Capsicum Habanero Pepper Spray
Business Plan

1. Table of Contents
1. Table of Contents 3
2. Executive Summary 4
3. General Company Summary 6
4. Products and Services 9
5. Market Analysis Summary (Marketing Plan) 12
6. Strategy and Implementation Summary (Operational Plan) 16
7. Management Summary (Management and Organization) 20
8. Financial Plan 22
9. Appendix 27

2. Executive Summary
Capsicum Habanero Pepper Spray is a new store that sells varies kinds of self-defense related products in Brownsville, Texas. As the name suggests our focus is to provide pepper spray and other types of self-defense sprays, and position ourselves as the top retail store servicing this particular market in the Rio Grande Valley area.

2.1 Objectives i. To create a shopping environment that caters to the self-defense needs of the female population age over 18. ii. To earn 60% market share and become the top self-defense store in Brownsville, TX and gain name recognition in the Rio Grande Valley area. iii. To earn a 30% profit margin within the first year. iv. To have a customer base of 500 by the end of the first year. v. To earn a net profit of $25,000 by year two and $60,000 by year three. vi. To be an active member in the community supporting anti-crime activities and local law enforcements.

2.2 Mission
Capsicum Habanero Pepper Spray’s mission is to offer quality and effective self-defense products to provide peace of mind to all types of customers.

2.3 Keys to Success a) Provide customers with top quality self-defense related products. b) Provide customers with top quality customer service in an atmosphere of the Rio Grande Valley hospitality. c) Promote and advertise in areas such as universities and grocery stores that our target customer base will learn about our store and products. d) Continuously review and improve our products and services.

3. General Company Summary
3.1 Company Ownership
Capsicum Habanero Pepper Spray is a privately held corporation with ownership Jacob Almaguer (25%), Nora Caballero (25%), Fei Cao (25%) and Monica Iracheta (25%).

3.2 Company Partnership
The company has partnership with four other partners. Sabal Tech is a GPS chip technology company, they will be our chip provider; Valley International Cold Storage is an assembly company, they will be our assembler; B4 Logistics Inc. is a trucking company, they will be in charge of the distribution work of our products; finally, our raw material, habanero peppers will be provided by two local farms, Duda’s Farm Inc. and Cactus Farm LLC.

3.3 Operation hours
The hours of operation will be Monday - Friday 9 a.m. - 5 p.m., Saturday - Sunday 12 p.m. - 5 p.m. like most other retail stores.

4.4 Start-up Summary
The Capsicum Habanero Pepper Spray will acquire the following start-up equipment: * Office equipment such as chairs, desks, tables and file cabinets. * Front counter, cash register and inventory shelves. * 5 computer units. * Main computer server with a color printer, and back-up system. * Software: Microsoft Office, Sage 100 (Peach Tree) and Salesforce CRM software * Servers including an intranet and an internal telephone system. * Storefront build-out. * Landscaping and modeling costs * Rent, utilities, insurance.

4.5 Company Locations and Facilities
Capsicum Habanero Pepper Spray will have one physical retail store located at the Sunrise Mall in Brownsville, TX. Majority of sales will take place through the online store hosted by eBay.com and Amazon.com.

All business functions will be handled through the physical store. The company headquarter will also be housed at this location. All inventories and goods will be stored at a warehouse rented nearby the office.

3.6 Government Regulation
Though pepper Spray is legal in all 50 states in U.S., it should only be purchased by individuals who is 18 years or older.

4. Products and Services
Pepper spray, also known as Oleoresin Capsicum spray, is the oil taken from the placenta near the stem of a pepper. All aerosol products will eventually lose pressure over time. Most defense sprays last for only two years from their manufacture date. Depending upon the wind, most defense sprays using a stream spray pattern fire 8 to 12 feet (3 to 4 meters).

4.1 Product description
Capsicum Habanero Pepper Spray will provide a selection of our own brand that serve self-defense purpose. One of our most signature self-defense products is the Habanero Pepper Spray series with GPS chip installed and core (pepper package) refill feature.

