Sample Business Plan

Introduction to the Sample Plan
The following document is a sample of a finished business plan. In your final plan, you have the opportunity to elaborate on those ideas in your outline that you feel are most integral to your business. In composing your business plan, you can follow your outline as loosely or closely as you choose. For instance, in the sample plan, the Executive Summary, which is the last section of the Business lanning !i"ard, is presented first in order to emphasi"e the most impressive features of the business. #our goal in composing a finished business plan is to construct the most comprehensive, thorough document possible, in order to attract investors and to confirm that you have ta$en the time to explore as many potential issues for your business as may arise.
%orthwind Traders Sample Business lan
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'r. (ichard )arey )anton Street Seattle, !ashington *****
+ear 'r. )arey, 'y attorney, 'r. !illiam -ollands, suggested I write to you regarding my business, %orthwind Traders. I am currently see$ing funding, and I believe that my company would coincide with your interest in businesses relating to the travel industry ma$es my company a great investment for you. %orthwind Traders is positioned to ta$e advantage of the significant mar$et opportunities available in the customi"ed travel.planning field. Through a professional approach to mar$eting, experienced management, and an emphasis on outstanding customer support and service, %orthwind Traders can become the /reater Seattle area0s premier provider of planning services for European adventure travel through a strong mar$eting campaign, experienced management, and an emphasis on outstanding customer support and service. From that base, the company will expand to become a regional force. !e are see$ing 123,455 in funding, and anticipate this to be the extent of the funds re6uired. The funds will be used to refurbish the shop, to expand the staff, and to develop increase mar$eting activities, primarily our !eb site and database development. I appreciate your consideration of the business plan for %orthwind Traders. I will contact you next wee$ to see if you have any 6uestions and or to discuss how we may proceed. Than$ you. Sincerely,
-eather 'itchell resident
TABLE OF CONTENTS EXECUTIVE SUMMARY.................................................................................................................................................1 DESCRIPTION OF THE COMPANY............................................................................................................................... 1 MISSION STATEMENT............................................................................................................................................... 1 PRODUCTS AND SERVICES......................................................................................................................................... 1 FINANCIAL FORECAST.............................................................................................................................................. 2 FINANCING REQUIREMENTS...................................................................................................................................... 2 HISTORY AND POSITION TO DATE............................................................................................................................4 THE COMPANYS MISSION........................................................................................................................................ 4 MANAGEMENT TEAM AND KEY PERSONNEL.............................................................................................................. 4 SERVICES................................................................................................................................................................. 6 TRANSPORTATION.................................................................................................................................................... 7 COMPANY HISTORY.................................................................................................................................................. 7 GUARANTEES AND WARRANTIES............................................................................................................................... 8
USINESS STRUCTURE.............................................................................................................................................. 8
MARKET RESEARCH......................................................................................................................................................8 ECONOMIC AND SOCIAL FACTORS............................................................................................................................. ! COMPETITIVE ENVIRONMENT.................................................................................................................................... ! LONG"TERM OPPORTUNITIES.................................................................................................................................... ! GEOGRAPHIC AREA................................................................................................................................................ 1# MARKET DESCRIPTION........................................................................................................................................... 1# TARGET CUSTOMERS.............................................................................................................................................. 1# MARKET DEFINITION.............................................................................................................................................. 1# MARKET OPPORTUNITIES........................................................................................................................................ 11 COMPETITIVE ANALYSIS......................................................................................................................................... 12 COMPETITIVE ADVANTAGES................................................................................................................................... 1$ COMPETITORS POSITIONS...................................................................................................................................... 14 POTENTIAL FUTURE COMPETITION.......................................................................................................................... 14 BUSINESS STRATEGY...................................................................................................................................................15 CUSTOMER INCENTIVES.......................................................................................................................................... 1% ADVERTISING AND PROMOTION.............................................................................................................................. 1% SALES AND MARKETING......................................................................................................................................... 16 COMMISSION.......................................................................................................................................................... 17 OPERATIONS...................................................................................................................................................................17 PREMISES............................................................................................................................................................... 17 CHOICE OF LOCATION AND PREMISES..................................................................................................................... 17 %orthwind Traders Sample Business lan 7
HOURS OF OPERATION............................................................................................................................................ 17 EQUIPMENT............................................................................................................................................................ 18 STAFFING............................................................................................................................................................... 18 FORECASTING................................................................................................................................................................18 SALES FORECAST.................................................................................................................................................... 18 CASH FLOW PRO&ECTIONS...................................................................................................................................... 2# INCOME STATEMENT.............................................................................................................................................. 2#
ALANCE
SHEET.................................................................................................................................................... 21
PERFORMANCE RATIOS........................................................................................................................................... 21
REAK"EVEN.......................................................................................................................................................... 21
FUNDS REQUIRED AND TIMING............................................................................................................................... 21 FUNDING OPTIONS.................................................................................................................................................. 22 BUSINESS CONTROLS...................................................................................................................................................23 ACCOUNTING SYSTEM............................................................................................................................................ 2$ QUALITY CONTROL................................................................................................................................................ 2$ NEW TOUR OPERATORS.......................................................................................................................................... 2$ CAPACITY.............................................................................................................................................................. 2$ LONG"TERM GOALS............................................................................................................................................... 24 STEPS FOR ACHIEVING GOALS................................................................................................................................ 24 POSITION................................................................................................................................................................ 2% RISKS ASSOCIATED WITH GROWTH......................................................................................................................... 2% APPENDIX 1 MARKET RESEARCH..........................................................................................................................2! APPENDIX 2 FINANCIAL FORECASTS....................................................................................................................35
EXECUTIVE SUMMARY
The Description of the Compan
%orthwind Traders, Inc. provides travel.planning services for European adventure vacations to residents ofindividuals in the /greater Seattle(edmond area. The service industry, including travel agencies, is one of the fastest growing business sectorsareas of the economy, and %orthwind Traders intends to capitali"e on the success of this industry by ta$ing advantage of travel planning opportunities in the acific %orthwest region.
resident -eather 'itchell and 8ice resident of Sales and 'ar$eting 9im :im currently hold the company0s stoc$. rior to starting the %orthwind Traders travel agency, 's. 'itchell cofounded, co.owned, and operated the %orthwind Traders clothing store. She has selected a small team with extensive travel, sales, and computer s$ills, all of whom will be invaluable to the new venture. -er cowor$ers bring a combined total of 34 years of travel industry experience to the agency.
Mission Statement
The mission of %orthwind Traders is to become the premier provider of adventure vacations for *4. to 34. year.old professionals. %orthwind Traders is dedicated to building long.term relationships with customers through 6uality training and customer support, and wants to be recogni"ed as the leading adventure vacation company in the /reater Seattle(edmond area. The company0s goal is to grow steadily, becoming profitable by the second year of operations.
Products and Ser!ices

%orthwind Traders recently became the appointed agents for 'argie0s Travel, one of the largest and most respected tour operators in the mar$et. !ith virtually no mar$eting effort, %orthwind Traders has sold some *55 adventure vacations in the past six months, netting 1;;,255 in commissions. Sales of insurance policies and other services have added to this total, and could potentially add much more. %orthwind Traders offers a comprehensive range of services to support the adventurous traveler, including pre. and postvacation briefings, travel insurance, and a directory of services specific to each destination and activity.
Mar"etin# and Sales Techni$ues

%orthwind Traders believes that by concentrating on one mar$et segment and one geographic destination, it will be able to deliver a service that is superior to anything currently on the mar$et. ublished research shows that tourism is a fast.growing business sector and that Europe is the favored location for most travelers. <dventure vacations, while a relatively new and small mar$et, loo$s set for explosive growth. In addition to targeting adventure travelers and wor$ing as the appointed agents for established travel tour firms, %orthwind Traders plans to leverage its relationship with its sister business, %orthwind Traders outdoor clothing shop, by offering discount services to shop customers.
The Competition
Because they are currently the only travel agency focused on European adventure vacations that is located in the Seattle(edmond area, %orthwind Traders has a substantial opportunity to dominate the region. In order to maintain and improve their current position in the region, they will need to invest in a !eb site, as well as database software and systems, and in refurbishing the shop premises. %orthwind Traders maintains the following advantages over existing competition, ongoing support to clients= extensive $nowledge of the European adventure vacation field= superior customer service= speciali"ed training programs for staff= informative !eb site= competitive rates. informative !eb site competitive rates
Tar#et Mar"et From des$ and field mar$et research carried out on 355 clients, it is clear that there is considerable potential in the adventure travel business. (esearch indicates that %orthwind Traders0 target mar$et finds it difficult to obtain reliable and authoritative advice on destinations and activities. (esearch also suggests that the customers in this mar$et are unli$ely to purchase their
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vacations again from the firm who provided their last vacation due to a lac$ of informative sales personnel. %orthwind Traders will cater to these needs and develop a strong return.customer base. ?perations The %orthwind Traders travel agency business will operate from a self. contained facility within the existing clothing shop, with its own shop window and entrance from the main street. The business will benefit both from its accessible location in the heart of (edmond0s downtown shopping district, as well as from the clientele it will gain through its proximity to the already established %orthwind Traders clothing store. 'anagement rior to starting the %orthwind Traders travel agency, 's. 'itchell cofounded, co.owned, and operated the %orthwind Traders clothing store. She has selected a small team with extensive travel, sales, and computer s$ills, all of whom will be invaluable to the new venture. -er cowor$ers bring a combined total of 34 years of travel industry experience to the agency. %inancial %orecasts
%orthwind Traders started as a clothing store and has expanded into the travel agency business, with its focus on adventure travel in Europe. @ast year, %orthwind Traders clothing store made 1*55,755 profit on sales of 1&,7&A,455 and employed seven people. %orthwind Traders expects that by concentrating full.time on selling adventure vacations, clients will increase from the present level of *55 Bachieved over a six.month period with only a part.time effortC, to at least ;;5 in the first year, &755 in the second, and *&55 in the third. To help achieve this growth, 's. 'itchell has identified three other tour operators she wishes to represent and has begun negotiations with them.
Selling between two and three vacations a day will allow the business to reach cash flow brea$. even in #ear ?ne, while ma$eing a modest profit in #ear ?ne. By the #ear Two posttax profits should be 13575,5;55, and will increase to nearly 17A;45&,555 by #ear Three.
%undin#%inancin# Re$uirementss Sou#ht and Utili&ation

