Diving Into The SoCal Market: A Sample Energy Drink Expansion Plan

A Sample Case Of A Business Expansion Proposal Into A New Market For A Fictitious Company Grounded In Research

This post has been slightly adapted to a blog post from a paper written by the Pierce Denning and Julia Wright. Download the original paper here!

Executive Summary   ~2 min

This is a paper from a Sales Management class where a team, Pierce Denning and Julia Wright, created a fictitious company: Zap Energy, a leading healthy alternative energy drink brand, that is primed for expansion into the Southern California region, marking the completion of its West Coast penetration. The scenario was to create a comprehensive, detailed, usable plan that could be feasibly implemented. Our SoCal expansion initiative promises a significant boost in annual revenue, forecasted to increase by $87.69m by 2026, as we tap into one of the largest markets yet.

Southern California boasts a population of over 23 million across ten counties, offering a vast customer base. Existing partnerships with major retailers such as Target, Costco, and Walmart, which already have a strong presence in this region, will expedite the distribution of our products. Concurrently, we aim to establish relationships with new potential customers, including Kroger-owned stores and fuel stations with convenience stores or Quick Service Restaurants (QSRs).

A comprehensive human resources plan ensures the successful implementation of our expansion strategy. A primary warehouse hub in San Bernardino will employ 180 individuals, plus middle and upper management. Operating 6 days a week, this hub will facilitate efficient product delivery and customer satisfaction.

Salary, raises, and bonuses are planned to attract and retain quality employees. Training programs will be rolled out to ensure all employees, regardless of their previous experience, maintain safety and productivity in the warehouse. Additionally, company policies have been designed to ensure a safe, friendly, and productive work environment.

Our comprehensive salesforce, customer service, merchandising, and credit departments will work cohesively to ensure smooth business operations. Security measures are set to protect employees and products. The purchasing department will ensure successful supply chain management and sourcing of competitive prices.

Our marketing strategy employs a multi-channel approach primarily focusing online. Key objectives include increasing brand awareness and sales in the Southern California region through social media marketing, sponsorships, and digital marketing. We will target individuals aged between 14 and 30 who seek healthier energy drink alternatives.

A competitive analysis reveals we will face competition from brands such as Body Armor, Gatorade, and Pedialyte, as well as bottled water brands. Despite the competition, our position as a healthier alternative energy drink presents a unique advantage, especially in the health-conscious Southern California market.

The distribution chain model involves centralized "Distribution Hub" warehouses feeding stores and smaller "Neighborhood Distribution" warehouses. This approach ensures cost-effectiveness and exceptional customer service.

We've allocated a budget of $3.64m for marketing and distribution infrastructure and $9.43m for personnel in the first year. With a projected gross profit of $87.69m and a pre-tax net profit of $22.96m by 2026 (5 years from the planned expansion start date), we are confident that the expansion into Southern California represents a strategically sound and profitable investment for Zap Energy.

Introduction: Zap Energy   ~17 min

Zap Energy is looking to move into Southern California, which will complete our entire West Coast expansion. This expansion into Southern California is important for future company growth, as it will introduce us into one of the largest markets we have gone into yet, with an expected increase in annual revenue of $87.69m by 2026 attributable to this new region alone.

Location

Southern California has a population of 23,860,793 as of 2019, and encompasses these 10 counties: Imperial, Kern, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, San Luis Obispo and Ventura. 

Potential Customer Accounts

The potential customers that we will be working with in the new region can be sorted into two categories: Existing Customers with locations in Southern California, and New Customers in Southern California.

Our existing customers that currently have locations in Southern California are: Target, Costco, WalMart, and 7/11 Stores. Starting with these customers, we believe that we can move our product into hundreds of locations within a couple of months based off of their continued satisfaction with our product line. When we decide to move into this new geographic location, we will start working with these customers who have locations in SoCal to move our products from their Washington, Oregon, and Northern California stores to add their Southern California locations as well.

In regards to New Customers - when we have committed to moving into Southern California, our sales teams will instantly reach out to and start working towards gaining these new accounts as customers. The largest possibilities for expansion that we foresee are with Kroger owned stores such as: Kroger, Fry’s Food Stores, Food 4 Less, and Ralphs. Another market segment that we believe we can corner starting in Southern California are fuel stations with convenience stores, or Quick Service Restaurants (QSRs) on location. With thousands of locations in Southern California that have convenience stores or QSRs, we believe that we are most likely to expand into: Shell, Chevron, Phillips 66 (76), Exxon Mobil, and Sinclair. With these new connections, we can then work on expanding these new customers to selling our product line in their Northern California, Oregon, and Washington locations.

