Legal Page
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by Native Flats,
LLC and Jesse Samuel Alton, in this business plan is confidential; therefore, reader
agrees not to disclose it without the express written permission of Jesse Samuel Alton,
CEO and Founder.
It is acknowledged by reader that information to be furnished in this business plan is in
all respects confidential in nature, other than information which is in the public domain
through other means and that any disclosure or use of same by reader, may cause
serious harm or damage to Native Flats, LLC.
Upon request, this document is to be immediately returned to Jesse Alton, at Native
Flats, LLC.
Signature
___________________
Name (typed or printed)
___________________
Date
This is a business plan. It does not imply an offering of securities.
1.0 Executive Summary
Native Flats, LLC is a manufacturer and provider of clubshoes, and clubware.
Native Flats offers businesses an effective marketing strategy, and the end-user of
Native Flats products with a comfortable, safe, cost-efficient alternative to walking
barefoot after a night out.
In exchange for these bars and clubs (Hosts) allowing Native Flats to sell within
their establishment, Native Flats will have the host locations desired logo printed
onto each pair sold within their establishment that day.
Native Flats is not just selling "flip-flops" with a logo on them. Rather Native Flats is
selling a cheap gift opportunity to men looking for a self-less gift, a comfortable
solution to the dangers of walking in public barefoot, due to sore feet. Club-shoes
are more than just flip flops, and Native Flats Clubshoes will be 100% Biodegradable
and Disposable.
Our initial product (Clubshoes) is designed for women; however men make up a
large secondary market. "For the price of a drink she can walk home safely," and
other tag-lines are used to associate the purchase of Native Flats products with the
act of being a gentleman.
Businesses inquiring about Native Flats services and Marketing opportunity are
given three options for business relations between our companies. The "B.R.O." form
offers these three selling methods:
1. Method 1: B2C - Direct Sales by Native Flats designated Floor salespersons. The
business hosting our services simply must provide a space near the door for floor
salesman to operate. At no cost to the establishment owner, Native Flats will
print their logo on the Clubshoes for free. Offering Free Guerrilla Marketing.
2. Method 2: HOC - Host's on Consignment are able to have a pre-determined
quantity of Native Flats stocked each day within their establishment. Host
locations sell the Clubshoes on their own, and still receive free marketing
benefits. All funds earned from the sale of Native Flats products leant on
consignment are transferred to Native Flats at the end of each day.
3. Method 3: B2B - Host locations can pre-purchase Native Flats Clubshoes at a
reduced wholesale price of $3.00 per pair. Locations operating under method 3
are responsible for the sale of the product, and are granted the opportunity to
make a profit off of their new marketing method.
Floor salespersons are used to introduce the product to the customer. After a trial
period of 1-3 months, the host location may switch the Business Relationship Option
to method 2, which enables them to take their new customer-connected product and
sell them on their own, without the risk of losing money or the stress of tracking
success, inventory, and value. Method 3, is recommended after 3-6 months, for
Native Flats to properly gather statistical data that can show the best-selling times,
profit opportunity, and value of adding the B2B method to their marketing plan.
Our Clubshoes will ultimately be made of 100% biodegradable, green materials. This
is what differentiates our product from traditional "flip-flops," and the value of
having Native Flats present is apparent with the time saved collecting data, and
managing inventory. Most importantly is the customer - product connection. It is
highly recommended that host locations allow their customers to connect with the
product in each phase, to build a lasting brand relationship, and properly introduce
the product.
The business is self-sustainable and rests in a profit margin of 200-800% dependent
upon the means of sale.
Any bar can print their logo on a sandal. Native Flats isn't a sandal company.
Rather, it is a company driven to helping customers, businesses, and Profits succeed.
Native Flats aims to improve every city it comes into contact with, by providing jobs
to those in need, and careers to those who deserve.
