Tempo Probiotics Bar
Business Plan Proposal
Susie Chang
Elizabeth Huang
Tanner Johnston
Michelle Smarsh
Tempo Probiotics Bar
Business Plan Proposal
Table of Contents
Executive Summary
3
1.0 Introduction
1.1
Opportunity & Value Proposition
5
1.2
Company Overview
6
1.3
Vision Statement
7
1.4
Mission Statement
7
1.5
Objectives
7
2.0 Operations Plan
2.1
Organizational Structure
8
2.2
Building Plan
8
2.3
Average Business Day
9
2.4
Planned Capital Budget
9
2.5
Operating Costs
10
2.6
Working Capital
11
3.0 Human Resources Plan
3.1
Human Resources Structure
12
3.2
Management Team
12
3.3
Manufacturing Employees
13
3.4
R&D Consultant
13
3.5
Human Resources Strategy
13
4.0 Marketing Plan
4.1
Competitor Analysis
14
4.2
Segmentation
16
4.3
Targeting
17
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4.4
Position
17
4.5
Products and Services
18
4.6
Place
19
4.7
Pricing Strategy
21
4.8
Promotional Strategy
21
4.9
Marketing Budget
26
5.0 Financial Plan
5.1
Financial Model
27
5.2
Business Valuation
28
5.3
Financial Statement Projections
29
6.0 Conclusion
30
Appendices
A
Financial Projections
31
B
Building Floor Plan
32
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Executive Summary
The business plan details our proposal for a capital investment to expand our Tempo
Probiotics Bar into a Canadian success. Tempo is a premium nutritional bar that is
convenient for consumers, contains no milk products and helps your digestive health.
We are asking for $100,000 to grow our business from a local success making bars in
our kitchen to a nationally recognized product sold in health food and fitness stores. In
return for your investment you will receive a 10% stake in the company and a seat on
the Board of Directors. Your investment will be used to buy large production kitchen
equipment, lease a commercial production space, and fund marketing expenditures
during our growth stage.
We are a local Vancouver company that would like to lease operations space in Maple
Ridge. We are currently selling to local stores and are in negotiations with Lululemon,
The Running Room and Mountain Equipment Co-op for national distribution. We would
like to also expand to specialty health food stores, such as GNC and Whole Foods
Market.
The four original founders currently make up the Board of Directors and the
management team. In addition to the management team that covers the general,
operations, human resources and marketing managers, Tempo will also use a research
and development consultant and additional manufacturing employees to grow the
company.
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Our intended market is young urban professionals and baby boomers. Both groups have
discretionary income, are first to act on health trends and typically have a vested interest
in fitness. The Tempo Probiotics Bar is a high quality product and will benefit from wordof-mouth from these groups. We also plan on using social media forums (website,
Facebook, Twitter), print ads, event placement (samples in marathon race bags), and instore promotion (taste tests and coupons) to market our product.
The Tempo Probiotics Bar will be a first mover in Canada and is growing at the perfect
time to build on the digestive health movement in a new and innovative way.
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1.0 Introduction
1.1 Opportunity & Value Proposition
The opportunity arises from the focus on healthy-eating and a good digestive system in
many people’s diets. DANONE’s Activia yogurt has captured consumers’ attention with
the positive benefits of probiotics for digestion in their yogurt. With the vast population
being baby boomers, and the active lifestyles of young urban professional we feel that
they are the main beneficiaries of this type of nutrition. As they age, there is an
increased chance of developing intestinal problems. However, since it is expensive to try
to target both the baby boomer market as well as the young urban professionals, we will
first work to target the young urban professional. Once we have gained product
acceptance in this target market, we will grow our strategy to target the baby boomers.
This will be discussed further in the marketing section of the report.
We have developed a travel-friendly source of probiotics that does not require
refrigeration and appeals to those who are lactose intolerant. Currently, there are no
prominent brands of nutrition bars, targeting probiotics. The industry of fibre and
nutritious bars exist, but this specific type of bar is still quite obscure, in what we have
assessed as a potentially large market. We will build our brand image to be the firstmover and number one supplier of this unique and tasty snack.
1.1.1 Why Probiotics?
Probiotics are live bacteria cultures that help maintain a healthy digestive system.
Research has shown that there are numerous potential benefits of consuming probiotics,
including lowering the risk of colon cancer, managing lactose intolerance, lowering blood
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pressure and cholesterol, and improving the immune system. Two trends in the modern
day North-American lifestyle are causing poor digestive health: the increase in obesity,
and increase in stress levels. With the obesity epidemic on the rise, many people turn to
extreme diets to lose weight, which have significant negative impacts on digestive