's. 'itchell plans to sell her shares in the clothing shop and invest the proceeds in the new travel business, %orthwind Traders. In addition, she will be investing 17&,>45 of her own money in the business, and see$ing 123,455 from outside sources. (eturn on shareholders capital by #ear Three is proDected to be close to &55 percent. The purpose of the business plan is to communicate this highly profitable opportunity to 's. 'itchell0s partners in the clothing shop and to outside investors, and to attract interest in the venture. <lternatively, 's. 'itchell is considering loan finance made up of a 17&,>45 two.year loan and a credit line of 142,745. In total, about 1&*4,*45 will be needed to fund the business during the initial months.
'IST(RY A)D P(SITI() T( DATE

%orthwind Traders, Inc. provides travel.planning services to individuals and businesses in the /greater Seattle(edmond area. The business is located at &*37 Fran$lin Street, Seattle(edmond, !ashington.
The Compan *s Mission

The goal of %orthwind Traders is to be the leading provider of hassle.free European adventure vacations to the *4. to 34.year.old business professional mar$et. Initially operating in the Seattle(edmond area inoutside of Seattle, !ashington, %orthwind Traders is rapidly expanding to sell its services worldwide via the Internet. Travel service sales is the fastest growing category of business to consumer activity on the Internet, and by the year *555, the value of this mar$et is estimated at 17.455' billion Bsee <ppendix &, Internet /rowth and the Sale of Travel ServicesC. ?ur emphasis will be on providing a complete speciali"ed service based on having a detailed $nowledge of the vacation destination and adventure activities being offered. 'ar$et research indicates that the maDor criticism our type of client has of existing travel agencies is that their agents E$now nothing about their products, they Dust open the catalogue and read,F to 6uote one of many disappointed travelers. By capitali"ing on our experience in the %orthwind Traders clothing shop, we will be able to both advise and direct our clients to the type of travel e6uipment they will need to get the very best out of their vacation.
Mana#ement Team and +e Personnel

-eather 'itchell, resident and )E?. Before founding %orthwind Traders, 's. 'itchell owned and operated %orthwind Traders, an outdoor clothing shop in the Seattle area. rior to that, she managed the ?lympia branch of one of the larger regional chains of general travel agencies operating throughout western !ashington, where she was responsible for managing the office systems and a staff of four. She has a degree in travel and tourism from State Gniversity. In addition to 's. 'itchell, team members 9im :im and (ichard Bready will be moving into the new venture on a full.time basis, and <my Egert has been recently recruited to cover Saturdays and vacations. Freelance business consultant 9ae a$ will be advising during the business0s changeover from clothing shop to adventure travel agency.
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9im :im, 8ice resident Sales and 'ar$eting. rior to Doining %orthwind Traders, 'r. :im wor$ed for the mar$eting department of a maDor airline. -is current responsibilities include the company0s direct mar$eting campaign and all sales.related issues. (ichard Bready, ?ffice 'anager. Twenty years as a travel agent has given 'r. Bready the ideal bac$ground for %orthwind Traders. < $nowledgeable salesperson, 'r. Bready0s expertise in the area of European travel enables him to entice the adventure traveler. <my Egert, Sales <ssistant. <fter completing her undergraduate degree at the Institute of <rt, 's. Egert spent a year traveling abroad and Doined the staff at %orthwind Traders recently as a sales assistant. 9ae a$, Business )onsultant. !ith over *5 years of consulting experience in industries ranging from aerospace to technology to retail, 'r. a$0s $nowledge and guidance will be instrumental to the success of %orthwind Traders. The volunteer members of the Board of +irectors provide guidance to the management and staff of %orthwind Traders. The board meets twice yearly to discuss policy changes, review the mission statement, and update the business plan if needed. 'embers include @isa 9acobson, retail store owner -olly Barrett, ) < 9o Brown, former travel agent !illiam -ollands, lawyer @isa /armaise, retail store owner Tony )hor, human resource manager rasanna Samarawic$rama, caterer
Ser!ices
!e are currently the appointed agents for 'argie0s Travel, a maDor supplier in the mar$et. )urrently, 'argie0s Travel offers some 75 different adventure vacation pac$ages throughout Europe, including horse tre$$ing in Iceland= above.the.clouds tre$$ing on islands and in remote
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regions in such areas as )orsica and %orway= van.supported inn.to.inn bicycling= mountain bi$ing and hi$ing adventure tours throughout France, /ermany, Italy, and <ustria= and ballooning across the <lps.
!e intend to be appointed agents by three other maDor adventure travel tour firms with whom we are currently in negotiation, Enchantment @a$es )orporation. ?ffers rafting, sea $aya$ing, and yachting trips around remote European rivers and coastline areas, covering such areas as the <driatic, the Blac$ Sea, and Tur$ey. !est )oast Sales. ?ffers adventure vacation pac$ages to corporate clients to use as incentives and rewards, and as part of management development programs. They are particularly strong in France, Italy, and /ermany. Exploration <ir. Speciali"es in adventure vacations in Eastern Europe and former Soviet countries, covering Bulgaria, (omania, oland, and @atvia. These are three relatively new and small tour operators, but they have ac6uired a reputation for innovation and reliabilityHand they are currently underrepresented. In addition, we will offer a comprehensive range of complementary services to support the adventurous traveler, ensuring that they will have a safe, enDoyable, and memorable experience. These services will include insurance, pre. and postvacation briefing pac$s, and a directory of advice and information services particular to each destination and adventure activity.
Transportation S stems
The vacations we will offer will use all principal travel systems, including planes, trains, buses, and where appropriate, taxis. !e will aim for a standard of travel higher than that offered by the general travel industry. The feeling we are loo$ing for is definitely not that which is engendered by the bac$pac$er mar$et.
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Compan 'istor
Five years ago -eather 'itchell cofounded %orthwind Traders, an outdoor clothing shop in Seattle(edmond, !ashington. ?ver the years, %orthwind Traders has extended its product range to include everything the adventurous traveler could want, from tents and sleeping bags to maps, guideboo$s, and insurance. The clothing shop has sales of 1&,7*5,555 per year Bsee Table &C, ma$es a gross profit of 1*5*,755, and employs seven people, either full. or part.time. < mail. order service is now provided by catalogue and via a new !eb site. Ta,le -. )orth/ind Traders Clothin# Shop Performance (!er Past %i!e Years
#ear Sales /ross rofit
1&23,>55 1;*,;*4
0 17**,4&5 1&;>
1 1;;A,;>5 1&55,>5&
2 1&,5*3,>&5 1&33,;5*
3ast Year 1&,7*&,&>5 1*5&,A&;
Increasingly, shop customers have as$ed for advice on adventurous places to go on vacation. @ast year %orthwind Traders ac6uired an agency from 'argie0s Travel, one of the largest and most respected tour operators in this mar$et, and began to promote and sell their products. In the six months that we have been selling travel agency products, some *55 vacation pac$ages, at an average cost of 13375, have been sold. %orthwind Traders0 commission on the sales has been 1;;,255 B&5 percent commissionC. In addition, 34 insurance policies have been sold at an average price of 1&;>, yielding 1&>47 B35 percent commissionC. -eather 'itchell, one of %orthwind Traders0s founding partners, intends to sell her shares in the store and to concentrate on setting up the new travel business, %orthwind Traders.
4uarantees and 5arranties

?ur clients will be protected financially against either our own or our tour operator0s failure, by virtue of the <() bonding held by our principals. !e will only use vacation providers who can provide *7.hour emergency support services for clients while on vacation.
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6usiness Structure3e#al Status

%orthwind Traders is incorporated under the laws of the state of !ashington. The company has authori"ed &5,555 shares, ;555 of which are owned by resident and )E? -eather 'itchell. 8ice resident of Sales and 'ar$eting 9im :im owns &555 shares, and the remaining shares are held by the company for future distribution. In the next few wee$s, the business will be set up as an operation independent from the clothing store. This structure will clearly separate the travel business from the clothing shop and ma$e it possible to attract the ris$ capital that will be re6uired when the business starts to grow. <t a later stage the business may wish to sell and issue airline tic$ets and to create its own charter vacations. This will re6uire membership in the <() B<irline (eporting )orporationC and I<T<% BInternational <irlines Travel <gency %etwor$C. These organi"ations regulate the collection of money and distribution to the appropriate airlines. -owever, in the period covered by this Business lan we intend to operate only as the appointed agents for a number of tour operators. <s such we can EshelterF under their licenses and bonds.
MAR+ET RESEARC'I)DUSTRY A)A3YSIS

+uring the current period of strong economic growth, %orthwind Traders can capitali"e on the many significant opportunities in the travel industry.
Economic and Social %actors

Service industries represent the fastest growing sector of the national economy, and travel and tourism agencies are poised to flourish in the midst of today0s economic boom. These services are proDected to grow at an average annual growth rate of 7.& percent over the period from &AA5 to *5&5 B<ppendix &C. The travel and tourism industry thrives in a vital economy. The general economic climate in the city of Seattle(edmond is very strong. <n influx of new businesses has added to the area0s prosperity, and the already large population of young professionals is growing. %earby, tThe city of Seattle is the center for business in :ing )ounty, with over 755,555 people employed in industries such as aerospace, transportation e6uipment, health services, tourism, computer software, and biotechnology.
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Competiti!e En!ironment
)urrently, tThe 6ualitylevel of service and the number of providers in the travel industry constantly fluctuatebroadly uneven, and providers enter and leave the field rapidly. ?ur competitive edge will be in attracting and retaining our customers with the most highly trained and well.informed individuals we can recruit. !ith our expertise in European adventure vacations, we will be able to provide the most accurate, up.to.date information possible.
3on#7Term (pportunities
Tourism in general is on the rise B<ppendix &C, Europe loo$s li$e it will continue to be the maDor destination, and the Internet will be an important channel into this mar$et. The state of the economy will be the most influential factor in how many people travel. ?ther driving forces for travel will include the cost of tic$ets, fuel prices, the threat of terrorism, and currency rates. %orthwind Traders )an +evelop Strong osition in (egion The current lac$ of industry leaders in the European adventure travel industry represents an exceptional opportunity for %orthwind Traders to develop a dominant presence in the European adventure travel industry in the /greater Seattle(edmond area. !ith their exceptional $nowledge of the adventure travel industry, strong customer base, and competitive prices, the company will be well situated to ta$e advantage of the region0s current economic prosperity.
T<(/ET '<(:ET <%<@#SIS
4eo#raphic Area
%orthwind Traders is basedoperates in the Seattle(edmond, !ashington, area, and targets individuals interested in adventure vacations in Europe. The region comprisesgeographic area includes the incorporated cities ofof (edmond, Bellevue, and Tacoma and the encompassing counties of :ing, Snohomish, and ierce. (edmondSeattle Bellevue Tacoma and the encompassing counties of
&4
:ing Snohomish ierce
Mar"et Si&e and Description

