BUSINESS PLAN PROJECT RICE STRAW BUSINESS DRINK HUT JOINT STOCK COMPANY

DRINK HUT DUY TAN UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION      BUSINESS PLAN PROJECT RICE STRAW BUSINESS DRINK HUT JOINT STOCK COMPANY Instructor Joan S Gorospe, Ph D Nguyễn Tố Quyên Class[.]

DUY TAN UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION  BUSINESS PLAN PROJECT: RICE STRAW BUSINESS DRINK-HUT JOINT STOCK COMPANY Instructor: Joan S Gorospe, Ph.D Nguyễn Tố Quyên Class : MGT 406 E Member : Trương Thị Ngọc Oanh-0973 Trịnh Thị Thanh Phương-9574 Phan Thanh Mỹ Duyên-1178 Lê Thị Quỳnh Như-2551 Hồ Phương Thảo-5961 Phan Thị Ái Nhi-5963 DA NANG DECEMBER 7, 2022 DRINK-HUT MGT 406 E Table of Contents Appendix I Introduction Nature of the start-up business Product Description II Management plan Form of business organization .5 Business model Management structure SWOT 10 III Marketing plan 11 Product strategy 11 Pricing strategy 12 Promotion strategy 12 Distribution strategy 13 IV Financial plan 13 Income statement projection 13 Balance sheet projection 14 V Operational plan .15 Process flowchart 15 Capacity .16 Location and lay-out 16 Waste disposal management 18 Development Timeline 18 MGT 406 E DRINK-HUT MGT 406 E Appendix Table Financial resources Table Physical assets Table Costs of goods sold Table Operating cost Table Job qualification and job description Table Staff salaries Table Price 12 Table Income statement .14 Table Balance sheet 14 MGT 406 E DRINK-HUT MGT 406 E I Introduction Nature of the start-up business Our company: - Full name: Drink-Hut Joint Stock Company - Abbreviation: DH., JSC - Headquarter: Da Nang - Reason for establishment: We are inspired by anti-plastic trend after coming acrosss hundreds of articles on the contamination caused by plastic-based products, which leads to oceanic pollution throughout the world Moreover, there have been shocking videos about plastic substances existing inside sea creatures’ bodies which died and drifted onto seashores or along the coastline about DrinkHut, we are a business that aims to promote a sustainable lifestyle: a planet that is balanced, healthy and truly cares about the earth’s blue ocean Mission statement: “By using there rice-bored shaw, we are heading towards the act of transforming agricultural produce into products that have great moral value contribute to improve living environment” Product Description: - DH imports raw materials directly without intermediaries Especial, the main raw materials are nice and additives for coloring and flavoring manufactured from reputable establishments passed inspection - Edible straws - This product helps people ensure own health, minisize the harmful effects of plastic products to people and our living enviroment - These days, health should be everyone’s top priority so that organic products like DH’s rice-based straws will meet customers demands on healthy foods and products - Expiration date: months (at the right temperature environment) - Properties: Stable in hot and cold water When served with drinking water at the temperature of about 10°C, DH’s straw only show plasticity, not softening, MGT 406 E DRINK-HUT MGT 406 E disintegrating or cracking Can with stand 4-6 hours in cold water and 2-3 hours in normal water - One–time usage only - Environment friendly: Users can eat the straw after use There can be also be used as organic fertilizers for green plants because of their ability to self-destruct in the natural environment after 90 days after use II Management plan Form of business organization Joint Stock Corporation Business model  Customer value position: Rice-based straws made from 100% natural ingredients including rice flour and tapioca; absolutely no additives or harmful chemicals affecting the health of consumers  Key resources: - Financial resources: Table Financial resources - Equity 11 billion VND Charter capital 10 billion VND Total 21 billion VND Physical assets: Cost of factories, machinery and equipment include MGT 406 E DRINK-HUT MGT 406 E Table Physical assets (unit: million VND) Expenses for building factories, 5,000 offices and showrooms Office equipment (cabinets, tables 1,000 and chairs, air conditioners, computers…) Kitchen equipment (kitchen 500 