Human Resources Needed

Our warehouse Hub will be located in San Bernardino, and will employ 180 individuals at the Operations Clerk level, along with some middle and upper management employees. Our warehouse will be open and operating 6 days a week, Monday-Saturday, with two shifts each day. The shifts will be from 5:00am-2:30pm and 2:00pm-11:00pm, each with a lunch hour and two 15 minute breaks. The thirty minute overlap allows for Warehouse Coordinators to meet for 20-25 minutes and discuss inventory and interpersonal issues. There will be two warehouse coordinators on each shift to handle the workload of 90 employees evenly. There will be 2 warehouse managers total who each work either the morning or afternoon shift so there is always someone monitoring the warehouse operations on a daily basis. The Director of Operations will work from 9:00am-5:00pm each day and will be on call the times they are not in the warehouse to help managers and coordinators work through any issues, if need be. 

We will be looking for employees through websites like LinkedIn, ZipRecruiter, and Glassdoor. The positions we are trying to fill are as follows:

Warehouse Clerks

These employees will be in charge of receiving, storing, and distributing inventory. They will unload trucks, count to ensure all products are accounted for and report back to the warehouse coordinators. 

Warehouse Coordinators

These employees will be responsible for coordinating the movement of inventory between shipping and the warehouse. They will also be responsible for inventory of the entire warehouse, and inputting that information into company information systems. Warehouse coordinators will also pick tickets for distribution orders, and respond to inventory queries from the sales department. Another key responsibility is being in charge of monitoring breaks and helping transition between the two shifts.

Managers

Managers will oversee individual warehouse operations. They are responsible for periodic inventory counts to ensure the accuracy of records, and establishing security procedures to maintain the safety of warehouse equipment, inventory, and employees.

Director of Operations

This employee will set warehouse policies and analyze operations data to maximize productivity within the warehouse. They will also examine sales and operational reports to make decisions about product mix and inventory procurement methods. Directors will also participate in price setting and help establish long term goals for the department.

Requirements

At our entry level position, Warehouse Clerk, we require the following things:

• 18 years or older
• Work experience as a warehouse clerk (preferred)
• Ability to operate a forklift (preferred)
• Completion of background investigation and drug screening
• Strong people skills
• Good moral character
• Positive work history and ability to maintain a solid attendance
• Available to work extended hours

Warehouse Coordinators are given extra responsibilities compared to a Warehouse Clerk, therefore their role will include all of the previously mentioned duties along with: 

• High School diploma or GED
• Inventory control experience
• Proficiency in relevant computer applications including MS word and Excel
• Familiar with warehouse management system (WMS) technology 
• Familiar with inventory scanner systems 
• Able to safely use warehouse equipment such as forklifts and pallet jacks
• Be able to manage employee breaks and schedules on a daily basis

Managers are expected to follow the same criteria as Warehouse clerks and Warehouse Coordinators with the extra expectations of:

• High School diploma or GED
• 3+years of experience in a warehouse lead role managing hourly employees
• Proficient knowledge of warehouse procedures and policies
• Excellent problem solving skills and leadership qualities
• Ability to work with all levels of company staff
• Comfortable delivering frequent direct written and oral feedback 

The top management of the warehouse, the Director of Operations, must be proficient in all skills expected from the entry level and middle management positions, along with: 

• Bachelor’s degrees in Business Administration or related field
• 10+ years senior leadership role in appropriate field
• Superior Knowledge of multiple operational functions and principles, including finance, customer service, production, and employee management
• Proven ability to plan and manage operational process for maximum efficiency and productivity
• Ability to streamline and implement new structures and roles that create speed, efficiency, and support rapidly shifting business demands
• Strong working knowledge of industry regulations and legislative guidelines
• Masterful organizational, communication, and leadership skills, demonstrated by previous professional success 

Compensation and benefits

Each employee who works 40 hours or more per week will be given health insurance along with vision and dental. We also will have a 401K matching plan to encourage our employees to save for retirement. We will be offering up to a 5% match on the amount contributed by the employee. 

As for other, non-full time they will be given one week paid time off after one year of being employed along with sick days. Full time employees will receive the same benefits but after one year will receive two weeks of paid vacation time. 

