(PDF) The Business Model and Business Plan

Running head: BUSINESS MODEL AND PLAN
BUSINESS MODEL AND PLAN
Name of the student
Name of the university
Author note

1BUSINESS MODEL AND PLAN
Executive Summary
Fabworld is a subscription box online business company. The company is designed to
create the market leader in the cosmetic and skin care products. The company is located in
Sydney and through its online business the goods are delivered to the different parts of the
world. Through its innovative business concept the business will be able to attract the
potential customers. The business model canvas is evaluated and business it is highly
effective to make the business successful in long-term. The market, technical, financial and
human resources feasibility of the business is also identified. The company will grow with
effective distribution system and earn maximum revenue of more than $300.000.

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Table of Contents
1.0 Introduction..........................................................................................................................3
2.0 Business Model Canvas.......................................................................................................3
3.0 Market Feasibility................................................................................................................5
4.0 Technical Feasibility............................................................................................................7
5.0 Financial Feasibility.............................................................................................................9
6.0 Human Resource Feasibility..............................................................................................11
7.0 References..........................................................................................................................14
8.0 Appendix............................................................................................................................16

3BUSINESS MODEL AND PLAN
1.0 Introduction
The report will depict a business plan for a new company named Fabworld, which
provides beauty products through online mode to its potential customers to the different parts
of Australia. In the recent era of globalization, the future of business is actually dependent on
the electronic commerce market. People nowadays are unable to purchase their goods and
services within a specific time period due to hectic schedule (Joyce and Paquin 2016).
Fabworld is a subscription box business that will be used to facilitate beauty products via e-
commerce trends. Fabworld is aiming to penetrate by develop an extensive product line to
cater to different segments of consumers in the market. The start-up will offer various price
ranges for subscription for different durations.
The subscription box business will facilitate services to its customers or subscribers,
who will pay for the subscribed beauty box on a monthly basis. The beauty boxes with five to
six varieties of cosmetic products will be sent to the customers on a monthly or quarterly
basis. The subscription box will include five to six ranges of high quality cosmetics of
different brands (Toro-Jarrín, Ponce-Jaramillo and Güemes-Castorena 2016). Fabworld will
ensure that the potential customers availing the products will obtain within a particular
interval of time at a reasonable rate. This is entirely a new concept and is very appealing to
the customers. It helps the customers to get an adequate knowledge about the various high
quality products, which is present within the subscription box.
2.0 Business Model Canvas
The proposed business model is to be based in Sydney for the beauty products
subscription services. The concept is really simple and the customers have to pay actually
$50 dollars for their box every month. The customers get an adequate knowledge related to
the various quality products that are present within the subscription box (Tukker 2015).

4BUSINESS MODEL AND PLAN
The business model helps in focusing on advertising its subscription to their potential
customers. The business is actually dependent on the promoting the products through
efficient marketing techniques. In addition to this the logistics of the business should also be
adequate to gain maximum profit. The marketing of the products is useful in attracting and
retaining the subscribers to create core revenues. On the other hand, proper logistic will
facilitate in delivering the elegant beauty boxes to its customers.
Key Partner
Providers of the
various ranges of
beauty products.
Logistics
(Packaging and
Delivery)
Developers of the
App.
Printing.
Key Activities
subscriber
and brand
acquisition
Research
(subscribers
helps in
obtaining the
information.)
Promotion
and
marketing
Content
publishing
Assembling
of boxes
Value
Proposition
Styling
products and
beauty care
Sample
products and
beauty care
Personalizatio
n of the items
Every
subscription
box includes
monthly
surprises
(Joyce and
Paquin 2016).
Customer
Relationships
Maintaining a
cordial
relation
through
pampering
and care
Gaining
customers
trust.
Discovery of
new beauty
products
Sampling
platform for
brands
Customer
Segments
Primary: Women
and teenage girls,
who are highly
concerned with
beauty
Beauty conscious
men and youths.
Secondary: beauty
salons
Key
Resources
Intellectual
data and
customer
Channels
newsletter
and websites
e-mails (box
delivery)

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base
Logistics
Magazine
production
Mobile
platform and
commerce
Print
magazine and
mobile
Social media
(Facebook
and
Instagram)
Cost Structure
Sales and marketing
Development and maintenance of content
platform and products
Supply Chain (distribution, warehouse and
logistics)
Revenue Streams
e-commerce or mobile commerce ( Click
and buy)
Monthly subscriptions
Revenue from advertizing space in the
company’s websites
Revenue from contents for the sponsored
brands is high.
3.0 Market Feasibility
3.1 Size of the market
Fabworld is a start-up business and expects to increase their sales. The consumers can
easily purchase various high-quality products so that they can easily purchase the high-
quality products at a very minimum bargaining price. Fabworld intends to dominate the retail
cosmetic market with such pricing that would easily help them to attract the customers, who
are on fixed budgets. Besides start-ups, retailers and brand manufacturers consumers are
entering the market at a rapid rate.

