Kombo Komfort

Kombo Komfort

True Komfort For You

100% Certified Authentic Kombo Butter

Alvand Yarahmadi Damon Giambrone

Christopher Wyckoff Ryan Boyd

Kombo Komfort

*Confidential Information* Reference date May 9, 2015 [email protected]

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Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Kombo Komfort Inc. in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of Komfort Inc. It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to Kombo Komfort Inc.

Upon request, this document is to be immediately returned to Kombo Komfort Inc.

Name (printed)__________________________ Signature_______________________________ Date___________________________________

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Table of Contents EXECUTIVE SUMMARY .......................................................................................................................... 5 THE COMPANY ........................................................................................................................................ 6 MISSION STATEMENT ................................................................................................................................................ 6 PRODUCTS AND SERVICES ......................................................................................................................................... 6 MARKET FORECASTS .................................................................................................................................................. 7 PAIN MANAGEMENT MARKET .................................................................................................................................. 7 HOMEOPATHIC & HERBAL REMEDY MARKET ...................................................................................................... 9 HEALTH AND WELLNESS MARKET ....................................................................................................................... 11 PRODUCT ................................................................................................................................................................... 12 CUSTOMER IDENTIFICATION AND SEGMENTS .................................................................................................... 12 GREEN BEHAVIOR .................................................................................................................................................... 14 LOCATION .................................................................................................................................................................. 15 READING & VIEWING BEHAVIORS ........................................................................................................................ 15 SWOT ANALYSIS ..................................................................................................................................................... 16 COMPETITION ........................................................................................................................................................... 17 MAIN COMPETITORS ............................................................................................................................................... 17 COMPETITOR ANALYSIS .......................................................................................................................................... 17 NICHE ......................................................................................................................................................................... 19 MARKET STRATEGY ................................................................................................................................................. 20 CONTENT DEVELOPMENT PHILOSOPHY .............................................................................................................. 20 CONTENT STRATEGY ............................................................................................................................................... 21 MARKETING TEAM STRUCTURE ............................................................................................................................ 21 CONTENT TEAM WORKFLOW ................................................................................................................................ 22 MOBILE APP ............................................................................................................................................................. 22 POSITIONING ............................................................................................................................................................. 23 PRODUCT DESCRIPTION ......................................................................................................................................... 23 PRODUCT LINE ......................................................................................................................................................... 23 PRICING ..................................................................................................................................................................... 23 CUSTOMER PERSONA .............................................................................................................................................. 24 TEST LAUNCH ........................................................................................................................................................... 25 MARKETING OBJECTIVES ....................................................................................................................................... 25 PROMOTION .............................................................................................................................................................. 25 COMMUNITY SERVICE ............................................................................................................................................. 26 STAGE DEVELOPMENT & DISTRIBUTION CHANNELS ....................................................................................... 27 SALES FORECAST ..................................................................................................................................................... 27

OPERATIONAL STRATEGY ............................................................................................................... 28 PRINCIPLE ................................................................................................................................................................. 28 SUMMARY OF OPERATIONS BY YEAR ................................................................................................................... 28 QUALITY CONTROL .................................................................................................................................................. 29 CUSTOMER SERVICE ................................................................................................................................................ 30 INVENTORY CONTROL ............................................................................................................................................. 30 FACILITY .................................................................................................................................................................... 30 ACCESS & FACILITY OPERATION .......................................................................................................................... 31 EQUIPMENT .............................................................................................................................................................. 31 SHIPPING ................................................................................................................................................................... 33 USDA ORGANIC ....................................................................................................................................................... 34

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PERSONNEL ............................................................................................................................................................... 34 INVENTORY ............................................................................................................................................................... 35 SUPPLIERS ................................................................................................................................................................. 35

FINANCIALS ........................................................................................................................................... 36 FINANCIAL ASSUMPTIONS ...................................................................................................................................... 36 EXIT STRATEGY ........................................................................................................................................................ 37 INCOME STATEMENT ............................................................................................................................................... 40 BALANCE SHEET ...................................................................................................................................................... 41 STATEMENT OF CASH FLOWS ................................................................................................................................ 42

MANAGEMENT ..................................................................................................................................... 45 PROJECT MANAGER-‐ DAMON GIAMBRONE ......................................................................................................... 45 MARKETING-‐ ALVAND YARAHMADI ..................................................................................................................... 45 OPERATIONS-‐ RYAN BOYD ..................................................................................................................................... 46 FINANCES-‐ CHRISTOPHER WYCKOFF ................................................................................................................... 46

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Executive Summary

Pain is an unwanted feeling we all experience at some point during our lives and

unfortunately some experience pain more often than others. Living in pain can

dramatically decrease one’s quality of life and a common source of pain is the

inflammatory response resulting from a disease or injury. We at Kombo Komfort can

relate to and sympathize with these individuals. It is for this reason we have developed

our product Kombo Komfort to help provide individuals with relief from pain produced

from inflammation. Our product Kombo Komfort, is a plant based all natural topical

ointment that has been proven to show anti-inflammatory and antioxidant properties. Our

product is derived from the African Nutmeg seed that is grown in West Africa. We have

formed relationships with United States and African suppliers to provide us with a semi-

refined kombo butter that we will further refine through a patented process. Kombo

Komfort has obtained exclusive rights to license proprietary technology developed by Dr.

Jim Simon and Rutgers University that identifies the components of the African Nutmeg

seeds that produce the anti-inflammatory and anti-oxidant effects, as well as a process to

concentrate these compounds. We believe we belong to the Pain Management,

Homeopathic & Herbal Remedy, and the Health & Wellness markets. We will target the

45 and older demographic due to the prevalence of arthritic and inflammatory conditions

common among these individuals. Our company will reach this population through

initially starting out with tabling demonstrations while our social media campaign grows

to draw attention to our online sales website. The social media campaign will provide

individuals with lifestyle interventions utilizing a blog to promote health and wellness.

This will not only promote our product but build a brand as well. Now more than ever,

customers are becoming more pro-active when it comes to their personal health and

wellness. Consumers are seeking all natural alternatives to provide relief from pain

caused by inflammation and we believe Kombo Komfort satisfy this need.

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The Company

Kombo Komfort is owned and operated by Damon Giambrone (CEO),

Christopher Wyckoff (CFO), Ryan Boyd (COO), and Alvand Yarahmadi (CMO).

Kombo Komfort will function as an S-Corporation. The legal governing board will

consist of the four co-founders and two representatives appointed by future investors. Our

scientific advisory board will include a retired lawyer, the patented inventor of our

product, and a well-established consultant in the sports business field.

Mission Statement

Our company was created to empower people by keeping them in motion. More

than one of our co-founders struggle from painful inflammatory conditions that have

greatly impacted their lives, therefore we are personally committed to this cause. At

Kombo Komfort, we offer a quality all-natural product at an affordable price to

customers who can benefit greatly from our unique anti-inflammatory topical ointment.

Rather than masking pain, our product helps naturally treat joint and muscle pain at its

source. With our Ghana Appreciation campaign, we devote 5% of all sales to Ghana for

community development, intellectual research, and crop sustainability.

Products and Services

Kombo Komfort will offer a line of products to provide customers with an all

natural topical ointment to help ease pain caused by inflammation. Kombo Komfort is

unique through enhancing the efficacy of kombo butter through the use of concentrated

kombo butter extracts, which specifically help to reduce inflammatory markers in the

body. The active ingredients of our product are sargaquinoic acid (KB-1),

sargachromenol (KB-2), and sargahydroquinoic acid (KB-3), which have been shown to

act as antioxidants through reducing iNOS, and COX-2 inflammatory markers while also

functioning as nitric oxide scavengers. Kombo Komfort provides a safe alternative for

prevention and treatment of inflammatory and associated arthritic conditions. Customers

can seek natural relief from Kombo Komfort.

Current remedies for pain resulting from inflammation include oral medications

and topical ointments. Oral medications subject the body to high doses of anti-

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inflammatory drugs systemically. This can result in development of drug dependence

among users and side effects, such as GI distress. Topical ointments currently on the

market only mask pain rather than treating the source. Kombo Komfort uniquely

addresses pain by helping to reduce inflammation and allow for specificity and ease of

application.

Our 4-ounce product will retail for $19.99 and we believe this price is competitive

with other joint and arthritis products on the market. We will compete with other topical

anti-inflammatory ointments produced by Blue-Emu and Australian Dream. Kombo

Komfort has a customer friendly return policy providing full refunds for unopened

products. Customers that belong to our loyalty program will be able to subscribe for

periodic orders and will receive discounts on products in exchange.

