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Business Plan

“Art from the heart of the wine country that will be

treasured for generations to come “

Edward Charlson

Contact Person: Edward Charlson – Founder/CEO

Address: 4490 Silverton Road, Salem, Oregon 97305

Telephone: (503) 881-0477

Email: traminerart@yahoo.com

Table of Contents

I. Executive Summary………………………………………………………………………….. 1

Highlights

Objectives

Mission Statement

Keys to Success

II. Description of Business…………………………………………………………………….. 3

Company Ownership/Legal Entity

Location

Products and Services

Management

Financial Management

Start-Up/Acquisition Summary

III. Marketing………………………………………………………………………………………… 9

Market Analysis

Market Segmentation

Marketing Strategy

Strategy and Implementation

Industry Synopsis

Competitive Analysis

Pricing Strategy

Sales Strategy and Implementation

IV. Appendix…………………………………………………………………………………………. 18

Startup Expenses Startup Capital Annual Sales Annual Payroll Annual Profit & Loss Break-Even Analysis Annual Balance Sheet Sales Payroll Profit & Loss Balance Sheet

Executive Summary

This business plan has been prepared to introduce Traminer: Art of Wine, LLC

(hereinafter also called the Company or the Business) and share a comprehensive

understanding of its business operations, growth strategy and financial objectives

necessary to achieve its objectives.

Traminer: Art of Wine, LLC will produce a series of "Collections" of quality wine fine

art prints and winery bronzes to market to affluent wine enthusiasts and wine

collectors worldwide at the retail level. A variety of marketing techniques will be

applied to leverage the excellent market potential of wine enthusiasts in an

environment that offers limited competition. With over 30 years working in the wine

industries of California and Oregon I have now used the knowledge I have gained

and commissioned internationally acclaimed fine artists to visually create the

nuances of wine and the wine lifestyle through fine art bronzes and fine art prints. I

have spent over $215,000 of my money to help launch this company and am now

seeking investors to reach my funding goal.

There is a largely untapped market niche for collectible, gallery-quality fine art that

is related to wine and the wine lifestyle; most notably winery bronzes which depict

top estate and artisan wineries heretofore not produced by any artist anywhere. The

fine art prints will feature depictions of wine and the wine lifestyle from various

perspectives. Traminer forecasts a recurring market for the targeted affluent

customers. There are hundreds of domestic and international wineries to select from

for bronze production. Having the “insider’s eye” and expansive knowledge about

the wine industry I can continue to continue to generate numerous design ideas for

art collections to produce that will bring new customers and allow Traminer to thrive

for years to come through the cultivation of new customers as well as repeat sales.

The combination of unique, collectible fine art products provided at competitive

prices makes the company unique to this market.

Objectives

Traminer: Art of Wine, LLC has three primary goals. The first two relate to the

establishment of a market presence at the outset, while the third is a recurring

objective.

1. Market the company website for retail sales at the national and international level.

2. Establish broad consumer awareness of both product and company through

additional traditional and new media marketing techniques.

3. Maintain Gross Profit Margins of 77% to 93%.

Mission Statement

Traminer: Art Of Wine, LLC is dedicated to offering the retail market the most

innovative, trend-setting, wine-inspired, art gallery-quality fine art pieces. To this

end, the company takes pride in the following characteristics:

1. The highest quality craftsmanship and an ongoing commitment to product

excellence.

2. Dedication to constantly strive to exceed industry-standard turnaround time lines.

3. Customer service that affluent buyers expect.

Keys to Success

Wealthy, affluent customers are driving success in many businesses; most notably

leisure industries that rely on this niche’s large disposable incomes to create

generous profits for enterprises that serve their needs and desires.

Affluent customers distinguish themselves from their non-affluent companion

demographics in a variety of ways. They seek exclusivity. They are drawn to

unique, highly-personalized “one-of-a-kind” products and services that amplify their

perceived standing. They seek convenience, value their time; are willing to pay a

premium for quality, exclusivity and superior customer service. Affluent buyers are

drawn to products that reinforce their high self esteem and superior self expressive

characteristics.

The demand for high quality artwork is very strong in a large share of the affluent

market: 42% of these consumers report that they are likely to make an art purchase

in the upcoming year. Additionally, industry analysts predicted a 5-6% growth in

custom print sales in 2011 (the most recent study of affluent art buyers available).

Traminer: Art Of Wine, LLC is confident that it can quickly and successfully establish

itself in this market. Financial projections are positive, and the company expects to

generate close to $30 million in income with a gross margin of 69% during the first

three years of operation due to the following characteristics:

1. Quality Craftsmanship - Because art is aesthetic in nature, the finished product

must be of impeccable quality.

2. Innovation and Creativity - Custom artwork implies uniqueness, and the customer

expects a one-of-a-kind product individually tailored to his preferences.

3. Embracing Technology - The computer has become an essential time-saver for all

businesses, including art and framing, and computerized equipment is fast

becoming a necessity for the modern art dealer.

Description of Business

Traminer: Art of Wine, LLC is a Start Up, Internet-based business which will initially

create and sell Top Winery bronzes of the United States, limited edition giclées, (fine

art prints), artist remarque’s (engraved plates), photographic prints and posters.

During our three year plan, we will begin expanding our offering to include the same

products devoted to the distinguished wineries of Italy and France. Traminer will

market these unique products to high-income wine collectors and enthusiasts

worldwide at the retail level. Traminer forecasts a continued market; especially for

the winery bronzes as they are a unique product and have never been produced by

any artist anywhere in the world.

With 30 years of diversified experience in the wine industry, Edward Charlson,

company President and CEO, has a unique “insider's view” of the industry;

empowering him to connect with wine enthusiasts and the affluent. His distinctive

insight gives Traminer an exclusive edge as to what types of art will connect with

wine enthusiasts and collectors worldwide and what will sell. To this end, an

assortment of proven marketing techniques will be leveraged to take advantage of

the excellent market potential that is represented from affluent wine enthusiasts in

the face of limited competition.