4.2 Competitive Comparison
Capsicum Habanero Pepper Spray’s unique product line helps gain brand identity and attracts more loyal customers while standing out among our competitors. a) We will be the first self-defense retail store with its own unique products in Brownsville, Texas. b) The returned customers will be rewarded with a free core refill and other discounts and coupons. c) We will offer products designed for women and men. d) We will create a sense of peace of mind and bonding with the community by offering self-defense seminar and anti-crime events. e) We will follow-up with the customer with an excellent post-sell service.

4.3 Sales Literature
Capsicum Habanero Pepper Spray will send emails including promotions and coupons to the customers in order to show our care and gain feedback on our products and services and therefore extend customer base.

4.4 Sourcing
Capsicum Habanero Pepper Spray will focus its sourcing to grocery stores such as Walmart and H.E.B, as well as sports centers including Academy and Dick’s sporting goods since those places has most of our target customers.

4.5 Future Products and Services
In the future, as the company achieve and exceed our goals, we will expand our e-commerce stores and open up more physical stores in the Rio Grande Valley area. Eventually, expand the sales size to a state level.

5. Market Analysis Summary
The primary target customer of Capsicum Habanero Pepper Spray will be the women in Cameron County ages above 18 years old.
Our secondary target customers are women above 18 years old in the upper Rio Grande Valley area including Hidalgo County and Starr County.

5.1 Target Segmentation
Based on the date retrieved from U.S. Census bureau, there is a population of 209,421 females in Cameron County, including 143,911 females over 18 years old.
In the upper Rio Grande Valley area, there is a population of 395,963 females in Hidalgo County, including 264,009 females over 18 years old; in Starr County, there is a population of 31,418 females, which 21,111 of them are over 18 years old.

5.2 Target Market Segment Strategy
The goal of Capsicum Habanero Pepper Spray is to serve the local female population with self-defense purpose pepper sprays. We will also serve the female populations in upper Rio Grande Valley area including Hidalgo County and Starr County for the same purpose.

5.2.1 Market Needs
Based the market research including surveys and interviewed we have conducted, we learned the following factors: i. Males may not be open to purchase our product. ii. GPS chip is more popular than the alarm feature. iii. People don’t know much about pepper spray and related self-defense products iv. Many college students are concerned about UTB parking lots at night due to the previous crime activities took place there. v. Most of the customers are willing to pay an average price from $50 to $55 for a GPS chipped pepper spray product.

5.2.2 Market Trends
More and more people starts to gain self-defense knowledge and pay more attention to self-safety. With the increase of the self-defense conscious among population, self-defense related products will be demanded more than ever.

5.2.3 Industry Analysis
Capsicum Habanero Pepper Spray retailers will have two types of stores: 1. Physical store: a physical Capsicum Habanero Pepper Spray retail store will be located in the Sunrise Mall in Brownsville, Texas in order to serve the target customers in Cameron County. 2. Online Stores: two virtue stores will be opened online hosted by eBay.com and Amazon.com in order to serve the target customers in the upper Rio Grande Valley area and those who could not physically go to the actual store to purchase the products.

5.3 Main Competitors
Capsicum Habanero Pepper Spray has two intense competitors nationwide.
Mace Security International: one of the most recognizing self-defense product brands world-wide. It has been in the business since 1970s. Mace offers variety kinds of personal defense related products including defense sprays and personal alarm.
SABRE - Security Equipment Corp.: One of the most recognizing self-defense product brands in the U.S. The company has been in the industry since 1975. SABRE offers variety kinds of personal defense related products including pepper sprays and stun guns.

6. Strategy and Implementation Summary (Operational Plan)
Capsicum Habanero Pepper Spray’s goal is to provide self-defense related products in order for customers to gain peace of mind.
We intend to gain 60% of market share by providing high quality and safety products and focusing on this particular niche.

6.1 Competitive Edge * The returned customers will be rewarded with a free core refill and other discounts and coupons. * We will send discount and coupons via emails.

6.2 Market Strategy
The company’s marketing strategy will focus mainly on sales promotion including discount and coupons, as well as high quality customer services and rewards over loyalty customers.

* The marketing budget would not exceed 10% of the gross annual income. * Our promotions will always help customers to save money and maximize probability at the same time.

