Business Plan Assessment of Honest Tea Company



Business Plan Assessment of Honest Tea CompanyWilliam E. Garlick IIISiena Heights UniversityBusiness Plan Assessment of Honest Tea CompanyThis paper will review the first business plan developed by the founders of the Honest Tea company written late in 1998. This business plan was made available on the Honest Tea website. What follows is a breakdown of the various sections of the business plan and the purposes for what they had written based on my understandings.Executive SummaryAccording to the 1999 business plan, The Honest Tea company focused on several key aspects in their executive summary. The first area was one from a sales or branding perspective. They made sure to include descriptions of not only what they are but also how they are setting themselves apart from other companies in the same market. They also had painted the picture of where the industry was heading and how they are in a position to capitalize on that potential. They also had made it a point to describe the previous six months since their startup as well as the plans for the upcoming year. They then closed the executive summary with the publicity they are receiving and the amount of capital they were trying to raise.Their executive summary was written ultimately to answer the one question any potential investors would be asking as they read their business plan; why should I invest in your company. They included a variety of pieces of information to capture the potential reader in one page, this was the equivalent of a good elevator pitch.General Company DescriptionIn their business plan there was a section included that described the company story. It told the story of how the concept for the business had started and where the passion came from as a reason for starting it. It also painted the picture of starting brewing tea in a guest room in five thermoses and quickly expanding over the span of a summer. It then finished off with stating a statistic of the market segment, which they had become the best-selling tea of. The goal of this section was to appeal to emotions and set the stage as being this “American dream” scenario that people could identify with. I think this also served to show a human warmth to the company instead of being a cold business entity which is part of their overall branding.Products and ServicesIn this portion of the business plan there was still heavy emphasis again on branding and image. They highlighted their production process, which is a market differentiator, and made sure to highlight how they were different including analogies to the wine industry, which was a nice touch. The business plan had also focused on their industry and the other companies that are competitors but again made the distinction on why their product was going to be superior. Finally, they provided a list of specific flavors that comprise their brand at the time as well as the flavors that were part of their roadmap over the next year.What they had accomplished in section of the business plan was primarily to define their specific product offerings limited to a small number of flavors. They also took the opportunity to draw comparisons to the bottled tea industry and how their product was going to stand out from competitors. Marketing PlanFor this portion of the business plan they provided four major trends that would directly tie into the marketability of their product which was sourced from looking into data from various sources. They also provided a profile of their target customer as well as described the market research they had performed with the use of focus groups. The next portion of the marketing information was to highlight the response they were getting from the markets they were already in by providing several customer and buyer feedback emails. They then provided specific strategies for their marketing as well as the markets they would pursue. Finally, they described in detail their packaging and pricing.The information seemed sourced from market research and provided the potential investor a level of confidence that the research was sound and the potential was there for the company to thrive. This was the first section that felt more like reading about a business than reading about my best friend’s hobby. The change in tone seems intentional because this is where investors want to know how well the company has thought out profitability.Operation PlanThe Honest Tea business plan did not specifically call out much detail into their operation plan. In some of the other sections, they did go into detail about their production process and a little bit about their facilities. However, they did not go into too much detail regarding the personnel. There was also no mention of the legal requirements, which they were likely bound to being part of the food industry. Management and OrganizationFor this section of the business plan, all of the members of the company had a robust summary of experience to establish credibility and authority of the employees. They had also provided their statement of how they will be a company known for their corporate social responsibility as it relates to their stakeholders. Much like the section on marketing the purpose of this section was to provide potential investors a level of comfort as it relates to the company due to the expertise the employees hold. They also provided more core values that could serve for not only how they were operate externally but also for the type of people they would bring in to the company.Personal Financial StatementNone of this information was included in the business plan, however given how this company was started, it was likely that there were personal assets used to finance the startup. Startup Expenses and CapitalizationNone of the information for this section was specified in the business plan. This could be due to the fact that the business was already operating and bringing in income. The purpose of this business plan was to expand their business for national and international distribution.Financial PlanThe monthly income statement and balance sheet for 1998 as well as the 1999 projected income and cash flow statements were attached to the business plan as additional exhibits. However, they were not included in the document shared publicly. The purposes of this section was disclosure of financial information as well as forecast for the future. They could have included projections further into the future and perhaps talked about the financial situation as far as debt and their break-even calculations.References BIBLIOGRAPHY Honest Tea. (1998, December). Our Story. Retrieved from Honest Tea: ................
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