Company Ownership

Traminer: Art of Wine, LLC is a Limited Liability Company, chartered within the state

of Oregon, United States.

Traminer is seeking $675,000 in equity funding for which Traminer will give 25% of

company ownership.

Upon successful completion of this investor funding, the ownership structure will be

as follows:

Shareholder Percentage of Ownership

Edward Charlson 75%

Additional Investors 25%

Location

Traminer: Art of Wine, LLC is a Start- Up, web-based business. The company

business office is located at 4490 Silverton Road, Salem, Oregon 97305.

Products & Services

Product Description

Traminer: Art of Wine, LLC will create and sell winery bronzes and wine art prints will

be released as a "Series Collection" to encourage purchases of the entire set. This type of offering will make the entire set a much more valuable collection for any art

collector. In order to grow the series (12) new prints, along with (12) winery bronzes will be added in the first year and each following year. the number will stay at (12).

Product line will be sold via the website. Initial art collections are as follows:

Winery Sculpture Collections

The winery sculptures will feature the top 36 wineries in the United States and will be

released as follows: Initial Collections (Napa/Sonoma) will take approximately 4 years to complete.

NAPA ESTATE COLLECTION: (12) of the premier estate and artisan wineries of

the Napa Valley.

SONOMA COLLECTION: (12) of the premier artisan and estate wineries of the

Sonoma Valley.

PACIFIC NORTHWEST COLLECTION: (12) of the premier artisan and estate wineries in Oregon and Washington.

The bronzes will be released as follows:

ARTIST RESERVE- Edition size: 195 pieces

Retail price: $3,995 to $6,995

Size: various

ARTIST RESERVE PROOFS- Edition size: 25 pieces

ARTIST SILVER EDITION- Edition size: 10 pieces

Size: various

Retail price: $38,000 / $48,000

Artist fee: 10%

Complete with a signed and numbered Certificate of Authenticity.The Artist Reserve

bronzes will be mounted on a walnut wood base with a brass plaque denoting winery name and number of the edition.

Future expansions to the chateaus of France, along with the wineries from other wine

regions, such as Australia, New Zealand and Italy are anticipated.

Wine Art Prints

The initial wine art print collections scheduled will be released as a Four Print

Collection and are as follows:

1) Table for Four- "A humorous look at wine and food pairings"

2) Lifestyles in Wine- "A playfully tongue in cheek look at the wine lifestyle"

3) Surrealistic Wine- "A look into wine through different eyes"

4) The Photographers Glass- "A photographic visualization of wine"

5) Winery Estate Art- "It's all in the name"

6) Masters of Wine- "It Ages well"

7) Winery Crew- “A playful look at the team that makes a winery a success”

8) Tasting Room- “ A look at the “characters” one can find in a tasting room”.

Initial artists:

Artist: Schim Schimmel www.schimschimmel.com

Artist: Jim Warren www.jimwarren.com

Artist: Jeremy Miranda www.jeremymiranda.com

Artist: Darrel Gulin www.gulinphoto.com

Some background and accolades on our initial artists.

Schim Schimmel

In 1991 Schimmel’s artwork was shown at the Tokyo Art expo in Japan. His work was immediately embraced by the Japanese, and a year later he was asked by Shogakukan, one of the largest book publisher’s in Japan, to

write a children’s book using his artwork. Since then, Schimmel has produced six more books. And has traveled to Japan over 50 times, attending hundreds of art shows in dozens of cities throughout the four main islands of the country. Schimmel continues to attend art exhibitions every year with Japan’s number one fine-art company, Art Vivant.

Jim Warren

“I had the pleasure of meeting Jim backstage at a Beach Boys concert at the Mandalay Bay in Las Vegas. His gentle

and unassuming manner belies the amazing talent he possesses. When Jim asked if I would care to write a few words

about his art for his new book, I indeed was honored and at the same time humbled by the prospect of such a task.”

Mike Love

Lead singer of The Beach Boys

“Many of life’s treasures come as a result of another’s contribution to one’s life. One of those life’s treasures comes to our

home as a result of the work of our friend, Mr. Jim Warren. It’s as if God be-gifted us.”

Pat Morita

Actor & star of The Karate Kid

“One of the best.”

The L.A. Times

Newspaper

“Jim is the greatest of the new millennium. His work carries on (in a most beautiful way) the torch for Dali, Norman

Rockwell and Maxwell Parrish. I love this man’s work.”

Chaka Khan

Singer

“Jim’s art really communicates. The word ‘under-achiever’ isn’t even in his vocabulary.”

Nancy Cartwright

Actress & the voice of Bart Simpson

“He truly is a great artist.”

NBC News

Television Show

Shray

Shray’s bronze entitled “Raising tomorrows Olympic Champions”. Shray’s bronze was one of eight USA

entrants to reach the finals and one of two Americans to receive the distinction of “Excellence Works” and

gifted it to Professor Yuan, Chairman of the 2008 Beijing Olympic Landscape Competition for the Yunnan

Government. Shray beat out over 2,300 other artists for this prestigious top prize.

Darrel Gulin

Darrel is one of Canon’s Explorers of Light Photographers. He is past President of the North American Nature

photography association (NANPA). He has been their keynote speaker and has led many workshops and programs

at their Annual Summits. His photography has been published in Outdoor photography, Newsweek, National

Geographic, Audubon, National wildlife, Sunset, Birder’s World, Nature Conservancy, Popular Photography and

many more. He has been showcased in almost every major nature calendar including, Audubon, Inner Reflection,

Sierra Club, Kodak, Browntrout, Nature conservancy, Greenpeace, World Wildlife Fund and Day Dreams.

These prints will be released as follows:

CELLAR EDITION

Edition size: 195 sn

Size: 24” x 30” overall

Retail price: unframed: $695 to $2,895

These prints will be reproduced on museum quality Acid free paper and canvas.

