Vape Nation business plan and financial projections

¶ … Vape Nation Business Plan

Company Identification

Mission of the Company

Business Goals

Keys to Success

Company Summary

Industry History

Legal Form of Ownership

Location and Facilities

Management Structure

Products and Services

Market Analysis

Target Market

Industry Analysis

Market Strategy

Price List

Promotional Strategy

Sales Forecast

Implementation Strategy

Overall Strategy

Monitoring Plan

F. Financial Statements and Projections

F1. Forecasted Profit and Loss Statement

F2. Forecasted Balance Sheet

G. Financial Report

G1. Financial Projections

G2. Financial Position

G3. Estimated Capital/Investment Needs

Executive Summary

Suggested length of 1-2 pages

Company Identification:

Vape Nation, based in the U.S. in California is national start-up that expects to compete in the emerging vapor industry, utilizing vaping technology, e-liquids, and e-cigarettes to market itself to local, national, and online customers.

A2. Mission of the Company:

The mission of Vape Nation is to create brand awareness, brand loyalty, and capture market share in the emerging vaporizer market.

A3. Business Goals:

The primary purpose of Vape Nation is to record $100,000 in monthly sales revenue by the end of the first year of operation. This goal is based on the business model that Vape Nation has, which is to establish itself as the premier vaporizer technology provider, giving vapers a unique vaporizer experience with patented e-liquid flavors, patented vape technology, and optimal levels of service at local kiosks and via online distribution. The second business goal that Vape Nation has is to create an international following based on consumer brand loyalty that will launch Vape Nation as a compelling product, using strategic product placement, such as a sponsorship of alternative sports games like X-Games, where other merchants such as Red Bull have had exceptional success in developing brand loyalty.

Vape Nation seeks to the premier vape shop of choice among alternative "smokers" also known as vapers. The trend in vaping is skyrocketing around the world since the invention of the e-cigarette in 2003 and the spread of e-cigarette usage to Europe and to America has created a boom in the use of the device that has allowed hundreds of thousands to quit smoking traditional and harmful tobacco products.

Creating a sophisticated vape tech that individuals can use to obtain a quality vaping experience with enjoyable e-liquid juice is a the number one priority of Vape Nation, as it looks to become a dominant player in the vape market.

A4. Keys to Success:

The three keys to success for the company are to focus on strategic marketing, using direct marketing strategies and sponsorship strategies; to utilize Internet shopping/networking/distributing as a gateway to becoming more visible in the marketplace; and to establish localized kiosk-based centers for consumption in regions and markets where vaping legislation is permissible and supportive of the overall aims of the company. Currently, the UK market is much more receptive to vaping as a healthier alternative to smoking, as the FDA in the U.S. has recently discussed vaping in mainly negative terms that do not bode well for smaller, independent producers looking to expand. Fortunately our team has foundations in the UK as well, and w expect to establish a base in London with open-air kiosks going up around the UK throughout 2017.

B. Company Summary

Suggested length of 4-6 pages

B1. Industry History:

The history of the vaping industry is relatively new compared to the history of smoking traditional tobacco cigarettes. Vaping technology does not utilize tobacco, which is why it is healthier for consumers than smoking tobacco products (Public Health England, 2015). It uses a battery-powered heating coil that heats e-liquid, which can or cannot contain nicotine, as well as flavors to give the vapor a pleasant or appealing taste to the user. The water vapor is heated by the coil and the vape user drags on the product, just like smoking a pipe, except the only difference is that the vaper inhales water vapor rather than tobacco smoke (Allen et al., 2015). What is exhaled is the same water vapor -- so there is no danger of secondary smoke for others. Vaping, therefore, is not the same as smoking tobacco, as the components are completely different.

The concept of vaping first really began with e-cigarette technology, in which a person looking to quit smoking traditional tobacco products would use an electronic "cigarette" -- which is essentially the same as a vaporizer in the sense that no tobacco is actually used in the product. Instead, the smoker of the e-cigarette is given a dose of nicotine (the addictive variable in the tobacco product that stimulates the hook) and the "smoker" is able to engage in the "smoking" habit without actually inhaling any dangerous toxins or pollutants (as the e-cigarette does not burn real tobacco but uses battery to produce the "smoke vapor" effect just like in vaping technology). The industry first began in 2003 as a result of proprietary engineering by a designer in China, who developed the first electronic cigarette technology. The designer was Hon Lik and his company became Ruyan, which means "like smoke" in English -- an apt title for the company who first developed the device that allows users to mimic the act of smoking without actually smoking (Boseley, 2015).