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3.2 Growth rate of the industry
In the era of digitalization, online business is growing at a rapid rate. The subscription
e-commerce trend is rising at a rapid rate. As per the survey, it has been revealed that more
than 15 percent of the shoppers are now subscribing to attain their preferred products on a
recurring basis in the form of monthly boxes. The subscription e-commerce business will
help in providing the customers, more often the affluent and young urbanites a vey
personalized and convenient way to get the products. In the industry, the churns rate is also
high as the consumers can easily cancel all the services, if they are unable to attain the best
services.
3.3 Trends affecting the industry
Subscriptions are recently increasing at a rapid rate to buy all the products and
services through the online mode. However, streamline media subscriptions is a new concept.
More and more customers are increasingly subscribing to avail the e-commerce business in
the recent times. This trend has positively affected the industry
3.4 Market segmentation
Fabworld is focusing mainly on the female market within the age group to 16 to 60.
As per the demographic report, spa goers are mostly female and the male consumers are very
low. Majority of the female customers earns more than $35,000.
3.5 Target customers
The affluent section of the society is to be targeted. Australia is a developed country
with urbanites. Females are highly educated and earn an adequate amount that they can easily
spend on cosmetic and skin care products. The products and service will be for all the beauty
conscious people. Nowadays people are so busy that they cannot enough time to go from to

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one shop to another and explore the market. Therefore, besides the youth and female groups
all the individuals are the major target.
3.6. Competitive analysis
The customers are now getting the products from different stores or through the
online website of that particular brand (Joyce and Paquin 2016). This becomes very
expensive and time-consuming for the customers to purchase after reviewing each and every
item from the websites. The major competitors are the retailers and wholesaler of the beauty
and skin care products. It is a well-established market so it would be quite difficult to
penetrate in the market. Though, this subscription beauty box business is an entirely new
concept. The women group would be targeted and provided premium, international, national
and niche brands at such a minimum price.
3.7 Business location
It is actually an online business but its main office would be located in Sydney. The
services will be provided to different parts of the world.
4.0 Technical Feasibility
4.1. Technological development option
Technical feasibility is to be developed to attract and retain the customers. Consumers
would buy the products for its benefits and not because of the underlying technology. It is
important to evaluate the products feasibility with the help of effective implementation
(Sarooghi, Libaers and Burkemper 2015). Effective technology would be helpful in
delivering the products effectively to the ultimate user by the planned method.
4.2. Technological changes

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In the era of digitalization, technology is rapidly changing and increasing at a rapid
rate so there is the need for updating the business techniques to survive in the long-run. Each
business requires an effective information system so that they can store their data. Fabworld
website will inform all the ideas related to the products and services to their customers but
developing an application for the mobile users would be advantageous for the growth of the
company. The mobile application would prove to be beneficial as the level of accessibility for
the consumers would increase (Toro-Jarrín, Ponce-Jaramillo and Güemes-Castorena 2016).
Moreover, the cost of paper newsletter and messages cost would also be reduced.
4.3. Options for producing services
The subscription business for beauty products involves sub-contract, licensing and
partnership with all the international and national brands. The products that are provided in
the subscription box will include the mixture of all the different brands. With few of the
international brands partnership and sub-contract both will both be involved (Tukker 2015).
Licencing may be required for different premium brands of the beauty products. Therefore,
combination of all is needed to prepare the ultimate subscription box business model. To
make Fabworld the most iconic brand, it is important to develop well-placed and effective e-
commerce site for sale of the beauty products.
4.4 options for sale and distribution
The option for sales and distribution further involves distributors through which the
boxes can be delivered to the ultimate customers (Carayannis, Sindakis and Walter 2015).
4.5 resources required
Skills required for the development of the business should be well-defined and well
maintained. The suppliers of the beauty products should be active and operative in nature to
conduct the business activities in a smooth manner (Metalloid et al. 2018). The price of the

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boxes should be kept low enough to provide maximum satisfaction the customers. Peoper
infrastructure is necessary for the achievement of web-based sales. The major elements
required to achieve success involves:
 Marketing
 Web design
 Product quality
 Service.
4.6. Laws and regulation
The laws and regulation related to the business should be properly followed. The legal
obligations related to the marketing of the products should be practised and fair enough. The
mission statement of the company, when posted in the websites should not discriminate any
race, creed or gender. The compliance issues while dealing with the employers should be
fulfilled. Each and every employer should feel that they are working in a safe, professional
and fair environment (Foss and Saebi 2017). All the procedures and policies would be
mention in the company’s website to avoid any future problems.
4.7 ethical issues
Fabworld would only sponsor and delivers such products that would be safe and
beneficial for the customers. To avoid any kind of scrutiny, the brands should be proactive
enough while creating to the environment. Fabworld would also have a certification process
that will be ensure the customers. In the current business environment, it is important to
follow all the ethical issues and policies. Fundamental ethical issues for the business often
include conducting the business with integrity. The issues also include empathetic decision-
making, accommodating diversity and government consistency.