systems. Various sugar substitutes used for dieting have been proven to cause digestive
discomfort and disease. Regarding stress levels, there is no system in the body that is
more responsive to mind-body influences than the digestive tract. When we get sick, we
tend to focus on the physical level, but our emotions and stress severely affect our
digestion in a profound way. With the increased pace of our daily routines; comes
increased stress, ultimately leading to increased digestive problems. Probiotics have
been proven to be preventative in nature by preparing the digestive system to combat
various levels of stress and poor diets. Our strategy will be to promote the benefits that
consumers have knowledge of already and inform them of the other benefits not yet
known.
1.2 Company Overview
Tempo Probiotics Bar began two years ago in Vancouver, BC when a group of graduate
students came up with an idea to create a nutrition bar that is pleasant-tasting, yet has
all the health benefits for the daily routine, with an emphasis on digestion. We realized
no such bar existed in the market or if it had, it had yet to gain any popularity. The
delicious bar was mastered in one of our kitchens and tested for nutrition contents. Once
testing was approved, the bars were distributed to friends, family, and neighbours. After
receiving praise and acceptance from people in their 20’s to late 50’s, we decided to
reach out to the public starting with small athletic stores and local fitness centres. We
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now have started negotiations with larger companies such as Lululemon and The
Running Room, to capture the attention of health-enthusiasts.
After developing market research and gauging consumer interest in those select stores,
we have determined a high level of existing demand and that consumers appreciate the
convenient form of daily nutrition which emphasizes healthy digestion. We would like to
expand our production in order to manufacture and sell to more grocery retailers and
larger athletic retailers. In maintaining the premium image and quality, bars will be sold
individually at organic and health food stores, including Whole Foods, Capers, and GNC.
We have met with the buyers of each store and they have expressed interest in selling
our product at their stores. We now require the capital and labour to enable us to mass
produce the bars to meet their demands.
1.3 Vision Statement
“The #1 source of nutrition and probiotics in North America”
1.4 Mission Statement
“To be the quick, delicious, probiotic snack for people wherever they go”
1.5 Objectives
1. In 2 years, to be sold in organic supermarkets across Canada
2. In 5 years, to be known in North America as the on-the-go, tasty, probiotic snack.
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2.0 Operations Plan
2.1 Organizational Structure
The company will function as a corporation and will be incorporated in the province of
British Columbia. A corporate structure is appropriate due to the nature of the business
and the benefits incorporation can provide (i.e. access to the small business deduction,
greater access to capital by issuing shares to equity investors, mitigation of the risk of
liability). There will be 5 seats on the Board of Directors, four of which will be the original
founders, and 1 of which will be an equity investor. The four original founders will be
majority shareholders. Combined, the founders have backgrounds in accounting,
science, law and entrepreneurship.
The company will develop an Advisory Committee, made of health experts and
experienced business owners to provide advice. This Advisory Committee will be
volunteer-based; with no salaries will be paid to those on the committee. Local
Vancouver health experts have already shown interest in being part of the committee.
2.2 Building Plan
An industrial facility will be leased in the suburbs of the lower mainland (i.e. Maple
Ridge) as rent is less expensive than in the city of Vancouver. The building will be
approximately 3000 square feet and be able to hold the required capital equipment and
all employees. The layout of the building will be basic and practical. The refrigerators will
be located near the mixing equipment and preparation area. The packaging machine
and labeler will be in a separate area near the loading bay. There will be a second level
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in the facility where the administration offices are located for marketing, human
resources, and the general manager. See Appendix B for the proposed floor plan.
2.3 Average Business Day
The average business day in the manufacturing process consists of mixing, forming, and
packaging individually-wrapped bars. The facility will have a capacity of producing 2000
bars per day, operating from 9:00am to 5:00pm, Monday to Friday. Production will be
adjusted according to the level of demand. The general manager oversees the
manufacturing process by doing quality control checks throughout the day and
processes any financial transactions required for the day. The marketing manager will be
planning promotions and organizing sales with buyers. Human resources will be
organizing the employees’ work schedules and payroll.
2.4 Planned Capital Budget
The company currently uses outdated and inefficient equipment to produce the Tempo
Probiotics bar. In order to match the growing demand, the company plans to invest in the
following equipment:

Industrial Mixing Machines: Given that probiotics bacteria are sensitive to
agitation and irregular temperatures, an appropriate mixing machine which
controls temperature and mixing speed is essential.

In-House Packaging Machine: Currently, the company outsources packaging of
the product. However, given the sensitive nature of the bacterium, there have
been issues in the past regarding inappropriate temperatures for packaging and
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inventory storage of the bars. As such, the company will produce its own
packaging and labeling for the bar. After speaking to various manufacturing
companies and receiving recommendations, we have found a packaging
machine and labeling machine that will meet the growing demand.

Industrial Dishwasher: Given the variety of flavors the probiotics bar offers, the
two mixing machines will be changed multiple times throughout the day. The
manufacturing process will gain efficiencies by having an industrial dishwasher
which decreases the mixing-machine change-over time significantly.

Refrigerator: The ingredients of the probiotics bar include agave nectar, dates,
and various fruits. Two large refrigerators are needed to hold the required
ingredients.
For more information on the planned capital budget and costs associated, please refer to
Appendix A, tab 1.
2.5 Operating Costs
2.5.1 Rent: Location
The rent for the office location described above is currently $1,200 per month. This rent
includes heat and water, but does not include electricity. Electricity has been allocated to
each bar in the calculation of variable overhead.
2.5.2 Salary Expenses
The salary expenses include the costs paid out to the management team and Research
and Development consultant, as described within the Human Resources Plan. The
management team will consist of 3 managers, and one general manager. The managers
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will be working full time, with salaries ranging from $55,000 to $65,000 per year. The
research and development consultant will be a part-time researcher.
2.6 Working Capital
The Company does not plan on keeping large levels of inventory on hand, given the
perishable nature of the probiotics bar. As such, inventory levels will stay low, at $20,000
of inventory and raw materials at all times.
Given that the company is pursuing growth, cash is essential. As such, the company will
manage cash tightly. Appendix A, tab 3 shows a preliminary cash flow analysis, showing
positive cash flows in year 4.
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3.0 Human Resources Plan
3.1 Human Resources Structure
3.2 Management Team
The management team consists of three managers – operations, human resources, and
marketing – who will all report to the general manager. The general manager oversees
all operations and handles all the finances of the company. He has the responsibility of
reporting to the Board of Directors. All managers have many years of experience in their
field. The operations manager had previously worked for a manufacturing plant of a
consumer food product. She will be in charge of the daily operations at the plant,
including allocating work to the manufacturing employees. The marketing manager is in
charge of promoting the brand and products. In addition to promotions, she will also be
monitoring potential competition. The HR manager deals with employee relations as well
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as payroll and benefits. The general manager will receive an annual salary $65,000
while the three other managers will receive $55,000.
3.3 Manufacturing Employees
There will be 10 workers in manufacturing when producing at full capacity. They will be
trained by the operations manager for their specific job requirements, which includes
mixing, assembly, and packaging. These workers consist of part-time and full-time
employees with a starting wage of $12/hour.
3.4 R&D Consultant
An expert of probiotics and microbiology will be hired as a part-time research and
development consultant. As the company’s specialist in probiotics and nutrition, he will
answer any consumer enquiries based on his research. He will also help develop new
products as the company intends to expand its line of products. The consultant will
report to the Board of Directors and work alongside the general manager.
3.5 Human Resources Strategy
There will be no formal training program as each manager brings in their experience
from previous employment. Each manufacturing employee will be trained on the job by
the operations manager. In addition to the technical capabilities of each manager, they
each have a keen interest in healthy living and an active lifestyle, as well as a financial
interest in the company.
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4.0 Marketing Plan
4.1 Competitor Analysis
Currently in the market, there are a variety of competitors that we face, both direct and
indirect. Described below are the details of our main competitors and the effects that
these competitors will have on the Tempo Probiotics Bar.
4.1.1 Activia Yogurt
Activia is a yogurt which contains the probiotics bacteria and is distributed through “big
box” grocers. Activia has also done extensive television advertising which has exposed
the general public to the benefits of having probiotics as part of their daily diet. Activia is
an indirect competitor to the Tempo Probiotics Bar as its probiotics ingredient requires
refrigeration to keep the probiotics alive; as well a yogurt product produces a different
taste that may not appeal to all people. Activia’s price point is about $5.00/8pack
($0.62/serving).
4.1.2 Attune
Attune currently has three different products: chocolate probiotics bar, granola probiotics
