Business Plan for Introducing Anti-Ageing Organic Cream

This report presents a business plan for introducing an anti-ageing organic cream in the market. It includes market research, budget, sources of finance, and more.

Business

EXECUTIVE SUMMARY
This report presents about the business plan for introducing anti-ageing organic cream in
the market. For knowing the feasibility of the plan, a complete industry analysis is carried out
which includes market and industry research, customers, budget for implementation, sources of
finance and so on. Based on the finding, it can be said that there are barriers in the way but
product can make its place if proper implementation is done and lot of opportunity is available to
grab.
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Table of Contents
Introduction......................................................................................................................................3
Proposed Future Business................................................................................................................3
Customers........................................................................................................................................4
Competitors......................................................................................................................................4
Skills analysis...................................................................................................................................6
Projected 2-year profit and loss account and proposed 2 years cash flow forecasts including
break-even........................................................................................................................................7
Finding, evaluating and selecting suitable sources of funding to grow the business opportunity...7
Plan for obtaining resources.............................................................................................................8
Type of organisation and the management information systems required to effectively control the
business............................................................................................................................................8
Vision for the Business Idea............................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
Appendix........................................................................................................................................11
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Introduction
The purpose of this report is to carry out a business plan with the purpose of introducing the
new product in the market. In this report, the new business entity is looking to introduce a
new product in the market. This report presents the proposed business plan which includes
complete description about the product in terms of innovation. It also covers the STP and
USP of the products and the market position of the business and the key competitors of its
by analysing the industry. It also includes the skills required for implementing business idea
into action along with the projected profit and Loss account and cash flow projections and
the difference sources of funding available.
Proposed Future Business
Product and Service
Beauty refiner is looking to launch a anti-ageing organic cream in the market but their
will be the touch of organic ingredient and organic flavour in it.
Beauty refiner will be giving different flower fragrant and also different will use the same to
make the product organic.
At the same time Beauty refiner will also try to fix the combination of organic product with the
fairness in it, as there is good preference of fairness providing cream in the market.
What does it do?
Beauty refiner will be procuring the new machinery in the organization and will conduct
the market research to understand the need of the customer and on the basis of the same different
product will be made in the organization, so that different product of the company is able to
attract the eye of the customer toward the company.
Innovation it bring
This idea will bring good amount of the innovation in the market, as it has been identified
that there is good demand of organic product in the market and there is no such cream who used
to provide these sorts of the feature in the market (Balaban, Župljanin and Ivanović, 2016).
Another innovative aspect of this idea is that with the help of this idea organization will able to
produce the organic cream at lower rate as compare to the other in market.
Intellectual Property
There are two type of the Intellectual property right which will be implemented to
safeguard this product of the company.
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Trademark: This Intellectual property right in the organization will be used to safeguard the
product name and logo of the product from the competitor in the market.
Registered Design: It is another Intellectual property right in which the organization will be
safeguarding the appearance of the product like colour and pattern to be used by the others.
Customers
Target Customer
Target customer of the company will be B2C, company will be looking to sell the product of
the company to the female consumer. Also, company will be looking to target teen customer
of the age 35-45 to sell the product (Kiznyte, Welker and Dechange, 2016). As demand is
high in this section customer.
Who will buy product
Generally female customer are the one in the market who will be buying the product of the
company, as this product will be targeted to them only, also female with higher income
section will look to buy the same in the market. This may help in improving profit margin as
cost will be low but price will be moderate.
USP
Unique selling proportion of the product will be organic ingredient which will be used in
manufacturing of the product in the market. As, it will help in overcoming different health
issue in the organization.
Customer need meet
This product will help the company in meeting the need of customer in aspect of their need in
context of product which do not impact their health, as there is good need of organic product
in the market.
STP
Segment: Different segment will be made on the basis of age, gender, and income
Target: Beauty refiner will be targeting the segment which belong to the age group of 35-45
years and high income female in the market.