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5.0 Financial Feasibility
5.1. Projected revenues
The major goal of the Fabworld is to be the leader in the e-commerce market in
distribution beauty subscription business. It sis to be assumed that the current interest rates
are as follows:
YEAR
1
YEAR
2
YEAR
3
Plan Month 1 2 3
Current
Interest Rate
10.00
%
10.00
%
10.00
%
Long-term
Interest Rate
10.00
%
10.00
%
10.00
%
Tax Rate 30.00
%
30.00
%
30
5.2. Start-up costs
The current staff should be sufficient for ascertaining the three years of operations. It
will be require additional hiring while carrying the operational activities of the business.
Total long-term and current assets would fulfil the 86% of the overall start-up requirements.
The start-up funding includes the combination of investment and long-term commercial loan
(DaSilva and Trkman, 2014). The start-up cost would require legal fees and cost for the
transformation of the business. This start-up cost also includes web development, office
supplies, telephones and internet lien instalments, desk chair, shelving units for inventory

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storage and computer systems. The start-up expenses entire costs involve $ 11,200 and the
total funding includes $80,000.
5.3. Profit and Loss Statements
The profit and loss statement of the proposed business plan of Fabworld is evaluated
for three following years (Souto 2015). During the first year of the business, the company
may incur a loss of around 37%. From the second and third year of the business, the company
will incur profit of around 11% to 12% respectively. The break-even analysis showcased that
the $24,248 would be needed to reach the break-even point.
5.4. Sources of Financing
The major sources of financing includes own capital and long-term loans or
borrowing would be required.
6.0 Human Resource Feasibility
6.1. Technical and management experiences
It would be actually the responsibility of the entrepreneur to maximize the business
values through profitable and marketable products. The failure of the products leads to the
failure for the entrepreneur. Fabworld would require high skilled human resources that could
lead to optimize the profitability and marketing of the product (Schaltegger, Hansen and
Lüdeke-Freund 2016). There are important gaps that are to be required to be filled. This
would include customer service representative, advisory board and distributor manger.
6.2. Entrepreneurs role
As it is a start-up business related to the beauty products. I have already worked as
product manager for a famous cosmetic product. Therefore, I have already acquired a lot of

12BUSINESS MODEL AND PLAN
knowledge for the products. I have experience in managing staff and obtaining their best
performances.
6.3. Ownership Structure
Fabworld is a privately held company and a sole proprietor business with 100%
ownership of the company. Being the president and founder for the product major
responsibilities is to be fulfilled to achieve the desired goal. The company would also involve
operational mangers, finance managers to get the full insight of the industry and proper
knowledge of the products and services
6.4. Manpower requirement
The manpower required would be the entrepreneur, Manager, Programmer, customer
service and distributor of the products.
Year 1 Year 2 Year 3
Entrepreneur $36,000 $42,000 $50,000
Manager $36,000 $42,000 $50,000
Programmer $30,000 $30,000 $30,000
Customer service $27,500 $30,000 $30,000
Distribution $27,500 $30,000 $30,000
Total Payroll $157,000 $174,00 $190,00
6.5 Company’s growth strategy
Fabworld is entirely a new and innovative concept and the subscription business
model enables the people to use the premium and international brands to achieve maximum
growth and delivery of the boxes. The growth strategy of such kind of business can be
through market penetration and word of mouth referrals (Klang, Wallnöfer and Hacklin
2014). Through positive online reviews the customers can easily ascertain the views of the
international product and subscribe for the services.

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In future, the beauty subscription boxes can be made personalized for the customers.
They would be able to choose few of the products themselves (Bocken et al. 2104). This
would be helpful in providing maximum satisfaction to the customers. The subscribers in the
recent times want something innovative and new. The monthly gift along with the beauty
boxes would be helpful enough to attract and retain maximum customers.

