also located in Ouro Fino. The new facility will be
3.500m2 and will have 30 selecting machines with capacity to prepare 40,000 bags for
exportation and 80,000 bags for storage. The proposed facility will also handle shipping.
3.0 Products
Silvera & Sons deal exclusively in green coffee, grown in the southern states of Brazil and one-
hundred percent Arabica. Beans in parchment are purchased directly from growers and are de-
husked and packaged into 60kg sacks in the Silvera & Sons' plant. The final product is suitable
for sale and exportation.
3.1 Competitive Comparison
In order to differentiate our product, coffee, which is a commodity, from the product offering of
competitors, all beans are guaranteed fresh and are shipped within seven days of preparation.
In addition all beans are sorted at ninety-five percent screen 18 and above compared to the
industry standard ninety percent screen of 17 and above. The beans shipped by Silvera & Sons
are therefore larger than most and are guaranteed fresh. In addition, all of the farms from
which Silvera & Sons purchases coffee adhere to environmentally sound farming practices and
avoid the use of pesticides and chemicals in crop production.
There are approximately ten competitors who offer a product similar to ours. Our research
indicates that with the additional capacity we would become one of the top four, in terms of
quantity, providers. We have the advantage of established distribution channels and reputation.
In addition, improvements to our marketing efforts will further separate us from the larger
market and from our close competitors.
Page 4
3.2 Sales Literature
Silvera & Sons currently works with two importers in the United States who handle all of our
shipments. Likewise, we have dealt with the same Brazilian wholesalers, for internal sales, each
year. Sales to this point have been handled through personal selling. Additional sales literature
will include a website, direct mail to specialty roasters and importers, and print advertising in
several trade publications including Coffee Times, a monthly publication which targets American
business dealing with issues relevant to the coffee industry.
3.3 Sourcing
Both the existing and the proposed facilities are ideally located in Ouro Fino, in the state of
Minas Gerais. Minas Gerais is the largest coffee producing state in Brazil and beans produced in
the region are of the highest quality. With additional financing, we would be able to buy larger
volumes at lower prices. We now buy from one or more of six private growers or grower
cooperatives. Contracts are secured six months in advance of harvest.
3.4 Technology
Improvements in technology will include the use of partially automated selecting machines
which will allow for increased production capacity with a lower machine-to-operator ratio than
we currently employ. Additional storage capabilities will decrease shipping charges and will
reduce the need for permanent shipping employees by thirty-five percent. High-technology
information system upgrades will improve all aspects of business, especially inventory control,
tracking of shipments, and communication with clients in import countries.
3.5 Future Products
Alternative to the Arabica bean, Coffea Robusta, though it shares some similarities with the
Arabica bean, is very different. Coffea Robusta is grown at lower elevations and has a higher
yield per plant as well as being more resistant to disease. It also has up to twice the caffeine
level as it's cousin the Arabica Bean. Due to the lower cost and larger market amount of
Robusta coffee, it is found primarily on supermarket shelves. The Arabica species grows at
much higher elevations, better soil rich areas, and is the source of the worlds finest coffees.
By providing the finest species of coffee, Silvera & Sons has taken the first step towards a
differentiated product. To further distinguish our coffee, we adhere to higher quality standards
than approximately ninety-five percent of the market. In addition, all of our beans are of the
Bourbon Santos variety. The "Bourbon" strain is considered one of the finest Brazil has to offer.
It is grown in the mountains surrounding Sao Paulo and is highly sought after by specialty
roasters from around the world. We have assumed the position of a specialized provider of this
exceptional coffee. Our customers, American and Brazilian specialty roasters, recognize Silvera
& Sons for our ability to provide the type of beans they require to produce award winning
coffee.
4.0 Market Analysis Summary
Coffee is the second largest commodity market next to oil and Brazil has remained the largest
producer of coffee in the world for two centuries. Imports of Arabica coffee in the United States
have increased ninety-four percent in the past five years and consumption of coffee within
Brazil has seen similar increases. In addition, demand for green coffee is above the market
clearing level, and market price and crop yield estimates are at an all time high.
Page 5
The increase in the number of independent specialty roasters in the United States and Brazil
has contributed to and is an indicator of the increased demand for coffee. Within the larger
coffee market is our target market is the specialty roaster. These discerning customers want
the highest quality coffee beans. They serve the growing "gourmet" coffee market and are
represented by large American companies like Starbucks and thousands of smaller specialty
roasters. The Arabica bean is considered to be the best in the world and as such, the demand
for Arabica beans is high on the specialty roaster market. Specialty roasters are willing to pay
more for Arabica beans and attempt to distinguish themselves via the characteristics of the
bean they use i.e. the location in which it was grown, farming methods, bean size, etc. The final
consumer is relatively price insensitive if the coffee is good, has won awards, or is compatible
with a popular trend. We estimate that specialty roasting in the U.S. alone is a ($USD) one-
billion market.
4.1 Market Segmentation
The potential customer groups for Silvera & Sons are:
 American importers of green Arabica beans: Market research suggests that there are
approximately 200 importers of green Arabica coffee on the West and East Coasts of the
United States that would be able to handle the quantities of our shipments and are in our
target market . Combined, they import a total of four to five million/60kg bags of Brazilian
coffee per year.
 Brazilian green coffee wholesalers: This market serves as a safety valve for our export
business. By maintaining relationships with Brazilian wholesalers we have an alternative
market with established distribution channels.
 Brazilian specialty roasters: As we move towards maximum capacity we will plan to more
aggressively target this audience. We hope to eventually reduce transactions with
wholesalers and capture their value-added costs as profit. We anticipate that this effort will
begin approximately four years into operation of the new facility.
Table: Market Analysis
Market Analysis
1999 2000 2001 2002 2003
Potential Customers Growth CAGR
U.S. Importers (60kg bags) 26% 70,140 88,376 111,354 140,306 176,786 26.00%
Brazilian Wholesalers (60kg 26% 30,060 37,876 47,724 60,132 75,766 26.00%
bags)
Total 26.00% 100,200 126,252 159,078 200,438 252,552 26.00%
Page 6
Chart: Market Analysis (Pie)
4.2 Industry Analysis
Coffee has been a growing industry for the past five years. The most notable growth has been
in the American market where imports have increased almost one-hundred percent and the
market price has nearly doubled. The number of specialty roasters has increased from a handful
of well known companies to thousands of independent entities. There is a constant struggle
within this market to produce the best coffee and serve one or more niches within the larger
market. Brazilian coffee producers and exporters have made great efforts to improve
agricultural techniques, processing methods, and distribution in order to better serve this
growing market. Demand for Brazilian coffee is currently greater than supply.
4.2.1 Competition and Buying Patterns
The purchase decision for our customer is based on trust in our process and bean selection. We
have established relationships with our customers which extend beyond that of the
buyer/seller. The Silvera & Sons label means that the product has been chosen and prepared
with the highest quality standards in mind. Our beans are priced up to nine percent higher than
similar products. Our customers are willing to pay more for our product because they are
familiar with us and trust in the quality of our beans. This is the result of their success in the
marketplace with our product.
Page 7
4.2.2 Main Competitors
There are approximately 150 exporters of green Arabica beans in Brazil. According to the
Brazilian Coffee Exporters Association, ABECAFE, fifty percent (50%) of all green coffee exports
come from their 45 members. Approximately eighty percent (80%) of these exports come from
20 ABECAFE members. Market contributions of individual exporters are held in strict confidence
and are not available to the public. However, based on this information and given the large
number of remaining exporters not affiliated with ABECAFE who account for the remaining sixty
percent (60%) of all exports, we assume that many of the largest competitors are amongst the
ABECAFE members. They are:
Agro Food Cooxupe Mitsui Alimentos