Market Forecasts

Kombo Komfort, our all natural anti-inflammatory topical ointment, is a part of

the pain management, homeopathic & herbal remedy, and health & wellness markets.

Using the following market trends described below, we are able to predict the future

performance of our product line.

Pain Management Market

The pain management market’s largest segments are in the United States and

Europe. It is estimated that 1.5 billion people globally suffer from chronic pain of varying

degrees. Market projections vary, but Episicom has estimated that the global pain

management market was worth $46.4 billion in 2011. The United States makes up nearly

half of this market, at 48% (Figure 1). Despite the pain management market being a

mature market, analysts still believe that there is room for growth. According to Global

Industry Analysts, Inc. (GIA), they anticipate a 9% compound annual growth rate

(CAGR) for pain management therapies specifically in Latin American countries. The

Pain Management: A Global Industry Report has documented the future and potential

growth in Latin American markets. GIA further predicts that the global pain management

market will grow to reach $60 billion by 2015. The reasoning for these optimistic

predictions by GIA is multifaceted. The prediction of growth in the global pain

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management market can be attributed to an aging global population, increasing number

of surgical procedures, personal lifestyle changes, and even the rise of medical conditions

such as cancer1. Other factors that attribute to projected growth of the global pain

management market are that consumers are influenced to buy over-the-counter (OTC)

pain management drugs and the removal of reimbursements for commonly used

prescribed pain-killers2. Although the pain management market is mature and

competitive, Kombo Komfort could find success due to the global pain management

industry growing from an estimated 46.4 billion in 2011 to $60 billion by 2015 according

to Episicom. Additionally, Kombo Komfort will further differentiate itself from existing

products in this market through its all natural ability reduce pain produced from

inflammation. Future opportunities and continuing growth can be found in the Asia/

Pacific market which is projected to be the fastest growing regional market during the

2007-2015 period3.

Figure 1 Projected U.S. Pain Management Market Revenue Growth The following figure shows steady growth with U.S. market generating ~ 40 billion by 2019 (Global Industry Analysts, Inc.).

1 http://www.genengnews.com/gen-‐articles/pain-‐management-‐market-‐ripe-‐with-‐immediate-‐opportunities/4123/ (3/29/15) 2 http://www.prweb.com/releases/2011/1/prweb8052240.htm (3/29/15) 3 http://www.prweb.com/releases/2011/1/prweb8052240.htm (3/29/15)

20

25

30

35

40

45

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

US Dollars (Billions)

Year

Projected U.S. Pain Management Market Projected Revenue

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Homeopathic & Herbal Remedy Market

Homeopathic & herbal remedy is a niche market that Kombo Komfort fits into.

According to a market research report on herbal supplements and remedies, Europe

makes up the largest region for the herbal remedy and supplement market4. The United

States homeopathic and herbal remedy market grew from 2005 to 2009 by 17% to $5.9

billion. It was previously believed that this market would grow by 2.6% from 2011 to

2012. This projected growth was attributed to increasing healthcare costs and lack of

insurance. Customers are said to be more pro-active when their health and wellness is at

risk5. Projected growth from 2011-2012 was as predicted. It was found that the United

States’ retail sales in the homeopathic and herbal remedies market reached $6.4 billion in

2012. Actual growth rate was up almost 3% from the previous year of 2011. Mintel, a

Chicago based market research firm, reported a growth of 16% over the previous 5 years

from 2007 to 2012. Mintel expects a steady growth rate of 3.5% for the homeopathic and

herbal remedy market through 20156 (Figure 2). In 2017, Mintel forecasted the

homeopathic and herbal remedy market sales to increase to $7.5 billion7.

Global medicinal plant production, according to the market research report on

herbal supplements and remedies, estimates it to be worth $50 billion with an annual

growth rate of nearly 16%. Even the International Trade Centre estimated that medicinal

global plant exports were worth $2.83 billion in 20138.

It was reported that 30% of respondents who stated that they had an ailment

within the last year claim to have used a homeopathic or herbal remedy to treat it9. Now

more than ever, customers are becoming more pro-active about their personal health and

wellness. Additionally, customers are also using more organic and natural products, 4 http://www.nutraceuticalsworld.com/issues/2014-‐07/view_features/botanical-‐boom/ (3/29/15) 5 http://store.mintel.com/homeopathic-‐and-‐herbal-‐remedies-‐us-‐march-‐2013 (3/29/15) 6 http://store.mintel.com/homeopathic-‐and-‐herbal-‐remedies-‐us-‐march-‐2013) (3/29/15) 7 http://www.nutraceuticalsworld.com/issues/2013-07/view_industry-news/us-sales-of-homeopathic-herbal-remedies-reach-64-billion/ (3/29/15) 8 http://www.nutraceuticalsworld.com/issues/2014-07/view_features/botanical-boom/ (3/29/15) 9 http://www.nutraceuticalsworld.com/issues/2013-07/view_industry-news/us-sales-of-homeopathic-herbal-remedies-reach-64-billion/ (3/29/15)

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which aids in the growth of herbal and homeopathic remedies10,11. The GIA reported

continued growth globally of the homeopathic and herbal remedy market. According to

the global report, the GIA estimated that the market would reach $107 billion by 201712.

It has been determined that Kombo Komfort’s current and future market outlook are

favorable.

Figure 2. The following figure represents the continued growth of the U.S.

Homeopathic and Herbal Remedy Market Revenue at a rate of 3.5% CAGR through 2015.

10 http://store.mintel.com/homeopathic-and-herbal-remedies-us-march-2013 (3/29/15) 11 http://www.nutraceuticalsworld.com/issues/2013-07/view_industry-news/us-sales-of-homeopathic-herbal-remedies-reach-64-billion/ (3/29/15) 12http://www.prweb.com/releases/herbal_supplements/herbal_remedies/prweb9260421.htm (3/29/15)

6

6.5

7

7.5

8

8.5

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

US Dollars (Billions)

Year

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Figure 3. Represents the combined markets of the US Pain Management and Homeopathic & Herbal

Remedy markets with their expected growth projections.

Health and Wellness Market

Customers have become more aware of the importance of maintaining a healthy

lifestyle. The health and wellness market needs to be taken into account for the overall

outlook and success of Kombo Komfort. Euromonitor International, a global research

company, has released information in regards to the health and wellness industry.

Euromonitor International reported a 6.75% growth in current value terms, reaching a

value of $774 billion in 2014. Emerging markets are the driving force for growth in the

health and wellness market, adding 87% absolute growth from 2009-2014. Even though

emerging markets are driving this new growth, pre-existing, developed markets still

encompass 60% of the total global health and wellness retail sales13. A major focal point

for Kombo Komfort is to serve customers who are improving their health. Evaluating the

global health and wellness market aids in defining the opportunity Kombo Komfort has

as a product for health and wellness market customers.

13 http://www.nutraceuticalsworld.com/issues/2014-‐11/view_industry-‐news/global-‐health-‐wellness-‐sales-‐reach-‐774-‐billion/ (3/29/15)

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Product

Our product provides our customers with an all-natural topical ointment as an

alternative for painful inflammatory conditions. These anti-inflammatory properties can

benefit those suffering from osteoarthritis, rheumatoid arthritis, fibromyalgia, chronic

back pain, postoperative pain/inflammation, and orthopedic conditions. Orthopedic

conditions can be classified as pathology of the joint, muscle, and tendon resulting from

overuse. Safety and side effects are a major concern for customers and our all-natural

topical ointment provides safe and effective treatment for reducing pain and

inflammation. This is accomplished through concentrating key compounds found in the

African Nutmeg seeds that have been found to reduce inflammatory markers, which

represent a reduction in inflammation.

Customer Identification and Segments

Prospective customers that would purchase Kombo Komfort are those that have

interest or are current customers of homeopathic & herbal remedy market. Currently,

baby-boomers represent a major portion of the herbal supplements and remedies14. Those

interested in our product would be seeking an alternative anti-inflammatory and pain

management product to treat their chronic condition. It has been estimated that 52.5

million adults in the United States have reported being told by a doctor that they had

some form of arthritis, rheumatoid arthritis, gout, lupus, or fibromyalgia.