14BUSINESS MODEL AND PLAN
7.0 References
Bocken, N. M., Short, S. W., Rana, P., and Evans, S. 2014. A literature and practice review to
develop sustainable business model archetypes. Journal of cleaner production, 65, 42-56.
Carayannis, E. G., Sindakis, S., and Walter, C. 2015. Business model innovation as lever of
organizational sustainability. The Journal of Technology Transfer, 40(1), 85-104.
DaSilva, C. M., and Trkman, P. 2014. Business model: What it is and what it is not. Long
range planning, 47(6), 379-389.
Foss, N. J., and Saebi, T. 2017. Fifteen years of research on business model innovation: how
far have we come, and where should we go?. Journal of Management, 43(1), 200-227.
Güemes-Castorena, D., and Toro, M. A. 2015. Methodology for the integration of Business
Model Canvas and technological road map. In Management of Engineering and Technology
(PICMET), 2015 Portland International Conference on (pp. 41-52). IEEE.
Joyce, A., and Paquin, R. L. 2016. The triple layered business model canvas: A tool to design
more sustainable business models. Journal of Cleaner Production, 135, 1474-1486.
Klang, D., Wallnöfer, M., andHacklin, F. 2014. The business model paradox: A systematic
review and exploration of antecedents. International Journal of Management Reviews, 16(4),
454-478.
Metallo, C., Agrifoglio, R., Schiavone, F., and Mueller, J. 2018. Understanding business
model in the Internet of Things industry. Technological Forecasting and Social Change.
Palattella, M. R., Dohler, M., Grieco, A., Rizzo, G., Torsner, J., Engel, T., and Ladid, L.
2016. Internet of things in the 5G era: Enablers, architecture, and business models. IEEE
Journal on Selected Areas in Communications, 34(3), 510-527.
Saebi, T., and Foss, N. J. 2015. Business models for open innovation: Matching
heterogeneous open innovation strategies with business model dimensions. European
Management Journal, 33(3), 201-213.
Sarooghi, H., Libaers, D., and Burkemper, A. 2015. Examining the relationship between
creativity and innovation: A meta-analysis of organizational, cultural, and environmental
factors. Journal of business venturing, 30(5), 714-731.

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Schaltegger, S., Hansen, E. G., andLüdeke-Freund, F. 2016. Business models for
sustainability: Origins, present research, and future avenues.
Souto, J. E. 2015. Business model innovation and business concept innovation as the context
of incremental innovation and radical innovation. Tourism Management, 51, 142-155.
Toro-Jarrín, M. A., Ponce-Jaramillo, I. E., andGüemes-Castorena, D. 2016. Methodology for
the of building process integration of Business Model Canvas and Technological
Roadmap. Technological Forecasting and Social Change, 110, 213-225.
Tukker, A. 2015. Product services for a resource-efficient and circular economy–a
review. Journal of cleaner production, 97, 76-91.

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8.0 Appendix
Appendix 1: Start-up Cost for business
START-UP REQUIREMENTS
Start-up
Expenses
Legal $1,000
Stationery etc. $200
Web
Development
$10,000
TOTAL
START-UP
EXPENSES
$11,20
0
Start-up Assets
Cash Required $65,600
Other Current
Assets
$0
Long-term
Assets
$3,200
TOTAL
ASSETS
$68,80
0
Total
Requirements
$80,000
START-UP FUNDING
Start-up
Expenses to
Fund
$11,200
Start-up
Assets to
Fund
$68,800
TOTAL
FUNDING
REQUIRED
$80,000

17BUSINESS MODEL AND PLAN
TOTAL
PLANNED
INVESTMENT
$80,000
Loss at Start-up
(Start-up Expenses)
($11,200)
TOTAL CAPITAL $68,800
TOTAL CAPITAL
AND LIABILITIES
$68,800
Total Funding $80,000
Appendix 2: profit and loss business
YEAR 1 YEAR 2 YEAR 3
Sales $189,397 $412,314 $456,226
Direct Cost of Sales $56,819 $123,694 $136,868
Other Production
Expenses
$0 $0 $0
TOTAL COST OF
SALES
$56,819 $123,694 $136,868
Gross Margin $132,578 $288,620 $319,358
Gross Margin % 70.00% 70.00% 70.00%
Expenses
Payroll $157,000 $174,000 $190,000
Sales and Marketing
and Other Expenses
$10,800 $9,200 $7,200
Depreciation $636 $636 $636
Leased Equipment $0 $0 $0
Utilities $1,800 $1,800 $1,800
Insurance $1,500 $1,500 $1,500
Rent $8,400 $8,400 $8,400
Payroll Taxes $23,550 $26,100 $28,500
Other $0 $0 $0
Total Operating
Expenses
$203,686 $221,636 $238,036
Profit Before Interest
and Taxes
($71,108) $66,984 $81,322
EBITDA ($70,472) $67,620 $81,958

18BUSINESS MODEL AND PLAN
Interest Expense $0 $0 $0
Taxes Incurred $0 $20,095 $24,397
Net Profit ($71,108) $46,889 $56,925
Net Profit/Sales -37.54% 11.37% 12.48%