FINANCING PROPOSAL FOR

B.BROTHERS COMPANY

Business Plan

To be submitted to
The Royal Bank of Scotland

Brock Johnson
Ben Johnson
B. Brothers Company
17 Queens Road
Bournemouth
BH2 6BA
Plan prepared March, 2010
 Table of Contents
Page 1

1.0 Executive Summary ------------------------------------------------- 1

2.0 Company Summary ------------------------------------------------- 2

2.1 Vision ----------------------------------------------------------- 2
2.3 Mission --------------------------------------------------------- 2

3.0 Products & Services ------------------------------------------------- 3

4.0 Market Segmentation & Competitors --------------------------- 4

5.0 Sales & Marketing Strategy ---------------------------------------- 5

6.0 Management Summary --------------------------------------------- 7

6.1 Personnel ------------------------------------------------------- 7

7.0 Financial Planning ---------------------------------------------------- 8

7.1 Summary of Financial Needs ------------------------------- 8
7.2 Cash Flow Projection ----------------------------------------- 8
7.3 Profit & Loss Projection ------------------------------------- 8

8.0 Risks & Conclusions ------------------------------------------------ 9

Appendix I ----------------------------------------------------------------- 10

Appendix II -----------------------------------------------------------------11

Appendix III ----------------------------------------------------------------12

1.0 Executive Summary

Formed in 2004, B. Brothers is the manufacturing company owned
and operated by two owners, Brock and Ben Johnson, located at 17
Queens Road, Dorset, and Bournemouth with 10,000 square foot
warehousing space. In the last five years the company has
developed the strong brand and strong market position in different
segments. Due to its quality and innovative cleaning products the
company has developed the close working relationship with the
distributors, retailers and consumers. And it's newly launched
product the oven-bomb is beating any other product in the market
today. The company currently serves 30% of the total market with
gross revenues of £2,650,000 in Bournemouth. We are expecting to
grow our customer base and market by 50% based on the previous
years records, our unique offering, and planned marketing
activities.
The company is seeking growth capital in the amount of
£5,000,000 over the next three years for the purpose to
• relocate its factory in order to cut costs
• purchase new equipment
• expand its business all over the UK so that our business can
operate at a higher level of profitability
• train the employees on the new equipment
• increase the marketing activities
• to modernize and renovate the machines &
• to invent and launch the new product

Based on the financial projections presented in this plan, it

indicates that with the investment of £5million, the company will
maintain good cash flow, increase profitability and provide a timely
and healthy repayment of loan with interest. Projection shows the
turnover of £2 million per annum with high sales growth and net
profit of £1.5 million year over the next three years. As owners, our
commitment is to take personal responsibility for all financial debt.
So we have taken necessary precautions and steps to ensure that
the investment is fully implemented. Repayment of 3-year loan,
plus interest, can begin promptly in July. Early retirement of loan is
anticipated, possibly by the end of tax year 2013. The company
aims to become one of the top manufacturing company in UK. And
we can do it. It is not our ego; it is our self confidence to be in the
top.

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Page 3
2.0 Company Summary
B. Brothers is the Bournemouth's leading manufacturing company
of innovative cleaning products established in 2004. B. Brothers is
owned by two brothers Brock and Ben Johnson. Five years ago the
Johnson brothers lived in London providing the cleaning services;
cleaning the schools, big offices and pubs and make money out of
it. At that time, there were lots of manufacturer of cleaning
products but they had mind blowing ideas to build exciting cleaning
products. It is their concepts and hard work how this company is in
this position now. It employs 90 people on a single site at Queens
road in Bournemouth, which accommodates both administrative
and manufacturing functions. It has earned a reputation within
these three years for making innovative line of biodegradable,
environmentally safe cleaning products, which are sold in
supermarkets household stores and DIY/hardware outlets. Its
turnover is £2M per annum and the company has some extremely
successful products which are household names. The company is
ranked as the top manufacturing company for its creative cleaning
products in Bournemouth by industry regulator, Ross Stone. Aside
from manufacturing, the company also offer residential house
cleaning, school cleaning and pubs cleaning services. Roger
Harrington has been appointed as the managing director who is
responsible for operations and management of cleaning services.
2.1 Vision
Its new revolutionary product 'Oven Bomb' makes B. Brothers one
of the most comprehensive manufacturing company in
Bournemouth. Our expertise lies in high quality manufacturing
research, service, technology, quality and efficiency in all our areas
of activity. This forms the basis for our success and safeguards the
future. However, our focus is firmly on optimising the available
funding and delivering the best product and cleaning services.
2.2 Mission
B. Brothers company is dedicated first and foremost to the
production of highest quality and exciting products to meet the
needs and demands of our customers while achieving an
acceptable return on investment. The launch new product is an
innovative self-cleaning oven cleaner and our lead market all over
the UK, following the successful testing and launch of product in
Bournemouth. The immediate goals are to gain funding, to expand
the business all over the UK, relocate the factory, provide an
excellent product at good value for money for customers within
budget and deliver the outstanding cleaning services.
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3.0 Products & Services Page 4
B. Brothers produce wide range of environmentally friendly safe to
use cleaning products. All products are designed to be effective at
cleaning, yet easy and strong but harmless. The cleaning products
will be developed and produced at our manufacturing facilities in
Bournemouth.
The product line of B. Brothers includes:
• Household cleaners
 • Industrial cleaners
• Degreasers
• Automotive cleaners
• Oven cleaners
• Concrete cleaners
• Tar remover
• Vehicle wash products
• Hand cleaners