By 2006, electronic cigarettes were being introduced into the West via Europe and the U.S. In the Middle East, however, as in Turkey (for example), the Health Ministry overseeing the importation and sale of electronic cigarettes deemed them harmful to users, highlighting the presence of nicotine as main reason (SA Transcripts, 2015). By 2008, the World Health Organization jumped on the prohibitory bandwagon when it announced that the e-cigarette was not substantial aid in the effort to limit or help people to stop smoking (WHO, 2008).

These claims have been countered by the UK's own Health Ministry, which reported in 2015 that vaporizers and e-cigarettes are 95% healthier than smoking traditional tobacco products precisely because tobacco is not used or smoked in the vaporizer product, thus making the inhaling of the water vapor not harmful (Public Health England, 2015). This publication by the UK government's medical community was a tremendous boon to the market in the UK and has facilitated the rise of the sector tremendously by giving it a lot of positive exposure and support as an alternative to smoking and for people looking to quit smoking traditional tobacco cigarettes.

Big Tobacco has also taken notice as it has developed its own line (or acquired other companies that have) of e-cigarettes and vaporizers to appeal to this growing segment of alternative vape technology users (SA Transcripts, 2015). With products like BLU on the shelves by major retailers, vaping has emerged out of the alternative, underground sub-culture of vape shops and lounges to the mainstream public. The recent filing by the FDA in the U.S. has shown that officials are still not willing to welcome vaping as a positive means of engaging in the "smoking" habit without harming one's body or polluting the air, thus making the U.S. a more difficult market to gain ground in when compared to the UK (Nather, Scott, 2016).

B2. Legal Form of Ownership:

The company will be a limited liability company (LLC) in the U.S. and in the UK. The articles of organization will include a statement of name, address, and members of the company. The company has been founded by a group of four individuals, all of whom have a collective net worth of over $100 million. Their passion for vaping stems from their love of counter-culture trends and their appreciation for alternative health products. At Vape Nation, we view e-cigarettes and vaporizers as being a great step forward for people looking to quit smoking and to lead healthier and more active lifestyles. We have incorporated our company as a limited liability company so as to mitigate the risk to our own personal and private equity/assets should the company fail to perform to our satisfaction and creditors seek remuneration.

B3. Location and Facilities:

The main headquarters will be in the U.S. (California), but as some members of the company are also in the UK, a base will be established there as well (London). The location of the U.S. facility is 112 Alamada St. in San Francisco, a four-story complex used for production of e-liquids, packaging, receiving of vaporizers/e-cig shipments (a train depot is nearby along with dockyards), and for storage and shipping processes. In the UK, the main location is Manilla St. near Canary Wharf, London, in a 3-story complex used for packaging and processing of shipments and used as the distribution site for kiosks throughout the UK. The facilities in both locations will utilize a team of 5-7 on-site workers, for processing shipping, packaging, inspection, management, outgoing deliveries, and inbound deliveries. The main dispensaries in the UK will be established in kiosk form, which is a non-traditional venue and allows for low cost operations in high foot-traffic areas where visual appeal and easy access can be obtained. The kiosk is not as popular in the U.S., where consumer culture is leaning more and more towards online purchasing; thus the main focus in the U.S. will be to become visible via direct marketing (giveaways) and sponsorship of events (like X-Games) as well as a cultivating an online presence.

B4. Management Structure:

The management structure will consist of a President and CEO of the company, a CFO, a Chief Marketing Officer, a Director of Sales, Director of Information Technology, Accounting Director, Finance Consultant, and Professional Consultant. A Technology Development Director will also be part of the overall company. The President and CEO will have the function of overseeing the direction of the company and managing its overall strategy and approving its implementation. The CFO will oversee financial operations, oversee the benefits of going public or staying as a private company, attracting investors, and meeting with lenders. The Chief Marketing Officer will be in charge of overseeing marketing, including direct marketing campaigns, giveaways, and brand loyalty developments, using Big Data metrics/software analysis tools. The Director of Sales will be responsible for targeting retailers, developing relationships with wholesalers, identifying market regions for expansion and localization, and overseeing sales strategy implementation. The Director of IT will oversee the development of the website technology. Accounting Director wil be responsible for maintaining accounts and finance records; the Finance Consultant will assist in developing contacts with lenders and investors as well as helping in deciding whether to go public; and the Professional Consultant will assist the CEO in making strategic acquisitions, streamlining the overall strategy, and creating a positive workplace culture and environment in the organization. The Technology Development Director will oversee that strategic development of key proprietary vaping technology that the company will patent and use in order to achieve a unique take on the market.