Allcoffee Cotia Trading Nicchio Cafe
Bramazonia Custudio Forzza Nova America
Cafe do Ponto Esteve N.S. da Guia
Cafeeira Carolina Eurobrasil Ottoni & Filhos
Cargill Agricola Fazenda da Serra Porto de Santos
Casas Sendas Guaxupe Ref. Oleos Brasil
Cocam Inter-Continental R&G
Comexim JR Exportadora Rio Doce
Comercial Ben. MC Coffee Tres Coracoes
Compel Melitta Volcafe
4.2.3 Industry Participants
Silvera & Sons deals exclusively in the exportation and sale of green Arabica beans. There are
approximately 150 Brazilian businesses in this market. However, approximately 30 companies
account for approximately eighty percent of the total amount of green Arabica exports. In
addition many of these companies prepare, export and sell, to the Brazilian market, other
coffee products. Additional products include:
 Green Robusta (Conillon) beans: The Robusta bean is produced in far less quantity, in
Brazil, than the Arabica and is considered an inferior species. The Robusta market
represents less than ten percent of all coffee produced in Brazil.
 Soluble coffee products: These are instant (water soluble) coffees and are either
decaffeinated or not. Sales of soluble coffee products account for approximately twelve
percent of the total market.
 Roasted & Ground coffee: Approximately eighty-five percent of all roasted and ground
coffee (decaffeinated and non-decaffeinated) goes to internal consumption and represents
approximately twenty-seven percent of the total coffee market.
 Primary competitors include: Golden Brazil, Bramazonia, Comexim, and Nicchio Cafe.
4.2.4 Distribution Patterns
All of the coffee produced for exportation by Silvera & Sons and approximately eighty-five
percent of all coffee produced for exportation in Brazil is shipped from Porto de Santos.
Prepared coffee is shipped via rail and/or truck from the Silvera & Sons plant in Ouro Fino to
Porto de Santos. From the port it is then shipped, in 40 foot containers to the port of Miami via
cargo ship. Distribution charges are assumed by Silvera & Sons up to the arrival of the
Page 8
shipments in Miami whereupon importers assume responsibility, as detailed in contract, of the

