Fragrance Store Business Plan

Fragrance Store worry Plan course Name FRAGRANCESCompevery SummaryFragrances is a new natural and herbal tea cosmetics company proposing to set up a signature herbal cosmetics pull in of descent in Central London. The line of descent go forth deal in herbal cosmetics including perfumes.The company has been setup by a team of three members who have got years of experience in understanding and managing cosmetics business, channel marketing and superior sales. The promoters give initially fund the business themselves as they believe strongly in their produce idea. foodstuff research among over 1000 women in various long time groups shows that there is a select for such products. taxation sales projections for Fragrances be estimated be over 1 million for the first year, with a decent net profit.The promoters feel that, by creating aw arness of their products, many women allow prefer to purchase their products for their own consumption, as imparting friends and fami ly members.ObjectivesCreate a niche market in herbal cosmetics industryGenerate retail sales of over 1,000,000 in year one.Maintain a gross margin of over 65%.MissionTo give an unlimited luck to women of all epochs to buy the farm beautiful naturallyKeys to SuccessFragrances allow for expand a unique line of herbal cosmetics that go out take into news report the differences in requirements of diverse age groups. Herbal cosmetic products are soon in demand today and are also available simply there are no differences in cosmetics available for different age groups.Satisfy the demand of women who do not want to use cosmetics containing bad chemicalsExecute a targeted marketing campaign to generate conscious(predicate)ness of the their productsFragrances exit be a UK- base herbal cosmetics company asseverateing its customers a series of unique herbal cosmetics including skin care products, hair care products and perfumes. There will a wide variety in these cosmetics and wi ll take the differences in requirements of diverse age groups. The store will have two product experts who will help the customers choose the right products according to their ages and requirements. The company will reach out to customers through their own signature store as well as its website.In the future, the company will also explore the possibility of expanding to the entire UK by setting up a reach of such stores.Company Ownership decoratives industry in the UK is a increment industry dominated by a few key players. Fragrances inevitably to pussycat funding to be able to make its presence felt in the industry. It will be set up as a private limited company as the three promoters will pool in their funds and will form the core management team. As a private company it will be able to grasp its initial standing which would not have been possible as a sole proprietorship or partnership firm. leap-up SummaryStart-up be for Fragrances include legal costs, computer supplie s, new product marketing, website role and regulatory costs for cosmetics1. Start-up assets are mostly dedicated to start-up stock.Start-up ExpensesLegal1,000Computer Supplies1,250 securities industrying15,000 electronic network design2,500Regulatory4,000General Administration (including rent and salaries)137,000 gibe Start-up Expenses160,750Start-up Assets coin10,000Start-up stock60,000Other current assets0 immovable assets (Including fixtures)20000 perfect assets90,000 constitutional Requirements for Expenses and assets250,750To start with, Fragrances will introduce its herbal range in skincare products perfumes.Skincare productsThese will include day creams, night creams, exfoliating creams, anti-wrinkle or anti-ageing creams. within these there will be creams for specific age-groups and skin types.PerfumesFragrances will starting time with a limited range of perfumes for the working women. In stage two, more(prenominal) variety will be introduced.Source National Statistics, a ccessed from http//www.statistics.gov.uk/cci/nugget.asp?id=6Market SegmentationThe three main segments of the market who would barter for herbal cosmetics are working executives, college and university students and ageing women. There will also be those who would browse for women, perhaps a husband, friend or a family member. Though the store will be in Central London it will leave to the take aims of entire UK. Women living outside London will buy the cosmetics online through the company website. The absence of a store in wee towns will not impact the sale as the product will be extremely effective and safe. The confidence will be based on additional expenditure on creating cognisance about the products.As per the mid census estimates, the fundamental women population in all age groups in UK is 30,730,300 (Source NSO Statistics). In addition, statistics indicate that on an average 93% of total women in all age groups buy cosmetics. The potential market whitethorn be set at 2 8,579,179 (93% of total women). Based on the ancient and secondary segments, the projected sales forecast is conservatively set at less then 1% of the total potential market (285,790), as foregrounded in the quest table and chart.Potential CustomersGrowth200820092010CAGRWorking women0%142,895142,895142,8950%Young