Wolke_Business_Plan-Fall2013

Business Plan for Wolke released 12 December 2013
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TRADE SECRET AND CONFIDENTIAL Copyright ©2013 Wolke
Wolke
BUSINESS PLAN
2015 TO 2017
Introducing Wolke
Promoting the welfare of our consumers by giving them a healthier alternative
for a better life.
Wolke
Enjoy Life Again

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Table of Contents
1 Executive Summary ........................................................................................................... 4
1.1 Our Company .............................................................................................................. 4
1.2 Our Product.................................................................................................................. 4
1.3 Corporate Strategy....................................................................................................... 4
1.4 Financial Projections ................................................................................................... 5
2 Current Situation ................................................................................................................ 5
2.1 Basic Corporate Data................................................................................................... 5
2.2 Vision........................................................................................................................... 5
2.3 Mission Statement ....................................................................................................... 5
2.4 Company Values.......................................................................................................... 5
2.5 Brief History and Current Status ................................................................................. 6
2.6 Projected Financial Data.............................................................................................. 6
2.7 Organization and Management.................................................................................... 6
2.8 Organization Chart ...................................................................................................... 6
2.9 Infrastructure ............................................................................................................... 7
2.10 Products.................................................................................................................... 7
2.11 Core Competencies .................................................................................................. 8
3 Market and Competitive Analysis...................................................................................... 8
3.1 Industry........................................................................................................................ 8
3.2 Our Market .................................................................................................................. 8
3.3 Territory....................................................................................................................... 9
3.4 Competitors ................................................................................................................. 9
3.4.1 Snoke.................................................................................................................... 9
3.4.2 XEO.................................................................................................................... 10
3.4.3 Hookahs and Other Electronic Cigarettes .......................................................... 11
3.5 Competitive Profile Matrix........................................................................................ 11
3.6 External Factor Evaluation ........................................................................................ 12
3.7 Internal Factor Evaluation ......................................................................................... 13
3.8 Internal External Matrix ............................................................................................ 14
3.9 Competitive Advantages............................................................................................ 14
4 Strategy and Operating Plan............................................................................................. 15

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4.1 Overview ................................................................................................................... 15
4.2 Adaptive Strategy ...................................................................................................... 15
4.2.1 Strategies based upon Strengths and Opportunities ........................................... 15
4.2.2 Strategies based upon Strengths and Threats ..................................................... 15
4.2.3 Strategies based upon Weaknesses and Opportunities....................................... 16
4.2.4 Strategies based upon Weaknesses and Threats................................................. 16
4.3 Objectives .................................................................................................................. 16
4.4 Operating Plan ........................................................................................................... 16
4.4.1 Structure & Staff Responsibility ........................................................................ 16
4.4.2 Service Offering ................................................................................................. 17
4.4.3 Pre Launch Activities......................................................................................... 18
4.5 Marketing and Sales .................................................................................................. 18
4.5.1 Market Objectives .............................................................................................. 18
4.5.2 Key Message ...................................................................................................... 19
4.5.3 Focus Customer Groups/Health Professionals................................................... 19
4.5.4 Pre Launch Activities......................................................................................... 19
4.5.5 Budgeting ........................................................................................................... 20
5 Sales Forecast................................................................................................................... 21
5.1 Introduction ............................................................................................................... 21
5.2 Sales Volume............................................................................................................. 21
5.3 Pricing Structures ...................................................................................................... 21
6 Financial Analysis............................................................................................................ 21
6.1 Introduction ............................................................................................................... 21
6.2 Break Even Analysis ................................................................................................. 21
6.2.1 Critical Success Factors ..................................................................................... 22
6.3 Balance Sheet ............................................................................................................ 23
6.4 Cash Flows ................................................................................................................ 24
7 Conclusion........................................................................................................................ 25
8 Appendix .......................................................................................................................... 26
8.1 Operating Costs - 2015.............................................................................................. 26
8.2 Operating Costs – 2016 ............................................................................................. 27
8.3 Operating Costs – 2017 ............................................................................................. 28
8.4 Income Statement ...................................................................................................... 30
8.5 Germany .................................................................................................................... 30
8.6 The Vending Machine ............................................................................................... 31