ARTIST PROOFS

Edition size: 25 signed / numbered

Size: 24” x 30”

Retail price: unframed $895 to $3,895

These prints will be reproduced with archival inks on some of the highest quality,

archival paper hand selected by individual artist to ensure a color reproduction of lasting quality and will be individually pencil signed and numbered by the artist.

ARTIST REMARQUE SERIES

Edition size: To be determined

Retail price: $2,695 to $3,895

These prints will be individually hand embellished by the artist.

Management Team

Edward Charlson

CEO/President, has over 30 years of diversified experience in the wine industries of

California and Oregon. He is responsible for the oversight of daily operations,

business development and management of Traminer: Art of Wine, LLC.

I began my wine industry experience in 1978 where I worked at The Wine Lab as an

experimental research enologist. I led research on the effects various yeast strains

had on a similar grape varietal. I have worked at 3 artisan wineries in both

Californai and Oregon where I learned all facets of winemaking where I was

employed as cellar master and cellar rat. I managed 2 wine shops where I focused

on customer service and education. At one of the wine shops I worked at as buyer

and manager I took the smallest of 7 stores and sold within 2% of the #2 store

which had a customer base of around two times mine. In wholesale I took a whole

area in Central Oregon and opened up 42 accounts within the first 3 months of

operations. I also owned and operated a restaurant wine consulting business in the

San Francisco Bay Area. I had 8 restaurants where I helped upgrade the wine lists.

Held staff wine education classes monthly where I tasted and educated the staff of

which foods paired with what wines. Sales at these restaurants increased an average

of 32% withing first three months.

David Gortner

CAO - Has a BS in Business Administration from Northwestern University and post-

graduate MB study at Northwestern and the University of Southern California. He

established the company, DDR in 1981 that successfully sold computer hardware and

software to 30 airlines around the world. These allowed airline data centers around

the world to control all their large IBM mainframe computers from one management

console. David will be responsible for business planning and operations.

John Patacolli

CVO - Owner/Winemaker at Redhawk Winery. Graduated from Harvard School of

Business. He will handle an advisory role in business decisions and operations.

Patrick Maguire

Consultant

Director, Art Angel Foundation. Newport Fine Arts.

Financial Management

The information below lists the initial start-up expenses, assets, working capital, and

total funding requirements in order to launch the business. The initial inventory is

outlined in “Start-up Inventory” document that accompanies this business plan.

Inventory will mostly be kept at each individual artist's place, with the exception of

the bronzes will be secured from the supplier as needed and shipped by Traminer:

Art Of Wine, LLC.

The $215,000 for R&D listed in the Start-up Requirements section below is the

owner's contribution has already been spent.

Start-up Requirements Start-up Expenses

Legal $2,500

Stationery, etc. $650

Insurance $3,400

Rent $5,700

Website Design $7,000

Computer (& Software) $1,800

R&D $215,000

Other $21,500

Note * - Website Design expenses only encompass initial development. As inventory

changes, periodic modifications/additions/subtractions will be necessary

Total Start-up Expenses $257,550

Below is an accounting of money spent by Edward Charlson over the past 3.5 years

which was devoted to R&D of the viability of Traminer: Art of Wine.

Public Relations $25,000

Art (original - 5) $60,000

Photography (brochure) $ 4,000

Design (brochure & poster) $ 3,675

Travel Trailer $14,000

Vehicle travel expenses $22,650

Printing (art poster & brochure) $30,700

Mailing (brochure) $ 2,100

(Salary draw) $45,000

Entertain $ 4,900

Misc. $ 2,975

Total R&D Expenses $215,000

Start-up Assets

Cash on-hand $356,450

Start-up Inventory $0

Long-term Assets $0

Total Assets $356,450

Total Start-up Requirements $856,450

SWOT Analysis

Strengths

Proven track record in art sales/marketing and marketing to the affluent

Experienced management and administrative staff in place

Niche market with limited competition

Unique product that has strong affluent market appeal and price structure.

Weaknesses

Limited budget to market the company to the targeted marketing segment.

The possible limited capacity to meet demand due to the small size of the

company

Opportunities

Growing market that, to some degree, is unaware of our products

Opportunity to expand geographically

Limited competition

Threats

Long term growth opportunities that could be tied to future slow economies

As Traminer: Art of Wine successfully leverages this niche, it could be threatened

by new competitors.

Marketing and Sales Strategy

Traminer: Art of Wine’s mission is to create products that impart the art of wine

through production of quality winery bronzes and limited edition giclees. Traminer:

Art of Wine is founded on the concept that exceptionally produced fine art products

will become highly collectible possessions of the affluent, discriminating wine

enthusiast. The art will be created by some of the nation's best artists and reflect

wine - and the wine lifestyle – in a variety of unique and appealing perspectives.

A great deal of time, research and planning has been devoted to analyzing the

affluent art buyer, the creation of marketing, sales and service strategies; then

testing and codifying profitable price points that appeal to this affluent buying

segment, and its large discretionary income.

Market Analysis

Key Target Audience - Affluent readers of Wine Enthusiast and Wine Spectator The Luxury survey, conducted online, consists of a national sample of wealthy American consumers with an average income of $293,000 and an average

net worth of $2.9 million.

Approximately 2.5M to 3.05 million affluent readers read Wine Spectator magazine

(traditional and online) and 754,000 read Wine Enthusiast. They are well educated

and super achievers: 83% have some college, 57% have a degree, and 26% have

graduate study, 61% are professionals and managers and 28% are senior managers,

62% are married.

They are exceptionally affluent: 81% boast a household income of $100,000+, 28%

carry an income of $200,000 + and a median net worth of $448,566 to over

$500,000 +.

