Mcdonald’s Business Strategy Essay

, Inc. 11410 N. E. 124th Street 223 Kirkland, capital letter 98034 the States O 425-822-3106 C 206-257-9839 timothyMcDonald steering. com postp champion and only when(a) of Con cardinalts varlet 3 knave 5 knave 6 pageboy 9 Page 11 Page 12 Page 16 Page 18 Page 21 administrator out pull back Our vocation externalise The tradeplace Defined solid ground View buffer z maven course of instruction (Ethiopia) casted merchandise assign mart Strategy Promotion argument The Bottled piddle exertion crossway festering four Keys Norit Ultra-Filtration outline (Perfector E) Solar ply Modules Prototype configuration and fictionalisationThe patent 20-litre Tamper-proof Bottle Organizational asking regular armygua confederacy political platform US Home comp sensationnt eastern Africa Central manufacture statistical distri justion ( actors to Owners) myocardial infarction St stars fiscal Statements Sales Projections strength Budgets Cash Flow Projections Income S tatements Projected disbursement Statements Projected 2 Executive Summary W e be direct in a position to intersection pointively stick in into the stipendiary and expanding foundationwide trade for thin, clean, off the hook(predicate) boozing pissing fork up. We yield authentic and testament stack away to the orbit, the concept of keen corporation commercial urine elaboration organizations.We s residuum for our systems USAgua gross(a) body of urine sales booths. distri furtherively of our st whollys is receptive of taking in 8,000 cubic decimeters of perilously polluted raw pee apiece twenty-four hours and, done and through and through the technologic entirelyy phenomenal function of ultra-filtration, they process that un comfortablynessy irrigate into ripe, clean, purified sw all toldow body of piss system supply. Our systems atomic number 18 containerized, modular, solar supply and ultra- percolateed they function entirely off-t he-grid. Our markets be the vibrant, sophisticated, impudently emerging put- split upes of the evolution earth. These bourgeois niches act all over one billion mass and their numbers be growing daily.These nation realize the enormousness of safe confound irrigate for themselves and their families nonwithstanding, at the alike time, they do it that their presidencys argon in sufficient of providing this close to primary need. What is all- minuteant(a) to our course of instruction is that these middle class families atomic number 18 monetaryly capable of nonrecreational for our weewee. The proof is the fact that they presently languish literally tens of millions of gallons of nursing bottled peeing apiece family. Our controversy is the bottled weewee sedulousness and, genuinely soon, we forget give a comforting fraction of that market.The product we give away is clean, pure, safe imbibition peeing system. How we produce, market and sell our product is through our USAgua Pure water stalls chopine. Our kiosks be a melding of 2 wonderful technologies just forthwith coming into their receive. The root is called ultra-filtration. celluloid a bundle of spaghetti sized punch tubes through which polluted water is wield infra pres indisputable. The perforations ar so shrimpy that they stave off viruses, bacterium and parasites d protest to a log 2-4 EPA rating. This means that the water we sell is 99. 99% pure or bump when it brings our system.And, because the strains energize only back-flushing instead of courtly filter replacements, the presbyopic- boundary hails argon minimized. The number s pingle engineering we stir engaged is Solar Power. Our stalls, including all the inevitable pumps, batteries, electronics and twinkle requirements run perfect(a)ly using a Solar Power softw ar box intentional specifically for our needs. The sign costs of the solar pickaxe be steep, har dly the long terminus reliability, the fact that we dont dep leftover on some(prenominal) well(p)(prenominal) extractions of cypher and the nearly- forethought-free specifications we employ certain, make them a perfect fit in baffleing countries. Our ultra filtration systems and our solar power systems adopt been rigorously athletic field tested by their manufacturers. Our own excogitate engineers overhear melded the deuce technologies together, combined them with our storage tanks and lab power train and integrated them seam littlely into our sell USAgua sales booths. After a final prototype development program, our manufacturers bequeath ship their modules to our USAgua Central Assembly Plants in our target markets. We allow use topical anesthetic anesthetic anesthetic technicians to retrofit universally available freight rate containers and perform final installation and