The /greater Seattle areaIincluding all of :ing, ierce, and Snohomish countiesIis home to approximately 3 million people B&AA7 figureC, half of whom fall within our target mar$et. Seattle0s Dob rate is climbing at a rate of &5 percent each year, and new Dobs and growth are expected through the year *55>. Seattle has become a world.class destination, and the downtown retail and shopping core has grown steadily over the last decade. The following maDor facilities reside in the /greater Seattle area, an international airport, several maDor medical centers, and a state university, and four other colleges and universities. The percentages of employment by industry are as follows, *2 percent services, *4 percent wholesale and retail, &; percent manufacturing, &7 percent government, ; percent transportation and communication, ; percent finance and insurance, and 4 percent construction.
Tar#et Customers
SeattleJ:ing )ountyKs labor force is highly educated, s$illed, productive, and stable. It consists of individuals who are deeply attached to the area and have tended to stay and wait out past periods of economic downturn. The vital economy, the %orthwest lifestyle, and its uni6ue environmental 6ualities attract people. Both public officials and business leaders recogni"e the need to $eep our labor force well e6uipped with mar$etable s$ills. From within this population, our target customers are individuals who are professionals with incomes of 175,555L,, ages *4 to 34, with incomes of 175,555L, single or married, without children, and college educated.
Mar"et Definition
The world travel mar$et is forecast to expand at a 7.& percent average annual growth rate until *5&5. This is faster than the general economic growth rate, which is expected to be around *.7 percent per year. The European mar$et, while not the fastest growing, will be the most important destination, accounting for over 45 percent of all international arrivals Bsee <ppendix &C. !ithin Europe,
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France, Italy, and Spain are the most popular destinations. This is why we have selected tour operators with appropriate products in these areas as our initial partners. Figures for the si"e and proDected growth of adventure vacations are s$etchy, but the figures from one recent study B!orld <dventure Travel +ata )orp.C are in Table *.
Ta,le 0. Ad!enture Tra!el Vacations 7 5orld forecast 8Million Arri!als9: -;;< 7 0<-<
Destination Europe %. <merica (est of !orld Total A#e &; . *7 *4 . 34 3; . 74 7;L
-;;< 5.*4 5.74 5.&5 5.25
1""7 5.;5 5.;5 5.*4 &.74 -;;< = ;& *5 &4 7 &55
0<<1 &.;5 &.75 5.A4 3.A4
0<-< *.34 *.*5 &.&5 4.;4 0<-< = 32 3& *4 ; &55
Source, !<T+ )orp. &AA>
Mar"et (pportunities
!e believe that by concentrating on the European travel mar$et, offering a limited but extensive range of vacation pac$ages, and targeting our service at affluent professionals, we can meet the needs of our clients. ?ur speciali"ed $nowledge of Europe and adventure travel will allow us both to satisfy our customers and to surpass the services offered by our competitors. ?ur mar$et study Bsee <ppendix &C has shown that theis group composed of affluent professionals has specific needs that are not currently being met, as ;4 percent of those planning vacations
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would not purchase them from the same source againM Specifically, they want their travel agent to have comprehensive $nowledge of the destination B2> percentC= to have an efficient administration system in which they can have confidence B27 percentC= to go on vacation with similar professional people B2& percentC= and to be offered useful advice and ancillary services such as insurance B>A percentC. In addition, our mar$et study confirms that Europe is li$ely to be the largest destination mar$et for adventure vacations. ?ur study shows only 35 percent of adventure travelers to be under *7 years of age, while the !orld <dventure Travel +ata study claims ;& percent is under *7. !e feel the difference is because our survey sample is confined to relatively affluent people who had spent at least 1345 on adventure clothing Bsee <ppendix &C. ?ne further emerging mar$et segment for adventure vacations is that of corporate clients. ?ur research suggests that up to one in five adventure vacations is at this top price end of the mar$et.
Competiti!e(MPETITIVE Anal sis)A3YSIS

%orthwind Traders is the only travel agency located in the Seattle area that is focused on European adventure vacations. -owever, there are many adventure travel agents in capital and secondary cities such as (edmondSeattle, Bellevue, and Tacoma that compete with %orthwind Traders to provide adventure vacation pac$ages. These agencies are described below, /eneral Travel <gents These agents have added adventure vacations to their services, but often have little or no $nowledge of adventure destinations or activities. They sell literally from the page, offering limited advice, information, and support. <ccording to our mar$et study, 75 percent of adventure vacations are boo$ed through these general travel agents, but only a third of clients would use them again. <dventure Tour ?perators These tour operators who advertise their vacations in the press attract about a 6uarter of all adventure vacation clients. -owever, clients have to shop around several tour operators to find what they want, and clientsthey cannot get unbiased advice or much help with information.
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?nly 74 percent would go bac$ to a tour operator for their next vacation. Independent Travelers These travelers comprise about &4 percent of those going on adventure vacations, of whom ;4 percent would travel that way again. !e need to persuade this group that our superior product $nowledge and service is worth their consideration. Internet roviders These providers sell only 4 percent of adventure travel vacations= however, >5 percent of adventure travelers would buy their next vacation via the Internet. There is plenty of scope to offer a superior !eb site. !e believe that by having daily face.to.face contact with clients, we will be better able to manage a fresh, vital, and relevant !eb site aimed at the specific needs of our mar$et segment. Specialist <dventure Travel <gencies These agencies sell only about &4 percent of travel pac$ages at present, but we feel this is partially due to lac$ of client awareness and to the comparative rarity of such outlets. !e will differentiate ourselves from our competitors by offering the most extensive material available from the most up.to.date, well.informed staff. )lients will return for our service, $nowledge and competitive prices. These findings are some of the most powerful results of our research. !hile general travel agents may be the most li$ely resource for those travelers ta$ing an adventure vacation, they are in fact the least li$ely place those clients will return to. <nd t<lthough specialist adventure travel agents, such as the business we are setting up, account for only &4 percent of the mar$et, ;4 percent of clients would use them again. !e aim to increase this percentage through our superior service.
Competiti!e Ad!anta#es
Some ;4 percent of those clients using specialist adventure vacation travel agents would use them againImany more than would use either a direct tour operator direct or a general travel agent. -owever, these agents were critici"ed for having such a wide range of activities and destinations that their sales agents $new little about them. ?ur research shows that while 7& percent of clients ta$e adventure vacations in Europe, only *3 percent of the 4555 adventure tours offered are for
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European destinations. !e feel that by concentrating on European destinations, which is the largest mar$et for both vacations in general and adventure vacations in particular, we will be able to have superior product $nowledge. !e will need to $now only perhaps &55 destinations and activities well, rather than have only a passing $nowledge of the 4555 adventure vacations available. ?ur mar$et research has also shown that many adventure travel agents are catering to the bac$pac$er mar$et, consisting mostly of individuals who are under *7 years of age and are generally very cost conscious. This can lead to very different types of clients ending up at the same destination, with some conse6uent dissatisfaction. It is also noteworthy that t The bac$pac$er mar$et re6uires a much lower level of service and information than does the mar$et for the more affluent *4. to 34.year.old professional. *4H34 year old mar$et.
Competitors* Positions
The two maDor competitors of %orthwind Traders are @a$es N Sons and Ferguson and Bardell, and @a$es N Sons. Ferguson and Bardell is the strongest competitor of %orthwind Traders, due to its strong client base and experienced owner. -owever, itstheir press releases are of a very low 6uality, and itstheir location is undesirable, with difficult par$ing and limited customer service space. In addition, Ferguson and Bardell lac$s the $nowledge and expertise in the field of European adventure travel that is valued so highly by the clientele of %orthwind Traders. @a$es N Sons will be a formidable competitor for %orthwind Traders because of itstheir prime location, well.established business, and extensive training program.
Potential %uture Competition

%orthwind Traders will occupy a speciali"ed niche in the travel industry, with its focus on adventure vacations in Europe. <lthough they areit is currently the only European adventure travel agency located in the Seattle(edmond area, there are competitors do exist in nearby areas Bsee aboveC. In order to stay competitive, %orthwind Traders will need to establish itself as the leader in adventure travel planning for Europe with its superior product $nowledge and high.6uality service. The lac$ of current adventure travel providers in the area represents a uni6ue opportunity for %orthwind Traders to expand in a rapidly growing mar$et.
*5
6USI)ESS STRATE4YMAR+ETI)4 > SA3ES P3A))I)4

!ith %orthwind Traders0 expertise in European adventure travel, we can create customi"ed travel itineraries for our clients and provide the most thorough, informative adventure travel service available. By offering superior customer service, %orthwind Traders can distinguish itself from its competitors.
Customer Incenti!es
?ur mar$et research shows that publicity has the greatest impact on people0s choice of an adventure vacation travel agent, followed closely by having the right location, and having a recommendation from a friend, relative, or colleague. /eneral press advertising seems to be fairly ineffective in this sector, and event specialist press advertising only brings in one out of seven clients. BSee <ppendix &, Summary of Findings from 'ar$et (esearch.C
Ad!ertisin# and Promotion

?ur advertising and promotions will pivot around six $ey strategies, public relations, our shop front, an Internet !eb site, customer relations, press advertising, and our association with the %orthwind Traders clothing store. ublic relations. !e will put considerable effort into preparing and disseminating a regular flow of press releases. These will be based on stories about our destinations, activities, corporate clients, and our staff. !e will employuse a freelance public relations adviser to help us write copy and locate publications editors. Shop front. !e plan to have an exciting, informative, and actively managed display window. There will be a video display showing adventure vacations in progress. +ifferent destinations can be selected from outside the window via a control panel=, otherwise, the scenes will rotate on a random basis.
*&
Internet !eb site. This is fast becoming a maDor promotional channel, and we believe it will increase in importance over time. <lso, it is the most convenient way for us to have a global presence at the outset. BSee <ppendix &, Internet /rowth and the Sale of Travel Services.C )ustomer relations. !e will $eep records of every sales contact. +ata such as source of in6uiry, client needs, previous vacation, Dob, and income will be included. By having superior information on our clients and prospects, we intend to offer a truly personali"ed service. ?ur database will contain full details on all our clients, including the vacations they have ta$en and their postvacation appraisal data. !e will use this data to encourage our satisfied customers to recommend our services to friends, relatives, colleagues, and employers. ress advertising. !e will underta$e a small amount of specialist press advertising in order to enhance our public relations activity. There is considerable research to support the argument that the more often a potential client hears about you, the more li$ely they are to approach you when they have a need for your type of service. %orthwind Traders association. !e will write to all past shop clients announcing the establishment of the travel business and offer them a special introductory adventure vacation pac$age.
Sales and Mar"etin#