Salary, Raises, and Bonuses

As Zap Energy is moving into Southern California, we want to ensure that we are providing a fair wage for the amount of work that will be expected of these employees. The position of Warehouse Clerk will be paid hourly, while Warehouse Coordinator, Warehouse manager, and Director of Operations will be salary employees.The current minimum wage in the San Bernardino area is $12.00 as of January 2021. Since we want to attract individuals who are qualified and eager to work at Zap Energy, we will pay our starting Warehouse Clerks $12.50 ($26,000 annually).With each year of employment at our facility a $0.25 increase will be added to their hourly wage, with the cap for each level of employment being the starting wage of the position above it (For example: Warehouse clerks can not pass $18.25 (the hourly wage of the Coordinator) as we want to encourage individuals who have been with the company for that period of time to move up into management roles).  Due to warehouse coordinators having more responsibilities and more requirements to obtain the position, their pay will be $38,000 annually. The average entry-level Warehouse Clerk salary in our selected counties is $12.28, while the average pay for Warehouse Coordinator is $36,000 a year. For the Warehouse Manager, these two individuals will be paid at a starting salary of $65,000 with room for growth and negotiation depending on education, experience, and additional skills. The Director of Operations will have a starting salary of $76,000 (above the area average) and will also be able to be negotiated dependent on experience, skills, and education. 

Training Programs

Since we are not requiring previous warehouse experience, it is very important to ensure the proper training for Warehouse Clerks along with every other member of the team to ensure the safety and security of each employee and the product. We will have an onboarding process that will be designed by the Director of Operations and then conducted by one of our two managers. The Warehouse Coordinators will provide feedback from the things as they will be in the closest contact with warehouse clerk employees on the daily. They will inform the Director of Operations as to what they have found to be successful and what areas could be improved. As we want our employees to safely operate forklifts and other heavy machinery, we will pay for all employees to obtain their forklift license and go through the required training. Most programs cost around $40 per person to get licensed. 

Company Policies

While we want to promote a friendly and welcoming work environment, we will also have policies that will need to be followed to ensure that every employee is safe and promotes a safe workplace for other employees as well. These policies will include:

• Only operate heavy machinery after proper training and certification if needed
• Clean up messes as soon as possible to prevent the injury of yourself and other employees
• No uniform required, but clothes must be logo free and easy to conduct physical labor in
• Close toes shoes only, work boots preferred
• Tattoos are allowed, but any tattoos with profanity or that can be offensive to others must be covered
• Facial hair and long hair is allowed, but must be tired up or short enough to prevent workplace accident
• Piercings are allowed as long as they do not prevent you from completing the work you are allowed

Salesforce Organization

Sales Representatives

Our team will consist of 7 sales representatives who will make calls and attend sales meetings on new prospects and continually check on current prospects’ satisfaction with our products and customer service team. Each sales representative will make a starting salary of $68,000 annually, which is $1000 more than the average sales representative makes in our selected counties. There is also the opportunity to make commission on top of their already competitive salary with no yearly cap on how much they can earn. Their tasks will include:

• Being knowledgeable about our products
• Identifying prospective customers, lead generation, and conversion
• Contact new and existing customers to discuss needs
• Emphasize the features of products to highlight how they solve customer problems
• Negotiate prices and terms, along with preparing sales agreements
• Collaborate with colleagues in many different sectors
• Maintain contact lists and follow up with customers to continue relationships

For these individuals, we want them to have more experience under their belt in a sales environment due to how big our company already is. In each individual we are looking for the following qualifications: 

• Bachelor’s degree in business, marketing, economics, or related field. 
• Experience in sales
• Understanding of the sales process and dynamics
• A commitment to excellent customer service
• Excellent written and verbal communication skills
• Superb interpersonal skills
• Experience using Microsoft, including Word and Excel, and also with CRM related online tools
• Ability to work comfortably in a fast paced environment.