assembly. one time our Kiosks are utter(a), they go away be delivered to our hustlers in the field. Our worry Team bequeath locate, grow and train topical anesthetic Operators in our confuse Target marketplaces. In time, our Operators exit be given the opport unit of measurementy to own their own USAgua Kiosk, thus allowing us to solicit the entrepreneurial energy and spirit that put up be found in spite of appearance individuals in e rattling(prenominal) corner of the world. Our USAgua Operator program give ensure our market position and perceptual constancy through world-wide name filthing, equipment tiredization, standardized maintenance routines and universally accepted explanation procedures.With the stand by of whatsoever very smart engineers we have genuine the concept of our USAgua Pure piss Kiosks. At the same time, we have regorge together a vexation mock up that carry aways the best of the Ameri lead word business concepts we are so proud of and we, very carefully, introduce them into the potentially lucrative parvenu middle-class ma rkets of the developing world. Our financial package is sound. Our assumptions and our projections are conservative, our research is up to date and our signalise players are heavy on both education and real world experience. We are ready to take the following demon step forward.To that end, we are asking to restrain a US $2,200,000 Investment package so that we can bring our USAgua transnational Program to fruition. P remove, feel free to call me anytime for more knowledge or clarifications. Sincerely, Timothy McDonald 4 Our melodic phrase Plan The valet de chambre Wide foodstuff Defined Of the 6 billion hoi polloi in the world to mean solar day, over 3 billion1 live both unaccompanied off-the-grid or in communities non serviced by safe, computeable water systems. Families inwardly this demo intense, no matter their economic level, are left vulnerable to water borne diseases including viruses, parasites and bacteria.The contradict social and economic repercussions of not having get at to safe, clean intoxication water are immense. Some joined Nations reports have at peace(p) so far as to announce that safe inebriation water exit be as economically real as oil within the next decade2. We intend to be a defective player in solving the inebriety water chore. We have knowing both our USAgua Water Purification System and our melodic phrase sample to be universally adaptable. Our equipment and our business model ordain function beautifully in the suburbs of Nairobi, along the Yangtze River in chinaware and in the mountains of northern India.Anywhere on that point is both a source of water (no matter how polluted) and an unfastened view of the sun, our USAgua water purging systems allow for work. Anywhere in that respect are energetic and entrepreneurial individuals who shoot for to a advance life for their families, our USAgua Operator interlocking bequeath prosper. At the macro scale, our market is unlimited. Good business dresss, however, arrange that we start dispirited and grow carefully. We impart introduce our program to a fine, model market we are familiar with. hotshot that can be slowly record and controlled.In our wing market we forget learn a great lease from both our winneres and our mistakes. erstwhile we have field proven both our equipment and our business model, we provide enter attachmental markets with frequently great knowledge and enthusiasm. _________________________________ It is very important to determine that we are in rivalry with the Bottled Water Industry in all aspects of our program. The statistics and the markets for bottled water, world wide, are the statistics and markets relevant to USAgua. _______________________________________ 1 2 United Nations Development Program report August 2008United Nations Development Program level August 2008 5 Our Ethiopian pilot burner Program and Our Share of the Market For several reasons, including a thirty yea r professional involvement in East Africa, we have chosen the coarse of Ethiopia to show up our Pilot Program. The Ethiopian Market Defined Population (millions) 2007 Population developing (annual %) Life expectancy at stemma (long time) Literacy rate GNI (US $ billions) GNI per capita (US $ ) 78. 6 2. 6 55. 0 38. 5 19. 4 220. 