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1 Executive Summary
Wolke is seeking funding of 250,000 Euro. The amount requested will be dispersed in two
installments:
∙ An installment of 200,000 Euro will be dispersed during the first year of business.
∙ A second installment of 50,000 Euro will be dispersed during the second year of business.
In order to receive this second installment, the company must reach its milestone of
acquiring and maintaining a sales goal of 3200 products.
This amount is needed so that we may further develop our product offering, expand our
operations, and generate net profits of 135,000 Euro by the end of year 2017.
1.1 Our Company
Wolke is a limited corporation whose office is located in Hexenberg, Germany. The company
will open for business in January, 2015 with an initial investment of 370,000 Euro. Wolke’s
founders, Liana Allen, Antoiba Fuller, Bruce Guzman, Nancy Peacock, Gonzalo Ramos, and
Charlene Thomas bring over 3 years of business experience and research in the market of
electronic cigarettes as a viable alternative to smoking.
1.2 Our Product
Since their creation, electronic vapor cigarettes have burst into market and are still gaining
popularity. Germany has one of the highest, if not the highest, cigarette smoking rates in
Europe. As time passes cigarettes will only become more expensive, less convenient, and not
to mention health hindering; this has and will continue to provide a favorable market for the
electronic cigarette industry. Electronic cigarettes will continue to gain support and more
consumers. They save big money and help to live a healthier lifestyle. Wolke will join in this
growing sector.
Wolke will provide electronic cigarette vending machines in the Frankfurt, Germany area.
We will be targeting social hot spots and high-traffic areas, such as bars and train stations.
We offer a healthy alternative to the smoking community.
Wolke’s competitive advantage is its ability to deliver superior products to its customers at a
competitive price. We provide convenient access to a product that is considerably new to the
market and will increase in desirability in the next 5 years.
1.3 Corporate Strategy
Wolke’s strategy is straight forward and can be defined as follows:
∙ All business activities will begin in Hexenberg and urban Frankfurt, Germany
∙ Our business facilities will be located in Hexenberg, Germany
∙ We will locate the 30 high-traffic areas and social hot spots in the urban Frankfurt area
and place our touch screen electronic cigarette machines there.
∙ Create a partnership with the following business segments:
⇒ Transited commute areas
⇒ Bars, clubs and social gathering hot spots around the city
⇒ Target individuals & help them conquer their battle against smoking.
∙ Educate these businesses on what the expectations are for our product being offered in
their premises.

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∙ Provide 24/7 maintenance to our machines.
∙ Employ well trained staff and when possible provide internship employment to students.
This will reduce the cost of staff and will benefit the interns as well.
∙ Establish partnerships with health and wellness companies to promote our product.
∙ Obtain a solid customer base within the first year.
∙ Increase the customer base by 80% during the second year of business
∙ Increase, the customer base by 90% during the third year of business
∙ In year three expand operations to other cities within Frankfurt
1.4 Financial Projections
Net profit is projected to be -268,059 Euro in the first year of business. A positive cash flow
is expected by September, 2016 when we anticipate the sale of 3200 units of product.
2 Current Situation
2.1 Basic Corporate Data
Name of Company: Wolke
Status: Limited Corporation
Founded in Hexenberg, Germany on
December, 2013
Initial Investment: 250,000 Euro
Initial Capital: 120,000 Euro
Executives: Six founders
Head Office: 18059 Hexenberg, Germany
2.2 Vision
Wolke is committed to becoming Germany’s leading provider of electronic vapor cigarettes
and vapor liquids.
2.3 Mission Statement
Wolke’s mission is to provide Germany with a safe and healthy alternative on their journey to
becoming tobacco free by:
Offering 24 hour access to product
Using quality ingredients
Providing the product in convenient locations
2.4 Company Values
Wolke values: The customer's well-being is our top priority. We want our customers to have
the freedom of using our product in every environment without the feeling of guilt and
harming their health and others.
Honesty
Integrity
Respect
Compassion
Diligence

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2.5 Brief History and Current Status
The founders of Wolke are establishing this business after doing extensive research on the
health dangers of smoking. Therefore, finding a healthier alternative, we chose to use a
convenient devise that is handy to all people of Frankfurt. Even though the people of
Frankfurt and the urban area of Frankfurt have access to electronic cigarettes, we will be able
to obtain a sizeable amount of this market due to our around the clock and convenience
factors. We will be placing them in high traffic areas such as: train stations and busy streets
and squares. We will also have 24/7 tech workers, truck drivers and delivery men to display
the products. Also, we will have interns helping with marketing and public relations, and a
lawyer for Wolke on call.
2.6 Projected Financial Data
All financial data is provided in detail beginning on page 20.
2.7 Organization and Management
Wolke’s management team is comprised of six highly skilled professionals managing and
operating the brand. Together we have experience of 25 years in business.
2.8 Organization Chart
Operations
Nancy Peacock is CEO, COO, and the head of the IT Department for Wolke. She has
worked for fifteen years in operations and is excellent in computer skills. Her primary
responsibility is to oversee our IT operations. Nancy also installs and maintains computer
hardware, software, and networks. She develops and implements policies and procedures for
our electronic data processing. This experience will be especially beneficial to Wolke.
Sales and Marketing
Bruce Guzman is our Sales and Marketing Director. He has over five years of experience
working with international telephone companies. Bruce has a very successful sales record. He
implements marketing strategies, identifies marketing strategies, establishes and adjusts our
sale prices, and analyzes competitor’s sales prices. Bruce’s strong ability to be a team builder
and long experience of success in sales will be important for Wolke’s success.