Sales Managers and Supervisors

To set goals and guide our salesforce team in the right direction, we will have one Sales Manager. This individual is someone who has had a few years of experience in sales along with proven leadership and management skills. We want to continue with our competitive pay scale, so this position will make $79,000 annually to start, with opportunity for bonuses, raises, and growth. The average salary of a sales manager in our counties is $75,000, so we feel confident that our starting salary will drive in top sales managers from all over. Some of the responsibilities that are expected from this position include:

• Overseeing local and regional sales, promotions, and campaigns
• Planning and directing the hiring and training of new Sales Representatives 
• Directing and coordinating all sales activities locally and regionally
• Preparing sales budgets and projections, and approving expenditures
• Tracking and analyzing sales statistics based on key qualitative metrics
• Handling and resolving customer complaints regarding a product or service
• Setting discount rates and determining price schedules
• Advising distributors and dealers on policies and Standard Operating Procedures

Due to this position being the lead for a team of interdependent working Sales Representatives, we want this individual to possess all of the skills from being a Sales Representative along with these essential skills:

• Bachelor’s Degree in business or a related field
• Experience in planning and implementing sales strategies
• Experience in customer service relationship management
• Experience in managing and directing a sales team
• Excellent written and verbal communication skills
• Dedication to providing great customer service

Inside Sales

As we are a very large company who already has a few established markets within business to business selling, our sales team will also include a fair number of Inside Sales Representatives. Along with the other 7 Representatives, 8 Inside Sales Representatives will work under our Sales Manager to build on sales into larger demographics. Since we have already established ourselves in businesses such as Target and Walmart, where we sell a pack of our energy drinks, we want to expand into convenient store locations where our product is sold individually and is ready for on-the-go buyers. These individuals will make the same salary as our Sales Representatives, setting them at $68,000 annually, with commission on top of their salary. The responsibilities of this role include: 

• Communicating with our business customers
• Understanding their needs and doing prior research to better grasp their standards
• Answer any potential questions and stay on top of follow up calls and emails
• Researching and qualifying new leads
• Be knowledgeable about our product
• Have testimonials and customer reviews available for sales meetings from related customers

When meeting with these clients, we are looking to truly build a connection that could build an even stronger relationship in the future. We prefer individuals who have the following qualifications:

• Bachelor’s Degree in business or related field
• Previous experience working in a call center, or related sales position preferred
• Proficiency in Microsoft office and CRM software systems
• Excellent communication skills, both verbal and written
• Good organizational skills and the ability to multitask
• Excellent phone and cold calling skills
• Exceptional customer service skills
• Strong listening and problem solving skills
• Ability to achieve targets set by the Sales Manager

Customer Service

Since we already have a great team up at our Northern California branch for customer service, we will continue to use the team we have up there and add on our new client base. If our sales at this new San Bernardino branch grow so large and it becomes overwhelming for our existing Customer Service Representatives, we will look into hiring more to distribute the work. We are mainly looking to do business to business sales, meaning that we will have less clients, but they will be bigger and might have larger scale issues. If this becomes a common occurrence, we will look into bringing a small Customer Service team down to Southern California. 

Merchandising

As a company, we have made it one of our core values that our customer service is one of the best when compared to our competitors. To ensure that we are the best, we plan on hiring a great team of merchandisers who will ensure that our product looks as good on the shelves as it does when we created it. Our team will consist of 5 merchandisers with one lead merchandiser who will travel to our Southern California customer locations to ensure the product is set up perfectly, along with other tasks. Their tasks will include:

• Collaborating with suppliers, manufactures, and stores to ensure proper execution of plans
• Creating and organizing promotions and advertising campaigns 
• Managing the educational materials for training employees
• Managing layout plans of store and maintain inventory of products to report back to sales force
• Gathering information on market trends and customers’ reactions to products
• Analyzing sales figures- reporting growth, expansion, and change in market trends

The average Merchandiser salary in San Bernardino is around $34,000, so to make ours competitive we will be paying our employees $36,000 annually, with the opportunity for bonus with good outcomes. The Lead Merchandiser will make $38,000 annually and will be someone who has had merchandising experience. The expectations of our merchandisers include:

• High school diploma or GED
• 1-2 years of experience working in retail or merchandising
• Excellent analytical skills 
• Strong communication and interpersonal skills
• Must be committed to providing outstanding customer service
• May be required to travel to client locations (valid driver’s license required)

Operations Personnel

Credit department

Our San Bernardino location will be our Southern California distribution headquarters, so the credit department will also work out of this location. We will employ 5 individuals whose main goal is to keep our accounts receivable as low as possible. The average credit employee in San Bernardino makes $52,000 annually, so we will keep our theme of paying above average and pay $54,000. These employees will receive the same benefits as previously mentioned above. 