0 The United Nations Childrens Fund (UNICEF) acquired these statistics wellness of existence using improved drinking-water sources, 2006, total 42 (cut and spread head from the UNICEF 2008 Report) These UNICEF statistics show us that in that location is a big segment of the Ethiopian commonwealth that understands the need for safe water. The definition of improved drinking-water sources, however, does not send the persona of the water. It only documents the fact that the water has been pinched from a centralized source and is conveyed to the end user via an established distribution mesh topology either municipal water systems, tank ship transpo rts or bottled water.The water may or may not be processed. It may or may not be safe. The note of both the tap water and the bottled water in Ethiopia is suspect cod to poor infrastructure maintenance and a lose of Health De bitment pattern levyment. 3 3 UNICEF Annual Report 2006 6 The Ethiopian Central statistical Agency (CSA) estimates that currently 4. 18% of the households, nationwide, have access to community water systems and taps within their bags. Ethiopia list 2004 2. 2 2006 2. 7 2008 3. 3 Current 4. 18 (cut and paste from the 2008 CSA Report)This means the bulky majority of concourse considered to have access to improved drinking water sources are using oil tumefy truck delivery (very dangerous) or bottled water. (78. 6 million X 42%) 4. 18% ) = 31. 4 million wad drink non-tap water. ) The CSA also publishes a quarterly retail toll listing for nearly any commodity found in Ethiopia. In 2008 the average cost per liter of bottled water was 6 birr. (Ethiopia n currency) BEVERAGES NON ALCOHOLIC Ambo mineral Water 500cc 3. 00 3. 00 3. 00 3. 17 3. 00 3. 00 2. 50 3. 00 2. 96 2. 50 3. 00 3. 00 2. 50 2. 5 Bure mineral Water 500cc (cut and paste from the 2008 CSA Report) (Or US $0. 48/liter at the current transpose rate) The CSA has not been able to estimate a total volume of bottled drinking water produced or consumed. We have been told some(prenominal) reasons for this overlook of statistical credential. The to the highest degree plausible is the lack of government oversight and a great black market for recycling local water in used malleable bottles. This is a very dangerous practice and one the central government has taken action to stop. 4 A a few(prenominal) assumptionsW e are way out to assume, in the interest of simplifying our Business Plan, that within and near the cities of Addis Ababa, Mekele, Bahra Dar, Nazerit and Awassa ( a total population of over 27 million ) in that location is a need for 27,000,0 00 liters of pure, safe drinking water every day. (27,000,000 X 365 long time = nearly 10 Billion liters per year) ( superstar liter of safe drinking water per day is the World Health Organizations minimum requirement. ) 4 Ethiopian Health Ministry 2008 7 Our Pilot Program Cities 10% Purchase Vicinity of Population Addis Ababa 15,375,000 15% Purchase 20% Purchase 5% Purchase Bottled Water at US $0. 50/liter Bottled Water at US $0. 40/liter Bottled Water at US $0. 30/liter Bottled Water at US $0. 20/liter 1,537,500 2,306,250 3,075,000 3,843,750 Nazerit 3,580,000 358,000 537,000 716,000 895,000 Bahri Dar 1,790,000 179,000 266,850 355,800 447,500 Awasa 1,430,000 143,000 214,500 286,000 357,500 Mekele 4,825,000 482,500 723,750 965,000 1,206,250 27,000,000 2,700,000 4,050,000 5,400,000 6,750,000 $1,350,000 $1,620,000 $1,620,000 $1,350,000 $492,750 ,000 $591,300,000 $591,300,000 $492,750,000 Population Market determine Market Value Per Day Per twelve calendar monthOur Pilot Program Mar ket Our Pilot Program Market focuses on quin major cities in Ethiopia. We can take a very conservative but educated guess that 15% of the 27 million population is capable of purchasing 1 liter of drinking water every day for US 0. 40/liter. (about a billion and a one-half liters per year guide) 1,248,000 liters (62,400 20-Liter USAgua Bottles) is the annual sales persona we have projected for each of our USAgua Kiosks. Or slight than one tenth of one percent (. 001%) of our Pilot Program conservative Market Demand. Our Kiosks are positively capable of physically producing ,920,000 liters of safe, clean drinking water annually, but for budgeting and logistical reasons as rise up as a conservative security deposit of safety, we are mental synthesis our Business Model on a 1,248,000 liters/year bottom or a 4,000 liters per day sales capacity, six days per week. The total cost to our USAgua Kiosk Program to produce, bottle and sell safe, clean drinking water is less than $0 . 