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Visigoth Imports Inc

Executive Summary

Opportunity

Solution

Visigoth Imports will provide complete import/export brokerage services including purchase contracts, shipping, warehousing, and delivery scheduling. The company will concentrate on special and cultural imports from Germany and Scandinavia to the unique Bavarian town of Leavenworth, WA.  Visigoth will provide trade consultation services to newly started farms created under the Puget Consumers Co-op’s Farmland Fund initiative.

Market

Visigoth will be concentrating on servicing just two types of clients, the gift shops of Leavenworth, Washington, and the farmers of the Puget Consumers Co-op (PCC). For both market segments, we have secured exclusive contracts or endorsements putting us in a unique position to service these niche firms and their needs.

Profitability in these two markets is expected to be excellent, especially in the import section as Leavenworth draws in over a million tourists each year. We expect profitability in the co-op end to be much slower in the first five years of operation, but it too will increase steadily.

Competition

Competition includes all potential importing firms that serve small enterprises such as farms and specialty gift shops. Practically speaking, this means the largest import/export firms such as Fisher-Mills, Eagle Distributing, and other large, nationwide companies will not compete with us. Most other companies tend to be regionally focused. The foreign trade industry is highly fragmented, with a large number of small companies that mainly cater to small firms and a few large companies that seek the largest contracts from companies such as Microsoft, GM, etc. This makes competition within the industry very intense. Through our niche strategy we intend to avoid competition and its drawbacks such as price wars, etc.

Why Us?

 We will become the preferred import company for the unique tourist town of Leavenworth. Visigoth understands that the import shops and restaurants in Leavenworth have special needs of most unique gifts for the million tourists that visit the town annually. Visigoth Imports also understands that the newly launched farms of the PCC farmland fund initiative also have higher costs than most competitors and will need to export their produce at a cost that provides sufficient profit. Visigoth Imports has a combined 35 years of experience working in the import/export business. Our philosophy is in creating a long-term relationship with clients so that the delivery of their products becomes a seamless experience that promotes loyalty.

Expectations

Forecast

Most of the company’s liabilities will come from outside private investors and management investment, however, we have obtained current borrowing from Bank of America Commercial Investments, the principal to be paid off in two years. A long-term loan through Charter Bank of Nieurich will be paid off in ten years.

The company expects to reach profitability in year 2 and does not anticipate any serious cash flow problems. We expect that about 3,500 units per month will guarantee a break-even point.

Financial Highlights by Year

Chart visualizing the data for Financial Highlights by Year

Financing Needed

We will be getting $84,000 from the four founders. 

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Opportunity

Problem & Solution

Our solution

The company will concentrate on special and cultural imports from Germany and Scandinavia to the unique Bavarian town of Leavenworth, WA. Visigoth also plans to export apples and other produce by newly started farms created under the Puget Consumers Co-op’s Farmland Fund initiative.

We will become the preferred import company for the unique tourist town of Leavenworth. Visigoth understands that the import shops and restaurants in Leavenworth have special needs of most unique gifts for the million tourists that visit the town annually. Visigoth Imports also understands that the newly launched farms of the PCC farmland fund initiative also have higher costs than most competitors and will need to export their produce at a cost that provides sufficient profit. Visigoth Imports has a combined 35 years of experience working in the import/export business. Our philosophy is in creating a long-term relationship with clients so that the delivery of their products becomes a seamless experience that promotes loyalty.

 

Target Market

Market Size & Segments

Visigoth will be concentrating on servicing just two types of clients, the gift shops of Leavenworth, Washington, and the farmers of the Puget Consumers Co-op. For both market segments, we have secured exclusive contracts or endorsements that put us in a unique position to service these niche firms and their more demanding needs.

Profitability in these two markets is expected to be excellent, especially in the import segment as Leavenworth draws in over a million tourists each year. We expect profitability in the co-op end to be much slower in the first five years of operation, but will increase steadily.

Visigoth intends to be a small import/export company focused on clients serving a niche market. Having secured a very advantageous contract with PCC and gained the endorsement of the Leavenworth city council, we plan to focus exclusively on these market segments. Both have such high potential that we do not see a need to expand our market reach for the foreseeable future.

Competition

Current alternatives

Competition includes all potential importing firms that serve small enterprises such as farms and specialty gift shops. Practically speaking, this means the largest import/export firms such as Fisher-Mills, Eagle Distributing, and other large, nationwide companies will not compete with us. Most other companies tend to be regionally focused. The foreign trade industry is highly fragmented, with a large number of small companies that mainly cater to small firms and a few large companies that seek the largest contracts from companies such as Microsoft, GM, etc. This makes competition within the industry very intense. Through our niche strategy we intend to avoid competition and its drawbacks such as price wars, etc.