shipment and additional distribution charges.
5.0 Strategy and Implementation Summary
Silvera & Sons strategy is to expand production capabilities in order to fulfill the requests of
importers with whom we currently deal for larger orders which we are unable to currently fulfill.
In addition Silvera & Sons seeks to establish additional contracts with importers on the West
Coast of the United States and increase the volume of green coffee sold on the Brazilian
market. We intend to first maximize quantity of coffee sold within existing channels and second,
establish additional accounts through targeted marketing efforts.
5.1 Competitive Edge
Silvera & Sons competitive edge comes from the advantage of having established relationships
with American importers, and Brazilian coffee growers, green coffee brokers and wholesalers.
Silvera & Sons has received affirmation of the demand for their product in the form of requests
from importers for larger product shipments. Ours is a superior product offering because of the
larger average size of the bean and because we purchase from growers who rely on the use of
chemicals and pesticides less than two percent of the time. In addition, prompt preparation and
shipment provides importers with a product that is up to one month fresher than beans sold by
many exporters.
5.2 Strategy Pyramid
Our main strategy is to communicate the unique and desired attributes of our coffee to larger
segments of the American and Brazilian markets. We sell a superior product, yet one that can
be considered a commodity. It is therefore important that we effectively communicate the
unique aspects which make it ideally suited for a niche market.
The unique aspects of our products include superior product selection and preparation, quality
assurance, and efficient distribution. These are things we have done since we started doing
business. The tactics we will use to communicate these strengths include, personal selling,
targeted print advertising, and improved communication capabilities via information system
improvements and a sophisticated website.
As tactics below the pyramid, we have identified three specialty publication in the United States
and two in Brazil in which we will run print ads. We also plan to increase personal selling efforts
to additional American importers. Part of the personal selling will include invitations to
importers to visit our facilities, at our expense.
5.3 Marketing Strategy
Silvera & Sons marketing strategy will include the use of targeted print media advertising and
direct selling to importers in the United States who provide green coffee to specialty roasters.
We will capitalize on existing relationships with importers who have stated their willingness to
contact West Coast affiliates and recommend Silvera & Sons coffee. We have positioned
ourselves as a differentiated provider of the highest quality Arabica beans. The primary goal of
all marketing efforts will be to communicate this to existing and potential customers.
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5.3.1 Promotion Strategy
Relationships are key to success in the export business. Importers in Florida have on several
occasions visited the Silvera & Sons facility, family home, and farms from which coffee is
purchased. Additional accounts and contacts with West Coast importers have all been
established and maintained through personal contact. Personal selling will remain our most
important means of promotion. Marco Silvera Jr. will continue to lead this effort. In addition to
personal selling Silvera & Sons has identified several specialty publications within which print
advertisements will run. Direct mail, in the form of personal letters will also be used to
communicate with existing and potential clients. Our budget for promotion activities is as
follows:
 Personal Selling which includes phone expenses, travel for Silvera & Sons employees and for
importers who we invite to Brazil: ($BRL) 35,000 annually.
 Print Advertising in three specialty publications and direct mail: ($BRL) 12,000 monthly.
 World Wide Web presence: ($BRL) 125,000 to produce a new site and $2,500 annually to
maintain the site.
5.3.2 Distribution Strategy
Distribution is one of the greatest challenges faced by Silvera & Sons. The distribution system
of Brazil is largely outdated and inefficient. Moreover, taxes, specifically excise taxes are high.
Distribution costs for internal sales are absorbed by the customer but distribution costs for
exports are absorbed by us. Increasing the volume of our exports makes us eligible to receive
reduced fees and helps ensure that trucks and rail cars are running at maximum capacity.
5.3.3 Marketing Programs
Our most important marketing program is an increase in personal selling combined with
targeted direct mail and print advertising. Marco Silvera Jr. will be responsible, with a budget of
($BRL) 35,000 and a milestone date of May 30, 1999. The program is intended to establish
contractual agreements with 10 additional importers, increase brand awareness of our product
in the United States, and communicate our position as a provider of the highest quality green
Arabica beans on the market.
Another key marketing program is the development of a sophisticated Website. The goal of this
program is to increase our presence on the world wide web and provide additional means of
communication and customer data collection. The website will cost ($BRL) 125,000.
5.3.4 Positioning Statement
For American importers of Brazilian coffee who use our coffee to supply specialty roasters,
Silvera & Sons coffee beans are the highest quality and largest beans available. Unlike many
exporters, our beans exceed the minimum acceptable quality standards and are shipped within
one week of preparation to ensure the largest and freshest beans on the market. Our products
are perfectly suited for the specialty roasting market which constantly strives to offer award
winning coffee.
5.3.5 Pricing Strategy
Because Silvera & Sons adheres to higher quality standards, the price of our coffee is slightly
higher (four to nine percent) than the market average. The import market largely determines
Page 10
the price of imported coffee in the United States. Beans that do not meet Silvera & Sons quality
standards are resold on the Brazilian market at the current market price. Green coffee, on the
import market, now sells for US$ 213.56/60kg bag. According to Silvera & Sons pricing
strategy, Silvera & Sons coffee would sell for approximately US$ 224/60kg bag. Importers have
to this point been willing to pay the additional cost.
5.4 Sales Strategy
Silvera & Sons strategy focuses first on meeting the increased demand from importers with
whom we have established relationships for larger orders. These importers are critical to our
ability to acquire additional accounts on both the East and West coasts of the United States
without having to spend a great deal on sales efforts. Secondly we will focus on increasing the
volume, while maintaining the percentage of sales, of beans sold to the internal Brazilian
market. When we have reached maximum sales to existing channels we can then shift the
majority of our focus to securing additional import accounts.
5.4.1 Sales Forecast
The following chart and table show our present sales forecast. We project healthy growth in
sales in 1999, a slightly smaller increase again in 2000, and reach maximum for production
capacity in 2001 representing a large growth over the previous year.
Table: Sales Forecast
Sales Forecast
1999 2000 2001
Unit Sales
Import and Export 100,200 120,000 160,000
Other 0 0 0
Total Unit Sales 100,200 120,000 160,000
Unit Prices 1999 2000 2001

Import and Export $262.08 $275.18 $288.29
Other $0.00 $0.00 $0.00
Sales
Import and Export $26,260,416 $33,021,600 $46,126,400
Other $0 $0 $0
Total Sales $26,260,416 $33,021,600 $46,126,400
Direct Unit Costs 1999 2000 2001

Import and Export $212.00 $222.60 $233.20
Other $0.00 $0.00 $0.00
Direct Cost of Sales

Import and Export $21,242,400 $26,712,000 $37,312,000
Other $0 $0 $0
Subtotal Direct Cost of Sales $21,242,400 $26,712,000 $37,312,000
Page 11
Chart: Sales Monthly
Chart: Sales by Year
5.4.2 Sales Programs
Personal selling: Through personal contact we need to confirm in writing orders for larger
quantities of our product from American importers and Brazilian wholesalers. In addition we
need to establish sales agreements with at least six, possibly ten, additional American
importers. Marco Silvera Jr. is responsible and the due date is May 30, with a budget of ($BRL)
24,000.
Page 12
5.5 Strategic Alliances
Our most valued alliances are those we have developed with American importers. They have
the ability and willingness to purchase larger quantities of our products and recommend us to
other importers. Additional alliances with trucking contractors and the Porto de Santos Cafe
Commission are currently established.
5.6 Milestones
The accompanying table shows specific milestones, with responsibilities assigned, dates, and
budgets. The milestones represented in this plan are those which we have determined to be the
most important.
Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department