10 per liter The universal laws of supply and demand would tell us that we could completely dominate the Bottled Drinking Water Industry in our Pilot Program Market.By honorable dickens things Highest Quality, Lowest terms we should expect to capture a substantial share of this huge market bandage at the same time realizing a very profitable return on investment very quickly. It is not unvoiced to imagine 40 USAgua Kiosks running(a) profitably within Ethiopia within ii years of start-up. 8 Market Strategy The Market for pure, clean, safe drinking water already exists. It is large, growing and lucrative. Our dominant piece of that world-wide market is what we go forth develop. Branding W e own the internet web domain and the trade marked name, USAgua.We are now in the process of building a comprehensive website that give address everything from the biology of parasites, bacteria and viruses to the science of removing those contaminants from our drinking water. It for get show how important safe drinking water is to individuals, societies and economies. It entrust score our USAgua Water Purification Kiosks from our competition, the bottled water industry. Our website will play very well in East Africa. Since the election of President Obama, a bran- new-sprung(prenominal), very pro-American, attitude has emerged. America and all things American are now very popular.Our USAgua Kiosks provide safe drinking water at standards equal to or better than our American EPA standards for domestic drinking water. In East Africa, they practice our standards and want that same high property for their families. Our Kiosks are multi- food colour in American national colors. The USA in USAgua is meant to emphasize our American root and our American standards. When a USAgua Kiosk is delivered to an African community our customers will feel that part of America has arrived. Our USAgua 20-liter plastic bottles are knowing to be used and re-used and re-used by the family to which they are assigned.The boldly branded bottles can not be refilled by anyone other than our Kiosk operator. Our branded one-liter personal bottles will be carried with self-complacency on the streets of our communities. The name, USAgua, will be synonymous with American high attribute and good health. Lower retail price W e know thither is a large and growing demand for safe, pure drinking water. On the macro scale this is evidenced by the ascension of the bottled water industry in every city and village in the world. In Ethiopia, our Pilot Program Market, we know the retail price of a liter of bottled water is US$0. 48.The laws of supply and demand arrange that as the price is lowered, the demand rises. The cost of our water, including all business related expectations, is less than US $0. 10 per liter. We will price our product to maximize both the measuring sold and the profit generated. 9 Flyers and Brochures Distributed topically . And a billboard or dic kens Because each of our USAgua Kiosks are intentional to replete the drinking water demand of only 400 families per day, (we are saying 10 liters per family per day) the geographic market area for each of our Kiosks is excellent, (by design) less than one square kilometer. preliminary to our Kiosks arriving at their final destinations, a local flyer and brochure campaign will saturate the area to introduce our program. club meetings will be held to educate members of our market and sell our products. A large changeable bill-board will be erected so that people will drive get wording our branding. 10 disputation The Competition for our Pilot Program Market (and every other market in the developing world, for that matter) consists of a handful of rule-governed Centralized Water Bottling and Distribution Companies as well as black-market water bottle recycling scams.The government is now in the process of both adopting new quality standards for all bottled water confident(p) they are developing the means to hold those standards. Because none of the major international bottled water producers (Danone, Nestle, and Coca-Cola) have entered the African markets, statistical documentation is lacking for total production and demand. We do know a few things, however. kickoff is that the existing legitimate bottled water industry depends on centralized plants that are, by definition, attach with the formidable costs associated with transporting heir product to market. Plus, they must corrupt plastic bottles that will be used only once, but then become potential competition as those same bottles are refilled on the black-market and resold. We also know that the end user of bottled water is becoming oft more sophisticated. They know full well the worry with boot-legged water and in most cases have gone back to boiling local water (at a tremendous expense in fuel) rather than purchase suspect bottled water. The Bottled Water Industry is not the answer for the Developing World. 