B5. Products and Services:

The products offered by the company will consist of three levels of vaping technology; the first level will consist of basic e-cigarette technology and devices for users seeking the transition from smoking traditional tobacco cigarettes to non-traditional electronic cigarettes. The next level will consist of technology for amateur or "new" vape users, and the third and highest level will consist of special, advanced vaping technology for advanced users seeking a type of product that can be customized to fit their own individual needs, experience levels, and heightened desire for a spectacular vaping experience. These devices will specialize in safely producing large vape clouds, high-level heat coils, smooth taste for long lasting vaping experiencing, including extra large fill tanks, long battery life, adapters, synthesizers, and switchable parts for alternative vape tech sources. The services that will be offered will be customized e-liquid boutiques at kiosks in the UK, custom-mixed liquids via website portals, customer service contacts with live chat boxes on the Internet, and direct contact information for consumers as well as subscription-based service like Shave Club, where razors are sent each month, only with Vape Nation, e-liquids could be sent each month.

The subscription service that Vape Nation seeks to implement will serve as the main crux of operations as it will promote a vape culture and membership in a "vape club" that allows individuals to replenish their e-liquid stock without having to go to the store or shop online. It is an automatic renewal, so once a member has signed up for monthly delivery, the needed amount of e-liquid juice will come to the customer's door on time at the beginning of every month. This saves the customer time and energy in having to replenish e-liquid juice and it also saves the customer money, as the membership dues are minimal, the monthly subscription is low and the price of products is competitive with other venues.

Vape Nation will focus on delivering quality products via its subscription service, which it expects to roll out in 2017 following an ad campaign on social media promoting the club, the products, the service, and the subscription membership. This will be accompanied by promotional activities at alternative sport and music venues and festivals, where outdoor advertising will take place and direct marketing will be practiced.

C. Market Analysis

Suggested length of 3-5 pages

C1. Target Market:

The target market for the e-cigarette and vaping business is the alternative smoking sector, which incorporates the health sector (as vaping and e-cigarettes are viewed by some academics and scholars, including the UK Ministry of Health, as being healthy alternatives to tobacco). This is a burgeoning sector that is seen growing in the food/agricultural industry (as non-GMO products are being labeled and sold in more and more stores) and in the dietary supplement and alternative medicine industry (as more people turn towards holistic medicine in reaction to the overreach of Big Pharma and the push for more and more pharmaceuticals on more and more people). Alternatives to the mainstream and to the status quo are even being seen in the political spheres today, with people like Bernie Sanders and Donald Trump challenging the Establishment politicians of their respective parties. The target market for vaping technology and e-cigarettes is, therefore, connected to that part of society that is willing to embrace a novel solution to an old problem, is welcoming towards a healthy alternative to old addictions, and that does not put much stock into what Establishment medical communities tied to obvious business giants (like the FDA and Big Tobacco) have to say about it (Chaudhui, 2015; SA Transcripts, 2015). Vaping technology has roots both in the underground sub-culture and in the health sector. Thus, the target market is not just one sector or populace or demographic: this technology appeals to both young and old, to men and women, and to former smokers as well as non-smokers. It is not just a technology that is designed for people looking to quit smoking -- it is also for people who never even started smoking and just like the idea of vaping better than the concept of smoking traditional tobacco.

Locally speaking, the UK is more primed to embrace vaping than the U.S., simply because it has been more willing to embrace the healthy alternative side of the product. Thus, the open-air kiosk delivery of the product in the UK in shopping centers where foot traffic is high will be the main target; in the metropolitan areas of London and in Wales, centers will be targeted where shoppers of all ages and demographics shop.

In the U.S., the targeted audience will follow the Red Bull playbook and begin to first seek brand loyalty from the alternative sports crowd, which has already shown a desire to be linked to alternative soft drinks and energy drinks like Monster and Red Bull. It is very likely that these same crowds and markets will respond favorably to the idea and concept of vaping e-liquids, as these are alternative sources of pleasure that the mainstream and status quo have not yet embraced. The demographic of X-Games audiences skews younger and marketing campaigns will thus be guided towards the 18- to 35-year-old demographic, but it will also seek cross-gender appeal. Thus, the specific location in the U.S. will focus on X-Games tours and will most likely be most impactful on the West Coast, beginning in California and expanding Eastward over time.