Excellent selling s$ills are vital in our type of business. Therefore, everyone will be fully trained in sales. <dditionally, every month we will EauditF each other by observing half.a.day0s selling activity and giving feedbac$ on strengths and wea$nesses in s$ills. !e will also be using a Econtact managementF system that will allow us to monitor the effectiveness of different promotional strategies and of different mar$eting messages. The $ey to our strategic advantage lies in having superior data on prospects and clients.
Commission
The normal commission paid to travel agents for this type of vacation is in the &5 percent to &4 percent range. !hile 'argie0s Travel, the first agency we have been appointed to, pays us at the lower end of the scale, they are a prestigious firm to represent. -aving them in our portfolio will enable us to negotiate much higher commissions from our new principals. <ccordingly, we are
**
planning on an average travel agency commission of && percent, rising to &3 percent by the end of #ear Three. )ommission on insurance and other services will be 35 percent, throughout. /uarantees and )ustomer rotection ?ur clients will be protected financially against either our own or our tour operator0s failure, by virtue of the <() bonding held by our principals. !e will only use vacation providers who can provide *7.hour emergency support services for clients while on vacation.
(PERATI()S
Premises
It is vital that the travel business has both a storefront facing onto the main street and a visible separate entrance. The goal is for clothing shop clients to be able to move between the premises without going outside. !e will be renting *555 s6uare meters of fully serviced space at a cost of 135,5;5 per year fully serviced. !e will need to spend 1*4,545 on internal refurbishing. !e plan to do some of this wor$ ourselves. <n additional 17&>4 will be needed for des$s, chairs, and other office furnishings.
Choice of 3ocation and Premises

!e intend to locate within the existing %orthwind Traders shop, sinceas this is close to the city center with a high density of both residential and business premises. The pavement is wide, so people can stand and loo$ in the window without being in the way of other pedestrians.
(penin# 'ours of (peration

The telephone lines will be staffed *7 hours a day by live operators. +uring the period from A am to ; pm, this will be done mostly by our staff. -owever, overload calls during the day and afterout. of.hours calls will go to our live telemar$eting bureau. eople consider vacation decisions at home in the evenings after discussion with friends and partners. !e want to be available as their first point of contact with an informed, friendly service. !e believe that since our clients will mostly be busy professional people, off.pea$. hours access to our services is also a $ey way in which we can differentiate ourselves from other travel agencies.
%orthwind Traders Sample Business lan *3
E$uipment
!e will be renting an integrated telephoneJdata.base system from the outset. This will allow up to ten sales staff to answer calls and have full on.screen data on clients and products. <s service is one of our $ey components, it is essential that we have full access to all relevant data speedily and efficiently.
Staffin#
From the outset all staff will have Dob descriptions, a career and training history file, and a record of employee reviews. %ew staff will ta$e the travel agency sychometric <ptitude Test, and then spend time with each member of the %orthwind Traders team. <ll staff will undergo full product training, and will spend at least four wee$s a year on.site at $ey travel destinations. ?ur dress code will re6uire us to loo$ as though we are on our way to one of our adventure vacations. !e plan to start with a staff of three full.time employees, including the founder, and one part.timer. !e plan to be operating with a staff of thirteen during the fifth year of business.
5ith this s stem /e can re!ie/ our sales and mar"etin# acti!ities on a re#ular ,asis. Thus /e /ill ,e a,le?ualit Control !e will be developing outline scripts to help the sales staff manage in6uiries. This will ensure that all incoming phone calls are dealt with in the same way and meet a high standard. !e will encourage people in6uiring about vacations to give us feedbac$ on, ?ur ability to handle their in6uiry The amount of time from the client0s first in6uiry to the date of actual travel
%orthwind Traders Sample Business lan *7
The client0s reactions to the vacation in terms of whether it meets their expectations )e/ Tour (perators -eather 'itchell will be responsible for reviewing the range of tour operators that we see$ to represent, and negotiating with prospective new principals.
Capacit ?ur offices can accommodate five sales des$s. Each sales des$ has a capacity to handle four clients per hour, which means over the year we could handle up to 75,555 in6uiries. !ith our average sales rate of one in five, we could service A;55 clients from our present facilities. This is well above the numbers we are anticipating in the business plan.
MA)A4EME)T > (R4A)I@ATI()
*4
+e Emplo ees -eather 'itchell, resident and )E?. Before founding %orthwind Traders, 's. 'itchell owned and operated %orthwind Traders, an outdoor clothing shop in the (edmond area. rior to that, she managed the ?lympia branch of one of the larger regional chains of general travel agencies operating throughout western !ashington, where she was responsible for managing the office systems and a staff of four. She has a degree in travel and tourism from State Gniversity. In addition to 's. 'itchell, team members 9im :im and (ichard Bready will be moving into the new venture on a full.time basis, and <my Egert has been recently recruited to cover Saturdays and vacations. Freelance business consultant 9ae a$ will be advising during the business0s changeover from clothing shop to adventure travel agency. 9im :im, 8ice resident Sales and 'ar$eting. rior to Doining %orthwind
Traders, 'r. :im wor$ed for the mar$eting department of a maDor airline. -is current responsibilities include the company0s direct mar$eting campaign and all sales related issues. (ichard Bready, ?ffice 'anager. Twenty years as a travel agent has given 'r. Bready the ideal bac$ground for %orthwind Traders. < $nowledgeable salesperson, 'r. Bready0s expertise in the area of European travel enables him to entice the adventure traveler. <my Egert, Sales <ssistant. <fter completing her undergraduate degree at the Institute of <rt, 's. Egert spent a year traveling abroad and Doined the staff at %orthwind Traders recently as a sales assistant.
*;
9ae a$, Business )onsultant. !ith over twenty years of consulting experience in industries ranging from aerospace to technology to retail, 'r. a$0s $nowledge and guidance will be instrumental to the success of %orthwind Traders. B-eather 'itchell0s )8 is in <ppendix 3C 6oard of Directors The volunteer members of the Board of +irectors provide guidance to the management and staff of %orthwind Traders. The board meets twice yearly to discuss policy changes, review the mission statement, and update the business plan if needed. 'embers include, @isa 9acobson, retail store owner -olly Barrett, ) < 9o Brown, former travel agent !illiam -ollands, @awyer @isa /armaise, retail store owner Tony )hor, human resource manager rasanna Samarawic$rama, caterer
*>
*2
3on#7Term 4oals %orthwind Traders plans to grow steadily over the next five years, becoming the premier provider of European adventure vacations in the greater (edmond area. ?ur financial obDectives are to be operating at or close to brea$.even cash flow by the end of the first year. !e aim to be profitable from #ear ?ne onward= our goal is to earn at least 1355,555 post tax profit in the #ear Two, and nearly 1455,555 in #ear Three. ?ur profit margin on sales by #ear Three will be a respectable > percent. Strate# for Achie!in# 4oals Extensive public relations campaign (ecruit well.trained, enthusiastic staff +eliver superior product $nowledge rovide high 6uality customer service
)reate library of toolsJreference materials for clients ?ffer competitive pricing on vacation pac$ages The first priority is to hire a competent public relations consultant. This individual will be the $ey to producing state.of.the art publicity materials and determining where these materials should be placed for optimum visibility. The second priority will be to increase the staff. The individuals recruited will go through an extensive training program to ensure that they will be able to provide superior product $nowledge in the field of European adventure travel. The present staff is passionate about adventure vacations, and we intend to maintain their enthusiasm through constant product development and s$ill
%orthwind Traders Sample Business lan *A
training. !e will only recruit those individuals who share our vision. !e also want the business to have an enDoyable atmosphere. The third priority is to install a library of reference wor$s in the shop. These materials will be available for clients to browse through while in the shop, or to Echec$ outF and peruse at home. <n agent will be on hand at all times to answer any 6uestions. Position !hile at present we are offering only other company0s adventure vacations, we have protected our position in a number of ways. First, we have a two.year agency agreement with 'argie0s Travel, which gives us access to all their existing vacation products as well as any new ones. This contract is dependent on %orthwind Traders achieving sales of at least *45 vacation pac$ages a year. !e intend to negotiate similar agreements with future suppliers, although sales targets with them will be lower to reflect their relative mar$et position. Second, we intend to maintain a high service element to our business, extending our range of value added services such as vacation insurance, individuali"ed prevacation boo$lets, postvacation follow.up, and continually updating our client database. In this way, we will see$ to build up a high level of repeat business. )ustomer loyalty is vital to our profitable growth. Ris"s Associated /ith 4ro/th @osing touch with customers @oss of clientele to other providers Ouality of services diminished
%orthwind Traders Sample Business lan 35
%ew businesses The ris$s facing the expansion of %orthwind Traders can be summed up in one word, competition. In order to sustain our position in the area as the premiere European adventure travel business, %orthwind Traders needs to outshine our competition. By maintaining our focus on superior product $nowledge and outstanding customer service, we will be able to uphold our position in the industry, thereby retaining current clients and attracting new clients.
%(RECASTI)4
Sales %orecast
?ur ratio of sales to in6uiries ofn the adventure travel vacations sold to date, while operating within the outdoor clothing shop, has been one in three. For the purposes of our sales forecast, we are assuming that only one in five in6uiries will actually result in an adventure vacation being boo$ed. This is a very conservative estimate. !e expect there to be a steady buildup of clients coming from the clothing shop to tal$ to us about vacations Bsee Table 3 belowC. -owever, the number of new in6uiries generated by our promotional activity will also build up during the year, gradually overta$ing in6uiries from the clothinges shop. This is a trend we expect to continue. Based on the proDection below, we are forecasting to sell ;;5 adventure travel vacations next year at an average price of 1347A. ?nce insurance and other service sales are added in, we expect to generate a gross profitn income of 1*;2,>23 over the first &* months.
Ta,le 1. Sales %orecast ProAection

??0 ?1 ?2 Year Total In6uiries generated through promotion %orthwind Traders Sample Business lan 3& *55 7*4 7*4 >45 &255
Shop in6uiries Total in6uiries 8acations sold <verage vacations cost )ommission received )ommission on insurance N other services received Total commission N fees earned
355 455 &55 13375 133,755 1&;>5
355 >*4 &74 13375 172,735 13375
745 2>4 &>4 13>42 1>*,33& 145&5
745 &*55 *75 13>42 1A2,>4> 14274
&455 3355 ;;5 1347A 1*4*,A&2 1&4,2;4
134,5>5
14&,>>5
1>>,37&
1&57,;5*
1*;2,>23
In #ear Two we are forecasting a gross profitcommissions of 1;*7,3&2, and in #ear Three we plan to reach 1A2;,27;.
Cash %lo/ ProAections