11 ingathering Development .. some historyFor generations, scientists more or less the world have cognise that viruses, parasites and bacteria are present in much of the water we drink. They have also known that these tiniest of creatures are the source of the water borne diseases that have plagued humanity since Lucy stood up on her two legs and peered over the tall grasses of the African Savannah. own(prenominal) Note McDonald was stationed in the Awash vale of Ethiopia in 1973-75 only 20 miles from where Lucy genus Australopithecus afarensisr was discovered. On several occasions his uncouth School and Farm hosted Lucys rcheologists. They apprehended the water system he had developed that pulled water from the muddy Awash River and provided them safe, pure drinking water. In the developed world, from our largest cities to our smallest villages, our engineering science has solved the problem of sublimateing our waters. In America, we long ago realize d the importance of safe water to the overall health and well being of our society. It was so important to previous generations that they mandated our government to class and enforce the highest water standards in the world.Our municipal and community water systems now process and emit a dependable flow of surprisingly inexpensive water to the habitations of every citizen. The success of America is due, in no small part, to the overall health of our people. And, the overall health of our people is, in no small part, due to our wonderful communal water systems. On the macro scale, the per gallon cost of water in America is very small a penny or two a gallon at the most. The reality is, however, that a water purification plant and a distribution network are tremendously expensive to develop and operate tens of millions of vaulting horses.And, the technical sophistication necessary to maintain these systems is overwhelming to any but the most advanced economies. For so galore(post nominal) reasons (economic, political, cultural, technical) there is little hope that the vast majority of people in the cooperate and third worlds will ever be able to build and maintain the water systems necessary to provide safe water for their people. Even now, as a burgeoning middle class emerges, the central governments are ineffectual to act. The problem is just too large and the costs too high. 12 Product Development . the Stars Line UpThe USAgua Pure Water Kiosk Program isFour Components. The product we sell is clean, pure, safe drinking water. How we produce, market and sell our product is through our USAgua Pure Water Kiosks Program. Our Kiosk Program brings together four independent but equally important physical components. to wit Ultra-Filtration, Solar Power, Retro-fitted Freight Containers and Keyed, Tamper-proof 20-liter Bottles. 1. Ultra-Filtration This is a water filtration method developed and patented by Norit X-Flow, a member of the global Norit Companies. N orit is headquartered in theNetherlands with sales offices throughout the world including one just outdoor(a) of Chicago. Ultra-filtration is easy to visualize. Picture a bundle of spaghetti sized perforated tubes through which polluted water is pumped under pressure. The perforations are so small that they block viruses, bacteria and parasites down to a Log 2-4 EPA rating. This means that the water they process is 99. 99% pure or better when it leaves their system. And, because the filters require only back-flushing instead of dear(p) filter replacements, the long-term costs are minimized.Norits filters can be used for months and then back-flushed to remove all contaminants. The unquestionable filters will last for years. Ultra-filtration is truly a marvelous breakthrough. One of the depression applications that Norit X-Flow developed for its Ultra-filter engineering science was a very intelligent machine they call the Perfector-E Mobile Water Purification System. It was orig inally designed for indispensableness responders to be used in the upshot of devastating natural casualtys earthquakes, floods and hurricanes. The systems are small, strong and highly mobile.They can be transported and set up in any disaster area within hours. They are totally self contained and can draw and purify water from almost any source including exposed surface waters, local lakes, rivers, ponds and irrigation systems. The Perfector-E System can provide literally thousands of gallons of pure, safe drinking water per day to a disaster area under the most extreme conditions. And, there is another very positive aspect to Norits system. It is not a big energy user. With some adaptations, we can literally run the systems exclusively on solar power. 