ACCG308: Adze Beverage Pvt. Ltd. Business Plan for Australian Market

This business plan, prepared for Adze Beverage Pvt. Ltd., outlines a comprehensive strategy for entering the Australian beverage market. It begins with a business plan pitch, detailing the company's offerings of energy drinks, carbonated soft drinks, and juices, along with backer rewards for investors. The plan then delves into the business opportunity, identifying the target market as sports professionals, households, corporates, retail stores, and students, while also highlighting the social impact through job creation and providing quality beverages at reasonable prices. The analysis includes relevant megatrends within the Australian beverage industry, comparing Adze Beverage to similar successful campaigns. The sales and marketing strategy focuses on product diversification, competitive pricing, and promotional activities through social media and free publicity. The operational strategy covers the company's structure, outsourcing considerations, and operational risks. Finally, the financial plan presents profit and loss statements, balance sheets, capital requirements, and valuation justifications, providing a detailed financial overview of the proposed business venture. References are also included for supporting the analysis and research.

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Table of Contents
1.0 Business Plan Pitch..........................................................................................2
1.1 Written Pitch..................................................................................................2
1.2 Visual Pitch....................................................................................................2
1.3 Backer Rewards............................................................................................3
2.0 Business Opportunity........................................................................................3
2.1 Customer Need and Target Market..............................................................3
2.2 Social Impact.................................................................................................3
2.3 Relevant Megatrends....................................................................................3
2.4 Similar Successful Campaign.......................................................................4
2.5 Opportunity Testing Plan...............................................................................4
3.0 Sales and Marketing Strategy..........................................................................5
3.1 Fundamentals...............................................................................................5
3.2 Social Media and Free Publicity....................................................................6
3.3 Measurement and Information......................................................................6
4.0 Operational Strategy.........................................................................................6
4.1 Operational Structure....................................................................................6
4.2 Outsourcing...................................................................................................7
4.3 Operational Risks..........................................................................................7
5.0 Financial Plan...................................................................................................8
5.1 Profit & Loss Statement and Balance Sheet.................................................8
5.2 Capital Requirements and Funding Plan....................................................11
5.3 Valuation and Justifications........................................................................11
6.0 References......................................................................................................13

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1.0 Business Plan Pitch
1.1 Written Pitch
Every business needs to have a business plan so that it provides a
direction to the operations of the company, inform the investors about the
financial activity that will be undertaken. The underlying growth or success
attached with the start-up idea should also be well presented. The demand for
beverages is huge as they are the best source of providing instant refreshment.
In terms of growth of both Alcoholic and Non-Alcoholic drinks have grown
tremendously over the years. The beverage industry as known by entrepreneurs
can provide a sound investment return, but face a downside risk because of the
huge capital inflow required (Qureshi, Saeed & Wasti, 2016). The designed
business plan is for a beverage company that would be serving various kinds of
beverages in the Australian Region. The company will be operating with the
trading name as Adze Beverages Pvt. Ltd. In order to well uniform the risks and
costs involved in the business we have forecasted the financials along with the
capital requirement in the trend period analyzed.
1.2 Visual Pitch
A visual pitch well highlighting the various business products and services
that will be catered by the company in the trend period analyzed for the company
(Reddy, 2013). The key products that would be served by the company, primarily
will be in the form of Energy Drinks, Carbonated Soft Drinks and Juices.
1.3 Backer
Rewards
Backers of
the company play