Approximately 800,000 affluent buyers read Wine Spectator magazine. Its website

has a verified hit rate of a 3.5 million monthly views. The visitor median salary is

$448,566, 83% have a college degree; 77% are list themselves as either executive,

senior management or professional. The demographics’ median age range is 40 to

45 years.

Key Demographic Information for Unframed Art:

Broad market research strongly indicates that affluent consumers aged 35-54 are

significantly more likely to make multiple purchases. Younger buyers, aged 18-24,

are more likely to make singular purchases. Older consumers, (55+) typically spend

20% less than their younger counterparts.

Buyers in metro urban and suburban areas spend more than those in rural areas,

with a median price of $35; as opposed to $20 in the rural demographic. College

graduates spend an average of $83 per piece, as opposed to $31 spent by their non-

college graduate counterparts. Buyers in the $50,000+ income bracket spend 20%

more on average.

Market Segmentation

Target Market Segment Strategy and Testing

Because a majority of Traminer: Art Of Wine, LLC's income is generated by bronzes,

the initial target market segment will be the Internet and Wine Trade and Lifestyle

publications consumer.

Within the broad category of Internet, Wine Trade and Lifestyle publication

consumers, there are additional noticeable distinctions that can be made: such as

gender, age, education, income, and others. Homeowners are a logical focus for

three reasons: they typically earn more than their counterparts, on average they

have more wall space to decorate, and are more likely to remodel their current

home.

These prosperous buyers are inspired to purchase new artwork. A growing number of

affluent homeowners are also building wine cellars, at a cost of thousands of

additional dollars. Due to their generous disposable incomes, many affluent

consumers have a strong wish to accentuate their new wine cellars with

complimentary art work and bronze pieces.

Market Testing

While researching the viability of this wine-related business, a number of questions

needed to be answered:

1. Was there a market for this type of business?

2. What type of product would attract the most customer interest?

3. If there was a market, was it large enough to sustain a profitable business?

4. What pricing structure would prove most profitable?

A promotional wine art print was created that featured the Oregon Pinot Noir to test

these questions. A surrealistic art piece was also created to address the question of

which stylistic approach to take. Artist Judith Sparks was commissioned to produce a

poster of Oregon Pinot Noir.

500 posters were then reproduced. Over a four month period all of these posters

were hand sold by Edward Charlson to customers. This helped identify valuable

information on the art styles collectors would be willing to purchase.

Also, a sculpture prototype in this collection was produced of the Far Niente winery.

It was then reproduced in Alabaster. But consultations with Fine Art experts revealed

that a fine art bronze sculpture would produce higher quality art prints and

significantly increase the art offering’s value and collectibility.

The above market information was incorporated into creating the collections

Traminer: Art of Wine, LLC would offer.

Plans to expand this art venture were discussed with various art critics who

suggested the need for a more professional quality artist to be retained in order to

more greatly appeal to an art savvy clientele at the national level. As a result, a

second, more professional print of the same art piece was created by nationally

known artist Michael Cacy, and published in limited edition format: 600

signed/numbered prints.

To further explore this art venture, extensive travel was conducted through the wine

regions of California, Oregon and Washington, lining up premium boutique and

artisan wineries to be part of the initial catalog that will be used to market the art.

A small ad (2 inches x 3 inches) was placed by Tri-Ad Advertising in the nationally

distributed wine magazine Wine Enthusiast, to gauge market response. It ran for

one month over 400 phone calls were received from affluent clients who requested a

catalog.

From this mailing, 89 orders (22.5%) were received for the limited edition prints.

Telephone follow up contacts were made to over 100 of the non-responders to

confirm receipt of the catalog, and to ask respondents’ reasons for not purchasing.

From the majority of their responses, 52 mentioned price of the print ($895) as the

major factor in their decision not to purchase. As a follow up question, they were

asked what would be an attractive price. The majority of those responses generally

fell into $250 - $350 range for the posters and $495 - $595 and limited edition

giclées.

Prior to this marketing study, I was also considering the incorporation of wine retail

sales in conjunction with the art sales endeavor. But this marketing study clearly

indicated that I should focus exclusively on wine-related art sales due to the buying

power of much larger retail wine distributors whose pricing was much lower than my

projected models, and a variety of other factors to which I had very limited control.

Conclusions reached after these two market research projects:

1. There was a strong market for wine art.

2. A finer quality art would be needed.

3. Prices would need to drop to between $495 and $695 for the regular edition and

$1,895 for the premium edition. Poster reproductions would need to be priced at

$49 - $149 in order to maximize profits.

After concluding that this entrepreneurial venture could be successful, travel

arrangements were made to search the Northwest in order to visit a generous

sampling of art galleries and winery gift shops and to begin building relationships

with potential artists who could create the collections envisioned for Traminer: Art of

Wine, LLC. As a result, an exclusive list of highly respected artists has been selected

from across the United States that fits the vision of Traminer.

Traminer: Art of Wine, LLC is positioned to reach a segment of affluent consumers

who are likely to purchase collectible art in the price range of $495 to $1,895 for

original art prints and $7,895 to $10,895 for collectible bronzes.

Marketing Strategy and Implementation

Marketing, Sales & Implementation Strategy

The primary focus for Traminer: Art of Wine, LLC is to clearly differentiate itself in

the marketplace by creating a unique series of products that appeal to affluent

buyers who are also wine fanciers. This can be accomplished through Internet and

print advertising, and by striving to build a positive reputation, particularly with

regard to art gallery quality fine art, fast shipping turnarounds and helpful customer

service that meets the stringent requirements of our targeted demographic.

Traminer: Art of Wine, LLC will be successful because it creates and markets highest

quality fine art and t and offering it to the knowledgeable, selective affluent

customers who - as in the wines they choose - seek only the finest and rarest

products that display elegance qnd finesse. Our products will be created to increase

in value with time. Many of them could ultimately approach investment grade. We

anticipate operating costs to remain relatively constant during the initial three to five

years of operations and remain constant with projected revenues.