13 2.The twinkling basic technology we have assiduous is Solar Power. Our Kiosks, including all the necessary pumps, batteries, electronics and illuminate requirements run perfectly using a Solar Power package designed specifica lly for our needs. Our solar energy system was designed by H-Dot logical system, a solar engineering company here in Seattle. The initial costs of the solar option are steep, but the long term reliability, the fact that we dont depend on any outside sources of energy and the nearlymaintenance-free specifications we have developed, make them a perfect fit in developing countries. . Our Kiosks Our Containers. We have chosen to utilize universally available, standard steal 20 foot consignment containers as the physical basis of our Kiosk system. Containers are strong and secure. They are easily transported on any flatbed truck in the world, and once they are delivered to our abroad locations, they will serve as the actual retail Kiosk facility. Our in-house engineers have designed the retro-fit of the containers to comfortably house all the miscellaneous components in and around the retail shell.The solar panels, the gravel pre-filters, the external raw water storage tank, the inte rnal finished water storage tank with the UV sterilizer, the Ultra-filter modules, the pumps, the bombing packs, all the electronics and a water interrogation system are all neatly configured inside the container. In addition to designing the retrofit, our Kiosks will have a copy scripted exterior color and graphic scheme. The graphic scheme, once rougeed on our containers will provide a great advert platform for our USAgua Brand. A prototype unit still needs to be assembled.USAgua Kiosk 0001, the prototype, will be assembled in Seattle, Washington. A careful documentation video of the specifications and assembly methods will be produced. This process will take about four months to accomplish. formerly the first Kiosk is ready it will be shipped from the Port of Seattle to Ethiopia. Once in Ethiopia, USAgua 0001 will be delivered to our Central Assembly Fabrication facility. Our local steering will use it to train a aggroup of assembly mechanics. We will then begin purchas ing containers on the local market and preparing them for the arrival of our Filter and Solar modules. in spite of appearance a four month period, we will be assembling and delivering two complete USAgua units per month. 4. The Keyed-Tamper Proof Bottle Program One of the reasons the bottled water industry is not a good fit for the developing world is because the plastic bottles are disposable. Each new bottle, when discarded becomes a potential competition as people refill the bottle and sell it on the black market. Our USAgua bottles are specially designed to discourage re-use by anyone but the family to which it was assigned. The bottles will have a tamper proof valve and seal that can only be refilled at USAgua Kiosks.This makes the bottles un-usable outside our network and assures our customers that the water inside our stamped and smashed bottles has not been counterfeited on the black market. Our large USAgua Logo on each bottle will help promote our brand where ever it is found. 14 Organizational Development Thirty years of experience working in developing countries has taught us many things. One of the most important is that without a very involved and almighty Management presence on the ground, no program can succeed.For the success of any project in the developing world, including ours, it is vitally important that we back-up our 21st vitamin C technology with an equally robust Management and operations Program based on centurys old tried and unbowed Business Practices. We call our In- rural area USAgua International Management and Operations Program Our Partnership Program. It is based on five ruling strategies 1. Recruiting the best and the brightest. Every developing country in the world has vibrant, honest, well educated, hardworking, entrepreneurs expression for an opportunity to improve themselves, their families and their communities.Our Country managing director will identify and arouse these individuals. We will offer them a good basic family wage with the added incentive of merit-based pay raises. 2. In-Country reproduction for our Operators Our USAgua in-country Management Staff will train every fire in Kiosk system functions, maintenance procedures, program hygiene, local marketing and program bookkeeping. Trainees will work with seasoned Operators during a six month apprenticeship program. If they prove themselves capable, they will be offered a position as an Operator or Operators Helper for one of our USAgua Kiosks. . In-Country Operations Management. We will have one Project Manager for every 10 USAgua Kiosk Operators. These Project Managers will address each Kiosk Operator every month to make sure that the extremely high USAgua standards are being met and maintained. The PMs are also in charge of auditing and banking functions. There will be zero tolerance for bookkeeping errors. In addition to our Project Managers, we have a Maintenance Repair team that routinely visits each Kiosk making sure t hat no small maintenance problem becomes a big repair problem due to lack of Operator vigilance. 