C2. Industry Analysis:

The industry is already heating up with competition in terms of other giants entering the marketplace ahead of us. BLU Cigs and UK brands such as VIP, V2 and Apollo are already extremely popular, so breaking into the market with a new brand will require an innovative vision and a definable and unique branding approach that would appeal to the specific target market. The current trends of the e-cig and vaping industry are booming with "annual global sales total upwards of $2 billion" (DeLuca, 2015). Wells Fargo analyst Bernie Herzog has stated that the e-cig/vaping industry could reach in the tens of billions of dollars in revenue by 2017. Between 2012 and 2013, e-cig sales reached more than $600 million (Giovenco, Hammond, Corey, Ambrose, Delnevo, 2014, p. 14). Bloomberg predicts that ecig sales will match or "exceed those of traditional cigarettes by 2047" (Goodman, 2013). In the past three years, sales have more than doubled around the world and may hit Herzog's target in the coming years.

The trend is therefore set for entry as the global response to e-cigs and vaping is extremely favorable and in the U.S., breaking into the market depends upon capturing that area of the market segment that is not compelled by FDA regulation or bureaucratic oversight, that accepts non-traditional innovation, and products that upset the status quo -- especially products that they deem as healthful as opposed to the clearly deadly and toxic products that are allowed to be sold without hesitation, such as tobacco products and GMO products. Thus the market is open to new and diverse ways for people to enjoy smoking as a recreational but safe hobby or practice and this is an excellent opportunity for vaping technology to take hold and claim market share from a tobacco industry that is under increasing scrutiny and pressure from the population as a result of cancer-related deaths.

Because vaping technology can not only help people to quit smoking tobacco, as the Public Health Ministry in the UK has pointed out, but it can also be a fun and safe way for younger users to enjoy "smoking" without smoking or developing an addictive habit to a dangerous substance, the impetus to act and invest in this market is happening and will not be dwindling in the foreseeable future, in spite of setbacks by the FDA in the U.S.; in markets and subcultures where status quo regulatory embargoes and Establishment politicians vie to represent the interests of Big Tobacco, the consumer who is aware will view Vape Nation as an opportunity to try something new. All that Vape Nation will need to do is deliver on a superior product and develop a superior brand identity that consumers can be proud to stand behind and promoted.

C3. SWOT Analysis: Complete a four-square SWOT analysis for the company in which you do the following:

S (Strengths)

1. Superior products

2. Easy access for customers to get what they want from kiosks, online shopping, and subscriptions to mail-delivered e-liquids

3. Providing educational material to smokers who want to quit

W (Weaknesses)

1. Lack of support from FDA in the U.S.

2. Competition is high in the UK

3. No brand loyalty as of yet O (Opportunities)

1. More and more people wanting to quit traditional tobacco products

2. Vaping is trending up

3. Consumers look for a brand they can trust and that can deliver consistently

T (Threats)

1. Big Tobacco tied to FDA leaders

2. Competition from other e-cig producers

3. The market could cool if government support does not become manifest in the U.S.

Three strengths that Vape Nation has are its ability to deliver superior products, technology, e-liquids, services and educational material to clients and consumers. Its planned subscription-based delivery system that allows users to order e-liquids for a one-time fee each month is designed to boost sales and brand loyalty. And its supply of educational material showing smokers why switching to vaping is sure to help boost the target market. The subscription-based system of delivery is its biggest strength as no other competitor in the market sector has taken advantage of this idea yet and Vape Nation has a brand loyalty system in place to reward continual customers. Three weaknesses include the FDA's refusal to commit to supporting the vaping industry, the level of competition in the UK and the fact that as of yet Vape Nation has no real brand following. With the FDA issuing unfavorable regulations, the sector may not respond favorably to a push by the company to be embraced as a health alternative. However opportunities abound and they are present in the fact that more and more people are looking to quit smoking as it is deemed more and more unacceptable universally. It is no longer welcome on flights or in most states indoors. Smokers are being pushed to the margins of society and are looking for ways to quit. Vaping is one solution and celebrity endorsements like that of Academy Award winning actor Leonardo DiCaprio seen vaping indoors at the Golden Globe Awards is a sign that vaping is something trendy, hip, and happening at all levels of society. Threats exist, nonetheless, and are palpable from the direction of Big Tobacco, which does not want to lose market share to up and comers like Vape Nation. Other producers of vape technology are also wary of losing recently gained ground to others and will fight fiercely to protect their investments. Likewise, if governmental support does not happen soon in the U.S., the trend could begin to cool and even reverse, so it is important to support legislators who understand the valuable impact that vaping technology can have on the youth and on smokers looking for a healthy alternative.