Those that suffer from these chronic inflammatory conditions are in the 45 or

older demographic. Approximately, 30.3% of people between the ages of 45 and 64, and

49.7% people 65 or older report having a case of doctor diagnosed arthritis. The

diagnosis of arthritic conditions by doctors is projected to experience continued growth.

By 2030 an estimated 67 million Americans age 18 or older are projected to have doctor

diagnosed arthritis (Figure 4). Approximately 1 in 3, or 31% of people with arthritis

report arthritis contributing towards their work limitation15. Kombo Komfort would be an

alluring option for customers who want pain relief through the use of a natural ointment. 14http://www.prweb.com/releases/herbal_supplements/herbal_remedies/prweb9260421.htm (3/29/15) 15 http://www.cdc.gov/arthritis/data_statistics/arthritis_related_stats.htm (3/29/15)

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Customers that suffer from chronic pain conditions may truly find relief in the use of

Kombo Komfort.

According to experimental and clinical studies, elderly people are more

susceptible to severe or persistent pain. The elderly’s inability to tolerate pain increases

as they age. The reasons for this population’s occurrence of pain can be attributed to joint

pain, post-surgical pain, chronic disease, and conditions associated with aging16. This

population demographic will look towards a product such as Kombo Komfort based on

its all natural properties for a pain relieving effect. The National Health Interview Survey

conducted in 2007 found 44% of people aged 50-59 use some form of complementary or

alternative medicine, compared to the average adult user rate at 38%17. This suggests that

the use of complementary or alternative medicine among the 50 or older population is

prevalent.

The 45 and older population is the age demographic that we will target. However,

women of this age demographic are possibly the most appealing option to keep in mind.

Roughly 26% of women and 19% of men report doctor diagnosed arthritis. Conditions

such as fibromyalgia affect 6 million patients in the United States and are nine times

more likely to be diagnosed in women than men18. Middle-aged women are a large group

16 http://www.ncbi.nlm.nih.gov/books/NBK92516/ (3/29/15) 17 http://www.nih.gov/news/health/apr2011/nccam-‐13.htm (3/29/15) 18 http://www.cdc.gov/arthritis/data_statistics/arthritis_related_stats.htm (3/29/15)

50%

30%

13%

7% 65 and older

Ages 45-64

Unreported/Unaccounted for

Ages 18-44

Figure 4. The figure above represents the breakdown of doctor- diagnosed cases of arthritis in the United States (Center for Disease Control and Prevention)

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contributing to the rising awareness of health and wellness currently occurring19. Women

have been found to report conditions of pain more frequently than men. Women report a

higher prevalence of chronic pain than men across multiple nations according to a study

conducted by Croft et al. Women have been found to show lower pain tolerances and

thresholds when compared to men, resulting from hormonal differences20. Overall an

estimated 25% of Americans experience chronic pain, with a disproportionate amount of

them being women. A review, published by the Journal of Pain in 2009, found that

women were facing a substantially greater risk of developing pain conditions21. The

demographic containing middle-aged women is a very important target demographic for

Kombo Komfort. This is a result of middle-aged women having an increased risk of

developing inflammatory conditions more frequently then men, and they have also been

found to have lower pain tolerances. Women continue to comprise the majority of

customers in the marketplace accounting for 85% of all customer purchases22.

The middle-aged baby boomer generation fits Kombo Komforts target marketing

demographic because of medical and inflammatory conditions associated with increased

age. Baby boomers possess the disposable income to spend on a premium all natural

homeopathic and herbal remedies. Our targeting of customers goes beyond standard

demographics. Psychographics are used to evaluate customer’s lifestyles and behaviors,

specifically, their interests and values towards green products23.

Green Behavior

Kombo Komfort encompasses all natural properties as a homeopathic and herbal

remedy product. Keeping that in mind, we realize the importance of green customers.

Green customers provide a loyal following for Kombo Komfort’s brand. These customers

19http://www.prweb.com/releases/herbal_supplements/herbal_remedies/prweb9260421.htm (3/29/15) 20 http://www.ncbi.nlm.nih.gov/books/NBK92516/ (3/29/15) 21 http://www.nytimes.com/2013/03/17/opinion/sunday/women-‐and-‐the-‐treatment-‐of-‐pain.html?_r=0 (3/29/15) 22 http://she-‐conomy.com/facts-‐on-‐women (3/29/15) 23 http://ecopreneurist.com/2008/04/16/how-‐to-‐reach-‐green-‐consumers-‐using-‐psychographics-‐to-‐define-‐your-‐target-‐market/ (3/29/15)

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can be properly assessed by using psychographics for green behavior. The green

customers we are targeting tend to fit under a number of descriptive conditions. The ideal

green customers are very progressive on environment and society. These super green

customers are more concerned about the impact a product has on the environment and are

willing to pay a premium to ensure preservation of the environment25. Super green

customers account for 5% of United States adults, with 76% of them having annual

household incomes of $150,000 or greater24. Kombo Komfort offers an environmentally

friendly product to solve the pain management needs of environment conscious green

consumers.

Location

Kombo Komfort’s target market customers reside in middle to upper class

neighborhoods in both urban and suburban settings. Online sales will comprise the

majority of Kombo Komfort’s total sales early on. At an early stage, offline sales will

occur on the east coast of the United States. This region provides a large demographic, as

well as a green and environmentally conscious consumer base to target. These factors

have an early impact on a homeopathic and herbal remedy product’s success.

Reading & Viewing Behaviors

Our target age demographic tends to read magazines and articles that reflect their

own personal health interests. Popular health and wellness magazines are Remedy’s

Healthy Living, Men’s Health, and Women’s Health25. These magazines are read by the

45 and older age demographic and help represent our company’s foundational beliefs of

health and wellness. Tweny-three million Women are found to read Women’s Health and

Remedy’s Healthy Living magazine26. Remedy’s Healthy Living Magazine has larger

female following at 63% compared to men at 37%26. Men on the other hand, tend to read

Men’s Health Magazine, and encompass over 13 million readers. The median age of

24 http://www.organicspamagazine.com/media-‐kit/super-‐green-‐consumer/ (3/29/15) 25 http://www.cision.com/us/2013/05/top-‐10-‐fitness-‐health-‐magazines-‐2/ (3/29/15) 26 http://www.remedyhealthmedia.com/sites/www.remedyhealthmedia.com/files/RHL-‐Thrive50_MediaKit_2014_LR.pdf (3/29/15)

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these male subscribers is 40 years old27. Women 45 and older watch television shows

such as HGTV, OWN, and Dr. Oz. On the other hand, men 45 and older view sports

channels such as ESPN and Golf Channel. We recognize that these forms of media will

be effective platforms to reach our target demographic to promote the use of Kombo

Komfort.

SWOT Analysis

Strengths

● Premium all natural product ● Provides a safe option to mitigate pain and discomfort by reducing inflammation ● Low production costs ● Unique patent-protected refinement process ● Building a Health and Wellness brand ● Growing macro and micro economies in our target market ● Inflammatory conditions are on the rise ● No added ingredients or preservatives ● Management team experience

o Knowledge of human anatomy, physiology, and biology o Personal training and athletic training backgrounds o Knowledge of social media

Weaknesses

● Importation of semi-refined kombo butter ● No preexisting customer base ● Long distance shipping ● Shipping costs ● Enrichment process ● Access into U.S. distributors ● Finance and accounting expertise

Opportunities

● Targets the increasing popular all natural market ● Provide a natural remedy as an alternative to traditional medicine ● Appeal to green customers ● Safe pain management alternative

Government Regulation & Potential Threats

● Competition 27 http://www.menshealthmediakit.com/audience/ (3/29/15)

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o Large pharmaceutical companies o Other topical analgesic products

▪ (Bengay, Flexall, Biofreeze, Icy Hot, Blue-Emu, Australian dream) o Genetically engineered solutions to inflammatory disease

● U.S. & International Government Regulation o FDA policy change o Importation of a foreign botantical o Potential USDA certification hurdles o U.S.-African relations

● Environmental o Economical or environmental disaster effecting West African distributors

of semi-refined kombo butter (raw material)

Competition

Our competitors consist of Blue-Emu, Australian Dream, BioFreeze, Bengay, Icy

Hot, and Flexall. Large pharmaceutical companies such as Pfizer, Merck, Johnson &

Johnson, and Eli Lilly are also competitors in the pain management market. The most

similar products to ours on the market are Blue-Emu and Australian Dream. Based on

competitor pricing for 4 oz. units, we believe that Kombo Komfort should retail at price

of $19.99. We believe this offers customers a discounted price for a premium, all natural

product that can help to reduce pain and inflammation.