4.advertizing and Marketing Support Each Kiosk comes with an introductory advertising budget for local marketing. We will saturate any new locale with USAgua literature. In addition, our Staff will visit each Kiosk to engage community seminars in water quality and family hygiene. 15 5. Operators to Owners Program After two years as a USAgua Operator we will offer some of our most gifted and hardworking employees the opportunity to purchase their own USAgua Kiosk. We are wholly win over that there exists a universally powerful business strategy that assures the success of a program such as ours.This is called pride in ownership and we intend to tap that strategy to its fullest. Our US Office The home office of McDonald Management is in Seattle, Washington as will be the home offices of USAgua International, Inc. At the top of our organizational map is the President and CEO, Timothy McD onald. Mr. McDonald has a BS in International Economics (minor in Civil Engineering) with Masters work in International Economics all from the University of Washington. He has been in and out of East Africa for over thirty years with our State surgical incision as both an employee and an independent contractor.He will supervise day to day operations both in the US and overseas. Norit X-Flow International will provide the Ultra-filtration modules. H-Dot logical system will provide the solar package design and modules. R. L. Clark and Associates of Redmond, Washington will be in charge of Investor Relations, financial program development and implementation. Bahiru G. Egziabiher will be the Country Director in Ethiopia for our Pilot Market Program. He holds a Masters in Electrical Engineering from the University of Washington and has worked for Seattle metropolis Light for over twenty years. Bahiru holds duel US and Ethiopian citizenship.Dalrymple and Associates will be in charge of our Kiosk design and equipment coordination. In addition his company has designed our logo, the graphic presentation of our USAgua name and our color schemes and themes. RedRover Marketing will be in charge of our website design, maintenance and hosting. Our Office in Ethiopia W e will lease a centralized office/ storage storage warehouse facility in Addis Ababa where we will identify, recruit and train a team of assemblers and fabricators to retrofit our containers, install our filtration systems, our solar modules and our storage tanks.Our paint shop will brand each Kiosk with our name, our logo and our color scheme. 16 Bahiru Egziabiher, our Country Director, will be in charge of our Ethiopia operations including the central warehouse and assembly facility. He will oversee the assembly of two complete USAgua Kiosks per month once we get underway. McDonald and Exziabiher and, eventually, a small team of Project Managers, will identify, recruit and train a Network of USAgua Operat ors. These Project Managers will be responsible for assuring the high standards of bringing up, maintenance, product quality and accounting standards for each of their Network Operators.Within two years there will be 40 Kiosks producing pure water in Ethiopia. There will be one Project Manager for every ten Kiosks. Our Operator Network is the key to our program. Once our USAgua Operators are identify and recruited, they will go through a thorough training program. They will serve a two year apprenticeship and then, if they have proven themselves capable of maintaining our extremely high standards, they will be given the opportunity to own their own Kiosk. In this way we will tap the entrepreneurial spirit of those who will make our entire program a success.How ambitious is it to Enter the Ethiopian Market? The World confide ranks countries world wide by their Ease of Doing Business. Of the 183 countries rated, Ethiopia ranks 107. In comparison, Egypt is 106 and Kenya is 95. Since 1993 when the people of Ethiopia removed their previous communist government and replaced it with one decisively more domesticate and business friendly, the new leadership has striven to outdoors its economy to a more free-enterprise(prenominal) model. In the past 10 years, Ethiopia has been gradually re-writing its constitution in an attempt to open new markets and stabilize its business community.These efforts have paid off. In 2008-9 the World Bank ranked Ethiopia at 122 for ease of starting a business. This year they are ranked 93. And, they are getting better every year. The following statistics are all from the World Bank. Ease of doing Business 107 beginning a Business 93 transaction with Construction Permits 60 Employing Workers 98 Registering spot 110 acquire Credit 127 defend Investors 119 Paying Taxes 43 merchandise crossways Borders 159 Enforcing Contracts 57 Closing a Business 77 Summary of Indicators Ethiopia Starting a Business Procedures (number) 5 sequ ence (days) 9 Cost (% of income per capita) 18. 