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Finance
Gonzalo Ramos is our Finance Director. He has over three years of experience in the finance
department. He monitors and interprets our cash flow and predicts future trends. He
summarizes our current financial status as well. Gonzalo’s contribution to Wolke is extremely
beneficial to the company.
International Liaison
Liana Allen is a well-travelled expert in International affairs. She establishes and maintains
amicable working relationships with local businesses. She also understands the cultural
climate and trains employees of appropriate conduct.
Human Resources
Antoiba Fuller is our Human Resources Director. She has over five years of experience in the
human resource field. She is adept at interpersonal communications. She ensures that the
company is properly staffed and trained, she establishes recruiting and interviewing programs,
and negotiates benefits (salary, health care, etc.)
Administration
Charlene Thomas is our Administrative Director. She oversees our administrative demands
and is a highly trained professional.
2.9 Infrastructure
Wolke will use a warehouse stationed in Hexenberg, Germany for the product and offices.
The offices will be used for our core employees such as the CEO, financial director, etc. The
rent for our building is 3500 a month and has bathrooms, a conference room, and a lunch
room with our own Wolke vending machine.
Our employees will spend 95% our time in the offices except when our vending machines
launch. We will go as a company to make sure everything is laid out exactly the way we had
planned. Otherwise, our work will be done in the offices. The truck drivers and maintenance
men will be out on the job stocking our product and making deliveries.
2.10 Products
Wolke will provide a healthy alternative to a normal cigarette. We will provide disposable,
eco-friendly, electronic cigarettes in vending machines.
Our product is divided into four main categories
● High level of nicotine, 300 puffs
● Medium level of nicotine, 300 puffs
● High level of nicotine, 500 puffs
● Medium level of nicotine, 500 puffs
The electronic cigarette will initially be available in Frankfurt, Germany. Using competitive
pricing and quality ingredients, our brand will be the best of the best.

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2.11 Core Competencies
Wolke’s competitive advantage is the value of our brand and its price compared to the
competitors in Frankfurt. The strongest value is our compassion for the product and our
customers. We want the best for our customers and want them to live a healthier life because
of our product. As a result, we will provide the following:
∙ A wide range of vending machines
∙ Convenience in high traffic areas
∙ Services available 24/7
∙ Quality ingredients
∙ Competitive pricing strategies
Wolke’s Value Chain
3 Market and Competitive Analysis
3.1 Industry
Wolke is part of the electronic vapor cigarette industry. This is a relatively new industry in
the world and Germany. Despite being a new emerging market, there are many competitors
already.
3.2 Our Market
The market for electronic vapor cigarettes is divided into 8 segments:
∙ Young Adult Smokers (Ages 18-25)
∙ Adult (1) Smokers (Ages 25-35)
∙ Adult (2) Smokers (Ages 35-55)
∙ Elderly Smokers (Ages 55+)
∙ Young Adult Social Smokers (Ages 18-25)
∙ Adult (1) Social Smokers (Ages 25-35)
∙ Adult (2) Social Smokers (Ages 35-55)
∙ Elderly Social Smokers (Ages 55+)
Wolke’s primary target is (all) smokers and those who are striving to lead a healthier lifestyle;
this segment will account for at least 95% of our total business. Our secondary target is (all)
non-smokers who occasionally smoke or socially smoke, and those who partake in smoking
from a hookah.