Main Competitors

Blue-Emu Made by NFI Consumer Products 501 5th St, Bristol, TN 37620 Australian Dream Distributed by: Nature’s Health Connection Inc. PO Box 609 Campton, KY 41301

Competitor Analysis

Kombo Komfort Strength Weakness Blue-Emu Australian Dream

Importance to Customer

Products All-Natural Topical Anti-Inflammatory Plant-based CMO

All-Naturally Derived

Limited

Raw material acquisition and

execution of simplistic

Original Super Strength

Arthritis Pain Relief

Arthritis Pain Relief Cream

Back Pain Cream 2

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ointment Ingredients

Scientifically research proven

and tested

supply chain. Pain Relief Spray

Anti-Itch

Pure Emu Oil

Lip Balm

Foot Therapy

Price 4oz. jar $19.99 Competitive and

reasonable pricing

Not set apart from

competitors in price

4 oz. jar $12.50

12 oz. jar $26.99

lowest price*

2oz. $17.99

4oz. $22.99

9 oz. $42.99

lowest price*

2

Quality

All natural w/ limited ingredients

No Dyes

Earthy/ Nutty Scent

Non-irritating

All natural look, feel, and scent

customers know what they are getting due to

limited ingredients

Natural scent

Oily feel

Not oily

Unscented

Non irritating

Not oily

Does not burn or irritate skin

Unscented

No Dyes

1

Selection 4 oz. jar

Providing a standard size as

compared to competitors

Price point is competitive

Wide range of sizes

Different forms of product

2oz. spray, 4 oz., 12 oz. jars

128oz. pump

Single use wipes

Kits

Wide array of Blue-Emu branded products

2 oz., 4oz., 9oz. jars 2

Service All natural topical anti-inflammatory

Unique product that decreases inflammation

Competitors are formulated and act differently

Does not cause pain relief by

increasing blood flow to

treatment area.

Topical for pain relief of muscle and joint

pain

Topical for pain relief of arthritis 1

Product

Stability 2 years Long shelf life

Shorter shelf life than

competitors 3 year shelf life 3 year shelf life 3

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Niche

Today’s customers are using more natural products, which help to promote the

growth of homeopathic and herbal all natural therapies. Customer’s needs are becoming

Expertise

Patented by Rutgers University Dr. Jim

Simon to provide an effective natural

solution for arthritis and inflammatory

conditions.

Research expertise

Research proven

Patent protected

Lack of wide spread use by

customer

Maker of currently the #1 selling OTC

muscle and joint cream (Original Super

Strength)

Developed in 1998 for treatment of

arthritis. Created oil and scent free

solution

2

Company Reputation

Provides an all natural solution for

pain and inflammation such as

arthritis

New and different product

for pain relief

Not well known

Not trusted Sells the #1 muscle and

joint cream

Provides an oil and scent free solution

for treatment of arthritis pain

2

Location Lincoln Park, NJ

Close proximity to shipping ports for shipping in

the future

Not prime location for early start of

business

Bristol, TN Campton, KY 4

Product

Appearance

Reddish-brown

color

container:

Smooth look and feel

Similar product container

Blue color

container:

White color

container:

3

Sales Method

Online, private distributors on east

coast of U.S.

Sold online on own website

Sold with private distributors

Not sold in big box stores

Not sold on major websites

Mass merchandiser retailers, supermarkets,

drug stores, online, own website.

Walmart, Target, Walgreens, CVS, Kroger and other retail pharmacies

Online at retailer websites

1

Advertising

Content Marketing-

Balance between traditional, social, and digital media

Real-time feedback on brand data

Target demographic may not be

social media savvy

Facebook, Twitter, Google Plus, Television

Television 2

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more economical due to escalating prices, tighter budgets, high healthcare prices, and

lifestyle costs. They are also more health conscious creating a desire for safer product

options to treat conditions of pain and inflammation. Growing alternative medicine and

dietary supplement use are examples of methods being utilized by customers seeking

relief from inflammatory conditions. Kombo Komfort provides a safe and helpful

alternative to reduce pain and inflammation.

Market Strategy

Our company’s approach for acquiring customers will focus on content marketing

to build a brand and an online following. We will provide our content on the web via our

blog and social media platforms such as Instagram, Facebook, and Twitter. Rather than

spamming product information on the products we sell to the masses, Kombo Komfort

will be shifting its focus on specific customers. For example, the 10,000 people seeking

our brand are more important to us than the 10 million people not seeking our brand.

There will be active involvement by the founders of the company to convey a

down-to-earth, helpful atmosphere. We will be involved in real time marketing by

exploiting current events and connecting with followers on platforms like Twitter using

their newly acquired Periscope application. Feedback data will be analyzed frequently to

serve our customers’ needs and ensure that they are heard and valued. In addition,

testimonials from customers will be periodically posted on the social media outlets and

eventually broadcasted on television through creative commercials and on billboard

advertisements. Ultimately, our goal is to have our customers spread our message through

word of mouth, because the majority of the public trusts recommendations from their

peers over advertisements. Limited-time promotions will be offered seasonally and our

products will be accessible through Amazon.com to increase product growth and

awareness. Through customer satisfaction and science, Kombo Komfort will be a product

that is associated with authenticity.

Content Development Philosophy

To provide the best content we will use customer-centric, “voice of the customer”,

language while tracking marketplace changes and audience needs. Content will be

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produced following the 80/20 rule, limiting the amount of product information we push

onto the customer. Our content must always reinforce the brand, contain news value, start

conversations, and engage the audience. We are aiming to deliver real benefits to help our

customers learn something new and refer others to learn about our brand.

Content Strategy

We will structure our content in a way that will effectively target our

demographic through forming a representative customer persona. Kombo Komfort aims

to educate its customers on health and wellness while informing them about our product.

Together, these elements will contribute to the building of our Kombo Komfort brand.

Furthermore, we will reach our audience through balanced tactics of traditional, social,

and digital media.

Marketing Team Structure

● Editor/Editorial Board- ensures high quality content that reinforces brand

● Designer- focuses on customer experience across all channels

● Content Curator- finds great content and creates exposure

● Search Engine Optimizer (S.E.O.)- improve online visibility of the brand through

utilizing keywords (see Mobile App below)

● Publisher- manages editorial calendar and deadlines

● Channel Manager- identifies proper channels to market content

● Content Creator- writes blogs and develops high-quality content

● Our team will collectively contribute to the publication process, which can be

visualized in Figure 5.

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Content Team Workflow

Figure 5. Team brainstorm → Contributor writes content → In review/In revision → If content is approved → Scheduled for Publish → Posted to Social Channels → Content Performance Analytics

Mobile App

Recent reports in the media explain that Google, being a model for innovation,

has decided to rank companies according to their mobile capabilities because most

searches occur on mobile devices. This project is dubbed “Mobilegeddon” and it is

reported to have a huge impact on the order of company website listings within Google’s

search engine results. Therefore, we created a mobile app with interactive features. For

example, users will be able to calculate max heart rate and target hear rate based on

intensity and age inputs. We will be able to evaluate provided information on prior

injuries and offer specific modifications to popular exercises. We cyclically offer sample

high-intensity interval training (HIIT), outdoor cardio, resistance training and flexibility

exercises. The mobile app will also present a feature that allows people to contact a

service associate to ask questions about general fitness and product benefits along with

any other technical questions.


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Positioning

Kombo Komfort is positioning itself as an all natural, plant-based product that

helps to relieve joint pain at the source of inflammation. We are able to isolate specific

kombo butter compounds using our licensed patented process developed by Rutgers

University’s Agricultural Laboratories. Together with Agribusiness in Sustainable

Natural African Plant Products (ASNAPP), Kombo Komfort will be providing quality

product in a transparent and eco-friendly.

Product Description

Kombo Komfort’s topical ointment is a natural plant-based Cerasomal cis-9-

cetylmyristoleate (CMO) product developed by Dr. Jim Simon at Rutgers University, the

State University of New Jersey. Our licensed technology concentrates the active

ingredients that are naturally found in the African Nutmeg seed to provide relief from

inflammation. We accomplish this without the need for chemical additives and

preservatives. CMO products have gained recognition for treating autoimmune illnesses

such as rheumatoid arthritis. Our patented extracts reduce the production of nitric oxide

(NO), iNOS protein, iNOS mRNA, COX-2 protein, and COX-2 mRNA in cells

experiencing inflammation. This added technology enhances our product over other

traditional kombo butter anti inflammatory ointments currently on the market (US Patent

#7,371,413, Dr. James Simon, 2008).