bar, and probiotics munch bar. Attune products are also gluten free and are advertised
to “contain more calcium, more fiber and less sugar than most yogurts”. Attune is
currently only available in the United States in large grocers such as Safeway and Vons,
but also specialized stores such as Pharmaca, New Leaf Community markets, and
Planet Organics. Attune also has an online store where customers can order directly
from Attune; however Attune only ships to addresses in the United States.
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Attune products must be refrigerated to keep the probiotics alive and are located in the
yogurt aisle. Due to the need for refrigeration, Attune competes directly with yogurt
products such as Activia and is an indirect competitor to the Tempo Probiotics Bar.
Attune products are also sold for $1.99/bar when sold individually, or $12.18/7 pack
($1.74/bar), or $34.44/21 pack ($1.64/bar).
4.1.3 Pop Culture Probiotics
Pop Culture Probiotics currently has two product lines: On the Go Probiotics Yogurt and
Granola Bars (includes a yogurt fruit and nut bar, and a chocolate chip granola bar), and
Oatmeal with Probiotics (Maple Brown Sugar Oatmeal, and Strawberries and Crème
Oatmeal). Pop Culture Probiotics has also patented a strain of probiotics called
Ganeden BC which can survive harsh environments of heat and pH. Pop Culture
Probiotics do not require refrigeration, thus they present as a direct competitor to the
Tempo Probiotics Bar. Pop Culture’s Granola Bars are sold for in a 5 pack for $6.45
($1.29/bar) or in a 15 pack for $18.38 ($1.23/bar). The Oatmeal products are sold for in
a 3 pack for $5.37 ($1.79/1.5 oz) or 12 pack for $20.41 (41.70/1.5 oz). Pop Culture
currently only distributes their products through their online store.
1.1.4 Renew Life
Renew Life is a digestive care company with a variety of health products. They have 6
different product lines: probiotics, cleansing, enzymes, oils, fiber, and other specialty
products. Renew Life’s products are only available in the United States and can either
be purchased online or through specialty health food stores. Renew Life’s probiotic
product line presents itself as an indirect competitor to the Tempo Probiotics Bar, as its
delivery method of the probiotics is in capsule form
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4.2 Segmentation
4.2.1 Demographics: Baby Boomers and “Yuppies”
Baby Boomers are those that are now in their 50s + who have worked their whole lives,
may have just finished raising their kids and are getting close to retirement, and may
now be looking to take care of their own health as they age.
“Yuppies” are young urban professionals in their 20s or 30s in professional careers and
have discretionary income that they enjoy spending on high quality items. They tend to
be driven and strive to succeed in many aspects of their lives.
4.2.2 Geographics: Urban and Suburban Dwellers
Our market segment will be urban dwellers that live and work downtown which is
consistent with the yuppies demographic. As well as suburban dwellers which is more
consistent with the baby boomers demographic who have raised their children in the
suburbs, and have kept their family home in the suburbs.
4.2.3 Behavioural: Heavy Users
The Tempo Probiotics Bar is a high quality item, and if the yuppies see the value in the
bar, they tend to stay loyal to a product brand if it continuously delivers to their
standards. Yuppies also tend to be less sensitive to price fluctuations as they are willing
to pay a high price if they see the value. Thus if it increases in prices at the grocery store
from one week to the next, they will still buy it regardless if they see it as part of their
dietary necessities. The yuppies also tend to be highly motivated individuals who strive
for success in various aspects of their life such as careers, family, fitness and health. As
such, yuppies are willing to make monetary investments to achieve successes in these
fields, and will be willing to pay the high price if they see that it is making a positive
difference in their health and fitness.
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Baby boomers are more sensitive to price fluctuations and may be more difficult to gain
their loyalty. If prices were to increase from one week to the next, baby boomers are
more likely to reach for a less costly item. Due to this, it is even more important that we
gain strong brand loyalty to win over the baby boomer demographic. Also, since the
baby boomers are ending their child-rearing days and may be more focused on their
own health now, they may be willing to spend their discretionary income on ensuring that
they stay healthy and fit.
4.3 Targeting
As stated above, we will be targeting the yuppies demographic as well as the baby
boomer demographic. Since it is costly to target both of these demographics, we will first
work to target the yuppies demographic as they have higher discretionary income, are
less price sensitive and are more loyal to the brands that they like.
We can target the baby boomer generation after our product has successfully gained
acceptance with the yuppie demographic.
4.4 Position
To the health conscience individual, Tempo Probiotics contains the highest quality
probiotics bar that is essential as part of a healthy lifestyle. It is a quick and convenient
snack that can be carried in your bag, and is not sensitive to temperature fluctuations
that is beneficial to people of all ages.
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4.5 Products and Services
The Tempo Probiotics Bar is a high calorie bar with a high concentration of quality
probiotics and fibre. There are a variety of benefits to having probiotics as part of a
regular diet. These benefits include:

Prevention of colon cancer

Improving Immune Function and preventing infections

Reducing inflammation

Managing urogenital health

Improve symptoms if irritable bowel syndrome

Preventing harmful bacterial growth under stress

Lowering cholesteral

Lowering blood pressure
The main factor that sets Tempo Probiotics Bar apart from products such as Activia and
Attune is that Tempo does not require refrigeration. This increases the convenience for
consumers to travel with the product while still receiving the full benefit of the live
probiotics. Our live probiotic ingredient will be patent protected, making it difficult for
potential competitors to replicate.
Although Pop Culture Probiotics products also do not require refrigeration, they have not
penetrated the Canadian market yet, allowing Tempo Probiotics to be the first mover in
the area.
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The shelf life for the product is six months and since Tempo does not need to be
refrigerated it also increases the flexibility for retailers to decide where in the store they’d
like to place the products. Also the cost of delivery from the manufacturing plant to the
retailer will also be less costly as we will not require refrigerated trucks to deliver the
product.
4.6 Place
Our future manufacturing facility will currently be located in Maple Ridge where we will
be close to our suppliers. Our strategy is to target our efforts to the Vancouver area.
Vancouver currently is the 3rd largest metropolitan area in Canada with a population of
about 2.3 million. The yuppie population makes up about 15% of Canada’s total
population, thus there are over 300,000 people in our primary target market.
In Vancouver, we are distributing the Tempo Probiotics Bar through small independent
retailers, gyms, and various athletic stores. Our goal is also to penetrate the health food
chain stores such as GNC and healthy food markets such as Whole Foods Market and
Capers Community Market. We believe that at stores like these we will be able to
establish stronger brand loyalty as well as leverage the reputations of the retailers.
Small independent health food retailers will provide for a strong base for the Tempo
Probiotics Bar to first gain customer acceptance. Since these are small retailers, owners
of these retailers are motivated to provide high quality service to their customers to sell
the products. Also, at small independent retailers we will have increased flexibility when
it comes to incentives and promotional ideas to implement to increase sales of the
Tempo Probiotics Bar.
We have also reached out to fitness centres that also provide dietary services at their
gyms to recommend, promote, and distribute our product. We believe that our yuppie
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demographic tends to frequent these fitness centres and by having the Tempo Probiotics
Bar associated with fitness centres will give it a more credible reputation of its health
benefits. Since the Tempo Probiotics Bar will not require refrigeration this makes it
simple for these fitness centres to carry our product. By placing our products in these
fitness centres, our product will also be easily accessible to our target market, thus
increasing the volumes of our sales. Also if we are able to penetrate any franchised
fitness centres such as World Health Club, we will also be able to increase our
geographic reach beyond Vancouver.
We are also currently in negotiations with other fitness stores to also distribute our
product. These fitness stores include Lululemon, The Running Room, and Mountain
Equipment Co-Op. We believe that these retail outlets are a good fit for our product and
that we are reaching out to meet the needs of the same target group. All of these fitness