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Market Segmentation
Young Adult
Population
(18-25 Years Old)
Adult (1)
Population
(25-35 Years Old)
Adult (2)
Population
(35-55 Years Old)
Elderly
Population
(55+ Years Old)
Smokers Wolke
-All
Brands/Kinds-
Snoke
Wolke
-All
Brands/Kinds-
Snoke
Wolke
-All
Brands/Kinds-
Snoke
Wolke
-All
Brands/Kinds-
Snoke
Social
Smokers
All Sheesha
Vapor Cigarettes
Wolke
All Sheesha
Vapor Cigarettes
Wolke
All Sheesha
Vapor Cigarettes
All Sheesha
Vapor Cigarettes
3.3 Territory
Wolke will be based in Hexenberg, Germany; however our vending machines will be placed
in Frankfurt, Germany and its urban area. The city of Frankfurt has a population of 691,518,
while its urban area has a population of 2,517,561 inhabitants. We will expand our business
to other major cities in Germany after operating for 3 years.
3.4 Competitors
Wolke’s major competitors in Germany are Snoke and XEO. These two organizations
account for 30+% of the market share.
Company Customers Market Share %
Snoke 361,270 41
XEO 132,172 15
Other Misc. Competitors 387,704 44
Total 881,146 100
3.4.1 Snoke
Snoke is Wolke’s top major competitor. Their products are available online and in stores.
They also provide reusable electronic cigarettes and flavored liquids.

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Here are some brief facts about Snoke:
∙ Native German Company
∙ Products are manufactured in Bonn-Beuel, Germany and known for their quality
∙ Sold online and in stores through-out Germany
∙ Established in 2009 by a leading German doctor of nuclear medicine and specialist for
oncology diagnostics
∙ Offer 3 different flavors for their disposable electronic cigarettes with or without nicotine
∙ Other products include: a reusable electronic cigarette, 17 flavored liquids with nicotine,
6 flavored liquids without nicotine.
∙ A German pharmaceutical lab and a German pharmacy process the certified and listed
ingredients and flavours in observance of the standards ISO 9001:2000 and GMP2000
Strengths Weaknesses
Manufactured in Germany -known for quality Must buy in store or online
German company- knows their market well Limited amount of services provided
Product Recognition Not available 24/7
Consumer Confidence
3.4.2 XEO
XEO is Wolke’s second competitor. XEO offers their products online and in-stores. They
also offer reusable electronic cigarettes and flavored liquids.
Here are some brief facts about XEO:
∙ English company with its head office located in Berlin, Germany
∙ In 2012 they started their own electronic cigarette production line in Suzhou, China
∙ The interdisciplinary team under the leadership of the German engineer Dipl.-Ing. Fritz
B.R. Feike is responsible for the development of the products since 2009
∙ Entered into an International market in 2013, offering their product in Europe, USA and
Asia
Strengths Weaknesses
German based company
(English company)
Made in China
Available in
stores and online
Germany is not
specifically targeted
Have their own
production line

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3.4.3 Hookahs and Other Electronic Cigarettes
While hookahs account for 2% of the market share, Wolke considers them more of a
situational and circumstantial product than a competitor. Electronic cigarettes that are not
disposable account for 60% of the market share. Disposable electronic cigarettes account for
38% of the market share. Snoke and XEO do not have any vendors selling their product
around the clock, besides online; Wolke sees this as the area where we have the biggest
competitive advantage.
3.5 Competitive Profile Matrix
Wolke chooses the following areas in which to be competitive:
∙ Distribution of services
∙ Financial position/profitability
∙ Operating costs
∙ Price
∙ Service
∙ Customer satisfaction
∙ Commitment to community
∙ Market share
∙ Advertising
Competitive Profile Matrix (CPM)
4 Major Strength
3 Minor Strength
2 Minor Weakness
1 Major Weakness
We have listed how important each of these areas is to our business along with our strengths
and weaknesses. We have also listed the strengths and weaknesses of our competitors in each
of these areas.
Competitive Profile
Matrix Wolke Snoke XEO
Weight Rating Score Rating Score Rating Score
Distribution of Products 0.15 4 0.60 3 0.45 3 0.45
Product Availability 0.10 4 0.40 3 0.30 3 0.30
Financial Position
(Profitability) 0.10 3 0.30 3 0.30 3 0.30

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Operating Costs 0.10 2 0.20 2 0.20 2 0.20
Price 0.15 3 0.45 3 0.45 2 0.30
Product 0.15 3 0.45 4 0.60 2 0.30
Commitment to Society
and
Environment 0.10 3 0.30 3 0.30 2 0.20
Advertising 0.10 4 0.40 2 0.20 2 0.20
Market Share 0.05 1 0.05 4 0.20 2 0.10
Customer Satisfaction 0.10 3 0.30 4 0.40 3 0.30
Total 1.00 3.45 3.40 2.65
3.6 External Factor Evaluation
Wolke has taken into consideration the external factors that could positively or negatively
impact our business. We have listed these factors below, the degree to which it could affect
our business, and our ability to respond to them.
External Factor Evaluation (EFE)
4 The Response is Superior
3 The Response is Above Average
2 The Response is Average
1 The Response is Poor
Key External Factors Weight Rating Weighted Score
Opportunities
Smokers account for 30+% of population 0.20 4.00 0.80
New Market 0.15 4.00 0.60
Consumer Confidence 0.10 3.00 0.30
Increasing Health Consciousness 0.15 4.00 0.60
Threats