Product Line

Our product line will feature our 4-ounce original Kombo Komfort blend, which

will also be available in a 2-ounce travel size, as well as a 9-ounce value size. Kombo

Komfort will also produce an extra strength formula designed to combat an acute flare-up

of inflammation.

Pricing

The suggested retail price for our feature 4oz. Kombo Komfort product will be

$20, which is $3 less than our leading competitor, Australian Dream. We have a free and

incredibly easy return policy. Just send our product back and you will be fully refunded!

Unopened products accepted with specification of reason for return. Customers that

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belong to our loyalty program will be able to subscribe for periodic orders and will

receive discounts on products in exchange. Available products and their prices are listed

below:

● Kombo Komfort 4oz. - $19.99



● Kombo Komfort Extra Strength 4oz. - $34.99

● Other Kombo Enriched well-known CMO Products- TBD

Customer Persona Name: Nancy

Occupation: Public School Teacher

Information: Nancy is 45 years old, has two children in college,

drives a compact car, adopted a Labrador Retriever, enjoys

exercising, and suffers from mild rheumatoid arthritis.

Buying Stage: In search of a product to provide inflammatory relief

Needs: To be able to do all daily tasks without being hindered with pain

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Interests: Light to moderate jogging/running, walking her dog, shopping in the mall with

her children, and swimming

Pain Locations: lower extremities radiating into the lower back with the occasional

arthritic flare-ups in the wrists

Brand Value Proposition: Special blend of all-natural ingredients that fight inflammation

rather than covering pain and avoid GI distress produced from chronic use of oral

medications

Media Habits: Pinterest, Facebook, LinkedIn, Twitter, (Google+), and blogs written by

industry leaders and influencers

Test Launch

Our test market will include the east coast of the United States. We will begin by

introducing our product at local gyms and areas where our target market of middle-aged

individuals congregate. We will do so by setting up different tables with a thought

provoking backdrops and lure people through the offering of free samples.

Marketing Objectives

● Increase brand awareness through social media and company website ● Facilitate market penetration through distinguishing our brand with patented

science and authenticity ● Build a following to support a potential USDA Organic Certification campaign by

year 6 ● Work with other well known products to enhance our brand and increase our

profits and industry relations ● Create a customer-driven continuous improvement culture in real time through

interactive social media campaigns ● Gain a significant market share for homeopathic herbal remedy market by 2020

Promotion

Early in operations, Kombo Komfort will be advertised and sold through direct

marketing via our website or Amazon.com. Social media outlets will feature quirky

themes for different days of the week. For instance, we plan to set aside a range of hours

on specific days where our customers can communicate directly with the founders via our

Facebook page and ask any general or specific questions. This promotion called Founder

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Fridays will give the opportunity for the company’s founders to stay in touch with the

customers and gain feedback from the community. We will also feature Hump Day

Humor, which means that every Wednesday, our social media pages will provide funny

cartoons or memes to brighten our customers’ days. You can find us on:

We will provide a loyalty program for our frequent customers. This includes 10%

savings at the end of every season for our members who regularly buy and use our

products. Being a loyalty member also means that we will send that customer a gift on

their birthday to show our appreciation for their business.

Another way that we will reach our customers is by attending appropriate

conventions and gatherings. There we will set up booths and tables that will allow us

spread the awareness of our product line. Kombo Komfort will invest in travel expenses

to send our sales representatives to these conferences. Each stand will have a beautiful

and eye-catching set-up, which will include a colorful cardboard backdrop, interactive

spin wheel, and handouts such as pens, keychains, Kombo Komfort water bottles, and

product samples.

After years 4 and 5, Kombo Komfort will introduce television and billboard

advertisements into our marketing strategy. Strategically placed television advertisements

will be aired during prime-time hours of shows that appeal to the baby-boomer

demographic. Billboards will be placed in highly trafficked areas to reach those that

commute to work.

Community Service

Kombo Komfort will sponsor the Ghana Appreciation Campaign, which involves

a donation of 5% of net sales to the under-developed areas from which our product is

grown. This campaign will focus on increasing three key areas: intellectual research,

community development, and agricultural sustainability. Our donation to this initiative

fulfills our licensing agreement with Rutgers University, as well as aligns with our

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company philosophy. We hope to limit our environmental impact to maintain our eco-

friendly reputation.

Stage Development & Distribution Channels

After the pre-launch phase, we will be sending sales representatives to certain

conventions and local strategic areas on the east coast of the U.S. increase product

awareness. Along with the promotional tables and branded stationary give-aways, we will

be able to market and sell our product directly through the web. Our product will be

featured on our own website and available for purchase on Amazon and Ebay. In Stage 2,

we will ask for additional funding to establish distribution channels with retailers such as

Vitamin Shoppe, GNC, Walgreen, CVS, Rite Aid, and Target. During stage 3, we will

consider realigning our brand to meet USDA Organic Certification standards. This will

support our authentic all natural standing and allow us to surface in other retailers such as

Whole Foods and Trader Joes. This will further expand our brand while reinforcing our

all natural eco-friendly image. Our projected sales are depicted in the following figure

(Figure 6).

Sales Forecast

Figure 6. As pictured above, represents the expected sales growth for Kombo Komfort’s product line

0

200

400

600

800

1000

1200

Year 1 Year 2 Year 3 Year 4 Year 5

US Dollars (Thousands)

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Operational Strategy

Principle

At Kombo Komfort, we rely on our highly-skilled personnel and firmly

established network of industry partners to effectively produce and distribute our product.

With careful strategic planning, we have formulated a streamlined business model that

allows for quick, efficient, cost-effective operation of our company. By combining our

skilled personnel and industry relationships with our precise operational strategy, we at

Kombo Komfort expect to possess a large portion of our target market.

Summary of Operations by Year Year 1 - 2016 (Initial Production)

The method for producing our Original Kombo Komfort anti-inflammatory

topical ointment is quite simple and extremely efficient. The production process on our

end begins after acquisition of semi-refined kombo butter at a price of $3/kg from our

suppliers. This semi-refined butter will be shipped to our manufacturing and processing

facility in New Jersey where it will be processed into 4-ounce containers and sold

through our distribution channels. The total cost of semi-refined kombo butter amounts to

approximately $0.10 per ounce. In our first year, we project the sale of 2,500 units

retailed at a price of $19.99 a unit amounting to $50,000 of net sales.

Year 2 - 2017

After extensive marketing and a successful year 1, our company will expand the

supply chain by purchasing semi-refined kombo butter directly from West Africa

suppliers. Through expanding our supply chain we look to mitigate the risk associated

with limited suppliers of our raw materials. Such risks include price gouging, natural

disaster interrupting our supply, shipping complications, government interference and

instability.

Our new source of semi-refined kombo butter will be transported overseas from

West Africa to ports in New York where it will then be shipped directly to our New

Jersey manufacturing facility. In addition to the expansion of our supplier base in year 2,

Kombo Komfort will be adding smaller and larger versions of its original 4-ounce

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product. This will not require any alterations to the original Kombo Komfort formula. At

this point, our product will be available to customers in three sizes for individual

convenience.

Year 3 - 2018

By year 3 of development, Kombo Komfort plans to have established firm

connections with a minimum of three suppliers. We will be working with ASNAPP sales

representatives in Africa to purchase our raw materials from multiple direct sources. We

will purchase our year’s supply of semi-refined kombo butter in bulk. If we were to

purchase smaller quantities of our raw materials frequently throughout the year we are

exposed to the risk of having our supply interrupted. By doing so we also greatly reduce

our shipping costs. Due to the inexpensive cost and long shelf life of our semi-refined

kombo butter, large purchases do not pose a risk to our company resulting from spoilage.

In year 3, Kombo Komfort will begin the manufacturing of its extra strength

product. To support the expansion of the product line, special equipment, personnel, raw

materials, and additional space within our processing facility will be required. Therefore,

our company will be seeking an investment of $100k for additional funding to support

this expansion as well gain access into additional distribution channels.