6.2.1 Pricing Strategy
In order to compete against the big brands (Mace and SABRE), besides our signature GPS chipped pepper spray products, we will sell our basic products at a 20% less price versus products from the big brands.
Our exclusive products, on the other hand, will be sold at an average price of $50 due to its uniqueness and usefulness.

6.2.2 Promotion Strategy
Capsicum Habanero Pepper Spray will use the following media and method to advertise our products and services. * Color flyers will be posted on campuses throughout the Rio Grande Valley Area to gain student customers’ attention. * Commercial through TV and radio stations such as KRGV and Wild 104. * Word of mouth.
6.2.3 Distribution Strategy
We expect an approximately 20% sales through our physical store located at Sunrise Mall in Brownsville, Texas. The rest 80% of sales will incur via our virtue stores on eBay.com and Amazon.com.

6.2.4 Marketing Program
We intent to pass out our flyers at the grand opening event and other self-defense seminars hosted in the community.

6.2.5 Positioning Statement
We will be selling variety types of self-defense related products from our own brand name.

6.3 Sales Strategy * The company will utilize the Salesforce CRM software with every sales transaction. The software will automatically record each customer’s purchase habit, purchase history and other important customer data in order for the company to provide quality customer service. * A 7 day return/exchange and “money back guaranteed” policy will be offered to build trust with customers and maintain retention and loyalty.

6.3.1 Sales Forecast
The following table will exhibit a sales forecast for the next 3 operating years.

An estimate of 10% increase on units sold per year is given.

7. Management Summary (Management and Organization)
The owners of Capsicum Habanero Pepper Spray would love to employ outgoing, war-hearted and punctual individuals as employees to work for the company. The pay rate will be determined depends on experiences and education background.

Monica Iracheta, one of the co-founders of Capsicum Habanero Pepper Spray, will also be in charge of HR department of the company. She is responsible for screening candidates and interview those who are mostly qualified.

7.1 Organizational Structure
Capsicum Habanero Pepper Spray is a small private owned company, it does not need a complicated company structure. Jacob Almagure, one of the co-founders of Capsicum Habanero Pepper Spray, will also be the general manager of the physical store located in Brownsville, Texas. All decisions will be discussed and made at the board meeting between the four owners.

7.2 Management Team
Besides the ones mentioned above, Monica Iracheta, HR manager; and Jacob Almagure, general manager. Nora Caballero will be the manager of accounting and finance department since she has a bachelor in accounting and many years of payroll experience. Fei Cao will be in charge of PR and other operational functions including overseeing distribution and quality control.

7.3 Personnel Plan
We believe an employee deserve a salary that match his or her performance. We will be hiring 1 full-time and 2 part-time employees for the physical store. We will also hire 1 full-time and 1 part-time employees to have eyes on the virtue stores online, in charge of payment, shipping and handling, customer service and webpage maintenance work.
The full-time workers will be paid at a starting rate of $9.00 and $7.50 for part-time workers. The company does not intent to offer health benefits, but there will be a rise based on service to date. A 5% increase on annual salary is expected.

8. Financial Plan * Growth will be moderate and cash flows will be steady. * Marketing and advertising costs will remain below 10% of sales. * The company will accept cash, credit cards, checks and other traditional payment methods. * The store will also accept PayPal, Apple Pay and Samsung Pay and other modern payment methods as well in order to convenient customers.

8.1 Important Assumptions
Capsicum Habanero Pepper Spray will accept cash and checks, Visa, MasterCard, Discover and American Express. All shipping and handlings will take up to but no more than 48 hours before finishing a business transaction.

8.2 Key Financial Indicators
The table below shows a general assumptions of the company’s debt status.

8.3 Break-Even Analysis
A break-even analysis is provided below. We have learned that the pepper extract cost is $1 per gram, sales price per unit is $50, and assembly cost is $20 per unit and with a fixed cost of approximately $5000. The company will need $15,000 per month in sales to break-even.

9.6 Projected Profit and Loss
The table below shows a projected profit and loss of the company in next 3 years.

9.7 Projected Cash Flow
The table below shows a projected cash flow of the company in next 3 years.

9.8 Projected Balance Sheet
The table below shows a projected balance sheet of the company.

Appendix