Business Plan History and Position to Date

Northwind Traders, Inc. provides travel-planning services to individuals and businesses in the Ggreater SeattleRedmond area. The business is located at 1234 Franklin Street, SeattleRedmond, Washington.

The Company’s Mission

The goal of Northwind Traders is to be the leading provider of hassle-free European adventure vacations to the 25- to 35-year-old business professional market. Initially operating in the SeattleRedmond area inoutside of Seattle, Washington, Northwind Traders is rapidly expanding to sell its services worldwide via the Internet. Travel service sales is the fastest growing category of business to consumer activity on the Internet, and by the year 2000, the value of this market is estimated at $4.500M billion (see Appendix 1, Internet Growth and the Sale of Travel Services).

Our emphasis will be on providing a complete specialized service based on having a detailed knowledge of the vacation destination and adventure activities being offered. Market research indicates that the major criticism our type of client has of existing travel agencies is that their agents “know nothing about their products, they just open the catalogue and read,” to quote one of many disappointed travelers.

By capitalizing on our experience in the Northwind Traders clothing shop, we will be able to both advise and direct our clients to the type of travel equipment they will need to get the very best out of their vacation.

Management Team and Key Personnel

Heather Mitchell, President and CEO. Before founding Northwind Traders, Ms. Mitchell owned and operated Northwind Traders, an outdoor clothing shop in the Seattle area. Prior to that, she managed the Olympia branch of one of the larger regional chains of general travel agencies operating throughout western Washington, where she was responsible for managing the office systems and a staff of four. She has a degree in travel and tourism from State University.

In addition to Ms. Mitchell, team members Jim Kim and Richard Bready will be moving into the new venture on a full-time basis, and Amy Egert has been recently recruited to cover Saturdays and vacations. Freelance business consultant Jae Pak will be advising during the business’s changeover from clothing shop to adventure travel agency.

Jim Kim, Vice President Sales and Marketing. Prior to joining Northwind Traders, Mr. Kim worked for the marketing department of a major airline. His current responsibilities include the company’s direct marketing campaign and all sales-related issues.

Richard Bready, Office Manager. Twenty years as a travel agent has given Mr. Bready the ideal background for Northwind Traders. A knowledgeable salesperson, Mr. Bready’s expertise in the area of European travel enables him to entice the adventure traveler.

Amy Egert, Sales Assistant. After completing her undergraduate degree at the Institute of Art, Ms. Egert spent a year traveling abroad and joined the staff at Northwind Traders recently as a sales assistant.

Jae Pak, Business Consultant. With over 20 years of consulting experience in industries ranging from aerospace to technology to retail, Mr. Pak’s knowledge and guidance will be instrumental to the success of Northwind Traders.

The volunteer members of the Board of Directors provide guidance to the management and staff of Northwind Traders. The board meets twice yearly to discuss policy changes, review the mission statement, and update the business plan if needed.


Members include


Lisa Jacobson, retail store owner

Holly Barrett, CPA

Jo Brown, former travel agent

William Hollands, lawyer

Lisa Garmaise, retail store owner

Tony Chor, human resource manager

Prasanna Samarawickrama, caterer


Services

We are currently the appointed agents for Margie’s Travel, a major supplier in the market. Currently, Margie’s Travel offers some 40 different adventure vacation packages throughout Europe, including horse trekking in Iceland; above-the-clouds trekking on islands and in remote regions in such areas as Corsica and Norway; van-supported inn-to-inn bicycling; mountain biking and hiking adventure tours throughout France, Germany, Italy, and Austria; and ballooning across the Alps.

We intend to be appointed agents by three other major adventure travel tour firms with whom we are currently in negotiation:

Enchantment Lakes Corporation. Offers rafting, sea kayaking, and yachting trips around remote European rivers and coastline areas, covering such areas as the Adriatic, the Black Sea, and Turkey.


West Coast Sales. Offers adventure vacation packages to corporate clients to use as incentives and rewards, and as part of management development programs. They are particularly strong in France, Italy, and Germany.

Exploration Air. Specializes in adventure vacations in Eastern Europe and former Soviet countries, covering Bulgaria, Romania, Poland, and Latvia.

These are three relatively new and small tour operators, but they have acquired a reputation for innovation and reliability–and they are currently underrepresented.

In addition, we will offer a comprehensive range of complementary services to support the adventurous traveler, ensuring that they will have a safe, enjoyable, and memorable experience. These services will include insurance, pre- and postvacation briefing packs, and a directory of advice and information services particular to each destination and adventure activity.


Transportation Systems

The vacations we will offer will use all principal travel systems, including planes, trains, buses, and where appropriate, taxis. We will aim for a standard of travel higher than that offered by the general travel industry. The feeling we are looking for is definitely not that which is engendered by the backpacker market.


Company History

Five years ago Heather Mitchell cofounded Northwind Traders, an outdoor clothing shop in SeattleRedmond, Washington. Over the years, Northwind Traders has extended its product range to include everything the adventurous traveler could want, from tents and sleeping bags to maps, guidebooks, and insurance. The clothing shop has sales of $1,420,000 per year (see Table 1), makes a gross profit of $202,400, and employs seven people, either full- or part-time. A mail-order service is now provided by catalogue and via a new Web site.


Table 1. Northwind Traders Clothing Shop Performance Over Past Five Years


Year
1
2
3
4
Last Year


Sales
$183,700
$422,510
$669,670
$1,023,710
$1,421,170

Gross Profit
$62,625
$167
$100,701
$133,602
$201,916


Increasingly, shop customers have asked for advice on adventurous places to go on vacation.

Last year Northwind Traders acquired an agency from Margie’s Travel, one of the largest and most respected tour operators in this market, and began to promote and sell their products.

In the six months that we have been selling travel agency products, some 200 vacation packages, at an average cost of $3340, have been sold. Northwind Traders’ commission on the sales has been $66,800 (10 percent commission). In addition, 35 insurance policies have been sold at an average price of $167, yielding $1754 (30 percent commission).

Heather Mitchell, one of Northwind Traders’s founding partners, intends to sell her shares in the store and to concentrate on setting up the new travel business, Northwind Traders.


Guarantees and Warranties

Our clients will be protected financially against either our own or our tour operator’s failure, by virtue of the ARC bonding held by our principals. We will only use vacation providers who can provide 24-hour emergency support services for clients while on vacation.


Business StructureLegal Status

Northwind Traders is incorporated under the laws of the state of Washington. The company has authorized 10,000 shares, 6000 of which are owned by President and CEO Heather Mitchell. Vice President of Sales and Marketing Jim Kim owns 1000 shares, and the remaining shares are held by the company for future distribution.

In the next few weeks, the business will be set up as an operation independent from the clothing store. This structure will clearly separate the travel business from the clothing shop and make it possible to attract the risk capital that will be required when the business starts to grow.

At a later stage the business may wish to sell and issue airline tickets and to create its own charter vacations. This will require membership in the ARC (Airline Reporting Corporation) and IATAN (International Airlines Travel Agency Network). These organizations regulate the collection of money and distribution to the appropriate airlines. However, in the period covered by this Business Plan we intend to operate only as the appointed agents for a number of tour operators. As such we can “shelter” under their licenses and bonds.

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