girls0%107,171107,171107,1710%Ageing women0%26,79326,79326,7930%Others0%8,9318,9318,9310%Total0%285,790285,790285,7900%Product snapThe product is a necessity and is not highly price elastic. Consumers are ready to pay a higher(prenominal) product if they become aware of the unique benefits from the product.Industry analysisThe UK cosmetics industry accounts for 5 billion sales. (Source Euromonitor Consumer atomic number 63 2002/3 eighteenth Edition Pub. Euromonitor International Plc)) 93% of British women use cosmetics in some shape or form making us one of the highest users in Europe. (Source Key Note Report Cosmetics Fragrances A Market Sector Overview 10th Edit ion, Ed. By Eleanor Hughes) Convenience and benefits continue to be a key trend for British cosmetics consumers. Easy application and usage, as well as effectiveness, are the main requirements. Some of these products have a higher price positioning, but consumers appear willing to pay higher unit prices if products can offer genuine benefits in terms of saving time.Fragrances will be a small segment of the cosmetics industry. The market is dominated by major players. Significant shifts in overall value share in this orbit have primarily been achieved through major mergers and acquisitions such as LOrals purchase of The Body Shop. competition AnalysisNatural and herbal cosmetic products is a growing sector with the presence of a few big players such as LOral, Bodyshop, Boots and Johnson and Johnson. It is becoming stronger in the UK and UK is right off competing with new(prenominal) European countries for product launches. There has been a 170 per cent summation on launches fro m the comparable period in 2006. According to a young Mintel report, the UK has seen the largest increase in herbal beauty products of any European country nevertheless in the first quarter of 2007. The country accounted for a mere phoebe bird per cent of the 1600 organic cosmetics launched worldwide in 2006, which has now risen to 19 per cent of the 1053 products that have already been launched globally in 2007.In recent years there has been an explosion of activity as consumers have become more aware of the health benefits of using natural ingredients. Supermarkets have now begun to pick up on this trend, with leading chains such as Asda, Tesco and Waitrose all developing own brands to capitalise on the growing consumer demand for organic and ethical products.Our marketing strategy is to create product knowingness among women using cosmetics by strategically placing Internet ads, using direct armsers and generating PR. matched EdgeThe present herbal cosmetic retailers carry a mainstream line of cosmetics that are appealing to the masses. Due to their mass distribution model, it would not be prudent for them to carry small amounts of specialty items for specific age groups. By positioning in the market as a specialty store, Fragrances is convinced(p) that word of mouth will help to create product cognisance across UK.Fragrances unique failing proposition is that its products will be scoop and customised for women in accordance with their age groups, skin types etc. menstruationly, no major cosmetic retailer and online stores offer such customised herbal cosmetics.The primary impuissance of Fragrance will be to generate awareness about the cosmetics and highlight how these are different from the other products available in the market. To generate sales, there is a need to first create awareness about the innovation of the product and make it easy for potential customers to locate the specialisation store. However, it will not be difficult to establi sh its presence in the cosmetics industry.merchandising StrategyFragrances marketing strategy is crucial to its success. The company will need to create awareness of its products throughStrategically- coiffured ads in womens magazines and women related websites broadcast mail and e-mail advertising to working women freshly product PR in publications for women sales Strategygross revenue are dependent upon creating awareness and generating excitement about the herbal cosmetics. The company will strategically place pop-up and banner ads on web-sites germane(predicate) to both women, use direct mail and e-mail lists and seek public relations coverage in relevant media sources.Fragrances will fulfil orders through its speciality store. It will also offer returning customers an option to place their orders on the companys formalised website, or fax in orders to the company.E-orders Customer can purchase online 24-hours a day, seven days a week.Fax orders Customers can fax in an order 2 4-hours a day, seven days a week.Sales auspicateThe sales forecast for First Year 2008 takes into account slower sales at the beginning as the company creates awareness of its product and website. initially the company will be selling limited range of skincare products and perfumes. As the company grows, it will explore the demand for other types of customised products.The spare-time activity table illustrates unit sales of 109,500 units for the first year. This would require the company to sell to less than 1% of its target market.FY 2008FY 2009FY 2010Unit SalesUnits Sold109,500115,000121,000 mean(a) unit price 101010Sales taxation 