Years 4 & 5 - 2019 & 2020

In years 4 and 5, Kombo Komfort plans to secure itself as a major force in the all

natural, anti-inflammatory, and pain relief markets. By this stage, Kombo Komfort will

have developed an extensive network of raw material suppliers as well as nationwide

distributors to retailer our product. Our company expects to reach over $1 million in net

sales by the end of the second stage 2 and in stage 3, will potentially pursue a

transformation into a USDA Certified Organic Company.

Quality Control

At Kombo Komfort, we are determined to provide our customers with the highest

quality and the most effective products at an affordable price. We apply an extensive

system of quality control that functions as follows:

1) Initial raw material inspection - Upon receiving our shipments of semi-refined

kombo butter, the butter is first examined visually, then manually strained to

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ensure removal of contaminants. All plastic containers are visually examined as

well for imperfections prior to product packaging. All imperfections or instances

of contamination are immediately recorded and managed.

2) Post-packaging inspection - After meeting quality control requirements for

packaging, our kombo butter processed, packaged, and sealed. Prior to shipment,

each unit is individually inspected to ensure that there are no defects. Appointed

staff accomplishes inspection visually.

3) Facility/Equipment inspection - On a monthly basis, appointed staff will conduct

thorough inspections, as well as clean the entire facility and all equipment.

Customer Service

In addition to our strict quality control system, Kombo Komfort ensures customer

satisfaction by offering top-notch customer service. With our customer service system,

our goal is to provide extensive support for our current and future customers. Our

customer service includes support for our customers before, during, and after a purchase.

Kombo Komfort understands the importance of accessibility and therefore provides its

customers with multiple methods of communication. Our company can be contacted

during business hours via telephone, email, and live chat through our online website.

Inventory Control

All inventory will be stored and managed at the Kombo Komfort

manufacturing/processing facility in Lincoln Park, New Jersey. All final products will be

tracked and managed using a QR code identification system. Each item will have a

unique QR code that can be scanned via a hand held device for immediate access to

inventory counts. This assists in the monitoring of movement of inventory to and from

customers.

Facility

Kombo Komfort Inc. 6 Frassetto Way Lincoln Park, NJ 07035

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Physical Attributes

Kombo Komfort will operate out of a single manufacturing/processing facility in

New Jersey. Due to the minimal processing and space required for operations, we will

rent 1,000 SF of space in a 38,000 SF warehouse in Lincoln Park, New Jersey at a rate of

$6.80/SF/year28. This will result in a total facility rental cost of $6,800/year. As our

company grows and sales increase, we will add rental space as needed. As shown in our

financials, as production increases, we will incur higher costs for utilities, insurance, and

maintenance. Our facility is beautifully suited for Kombo Komfort as it is equipped with

plenty of office space as well as a single loading dock for convenient delivery of raw

materials and shipment of final product.

Access & Facility Operation

Kombo Komfort’s business hours will run from 9:00 AM to 5:00 PM Monday

through Friday. Our facility is located in close vicinity to nearby highways including

Route 23, I-80, I-287, and Route 46 making it widely accessible for movement of product

and materials to and from suppliers and customers.

Equipment

At Kombo Komfort, we manufacture all of our products in house using several

machines and processes. Listed below is the equipment used to manufacture Kombo

Komfort products along with brief descriptions of their associated uses.

28 http://www.loopnet.com/Listing/19096196/6-Frassetto-Way-Lincoln-Park-NJ

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Vertical Tube Evaporator -

As pictured above, a vertical tube evaporator will be used to extract our

key anti-inflammatory acids from our semi-refined kombo butter. This

process will then enable us to produce our extra-strength product.

High Speed Container Filler -

After processing either our Kombo Komfort Original or Extra-Strength

formulas, we will be using a container filler (pictured above) to precisely

fill our containers with product.

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High Speed Container Labeller -

Prior to filling, each one of our product containers will be sent through our

high-speed labeller. The labeler will apply our custom-designed Kombo

Komfort labels. This machine is able to apply labels to units at a rate of 30

units per minute.

Shipping

Our semi-refined kombo butter will be shipped by land and sea from several

suppliers to our manufacturing facility in New Jersey. All overseas shipping of raw

materials will be executed by AMID Logistics, LLC29. Specifically, AMID Logistics,

LLC. will be loading our raw material from ports in Ghana, Africa and transporting it to

ports in New York, NY. All land transport including shipping from our US supplier as

well as from NY ports to our manufacturing facility will be executed by the United States

Postal Service30. Due to the nature of our raw materials, our company does not require a

special permit for foreign import into the U.S.

29 http://www.amid-logistics.com/ 30 https://www.usps.com/

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USDA Organic

Following year 5 of development, Kombo Komfort will entertain plans to

transform into an organic company. There are several steps that would be taken to

accomplish this. First and foremost, our company would aim to secure a certified organic

supplier of unrefined Kombo butter in Africa. Once we have established a reliable source

of our raw organic material, we would proceed to convert our manufacturing/processing

facility in New Jersey to a certified organic establishment. At this time, we would also

ensure that our processing techniques, shipping, packaging, waste removal, etc. are

admissible by USDA Organic standards.

Following the physical transformation of our company, Kombo Komfort would

begin the process of obtaining an organic certification from the USDA. Specifically, we

would locate a USDA certifying agent and provide them with all of the required

application information and fees31. Kombo Komfort would be sure to abide by USDA

Organic standards on a yearly basis by executing annual inspections of facilities and

processes. This would streamline the USDA annual recertification process. The complete

process of converting our company to an organic product retailer would begin after

Kombo Komfort has firmly established itself in the all natural pain relief management

and homeopathic and herbal remedy market.

Personnel

Our company will maintain a highly-skilled and well-trained core group of

individuals to ensure smooth management of operations. Initially, the Kombo Komfort

team will be operated by the founders. As our company expands, the following positions

will be filled:

Accountant and Financial Advisor - will manage all finances within our

company

Sales Representatives - will address all incoming sales inquiries and manage

relationships with customers and distributors

31 http://www.ams.usda.gov/AMSv1.0/NOPFAQsHowCertified

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Lab Technician - will oversee the manufacturing and processing of our products

as well as maintain a safe laboratory environment

All Kombo Komfort employees will be responsible for adherence to their

individual employment schedules and responsibilities. Failure to comply with the above

mentioned conditions would result in termination of employment from the Kombo

Komfort team.

Inventory

As previously mentioned, all inventory including raw materials, supplies, and

finished product will be stored at our manufacturing and processing facility in Lincoln

Park, New Jersey. Due to the low cost of production of our product, we will purchase

enough inventory to produce the projected sales for the current year as well as carry

excess inventory. This will prevent concern regarding meeting demand if and when a

large order of our product is placed.

Suppliers

Our semi-refined kombo butter and packaging containers will be purchased in

bulk from the listed suppliers. Importantly, we have secured alternative suppliers for all

of our required materials in case we have issues with our primary suppliers. Although

current supplier prices are stable, these alternative suppliers will be useful if material

prices begin to fluctuate.

Suppliers:

Pelham Healthcare Limited Supplier Representative: Oliver Felstead

Established: 2012 Spearson Supplier Representative: George Morgan Dadzie

Location: Ghana Established: 1995 Response Products LLC. 44523 Rd 795 Broken Bow, NE 68822

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Phone: 308-872-6919 Packaging: Uline 12575 Uline Drive Pleasant Prairie, WI 53158 Phone: 1-800-295-5510 ASNAPP representatives: Ghana Juliana Asante-Dartey Country Director, ASNAPP Ghana (West Africa) T:+233-302-505617 F:+233-302-505617 Email: [email protected] Senegal Mr. Babou Diouf Country Director ASNAPP Senegal T:+221-8645-101 F:+221-8645-102 Email: [email protected]

Financials

Our company will operate for the first 2 years utilizing an investment of $45,000.

This investment will be evenly divided among the founding members producing an equal

distribution of equity. In year 3 of operations, Kombo Komfort will seek an investment of

$100,000 for a 25% stake in the company to support the expansion of the product line, as

well as expedite the formation of national distribution channels. The net present value of

the company at the end of year 2 is valued at $386,000 using a risk adjustment coefficient

of 30%. Kombo Komfort may seek an additional investment in year 5 to fund a potential

transformation to become USDA certified organic and gain additional resources provided

by an experienced investor.