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Competition 0.15 2.00 0.30
Taxation 0.10 2.00 0.20
Legal & Environmental Regulations 0.10 2.00 0.20
24 Hour Corner Shops 0.05 2.00 0.10
Total 1.00 3.10
3.7 Internal Factor Evaluation
Wolke has identified those areas that will be the most important functional areas of business
for us. Below we have listed the importance of each of these areas and our strengths and
weaknesses in each of these areas.
Internal Factor Evaluation (IFE)
4 Major Strength
3 Minor Strength
2 Minor Weakness
1 Major Weakness
Internal Factors Evaluation Weight Rating Weighted
Score
Internal Strengths
International Experience 0.05 3.00 0.15
Aggressive Marketing Campaigns 0.10 3.00 0.30
Customer Service 0.10 2.00 0.20
Ease/Accessibility for consumer to purchase
product
0.10 4.00 0.40
Exclusive Access to unmet Market Need 0.10 3.00 0.30
Human Resources Experience 0.05 2.00 0.10
Social Media/Network Expert 0.05 2.00 0.10
Internal Weaknesses
Initial Price of Product 0.10 2.00 0.20

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Product Recognition 0.10 3.00 0.30
Most Staff Inexperienced 0.10 3.00 0.30
Staff Personal Knowledge of Product 0.10 2.00 0.20
Reliability of Outsourced Services/Product 0.05 2.00 0.10
Total 1.00 2.65
3.8 Internal External Matrix
Wolke’s major threat will be competition. Other concern-able threats are potential
regulations and a ban on electronic cigarettes in public spaces. Operation costs will have to
be closely monitored but entering into the German market at this time is a profitable task. As
long as we hold and maintain, as the Internal-External Matrix shows us, we will be in
business to snatch a considerable chunk(share) of our market.
3.9 Competitive Advantages
There are three areas in which Wolke has the competitive advantage. They are: product
accessibility, pricing and advertising.
Product Distribution
Wolke will strategically place their touch screen vending machines in highly trafficked areas
and social hot spots for easy access. Consumers will be able to purchase our products around
the clock. Our services will be available to our customers 24 hours a day, seven days a week.

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Advertising
Our touch screen vending machines will display our logo on all sides and due to the locations
of Wolke’s vending machines, we will have maximum curb appeal; the vending machines on
their own will attract many consumers and potential loyal customers.
Standardized & Competitive Pricing Structure
Because our products are offered via vending machines that are always available, we are able
to offer convenience and competitive pricing in Germany.
4 Strategy and Operating Plan
4.1 Overview
Based upon the market analysis done in section three of this business plan, Wolke can be
most competitive by providing easily accessible disposable products in heavily populated
areas of the city. As business grows, we will expand our business to other major cities in
Germany after the third year of business.
Our clear competitive advantage is offering a healthy alternative to smoking to our customers
and delivering quality products at any time of the day at competitive pricing.
4.2 Adaptive Strategy
We have developed four sets of strategies based upon our SWOT analysis. These strategies
are as follows:
1. Strategies based upon Strengths and Opportunities
2. Strategies based upon Strengths and Threats
3. Strategies based upon Weaknesses and Opportunities
4. Strategies based upon Weaknesses and Threats
4.2.1 Strategies based upon Strengths and Opportunities
Wolke’s main strengths are the wide range of experience that each of our members offer to
the company and the social media expertise that would help us increased consumers. The two
major opportunities for Wolke are the health consciousness that our product can offer to the
consumers; which can turn into a lifestyle change to the customers. Based upon these factors,
our strategy will be as follows:
∙ Use international experience to enter the German market.
∙ Use social media to educate potential consumers in our product
∙ Promote health consciousness and lifestyle change.
∙
4.2.2 Strategies based upon Strengths and Threats
The major threat to Wolke is the environmental regulations and protection that the EU
countries can banned some our products. The possible barriers. Another threat is the taxation
system in Germany so we have to careful to stay away from legal problem. Based upon these
factors, our strategy will be as follows:
∙ Marketing campaigns promoting our product as pro-life
∙ Hire a domestic accountant that can prevent us from violating taxation laws