stores have high quality products with good brand reputation, higher prices and high
customer loyalty.
Our ultimate goal is to gain access to the “big box grocers” We hope to get the Tempo
Probiotics Bar on the shelves of Costco where heavy users of the product will be able to
buy it in bulk.
At GNC, sales staff who are knowledgeable in their products will be able to inform
customers of our products and provide credible information and excellent service to our
customers. As well, at specialty heath foods such as GNC we will be able to command a
premium price that reflects the high quality nature of our product. Also, since GNC is a
national chain, we will also be able to use GNC as a starting base to expand into other
metropolitan cities.
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At Whole Foods Market, which is specific to Vancouver and Toronto, we can leverage
Whole Foods Market’s reputation of providing the highest quality of natural and organic
products and providing excellent service to their customers which has resulted in high
brand loyalty. Since our values are a good fit with Whole Foods Market, and we believe
that our target market would shop here that this distribution stream will prove to be very
profitable.
Finally in about 3 years, after we have achieved success in these smaller markets, and
have established a strong customer following, we will work to get our product on the
shelves of Costco to be sold in bulk products. This will increase the volume of sales of
Tempo as well as give our loyal customers a volume discount when purchased here.
4.7 Pricing Strategy
We will be using a premium pricing strategy for the Tempo Probiotics Bar. The price
point for the Tempo Probiotics Bar will be $3.50/bar. This price per bar is significantly
higher than the price of our competitors. The higher price point implies that we have
significantly higher quality products with a higher concentration of live probiotics in each
bar, as well as the specific type of probiotics that we have developed to withstand
temperature fluctuations resulting in increased convenience for customers.
This pricing strategy is consistent with our primary aim to target the yuppies
demographic, as they have the discretionary income to spend on this product and
appreciate high quality product.
4.8 Promotional Strategy
4.8.1 Communications Objective
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Our objective for our promotional strategy is to communicate to our target market that
the Tempo Probiotics Bar is a high quality probiotics bar that is essential to one’s daily
diet. To achieve this objective, we must first inform our target market of the necessity of
probiotics in one’s diet and the benefits of probiotics.
Second, we need to differentiate ourselves from our competitors and ensure that Tempo
is perceived as the premium brand with the highest concentration and quality of
probiotics and there is also the added convenience to the customer as the live probiotics
do not require refrigeration.
Finally, we will need to communicate to our target market where they can buy our
product. We will need to inform them that the Tempo Probiotics Bar will be found at local
gyms, The Running Room and other specific stores where they are available. We will
then direct them to our website, where all of the above communication objectives will
also be reiterated.
4.8.2 Communications Strategy
To reach our target market of yuppies, we will be using a mix of social media tools,
sponsoring sporting events, gaining credibility through print media, and in-store
promotions. As our target market have high technological skills, lead active lifestyles and
usually aware of events in the communities, we need to use the communication
mediums to reach them.
4.8.3 Promotions Mix