The )ash Flow proDections for #ear ?ne Bsee <ppendix *C show that after the owner has put in 17&,>45, the business will need additional short.term financing of about 123,455. For the last two months of the year, we are forecasting a positive cumulative cash flow and a year.end cash surplus of 1&A,A34. In our )ash Flow proDection, we have assumed the whole 123,455 additional financing has come from a ban$ loan. !e have allowed for interest on the full amount for the whole period. In practice we would hope to finance part of this at least by a line of credit e6ual to the money actually re6uired. In this way we believe we have made a prudent, conservative provision.
Income Statement
!e expect to ma$e a small after. tax profit of 137,A5& in the first year of 137,A5& Bsee <ppendix * and Table 7 belowC. This is before the owner0s drawings. <ny owner0s drawings will be contingent on performance being better than that expected in the lan.
Ta,le 2. Profits in Years (ne to Three /ill ,e

%orthwind Traders Sample Business lan 3*
Year (ne Sales @ess cost of sales /ross profit @ess expenses %et income before taxes rovision for taxes %et income after taxes *,3;7,23A *,5A;,54; *;2,>23 **7,>75 77,573 A&7* 137,A5&
Year T/o 4,*5*,;74 7,4>2,3*> ;*7,3&2 *73,7573 325,A&74 >;,&27 1357,>35&
Year Three >,4A&,&3* ;,;57,*2; A2;,27; 374,;A5 ;7&,&4; &74,>4& 17A4,754
6alance Sheet
The Balance Sheet at the end of #ear ?ne Bsee <ppendix *C shows a healthy surplus of current assets over current liabilities. !e have shown a conservative funding position, which does not include any of the additional capital that we hope to secure.
Performance Ratios
!e plan to move our gross profit up from && percent in #ear ?ne, to &3 percent in #ear Three. These figures loo$ 6uite low, but it should be remembered that our gross profitincome is really the sales commission we earn, not the full price of an adventure vacation. ?ur net income before taxes is a more accurate measure of performance. This we expect to move from * percent at the outset, up to 2 percent by #ear Three. )ommission generated and profit per employee will be among the highest in the industry. Ta,le B. Commission 4enerated and Profit per Emplo ee
Year (ne /ross profit P %et income before taxes P )ommission generated per employee rofit per employee 1&*,427 1;A,*4> 1&5;,242 && * 1>;,>A4 Year T/o &* > 1&32,>3> Year Three &3 2 1&;7,7>3
33
6rea"7E!en
To brea$ even we will need to sell between * and 3 vacations per day. This compares with our present sales of &.3 vacations per day, based on our part.time effort out of the clothing shop. !e feel confident that the brea$.even point can be attained within a reasonable period of time.
%unds Re$uired and Timin#

!e plan to ma$e two maDor investments, one in !eb site and database development and one in shop premises development. ma$e are the, !eb site and data base development . this will cost 17&,3*4>45. The data base system is one of our $ey differentiators. It will allow us to offer superior service and ensure a high level of repeat business and referrals. The !eb site is vital if we are to reach this wide and disparate global mar$et. The group of potential clients we have chosen as our target mar$etI, affluent, professional *4. to 34. year oldsI, are prime users of the Internet. Even those people in our locality will expect to be able to research our offers on the Internet before coming to the shop. BSee <ppendix &, Internet /rowth and the Sale of Travel Services C Shop premises development . this will cost us 1*A,**4. !e have to loo$ professional and to have an efficient wor$ environment. If our staff do not have the right tools, we can hardly expect them to deliver superior performance. If clients see EamateurF premises, they will not be inspired to spend thousands of dollars and entrust their adventure vacation plans to us. Both these investments need to be made at the outset to ensure that the business creates the right impression from the start. !e get only one chance to ma$e a first impression. !e have decided to lease our telephone and computer systems, sinceas this is a rapidly changing area and we need to have access to the very latest technology. Financing pac$ages from e6uipment suppliers are currently very attractive.
%undin# (ptions
The owner plans to invest 17&,>45 of her own money Bthe proceeds of the sale of her share of the clothing shop businessC. The cash flow proDections show that the business will re6uire 123,455 of wor$ing capital during the early months of the first year0s operations. !e thin$ we should provide
an additional 1&5,5*5 for unforeseen eventualities. !e are considering In the event that additional funds prove necessary, we have identified two options for raising further fundsthis 1A3,4*5, (ption -: The sale of e6uity, perhaps to the original shop partners, could raise between 17&,>45 and 1&;>,555. This would provide some capital to allow for growth. <ny shortfall could be funded either by a line of credit or a ban$ loan. (ption 0, <pproach our ban$ with a view to raising a medium. term loan of 17&,>45 and a line of credit of 142,745. -eather 'itchell could, with family help, provide any lender with security for part, if not all, of this facility. Financial !e will be using a computer.based financial management system. This will allow us to analy"e the profitability of sales of different vacations through each tour operator. In this way we can review our sales and mar$eting activities on a regular basis. It will also allow us to reward staff on the basis of profit achieved rather than Dust on sales.
6USI)ESS C()TR(3S
Accountin# S stem
!e will be using a computer.based financial management system. !ith this system we can review our sales and mar$eting activities on a regular basis. This will allow us to analy"e the profitability of sales of different vacations through each tour operator. Thus we will be able to reward staff on the basis of profit achieved rather than Dust on sales.
?ualit Control
!e will be developing outline scripts to help the sales staff manage in6uiries. This will ensure that all incoming phone calls are dealt with in the same way and meet a high standard. !e will encourage people in6uiring about vacations to give us feedbac$ on our service, ?ur ability to handle their in6uiry The amount of time from the client0s first in6uiry to the date of actual travel
34
The client0s reactions to the vacation in terms of whether it meets their expectations
)e/ Tour (perators

-eather 'itchell will be responsible for reviewing the range of tour operators that we see$ to represent and negotiating with prospective new principals.
Capacit
?ur offices can accommodate five sales des$s. Each sales des$ has a capacity to handle four clients per hour, which means over the course of a year, we could handle up to 75,555 in6uiries. !ith our average sales rate of one in five, we could service A;55 clients from our present facilities. This is well above the numbers we are anticipating in the business plan.
3on#7Term 4oals
%orthwind Traders plans to grow steadily over the next five years, becoming the premier provider of European adventure vacations in the /reater Seattle area. ?urThe financial obDectives of %orthwind Traders are to be operating at or close to brea$.even cash flow by the end of the first year, with steady growth over the next five years. !e aim to be profitable from #ear ?ne onward= our goal is to earn at least 1357,555 posttax profit in #ear Two and nearly 17A;,555 in #ear Three. ?ur profit margin on sales by #ear Three will be a respectable > percent.
Steps for Achie!in# 4oals

%orthwind Traders0 strategy for achieving our goals consists of six maDor points, Establish an extensive public relations campaign (ecruit well.trained, enthusiastic staff +eliver superior product $nowledge rovide high.6uality customer service )reate a library of toolsJreference materials for clients ?ffer competitive pricing on vacation pac$ages The first step to achieving our goals is to hire a competent public relations agency. This will be the $ey to producing state.of.the art publicity materials and determining where these materials should be placed for optimum visibility.
3;
The second step will be to increase the staff. The individuals recruited will go through an extensive training program to ensure that they will be able to provide superior product $nowledge in the field of European adventure travel. The present staff is passionate about adventure vacations, and we intend to maintain their enthusiasm through constant product development and s$ill training. !e will only recruit those individuals who share our vision. !e also want the business to have an enDoyable atmosphere. The third step is to install a library of reference wor$s in the shop. These materials will be available for clients to browse through while in the shop or to Echec$ outF and peruse at home. <n agent will be on hand at all times to answer any 6uestions.
Position
!hile at present we are offering only other company0s adventure vacations, we have protected our position in a number of ways. First, we have a two.year agency agreement with 'argie0s Travel, which gives us access to all their existing vacation products as well as any new ones. This contract is dependent on %orthwind Traders achieving sales of at least *45 vacation pac$ages a year. !e intend to negotiate similar agreements with future suppliers, although sales targets with them will be lower to reflect their relative mar$et position. Second, we intend to maintain a high service element to our business, extending our range of value.added services such as vacation insurance, individuali"ed prevacation boo$lets, postvacation follow.up, and continually updating our client database. In this way, we will see$ to build up a high level of repeat business. )ustomer loyalty is vital to our profitable growth.
Ris"s Associated /ith 4ro/th

!e see some ris$s associated with our expected growth, @osing touch with customers @oss of clientele to other providers Ouality of services diminished %ew businesses
3>
The ris$s facing the expansion of %orthwind Traders can be summed up in one word, competition. In order to sustain our position in the area as the premier agency for European adventure travel, %orthwind Traders needs to outshine its competition. By maintaining our focus on superior product $nowledge and outstanding customer service, we will be able to uphold our position in the industry, thereby retaining current clients and attracting new clients.
32
3A
APPE)DIX -: MAR+ET RESEARC'

International Arri!als , 5orld Re#ion
Updated forecast for the ears 0<<< and 0<-< 8millions9
<verage annual &A>4 Europe East <siaJ acific <mericas <frica 'iddle East South <sia !orld total &43.2 2.> 45.5 7.> 3.; &.; ***.3 &AA4 332.* 27.4 &&5.& &2.> &&.3 7.4 4;>.7 &AA; 37>.7 A5.& &&4.4 &A.7 &4.& 7.4 4A*.& *555 3A> &** &32 *4 &7 ; >5* *5&5 4*4 **A &A4 3> *& && &,5&2 growth rate BPC &AA5 . *5&5 3.& >.; 3.> 7.; 7.A ;.> 7.&
Source, /lobal Stats. )orp. &AA>
75
Indications of Tourism Demand in -;;C