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4.2.3 Strategies based upon Weaknesses and Opportunities
The major weaknesses Wolke is that all of our members are young entrepreneurs that lack
experience in starting a business, which can put us in disadvantage with our competitors.
Another weakness is that the electronic cigarette is a new market in Germany and we have not
decided on the launch price. Based upon these factors, our strategy will be as follows:
∙ Research our opportunities with consultants before making a decision.
∙ Watch the competition price to help us create a fair price.
4.2.4 Strategies based upon Weaknesses and Threats
The strategies developed based upon our weaknesses and threats are the most crucial. The
single greatest threat to Wolke is the barrier to entering the market. Consequently the single
greatest weakness for Wolke is the ability to keep overhead costs low while we expand our
business. Our strategies to overcome these problems are:
∙ Determine entry barriers and how to overcome them
∙ Develop strategies to keep overhead low while building customer base
∙ Use competitors as benchmark and remain competitively priced
4.3 Objectives
The objectives we would like to accomplish as a result of these strategies are as follows:
∙ Establish rapport with area businesses in Frankfurt and the surrounding areas to get
permission to install vending machines on their premises
∙ Establish partnerships with local celebrities (such as David Hasselhoff) to endorse our
product
∙ Purchase 30 vending machines for the initial launch
∙ Increase the customer base by 80% during the second year of business
∙ Increase the customer base by 90% during the third year of business
∙ In year three expand operations to other major cities in Germany
4.4 Operating Plan
This section of the business plan will explain how Wolke is structured, our staff responsibly
and pre-launch activities.
In an effort to stay abreast of market trends and remain competitive in the field, our Executive
staff will meet quarterly to discuss new ideas and developments. This will enable us to make
any necessary staffing adjustments and revise our marketing/sales plan.
4.4.1 Structure & Staff Responsibility
Wolke is headquartered in Hexenberg, Germany. Our vending machines will initially be
stationed in Frankfurt. Our management staff consists of the following individuals:
Nancy Peacock - Excellent in computer skills, Ms. Peacock oversees our IT operations.
installs and maintains computer hardware, software and networks
develops and implements policies and procedures for electronic data processing

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Liana Allen - Well travelled, expert in International affairs. Ms. Allen is our International
liaison.
establishes and maintains amicable working relationships with local businesses
understands cultural climate and trains employees of appropriate conduct
Shipping & Receivng
verifies accuracy of shipments
distributes shipments to drivers
Gonzalo Ramos - Experienced finance officer, Mr. Ramos is our CFO.
monitors and interprets cash flows and predicts future trends
summarizes current financial status
Charlene Thomas - Highly trained professional, Ms. Thomas oversees our administrative
demands.
maintains procedure manuals
coordinates work flow
composes correspondence/reports
Bruce Guzman - Mr. Guzman has a very successful sales record. He is Head of Sales and
Marketing.
implements marketing strategies
identifies target audience
establishes and adjusts sales prices
analyzes competitors and market trends
Antoibe Fuller - Adept at interpersonal communications, Ms Fuller is our Human Resources
manager.
trains managers to coach employees
establishes recruiting and interviewing program
negotiates benefits (salary, health care, etc.)
We will need to hire the following additional employees:
Marketing and Sales Assistant Manager
(Assistant) Accounting Manager
Shipping and Receiving Manager
1 or 2 Drivers /Vending Machine Stockers
3 Interns
On-call Lawyer
Currently, German law is very lenient on smoking regulations. Our vending machine sales
should be relatively unaffected by regulations. The European Union has ruled very favorably
for vaporized cigarettes.
4.4.2 Service Offering
Wolke will initially purchase 30 vending machines stocked with disposable electronic
cigarettes. We will place these machines in public locations in and around the Frankfurt,
Germany area. The vending machines we purchase contain the software necessary to
maintain stock. When the stock is low, it will notify us and we will order additional product.
When the product is delivered to our offices, the shipping and receiving employees will
organize and distribute the supplies to the drivers. The drivers will take the supplies to the
machines and stock them.