1,095,0001,150,0001,210,000 range Unit Costs333Direct Cost of Sales 328500345000363000Initially the company will be managed by its promoters. They will oversee product development, the online store, speciality store and marketing efforts. Outsourcing will be used on some initial tasks, specifically the website design and maintenance.Personnel PlanAs t he companys launch date approaches, two product experts will be hired to help with the speciality store sales. As the company grows, more personnel will be added as needed.Personnel PlanFY 2008 (in )FY 2009 (in )FY 2010 (in )Management team for 3 Members45,00045,00045,0002 Employees20,00021,00022,050Total People555Total payroll65,00066,00067,050Fragrances project the gross margin to be healthy percent (70%). Sales projections for 2008 are at over 1 million. Refer appendix for a projected profit loss account, projected exchange in-flow statement and projected residue sheet for the period 2008-2010.Start-up FundingThe promoters of the company will use face-to-face funds to finance the start of this business. The primary start-up costs are as followsStart-up ExpensesStart up FundingStart up Expenses to fund160,750Start up Assets to fund90,000Total Funding Required250,750AssetsNon-cash assets from start-up80,000 gold10,000 special cash Raised0 interchange Balance on jump Date10,00 0Total Assets90,000Liabilities and enceinteLiabilitiesCurrent Borrowing0 decided liabilities0Accounts payable0Other current liabilities0Total Liabilities0 crackingPlanned InvestmentShareholders equity250,750Investor0 additive Investment Requirement0Total Planned Investment250,750 spillage at Start-up(160,750)Total Capital90,000Total Liabilities and Capital90,000Break-even AnalysisThe following Break-even Analysis shows what is needed in monthly sales to break even.Break-even Analysis (Year 2008)Monthly units break-even1,914Monthly Revenue Break-even19,140Assumptions bonnie per-unit revenue10Average per-unit variable cost3Estimated monthly unbending cost13396This Confidentiality conformity (the Agreement) is by and between (hereinafter Disclosing companionship) and the undersigned recipient of information. (hereinafter recipient role) pass catcher and its Representatives shall not disclose any of the Confidential information in any manner whatsoever, except as provided under Per mitted Disclosures. Recipient hereby agrees to remunerate Disclosing Party against any and all losses, damages, claims, expenses and legal fees incurred or suffered by Disclosing Party as a result of breach of this Agreement by Recipient or its RepresentativesAppendix A intercommunicate Profit Loss2008 ()2009 ()2010 ()Sales1,095,0001,150,0001,210,000Direct cost of goods328,500345,000363,000Other costsCost of goods sold328,500345,000363,000 earn Margin766,500805,000847,000Gross Margin %70%70%70%Total Operating Expenses396,025375,667352,917Profit Before Interest and Taxes370,475429,333494,083EBITDA370,475429,333494,083Interest ExpenseTaxes148,190171,733197,633 salary Profit222,285257,600296,450Projected Cash Flow2008 ()2009 ()2010 ()Cash ReceivedCash from OperationsCash sales1,095,0001,150,0001,210,000Subtotal cash from operations1,095,0001,150,0001,210,000Additional cash receivedVAT received000New current borrowing000New other liabilities000Sale of other current assets000Sale of fi xed assets000New Investment received000Subtotal cash received1,095,0001,150,0001,210,000ExpenditureCash spending58,00086,00095,000Bills payment652,232691,342727,276Total pass on operations710,232777,342822,276VAT paid000Repayment of current borrowing000leverage of other current assets000Purchase of fixed assets000Dividends000Subtotal Cash Spent710,232777,342822,276Net Cash Flow384,768372,658387,724Cash Balance394,768767,4261,155,150Projected Balance Sheet200820092010AssetsCurrent assetsCash394,768767,4261,155,150Stock60,00060,00060,000Other Current Assets000Total Current Assets454,768827,4261,215,150Fixed AssetsFixed assets Accumulated20,00020,00020,000Depreciation000Total Assets474,768847,4261,235,150200820092010Liabilities and CapitalCurrent LiabilitiesAccounts payable53,90057,08560,020Current borrowing000Other current liabilities108,583220,456308,795Long term liabilities0Total liabilities162,483277,541368,815Capital including profits312,285569,885866,335Total liabilities and Cap ital474,768847,4261,235,150BibliographyBarrow Colin, Barrow Paul, Brown Robert, The subscriber line Plan Workbook, (2001) Kogan Page LtdBlackwell Edward, How to Prepare a Business Plan, (2004) Kogan Page LtdBranson, Richard, The Best-Laid Business Plans How to Write Them, How to Pitch Them (Virgin Business Guides), (2005) Virgin Books New Ed translationCovello Joseph, Hazelgren Brian, The Complete Book of Business Plans (Jan 1993), SourcebooksEleanor Hughes, Key Note Report Cosmetics Fragrances A Market Sector Overview 10th EditionEuromonitor Consumer Europe 2002/3 18th Edition Pub. Euromonitor International PlcFinch Brian, How to Write a Business Plan, (2006), Kogan Page LtdMcKeever mike P., How to Write a Business Plan,(1992) Nolo PressUK Population data accessed from http//www.statistics.gov.uk/ descry/populationFootnotes1 The UK cosmetics industry is regulated under the the Department of Trade and Industrys 1996 Cosmetic Products (Safety) Regulations.