Secure Financing 1/1/1999 2/1/1999 $12,000 M. Silvera Sr. Finance
Establish Import Accounts 1/1/1999 5/1/1999 $18,000 M. Silvera Jr. Sales & Marketing
Increase Production 1/1/1999 9/1/1999 $18,000 A Silvera Production & Shipping
Hire Intl. Legal & Finance Specialist 1/1/2000 3/1/2000 $35,000 TBA Administration
Totals $83,000
Chart: Milestones
6.0 Management Summary
Silvera & Sons management consists of four full-time employees. Additional assistance is
acquired on a part-time basis and/or through the use of consultants, specifically in legal
matters. Detailed descriptions are found in the following section.
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6.1 Management Team
Silvera & Sons is organized into three functional areas: product sourcing, sales, and marketing;
production and shipping; and finance and administration.
Marco Silvera Sr: CEO/President in charge of finance and administration. Marco Silvera Sr., 57
has worked in the coffee export business for 30 years. Before starting Silvera & Sons he was
the Chief Financial Officer and general manager of the Cafe Fino coffee company. He began
working for Cafe Fino after he finished an accounting degree at the University of Southern
California. The current Silvera & Sons plant was formerly owned by Cafe Fino and was sold to
Mr. Silvera who had decided to "retire" and wanted to run a small business. Cafe Fino had
purchased larger facilities and no longer needed the plant.
Marco Silvera Jr: Vice president in charge of product sourcing, sales, and marketing. Marco
Silvera Jr., 32 completed his MBA at Syracuse University and worked for several years on the
Brazilian stock and commodities market as a broker. He later took a position as an International
Sales and Marketing Representative for a major agricultural brokerage and supply firm in Sao
Paulo. He is expected to succeed his father as CEO of Silvera & Sons Ltda.
Antonio Silvera: Vice president in charge of production and shipping. Antonio Silvera, 29
worked as a civil engineer for two years for the Brazilian government after completing an
engineering degree at the University of Brazil, Sao Paulo. He is responsible for the supervision
of all plant employees.
Additional Management:
Ralph Henzo, CFO:
Gracie, Renoldo, & Fertado Attorneys at Law, Sao Paulo.
6.2 Management Team Gaps
We currently lack a full-time professional who can deal with the changing legal and financial
aspects of international business. We have relied on legal consultants but are now analyzing the
possibility of adding an additional position to deal exclusively with international issues. In
addition, as we continue to grow and hire more personnel, we may hire a controller.
Page 14
6.3 Personnel Plan
The personnel plan requires an increase in plant employees from 11 to 17-20 within the next
three years. Additional employees will also be added to increase administrative and accounting
support. One additional employee will be added to the sales and marketing division. We will
retain all current employees as they will not have to relocate.
Table: Personnel
Personnel Plan
1999 2000 2001
Production Personnel
Antonio Silvera, VP Production $38,400 $41,088 $43,964
Plant Employees $219,996 $228,796 $237,948
Other $42,000 $47,000 $50,000
Subtotal $300,396 $316,884 $331,912
Sales and Marketing Personnel

Marco Silvera Jr, VP Sales/Mktg. $45,000 $48,150 $51,521
Other $180,492 $80,000 $85,000
Subtotal $225,492 $128,150 $136,521
General and Administrative Personnel

Marco Slivera Sr, CEO $50,400 $53,928 $57,703
Ralph Henzo, CFO $42,000 $44,940 $44,940
Admin/Acctg. Staff $9,000 $9,360 $44,734
Other $18,000 $22,000 $26,000
Subtotal $119,400 $130,228 $173,377
Other Personnel
Name or Title or Group $0 $0 $0
Subtotal $0 $0 $0
Total People 15 16 17
Total Payroll $645,288 $575,262 $641,810
7.0 Financial Plan
We want to finance growth through a combination of long-term debt and cash flow. Purchase of
the larger facility and equipment will require approximately eighty percent debt financing.
Additional technology will be primarily financed with cash-flow. Inventory turnover must remain
at or above four or we run the risk of backing up orders and jeopardizing our freshness
guarantees. We have had no problems with accounts receivable and we expect to maintain our
collection days at 30 with thirty percent of sales on credit.
In addition, we must achieve gross margins of thirty-five percent and hold operating costs no
more than sixty-five percent of sales.
Page 15
7.1 Break-even Analysis
The break-even analysis shows that Silvera & Sons has sufficient sales strength to remain
viable. Our per month break-even point projections are detailed in the following table and
chart.
Chart: Break-even Analysis
Table: Break-even Analysis
Break-even Analysis
Monthly Units Break-even 2,049

Monthly Revenue Break-even $537,078
Assumptions:
Average Per-Unit Revenue $262.08
Average Per-Unit Variable Cost $212.00
Estimated Monthly Fixed Cost $102,629
Page 16
7.2 Important Assumptions

Important assumptions for this plan are found in the following table. These assumptions largely
determine the financial plan and require that we secure additional financing.
Table: General Assumptions
General Assumptions
1999 2000 2001
Plan Month 1 2 3
Current Interest Rate 14.00% 14.00% 14.00%
Long-term Interest Rate 9.00% 9.00% 9.00%
Tax Rate 47.00% 47.00% 47.00%
Other 0 0 0
7.3 Key Financial Indicators
The most important factor to Silvera & Sons anticipated growth is the procurement of necessary
financing. The size of the orders currently requested by importers are larger than what can be
produced given our present plant capacity.
The following chart shows changes in key financial indicators: sales, gross margin, operating
expenses, collection days, and inventory turnover. The growth in sales goes above thirty
percent in the first year, twenty percent in second, and back to thirty percent in year three
after which it will settle. We expect to increase gross margin but our projections show a decline
in the first two years following the purchase of the new facility. This is due to the facilities not
being run at maximum capacity. The projections for collection days and inventory turnover
show that we expect a decline in these indicators.
Chart: Benchmarks
Page 17
7.4 Projected Profit and Loss
We expect to close the first year of production in the new facility with quite exempary ($BRL)
sales and to increase our sales in the second and third years. Net earnings will be above
industry average ($BRL).
Chart: Gross Margin Monthly
Chart: Gross Margin Yearly
Page 18
Table: Profit and Loss
Pro Forma Profit and Loss