Social Media

Website
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We will use the website first to provide informative information about the
health benefits of probiotics and how it should be part of one’s everyday
health regime. We will then use the website to introduce our Tempo
Probiotics Bar and how it is different from other products on the market.
There will also be a page informing customers the nearest location where
they can buy the Tempo Probiotics Bar. In addition, we will also have an
online ordering system available for those outside the Vancouver area
who would like access to the bar.
In addition, we should have a link or product label on our distributors’
websites, such as the fitness center’s website to show that our product is
available at their locations.

Facebook
Currently, Facebook has 400 million active users worldwide, and our
target market of yuppies are heavy users of Facebook. Facebook is also
a very inexpensive way to generate brand recognition and exposure.
People also tend to be more trusting and more willing to purchase or try
products that their friends use, thus Facebook can be used as an
alternative from “word of mouth” communication.
Facebook also has versatility as to what can be done with it. A group for
Tempo can be created, and we will be able to market new products,
display events that we are sponsoring, inform customers of in-store
promotions and gain a direct communication line to those users of our
product.

Twitter
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Much like Facebook, Twitter can be used to inform our target market of
events that we are sponsoring, and current promotions. We will also be
able to grow a following where we can directly communicate with our
consumers.

Events

Marathons and City Runs
Our yuppies target market lead active lifestyles and strive to succeed in
everything they do. They tend to enjoy challenges such as marathons and
other running events. Thus, these events would be an excellent way to
reach our target market if we sponsor the events and provide our product
in their running kits that they would receive or also have a booth with
samples of them at the event itself. By doing this, we are introducing our
target market to the product, thus gaining brand exposure.

Charity Events
By sponsoring charity events, such as those for Canadian Cancer Society
or Colectoral Cancer Assocation of Canada we will be able to gain
exposure to those who care about these issues or have been affected by
it. We will be able to reach a wide audience at such events, as there will
likely be newspaper, radio and television advertising where the primary
sponsors will be named, and we will be able to show that our company
lives our product’s values and that we care about issues facing the
community.

Tradeshows
As a new product, we should use the opportunity of tradeshows to market
our product and find potential buyers. At industry tradeshows, there will
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Business Plan Proposal
be buyers from stores looking for new products to put on store shelves.
Thus we whould capitalize on these opportunities and invest in
knowledgeable sales staff to represent Tempo Probiotics bar at the
tradeshows as well as provide samples, and brochures to give to the
buyers.

Print Media

Health Magazines
To increase our credibility as a product that has legitimate health benefits,
we should place ads or submit articles about probiotics in health
magazines. Such a magazine that we could use is Canadian Health and
Lifestyle. This specifically targets our Canadian market, thus the
advertising cost should also be lower. As well it is a magazine that is
targeted to the young working professional with other articles about
nutrition, lifestyle, relationships. They also have a featured product in
every issue, and it would increase our product exposure signifnicantly if
we were a featured product for an issue, and included an in-store coupon
in the magazine.

In Store Promotions

Taste Tests
These taste tests will occur at events that we sponsor, such as city runs
or marathons as well as stores where our products are available. Since
our product is a food type product, we need to allow consumers to try the
bar to see if they enjoy the taste. Consumers may have a pre-existing
bias that since it is a healthy product, it may not be very tasteful. Thus we
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Business Plan Proposal
must dispel pre-existing notions and show that the Tempo Probiotics Bar
is not only healthy and beneficial to ones’ health but also tastes good.