Companies usually enter into contracts with import/export firms based on a firm’s reputation for professionalism and service. With no proven track record, a star-up import/export company obtains a "good reputation" through its personnel, people who have experience in other businesses in the industry. Price, reliability and scope are the driving factors for accepting contracts, especially if the import/export company is small.

Our niche clients have different needs than most other firms. Our import clients need to have relatively small numbers of expensive and fragile products moved from Europe to local warehouses in Wenatchee and Leavenworth. Most of these items are handmade so handling is a special issue. In addition, the small companies and shops in Leavenworth depend a great deal on their import agents to alert them to new and unique product introductions overseas.

On the other end, the farms belonging to the PCC need to keep export costs as low as possible since many of them are start-up ventures with initially high overhead. Quite a few trade firms do not accept these types of contracts and leave it to the co-ops to create their own exporting ventures. This can lead to higher costs as most co-ops do not have the core competencies in import/export issues.

Our advantages

The town brings in an average 24 million dollars in revenue each year, and since much of the town’s profits are based on the sale of alpine and Scandinavian gifts, the opportunity for a company such as Visigoth is almost unmatched. In 2002 a town meeting of the principal shop owners in Leavenworth was held concerning the present contracts with the community’s main importer, Deutsche Gifts. The previously good relations between the community and the import firm had soured due to rising costs and unreliable service. The result of the meeting was to look for another importer better able to meet the local needs once the current contract expired. Mr. Frank Curtiss successfully bid for the contract, and the idea of Visigoth was born.

Visigoth has made arrangements to export produce from member farms established by the Puget Consumers Co-op Farmland Fund. The Fund works to secure and preserve threatened farmland in Washington State and move it into organic production. The Fund’s primary focus is on large, functional landscapes of local, regional and statewide importance so protection can be extended to biodiversity and wildlife habitat as well as to farmers and farming communities. The Fund is an independent, community-supported non-profit land trust founded in 1999. The Fund has already rescued a half dozen farms within the state and plans to increase these projects so that by 2007 there will be at least 36 farms that come under the fund’s protection. In addition, approximately 60 farms belonging to the Co-op have expressed interest in contracting with Visigoth.

Keys to Success

Keys to Success

Visigoth Imports’ keys to long-term and profitability are as follows:

  • Differentiate our services to our niche clients so that they realize that we are better able to serve their needs than a more generic competitor.
  • Keeping close contact with clients and establishing a well functioning long-term relationship with them to generate repeat business and create a top notch reputation.
  • Establish a comprehensive service experience for our clients that includes consultation, product/client search, purchasing contracts, warehousing, shipping, delivery, and follow up service analysis.
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Execution

Marketing & Sales

Marketing Plan

Visigoth intends to leverage its contacts with the Leavenworth city council and the Puget Consumers Co-op in order to draw in new clients. The city council works very closely with local businesses in facilitating all aspects of business management in order to keep tourism flowing. Because of this, Visigoth has already signed contracts with nine Leavenworth businesses and we expect to gain a dominant market share within the town.

The PCC will be recommending Visigoth Imports, Inc. to its new farmers as long as we can keep shipping costs within accepted limits. Therefore we expect to have a large proportion of member farmers use our services.

Sales Plan

Visigoth intends to develop sales by establishing close contact with potential clients. We will begin by offering a free consultation in terms of overall cost, service, and delivery. In addition, we intend to promote our management team’s extensive experience both with German gift manufacturers and artisans, and our knowledge of the produce trade environment to draw in our target market segments.

Operations

Technology

Visigoth offers complete import/export brokerage services plus inventory consulting services. As mentioned previously, this includes the following:

  • Supplier/buyer identification
  • Purchasing process contracting and consulting
  • Shipping setup
  • Warehousing arrangements
  • Delivery

It must be noted that Visigoth does not posess any warehousing facilities and intends to outsource this particular service.This means that we will have virtually no variable costs associated with unit sales.

Visigoth will be importing such things as steins, figurines, Christmas gifts, germanic foodstuffs, cuckoo clocks, and nutcrackers from Germany, where Mr. Curtiss has had extensive experience. In addition Visigoth will be importing Scandinavian wool products such as sweaters and other gift items. 

The company will be exporting produce, primarily apples, to Europe.

Our revenue model is based on a commission rate charged to our clients scaled on the dollar value of goods moved per order.