1999 2000 2001
Sales $26,260,416 $33,021,600 $46,126,400
Direct Cost of Sales $21,242,400 $26,712,000 $37,312,000
Production Payroll $300,396 $316,884 $331,912
Other Costs of Sales $300,000 $345,000 $410,000
Total Cost of Sales $21,842,796 $27,373,884 $38,053,912
Gross Margin $4,417,620 $5,647,716 $8,072,488

Gross Margin % 16.82% 17.10% 17.50%
Operating Expenses
Sales and Marketing Expenses

Sales and Marketing Payroll $225,492 $128,150 $136,521
Advertising/Promotion $144,000 $165,000 $165,000
Travel $21,000 $22,500 $24,000
Other Sales and Marketing Expenses $24,000 $26,500 $28,500
Total Sales and Marketing Expenses $414,492 $342,150 $354,021
Sales and Marketing % 1.58% 1.04% 0.77%
General and Administrative Expenses

General and Administrative Payroll $119,400 $130,228 $173,377
Marketing/Promotion $0 $0 $0
Depreciation $216,000 $216,000 $216,000
Leased Equipment $50,400 $50,400 $50,400
Utilities $36,000 $36,000 $36,000
Insurance $72,000 $75,000 $78,000
Rent $305,250 $300,000 $300,000
Payroll Taxes $0 $0 $0
Other General and Administrative Expenses $0 $0 $0
Total General and Administrative Expenses $799,050 $807,628 $853,777
General and Administrative % 3.04% 2.45% 1.85%
Other Expenses:
Other Payroll $0 $0 $0
Consultants $18,000 $24,000 $30,000
Other Expenses $0 $0 $0
Total Other Expenses $18,000 $24,000 $30,000
Other % 0.07% 0.07% 0.07%
Total Operating Expenses $1,231,542 $1,173,778 $1,237,798
Profit Before Interest and Taxes $3,186,078 $4,473,938 $6,834,690

EBITDA $3,402,078 $4,689,938 $7,050,690
Interest Expense $269,166 $238,449 $225,191
Taxes Incurred $1,370,949 $1,990,680 $3,106,465
Net Profit $1,545,964 $2,244,809 $3,503,035

Net Profit/Sales 5.89% 6.80% 7.59%
Page 19
Chart: Profit Monthly
Chart: Profit Yearly
Page 20
7.5 Projected Cash Flow
Silvera & Sons expects to manage cash flow over the next three years with the assistance of a
loan supported by the Central Bank of Brazil. This financing assistance is required to provide
the working capital to meet the current needs for the construction of the new production facility
and additional personnel, distribution costs, and other related expenses.
Table: Cash Flow
Pro Forma Cash Flow

1999 2000 2001
Cash Received
Cash from Operations

Cash Sales $26,260,416 $33,021,600 $46,126,400
Subtotal Cash from Operations $26,260,416 $33,021,600 $46,126,400
Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $2,700,000 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $650,000 $650,000
Subtotal Cash Received $28,960,416 $33,671,600 $46,776,400
Expenditures 1999 2000 2001
Expenditures from Operations

Cash Spending $645,288 $575,262 $641,810
Bill Payments $23,678,478 $30,335,893 $42,448,245
Subtotal Spent on Operations $24,323,766 $30,911,155 $43,090,055
Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $57,996 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $305,250 $294,636 $0
Purchase Other Current Assets $60,000 $75,000 $85,000
Purchase Long-term Assets $2,700,000 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $27,447,012 $31,280,791 $43,175,055
Net Cash Flow $1,513,404 $2,390,809 $3,601,345

Cash Balance $2,507,664 $4,898,473 $8,499,818
Page 21
Chart: Cash
Page 22
7.6 Projected Balance Sheet
As shown in the balance sheet in the following table, our net will grow quickly by the end of
1999 and to continue steadily through the end of the plan period. The monthly projections are
in the appendix.
Table: Balance Sheet
Pro Forma Balance Sheet

1999 2000 2001
Assets
Current Assets
Cash $2,507,664 $4,898,473 $8,499,818
Inventory $1,958,880 $3,079,078 $4,777,515
Other Current Assets $303,936 $378,936 $463,936
Total Current Assets $4,770,480 $8,356,487 $13,741,269
Long-term Assets
Long-term Assets $3,221,650 $3,221,650 $3,221,650
Accumulated Depreciation $316,000 $532,000 $748,000
Total Long-term Assets $2,905,650 $2,689,650 $2,473,650
Total Assets $7,676,130 $11,046,137 $16,214,919
Liabilities and Capital 1999 2000 2001
Current Liabilities
Accounts Payable $1,786,801 $2,556,635 $3,572,383
Current Borrowing $4 $4 $4
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $1,786,805 $2,556,639 $3,572,387
Long-term Liabilities $2,796,750 $2,502,114 $2,502,114

Total Liabilities $4,583,555 $5,058,753 $6,074,501
Paid-in Capital $525,000 $1,175,000 $1,825,000

Retained Earnings $1,021,611 $2,567,575 $4,812,383
Earnings $1,545,964 $2,244,809 $3,503,035
Total Capital $3,092,575 $5,987,383 $10,140,418
Total Liabilities and Capital $7,676,130 $11,046,137 $16,214,919
Net Worth $3,092,575 $5,987,383 $10,140,418
7.7 Business Ratios
Standard business ratios are included in the following table. The ratios show an aggressive plan
for growth in order to reach maximum production within three years. Return on investment
increases each year as we bring the new facility to maximum capacity and production. Return
on sales and assets remain strong and cost of goods decreases based upon efficiency
projections. Projections are based on the 1997/98 selling price. Industry Profile is based on
NAICS code 311920, Coffee and Tea Manufacturing.
Page 23
Table: Ratios
Ratio Analysis
1999 2000 2001 Industry Profile
Sales Growth 43.14% 25.75% 39.69% 5.50%
Percent of Total Assets

