Cigar Manufacturing Business Plan

Cigar World

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Company Summary

Our aim is to establish Cigar World as the company with the best customer service in the industry. Our unsurpassed customer service coupled with production flexibility and the best quality control in the industry will help launch this company and enable us to compete with other companies in the market. As far as production is concerned, we have the best turnaround time and flexibility that allows us to accommodate any customer of any size.

We have established a strong business to business telemarketing effort that is working very well to create new business for us. Although this is a big industry, less than 1% of the companies doing business today are as aggressive as we are in capturing new business. Members of our management team will be attending the Retailers Tobacco Dealers of America (RTDA) trade convention in Las Vegas, Nevada. It is at this convention where our products will be officially launched. Furthermore, the company has acquired a vehicle to be used by our sales representatives. This will allow us to better serve customers in the state of North Carolina.

We have acquired all the necessary permits at the federal, state, and county levels. At the present moment, there are no regulations as far as producing, importing, and commercializing cigars. Although a health-warning label is not mandatory for cigars, the company will place the labels as a matter of protection against the possibility of lawsuits.

2.1 Company Ownership

Cigar World is a North Carolina corporation and is owned, in equal shares, by:

  • Michael Jones, president.
  • Nathan Smith, vice president.
  • John Thompson, production manager.

2.2 Company History

The table and chart below summarize Cigar World's performance for the previous two fiscal years.

Past Performance
1997 1998 1999
Sales $0 $1,000,000 $1,800,000
Gross Margin $0 $870,000 $1,600,000
Gross Margin % 0.00% 87.00% 88.89%
Operating Expenses $0 $350,000 $400,000
Collection Period (days) 0 13 14
Inventory Turnover 0.00 6.00 6.00
Balance Sheet
1997 1998 1999
Current Assets
Cash $0 $40,000 $40,000
Accounts Receivable $0 $50,000 $50,000
Inventory $0 $5,000 $5,000
Other Current Assets $0 $35,000 $35,000
Total Current Assets $0 $130,000 $130,000
Long-term Assets
Long-term Assets $0 $25,000 $25,000
Accumulated Depreciation $0 $5,000 $5,000
Total Long-term Assets $0 $20,000 $20,000
Total Assets $0 $150,000 $150,000
Current Liabilities
Accounts Payable $0 $20,000 $20,000
Current Borrowing $0 $0 $0
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $0 $20,000 $20,000
Long-term Liabilities $0 $100,000 $100,000
Total Liabilities $0 $120,000 $120,000
Paid-in Capital $0 $25,000 $25,000
Retained Earnings $0 $5,000 $5,000
Earnings $0 $0 $0
Total Capital $0 $30,000 $30,000
Total Capital and Liabilities $0 $150,000 $150,000
Other Inputs
Payment Days 0 0 30
Sales on Credit $0 $700,000 $1,350,000
Receivables Turnover 0.00 14.00 27.00
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Past Performance
1997 1998 1999
Sales $0 $1,000,000 $1,800,000
Gross Margin $0 $870,000 $1,600,000
Gross Margin % 0.00% 87.00% 88.89%
Operating Expenses $0 $350,000 $400,000
Collection Period (days) 0 13 14
Inventory Turnover 0.00 6.00 6.00
Balance Sheet
1997 1998 1999
Current Assets
Cash $0 $40,000 $40,000
Accounts Receivable $0 $50,000 $50,000
Inventory $0 $5,000 $5,000
Other Current Assets $0 $35,000 $35,000
Total Current Assets $0 $130,000 $130,000
Long-term Assets
Long-term Assets $0 $25,000 $25,000
Accumulated Depreciation $0 $5,000 $5,000
Total Long-term Assets $0 $20,000 $20,000
Total Assets $0 $150,000 $150,000
Current Liabilities
Accounts Payable $0 $20,000 $20,000
Current Borrowing $0 $0 $0
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $0 $20,000 $20,000
Long-term Liabilities $0 $100,000 $100,000
Total Liabilities $0 $120,000 $120,000
Paid-in Capital $0 $25,000 $25,000
Retained Earnings $0 $5,000 $5,000
Earnings $0 $0 $0
Total Capital $0 $30,000 $30,000
Total Capital and Liabilities $0 $150,000 $150,000
Other Inputs
Payment Days 0 0 30
Sales on Credit $0 $700,000 $1,350,000
Receivables Turnover 0.00 14.00 27.00