The marketing strategy for Traminer: Art of Wine, LLC hinges on two primary areas:

Packaging and Promotion/Advertising.

Packaging

The primary packaging effort by Traminer: Art of Wine, LLC will concentrate on how

best to introduce and leverage the company's new products. Methods to accomplish

this include (but may not be limited to):

Web Site and social media development and enhancement which includes:

1. Search Engine Keywords (and key phrases) to drive prospective customers to

our website. On-site marketing to include: keyword research, analysis, SEO,

and opt-in box, embrace automation tools such as landing pages, email auto

responders, shopping carts, customer management software.

2. Targeted web linking to participating wineries, Social Media sites such as

Linkedin and Cruvee (the latter of which focuses solely on the wine industry).

Cruvee’s data is syndicated to 76 partners with a total audience of more than

2.2 million customers and connects with all of the popular social media sites

connecting with sites such as Twitter, FaceBook, Instagram, etc. The Cruvee

platform also monitors over 77 wine-specific presences, 110,000 blogs and

more than 50,000 forums.

3. Establish our own unique Facebook page, Twitter, Instagram and Google

accounts.

4. Media Promotions through viral email blasts to focused audiences.

Traditional magazine advertising in wine industry and lifestyle publications.

Wine label promotions.

In November 2007, eMarketer published a report titled "Affluent Internet Users: How

the Rich Live Online." In the report they concluded that the number of affluent

Internet users will grow from 43.7 million in 2006 to 57.1 million in 2011.

Affluent Consumers and How They Use the Internet, Social Media and Mobile

Devices

Pam Danziger, president of Unity Marketing, shares the key insights from

the Affluent Consumers and How They Use the Internet, Social Media and

Mobile Devices report

As the luxury industry changes and consumers further engage the digital revolution,

today’s brand marketers may never see his or his best customer. Instead, many

affluent consumers are turning to the Internet to investigate brands, form

connections and make purchases. In an attempt to better understand the online

shopping landscape, Unity Marketing has published a new report, Affluent Consumers

and How They Use the Internet, Social Media and Mobile Devices.

The research looks at how often affluent consumers use the Internet in support of

luxury goods and services purchases, what do they buy online and how much they

spend. The report also examines how affluent luxury shoppers use social media to

learn about luxury brands, share information about luxury brands, and connect with

people with similar outlooks. This year’s report also includes an in-depth look at how

affluent consumers use their mobile devices to shop, interact, form relationships, and

learn more about their favorite luxury brands.

To better understand the online shopping landscape, Unity Marketing surveyed 1,237

affluent consumers from January 6-13, 2011, with an average income $308,700; age

43.9 years; 42 percent male/58 percent female, who use the internet, social media,

and — new this year — mobile devices.

Through the research, we aimed to answer critical questions about today’s online

environment so that luxury marketers can develop their online marketing strategies,

including how best to use social media for building their brand and how to tap the

rising power of mobile apps to connect with the affluent shopper.

Promotional and Advertising Plans

The following plan will be deployed:

Product Promotions

Magazine advertising and other trade and lifestyle publications

Web Site development and marketing

Customer referral and word of mouth marketing

Viral and email marketing to affluent audiences

Competitive Analysis

The three major sources for art include art galleries, home product stores and

discount stores. To a limited degree, art is also purchased art from gift shops, art

shows, directly from the artist, from custom frame shops, and from department

stores. Consumer use of the Internet is also rising exponentially as a source for

purchasing fine works of art.

Not surprisingly, art galleries are the leading source for artwork. One third of those

who bought art in 2008 made their purchase at an art gallery. This has been the

case for many years. It is expected that art galleries will remain a significant retail

distributor of artwork.

Demographic Information for Art Galleries: A higher incidence of purchases

made at art galleries was positively correlated with higher education and income

levels.

Demographic Information for Artists: Purchasing artwork directly from the

artist was directly correlated with higher income and education levels.

Demographic Information for Art Shows: Again, a higher incidence of art

show purchases coincided with higher education and income levels.

Demographic Information for the Internet: Internet purchases were

positively correlated with higher education levels, especially with younger buyers

and the growing segment of tech-savvy affluents.

Competitive Edge

Competitive strategies include new, inventive and unique products as well as efforts

to expand products and sales through owner's 30 years of contacts in the wine

business. The primary advantages of Traminer: Art Of Wine, LLC include:

Our product has been developed through my “insider’s eye” into the wine

industry.

Fine art quality meets or beats competition.

Winery Bronzes are unique to Traminer: Art of Wine. This is an exclusive niche as

my research reveals that no other bronzes have ever been produced of any

winery in the world.

Wineries are already branded entities with customer loyalty. Offering bronzes of

these wineries offers high potential.

100% Customer Satisfaction is guaranteed or a refund will be provided.

A full product line will be available through the website no later than the sixth or

seventh month of operations.

Primary Competitors

Competitors who sell wine art via the internet include:

Wine Enthusiast.com

CK Arvid

Guy Buffet.

Scott Jacob

Thomas Arvid

Leanne Laine

The strengths of these competitors lie in the fact that they are already established,

and have experience selling online with a large selection of products. Their

weaknesses lie in the fact that their products offer varying quality, collectibility and

uniqueness. Contrary to our in-development product line, there is very little

“investment grade” potential for these competitors’ products.

Promotion Strategy

In the retail market we cannot afford the appearance of producing second-rate

material. Additionally, poor advertising runs the risk of making our art to appear

inferior. Hence, we intend to use quality advertising and other sales media to

leverage our presence. We intend to create a strong Traminer: Art of Wine brand

through the following:

Traditional Advertising

This shall be undertaken through wine trade and industry publications, as well as

national lifestyle magazines. Additional focus on these advertising outlets will

include any special editions of these publications; thereby offering premium

promotional opportunities to clearly differentiate the Traminer brand from its

competitors.