International tourist arrivals Bx &,555C <ustria Belgium +enmar$ Finland France /ermany /reece Ireland Italy @uxembourg %etherlands ortugal Spain Sweden Gnited :ingdom EG Iceland @iechtenstein %orway EE< Swit"erland Europe.&A &>,&>3 44;5 &;&7 234 ;5,&&5 &7,27> &5,&35 7*3& 3&,54* >;> ;4>7 A>5; 77,22; ;23 **,>55 *35,2;2 &A5 4A *225 *33,AA> &&,455 *74,7A> %ights spent by foreign tourists B'illC ;3.2 &*.2 &5.2 3.3 47.3 34.4 3A.; &7.5 &&3.5 *.3 &A.> **.* &5>.2 >.A &;7.A ;>*.5 5.2 5.& >.& ;25.5 37.5 >&7.5 International tourism receipts B'ill. E)GC &&,&;2 7>>; *2&7 &3*5 *5,>7* &*,752 3&32 *54A *5,AA3 7>>; 7A7; 3335 &A,73& *;4* &7,3;; &*7,&73 &*> nJa &2*; &*;,5A; >*3; &33,33*
Source, /lobal Stats. )orp. &AA>
7&
Summar of %indin#s from Mar"et Research Sur!e

Three hundred clients of %orthwind Traders who had made purchases in excess of 1345 in the past six months were surveyed. Percenta#e of Sample Customers Ta"in# and )ot Ta"in# Ad!enture Vacations <ccording to our research, only *5 percent of our sample customers had never ta$en or considered ta$ing an adventure vacation. Thirty percent, while they had not yet ta$en such a vacation, had at least actively considered doing so. Fifty percent of our sample are regular adventure travelersusers, ta$ing at least one adventure vacation each year. Information A,out -B< Respondents 5ho Too" At 3east (ne tra!el Vacation Per Year /ender, Status, 'ale 'arried ;4P *&P Female Single >AP 34P
Ad!enture Vacation Tra!elersD , A#e and Percent <ccording to our study, the percentages of adventure vacation travelers in fall into various age groups as follows, 4P are under the age of &; *4P are between the ages of &; toand *7 75P are between the ages of *4 toand 34 *5P are between the ages of 3; toand 74 &5P are over the age of 74
Percenta#e of Ad!enture Vacation Tra!elers , Income 4roup <ccording to our research, the percentages of adventure vacation travelers in various income brac$ets are as follows, ;P earn less than 1&;,>55 or less annually **P earn between 1&;,>5& and 1*4,545 annually *2P earn between 1*4,54& and 133,755 annually
7*
*4P earn between 133,75& and 17&,>45 annually &AP earn more than 17&,>45 annually
Forty.five percent of respondents ta$ing adventure vacations spend in excess of 13375 per person per vacation. Twenty percent of the respondents, who tend to be professionals in the *4. to 34.year age range, typically spend over 145&5 per person. Those respondents spending under 13375 are both in the lower income and lower age groups and represent &5 percent of the respondents. Percenta#e , Destination of B<<< MaAor Ad!enture Tours A!aila,le on the Mar"et < study by destination of approximately 4555 maDor adventure tours on the mar$et reveals the following, &*55 of the 4555 offered are for destinations in Europe &555 of the 4555 offered are for destinations in %orth <merica ;55 of the 4555 offered are for destinations in India 2&5 of the 4555 offered are for destinations in <frica ;>4 of the 4555 offered are for destinations in the Far East ;>4 of the 4555 offered are for other destinations
By contrast, the percentages of the mar$et adventure travelers devoted purchasing vacation pac$ages to each of these regions destinations is are as follows, Europe . 7&P of adventure travelers purchase vacation pac$ages for destinations in Europe %orth <merica . 35P of adventure travelers purchase vacation pac$ages for destinations in %orth <merica India . &5P of adventure travelers purchase vacation pac$ages for destinations in India <frica >P of adventure travelers purchase vacation pac$ages for destinations in <frica Far East . >P of adventure travelers purchase vacation pac$ages for destinations in the Far East other destinations . 4P of adventure travelers purchase vacation pac$ages for destinations in other regions
?ur research shows that Europe is the most popular destination for adventure vacation travelersa$ers. -owever, only &*55 of the 4555 adventure tours on the mar$et are for European destinations. <frica, which only attracts > percent of the mar$et, has &; percent of the tours aimed at it. It follows that the European mar$et has scope for expansion and that if we concentrate on that mar$et, we only need to have detailed $nowledge of upmar$et European tours, rather than all 4555. In that way we can have the advantage of superior $nowledge in our chosen mar$et.
Percenta#e , Source from /hich Tra!eler 'eard A,out 3ast Ad!enture Vacation ?ur research reveals the following about the source from which adventure travelers originally found out about the last adventure vacation they purchased, publicity activity . 35P heard about their vacation pac$age through publicity activity travel agent . *4P heard about their vacation pac$age through a travel agent friend . &2P heard about their vacation pac$age through a friend adventure press . &4P heard about their vacation pac$age through adventure press press advertising . 2P heard about their vacation pac$age through press advertising Internet . 7P heard about their vacation pac$age through the Internet
These findings demonstrate the power of publicity. The next most effective way to reach potential clients is via the travel agent0s shop window. Both the press in general and the adventure travel press do not appear to have much effect on buyers in this mar$et.
The percentagemaDority of respondents who have not been on an adventure vacation organi"ed by their employer far outnumbers those who have been on a vacation planned by their employer. There is a significant minority of corporate clients who buy adventure vacations to use as rewards,
motivation, or as a part of a management development program. These corporate customers are also those clients who spend over 145&5 per person per tour.
74
)(RT'5I)D TRADERS ?UESTI())AIRE (Your replies are anonymous so confidentiality is assured)

&. 4ender, Married: Children A#e, 'ale #es #es Gnder &; &; . *7 *4 . 34 3; . 74 74L (ccupation: Female %o %o Income, Gnder 1&;,>55 1&;,>5&.1*4,545 1*4,54&.133,755 133,75&.17&,>45 over 17&,>45
Self,................................................................... artner,.............................................................
*.
-ow many adventure vacations have you ta$en in the past three yearsQ %one . never considered ta$ing one )onsidered, but not yet ta$en a vacation Ta$en one adventure vacation Ta$en two adventure vacations Ta$e at least one adventure vacation every year
3.
If you ta$e adventure vacations, how much do you spend per head per vacationQ Gnder 1&;>5 1&;>&.13375 1337&.145&5 ?ver 145&5
7;
7.
!ho did you buy your last adventure vacation fromQ !ould you use that source Traveled independently +irectly from the tour operator 8ia the Internet From a specialist adventure travel agent From a general travel agent #es #es #es #es #es %o %o %o %o %o
againQ
4.
-ow did you hear about the last adventure vacation that you too$Q From a friendJcolleagueJrelative 8ia an advertisement in general press 8ia the Internet Saw it in the travel agent0s window 8ia an advertisement in specialist adventure travel press Editorial in pressJT8Jradio
;.
!hat impressed you most about the people you bought your last adventure vacation fromQ (an$ing for level of impression B& R excellent, 7 R uselessC :nowledge of activity :nowledge of destination (ange of helpful advice <dditional services, such as insurance (an$ing for importance of factor B& R very high, 7 R 6uite unimportantC
>.
!hat did you disli$e most about the last adventure travel vacation that you too$Q The other people on the vacation were not compatible Be.g. much older, Jyounger, or had very different competence levelsC
7>
Too expensive
The travel agentJtour operator did not properly explain the true nature of the vacation The administrative arrangements were poor . I had to do all the chasingM 2. !hat was the destination of your last adventure travel vacationQ Europe <sia
%. <merica
?ther
<frica A.
India
If you have never ta$en an adventure vacation would you consider ta$ing one from a reputable travel agent with proven expertise in this mar$etQ #es %o
&5.
-ave you ever been on an adventure vacation organi"ed by your employerQ #es %o
Thank you for your help with our research. We hope thisit will help Northwind Traders to bring you more exciting adventure vacations.
72
Internet 4ro/th and the Sale of Tra!el Ser!ices

Sales of travel services on the Internet have risen steadily over the past several years and loo$ to continue increasing through the year *555. These sales far outweigh other Internet sales, including ) sales of software and hardware, clothing sales, and boo$ sales. For example, in &AA2, sales of travel services totaled 1&.7 billion55', while ) products e6ualed 1&.5 billion55', boo$s 1755 million5', and clothing 1*45 million5'. It is also evident that the European users of the Internet are growing rapidly. The Gnited :ingdom is the second largest Internet user mar$et after /ermany, followed in decreasing order by the %etherlands, France, Finland, Italy, and Spain. Percenta#e of Internet Users 5ho 'a!e Shopped (nlineD -;;ED in Millions !hen it comes to actually using the Internet for online shopping, Finland leads the way, with /ermany and the Gnited :ingdom sitting s6uarely in the middle, close to the European average. The percentage of Internet users, by region, who have shopped online in &AA2 are as follows, Finland . ;AP of Internet users in Finland have shopped onlineP the %etherlands . 73P of Internet users in the %etherlands have shopped online /ermany . 7&P of Internet users in /ermany have shopped online Gnited :ingdom . 32P of Internet users in the Gnited :ingdom have shopped online Italy . 33P of Internet users in Italy have shopped online Spain . 3&P of Internet users in Spain have shopped online France . *AP of Internet users in France have shopped online
The average percentage of European Internet users who have shopped online in &AA2 is 7& percent.
7A
APPE)DIX 0: %I)A)CIA3 %(RECASTS