Financial Assumptions

The following financial statements are a subjective projection of the revenues and

expenses Kombo Komfort will produce from operations. The resulting graphs and charts

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37


that include, but are not limited to, an income statement, balance sheet, and cash flow can

be located below. The projections were determined through a detailed market analysis

derived from public information from multiple relevant industries, government studies,

and comparable companies. These statements were not prepared for release to the public

and are not audited.

o We assume that we can operate as a cash-only business. We will operate as an

online-based business initially with all sales purchased via cash or credit card

payment. The payment periods of major credit cards are very minimal and we

believe we will receive our cash payments within a few days. Because of this, we

will have minimal accounts receivable.

o We can pay our operating expenses in full with cash on hand.

o We assume our tax rate to be 20% and remain constant in years to come.

o We assume that the global and U.S. economies will continue to show growth

without interruption.

Kombo Komfort will retain all earnings in years 1 and 2, and a majority of

earnings thereafter, however, we will also be paying dividends in years following year 2.

This conservation of cash is in preparation to pursue several available options. If our

sales are exceeding expectations, we will look to begin the transformation of our

company into a USDA organic certified organization. Alternatively, we can pursue the

further enhancement of our product through R&D, build our patent protection, or expand

into foreign markets and open new facilities.

Exit Strategy

We at Kombo Komfort will consider all acquisitions and merger offerings.

However, we plan to be acquired by approximately year 5 during our transformative

stages to a USDA certified organic organization. We would expect to be acquired by a

large nutriceutical company within the homeopathic and herbal remedy market.

According to our calculation using a risk coefficient of 30%, our company would be

valued at $2.3 million pre-USDA organic and have a higher evaluation after becoming

USDA organic certified.

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Figure 7. The figure pictured above, represents the results of our breakeven analysis. The breakeven point

is projected to occur between months 6 and 7 of year one.

0

2000

4000

6000

8000

10000

0 1 2 3 4 5 6 7 8 9 10 11 12

US Dollars

Month

Product Breakeven Analysis

Sales

Cost

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Income Statement

Income'StatementKombo'Komfort'Pro0Forma

Year%1 Year%2 Year%3 Year%4 Year%5Revenues

Online Sales 36,500$''''''' 240,000$''''''' 500,000$''''' 700,000$''''' 850,000$''''''' Tabling Sales 13,500$''''''' 18,000$''''''''' 25,000$''''''' 25,000$''''''' 25,000$''''''''' Small Distributor Sales -$''''''''''''' -$''''''''''''''' 75,000$''''''' 100,000$''''' 150,000$''''''' Large Disributor Sales -$''''''''''''' -$''''''''''''''' -$''''''''''''' 125,000$''''' 200,000$''''''' Product Waste Disposal -$''''''''''''' -$''''''''''''''' 1,080$''''''''' 1,485$''''''''' 2,160$''''''''''' Other Income -$''''''''''''' -$''''''''''''''' -$''''''''''''' -$''''''''''''' -$''''''''''''''' TOTAL REVENUES 50,000$''''''' 258,000$''''''' 601,080$''''' 951,485$''''' 1,227,160$'''

Expenses

Materials COGS -$''''''''''''' 20,775$''''''''' 64,101$''''''' 50,542$''''''' 70,779$'''''''''Salaries 1,500''''''''''' -''''''''''''''''' 68,240''''''''' 135,849''''''' 180,689'''''''''Utilities -''''''''''''''' 12,000''''''''''' 12,000''''''''' 24,000''''''''' 24,000''''''''''' Total Cost of Goods Sold 1,500$''''''''' 32,775$''''''''' 144,341$''''' 210,391$''''' 275,468$'''''''

Gross Profit 48,500$''''''' 225,225$''''''' 456,739$''''' 741,094$''''' 951,692$'''''''

Selling Expenses 13,600$''''''' 74,600$''''''''' 155,000$''''' 197,100$''''' 202,200$''''''' General and Administrative Expenses 27,600$''''''' 65,300$''''''''' 99,400$''''''' 99,800$''''''' 105,800$''''''' 5% Ghana Initiaive 2,500$''''''''' 12,900$''''''''' 30,054$''''''' 47,574$''''''' 61,358$''''''''' Total Operating Expenses 43,700$''''''' 152,800$''''''' 284,454$''''' 344,474$''''' 369,358$'''''''

Operating Income 4,800$''''''''' 72,425$''''''''' 172,285$''''' 396,620$''''' 582,334$'''''''

Other Expenses Interest Expense -$''''''''''''' -$''''''''''''''' -$''''''''''''' -$''''''''''''' -$'''''''''''''''

Pre-Tax Income 4,800$''''''''' 72,425$''''''''' 172,285$''''' 396,620$''''' 582,334$'''''''

Income Taxes (20%) 960$'''''''''''' 14,485$''''''''' 34,457$''''''' 79,324$''''''' 116,467$'''''''

NET Income 3,840$''''''''' 57,940$''''''''' 137,828$''''' 317,296$''''' 465,867$'''''''

Income'Tax'Rate 0.2 0.2 0.2 0.2 0.2Income'Tax 960$'''''''''''' 14,485$''''''''' 34,457$''''''' 79,324$''''''' 116,467$'''''''

Gross'Margin 48,500$''''''' 225,225$''''''' 456,739$''''' 741,094$''''' 951,692$'''''''Net'Operating'Profit 4,800$''''''''' 72,425$''''''''' 172,285$''''' 396,620$''''' 582,334$'''''''EBITA 5,760$''''''''' 86,910$''''''''' 206,742$''''' 475,944$''''' 698,801$'''''''Net'Profit 3,840$''''''''' 57,940$''''''''' 137,828$''''' 317,296$''''' 465,867$'''''''

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Balance Sheet

Balance'SheetKombo'KomfortBalance Sheet (pro forma) End of T0 T1 T2 T3 T4 T5TOTAL Assets $45,000 $87,308 $368,427 $719,968 $1,127,030 $1,623,504Current 45,000 87,308 368,427 719,968 1,127,030 1,623,504 CASH 35,037111 20,437111111 78,402111111 42,268111111111 86,332111111111 288,3351111111A/R 4111111111 50,000111111 258,0001111 601,0801111111 951,4851111111 1,227,1601111Inventory 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111

4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111Regular1Strength1Inventory 6,81311111 2,27111111111 6,92511111111 10,525111111111 13,188111111111 18,331111111111Extra1Strength1Inventory 4111111111 4111111111111 4111111111111 3,59511111111111 4,31811111111111 5,52411111111111

Total1Inventory 6,81311111 2,27111111111 6,92511111111 14,120111111111 17,506111111111 23,855111111111Prepaid1expenses 3,15011111 14,600111111 25,100111111 62,500111111111 54,200111111111 60,300111111111

Noncurrent Assets - - - - - - Leased1Plant,1Property,1and1Equipment 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111Depreciation 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111Net1PPE 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111Investments 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111Patents1/1IP 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111Goodwill

TOTAL Liabilities - 38,468 161,647 475,360 665,126 795,733 Salaries/Dividends - 38,468 161,647 475,360 665,126 795,733 A/P 4111111111 38,468111111 161,6471111 475,3601111111 665,1261111111 795,7331111111Bank1loan1payable 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111Accrued1liabilities 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111Estimated1tax1liability 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111Current1portion1of1LT1debt 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111

Noncurrent Liabilities - - - - - - Long4term1debt 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111Deferred1income1taxes 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111

TOTAL Equity 45,000 48,840 206,780 244,608 461,904 827,771

Common1stock 45,000111 45,000111111 45,000111111 45,000111111111 45,000111111111 45,000111111111Other1paid4in1capital 4111111111 4111111111111 100,0001111 4111111111111111 4111111111111111 4111111111111111Retained1earnings 4111111111 3,84011111111 57,940111111 137,8281111111 317,2961111111 465,8671111111Dividends (100,000)111111 (100,000)111111 (100,000)111111TOTAL Liabilities + Equity 45,000 87,308 368,427 719,968 1,127,030 1,623,504

BALANCE: Assets - (Liabilities + Equity) - - - - - -

Some indicatorsWorking1capital: 45,000$1 48,840$1111 206,780$1 244,608$11111 461,904$11111 827,771$11111Current1ratio: #DIV/0! 2.27 2.28 1.51 1.69 2.04Debt1ratio:1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Return1on1Equity: 0.00 0.09 0.40 0.95 2.19 3.21Return1on1Investment: 41 0.914111111111 1 0.291111111111 2.061111111111111 6.051111111111111 9.351111111111111Gross1Margin 0.00 0.97 0.87 0.76 0.78 0.78Profit1margin 4111111111 8% 22% 23% 33% 38%Collections1lag1(days) 4111111111 4111111111111 4111111111111 4111111111111111 4111111111111111 4111111111111111