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an important role and the same would be in the field of capital investment that
would be provided by the equity capital investors who will be providing an all-
around of 1 million of capital investment. The capital investment provider would
be entitled to the annual return, which would be generated by the business. The
pricing of the product would be kept at a very minimal rate like $0.10 for juices
tetra pack, $0.25 for soft drinks and $0.50 for Energy Drink on a per unit basis.
The associated cost of selling will be around 30% that will be the variable cost for
the product. The operational expenses will be well managed by the company so
that investors on a net generate sound return for the equity investors (Feenstra,
2014).
2.0 Business Opportunity
2.1 Customer Need and Target Market
Every business venture has its own set of target customer that defines the
customers group that it would be serving for the purpose of expanding the
business services and exploring the customer target market. The key advantage
that the Beverage Company will be getting is in the field of the identifying the
needs of the customers and the associated level of target market it should focus
on (Haag, 2013). The key target market and customers for the company would
be Sports Professionals, Households, Corporates, Retail Stores, and Students.
The target market identification will be helping the company in the identification of
the target customers and the associated level of marketing and sales activity that
the company needs to carry out for the purpose of increasing brand awareness
and customer base (McKenzie, 2015).
2.2 Social Impact
The social benefit that the company will be providing is the creation of
employment in the Australian Region where people from multiple background will
be deployed in effectively carrying out the various set of business operations. On
the other hand, the consumers of beverage industry will be getting a quality
product at a very reasonable rate so that they do not end up paying higher prices
for beverages (Sutton, 2013). The equity investors or the capital providers of the
company will also be benefited with the growing business operations and
profitability that the company expects to earn in the trend period analyzed.
2.3 Relevant Megatrends
The trend for the beverages company shows that the business operators
especially in the carbonated drinks industry have faced a hard times in the field
of shift of consumer preference from soft drinks to healthy beverages. The same
data and information were well captured when starting and designing the

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business plan for the new start-up capital for the company (Levison, 2013). The
trend shows that the industry size of Australian Beverage Industry generates a
revenue of around, $4 billion with an annual growth rate shown of -0.4%.
However, on the other hand, the forecast for the growth of the Australian
Beverage Industry has been kept at 3% and the same has been due to the
product diversification strategy followed by companies and addressing the needs
and demand for healthy beverages in the product portfolio. The current customer
base for the industry stands at around 4.9 million and the same is expected to
reach around 7.6 million by the year 2023 (Soft Drink Manufacturing – Australia
Industry Report | IBISWorld, 2019). The forecasts and trend shown by the
beverage industry would be helpful for the Adze Beverage Company in designing
and planning the various operational work for the company.
Figure 1: User Base and Revenue Base for Australian Beverage Industry
(Source: Food & Beverages - Australia | Statista Market Forecast, 2019)
2.4 Similar Successful Campaign
The Australian Beverage Company itself is huge and growing as per the
industry levels companies like Boost Juices, Tarax and Cool Ridges were
identified to be some of the enterprise that have similar business operations. The
fund investment raised by these firms have been primarily in the form of Angel
Investment, Venture Capital Investments, Direct Equity Investment and have also
raised capital in the form of borrowings (Food & Beverages - Australia | Statista
Market Forecast, 2019). Adze Beverage Ltd will also be deploying a similar kind
of initiative for raising the required capital sources it requires for financing the
capital assets and the operational expenses that the company will be incurring
for the purpose of expanding the business operations of the company (Soft
Drinks - Australia | Statista Market Forecast, 2019).

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2.5 Opportunity Testing Plan
The business opportunity plans that is designed by the company will be
undertaking the industry level forecast along with the expectation, needs and
demands of customers for forecasting and planning out the business
opportunities available. Market Research would be done by the company so that
it can get an idea about the product it is selling to the consumer and the
associated level of revenue that it would be able to generate from the market
(Soft Drink Manufacturing – Australia Industry Report | IBISWorld, 2019). The
policies followed by companies operating in this industry in terms of sales,
marketing, business, financial, legal and regulatory policies needs to be well
analyzed and adhered so that the operations of the company are not affected by
changes in the same.
3.0 Sales and Marketing Strategy
3.1 Fundamentals
The sales and marketing strategy that will be undertaken by the company
will be focusing on the key product success like the factor, price, place,
promotion strategy and sales forces that will be deployed in the due course of
sales activity undertaken. The concept of marketing mix and the 4Ps of
marketing model helps in the development of a marketing model for a company
(6 Sales Promotion Tips for Marketing Success, 2019).
Product: The product that would be offered by the company in the Beverage
Industry will be in the form of Beverages like (Carbonated Soft Drinks, Energy
Drinks and Juices). Product diversification is an important concern in this industry
as the trend and demand for the carbonated drinks is falling the company, will be
focusing on healthy beverages like energy drinks and juices that would be
offered by the company (Baker, 2014). Products offered by the company will be
as per the customer needs and demand where the key focus will be on flavored
energy drinks along with 100% natural juices that would be served in a tetra pack
by the company.
Price: The prices that would be charged by the company for the various products
that would be offered will be as per the industry standard levels whereby the
company will be charging competitive price for the product offered. The pricing of
the product would be kept at a very minimal rate like $0.10 for juices tetra pack,
$0.25 for soft drinks and $0.50 for Energy Drink on a per unit basis (Tiago, &
Veríssimo, 2014).
Place: The key places that the company would be having its operating will be in
the Australian Region in the initial phase of business operation. However, the