utensils, refrigerators ) Production equipment (power 5,500 mixed, dryers, forming machines ) Business cards, signs Cargo trick Total  Profit formula: - 300 2,000 14,300 Revenue model: Products are sold at physical stores, distributed to sales agents, wholesales and retailers - Cost model (Duration: year) Table Costs of goods sold Raw materials Packing Total 3,5 billion VND 1,5 billion VND billion VND Table Operating cost Staff salaries Premises rent Electricity, water, wifi bills Total 1,264 billion VND 350 million VND 100 million VND 1,714 billion VND MGT 406 E DRINK-HUT MGT 406 E Management structure  Organization chart - Job qualification and job description Table Job qualification and job description Position Quantity CEO Responsibility Managing, supervising all operations throughout the company Qualifications - Bachelor’s or Master Degree - Good experience in Managing, controlling administration and financial affairs management Making decisions - Highly expert, able to handle and making decisions for future company’s growth Accountant Marketing staff Making statistical Higher Education to paperwork comprising Bachelor’s Degree in revenue, cost, profit… Accountancy Market researching - Higher Education to Handling promotional Bachelor’s Degree in activities, PR, Marketing/ distribution channels Public Relations Organizational - Good communication researching skills - Creative in new ideas to come up with efficient promotions Manager Supervising factories - Well-trained in machinery operations - Good HR skills Production Manufacturing - Well-trained in MGT 406 E DRINK-HUT MGT 406 E staff Sales staff machinery operations Searching for customers - High school Diploma and selling products and above - 18 years old and above - Good communication skills - Resourceful in product introduction Security staff Security - No experience required - Male, 18 years old and above - Good health - Able to control and handle unexpected situations  Compensation package: - Salary Table Staff salaries (Unit: VND) Position CEO Accountant Marketing staff Manager Production staff Sale staff Security staff - Salary 20,000,000 8,000,000 8,000,000 8,000,000 5,000,000 6,000,000 4,000,000 Other benefits: MGT 406 E DRINK-HUT MGT 406 E +) 13th month salary +) Bonus by day, by contract, by month +) Fixed salary + Allowance + % of Revenue + Bonus (If any) +) days off in a month and day off +) Social insurance, health insurance, 13 th month salary, annual leave + benefits according to state regulations +) Ideal working space with friendly colleagues, helping you to develop the best thinking and work orientation +)Working in a fun, dynamic and professional environment Opportunity for advancement and development +) Get 30% off purchase +) Participating in periodic personnel training courses, improving knowledge and soft skills +) Participate in extracurricular activities such as team building, workshops SWOT Strength: - Protecting the environment, Weakness: - Unbranded products degradable within months, - The sales team is young reducing plastic wastes - The process of treating - It's a completely new product on the market - Safe for the user's health - Can eat after using - Abundant supply: Vietnam is always in the top largest rice exporting Countries in the World - Colors are made from natural materials - Variety of sizes, suitable for many requirements wastewater is not optimal, not really protecting the environment - Competing with similar brands and product markets: plastics, bamboo, paper, grass, straws - Easily moldy if not stored carefully or broken in an airconditioned room - Less time to use than other types of straws: Soft straw, hydrated MGT 406 E DRINK-HUT MGT 406 E - Automatic production line, high within 1,5- hours, after that technology, can produce large will have to change new straw quantity - The cost is higher than common - Storge time and shelf life are quite straws, difficult to distribute to long compared to other biological straws - Increasing agricultural value of small cafes and restaurants - Cannot be reused - Affects the taste of drinks, Vietnam causes chemical reactions with Opportunities: carbonated water, and soft drink Threats: - Trends of environmental protection around the world - Strong competitor - The world covid-19 pandemic is - Export opportunities: many developed countries have issued still complicated - Difficult to change consumption orders to limit the use of plastic habits and reception of Straws customers - The Ministry of Natural resources - Is new product in the market, so Environment has launched the there are few references movement “Against plastic waste” - Changing consumers’ habits of - Large number of potential customers (users tend to use products that are safe for health using plastic straws takes time - The are many substitute products and protect the environment) - Rice straws are already on the market but not very popular, a potential new market - Is an indispensable item for dinner to enjoy drinks, soft drinks - Suitable for all customers, all ages MGT 406 E 10 DRINK-HUT MGT 406 E III Marketing plan Product strategy  Describe the core product: Rice straws that varies on size and color and taste  Create your customer value proposition: - Difference Drink-Hut's straws make the difference: the taste which enhances the taste of the drink, making it unique but suitable for each drink that customers request Eg Cinamon flavored straws are suitable for herbal drinks Coffee flavored straws would go well with coffee based drinks - Edible, Safe for health Generally, plastic or paper straws would become useless and ready to be dumped after used Moreover, plastic ones hardly decompose Now, rice-based straws can be eaten immediately after use Not only Viet Nam but also Korea and other countries are also becoming fond of this "edible straw" The reason for the edibility is that our product is made from rice flour, tapioces starch and natural food coloring and fruit flavor You can also eat them as a snack without health being affected Drink - Hut's rice straws are extremely safe without microplastics, preservatives, toxic chemicals and with ultimate hygiene standards - Environmental protection: As an alternative for 500-year-old plastic strays, rice straws are a breakthrough with its ability to quickly decompose in natural environment Pricing strategy Drink-Hut to apply a penetration pricing strategy with the price range from 600d – 1200d/straw according to size Table Price Type Bubble tea rice Quantity Unit 50 straw Box Retail price Wholesaler(>100boxes 60,000d ) 40,000d straw(12mm)MGT 406 E 11 DRINK-HUT many color Smoothies rice MGT 406 E 50 straw Box 50,000d 30,000d 50 straw Box 30,000d 15,000d straw(8mm)-many color Water/coffee rice straw(6mm)-many color Promotion strategy  Broadcastst media: TV (45 sec)  Social media: - Fanpage account, website, Grand Opening Display Ads - Drink-Hut will hold such campaigns as "trash picking" throughout Da Nang, then post on social networking platforms like Facebook, Instagram - Producing short videos with content about product features, environmental protection on tik tok, youtube shorts, reels…  Sale promotion: - On the launch day, Drink-Hut's product will be discounted by 15% across the company's stores/retail points This will last for days from the date of launch - Orders over 300.000d will be gifted a lucky draw to own valuable gifts - There will be incentives for restaurants/gents/distributors working with Drink-Hut such as periodic purchase discounts, price incentives for longterm cooperation  Personal selling: - Press conference to introduce the product to launch - Participate in trade fairs Distribution strategy:  Channel coverage: Selective Selected distributors are: coffee (Highland, Starbucks,…) restaurants, cinemas on average-income segment, supermarkets (Go!, Winmart…)  Entrepreneur perspective: Bussiness distribution MGT 406 E 12 DRINK-HUT MGT 406 E  Channel members: Retailer / Wholesaler  Strategic location: Le Duan Street, Da Nang At starting phase, Drink-Hut plans to allocate our products to official showrooms in Da Nang, which is also the location of official store and exclusive owned brand distributor Statistics throughout the first half of the year 2022, showed the total amount of Da Nang visitors reached over 1,88 million, equivalent 83% more than previous period This means Da Nang is a suitable choice for everyone to welcome a brand new type of product like Drink-Hut's rice straw IV Financial