Internet Marketing

We intend to actively leverage viral video presentations (YouTube) that is integrated

with targeted email launches to affluent wine collectors and enthusiasts. Additional

specialized Internet promotional opportunities to drive prospective customers will be

incorporated along with other highly focused email promotional campaigns.

All of our communications will emphasize our ability to deliver superior and unique

artwork that will meet or exceed our client needs and wishes. Each promotional

campaign will be highly integrated across multiple media lines and interdependent

with the other in order to offer branding consistency and maximize their impact.

David Baer of Baer on Marketing will be contracted to handle our internet

marketing campaign.

Pricing Strategy

Prices will be established to secure the perceived quality of the art and will target

market perception of price which will be reviewed annually. According to Gateway to

Bronze, Bend, Oregon, pricing of bronzes could be raised at least 500% from initial

offering price structure and still sell out due to uniqueness of bronze product offered.

BRONZES & SILVERS:

Artist Edition Bronzes will retail @ $3,895 to $12,895 each. Silvers will retail @

$38,000 to $48,000 each.

POSTERS / LIMITED EDITIONS / ARTIST PROOFS / ARTIST REMARQUED

Open Edition Posters will retail @ $49 to $59 each

Artist Edition Limited Edition Giclee’s will retail @ $495 to $1,895 each

Artist Remarque Edition will retail @ $2,895 to $3,895

Sales Methodology

The following suppositions have been made in developing this forecast:

Inventory will mostly be kept at the individual artist's place, with the exception of

the bronzes which will be picked up from the supplier as needed.

The sales forecast for Bronzes is based on 75 customers per winery bronze and

there will be 6 Bronzes in the first year and 12 Bronzes each year thereafter.

The sales forecast for s/n prints is based on 150 customers per s/n print and

there will be 6 s/n prints the first year and 12 s/n prints each year thereafter.

Upon completion of the business plan our leadership team decided to add a series of

silver sculptures (12 s/n @ $38,000 to $48,000) to the company’s portfolio. Due to

certain constraints, it is not practical to include these sales numbers to the business

plan or financial projections at this time. It should, however, be noted that the total

value of these sales could add several million dollars to financial forecasts within the

first three years.

Customer Service and Support

Customer service and care has a significant impact on marketing and sales efforts;

especially to affluent buyers who expect such superiority as a featured benefit of

their purchase. A happy customer doesn’t need to be “sold twice;” and will most

likely recommend the company to their friends.

Word of mouth is another key benefit to having satisfied customers. Research shows

that the most satisfied customers go out of their way to convince others to do

business with you. Unfortunately, dissatisfied customers make it a point to tell others

to stay away, and dissatisfied customers are significantly more vocal.

This basic concept teaches that:

Satisfied customers are the foundation of a profitable business.

Successful retail businesses truly put the customer first.

The customer’s voice is amplified by the Internet medium with its immediate

feedback channel and the availability of virtually unlimited knowledge. Successful

Internet marketers are true power brokers.

High satisfaction levels eliminate customer churn (and the replacement value of a

dissatisfied customer, which can cost as much as five times more than it does to

keep a satisfied customer).

Customer satisfaction is a moving target. Consumers expect more, which means

that customer service is constantly undergoing reinvention in order to meet

constantly higher standards.The entire Traminer: Art of Wine organization is

committed to delivering unparalleled, leading-edge customer service to ensure

complete buyer satisfaction; regardless of the level of expectation. Loyalty is one of

the ways that customer satisfaction drives profits. J.D. Powers and Associates'

research shows that consumers are willing to pay a hefty premium to do business

with a company that has a reputation for delivering first-class customer satisfaction.

This even holds true where the choices are otherwise objectively similar. All

customer loyalty research clearly shows that not only will satisfied customers pay

more to do business with companies that offer top quality service, they will spend a

larger share of their income. This is important, because in the end, customer loyalty

and brand loyalty are inexorably linked; regardless of the product or service.

EXIT STRATEGY

Investor(s) will be paid back their investment before Traminer:Art of Wine, LLC

receives any money out of the profits. Each investor will have the choice to either get

paid their percentage ownership at the end of each fiscal year or wait until the end of

five years business operations and be bought out with a cash settlement. Each

investor may chose to re-invest back in, at a negotiated percentage of ownership.

Appendix

Star

tup

Exp

ense

s

Requirements

Startup Expenses

Marketing/Advertising $18,000

Legal Fees $2,500

Total Start-up Expenses ($20,500)

Startup Assets

Cash Required/Contingency $168,360

Startup Inventory/Supplies $314,000

Other Current Assets $0

Long-term Assets $107,140

Total Assets ($589,500)

Total Requirements ($675,000)

Sta

rtu

p F

un

din

g

Startup Expenses to Fund ($20,500)

Startup Assets to Fund ($589,500)

Total Funding Required ($675,000)

Assets

Non-cash Assets from Start up $0

Cash Requirements from Start up $168,360

Additional Cash Raised $0

Cash Balance on Starting Date $168,360

Total Assets $168,360

Liabilities and Capital

Liabilities

Current Borrowing $0

Conventional Bank Loan $0

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

Total Liabilities $0

Capital

Planned Investment

Owner $210,000

Investor $675,000

Additional Investment Requirement $0

Total Planned Investment $885,000

Loss at Startup (Startup Expenses) ($20,500)

Total Capital ($20,500)

Total Capital and Liabilities ($20,500)

Total Funding $885,000

Sale

s P

roje

ctio

ns

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Sales

Bronze Products Sold $1,764,750 $3,529,500 $3,882,450 $4,270,695 $4,697,765

Prints Sold $373,500 $747,000 $822,304 $904,534 $994,987

Total Sales $2,138,250 $4,276,500 $4,704,754 $5,175,229 $5,692,752

Bronze Products Cost ($294,150) ($323,565) ($355,921) ($391,514) ($430,665)