D. Market Strategy

Suggested length of 3-6 pages

D1. 4Ps: Product, Price, Place and Promotion

What the customer wants in a product from a vape tech supplier is a superior vaporizer that can meet the range of needs from an e-cigarette user to an experience vaper looking for maximum vape cloud, heating coils, and e-liquid juice. The strategy of Vape Nation is to "hook" users by offering a discount consumer rate for subscribers who purchase vape tech from Vape Nation and can get a month's supply of e-liquid for less than they can from other producers. This is akin to the business model of Dollar Shave Club.

Thus what the customer wants in terms of price is something competitive but that reflects the quality of the product. A months' supply of e-liquid for a dollar would raise too many eyebrows and have many wondering if the e-liquid was worth it, so it is better to raise the price to $10 -- so a month's supply of e-liquid for just $5 is still a bargain, considering that one pack of cigarettes which might last some a day, others a week, will cost just as much; so the customer is still getting a bargain but is also conscious of receiving a quality product.

What the customer wants from place is ease of access: can the customer easily find the product and purchase it? That is where the Internet website service comes into play along with the subscription service; with the subscription service, there is no need to even go shopping as once you are signed up, the shipments come every month on time and with the right purchase order. For those looking to buy in person, the kiosks in England are great avenues for direct contact with consumers -- and product placement at alternative sporting events like X-Games is another way to put the product in the right place at the right time for the right consumer.

This leads to promotion, and the great vape giveaway is an ideal method of expanding one's consumer base; by giving away free vape tech with e-liquids to a sizeable sample after collecting contact information and subscriptions, the direct marketing campaign can kick off with positive results. Promotions will include supporting X-Games and other alternative venues, such as music shows like VANS Warped Tour and other events. Promotions will also include health conscious events that can allow Vape Nation to simultaneously appeal directly to individuals looking to quit the harmful habit of smoking. So the company can target to diverse segments of the market at the same time with an equal impact creating a tightening effect on the market, by squeezing in from both sides.

D2. Price List:

The price list for the company's products and services include the following:

Starter Kits for $25

Starter Kits for $50

Starter Kits for $75

Website, email, phones, office setup, target date 31 Nov 2016

The overall strategy for launching the business will depend upon a four-pronged approach. The first avenue is to establish brand identity and create an emotional connection with consumers. Setting Vape Nation apart from other vape tech producers is therefore the first and most essential goal and will depend highly upon the marketing aspect of the company. To drive this avenue of the business, the company will seek promotional outlets throughout the world as alternative extreme sports enthusiasts meet to compete. It is a venue along with music shows like VANS Warped Tour, that will be a pillar of advancing the visibility of the company. Marketing a product and making it available to consumers is essential to the success of the company and thus making the company visible through ad campaigns like viral videos on YouTube, social media, and direct marketing giveaways, which will be tied into promotions and subscriptions -- all will be needed in the launch of the company.

Thus by the end of 2017, the goal of the company is to have participate in 12 extreme sporting events and music festivals by supporting these events and promoting Vape Nation products, offering free giveaways, educational material and try-outs. Product placement will also be a priority along with ad placement and sponsorship of athletes competing in the X Games. Sponsoring athletes can be a significant financial commitment and thus obtaining financing for this endeavor will be avenue number two.

Financing the company will be of top importance, as without adequate financial support from lenders and investors, the company cannot proceed forward. With assets in the pipeline, the development of e-liquids already in the works, and advertising beginning to go out, the company is ready to make a commercial pitch to both investors and lenders; it will be the goal of the financing department to secure a $25 million dollar loan for 2017 and a $30 million loan for 2018, repayable over 12 years at 5% interest rate. As collateral, the company intends to put up private assets owned by the directors of the company, who are in agreement with the necessity of proceeding in this fashion. The LLC will take ownership of private equity to secure loans and pitches will be made to investors, the reaction of whom will be used to measure whether there is any realistic sense to taking the company public on the OTC in the U.S. in order to raise money through the selling of shares or the issuance of warrants to lenders. Avoiding toxic debt will be a top priority as the company has no interest in going public only to have its stock wind up in a death spiral controlled by toxic financiers.