Cash %lo/ ProAection Year (ne
Cash Flow Forecast - 12 Months
Month:
Pre-Start
Receipts Cash Sales Collections from Credit Sales New E !it" #nflow $oans %ecei&ed 'ther Total Receipts 16!7 1 ! 2 11!1 6 21!2"3 14!6"6 16!366 27!3 5 22!462 16,700 8,350 8,350 10,020 10,855 251 12,525 418 14,195 501 15,865 501 18,370 585 21,710 752
Pa#$ents Cash (!rchases (a"ments to Creditors Salaries and )a*es Em+lo"ee ,enefits (a"roll -a.es %ent /tiltities %e+airs and 0aintenance #ns!rance -ra&el -ele+hone (osta*e 'ffice S!++lies 1d&ertisin* 2delete row3 0ar4etin* and 1d&ertisin* (rofessional 5ees -rainin* and 6e&elo+ment ,an4 Char*es 0iscellaneo!s 'wner7s 6rawin*s $oan %e+a"ments -a. (a"ments Ca+ital (!rchases 'ther 8 6ata9ase and )e9 Site 6,938 5,439 1,751 26 0 0 0 0 25,050 0 5,635 4,418 1,422 21 0 0 0 0 0 0 2,883 2,261 728 11 0 0 0 0 4,175 0 2,265 1,776 572 9 0 0 0 0 0 10,000 4,103 3,217 1,036 16 0 0 0 0 0 0 2,883 2,261 728 11 0 0 0 0 0 0 2,571 2,016 649 10 0 0 0 0 0 10,000 2,571 2,016 649 10 0 0 0 0 0 0 401 1,203 6,304 3,152 1,051 5,253 1,021 584 1,021 1,240 1,043 438 949
3*;
978 5,120 2,560 853 4,267 830 474 830 1,007 847 358 770
166 499 2,620 1,310 437 2,183 425 243 425 515 434 182 394
131 392 2,058 1,029 343 1,715 333 191 333 405 341 143 310
237 713 3,728 1,864 621 3,107 604 345 604 734 617 259 561
166 499 2,620 1,310 437 2,183 425 243 425 515 434 182 394
149 446 2,336 1,168 389 1,947 379 216 379 460 387 162 352
149 446 2,336 1,168 389 1,947 379 216 379 460 387 162 352
45
Total Pa#$ents
62!864
3 !716
1"!8"1
22!346
22!366
15!716
24! 16
14! 16
Cash%low S&rpl&s'(e%icit )-*
)46!164*
)2 !6"6*
)8!785*
)1! 53*
)7!67 *
65
3!28"
8!446
+penin, Cash -alance
)46!164*
)66!86 *
)75!645*
)76!6"8*
)84!368*
)83!718*
)8 !42"*
Closin, Cash -alance
)46!164*
)66!86 *
)75!645*
)76!6"8*
)84!368*
)83!718*
)8 !42"*
)71!"83*
4&
Income StatementD Years (ne to Three

.nco$e State$ent! Pro%it an/ 0oss State$ent - 12 Months
Year Year Year Perio/ Startin,: Month 1 Sales Sales 'ther Total Sales 2!364!8 5!2 2!6 7!5"1!1 3" Less Cost o% 1oo/s Sol/ 0aterials $a9or '&erhead 'ther Total Cost o% 1oo/s Sol/ 1ross Pro%it 2,096,05 4,578,32 6,604,28 6 7 6 2! "6! 4!578!3 6!6 4!2 56 27 86 45 32 2,364,83 5,202,64 7,591,13 9 5 2
0
Month 2
1
Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month " Month 1 Month 11
268!78 624!31 "86!84 3 8 6
+peratin, 23penses Salaries and )a*es Em+lo"ee ,enefits (a"roll -a.es %ent /tilities %e+airs and 0aintenance #ns!rance -ra&el -ele+hone (osta*e 'ffice S!++lies 1d&ertisin* 2delete row3 0ar4etin* and 1d&ertisin* 39,700 38,410 50,100 36,072 18,036 6,012 30,060 5,845 3,340 5,845 7,097 5,970 2,505 5,428 40,581 20,291 6,764 30,060 5,845 3,340 9,185 17,535 7,933 4,175 8,350 58,116 29,058 9,686 40,080 6,680 3,340 16,700 30,895 10,855 8,350 12,525
4*
(rofessional 5ees -rainin* and 6e&elo+ment ,an4 Char*es 6e+reciation 0iscellaneo!s 'ther Total +peratin, 23penses +peratin, .nco$e
31,125 10,020 150 9,185
16,550 16,700 150 9,185
16,500 35,070 200 9,185
216!3" 235! 5 337!34 4 52!3"3 38"!26 64"!5 4 6 28,3503
#nterest #ncome 2E.+ense3 'ther #ncome 2E.+ense3 Total 4onoperatin, .nco$e )23pense* .nco$e )0oss* -e%ore Ta3es .nco$e Ta3es
28,3503
28,3503
)8!35 * )8!35 * )8!35 *
44! 43
38 !"1 641!15 4 6
9,142
76,184 145,751
4et .nco$e )0oss*
34!" 1
3 4!73 4"5!4 5
C&$&lati5e 4et .nco$e )0oss*
34!" 1
33"!63 835! 3 835! 3 835! 3 835! 3 835! 3 835! 3 835! 3 835! 3 835! 3 1 6 6 6 6 6 6 6 6 6
43
6alance Sheet at end of Year (ne

-alance Sheet - Two 6ears )7&arterl#* 6ear 1 7tr 1 7tr 2 7tr 3 7tr 4 7tr 1 6ear 2 7tr 2 7tr 3
7t
8SS2TS
C&rrent 8ssets Cash 0ar4eta9le Sec!rities 1cco!nts %ecei&a9le, Net #n&entor" (re+aid E.+enses 'ther Total C&rrent 8ssets 0on,-Ter$ 8ssets (ro+ert", (lant, and E !i+ment $ess 1cc!m!lated 6e+reciation Net (ro+ert", (lant, and E !i+ment 'ther $on*8-erm 1ssets Total 0on,-Ter$ 8ssets Total 8ssets 2 ! 4 86!628 29,225 9,185 20,040 0 0 0 0 0 0 0 19,935 0 45,818 0 835 0 66!588
0.8-.0.T.2S 84( S98R29+0(2RS: 27;.T6
C&rrent 0ia<ilities Short8-erm 6e9t C!rrent 0at!rities of $on*8-erm 6e9t 1cco!nts (a"a9le #ncome -a.es (a"a9le 1ccr!ed $ia9ilities 'ther Total C&rrent 0ia<ilities 0on,-Ter$ 0ia<ilities $on*8-erm 6e9t $ess C!rrent 0at!rities 6eferred #ncome -a.es 'ther $on*8-erm $ia9ilities Total 0on,-Ter$ 0ia<ilities Sharehol/ers: 2=&it# 0 0 0 0 0 835 9,142 0 0 "!"77
47
Common Stoc4 1dditional (aid8#n Ca+ital %etained Earnin*s 'ther Total Sharehol/ers: 2=&it# Total 0ia<ilities an/ Sharehol/ers: 2=&it#
41,750 0 34,901 0 76!651 86!628
44
Sources and Uses of %unds

So&rces an/ ;se o% F&n/s 4&$<er o% %&n/in, ro&n/s e3pecte/ %or %&ll %inancin,: Total /ollar a$o&nt <ein, so&,ht in this ro&n/: S+;RC2S +F F;4(S 2=&it# Financin,: (referred Stoc4: Common Stoc4: (e<t Financin,: 0ort*a*e $oans: 'ther $on*8-erm $oans: Short8-erm $oans: Con&erti9le 6e9t: .n5est$ent %ro$ Principals: ;S2 +F F;4(S Capital 23pen/it&res: (!rchase of (ro+ert": $easehold #m+ro&ements: (!rchase of E !i+ment<5!rnit!re: 'ther: ?or@in, Capital: (!rchase of #n&entor": Staff E.+ansion: New (rod!ct $ine #ntrod!ction: 1dditional 0ar4etin* 1cti&ities: 'ther ,!siness E.+ansion 1cti&ities: 'ther: 6ata9ase and )e9 site (e<t Retire$ent: Cash Reser5e: ;41,750 >83!5 1
;29,225
;20,000 ; 34,700
; 41,325
4;
So&rces an/ ;se o% F&n/s 4&$<er o% %&n/in, ro&n/s e3pecte/ %or %&ll %inancin,: Total /ollar a$o&nt <ein, so&,ht in this ro&n/: S+;RC2S +F F;4(S 2=&it# Financin,: (referred Stoc4: Common Stoc4: (e<t Financin,: 0ort*a*e $oans: 'ther $on*8-erm $oans: Short8-erm $oans: Con&erti9le 6e9t: .n5est$ent %ro$ Principals: ;S2 +F F;4(S Capital 23pen/it&res: (!rchase of (ro+ert": $easehold #m+ro&ements: (!rchase of E !i+ment<5!rnit!re: 'ther: ?or@in, Capital: (!rchase of #n&entor": Staff E.+ansion: New (rod!ct $ine #ntrod!ction: 1dditional 0ar4etin* 1cti&ities: 'ther ,!siness E.+ansion 1cti&ities: 'ther: 6ata9ase and )e9 site (e<t Retire$ent: Cash Reser5e: ;41,750 >83!5 1
;29,225
;20,000 ;34,275
;41,750
6alance SheetD (ne Year 8?uarterl 9

-alance Sheet - +ne 6ear )7&arterl#*
4>
7tr 1 8SS2TS C&rrent 8ssets Cash 0ar4eta9le sec!rities 1cco!nts recei&a9le, net #n&entor" (re+aid e.+enses 'ther Total C&rrent 8ssets 0on,-Ter$ 8ssets (ro+ert", +lant, and e !i+ment $ess acc!m!lated de+reciation Net +ro+ert", +lant, and e !i+ment 'ther lon*8term assets Total 0on,-Ter$ 8ssets Total 8ssets 0.8-.0.T.2S 84( S98R29+0(2RS: 27;.T6 C&rrent 0ia<ilities Short8term de9t C!rrent mat!rities of lon*8term de9t 1cco!nts +a"a9le #ncome ta.es +a"a9le 1ccr!ed lia9ilities 'ther Total C&rrent 0ia<ilities 0on,-Ter$ 0ia<ilities $on*8term de9t less c!rrent mat!rities 6eferred income ta.es 'ther lon*8term lia9ilities Total 0on,-Ter$ 0ia<ilities Sharehol/ers: 2=&it# Common stoc4 1dditional +aid8in ca+ital %etained earnin*s 'ther Total Sharehol/ers: 2=&it# Total 0ia<ilities an/ Sharehol/ers: 2=&it#
6ear 1 7tr 2 7tr 3
7tr 4
7855 0 5600 0 400 0 13!855
210 0 16,800 0 535 0 17!545
20,768 0 35,890 0 835 0 57!4"3
19,935 0 45,818 0 835 0 66!588
29,225 222963 26,929 0 26!"2" 4 !784
29,225 245923 24,633 0 24!633 42!178
29,225 268883 22,337 0 22!337 7"!83
29,225 291853 20,040 0 2 ! 4 86!628
0 0 525 0 0 0 525
0 0 640 0 0 0 64
0 0 750 3500 0 0 425
0 0 835 9142 0 0 ""77
0 0 0
0 0 0
0 0 0
0 0 0
41,750 0 21,4913 0 4 !25" 4 !784
41,750 0 22123 41!538 42!178
41,750 0 33,830 75!58 7"!83
41,750 0 34,901 0 76!651 86!628
42
Cash %lo/ %orecastD -0 Months