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company is willing to expand the business operations as the market penetration
for the product increases and the demand for company product increases in the
trend period analyzed for the company.
Promotion: The key steps undertaken by the company for the purpose of
carrying, on promotional activity is primarily in the field of social marketing
activities that the company will be carrying on along with the promotional
activities such as sponsors and free sample product distribution in order to
increase the customer base and increase the know how about the product that is
primarily offered by the company.
3.2 Social Media and Free Publicity
In order to increase the awareness about the various products that the
company will be offering a various set of sales and marketing strategy will be
deployed by the company and the same will be in the form of social media
marketing, advertisements in televisions, newspapers, pamphlets and hoardings.
Social Media Marketing has been a key source of marketing in today’s era and
has helped companies and business to well reach out to consumers in a cheap
and effective manner (Arnett & Wittmann, 2014).
In order to attain free publicity for the company the company can undertake
various business operations in the field of free sample product distributions,
promotional events and sponsoring sports and other events where the customers
actually get to know about the product offered.
3.3 Measurement and Information
The key sales and marketing strategy that would be taken by the company
for the purpose of expanding the business will be well judged and measured with
the help of the increase in the market penetration. Growth of various products
and services that the company will be offering in the trend period analyzed will be
assessed with the help of acceptance of product in the market.
The market penetration that was undertaken into consideration for the
business was taken at around 3.5%, which is well aligned with the industry
growth rate and the same would be the base for the increase in the revenue of
the company in the trend period analyzed. On the other hand, increase in the
customer base for the company and the associated awareness of the products
offered will be helping the company in assessing the effectiveness of the sales
and marketing strategy that is deployed by the company (Nobre & Silva, 2014).

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4.0 Operational Strategy
4.1 Operational Structure
The operational structure for the company should be designed in such a
manner that it allows the operations of the company to be well carried out in the
developed time period analysis. The operational structure of the company will be
as follows:
Chief Executive Officer: The CEO of the company will be meeting and
negotiating high end client on behalf of the company and would also be
developing strategic decision and budget deployment for the company.
General Manager: The general manager would be looking into various business
operations thereby overseeing and coordinating the department activities. Daily
business activities and operations that are carried on by the business is the key
responsibilities that the general manger would be entitled with.
Finance Manager: The finance manager of the company will be undertaking
various financial perspective and finance related decision that the company
would be undertaking in the due course of business operations. The finance
manager would also be overlooking the purchase and sales department, where
daily movement of goods and services that are observed in the company’s daily
business activity will be taken into consideration.
Customer Care Executives: The customer care executive’s team will be
handling the various business related query and thereby allow the customers of
the company to get updated with the various information’s and queries they have
regarding the products and services that are offered by the company.
Sales and Marketing Manager: The sales and marketing manager of the
company would be deploying various sales and marketing activities that would be
allowing the company in expanding the business product and services that are
currently offered by the company. The team would be responsible for the creation
of successful strategies and ideas so that it helps in the market penetration of the
various products that are offered by the company (Australia, 2019).
4.2 Outsourcing
The operational strategy that would be deployed by the company in filling
out the vacant position for the company will be based on the above job post that
would be required for the company operations. The operations of the company is
primarily new so it would be focusing more on external recruitments rather than
internal source of recruitment. The key recruitment process will be Direct
Recruitment, Casual Callers, Advertisement, Employment Agencies will be some