Inventory 25.52% 27.87% 29.46% 12.43%
Other Current Assets 3.96% 3.43% 2.86% 27.50%
Total Current Assets 62.15% 75.65% 84.74% 60.13%
Long-term Assets 37.85% 24.35% 15.26% 39.87%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 23.28% 23.15% 22.03% 8.46%

Long-term Liabilities 36.43% 22.65% 15.43% 16.54%
Total Liabilities 59.71% 45.80% 37.46% 25.00%
Net Worth 40.29% 54.20% 62.54% 75.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 16.82% 17.10% 17.50% 23.32%
Selling, General & Administrative Expenses 10.94% 10.31% 9.91% 9.39%
Advertising Expenses 0.55% 0.50% 0.36% 2.06%
Profit Before Interest and Taxes 12.13% 13.55% 14.82% 4.36%
Main Ratios
Current 2.67 3.27 3.85 5.32
Quick 1.57 2.06 2.51 3.45
Total Debt to Total Assets 59.71% 45.80% 37.46% 27.13%
Pre-tax Return on Net Worth 94.32% 70.74% 65.18% 12.79%
Pre-tax Return on Assets 38.00% 38.34% 40.76% 17.55%
Additional Ratios 1999 2000 2001

Net Profit Margin 5.89% 6.80% 7.59% n.a
Return on Equity 49.99% 37.49% 34.55% n.a
Activity Ratios
Inventory Turnover 10.91 10.60 9.50 n.a
Accounts Payable Turnover 14.25 12.17 12.17 n.a
Payment Days 27 25 26 n.a
Total Asset Turnover 3.42 2.99 2.84 n.a
Debt Ratios
Debt to Net Worth 1.48 0.84 0.60 n.a
Current Liab. to Liab. 0.39 0.51 0.59 n.a
Liquidity Ratios
Net Working Capital $2,983,675 $5,799,847 $10,168,882 n.a
Interest Coverage 11.84 18.76 30.35 n.a
Additional Ratios
Assets to Sales 0.29 0.33 0.35 n.a
Current Debt/Total Assets 23% 23% 22% n.a
Acid Test 1.57 2.06 2.51 n.a
Sales/Net Worth 8.49 5.52 4.55 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Page 24
Appendix
Table: Sales Forecast
Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Unit Sales
Import and Export 0% 8,700 8,200 8,800 8,300 8,450 8,050 8,000 8,200 8,050 8,000 9,050 8,400
Other 0% 0 0 0 0 0 0 0 0 0 0 0 0
Total Unit Sales 8,700 8,200 8,800 8,300 8,450 8,050 8,000 8,200 8,050 8,000 9,050 8,400
Unit Prices Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Import and Export $262.08 $262.08 $262.08 $262.08 $262.08 $262.08 $262.08 $262.08 $262.08 $262.08 $262.08 $262.08
Other $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Sales
Import and Export $2,280,096 $2,149,056 $2,306,304 $2,175,264 $2,214,576 $2,109,744 $2,096,640 $2,149,056 $2,109,744 $2,096,640 $2,371,824 $2,201,472
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $2,280,096 $2,149,056 $2,306,304 $2,175,264 $2,214,576 $2,109,744 $2,096,640 $2,149,056 $2,109,744 $2,096,640 $2,371,824 $2,201,472
Direct Unit Costs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Import and Export 0.00% $212.00 $212.00 $212.00 $212.00 $212.00 $212.00 $212.00 $212.00 $212.00 $212.00 $212.00 $212.00
Other 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Direct Cost of Sales

Import and Export $1,844,400 $1,738,400 $1,865,600 $1,759,600 $1,791,400 $1,706,600 $1,696,000 $1,738,400 $1,706,600 $1,696,000 $1,918,600 $1,780,800
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $1,844,400 $1,738,400 $1,865,600 $1,759,600 $1,791,400 $1,706,600 $1,696,000 $1,738,400 $1,706,600 $1,696,000 $1,918,600 $1,780,800
Page 1
Appendix
Table: Personnel
Personnel Plan
Production Personnel
Antonio Silvera, VP Production $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200
Plant Employees $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333 $18,333
Other $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Subtotal $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033
Sales and Marketing Personnel

Marco Silvera Jr, VP Sales/Mktg. $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750
Other $15,041 $15,041 $15,041 $15,041 $15,041 $15,041 $15,041 $15,041 $15,041 $15,041 $15,041 $15,041
Subtotal $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791
General and Administrative Personnel

Marco Slivera Sr, CEO $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200
Ralph Henzo, CFO $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Admin/Acctg. Staff $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750
Other $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Subtotal $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950
Other Personnel
Name or Title or Group $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 15 15 15 15 15 15 15 15 15 15 15 15
Total Payroll $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774
Page 2
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss

Sales $2,280,096 $2,149,056 $2,306,304 $2,175,264 $2,214,576 $2,109,744 $2,096,640 $2,149,056 $2,109,744 $2,096,640 $2,371,824 $2,201,472
Direct Cost of Sales $1,844,400 $1,738,400 $1,865,600 $1,759,600 $1,791,400 $1,706,600 $1,696,000 $1,738,400 $1,706,600 $1,696,000 $1,918,600 $1,780,800
Production Payroll $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033 $25,033
Other Costs of Sales $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Total Cost of Sales $1,894,433 $1,788,433 $1,915,633 $1,809,633 $1,841,433 $1,756,633 $1,746,033 $1,788,433 $1,756,633 $1,746,033 $1,968,633 $1,830,833
Gross Margin $385,663 $360,623 $390,671 $365,631 $373,143 $353,111 $350,607 $360,623 $353,111 $350,607 $403,191 $370,639
Gross Margin % 16.91% 16.78% 16.94% 16.81% 16.85% 16.74% 16.72% 16.78% 16.74% 16.72% 17.00% 16.84%
Operating Expenses
Sales and Marketing Expenses