B. Brothers products will be used by house wives, hospitals, hotels,

car washes, schools and cleaning specialist. Next to the cleaning
products, the newly launched revolutionary product is the oven
bomb which is self oven-cleaning product with a difference. The
oven bomb is a time saving small sized product which can fit into
any conventional oven. This product can be used for both
domestic and commercial uses. It is safe and very easy to use. This
is an exceptional product superior to any other oven cleaning
product in the market today. A number of B. Brothers products will
be available from supermarkets and household stores. Also the
products can be purchased from the company's secure website:
www.brothersinvention.com
The B. Brothers company also offers professional cleaning services
in Bournemouth which also support in advertising the product of
the company. It provides the cleaning services to residential
houses, pubs and schools. The company offer wide range of
services to the clients from general room cleaning to bathroom,
kitchen, bedroom as well as others usual jobs.

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4.0 Market Segmentation & Competitors
The company will be focusing on wholesale distributors, cleaning
specialists and also the consumers who want to buy it online from
company website. The wholesale distributors play the important
role for company to achieve its goal and success because they are
the critical supplier to commercial retail outlets. We consider B.
Brothers products are the most desirable and a first-class weapon
to cleaning specialists. So to give the outstanding outcome for
cleaners B. Brothers product is the best choice. As we expand the
business we plan to switch to retail consumers more than
wholesalers. The wholesale demand is constant and increasing. We
feel that the latter can be improved by more direct selling efforts.
Retail business should grow over the next few years, but the
greatest growth will be in wholesale accounts.

Market segmentation for B.Brothers products

10%

20%

Wholesale
Distributors
Cleaning specialist
Online consumers

70%

Also with the revolutionary new product the oven bomb will be
targeted at: Housewives, commercial market such as restaurant
and hotels and the smaller segment would be cleaning
professionals. Although there are lots of competitors who are also
manufacturing the cleaning products but we believe we are only
the company who delivers the high quality and innovative product
to the consumers at good value. And the oven bomb is one of the
exceptionally invented self oven cleaning machine for which the
company is really proud of.
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Page 6
Market segementation for new product:oven bomb
10%

20%
Housewives
Cleaning specialist
Hotels and
restaurants
Others

60%

10%
Also B. Brothers cleaning business, they offer both residential as
well as commercial cleaning service. The company service will be
focusing on residential homes, school and pubs. There are many
competitors in the local market. Although each of them provide a
good cleaning service but we feel they provide to fail the level of
professionalism, trustworthiness , attention to detail and use of
quality cleaning products.

5.0 Sales & Marketing Strategy

The B. Brothers products are very popular among the market
nowadays with its logo and its slogan “Cleaning matters: Nothing
advanced than B. Brothers product”. The company will use a
different marketing and sales strategies on three different market
segments that it seeks to reach. The company will have different
marketing and sales approaches which is detailed below:

For individual and online consumers: Marketing for these

segments will be done generally over the internet. The company
will give more focus on building the good quality website
promoting the website through different popular search engines
like Google and yahoo. But unless our website is optimised to get a
listing at the top of search results, there’s a chance the consumers
will buy from competitors instead. So the company will be using
pay-per-click advertising. It is an effective marketing scheme for
the internet. Pay per click assures that we are reaching our target
market. People who are searching for

-5- Page 7
some specific information on the subject will only come to our
website. Also the company will produce adds on the popular
magazines like Housekeeping, C& M: Cleaning and Maintenance
magazine. As a pricing strategy, we will use market penetration
pricing strategy. Here we set a low price as an introductory release
offer to attract segment. And after we first reach the market to
attract the higher end consumers we would set the price at a high
price which is called price skimming strategy.