Developing a superior product is also an imperative and as there are myriad varieties of mods and AVPs already in the market, the key to this driver is to streamline the vaping tech product and offer consumers a product that is affordable, efficient, small, and dependable. The product must also have an appearance that is recognizable and likeable to consumers and highlighting the importance of design and appearance will play a part in the marketing of the brand as well. The key to this driver will be to analyze the metrics of the top, best-selling vaporizers in the market, analyzing what consumers are demanding in terms of vape tech, and how to provide this at low-cost to them.

The key driver, however, is to bring the consumer into the Vape Nation club via subscriptions of monthly deliveries of e-liquids and vape tech. The subscriptions should be the main driver and assurance of income for the company and it is this low cost service that will set Vape Nation apart as it delivers a month's worth of e-liquid juice to vapers at a lower cost and high quality than can reasonably be found by any other producer. The e-liquid juices will be produced locally and follow all FDA regulations as well as regulations established in the UK and these e-liquids will be ready to ship by 2017.

E2. Monitoring Plan:

Monitoring Activity: testing equipment, liquids, that it conforms to federal regulations: Frequency -- Monthly; Responsible Party: Inventory manager

Monitoring Activity: reviewing prices, ensuring they are competitive with online sales: Frequency -- Monthly; Responsible Party: Sales Director

Monitoring Activity: Review of sales channels, profitable returns: Frequency -- Quarterly; Responsible Party: Sales Director

Monitory Activity: Survey of followers on social media and customers: Frequency -- Quarterly; Responsible Party: Creative Marketing Director

A post-launch monitoring plan will consist of utilizing a Balanced Scorecard strategy tool (BSC) which will allow managers to monitor/evaluate how the staff of the company is progressing, whether the supply chain management is experiencing any delays or missed opportunities, whether every department is meeting its goals, or if there are any deficiencies that need to be addressed. BSC is an efficient way to focus attention on the approach that the company is taking to meet defined goals, and it is through a goals-oriented strategy that this system of monitoring results in the post-launch is most effective. The BSC system of monitoring revolves around a focused range of data that combines information from financial and non-financial departments, so that a complete overview of the company's progress and outcomes is evaluated. The manager of the BSC monitoring system thus is provided a closed-loop control system that accurately reflects the progress that the company is or is not making.

The sector itself can continuously be monitored by purchasing market analyses from organizations like Wells Fargo and there are also opportunities to monitor the company's own reception in the marketplace by using social media tools like Facebook, Twitter, and Google AdSense.

Quality controls will thus be established via the monitoring of both internals and externals using these methods and means highlighted above. Performance rating systems will also be available, including graphic ratings formats culled from hands-on performance measures gathered from walk-through testing orchestrated by managers in the various departments set up for shipping channels, receiving, taking orders, marketing, and staffing stations and kiosks in localized centers. Work related tasks will be identified by checklists and as workers appear to achieve specific tasks, the checklists will be completed during the walk-through and graphic analysis presented to upper management. A forced choice format may be utilized, as this provides the walk-through manager with the opportunity to choose a rating of the employee from a group of statements that describes that worker's ability, and behaviorally anchored rating scales (BARS) can be used to illustrate the worker's achievements in a descriptive format that expands and deepens the monitoring/rating of employee performance and progress.

Quality control will also be monitored internally and externally by allowing both workers and customers to leave electronic feedback that is sent directly to management for review. This is an especially effective means of monitoring overall progress as it opens the way for two-way flow communication and invites individuals to share their thoughts and experiences both as an employee of the company and as a customer who has purchased products or paid for the subscription service.

Establishing a workplace organizational culture that is positive and upbeat will also be a top priority and HR will incentivize workers by providing benefits and setting the organizational tone through the cultivation of a workplace "spirit of mission" that will serve to unite everyone involved in the firm under the same banner and behind which the entire company can march towards its specified goals. By balancing and maintaining a positive workplace culture where employees are happy and pleased to come to work, it will follow that customer satisfaction will be the natural outcome, as it is happy and fulfilled workers who go about pleasing and ensuring that the customer is happy and fulfilled as well. If the source is polluted then the spring is likely to be corrupted too -- thus, it is very important that the workplace culture be established and maintained from the beginning.