Sales and Marketing Payroll $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791 $18,791
Advertising/Promotion $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
Travel $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750 $1,750
Other Sales and Marketing
$2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Expenses
Total Sales and Marketing
$34,541 $34,541 $34,541 $34,541 $34,541 $34,541 $34,541 $34,541 $34,541 $34,541 $34,541 $34,541
Expenses
Sales and Marketing % 1.51% 1.61% 1.50% 1.59% 1.56% 1.64% 1.65% 1.61% 1.64% 1.65% 1.46% 1.57%
General and Administrative

Expenses
General and Administrative Payroll $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950 $9,950
Marketing/Promotion $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Depreciation $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000
Leased Equipment $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200 $4,200
Utilities $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Insurance $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
Rent $0 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750
Payroll Taxes 9% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other General and Administrative
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Expenses
Total General and Administrative
$41,150 $68,900 $68,900 $68,900 $68,900 $68,900 $68,900 $68,900 $68,900 $68,900 $68,900 $68,900
Expenses
General and Administrative % 1.80% 3.21% 2.99% 3.17% 3.11% 3.27% 3.29% 3.21% 3.27% 3.29% 2.90% 3.13%
Other Expenses:
Other Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Consultants $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Other Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Other Expenses $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Other % 0.07% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07% 0.07% 0.06% 0.07%
Page 3
Appendix
Total Operating Expenses $77,191 $104,941 $104,941 $104,941 $104,941 $104,941 $104,941 $104,941 $104,941 $104,941 $104,941 $104,941
Profit Before Interest and Taxes $308,472 $255,682 $285,730 $260,690 $268,202 $248,170 $245,666 $255,682 $248,170 $245,666 $298,250 $265,698
EBITDA $326,472 $273,682 $303,730 $278,690 $286,202 $266,170 $263,666 $273,682 $266,170 $263,666 $316,250 $283,698
Interest Expense $23,885 $23,621 $23,356 $23,092 $22,827 $22,563 $22,298 $22,034 $21,769 $21,505 $21,240 $20,976
Taxes Incurred $133,756 $109,069 $123,316 $111,671 $115,326 $106,035 $104,983 $109,815 $106,408 $105,356 $130,195 $115,019
Net Profit $150,831 $122,992 $139,058 $125,927 $130,049 $119,572 $118,385 $123,834 $119,992 $118,805 $146,815 $129,703
Net Profit/Sales 6.62% 5.72% 6.03% 5.79% 5.87% 5.67% 5.65% 5.76% 5.69% 5.67% 6.19% 5.89%
Page 4
Appendix
Table: Cash Flow
Pro Forma Cash Flow

Cash Received
Cash from Operations

Cash Sales $2,280,096 $2,149,056 $2,306,304 $2,175,264 $2,214,576 $2,109,744 $2,096,640 $2,149,056 $2,109,744 $2,096,640 $2,371,824 $2,201,472
Subtotal Cash from Operations $2,280,096 $2,149,056 $2,306,304 $2,175,264 $2,214,576 $2,109,744 $2,096,640 $2,149,056 $2,109,744 $2,096,640 $2,371,824 $2,201,472
Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $2,700,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $4,980,096 $2,149,056 $2,306,304 $2,175,264 $2,214,576 $2,109,744 $2,096,640 $2,149,056 $2,109,744 $2,096,640 $2,371,824 $2,201,472
Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Expenditures from Operations