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4.4.3 Pre Launch Activities
Wolke will launch its business in January, 2015. Pre-launch activities will begin as early as
June, 2014. The pre-launch activities are as follows:
∙ Establishing alliances with local businesses
∙ Setting up our offices for business
∙ Securing our suppliers
∙ Acquiring the vending machines
∙ Hiring personnel
Break Even Analysis
Time 2015 2016 2017
Product 1800 3200 3000
Revenue 198,000 444,000 577,500
Costs 466,059 394,552 442,691
4.5 Marketing and Sales
This section of the business plan will explain our marketing strategy, communications plan,
and launch activities.
The marketing communications plan details an aggressive campaign for Wolke’s services
with the aim of taking significant market share from our competitors and acquiring new
customers.
4.5.1 Market Objectives
Wolke‘s marketing objectives in launching our services are as follows:
∙ Attract new consumers in our product
∙ Take Market Share from competitors
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1800 3200 3000
Amount
Product
Break Even Analysis
Revenue
Costs
September 2016

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4.5.2 Key Message
The key message used throughout our campaign is as follows:
∙ Our product is pro-life
∙ We are at your service 24 hours a day, 7 days a week
∙ Our machines are convenient for any users
∙ We offer different flavors to fit consumers needs and desires
4.5.3 Focus Customer Groups/Health Professionals
Marketing activities will focus on targeting new consumers and the consumers who want to
make a transition from regular cigarettes to electronic cigarettes . Places where we will be
marketing:
∙ Music events
∙ World Tobacco Conference
∙ Public places (parks, cafe, bars)
∙ Soccer games
∙ Pro-life event
4.5.3.1 Private Individuals
The following marketing materials will be used for private individuals:
∙ Exhibitions
∙ Social Media
∙ Surveys
∙ Fliers
∙ Restaurants/clubs
4.5.4 Pre Launch Activities
Wolke’s plans to launch its new services in January, 2015. Launching in January gives us a
chance to educate and inform customers about our product by using the winter season as a
strategy
COMMUNICATIONS
TIMELINE
Pre Launch Activities
June, 2014 Create marketing materials:
Drafting, editing and preparation of brochures, fliers,
and posters
July, 2014 Create web sites, and social media pages
July, 2014 Have an email list for potential investors
August, 2014 Set up meetings with potential investors
June – October 2014 Visit bars and restaurants:

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Leave posters and fliers
Schedule meetings to educate the business owners
about our manchines
September, 2014 First sample hand out
October, 2014 Radio advertisement
October – 2014 Hand out second round of samples
November, 2014 Create a Survey for consumers
November, 2014 Have a local news paper write an article about our
product
November, 2014 Follow up on the survey
December, 2014 Host a pre-launching holiday party for business
owners and future consumers.
December, 2014 Host an special event for business owners
January, 2015 Conference and announcement of Wolke’s launch
4.5.5 Budgeting
The key to our success will be a very aggressive marketing campaign which will require a
significant investment. To meet this need, we have allocated 40,000 euros for marketing
expenses.
Activity Cost
(Euro)
Amounts Shown in Thousand
Literature Preparation:
Drafting, editing and preparation of fliers & posters – Qty 5000 8
Total 8
Preparation of website 5
Web Hosting 1.2
Holiday Party 9
Press release and conference at company HQ 12
Grand Total 35.2
Marketing Communications Launch Budget 40
Under Budget 4.8

21
5 Sales Forecast
5.1 Introduction
The products and services that Wolke offers to customers allows them to continue to consume
a product they already enjoy and lead them to a much healthier lifestyle.
5.2 Sales Volume
The sales volume that we need in order to enter the market will slowly increase. Using media
marketing resources we will reach a great number of consumers. Our research shows that the
competitors who are already established in the area do not present any new competitive
features. Consumers seem to be unaware of what company is the one providing the product
since they all seem to be very much a-like.
Our target is to acquire at least sixty percent of customers within the first year, eighty within
the next and eventually be the lead brand in Germany with the largest consumer base.
5.3 Pricing Structures
Wolke offers the following products:
Disposable e-cigs containing;
-High level of nicotine, 300 puffs
-Medium level of nicotine, 300 puffs
-High level of nicotine, 500 puffs
-Medium level of nicotine, 500 puffs
On average consumers spend a large amount on cigarettes, we will have competitive pricing
that will not only be attractive to their pocket but will also make the product last twice as long
providing them with twice the benefit of current competitors.
6 Financial Analysis
6.1 Introduction
While reviewing the following pages,Wolke will present to you how in a short period of time
we can become a very profitable business and show the return of our Investors. Our
aggressive marketing style will lead to our increase in sale. Due to us providing two products
that will better improve the nature of our customers health and lifestyle; Wolke believes that
will directly affect our Sales and reach our goals.
6.2 Break Even Analysis
As you can see in the chart below Wolke expects to break even in September 2016. In 2016,
during our high sales period of 3200 units per Vending Machine Wolke is foreseeing a total
Revenue of 444,000 Euro.