Furthermore, if customers refuse to throw away their Native Flats Clubshoes, then
that "reduces sales in the future." This is not the case; rather Native Flats looks at
these instances as continuous marketing. Native Flats aims to be thrown away, so
that the customer can make a repeat purchase in the future. However, should they
decide to keep them to "save money," then they are marketing with each step they
take. Native Flats can be seen hanging on Dorm room walls, in keepsake chests, and
as mementoes of a great event.
1.1 Objectives
Goals:
1.
2.
3.
4.
5.
6.
To make the purchasing of Native Flats club-shoes a gentlemanly duty
To establish a brand identity that can be easily recognized by our customers
To reach as many cities, towns, and neighborhoods as possible
To provide the customer with a comfortable, safe method of walking home
To provide a green product, appealing to those in support, and even to those
who do not care
To market effectively our "host" locations and constituents businesses through
successful, word-of-mouth marketing.
7.
To effectively manufacture and distribute appx. 500 pairs a week at each
designated "host" environment.
To acquire and retain at least 10 host locations within a 3 month span of time.
Retaining these 10 locations at estimated sales of 500 pairs a week would yield
appx. $1.6M in profit.
To effectively enter markets such as Proms, Weddings, and Events as early as
possible.
8.
9.
Future Goals:
1.
Have seeds put into the sandals so that women may bury them in their yards
or garden after a great night.
Rapid expansion:
a.
Charging $5 per pair with 10 locations averaging sales of approximately.
500 pairs per week at each location, Native Flats accumulate a rough
estimate of $1.6 Million dollars a year.
Creation of a winter time comparable product
2.
3.
1.2 Mission
Our Mission: To provide the world with a comfortable, safe alternative for walking
after a night spent having a great time. For the Price of a drink our customers can
come looking good, and leave feeling great!
1.3 Keys to Success
1.
2.
3.
4.
5.
6.
7.
8.
9.
Effectively Market our "host" locations
Provide a safe alternative to walking barefoot
Manufacture 100% Biodegradable sandals
Establish a well-maintained supply chain
Create Exponential spread of business
Convert "host" locations to re-sellers (price point $3.00)
Create effective revenue streams that sustain the company and employee
needs.
Offer a creative solution to making any party original.
Build a trusted brand
2.0 Company Summary
The company was founded to answer the following question:
"You know how women go to bars and clubs wearing high-heels, only to leave
barefoot because their feet hurt or they're too drunk to walk?"
Native Flats plans to solve this by providing disposable and ultimately
biodegradable sandals in every bar, club, concert venue, resort, spa, etc. Our location
can be anywhere at any given time, our product has a variety of uses, most notably
the marketing service it provides to our affiliates, hosts, and purchasers.
Currently Native Flats desires the right to use and manufacture with, a
biodegradable material known as Glycan. Glycan derives from corn starch, and
would act as the preferred material used for production. Manufacturing and
Distrubtion is currently under deliberation. Chinese manufacturers are currently set
up for business, however, a domestic U.S. based manufacturer is desired for Native
Flats.
Sales will start on the floor at "Host" (the venue or location) locations, bringing the
product direct to the customer at their place of leisure and comfort. Sales price will
start at a fixed $6.00 price point. Corporate bulk sales, and custom order sales in
bulk will be sold for $4.00 a pair. Custom Order Flats, will sell at a price range of $710.00 per pair, netting a profit of about 700%.
"Host" Locations will include all consituents and associated locations used for sale
of Native Flats products. Any location hosting our company in exchange for the
marketing potential provided by our products are referred to as "host's." Host
locations will provide a space within their establishment for Native Flats to sell our
products. The Host locations will not be compensated financially, however they do
hold the right to change their logo, or ad-space fillers at any time, given atleast
2 weeks notice for printing changes.
Host's on Consignment are essentially the "in-betweeners" of methods 1 and 3.
HOC's will have an established stock of clubshoes with their logo printed on as
normal. However, instead of floorsalespersons selling the product, the host location
will sell them directly themselves. This enables their guests to associate the product
purchase pattern with the host locations own employees (bartenders, bouncers, etc.)
at the host locations own discretion. Inventory is taken at the end of each night, and
all funds are transferred directly to Native Flats each day, no funds are to be held in
escrow, and inventory is replenished as soon as possible.