Cash Spending $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774 $53,774
Bill Payments $132,806 $3,668,016 $1,850,946 $2,222,911 $1,867,189 $2,040,313 $1,827,442 $1,898,330 $1,996,185 $1,883,378 $1,911,190 $2,379,772
Subtotal Spent on Operations $186,580 $3,721,790 $1,904,720 $2,276,685 $1,920,963 $2,094,087 $1,881,216 $1,952,104 $2,049,959 $1,937,152 $1,964,964 $2,433,546
Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $4,833 $4,833 $4,833 $4,833 $4,833 $4,833 $4,833 $4,833 $4,833 $4,833 $4,833 $4,833
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750 $27,750
Purchase Other Current Assets $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Purchase Long-term Assets $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000 $225,000
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $421,413 $3,984,373 $2,167,303 $2,539,268 $2,183,546 $2,356,670 $2,143,799 $2,214,687 $2,312,542 $2,199,735 $2,227,547 $2,696,129
Net Cash Flow $4,558,683 ($1,835,317) $139,001 ($364,004) $31,030 ($246,926) ($47,159) ($65,631) ($202,798) ($103,095) $144,277 ($494,657)
Cash Balance $5,552,943 $3,717,626 $3,856,626 $3,492,622 $3,523,653 $3,276,727 $3,229,568 $3,163,937 $2,961,139 $2,858,044 $3,002,321 $2,507,664
Page 5
Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets Starting Balances
Current Assets
Cash $994,260 $5,552,943 $3,717,626 $3,856,626 $3,492,622 $3,523,653 $3,276,727 $3,229,568 $3,163,937 $2,961,139 $2,858,044 $3,002,321 $2,507,664
Inventory $355,200 $2,028,840 $1,912,240 $2,052,160 $1,935,560 $1,970,540 $1,877,260 $1,865,600 $1,912,240 $1,877,260 $1,865,600 $2,110,460 $1,958,880
Other Current Assets $243,936 $248,936 $253,936 $258,936 $263,936 $268,936 $273,936 $278,936 $283,936 $288,936 $293,936 $298,936 $303,936
Total Current Assets $1,593,396 $7,830,719 $5,883,802 $6,167,722 $5,692,118 $5,763,129 $5,427,923 $5,374,104 $5,360,113 $5,127,335 $5,017,580 $5,411,717 $4,770,480
Long-term Assets
Long-term Assets $521,650 $746,650 $971,650 $1,196,650 $1,421,650 $1,646,650 $1,871,650 $2,096,650 $2,321,650 $2,546,650 $2,771,650 $2,996,650 $3,221,650
Accumulated Depreciation $100,000 $118,000 $136,000 $154,000 $172,000 $190,000 $208,000 $226,000 $244,000 $262,000 $280,000 $298,000 $316,000
Total Long-term Assets $421,650 $628,650 $835,650 $1,042,650 $1,249,650 $1,456,650 $1,663,650 $1,870,650 $2,077,650 $2,284,650 $2,491,650 $2,698,650 $2,905,650
Total Assets $2,015,046 $8,459,369 $6,719,452 $7,210,372 $6,941,768 $7,219,779 $7,091,573 $7,244,754 $7,437,763 $7,411,985 $7,509,230 $8,110,367 $7,676,130
Liabilities and Capital Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Current Liabilities
Accounts Payable $8,435 $3,606,760 $1,776,433 $2,160,879 $1,798,931 $1,979,476 $1,764,281 $1,831,660 $1,933,419 $1,820,231 $1,831,254 $2,318,158 $1,786,801
Current Borrowing $58,000 $53,167 $48,334 $43,501 $38,668 $33,835 $29,002 $24,169 $19,336 $14,503 $9,670 $4,837 $4
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $66,435 $3,659,927 $1,824,767 $2,204,380 $1,837,599 $2,013,311 $1,793,283 $1,855,829 $1,952,755 $1,834,734 $1,840,924 $2,322,995 $1,786,805
Long-term Liabilities $402,000 $3,102,000 $3,074,250 $3,046,500 $3,018,750 $2,991,000 $2,963,250 $2,935,500 $2,907,750 $2,880,000 $2,852,250 $2,824,500 $2,796,750
Total Liabilities $468,435 $6,761,927 $4,899,017 $5,250,880 $4,856,349 $5,004,311 $4,756,533 $4,791,329 $4,860,505 $4,714,734 $4,693,174 $5,147,495 $4,583,555
Paid-in Capital $525,000 $525,000 $525,000 $525,000 $525,000 $525,000 $525,000 $525,000 $525,000 $525,000 $525,000 $525,000 $525,000
Retained Earnings $85,985 $1,021,611 $1,021,611 $1,021,611 $1,021,611 $1,021,611 $1,021,611 $1,021,611 $1,021,611 $1,021,611 $1,021,611 $1,021,611 $1,021,611
Earnings $935,626 $150,831 $273,823 $412,881 $538,809 $668,857 $788,429 $906,814 $1,030,648 $1,150,640 $1,269,445 $1,416,261 $1,545,964
Total Capital $1,546,611 $1,697,442 $1,820,434 $1,959,492 $2,085,420 $2,215,468 $2,335,040 $2,453,425 $2,577,259 $2,697,251 $2,816,056 $2,962,872 $3,092,575
Total Liabilities and Capital $2,015,046 $8,459,369 $6,719,452 $7,210,372 $6,941,768 $7,219,779 $7,091,573 $7,244,754 $7,437,763 $7,411,985 $7,509,230 $8,110,367 $7,676,130
Net Worth $1,546,611 $1,697,442 $1,820,434 $1,959,492 $2,085,420 $2,215,468 $2,335,040 $2,453,425 $2,577,259 $2,697,251 $2,816,056 $2,962,872 $3,092,575
Page 6
Appendix
Table: General Assumptions
General Assumptions
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00%
Long-term Interest Rate 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%
Tax Rate 47.00% 47.00% 47.00% 47.00% 47.00% 47.00% 47.00% 47.00% 47.00% 47.00% 47.00% 47.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
Page 7

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Table of Contents

1.0 Executive Summary .................................................................................................................... 1

Chart: Milestones ....................................................................................................................... 13

1.0 Executive Summary

Our keys to success are:

1. Establishing and maintaining working relationships and contractual agreements with

The objectives of Silvera & Sons:

1.3 Keys to Success

The keys to success for Silvera & Sons are:

 Establishing and maintaining working relationships and contractual agreements with

2.0 Company Summary

2.1 Company Ownership

2.2 Company History

Table: Past Performance

Total Assets $0 $0 $2,015,046

Long-term Liabilities $0 $0 $402,000

Paid-in Capital $0 $0 $525,000

Total Capital and Liabilities $0 $0 $2,015,046

Chart: Past Performance

2.3 Company Locations and Facilities

3.1 Competitive Comparison

3.2 Sales Literature

3.5 Future Products

4.0 Market Analysis Summary

4.1 Market Segmentation

The potential customer groups for Silvera & Sons are:

Table: Market Analysis

Chart: Market Analysis (Pie)

4.2 Industry Analysis

4.2.1 Competition and Buying Patterns

4.2.2 Main Competitors

Agro Food Cooxupe Mitsui Alimentos

4.2.3 Industry Participants

4.2.4 Distribution Patterns

shipments in Miami whereupon importers assume responsibility, as detailed in contract, of the

5.0 Strategy and Implementation Summary

5.1 Competitive Edge

5.2 Strategy Pyramid

5.3 Marketing Strategy

5.3.1 Promotion Strategy

5.3.2 Distribution Strategy

5.3.3 Marketing Programs

5.3.4 Positioning Statement

5.3.5 Pricing Strategy

5.4 Sales Strategy

5.4.1 Sales Forecast

Table: Sales Forecast

Unit Prices 1999 2000 2001

Direct Unit Costs 1999 2000 2001

Direct Cost of Sales

Chart: Sales Monthly

Chart: Sales by Year

5.4.2 Sales Programs

5.5 Strategic Alliances

Milestone Start Date End Date Budget Manager Department

6.0 Management Summary

6.1 Management Team

6.2 Management Team Gaps

6.3 Personnel Plan

Sales and Marketing Personnel

General and Administrative Personnel

Total Payroll $645,288 $575,262 $641,810

7.0 Financial Plan

7.1 Break-even Analysis