Prints Cost ($66,600) ($73,314) ($80,645) ($88,710) ($97,581) Subtotal Direct Cost of Sales ($360,750) ($396,879) ($436,567) ($480,223) ($528,246)

Co

mp

an

y S

taff

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Edward Charlson $75,000 $108,750 $121,800 $127,890 $134,285

David Gortner $25,000 $26,250 $26,775 $28,114 $29,519

Total people 2 2 2 2 2

Total Payroll $100,000 $135,000 $148,575 $156,004 $163,804

Po

Fo

rm

a P

ro

fit

an

d L

oss

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Total Sales $2,138,250 $4,276,500 $4,704,754 $5,175,229 $5,692,752

Bronze Products Cost ($294,150) ($323,565) ($355,921) ($391,514) ($430,665)

Prints Cost ($66,600) ($73,314) ($80,645) ($88,710) ($97,581)

Total Direct Cost of Sales ($360,750) ($396,879) ($436,567) ($480,223) ($528,246)

Gross Margin $1,777,500 $3,879,621 $4,268,187 $4,695,006 $5,164,507

Gross Margin % 83.13% 90.72% 90.72% 90.72% 90.72%

Expenses

Payroll $100,000 $135,000 $148,575 $156,004 $163,804

Rent/lease $4,500 $4,590 $4,682 $4,775 $4,871

Marketing & Advertising $22,053 $22,494 $22,944 $23,402 $23,871

Utilities $1,931 $1,969 $2,009 $2,049 $2,090

Equipment/Leasing $2,940 $2,999 $3,059 $3,120 $3,183

Repair/Maintenance $1,419 $1,447 $1,476 $1,505 $1,536

Bank charges $8,641 $8,813 $8,990 $9,169 $9,353

Dues and subscription $5,416 $5,525 $5,635 $5,748 $5,863

Insurance/liability $7,648 $7,800 $7,956 $8,116 $8,278

Legal and professional $4,101 $4,183 $4,267 $4,352 $4,439

Taxes and licenses $4,398 $4,486 $4,575 $4,667 $4,760

Telephone $2,038 $2,078 $2,120 $2,162 $2,206

Miscellaneous $3,972 $4,051 $4,133 $4,215 $4,299

Total Expense $169,055 $205,436 $220,420 $229,285 $238,551

Total Operating Expenses ($169,055) ($205,436) ($220,420) ($229,285) ($238,551)

Profit Before Interest and Taxes $1,608,445 $3,674,185 $4,047,768 $4,465,721 $4,925,956

EBITDA $1,608,445 $3,674,185 $4,047,768 $4,465,721 $4,925,956

$0 $0 $0 $0 $0

Depreciation ($27,592) ($32,558) ($38,418) ($45,334) ($53,494)

Interest $0 $0 $0 $0 $0

Incomes Taxes $0.00 $0.00 $0.00 $0 $0

Net Profit $1,580,854 $3,641,627 $4,009,349 $4,420,387 $4,872,462

Net Profit/Sales 73.93% 85.15% 85.22% 85.41% 85.59%

Break-e

ven

An

aly

sis

Monthly Units Break-even

Monthly Revenue Break-even $14,467

Assumptions:

Average Percent Variable Cost 17%

Estimated Monthly Fixed Cost -$14,088

Pro F

orm

a B

ala

nce S

heet

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Assets

Current Assets

Cash $1,749,214 $3,641,627 $4,009,349 $4,420,387 $4,872,462

$0 $0 $0 $0 $0

Total Current Assets $1,749,214 $3,641,627 $4,009,349 $4,420,387 $4,872,462

Long-term Assets

Long-term Assets $197,083 $232,557 $274,418 $323,813 $382,099

Accumulated Depreciation $0 $0 $0 $0 $0

Total Long-term Assets $197,083 $232,557 $274,418 $323,813 $382,099

Total Assets $197,083 $232,557 $274,418 $323,813 $382,099

Loan Balance $0 $0 $0 $0 $0

Total Debt $0 $0 $0 $0 $0

Retained Earnings $2,335,333 $4,509,057 $4,979,172 $5,499,042 $6,074,852

Earnings $2,138,250 $4,276,500 $4,704,754 $5,175,229 $5,692,752

Total Capital $2,138,250 $4,276,500 $4,704,754 $5,175,229 $5,692,752

Total Liabilities and Capital $2,138,250 $4,276,500 $4,704,754 $5,175,229 $5,692,752

Net Worth $2,335,333 $4,509,057 $4,979,172 $5,499,042 $6,074,852

es

Pro

ject

ion

s

Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

Sales

Bronze Products Sold

$128,187 $129,469 $130,764 $133,379 $136,046 $140,128 $145,733 $150,105 $156,109 $163,915 $172,110 $178,806

Prints Sold

$25,870 $26,646 $27,445 $27,994 $28,834 $29,699 $30,590 $31,508 $33,398 $34,400 $35,432 $41,681

Total Sales

$154,057 $156,115 $158,209 $161,373 $164,881 $169,827 $176,323 $181,613 $189,508 $198,315 $207,543 $220,487

Bronze Products Cost

($21,366) ($21,580) ($21,796) ($22,232) ($22,676) ($23,357) ($24,291) ($25,020) ($26,020) ($27,321) ($28,687) ($29,804)

Prints Cost

($4,613) ($4,751) ($4,894) ($4,992) ($5,142) ($5,296) ($5,455) ($5,618) ($5,955) ($6,134) ($6,318) ($7,432)

Subtotal

Direct

Cost of

Sales

($25,979) ($26,331) ($26,690) ($27,223) ($27,818) ($28,652) ($29,746) ($30,638) ($31,976) ($33,455) ($35,006) ($37,236)