9 Min. capital (% of income per capita) 492. 4 17 Dealing with Construction Permits Procedures (number) 12 Time (days) 128 Cost (% of income per capita) 561. 3 Employing Workers encumbrance of hiring major power number (0-100) 33 Rigidity of hours force (0-100) 20 Difficulty of redundancy mogul (0-10) 30 Rigidity of employment index (0-100) 28 Redundancy costs (weeks of salary) 40 Registering Property Procedures (number) 10 Time (days) 41 Cost (% of property value) 2. 2 Getting Credit Strength of legal rights index (0-10) 4Depth of credit information index (0-6) 2 Public registry coverage (% of adults) 0. 1 Private part coverage (% of adults) 0. 0 Protecting Investors purpose of disclosure index (0-10) 4 issue of director liability index (0-10) 4 Ease of shareholder suits index (0-10) 5 Strength of investor tax shelter index (0-10) 4. 3 Paying Taxes Payments (number per year) 19 Time (hours per year) 198 improvement taxation (%) 26. 8 Labor tax and contributions (%) 0. 0 Other taxes (%) 4. 3 Total tax rate (% profit) 31. 1 Trading Across Borders Documents to merchandise (number) 8Time to export (days) 49 Cost to export (US$ per container) 1940 Documents to import (number) 8 Time to import (days) 45 Cost to import (US$ per container) 2993 Enforcing Contracts Procedures (number) 37 Time (days) 620 Cost (% of claim) 15. 2 winning into account the above information provided by the World Bank, it will take McDonald Management about 90 days to secure all the necessary permits, licenses, patent protection registrations and lease agreements in Ethiopia. This will all be done prior to our first Kiosk leaving the US. 8 Mile Stones First Three Months Investors have been identified and secured A US $2,200,000 credit line is opened Dalrymple Associates secures a short term warehouse lease where the prototype Kiosk will be assembled and the process documented. Norit X-Flow, H-Dot Logic and USAgua finalize specif ications for the prototype filter/solar modules The USAgua Prototype is completed and Unit 0001 is prompt for shipment to Africa In Month One, McDonald and Exziabiher leave for East Africa to secure business licenses and leases. epoch in Africa McDonald and Exziabiher identify and recruit a team of mechanics and fabricators as well as a Project Manager. They identify the first five individuals for the USAgua Operators Network. Months 4 and 5 USAgua Kiosk number 0001 is shipped from Seattle to Addis Ababa USAgua Seattle begins producing and shipping filter/power modules to Ethiopia at the rate of 2 units per month. Containers are purchased and retrofitted in our Addis Ababa facility at the rate of 2 units per month.Assembly begins and the first delivery of a unit is accomplished. Months 6 -12 All elements of our program are interrelated and we are assembling and placing USAgua Kiosks in lymph gland communities at the steady rate of 2 units per month. Project Managers and Operator s are continuing the training, quality control and apprenticeship programs. Month 13 W e achieve income/expense financial Break Even Month 24 The first 40 USAgua Kiosks are in place and working. The first USAgua Operator recruits are offered ownership of their Kiosks. 19 Business Plan SummaryW e are confident that a vibrant and lucrative market for safe, clean drinking water exists in every country of the world. We are also confident that we have the right Technology and Business Model to enter and eventually dominate those markets. To prove this, we are going to introduce 40 of our USAgua Kiosks into the Ethiopian market. There we will show that our technology is exactly right that each of our Kiosks can be operated and maintained profitably for years. And, that our Business Model is sound and worthy of the trust our investors have shown.We have developed a set of financial projections. These itemize the key elements of our program and put a dollar figure on their implementation. T hey show that an initial two year investment of US $2,200,000 will produce an operating income/expense breakeven within a year and actual profit by the end of the 40 Unit 2 Year Pilot Program. Anyone interested in viewing our Financial Report, please, call Timothy McDonald. He will be more than happy to send along our spreadsheets. Many Thanks, Timothy McDonald 206-257-9839 20