plan Income statement projection  Estimate increases every year: - Sale: 7% - Advertising expense: 4% - Cost of goods sold: 2% - Rent expenses: 2% - Salary expenses: 5% Sale = 150 boxes/day * 50,000d*360days = 2,700,000,000 Table Income statement Quantity Sales Ads expenses 2023 150 2,7B 150B 2024 160,5 2,889B 156M 2025 171,7 3,091B 162M 2026 183,8 3,308B 169M 2027 196,6 3,539B 175M Cost of goods sold 155M 158,1M 161,3M 164,5M 167,8M Rent expenses 750M 765M 780,3M 796M 8,2M Salary expenses Gross profit 114M 2,545B 119,7M 2,731B 125,7M 2,93B 132M 3,144B 138,5M 3,371B Less: Expenses 1,014B 1,841B 1,068B 1,097B 1,126B Operating profit 1,531B 1,689B 1,862B 2,047B 2,245B Less: interest Net income 1,531B 1,689B 1,862B 2,047B 2,245B Before taxes Less: tax(20%) Net income 540M 911M 577,8M 1,111B 618,2M 1,244B 661,6M 1,385B 707,8M 1,537B MGT 406 E 13 DRINK-HUT MGT 406 E Balance sheet projection Table Balance sheet DRINK-HUT RICE STRAW Balance Sheet December 31, 2023 Assets Liabilities Current Assets Current Liabilities Cash +2B Accounts Payable +150M Account Receivable +300M Accrued Expenses +114M Inventories +50M Unearned Revenue +236M Prepaid Rent +750M Total Current Liabilities +500M Long-term Liabilities +0M Total Liabilities 500M Total Current Assets 3,1B Owner’s Equity Long-term Asset Owner’s Equity Leasehold Improvement +200M Thao +1B Accumulated Depreciation (100M) Nhi +1B Building +2B Oanh +1B Machines +300M Nhu +1B +2,4B Duyen +500M Phuong +500M Total long-term Asset Total Owner’s Equity Total Asset 5,5B +5B Total Liabilities and Owner’s Equity 5,5B MGT 406 E 14 DRINK-HUT MGT 406 E V Operational plan Process flowchart - Selection ingredients Flour mixing Shaping straws Packing Steaming Step 1: Selection ingredients Main ingredients: rice flow, tapioca, coloring veggies (such as beetroot, butterfly pea, magenta plant, ) - Step 2: Flour mixing After preliminary treatment, ingredients are added to a mixer simultaneously with water, all of which are blended and stired until smooth, then put into trays - Step 3: Steaming Put the trays into steamer and wait until cooked Let them cool down naturally then put into dispenser - Step 4: Shaping straws The mixture is pulled and formed into straws Craftsmen then straighten the straws and air-dry them within 6-12 hours Afterward, long straws are cut into short - Step 5: Packing MGT 406 E 15 DRINK-HUT MGT 406 E Craftsmen categorize, quality checks and package the products Averagely, 1kg of rice flour is made into 50-100 straws, dependent on size Capacity Estimated maximum volume of production: 150 boxes per day Location and lay-out  Location: Nguyen Huu Tho street, Hai Chau district, Da Nang city  Lay-out: The company has floors The first floor is where the factory is located To the right of the entrance is the reception area Next is the product display shelf Deep inside is the production area and the warehouse The first floor The second floor is where the employees work To the right of the aisle is the meeting room, followed by the Director's room To the left of the aisle is the area for the finance department, the sales department and the staff rest area MGT 406 E 16 DRINK-HUT MGT 406 E The second floor Some 3d images of company Waste disposal management  For Manufacturing Waste: MGT 406 E 17 DRINK-HUT MGT 406 E Disposed of general trash periodically in an environmental-friendly manner Recycle or dispose of SQG dangerous waste by sending it to a properly licensed facility for recycling or disposal  For Inventory Produce: Promote a special discount for wholesale and retail channel members to avoid inventory as much as possible because of the firm’s product’s organic properties Development Timeline - 20/9 – 21/9: Conceptualization of business plan - 22/9 – 12/10: Complete legal procedures to establish a company - 12/10 – 19/10: Choose a machine manufacturer and Choose raw material supplier - 19/10 – 24/10: Agreements with supplier - 20/10 – 27/10: Choose a business location - 27/10 – 26/11: Infrastructure design and construction - 26/11 – 30/11: Install operating machinery - 1/12 – 21/12: Staff recruitment and training - 21/12 – 24/12: Product testing - 5/12 – 26/12: Bringing products to market MGT 406 E 18 DRINK-HUT MGT 406 E MGT 406 E 19