Co

mp

an

y S

taff

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020

Edward Charlson $75,000 $108,750 $121,800 $127,890 $134,285

David Gortner $25,000 $26,250 $26,775 $28,114 $29,519

Total people 2 2 2 2 2

Total Payroll $100,000 $135,000 $148,575 $156,004 $163,804

P

ro

Fo

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fit

an

d L

oss

2 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

Total Sales $154,057 $156,115 $158,209 $161,373 $164,881 $169,827 $176,323 $181,613 $189,508 $198,315 $207,543 $220,487

Bronze Products Cost ($21,366) ($21,580) ($21,796) ($22,232) ($22,676) ($23,357) ($24,291) ($25,020) ($26,020) ($27,321) ($28,687) ($29,804)

Prints Cost ($4,613) ($4,751) ($4,894) ($4,992) ($5,142) ($5,296) ($5,455) ($5,618) ($5,955) ($6,134) ($6,318) ($7,432)

Total Direct Cost of Sales ($25,979) ($26,331) ($26,690) ($27,223) ($27,818) ($28,652) ($29,746) ($30,638) ($31,976) ($33,455) ($35,006) ($37,236)

Gross Margin $128,078 $129,784 $131,519 $134,150 $137,063 $141,175 $146,578 $150,975 $157,532 $164,859 $172,537 $183,251

Gross Margin % 83.14% 83.13% 83.13% 83.13% 83.13% 83.13% 83.13% 83.13% 83.13% 83.13% 83.13% 83.11%

Expenses

Payroll $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333

Rent/lease $375 $375 $375 $375 $375 $375 $375 $375 $375 $375 $375 $375

Marketing & Advertising $1,710 $1,732 $1,755 $1,778 $1,801 $1,824 $1,848 $1,872 $1,896 $1,921 $1,946 $1,971

Utilities $160 $160 $160 $160 $161 $161 $161 $161 $161 $161 $162 $162

Equipment/Leasing $228 $231 $234 $237 $240 $243 $246 $250 $253 $256 $259 $263

Repair/Maintenance $110 $111 $113 $114 $116 $117 $119 $120 $122 $124 $125 $127

Bank charges $670 $679 $688 $696 $706 $715 $724 $733 $743 $753 $762 $772

Dues and subscription $420 $425 $431 $437 $442 $448 $454 $460 $466 $472 $478 $484

Insurance/liability $593 $601 $609 $616 $624 $633 $641 $649 $658 $666 $675 $684

Legal and professional $318 $322 $326 $331 $335 $339 $344 $348 $353 $357 $362 $367

Taxes and licenses $341 $345 $350 $354 $359 $364 $368 $373 $378 $383 $388 $393

Telephone $158 $160 $162 $164 $166 $169 $171 $173 $175 $177 $180 $182

Miscellaneous $308 $312 $316 $320 $324 $329 $333 $337 $342 $346 $350 $355

Total Expense $13,724 $13,788 $13,852 $13,917 $13,982 $14,049 $14,117 $14,185 $14,254 $14,324 $14,395 $14,467

Total Operating Expenses ($13,724) ($13,788) ($13,852) ($13,917) ($13,982) ($14,049) ($14,117) ($14,185) ($14,254) ($14,324) ($14,395) ($14,467)

Profit Before Interest and Taxes $114,353 $115,996 $117,668 $120,233 $123,080 $127,126 $132,461 $136,790 $143,278 $150,535 $158,142 $168,784

EBITDA $114,353 $115,996 $117,668 $120,233 $123,080 $127,126 $132,461 $136,790 $143,278 $150,535 $158,142 $168,784

Depreciation ($1,500) ($1,572) ($1,647) ($1,726) ($1,809) ($1,896) ($1,987) ($2,083) ($2,183) ($2,287) ($2,397) ($2,512)

Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Incomes Taxes

Net Profit $114,353 $115,996 $117,668 $120,233 $123,080 $127,126 $132,461 $136,790 $143,278 $150,535 $158,142 $168,784

Net Profit/Sales 74.23% 74.30% 74.37% 74.51% 74.65% 74.86% 75.12% 75.32% 75.61% 75.91% 76.20% 76.55%

Pro F

orm

a B

ala

nce S

heet

Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

Assets Starting Balances

Current Assets

Cash $168,360 $282,713 $284,356 $286,028 $288,593 $291,440 $295,486 $295,486 $295,486 $295,486 $295,486 $295,486 $295,486

Total Current Assets

$168,360 $282,713 $284,356 $286,028 $288,593 $291,440 $295,486 $295,486 $295,486 $295,486 $295,486 $295,486 $295,486

Long-term Assets

Long-term Assets $107,140 $112,283 $117,672 $123,321 $129,240 $135,443 $141,945 $148,758 $155,898 $163,382 $171,224 $179,443 $188,056

Accumulated Depreciation

Total Long-term Assets

$107,140 $112,283 $117,672 $123,321 $129,240 $135,443 $141,945 $148,758 $155,898 $163,382 $171,224 $179,443 $188,056

Total Assets $107,140 $112,283 $117,672 $123,321 $129,240 $135,443 $141,945 $148,758 $155,898 $163,382 $171,224 $179,443 $188,056

Loan Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Debt $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Retained Earnings $268,398 $275,881 $284,694 $294,121 $305,271 $318,268 $330,371 $345,406 $361,697 $378,767 $399,930 $2,326,306

Earnings $154,057 $156,115 $158,209 $161,373 $164,881 $169,827 $176,323 $181,613 $189,508 $198,315 $207,543 $220,487

Total Capital $154,057 $156,115 $158,209 $161,373 $164,881 $169,827 $176,323 $181,613 $189,508 $198,315 $207,543 $220,487

Total Liabilities and Capital

$0 $154,057 $156,115 $158,209 $161,373 $164,881 $169,827 $176,323 $181,613 $189,508 $198,315 $207,543 $220,487

Net Worth $107,140 $266,340 $273,787 $281,530 $290,613 $300,324 $311,772 $325,081 $337,511 $352,889 $369,539 $386,985 $408,543