Position: Product of the company will be position in front of the two marketing platform that
is local with the help of newspaper and radio and social media platform in the organization.
Competitors
Key competitors and market share
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Competitors Market share (in revenue)
L’Oréal 35%
Unilever 27%
Procter & Gamble 19%
Why customer prefer the product
Customers will prefer the product because of its unique selling proposition. The product
is made up of organic ingredients along the premium price strategy of the company. Also, no
other competitors have come up with such a unique and organic skin care product. Because of its
uniqueness and benefits the price is set high to target.
Porter’s five forces
Bargaining power of suppliers
 In UK, there is a consistent and continuous rivalry with the organizations in skin care
segment such as Clarins, Unilever, Allergan, L’Oréal S.A., Procter & Gambler and so on.
 Since there is such an enormous rivalry, the suppliers to these industry chains have a
greater power as they are all fighting to get to the top of the market (Bruijl, 2018).
Bargaining power of buyers
 Buyers tend to have more power on a general scale as there is so many brands they can
go to. However, in this case the have already put the prices high to target the premium
customers, meaning less power goes to them.
Competitive Rivalry
 Since this segment has such a large competition, implementing premium pricing
strategies in order to attract and keep customers will attract the premium customers
towards it.
Threat of Substitution
 There are numerous comparable options to the product that a client can utilize. These are
basically Clarins, Unilever, Allergan etc.
 This implies that if the brand somehow managed to expand their costs, a customer could
substitute them with these contenders. This puts product in a debilitated market position
as it is a profoundly serious market.
Threat of New Entry
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 It would be extremely difficult for another competitor to enter this market as there is as of
now an excessive number of huge players inside this market.
 It would require a lot of beginning money to enter the market. Thus, the threat is high.
Industry analysis
In order to analyse the industry, pestle analysis is carried out, which is stated below.
Political factors: The political concerns in UK and EU will have a huge impact on the
personal care segment as the product is considered to be luxurious and will not be the top priority
of the consumers.
Economic factors: It will be favourable as the consumers UK are willing to spend more
on cosmetic products.
Social factors: Consumers are more interested in knowing the ingredients and the
characteristics of the product to find the best especially, organic and herbal products ae in
demand (Hofer, 2016).
Technological factors: Emergence of online companies are grasping the market share,
which is required to be taken care off.
Environmental factors: Increase in awareness green consumerism has increased the costs
of the company. But the customers are preferring such companies who are fulfilling their
responsibilities.
Legal factors: In UK, there are various regulations in respect to the safety of the cosmetic
products and safety standards which are required to be complied with.
Skills analysis
Skills possessed
 Communication
 Negotiation
 Marketing
 Networking
Personnel’s required
 Financial analyst – Accounting, finance and taxation
 Business analyst – knowledge of business analysis tools, research skills, critical thinking skills
 Marketing analyst- market research skills, statistical knowledge, interpretation skills
Skills required in the industry
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 Deep product knowledge
 Leadership skills
 Problem solving skills
 Effective communication skills
 Networking (Berbegal-Mirabent, Gil-Doménech and Alegre, 2016)
Skills to be acquired
 In-depth product knowledge
 Leadership skills
 Problem solving skills
Addressing the skill gap
 Cross -training
 Online courses
 Assessing the progress and working on continuous improvement
Projected 2-year profit and loss account and proposed 2 years cash flow
forecasts including break-even
The projected profit and loss account is prepared for two years. For evaluating the break-
even point, it is being assumed that the sales price per unit is $1. It can be analyzed from the
table that company is required to sell 119478 units in 2018 and 111583 units in 2019. Thus, it
can be further said that it is able to cover its cost.
Finding, evaluating and selecting suitable sources of funding to grow the
business opportunity
Sources of finance available
 Inviting more investors for getting funds
 Equity funding in which here will be no obligation to return back in return of ownership.
 Debt financing, strong performance of business will help it in getting loans from banks
easily (Abor, 2017).
 Leasing can be used for purchasing the machinery instead of buying it.