22
Break Even Analysis
Time 2015 2016 2017
Product 1800 3200 3000
Revenue 198,000 444,000 577,500
Costs 466,059 394,552 442,691
6.2.1 Critical Success Factors
Only through keeping our Operation Cost constant, Continued Marketing, and High sales
rates will Wolke effectively reach our break-even point 2016
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1800 3200 3000
Amount
Product
Break Even Analysis
Revenue
Costs
September 2016

23
6.3 Balance Sheet
Balance Sheet
2015 2016 2017
ASSETS
Cash and cash equivalents 41,780 32,760 180,240
Accounts receivable 27,000 48,000 45,000
Prepaid expenses 675 675 675
Inventory 200 200 200
Total current assets 69,655 81,635 226,115
Office furniture and equipment 7,696 6,394 4,854
Computer equipment 10,333 7,111 3,667
Vending Machine 76,000 45,600 38,000
Total fixed assets 94,029 59,105 46,521
TOTAL ASSETS 163,684 140,740 272,636
LIABILITIES AND
SHAREHOLDERS EQUITY
Accounts payable 2,150 2,150 2,150
Provisions and reserves
Total current liabilities 2,150 2,150 2,150
Long-term debt
Long-term provisions
Total long-term liabilities 0 0 0
Share capital 320,000 370,000 370,000
Retained earnings(Deficit) -158,466 -231,410 -99,514
Total equity 161,534 138,590 270,486
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY 163,684 140,740 272,636
The financial outlook of the next three years is shown in the Balance Sheet. As you might see
we have no long term liabilities. Wolke believes by buying our Vending Machines we can see
a faster return to our Investors. However as we grow and expand we will possibly need to.
Wolke’s current assets increases every year. Mainly due to a higher cash flow /revenue Wolke
generates every year. Wolke wants to stay as constant low with our current Liabilities. We
believe this is the way to achieve a lower risk of failure and a higher rate of success

24
6.4 Cash Flows
In our startup year our operating expenses are high; however by the end of the second year
Wolke sees a positive cash flow from the initial financial dip in year one. Our Cash flow in
year two comes from our Sales, which we will see from the continual aggressive marketing
strategies that have been put in place at the beginning of 2016 and the rest of the year.
By our third year we will no longer need external financial help and are expected to be
financially stable. With this Wolke will start plans for expansion in year 2018.
CASH FLOWS
2015 2016 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net result of the year (251,220) 88,980 192,480
Changes in working capital
Depreciation and amortization 19,839 12,532 9,671
Accounts receivable (27,000) (48,000) (45,000)
Prepaid expenses 675 675 675
Inventory 200 200 200
Accounts payable 2,150 2,150 2,150
Unearned revenue
Provisions and reserves
Total changes in working capital (4,136) (32,443) (32,304)
Net cash flow from operating activities (255,356) 56,537 160,176
CASH FLOW FROM INVESTMENT ACTIVITIES
Purchases of fixed assets (94,029) (8,320) (8,320)
Net cash flows from investment activities (94,029) (8,320) (8,320)
CASH FLOWS FROM FINANCING ACTIVITIES
Owners' investment 120,000
External financing 200,000 50,000
Net cash flows from financing activities 320,000 50,000 -
Net change in cash (29,385) 98,217 151,856
Opening Balance 320000 (35,701) 62,516
Closing Balance (35,701) 62,516 214,372

25
7 Conclusion
We have subjected this business plan to the most rigorous analysis and the business appears to
be viable.
We firmly believe that we have identified a solid new business. The conclusion from our
detailed market analysis is that customers are looking for alternatives to tobacco cigarette
smoking. Based on this analysis, we have developed a solid strategy to rapidly move into the
major markets and consolidate our position.
We have aligned the business organization to meet our initial needs. This will enable us to
accommodate the growth that will follow. We have a highly qualified management team with
a lot of passion and many years of experience in the business community.
We believe our product provides a much-needed healthy alternative to the smoking
community. Our product is safe, enjoyable, and convenient to obtain.

26
8 Appendix
8.1 Operating Costs - 2015

27
8.2 Operating Costs – 2016

28
8.3 Operating Costs – 2017

29

30
8.4 Income Statement
8.5 Germany

31
8.6 The Vending Machine

Wolke_Business_Plan-Fall2013

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