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of the key external process that would be applied for the purpose of outsourcing
the various position that needs to be filled within the organization.
4.3 Operational Risks
The key operational risks that would be incurred by the company in the
trend period analyzed primarily will be in the management of the assets and the
effectiveness of the management in utilization of the assets. The company
biggest operational risk that it would be running will be in the field of efficiency of
the assets deployed in the business and the associated costs of operations that
are associated with the company.
In order to well reward the employees of the company for the various
operations it undertakes they will be promoted and rewarded with various reward
and recognition process that will be enabled in the business organization process
helping the company in increasing the efficiency and the overall utilization of the
assets of the company.
5.0 Financial Plan
The financial plan for the company has been developed for a sum of three
years whereby relevant analysis for the company in the form of revenue and
expenses that would be earned by the company will be taken into consideration
for the company. The financial plan included forecasting the profit & loss
statement, balance sheet and the cash flow statement for the company in the
three-year trend period analyzed for the company (Food and Beverage -
Austrade's industry capability information – Austrade, 2019).
5.1 Profit & Loss Statement and Balance Sheet
Profit and Loss Statement: The profit and loss statement prepared for the
company will be well reflecting about the various sources of revenue and the
associated expenses that the company will be incurring in the stipulated time
period of three years. The growth rate in the revenue of the company will be
taken at 3.5% and the associated cost of goods sold for the company will be
around 30% for the company. The cost of goods sold for the company will be
acting as a variable expense for the company which will be directly dependent on
the level of sales activity carried on by the business. The operational expenses
that would be incurred by the company will be around $250,500 and the rise in
the operational expenses is taken at 5% given the fact that rise in inflation and
other associated cost may increase over the trend period analyzed.
The operational expenses that the company will be incurring in the trend
period primarily will be in the field of the Premises expenses, wages and salaries,

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general expenses, accountant fees, payroll taxes, utilities expenses, sales and
marketing activities, postage and telephone expenses, preliminary expenses that
will be acting as a fixed cost expenses for the company,. The net profitability that
the company is expected to earn from the business in the first year of operations
will be around $212,425 giving an net investment return of around 21.24% for the
company, In the second year of operation the profitability of the company is
expected to increase to around $236,368 making the total investment return to
around 23.64% and the third year profitability for the company will be around
$242,277 making the overall return on investment for the company to be around
22.03%. The growing profitability trend and the return generated by the company
on the capital invested will be helping the equity shareholders and the capital
providers of the company in generation of wealth for the company in the trend
period analyzed.
(4) PROFIT AND LOSS FORECAST & ROI
Year 1 2 3
Revenue 750,000 776,250 803,419
Cost of sales 225,000 232,875 241,026
Gross profit 525,000 543,375 562,393
Expenses/overheads
Premises (rent, rates) 75,000 78,750 82,688
Wages and salaries 95,000 99,750 104,738
General expenses 3,000 3,150 3,308
Accountant Fees 2,500 2,625 2,756
Payroll Tax 5,000 5,250 5,513
Utilities 10,000 10,500 11,025
Sales and Marketing 5,000 5,250 5,513
Postage & Telephone 1,500 1,575 1,654
Repairs and Maintenance 2,500 2,625 2,756
Preliminary expenses 7,500 7,875 8,269
Lease Payments 25,000 26,250 27,563
Total expenses/overheads 232,000 217,350 228,218
Profit before tax 293,000 326,025 334,176
Tax @ 27.5% 80,575 89,657 91,898
Before tax net margin 39% 42% 42%
Profit after tax 212,425 236,368 242,277
Transfer to reserves 212,425 236,368 242,277
Particulars Year 1 Year 2 Year 3
Return on Investment 21.24% 23.64% 22.03%