Cash Flow Forecast - 12 Months Month PreReceipts Start Cash sales Collections from credit New salese !it" inflow $oans recei&ed 'ther Total Receipts Pa#$ents Cash +!rchases (a"ments to creditors Salaries and wa*es Em+lo"ee 9enefits (a"roll ta.es %ent /tilities %e+airs and maintenance #ns!rance -ra&el -ele+hone (osta*e 'ffice s!++lies 0ar4etin* and ad&ertisin* (rofessional fees -rainin* and de&elo+ment ,an4 char*es 0iscellaneo!s 'wner7s drawin*s $oan re+a"ments -a. +a"ments Ca+ital +!rchases 'ther 8 data9ase and )e9 Total site Pa#$ents Cash%low S&rpl&s'(e%icit )-* +penin, Cash -alance Closin, Cash -alance 1 2 10,020 3 10,855 251 4 12,525 418 8350 1 ! 2 11!1 6 21!2"3 14!6"6 16!366 5 14,195 501 6 15,865 501 7 18,370 585 8350 27!3 5 22!462 24!"67 8 21,710 752 " 24,215 752 1 26,406 1002 8350 35!758 2"!81 34!232 11 28,808 1002 12 33,066 1166 Totals 216! 35 6"3 41!75 264!715
16,700 16!7
401 1203 6304 3152 1051 5253 1021 584 1021 1240 1043 438 949 6938 5439 1751 26 0 0 0 0 25,050 0 62!864
326 978 5120 2560 853 4267 830 474 830 1007 847 358 770 5635 4418 1422 21 0 0 0 0 0 0 3 !716
166 499 2620 1310 437 2183 425 243 425 515 434 182 394 2883 2261 728 11 0 0 0 0 4175 0 1"!8"1 )8!785*
131 392 2058 1029 343 1715 333 191 333 405 341 143 310 2265 1776 572 9 0 0 0 0 0 10,000 22!346 )1! 53*
237 713 3728 1864 621 3107 604 345 604 734 617 259 561 4103 3217 1036 16 0 0 0 0 0 0 22!366 )7!67 *
166 499 2620 1310 437 2183 425 243 425 515 434 182 394 2883 2261 728 11 0 0 0 0 0 0 15!716 65
149 446 2336 1168 389 1947 379 216 379 460 387 162 352 2571 2016 649 10 0 0 0 0 0 10,000 24! 16 3!28"
149 446 2336 1168 389 1947 379 216 379 460 387 162 352 2571 2016 649 10 0 0 0 0 0 0 14! 16 8!446
166 499 2620 1310 437 2183 425 243 425 515 434 182 394 2883 2261 728 11 0 0 0 0 0 0 15!716 "!251
113 339 1780 890 297 1483 288 165 288 350 295 124 268 1959 1536 494 7 0 0 0 0 0 21,325 32! 1 3!757
113 339 1780 890 297 1483 288 165 288 350 295 124 268 1959 1536 494 7 0 0 0 0 0 0 1 !676 1"!134
167 503 2631 1315 438 2192 426 244 426 518 435 183 396 2895 2270 731 11 0 0 0 0 0 0 15!781 18!451
2!284 6!856 35!"33 17!"66 5"8" 2"!"43 5823 332" 5823 7 6" 5"4" 24"" 54 8 3"!545 31! 7 ""82 15
2"!225 41!325 286!1 5 )21!3" *
)46!164* )2 !6"6*
)46!164* )66!86 * )75!645* )76!6"8* )84!368* )83!718* )8 !42"* )71!"83* )62!732* )58!"75* )3"!841* )46!164* )66!86 * )75!645* )76!6"8* )84!368* )83!718* )8 !42"* )71!"83* )62!732* )58!"75* )3"!841* )21!3" *
4A
Income StatementD Three Year Summar

.nco$e State$ent - Three 6ear 6ear 1 S&$$ar# Sales Sales 'ther Total Sales 0ess Cost o% 1oo/s Sol/ 0aterials $a9or '&erhead 'ther Total Cost o% 1oo/s Sol/ 1ross Pro%it +peratin, 23penses Salaries and wa*es Em+lo"ee 9enefits (a"roll ta.es %ent /tilities %e+airs and maintenance #ns!rance -ra&el -ele+hone (osta*e 'ffice s!++lies 0ar4etin* and ad&ertisin* (rofessional fees -rainin* and de&elo+ment ,an4 char*es 6e+reciation 0iscellaneo!s 'ther Total +peratin, 23penses +peratin, .nco$e #nterest income 2e.+ense3 'ther income 2e.+ense3 Total 4onoperatin, .nco$e )23pense* .nco$e )0oss* -e%ore Ta3es .nco$e Ta3es 4et .nco$e )0oss* C&$&lati5e 4et .nco$e )0oss* 2,364,839 2!364!83" 6ear 2 5,202,645 5!2 2!645 6ear 3 Totals
7,591,132 15!158!616 7!5"1!132 15!158!616
2,096,056 2! "6! 56 268!783
4,578,327 4!578!327 624!318
6,604,286 13!278!66" 6!6 4!286 13!278!66" "86!846 1!87"!"47
36,072 18,036 6012 30,060 5845 3340 5845 7,097 5970 2505 5428 39,700 31,125 10,020 150 9185
40,581 20,291 6764 30,060 5845 3340 9185 17,535 7933 4175 8350 38,410 16,550 16,700 150 9185
58,116 29,058 9686 40,080 6680 3340 16,700 30,895 10,855 8350 12,525 50,100 16,500 35,070 200 9185
134!76" 67!385 22!462 1 !2 18!37 1 ! 2 31!73 55!527 24!758 15! 3 26!3 3 128!21 64!175 61!7" 5 27!555
216!3" 52!3"3 283503 )835 * 44! 43 9142 34!" 1 34!" 1
235! 54 38"!264 283503 )835 * 38 !"14 76,184 3 4!73 33"!631
337!34 64"!5 6 283503 )835 * 641!156 145,751 4"5!4 5 835! 36
788!784 1! "1!163 )25! 5 * )25! 5 * 1! 66!113 231! 77 835! 36 835! 36
;5
Sources and Uses of %unds

So&rces an/ ;se o% F&n/s N!m9er of f!ndin* ro!nds e.+ected for f!ll financin*: -otal dollar amo!nt 9ein* so!*ht in this ro!nd: ;83,500 S+;RC2S +F F;4(S 2=&it# Financin,: (referred Stoc4: Common Stoc4: (e<t Financin,: 0ort*a*e $oans: 'ther $on*8-erm $oans: Short8-erm $oans: Con&erti9le 6e9t: .n5est$ent %ro$ Principals: ;S2 +F F;4(S Capital 23pen/it&res: (!rchase of (ro+ert": $easehold #m+ro&ements: (!rchase of E !i+ment<5!rnit!re: 'ther: ?or@in, Capital: (!rchase of #n&entor": Staff E.+ansion: New (rod!ct $ine #ntrod!ction: 1dditional 0ar4etin* 1cti&ities: 'ther ,!siness E.+ansion 1cti&ities: 'ther: 6ata9ase and )e9 site (e<t Retire$ent: Cash Reser5e: ;41,325 ;34,700 ;20,000 ;29,225 ;41,750 1
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Introduction to the Sample Plan

%orthwind Traders Sample Business lan

'r. (ichard )arey )anton Street Seattle, !ashington *****

-eather 'itchell resident

%orthwind Traders Sample Business lan

%orthwind Traders Sample Business lan

Products and Ser!ices

%orthwind Traders Sample Business lan

Mar"etin# and Sales Techni$ues

%orthwind Traders Sample Business lan

%undin#%inancin# Re$uirementss Sou#ht and Utili&ation

%orthwind Traders Sample Business lan

'IST(RY A)D P(SITI() T( DATE

The Compan *s Mission

Mana#ement Team and +e Personnel

%orthwind Traders Sample Business lan

#ear Sales /ross rofit

3ast Year 1&,7*&,&>5 1*5&,A&;

4uarantees and 5arranties

%orthwind Traders Sample Business lan

6usiness Structure3e#al Status

MAR+ET RESEARC'I)DUSTRY A)A3YSIS

Economic and Social %actors

%orthwind Traders Sample Business lan

T<(/ET '<(:ET <%<@#SIS

%orthwind Traders Sample Business lan

:ing Snohomish ierce

Mar"et Si&e and Description

Destination Europe %. <merica (est of !orld Total A#e &; . *7 *4 . 34 3; . 74 7;L

-;;< 5.*4 5.74 5.&5 5.25

1""7 5.;5 5.;5 5.*4 &.74 -;;< = ;& *5 &4 7 &55

0<<1 &.;5 &.75 5.A4 3.A4

0<-< *.34 *.*5 &.&5 4.;4 0<-< = 32 3& *4 ; &55

Source, !<T+ )orp. &AA>

Competiti!e(MPETITIVE Anal sis)A3YSIS

Potential %uture Competition

%orthwind Traders Sample Business lan

6USI)ESS STRATE4YMAR+ETI)4 > SA3ES P3A))I)4

Ad!ertisin# and Promotion

%orthwind Traders Sample Business lan

Sales and Mar"etin#

%orthwind Traders Sample Business lan

Choice of 3ocation and Premises

(penin# 'ours of (peration

MA)A4EME)T > (R4A)I@ATI()

%orthwind Traders Sample Business lan

%orthwind Traders Sample Business lan

%orthwind Traders Sample Business lan

%orthwind Traders Sample Business lan

Ta,le 1. Sales %orecast ProAection

355 455 &55 13375 133,755 1&;>5

355 >*4 &74 13375 172,735 13375

745 2>4 &>4 13>42 1>*,33& 145&5

745 &*55 *75 13>42 1A2,>4> 14274

&455 3355 ;;5 1347A 1*4*,A&2 1&4,2;4

Cash %lo/ ProAections

Ta,le 2. Profits in Years (ne to Three /ill ,e

Year T/o 4,*5*,;74 7,4>2,3*> ;*7,3&2 *73,7573 325,A&74 >;,&27 1357,>35&

Year Three >,4A&,&3* ;,;57,*2; A2;,27; 374,;A5 ;7&,&4; &74,>4& 17A4,754

%orthwind Traders Sample Business lan

%unds Re$uired and Timin#

%orthwind Traders Sample Business lan

)e/ Tour (perators

3ast Year 1&,7&,&>5 15&,A&;

Destination Europe %. <merica (est of !orld Total A#e &; . 7 4 . 34 3; . 74 7;L

1""7 5.;5 5.;5 5.4 &.74 -;;< = ;& 5 &4 7 &55

0<-< .34 .5 &.&5 4.;4 0<-< = 32 3& 4 ; &55

745 &55 75 13>42 1A2,>4> 14274

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