Corporate Resellers (CR's): These are locations that may or may not have been
"host's" prior to starting this type of business relationship. Whereas, as host location
allows Native Flats to make direct sales to the customer (B2C), CR's will purchase
desired quantities of Native Flats, for their use of sale. CR's may resell Native Flats
with vending machines, their own salespersons, or even the use of their own
merchandise counters. CR's will purchase Native Flats at a reduced price point,
currently estimated to be approximately $3.00 per pair.
Floor salesperson’s will interact with the customer at their respective places of
leisure (bars, concerts, resorts, etc.) and will encourage host patrons to purchase
Native Flats as a means of comfort and safety. Floor salesperson’s will earn a salary
of $1.00 per pair they sell. Paychecks will be issued bi-weekly. Floor salespersons
will report to their designated listener.
Hucksters will operate similar to paper salesman on city streets and corners. Those
wishing to make general sales, may purchase a set quantity for a set price. Hucksters
may then sell and distribute Native Flats products at their own discretion. Hucksters
are encouraged to report to Listeners, however it is not required.
Affiliates: Affiliate sellers are individuals, or organizations, that currently operate in
markets that could be mutually beneficial. Wedding Planners, can tell their clients
about NF Customs and earn a commission. Native Flats aims to develop an affiliate
army, both online, and offline, consisting of DJ’s, event planners, Lodges, and More.
District Managers: will effectively oversee the sales, inventory, and revenue stream
of a designated region of host locations. The DM will pick up the product from our
printing partner. Inventory will be taken, and as instructed, the DM will distribute
necessary quantities to the host locations within their region. The DM will provide
aid at locations as necessary, as well as, provide support to all sellers within their
region. DM’s will receive compensation different from the floor salespersons.
Currently, pay scale is volatile and can change yet a compensation of approximately
$.20 per pair sold within their region (Listeners can earn less than floor salespersons,
should they fail to effectively promote growth in all host locations within their
designated region.)
Overseers' (Regional Manager) will examine the data provided by their designated
DM’s. Overseers are responsible for a larger region, or a region of regions,
respectively overseeing growth, and trends within their demographic region.
Overseers' will report direct to the C.E.O. and will work for the company Native
Flats, rather than operate as 1099 contractors. Overseers will provide support to
their DM’s as needed, and will effectively implement the plans issued by the C.E.O.
and Native Flats. Overseers' compensation will be based on a later disclosed
corporate pay scale. Productivity, and goal accomplishment will effect pay grade.
C.E.O. Position is currently held by Native Flats founder, Jesse Alton. The C.E.O.
will examine data provided weekly by the overseers. The C.E.O. will implement
new strategy, as well as provide relevant feedback on improving customer
acquisition, and host location acquisition. The C.E.O. will also oversee the actions of
Native Flats web department and web-presence. As well as effectively manage all
B2B relationships. All positions are subject to reporting directly to the C.E.O. at any
time.
Printing and Design will be done by Native Flats as a complimentary service. Logos
will be applied by use of heat-adhesive stickers that our businesses printer can
create. The estimated costs range from $.05 - .50 cents per sticker, with costs
dropping based on volume.
Legal: All Legal work will be handled by designated attorneys. Native Flats, LLC
currently receives legal counsel from Stephen Stern, of Hyatt and Webber.
Accounting: All accounting work will be done by the C.E.O. (Jesse Alton) with a
quarterly review to be assessed by Matt Wagner, C.P.A. (as of 02/23/12)
Investment: Investors will be compensated financially under disclosed terms. At no
point will the Founder and C.E.O. Jesse Alton, own under 51% share of Native Flats
Membership.
W/2 Employees Vs. 1099 Employees: Employment status and compensation is
based on the role assigned to potential, and residing employees. Corporate
positions, and fixed income employees will operate under a W/2 form of
employment and taxation. Floor salespersons, and listeners, will operate under a
1099 employment status: allocating responsibility, and liability to the salespersons
and listeners directly.