Logistics

In order for this new brand of our company to be successful, we need to ensure that our products are getting delivered on-time and in great condition. To achieve this high standard we have set, we will have 17 trucks in Santa Barbara, 23 in San Diego, and 35 in San Bernardino for a total of 75. To drive these trucks and unload them at the delivery site, we will have 115 employees on top of our existing team dedicated to these tasks. These employees will be paid hourly, making $31 an hour with room for raises and bonuses. These individuals will work 8 hour days in two shifts, morning and evening, matching our warehouse staff hours. 

Security

To protect our employees and our products, we will employ security professionals during day and night. Our day security team will watch security footage and ensure there is nothing suspicious going on outside the buildings. This team will be smaller as we are not anticipating a lot of crime in the areas we have chosen. This shift will consist of 2 individuals. The night shift will be larger with a team who walks around the building on foot, watches security tape, and ensures there are no unauthorized visitors on the premises at night. This team will consist of 5 individuals. These employees will be hourly $13.75, above the average hourly in the areas our warehouses will be located. 

Other

Purchasing

This department will be located at our headquarters in San Bernardino, and will consist of 4 individuals with one lead purchasing advisor, making this a 5 person department. This team will be in charge of successful supply chain management, and will help other departments identify their needs, manage the requisition process, and source competitive prices. Our Purchasing Agents will make $67,000 annually to start with room for bonuses and raises. Our Lead Purchasing Agent will make $71,000 annually also with room for bonuses and raises. Both of these employee types will qualify for our full time benefits package. Qualities we are looking for in individuals for these positions include:

• Proven work experience as a Purchasing Agent in the past
• Good knowledge of vendor sourcing practices
• Hands-on experience with purchasing software
• Understanding of supply chain procedures

Along with the skills previously mentioned, Lead Purchasing Agents will need to show leadership skills and experience in managing a team. 

Finance

This team is a key part of our organization that is responsible for acquiring funds for our firm, managing our funds from within the company, and planning for the expenditure of funds for our various assets. This 3 person team will be located at our San Bernardino warehouse to act as a central point for the other two distribution centers as well. We will have 2 Finance Associates, who will make $67,000 annually, and a Lead Finance Advisor, who will make $74,000 annually. These positions will be included in our full-time benefits package. For this position, we are looking at individuals with the following characteristics:

• Communication skills
• Bachelor’s in Finance, or related field
• Attention to detail
• Adaptability
• Problem-solving skills

Along with the previously mentioned skills, the Lead Finance Advisor will also need prior experience managing a team, and known leadership skills. 

Legal

While we hope to never run into any issues, it is very important to have a trustworthy legal team on your side, and for that reason we will have a team of 3 lawyers available at our San Bernardino location. They will always be available and will also review contracts and other agreement types made at our company. We will only be using experienced lawyers, so we will actually be taking 3 individuals from our team in Northern California so we have trusted individuals who know our company inside and out. As we do have a large team of lawyers in Northern California, we are recommending that we wait on hiring any new employees to see if we truly need them. 

Marketing Plan

Our marketing strategy is to take advantage of a multi-channel approach focused primarily online, as this is the best way to reach our target demographic of those aged 14 to 30. 

Situation, Competition Analysis

Zap Energy is the leading healthy alternative brand in Washington, Oregon, and the Northern California marketplace for energy drinks. Our current annual revenue is roughly $100m, selling approximately 38.61m energy drinks per year. Our current Market Capitalization is $300m, and we expect by 2026 for the Southern California region to be one of our most profitable regions, bringing in an estimated $87.69m in annual revenue. 

Our competition is fierce and will be highly competitive in this new market. Our main competitors are Body Armor, Gatorade, and Pedialyte. Other competitors that are in the space, but are not branded as healthy as our product are Rockstar, Monster, Powerade, Bang, and Propel. Since Southern California is so focused on health, even more so than the rest of the West Coast Market which we have already penetrated, there will also be competition with bottled water brands, as these are the only other alternatives on the market which can claim are even more healthy than our offerings. 

Goals, Objectives, Strategy, and Tactics

Our goals and objectives with marketing will be to increase brand awareness and sales in the Southern California region. Our primary focus for the first year will be to bring brand awareness to this area, as well as develop new relationships with customers. Our strategy will be to make the product popular among our target market by working with the people and sites that they love. With social media marketing, sponsorships of their favorite local creators, and digital marketing on Google, we will be able to reach out directly to the exact people who would love our product offerings. 