For whole sale distributors: B. Brothers have already have some

reliable wholesale distributors. One of them is our cleaning service
company. As a pricing strategy we will offer them 25% discount for
wholesale purchases for the first two months of product
performance. It will enlarge the relationship between the
distributors and the company .B. Brothers will work hard on
convincing distributors that it will be able to meet all of the needs
of the distributor, that production can be scaled quickly if
necessary,

For cleaning specialist: Our cleaning service company will

market our products to specialist firms. The advertising channel
like magazines, newspaper, yellow pages, flyers, posters, bus
boards, radio broadcasting will be used to create market
awareness. As a pricing strategy we will offer them the whole sale
prices for the first five months of operation.

Although it is not on the top of our plan, but we will be using

BOGOF pricing strategy to get rid of old stock.
And for the promotion of newly launch oven bomb we will have
stand in front of the superstores giving samples as testers with a
video demonstration showing how the product work. To get free
publicity and media attention, samples would be given to journalist
to test the product and write review based on the product
performance. We also have contacted “Kim and Aggie” from how
clean is your house from channel4. They have agreed to endorse
the product via internet, blogs, twitter, cleaning tips websites and
also new series of “how clean is your house”. For pricing strategies
we will be using market penetration and price skimming strategies
as above.

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6.0 Management Summary

The Brock and Ben Johnson has ten years of experience in cleaning
specialist and five years of experience in manufacturing the
cleaning product. Basically it is the family business. During these
years of manufacturing, Johnson brothers have made invaluable
contacts with wholesale distributors, cleaning specialist and also
with commercial retail outlets. Brock Johnson will be responsible for
sales, marketing & day-to-day control and Ben Johnson will be
responsible for the production, purchasing and transport. They will
set the policies together and personnel decisions will be made
jointly. Both men are inventive and energetic. They believe their
energies complement each other and will help them make B.
Brothers company a great success to the top of the Mount Everest.

6.1 Personnel
Management believes that the strength of the Company's
personnel is a key to success. As such, plans include filing staff
positions with professionals who have proven success and records
in manufacturing world and have an understanding of the industry.
The company plans to hire one office manager with salary of
£22,00 per year, two production and administrative assistants with
salary of £15,000 per year and all the other production staff ; 8
hours employees at a minimum wage rate. The table shows the
salary for the whole company. (See Appendix I)

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Page 9

7.0 Financial Summary

7.1 Summary of Financial Needs

B. Brothers Company, a limited partnership of two brothers, is

seeking a loan of £ 5,000,000. The funds will be utilize to expand
the business all over the UK , to modernize the equipment, to
relocate its factory 250 miles north in order to cut costs and to
increase our marketing activities. The whole debt with the Royal
Bank of Scotland is secured by owners and company collateral. We
plan to support our debt accountability through increased sales,
profit and cash flow.

7.2 Cash Flow Projection

In our cash flow projection, we have assumed that the whole
finance of £5 million has come from the bank loan. We have
allowed for interest on the full amount for the whole period. We
expect to grow sufficient cash flows over the next three years with
healthy repayment of loan with interest. This loan will be repaid
quarterly over three years.
Our cash flow forecasting for the three years is shown in the table:
(See Appendix II.)

7.3 Profit & Loss Forecasting

B. Brothers expect a significant increase in profitability to the next

three years and in the future also based on our experiences and
market research. We anticipate that sales will grow quickly within 4
month of operation. But certain expenses are assumed like
marketing, advertising, training & development, salaries and
wages to bring our products to prominence. We assume in
increasing 20 distributor clients within a first year and so on, which
give us an estimated turnover of £2 million every year. We expect
to see very strong net profit every year. We anticipate our annual
gross profit will be £1.5 million over the next three years and
expected more profit in future.
Our projected profit and loss for the three years is shown in the
table: (See Appendix III)

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8.0 Risks & Conclusions

We have taken into consideration that equipment from the
previous location could present a risk of costly repair and
replacement fees. So, we have an insurance of £24,000 per year to
reduce this risk. Also if in case we have the latest equipment on
the stock if the equipment are damaged or failed.

It is our goal to relocate our company and expand our business all
over the UK and making it top manufacturing company. In order to
achieve this goal, we are asking for a term loan of £5 million. Once
we have secured this loan, and relocated the company, we
anticipate that our sales will increase by £200,000, approximately
£1.5 million of which we are projecting as net profit. The company
is confident of its ability to achieve growth, success and
sustainable profitability.
 -9- Page 11
Appendix I

Employer & Salaries

employee
Brock Johnson(owner) £32,000.00 per year Yearly increase
depending upon
profitability

Ben Johnson(owner) £32,000.00 per year Yearly increase

depending upon
profitability

Office Manager £22,000.00 per year Stays same

Production & Administrative £15,000.00 per year Stays same

Assistants(2)
Part Time workers(15) @6 per hour More added as production
increases.

Full time workers(20) @7 per hour 40 hours a week

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Appendix II
Cash Flow Projection

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Appendix III
Profit & Loss Projection
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