Currently there are several potential employees, and members of Native Flats team.
Aside from the founder, all names listed are not official members, nor do they hold
any share of Native Flats.
Target locations:
Fur Nightclub, LUX lounge nightclub, The Regal, paparazzi, Cancun Cantina and affiliated
locations, Rams head LIVE, LIVE casino, Sandals Resort, G&G Outfitters (Baltimore
Ravens Stadium), pickles pub, pig town, fells point, York pa, TBD...
2.1 Company Ownership
Native Flats, LLC is currently a registered LLC operating in the state of Maryland.
Ownership / Membership: Currently Jesse Alton, C.E.O. and Founder of Native
Flats, owns 95% share of the company. Phil Cox, owns 5% and may be bought out
after 1 year. Membership percentage can be sold, exchanged, or gifted at the
discretion of Jesse Alton. Membership certificates can be issued, as well as "at time of
sale" percentage shares. "At time of sale," refers to percentage of profit earned at the
time that Native Flats is sold, bought out, merged, or made available to the public
(IPO).
2.2 Startup Summary
Primary Method: Native Flats will start with a bank balance of $3,000.00.
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Order 2,000 Pair
o Cost: $2,100
o Cost to Print: $400
Direct Sales to Proms at $5.00 per pair
o Estimated sales: >1,000 pair , >$5,000.00 Revenue
“Sponsor” a local band at $5.00 per pair
o Estimated sales: 100 pair , $500.00 Revenue
Identify “Host” Launch Site at $6.00 per pair
o Estimated sales: 500 pair, $3,000 Revenue - $500 commissions
Order 4,000 pair
o Cost: $4,150.00
Contact Wedding Planners
Contact potential Vendors
o Use 50 pair as samples to acquire new host locations
o Loss of $52.50 + print costs
Total Revenues: $8,000
Total COGS: (2,100 + 400 + 500 + 4,150 + 600) $7,750.00 (inv. 1, print 1, comm. 1, inv. 2,
print 2)
Benefits: This will give us 4,350 pair in inventory, pay off moneys borrowed for order,
and attract business. Once at one host location, that provides continuous sales of x
amount. The business will have inventory valued at $15,000 – 40,000 dependent upon
the method of sale.
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Beach week at $10.00 per pair or two for $15.00
o Est. Sales: 2,000 pair , $15,000 - $20,000 Revenue
o Cost to print: $400
Acquire Host locations Seacrets at $3.00 B2B or $6.00 B2C
o Est. Sales: 1,000 pair , $3,000 - $6,000 Revenue
o Cost to print: $250
Host 1 Repeat Sales at $6.00 per pair -$1.00 commission
o Est. Sales: 500 pair , $3,000 Revenue – 500 comm.
o Cost to print: $200
Total Revenues: $21,000 – 29,000
Total COGS: $850.00 + travel expenses
Benefits: Inventory was already accounted for in the first phase. Now that the company
has at least $20,000 more opportunities are opened. A remaining 850 pair (variable) will
be used while the next order is shipped.
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Order 5,000 pair for inventory
o Cost: $5,000
Appropriate inventories to host locations being used
Establish Core teams for each of Native Flats key markets
o Bar & Club
 Floor sales method
 B2B method
o Concert & Festival
o Weddings & Events
Switch manufacturing materials to biodegradable materials
o Increasing costs about $.30 cents per pair
Begin Rigorous E-Marketing Campaign
o To attract custom orders , host locations, and build email database
Acquire 5 host locations in the DC, Baltimore area.
Revenue *when sold*: $17,550 - $52,650 (charging 3.00pp – 9.00pp)
At this point in the primary method the business will have developed repeat host
locations, a mild consistency in purchase patterns, and an outlook for festivals, events,
and opportunities for the business to take part. Also, after this inventory has depleted,
our products will be made of biodegradable materials. This will increase market size,
purchase probability, and overall value of the company.
In short your money can easily be returned in a variety of phases throughout the
company. This is a rough overview, to see the full business plan please email me at
jessealton@nativeflats.com