Milestones & Metrics

Milestones Table

Milestone Due Date
Q1 Review
Mar 06, 2018
Q2 Review
June 06, 2018
Q3 Review
Sept 13, 2018
Q4 Review
Dec 13, 2018

Key metrics

Our key metrics are: 

  • monitor tweets and retweets to measure long term customer relationships 
  • # of reviews 
  • # of returning customers 
  • # of our most popular products 

 

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Company

Overview

Ownership & Structure

The company will have a number of outside private investors who will own 27% of the company’s shares. The rest will be owned by the senior management including Mr. Frank Curtiss, (25%), Ms. Hannah Mills (20%), Mr. Steve Iltheus (20%), and Mr. Pierce Bolm (8%). All other financing will come from loans.

Team

Management team

Visigoth’s management brings to the company strong capabilities in all aspects of trade relations, logistics, contracting and selling.

Mr. Frank Curtiss is a former master distributor with Fisher-Mills, one of the nation’s largest import/export firms. During his 10 years with Fisher-Mills he worked exclusively on trade contracts with Germany. Mr. Curtiss accepted a position with Eagle Distributors as a department head. By introducing American wines into eastern Europe and the former Soviet republics he demonstrated his flair for opening new markets. Mr. Curtiss has an MBA in finance and an BS in International Relations.

Ms. Hannah Mills graduated with honors from the University of Oregon, having earned a bachelors degree in marketing.  After that Ms. Mills worked for Stanford Distributors working with canning companies in the midwest region. After that she went to work for Anderson Consulting in their International Trade division. Finally Ms. Mills became vice president of A.V. Imports.

 

 

Personnel Table

2018 2019 2020
Frank Curtiss $42,000 $42,840 $43,697
Hannah Mills $42,000 $42,840 $43,697
Steve Iltheus $42,000 $42,840 $43,697
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Financial Plan

Forecast

Key assumptions

We assume: 

  • Everyone appreciates a beautiful spot 
  • The town and company has a lot to offer tourists 

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of funds

Our use of funds are:

Legal $2,000

Insurance $1,000

Rent $2,000

Accounting and bookkeeping fees $2,000

Expensed equipment $2,000

Advertising $4,000

Other $8,000

TOTAL START-UP EXPENSES $21,000

Sources of Funds

Our Planned investment is: 

Mr. Frank Curtiss $25,000

Ms. Hannah Mills $23,000

Mr. Steve Iltheus $23,000

Mr. Pierce Bolm $23,000

TOTAL PLANNED INVESTMENT $84,000

Statements

Projected Profit and Loss

2018 2019 2020
Gross Margin $207,900 $222,500 $249,000
Operating Expenses
Salaries & Wages $126,000 $128,520 $131,091
Employee Related Expenses $25,200 $25,704 $26,218
Rent $36,000 $36,000 $36,000
Marketing $6,180 $6,700 $7,560
Utilities $3,600 $3,600 $3,600
Amortization of Other Current Assets $0 $0 $0
Interest Incurred $872 $582 $278
Depreciation and Amortization $0 $0 $0
Gain or Loss from Sale of Assets
Income Taxes $0 $0 $0
Total Expenses $298,952 $313,606 $333,747
Net Profit $10,048 $21,394 $44,253

Projected Balance Sheet

Starting Balances 2018 2019 2020
Cash $60,000 $75,909 $91,735 $131,257
Accounts Receivable $0 $0 $0
Inventory
Other Current Assets $15,000 $15,000 $15,000 $15,000
Total Current Assets $75,000 $90,909 $106,735 $146,257
Long-Term Assets $10,000 $10,000 $10,000 $10,000
Accumulated Depreciation $0 $0 $0
Total Long-Term Assets $10,000 $10,000 $10,000 $10,000
Accounts Payable $2,000 $13,517 $13,895 $15,414
Income Taxes Payable $0 $0 $0
Sales Taxes Payable $0 $0 $0
Short-Term Debt $5,656 $5,946 $6,250 $2,148
Prepaid Revenue
Total Current Liabilities $7,656 $19,463 $20,145 $17,562
Long-Term Debt $14,344 $8,398 $2,148 $0
Long-Term Liabilities $14,344 $8,398 $2,148 $0
Paid-In Capital $84,000 $84,000 $84,000 $84,000
Retained Earnings ($21,000) ($21,000) ($10,952) $10,442
Earnings $10,048 $21,394 $44,253

Projected Cash Flow Statement

2018 2019 2020
Net Cash Flow from Operations
Net Profit $10,048 $21,394 $44,253
Depreciation & Amortization $0 $0 $0
Change in Accounts Receivable $0 $0 $0
Change in Inventory
Change in Accounts Payable $11,517 $378 $1,519
Change in Income Tax Payable $0 $0 $0
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt $289 $304 ($4,102)
Change in Long-Term Debt ($5,946) ($6,250) ($2,148)
Cash at Beginning of Period $60,000 $75,909 $91,735
Net Change in Cash $15,909 $15,826 $39,522
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