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Plan for obtaining resources
Based on this, the total cash required for making the first sale is 62900 which includes the
capital purchases and operating expenses. The amount included is estimated amount for carrying
out the initial business activities.
Start-up resources needed Cost £
Machinery and equipment 5500
Materials and supplies 3000
Office space 2000
Electricity 500
Insurance 900
Manufacturing space 2700
Service providers 3000
Salary of key personnel required 40000
Intellectual property rights 3000
Internal use software 1500
Website development 800
Total 62900
Type of organisation and the management information systems required to
effectively control the business
Standardizing the system
CRM system
 It will help in establishing a better relation with the customers as it saves all the activities,
and data of the customers which helps in personalized communication (Dutt and
Chauhan, 2019.
 It will help the company in breaking down the data as per the required to get the required
target audience (Chen and et.al, 2020).
MIS system
 This system will help in achieving higher efficiency as it identifies the non-performing
areas (Anwar and Hasnu, 2016).
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 Helps in improving the quality of decisions because of the availability of better
information.
 Promotes effective communication among departments (Zhang, 2016).
Vision for the Business Idea
Future of business idea
It will meet the needs of the skin conscious customer group because of increase in
awareness about the skin which indicates a bright future of the business.
Impact over the organization
The aim of brand is to grow continuously and add value to the economic growth of
country and provide employment.
Conclusion
It can be summarized that the planning process helps in taking effective decisions. It helped
in identifying the factors that will affect the plan and the key skills required and how to bridge
the skill gap. There is a lot of opportunity available along with challenges but the brand or the
product can cope with it in a sustainable manner.
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References
Books and Journal
Abor, J. Y., 2017. New Venture Development and Sources of Financing. In Entrepreneurial
Finance for MSMEs (pp. 21-50). Palgrave Macmillan, Cham.
Amuna, Y. M. A. and et.al, 2017. The Role of Knowledge-Based Computerized Management
Information Systems in the Administrative Decision-Making Process.
Anwar, J. and Hasnu, S. A. F., 2016. Business strategy and firm performance: a multi-industry
analysis. Journal of Strategy and Management.
Balaban, M., Župljanin, S. and Ivanović, P., 2016. Sources of Finance for Entrepreneurship
Development. Economic Analysis. 49(1-2). pp.48-58.
Berbegal-Mirabent, J., Gil-Doménech, D. and Alegre, I., 2016. Improving business plan
development and entrepreneurial skills through a project-based activity. Journal of
Entrepreneurship Education. 19(2). p.89.
Bruijl, G. H. T., 2018. The Relevance of Porter's Five Forces in Today's Innovative and
Changing Business Environment. Available at SSRN 3192207.
Chen, R. R. and et.al, 2020. Moving beyond the direct impact of using CRM systems on frontline
employees' service performance: The mediating role of adaptive behaviour. Information
Systems Journal. 30(3). pp.458-491.
Dutt, H. and Chauhan, K., 2019. Using flexibility in designing CRM solution. Global Journal of
Flexible Systems Management. 20(2). pp.103-116.
Hofer, C., 2016. The Evolution of Business Plans in International Business Plan
Competitions. Models of Start-up Thinking and Action: Theoretical, Empirical and
Pedagogical Approaches. pp.145-211.
Kiznyte, J., Welker, M. and Dechange, A., 2016. Applying project management methods to the
creation of a start-up business plan: the case of Blendlee. PM World Journal. 5(5). pp.1-24.
Zhang, Y., 2016, June. Management information system. In 2017 2nd International Conference
on Machinery, Electronics and Control Simulation (MECS 2017). Atlantis Press.
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Appendix
Unit
cost 2018 £
Unit
cost 2019 £
Sales 1 200000 1 180000
Variable cost 0.425 85000 0.414 74500
Contribution 0.575 115000 0.586 105500
Fixed cost 68700 65400
Net profit 46300 40100
Break-even point (in
units) 119478 111583
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