The monitoring schedule will consist of weekly walk-throughs conducted using the checklist to assess progress with specific goals highlighted. A 50-50 system of reward will be utilized to give workers incentive and freedom to begin and pursue their intended objectives, with oversight coming through this manner of walk-through and monitoring. These will be checked against monthly checklists to indicate whether targets are being achieved. The supply chain organization system will incorporate an integrated model that can have a direct affect on the financial progress of the company, so it will be regulated accordingly to make sure that the complex nature of the movement of goods and products in both receiving and delivering is on-time, effective, and efficient. How the parts of the supplier-customer-company chain relate to one another are proportional to the company's success and to the company's ability to deliver quality care. Therefore, weekly check-ups on the supply chain organization system will also be utilized to ensure that the chain is not experiencing disruptions that can have a negative impact on the company's ability to be profitable. As Singhry (2015) notes, "weak corporate technological culture" can be responsible for problems within supply chain management and it is precisely this weakness that the company seeks to avoid (p. 259). Innovation is key to maintaining a success hold on tight supply chain management and Singhry (2015) states especially that "innovation capability mediates the relationship" between the company's ability to perform supply chain management and the technology required to oversee the organizational level and impact (p. 261).

Customer satisfaction will also be a key to growing the company and developing brand loyalty and this will be cultivated and monitored using social media, where consumers and providers as well as management and workers can interact to exchange ideas and information. Consumers who have questions can post them on social media and they can be answered by workers assigned the task of keeping up with customer relations, and quality assurance can be the hallmark of the company as it seeks to interact with customers on a daily basis, answering questions, releasing photos of operations, documenting participation in events like music festivals or alternative sporting activities. Facebook is a way for individuals and businesses to promote themselves and it is a tool that the company plans to use and update weekly for better communication with the public and for optimal interaction with followers.

Customer satisfaction will also be achieved through careful monitoring of the e-liquid and product development so that the best product is being put forward for public consumption. So long as the development is undertaken with care and consideration, the customer's satisfaction will be assured and measured through the financial impact that the company is having over the course of the year.

This financial impact will be measured quarterly and monitored by the accounting department, which will provide daily updates of units sold both locally and over the Internet websites that will be live for online vending. These updates will be graphed and charted for management so that buying times, trends, and busy hours are highlighted and understood so that peak hours can be optimized with enough staff. The types of units and e-liquids that are selling will also be monitored so that the company can have a clear idea of what is selling, to whom, when and where, as all of this information can be part of the Big Data that the company plans to collect and interpret for the purpose of providing products that are in demand and that will bring in the highest amount of customers.

Monitoring each of these aspects will allow the company to ensure that it is on target to achieve and reach its milestones, which consist of obtaining 1000 new customers every month, via paid subscription service and having minimal turnover month-to-month.

F. Financial Statements and Projections

Figure 1. Profit/Loss Forecast

Figure 2. Balance Sheet Forecast

As the projected financial statements and balance sheet show, we do not expect Vape Nation to have a profitable year in 2017; however, we do expect the company to be profitable month-to-month by the end of 2017.

G. Financial Report

Suggested length of 1-2 pages

G1. Financial Projections:

The assumptions made in the financial statements are based upon the financial statements and balance sheet of a competitive company identified as Electronic Cigarettes International Group or ECIG, which is a publicly traded company on the OTC in the U.S. This company has posted sales of north of $30 million in 2015 and 2016. It has over 100 kiosks in the UK and a headquarters in Denver, CO. Its business model is similar to ours; however, its marketing approach and branding strategy is not the same, and its early strategy of acquiring companies has left it buried beneath debt that has quickly become toxic for the company.

The financial strategy of Vape Nation is to be self-funded. The owner is using his own funds of $1,862,500 to cover costs for the first year of business. Thus, liabilities are limited to the owner's investment in the company, as the company will not use debt to fund its business.

G2. Financial Position:

The company's financial position at the end of the first year is negative with the company showing a net loss on the year of $112,500; however, by the end of the business year, it is forecasted that the company will be turning a profit in the final months, and by the last month the profit is expected to be $16,100 for the month of December.

G3. Estimated Capital/Investment Needs:

The owner will be investing $1,862,500 for the first year of business to cover expenses. It is not expected that the business will be profitable after one year.