Product Line, Brands, Target Market, Product Positioning

Our product line consists of five flavors of healthier alternatives to energy drinks such as Gatorade, Rockstar, and Monster. These flavors are Berry Punch, Berry Lemonade, Fruit Punch, Tropical Punch, and Orange Mango.

Our target market are individuals who are typically aged between 14 and 30 and are looking for an energy drink that is healthier for them than the alternatives. Not only are our consumers those looking for a slight boost in energy throughout the day, but also athletes who are looking for a replenishment of electrolytes and other key nutrients which give them energy in the middle of competition.

Our product positioning is for young adults who are looking for an even healthier alternative to energy drinks. Not only are we meant for those who are looking for a more natural boost to their energy, but we are also positioned to serve athletes who are looking for more hydration from their drink, as well as energy replenishment from what they drink in competition.

Price Strategy

Our product pricing strategy will be the same as we have used to break into Northern California. We will bring to market our five flavors: Berry Punch, Berry Lemonade, Fruit Punch, Tropical Punch, and Orange Mango. With research, we believe that for an average store order and delivery, we can maintain our average cost, landed in-store per drink of $1.19/drink.

Our pricing structure will break down as follows:

Our Cost Landed In-Store:   $1.19

Average Consumer Cost/Drink:   $2.02

Average Spend Per Customer, Per Visit:   $16.05

12-Pack:   $23.99  -  65% of Sales

Single:   $2.59  -  35% of Sales

Promotion / Advertising / Salesforce Incentive Program

Marketing should be done online via sponsorships, search, display, and video ads; in-person demonstrations/taste testing in the form of sponsoring local high school sporting events by providing on a rotating basis 300 bottles of each of our 5 flavors each week to various schools, costing $92,820/year.

Digital marketing will be done once our products are starting to become available in stores. We will allocate $10,000, or $120,000 for the first year dedicated to working with and sponsoring local digital influencers. These campaigns will have influencers not only post on their social media platforms but also hold small, sponsored, fan events where groups of influencers will meet up with fans and free drinks will be provided to those in attendance.

In addition to these influencer ad campaigns, we will set aside a budget of $85,000 per month, or $1,020,000 per year to run search, display, and video ads which will run on Google’s AdWords and DoubleClick digital ad service networks. This will provide us with roughly 136,000 - 170,000 clicks per month to our landing page. These clicks will result in an average of 8,500 -17,000 immediate and direct sales, with residual sales, as well as serving the purpose of getting our brand name out to this new group of consumers, which will result in even more customers in the future due to this increased brand awareness. 

Distribution

Our distribution chain will follow a model of larger, centralized “Distribution Hub” warehouses which feed to both stores, as well as smaller, “‘Neighborhood’ Distribution” warehouses.

(Warehouse Map On Original Paper)

With this model, we can keep costs lower by keeping the majority of our product in San Bernardino due to lower costs for both warehouse space, as well as personnel. As well as deliver our product within a few hours to customers who are running low on our product with our neighborhood distribution centers network. This provides the best of lowered costs, as well as providing top-notch customer service and order fulfillment.

We plan on renting a 73,000 sqft warehouse in San Bernardino for $657k per year for our Distribution Hub. For our two intended neighborhood distribution centers, we plan on renting a 26,500 sqft warehouse in Goleta, Ca for $222.6k annually, and renting a 35,000 sqft warehouse in San Diego, Ca for $550.8k annually.

For logistics/transportation, we will buy 75 18-wheelers for $984,375 per year for eight years which will be projected to handle a delivery rate of up to 58m drinks per year (150.2%) in total assuming 100% uptime working 12 hours per day.

Budget

Our total budget for digital marketing and other influencer marketing is $1,232,820 for the first year. Our budget for our new distribution network, not including personnel, is $2,414,775 per year.

The total budget for marketing and distribution is $3,647,595 for the year.

Expansion Estimated Budget

The total estimated expansion budget is $13.07m, which consists of $3.64m for the marketing and distribution infrastructure, and $9.43m for personnel for the first year. Based on our projected gross profit of $87.69m and projected net profit pre-tax of $22.96m, we believe that it would be a smart investment to expand into Southern California.

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Once again: This post has been slightly adapted to a blog post from a paper written by the Pierce Denning and Julia Wright. Download the original paper here!