Coupons
Coupons are the final step to entice the customer to purchase the
product. As the coupon will give a certain dollar amount off of the
purchase price of the product, or give incentives when buying items in
increased volume, it increases the chances that the customer will follow
through and purchase the product; especially if the customer feels a
sense of urgency. To create that sense of urgency, the coupons should
have a short expiry date so that the customer makes the purchases
immediately.
4.9 Marketing Budget
Refer to Appendix A, tab 6 for the marketing budget breakdown.
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5.0 Financial Plan
5 year projections for the balance sheet, income statement, statement of retained
earnings and cash flows are included in Appendix A, tabs 2, 3 and 4 respectively.
5.1 Financial Model
Given that the company has planned to incorporate, a financing model consisting of both
debt and equity will be used.
In order to fund our initial acquisition costs as well as operating expenses within the first
3 years of the business, we require initial cash investment from both debt and equity
sources of $125K.
5.1.1 Debt Financing
We have arranged with a reputable lending institution debt financing, with the following
terms:
Initial Loan
$25,000
Term
10 years
Interest Rate
12%
The company plans to take out this loan on July 15, 2010, and will use the funds to
purchase the capital assets needed, as discussed in the Operations section, above.
5.1.2 Equity Financing
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The company requires an initial equity investment of $100K. These funds will be
obtained from family members and friends, as well as the founders of the company.
To ensure that the investors are appropriately remunerated, dividends are scheduled to
be paid in year 5, the company’s second year of positive cash flows. The dividend policy
will be determined by the Board of Directors at each annual meeting. The magnitude of
dividends will be based on availability of cash flows from operations, as well as the
opportunity cost of dividend payments (i.e. growth of the company). As shown in
Appendix A, tab 3, we expect cash flows from operations to be positive in year 4, and as
such we expect to declare and pay a dividend in year 5. However, the amount of
dividends shown is only for presentation purposes, and may vary based on cash
availability.
5.2 Business Valuation
Based on the financial projections for the company, our analysts have determined that
the net present value (NPV) of this company is large and positive at $1.3M. The NPV
calculation represents and estimates the present value of the future economic profits of
the company. In order to predict future earnings, estimates must be used. We have
estimated that growth will increase substantially during the first 5 to 6 years of
operations, followed by smaller levels of growth thereafter. Our analyst has calculated
the NPV based on a required rate of return of 25% to equity investors, which is typical
for this type of business and its level of risk.
5.3 Financial Statement Projections
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As shown in Appendix A, projected financial statements (balance sheet, income
statement, statement of retained earnings, and statement of cash flows) have been
prepared. Note that the significant assumptions within these projected statements
include demand and growth throughout the years. All cost of sales are based on the
company’s average historical cost to produce the Tempo Probiotics Bar, taking into
account new efficiencies created from revisions to operations (such as in-house
packaging and labeling). Other significant costs include capital assets to be purchased
(see Appendix A, tab 1). The costs used in the model are based on quotes from retailers
who sell the assets our company requires.
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6.0 Conclusion
The Tempo Probiotics Bar is a new healthy bar that is easy to transport. Tempo will build
on the trend of digestive health started by Activia yogurt, but with a twist – no need for
refrigeration and can be eaten by lactose intolerant consumers. Tempo is a bar sold at a
premium price and will be the first of its kind in Canada. Being the first mover, and
marketing towards yuppies and baby boomers both with high levels of discretionary
income and knowledge of health trends, will help make the Tempo Probiotics bar a great
success. In order to reach our target market, we plan to market to these groups through
social and print media, events and in-store promotions.
Tempo has been a local Vancouver success for two years, and is currently in
negotiations to sell its products to Lululemon, The Running Room and Mountain
Equipment Co-op. In order to meet the high growth in demand for this unique product,
and take advantage of being a first mover in this industry, we must increase
manufacturing capacity.
Studies show that the importance of digestive health in today’s society is increasing
dramatically. We feel that Canadian’s need and deserve this product. Your investment of
$100K will expand our company, thereby allowing the Tempo Probiotics bar to grow from
a local Vancouver creation to a national household name.
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Appendix A
Financial Projections
Appendix is excluded from this document due to presentation limitations. Please refer to
supplementary Excel files for financial information.
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Appendix B
Building Floor Plan
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