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Balance Sheet: The balance sheet of the company will be prepared for the three
year time period where relevant analysis and changes in the financial position of
the company will be reflected. The balance sheet of the company would be
deploying various components including the classification of the assets and
liabilities of the company.
The balance sheet for the company reflects the amount of finance that is
around 1 million will be financed with the equity shareholders while the other 0.2
million will be financed with the debt holders of the company. The key asset that
would be included in the non-current assets of the company primarily will be as
Equipment, Plant and Machinery and Vehicles that would be required as a part of
start-up assets for the company.
Balance Sheet
Assets FY-1 FY-2 FY-3
Current Assets
Cash $435,918 $517,149 $643,446
Accounts receivable $750,000 $776,250 $803,419
Total current assets $1,185,918 $1,293,399 $1,446,865
Fixed (Long-Term) Assets
Vehicles $70,000 $240,000 $210,000
Furniture $300,000 $44,800 $35,840
Equipment $500,000 $320,000 $256,000
(Less accumulated depreciation) $144,000 $121,200 $102,960
Total fixed assets $726,000 $483,600 $398,880
Total Assets $1,911,918 $1,776,999 $1,845,745
Liabilities and Owner's Equity
Current Liabilities
Accounts payable $167,317 $117,574 $172,774
Accrued Rent $75,000 $78,750 $82,688
Bank Charges Payable $3,000 $3,000 $3,000
Short-term loans $40,601 $10,000 $5,000
Income taxes payable $80,575 $89,657 $91,898
Accrued salaries and wages $95,000 $99,750 $104,738
General Expenses $3,000 $3,150 $3,308
Lease Payment $25,000 $26,250 $27,563
Current portion of long-term debt $10,000 $12,500 $2,500
Total current liabilities $499,493 $440,631 $493,467
Long-Term Liabilities
Long-term debt $200,000 $100,000 $0
Less: Loan Repayment $100,000 $100,000
Total long-term liabilities $200,000 $0 -$100,000
Owner's Equity
Owner's investment $1,000,000 $1,100,000 $1,210,000
Net Profits $212,425 $236,368 $242,277

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Total owner's equity $1,212,425 $1,336,368 $1,452,277
Total Liabilities and Owner's Equity $1,911,918 $1,776,999 $1,845,745
5.2 Capital Requirements and Funding Plan
The capital requirements that would be required by the company will be
primarily in the field of assets investment and operational expenses that the
company will be incurring in the given time frame. The funding plan that would be
required by the company will be around 1.2 million of which 1 million will be
financed with the help of the equity finance and the rest of finance would be
given by debt investors of the company amounting to around $0.2 million.
Start-up Assets
Owner Funding
Owners Fund $1,000,00
0
Total Owner Funding $1,000,00
0
Loans
Loan $200,000
Other
Total Loans $200,000
Total Start-Up Funds $1,200,00
0
Assets
Equipment’s $300,000
Vehicles $70,000
Plant and Machinery $500,000
Total Fixed Assets $870,000
Total Start-up
Assets
$2,070,00
0
5.3 Valuation and Justifications
The valuations and justifications that are provided by the company in the
field of company perspective would be in the field of return generated and the
payback period of the investment. The return on investment for the company will
be 21.24% in the first year and the same is expected to increase in the trend
period to around 23.64% and 22.04 in the three year time frame. The breakeven

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analysis of the various products that are offered by the company is analyzed and
discussed.
Breakeven Analysis
Particulars Juice
Soft
Drinks
Energy
Drink
Fixed Costs (Total Fixed Costs*Revenue % Generated)
125,25
0 75,150 50,100
Revenue Per Unit $0.10 $0.25 $0.50
Variable Cost Per Unit (Total Revenue Percentage* COGS) $0.03 $0.08 $0.15
Units Sold
375000
0 900000 300000
Breakeven Analysis: Fixed Cost/(Price-Variable Cost) (In
Units)
17892
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