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42


Statement of Cash Flows

Cash%Flow%Statem

entT3

T2T1

T0M1

M2

M3

M4

M5

M6

M7

M8

M9

M10

M11

M12

Year 1 TotalC

ash from O

perations N

et Earnings

-

- -

-

320

320320

320320

320320

320320

320320

3203,840

Depreciation

-

- -

-

-

- -

- -

- -

- -

- -

- 0

Am

ortization-

-

-

-

- -

- -

- -

- -

- -

- -

0 O

ther Non-cash C

harges-

-

-

-

- -

- -

- -

- -

- -

- -

0 C

hanges in Assets/Liabilities

-

68133150

99636731

67316731

67316731

67316731

67316731

67316731

673180,776

Cash P

rovided by Operations

06813

31509963

70517051

70517051

70517051

70517051

70517051

70517051

84,616

Cash from

Investing Loan C

osts-

-

-

-

- -

- -

- -

- -

- -

- -

0 P

urchases of Property &

Equipm

ent-

-

-

-

- -

- -

- -

- -

- -

- -

0 C

ash Used in Investing

00

00

00

00

00

00

00

00

0

Cash From

Financing A

DV

S(P

MTS

) on Revolver

-

- -

-

-

- -

- -

- -

- -

- -

- 0

Paym

ents on Long Term D

ebt-

-

-

-

- -

- -

- -

- -

- -

- -

0 P

ayments on D

ividends-

-

-

-

- -

- -

- -

- -

- -

- -

0 P

urchase of Treasury Stock

-

- -

-

-

- -

- -

- -

- -

- -

- 0

CapE

x Loan-

-

-

-

- -

- -

- -

- -

- -

- -

0 P

rogress Paym

ents on Lease-

-

-

-

- -

- -

- -

- -

- -

- -

0 A

ccr'd Int(Pm

ts) on Sub-D

ebt-

-

-

-

- -

- -

- -

- -

- -

- -

0 C

ash Provided by Financing

00

00

00

00

00

00

00

00

0

Change in C

ash0

68133150

99637051

70517051

70517051

70517051

70517051

70517051

705184,616

Kombo Komfort


43


Cash%Flow%Statem

ent

Cash from

Operations

Net Earnings

Depreciation

Amortization

Other N

on-cash Charges

Changes in Assets/Liabilities

Cash Provided by O

perations

Cash from

Investing Loan C

osts Purchases of Property & Equipm

ent C


Cash From

Financing AD

VS(PMTS) on R

evolver Paym

ents on Long Term D

ebt Paym

ents on Dividends

Purchase of Treasury Stock C

apEx Loan Progress Paym

ents on Lease Accr'd Int(Pm

ts) on Sub-Debt

Cash Provided by Financing

Change in C

ash

Year 2 Quarter 1

Year 2 Quarter 2

Year 2 Quarter 3

Year 2 Quarter 4

Year 2 TotalYear 3 Q

uarter 1Year 3 Q

uarter 2

14,48514,485

14,48514,485

57,94034,457

34,457-

-

-

-

0

-

-

-

-

-

-

0-

-

-

-

-

-

0

-

-

101,075101,075

101,075101,075

404,298166,314

166,314115,560

115,560115,560

115,560462,238

200,771200,771

-

-

-

-

0-

-

-

-

-

-

0

-

-

00

00

00

0

-

-

-

-

0-

-

-

-

-

-

0

-

-

-

-

-

-

0-

-

-

-

-

-

0

-

-

-

-

-

-

0-

-

-

-

-

-

0

-

-

-

-

-

-

0-

-

0

00

00

00

115,560115,560

115,560115,560

462,238200,771

200,771

Kombo Komfort


44


Cash%Flow%Statem

ent

Cash from

Operations

Net Earnings

Depreciation

Amortization

Other N

on-cash Charges

Changes in Assets/Liabilities

Cash Provided by O

perations

Cash from

Investing Loan C

osts Purchases of Property & Equipm

ent C


Cash From

Financing AD

VS(PMTS) on R

evolver Paym

ents on Long Term D

ebt Paym

ents on Dividends

Purchase of Treasury Stock C

apEx Loan Progress Paym

ents on Lease Accr'd Int(Pm

ts) on Sub-Debt

Cash Provided by Financing

Change in C

ash

Year 3 Quarter 3

Year 3 Quarter 4

Year 3 TotalYear 4 Total

Year 5 Total

34,45734,457

137,828317,296

465,867-

-

0

00

-

-

00

0-

-

0

00

166,314166,314

665,254596,828

627,081200,771

200,771803,082

914,1231,092,949

-

-

00

0-

0

00

00

00

00

-

-

00

0-

-

0

00

-

-

-100,000-100,000

-100,000-

-

0

00

-

-

00

0-

-

0

00

-

-

00

00

0-100,000

-100,000-100,000

200,771200,771

703,082814,123

992,949

Kombo Komfort


45


Management

Project Manager- Damon Giambrone

Damon’s primary responsibilities consist of analyzing the markets for our product

as well as overseeing the project. His knowledge of digital marketing has provided him

the skill set to understand and identify market trends. He has the ability to define target

customers for Kombo Komfort, which is especially true when it comes to the introduction

of a new product market. With knowledge of the nutraceutical and all natural supplement

industry, he can identify and define the specified markets for our product. Damon

possesses the ability to recognize the competitors in the marketplace, while defining

Kombo Komfort’s unique services as a company. Damon has previous experience

working at a start-up company, Wrightstown Health and Fitness. He is experienced in the

field of health and wellness with a background in athletic training and masters in human

anatomy and physiology. His athletic training background provides him with knowledge

in the area of injuries, injury prevention, and the inflammatory response to injury. His

leadership quality will be an asset to the Kombo Komfort team.

Marketing- Alvand Yarahmadi

Alvand is a Certified Strength and Conditioning Specialist and an active member

in the National Strength and Conditioning Association. Alvand has built a vast amount of

knowledge and an extensive social network in the bodybuilding community, culminating

from his several years of competitive experience. Furthermore, Alvand currently works

for one of the fastest growing exercise companies, Fitness & Wellness Plazas, with

known affiliates such as Robert Wood Johnson Hospital and the F&WP center in

Maywood with direct connections to the New York Giants of the National Football

League.

Alvand will contribute to the Kombo Komfort team through managing the

marketing strategies of the company. He is an influential figure in the bodybuilding

community with a well-established and extensive network in the health and wellness

industry, including ties to the NFL. Alvand plans on utilizing his networks to connect

with influential persons in the field of health and wellness. He is firmly committed grow

Kombo Komfort


46


Kombo Komfort’s recognition and brand name. With his networking capabilities and pull

in the community, he is an asset to our young developing company.

Operations- Ryan Boyd

Ryan has spent over a decade supervising fitness and sports camps. In addition to

his work in management, Ryan holds a personal interest in the human inflammatory

process. Specifically, he focuses on addressing inflammation using natural remedies. In

application, he has worked with hundreds of clients as a personal trainer while offering

specific anti-inflammatory diet and supplementation remedies.

At Kombo Komfort, Ryan will be responsible for the management of the

facilities, product development, and supply chain. Ryan has experience in the organic

healthcare industry, along with exposure to new product development and supply chain

management. He is a very goal driven and detail-oriented individual for management of

the facilities and he will make a great addition to the Kombo Butter team.

Finances- Christopher Wyckoff

Christopher has accumulated years of athletic experience competing at the

national level for Rutgers University’s Division I Track and Field program as a pole-

vaulter and team captain. He has committed his time and effort to focus his studies on

expanding his knowledge of exercise and nutrition to provide lifestyle interventions for

individuals to help improve their athletic performance, health, and increase their ability to

perform activities of daily life. Christopher’s goal is to treat existing injuries and also

provide preventative interventions to mitigate risk for injury and re-injury.

As a member of the Kombo Komfort team, Christopher will lead the financials.

His responsibilities will also include contributions to research and development to drive

innovation and ensure the continued growth of the company. He is a valuable member of

the team because of his competitive nature, along with his extensive knowledge of

physiology. Christopher’s tenacious determination and experience secure his vital role as

a member of the Kombo Komfort team.

Kombo Komfort


47


Kombo Komfort

Documents

Transcript of Kombo Komfort