Entrepreneurship and Innovation Case Study 2022

Running head: ENTREPRENEURSHIP AND INNOVATION
Entrepreneurship and Innovation
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ENTREPRENEURSHIP AND INNOVATION
Table of Contents
Introduction................................................................................................................................3
Venture Description...................................................................................................................4
Management...............................................................................................................................4
Marketing Plan...........................................................................................................................5
Competitor Analysis...................................................................................................................6
Financial Analysis......................................................................................................................7
Risks and Challenges.................................................................................................................7
References..................................................................................................................................8
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Executive Summary
‘The Delicate Touch Creations’ will be a start-up business company, which will deal with
herbal products. In this contextual, herbal is presently used by a large number of peoples, as it
focuses on natural resources. Being a start-up company, the company will provide various
products to the customers such as powder, spray, tablets, capsules, extracts, oils, and spirits
among others. On the other hand, the company will be operating as a sole proprietorship. The
main target audience of the company will be small companies, which are operating in the
regional market. This company has estimated the sales goal of $120,000 in the initial year
and will be increased with respect to the time. The management part of the company mainly
overlooks all the business operation of the company. In addition, the competitor analysis
should be done based on the market analysis of the company. The financial analysis of the
company will address the strengths, as well as, weaknesses of the company, which is helpful
for the effectiveness of the company. Lastly, the evaluation of the risk and challenges needs
to be emphasised.
Introduction
Herbal products are growing in popularity in the present scenario. In addition, herbal
products are mainly generated by plants. The herbal product industry is mainly observed to
have high volume of sales. At present, herbal products have spread all over the world, as its
demand has been growing at a rapid pace. Herbal products are considered for natural
products, which includes herbal materials. Moreover, these products have benefits related
health (Drugs, 2019). The main objective of the study is to develop a business plan with
respect herbal products.
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Venture Description
People believe that chemical-based products are harmful to the skin, but natural cosmetics are
highly beneficial to use. Herbal cosmetics will mainly involve in producing “natural
cosmetics”, which will be skin-based. This type of the products will comprise ingredients
such as sandal (Shivan nd, Nilam, & Viral 2010). The name of the company will be ’The
Delicate Touch Creations‘, which will be a supplier of natural items. It includes home-grown
treatment packs, wort oil, cleansers, resin eye packs, balms, lotions, home-grown shower
sacks, and shower powder. On the other hand, Delicate Touch Creations will offer natural
products to the organisations. However, this start-up organisation will be initiated under sole
proprietorship. Most importantly, the organisation will mainly emphasise in producing and
extracting equipment. It has been observed that the popularity of using herbal products has
increased among the customers in recent years. The main purpose of the company will be to
manufacture herbal products related to soothe and cleanse. Moreover, the aim of The Delicate
Touch Creations will be to achieve the sales goal of $120,000 in the initial year of the
business operation. Being a start-up company, the company will initially focus on targeting
the clients of 10 companies. The second-year operation is expected to increase by 12%, as it
will focus on increasing sales. The company will be engaged in manufacturing, as well as,
selling of the powder along with spray, capsules, extracts, oils, spirits, and tablets among
others (Bijauliya, Alok, Kumar, Chanchal, & Yadav, 2017)
Management
Management is an important aspect with respect to the development of the organisation. It
should be kept in mind that managers and employees play a significant role in the company’s
operating plan. An effective management structure measures the performance of the
organisation (EntrepreneurInsight 2019). The Delicate Touch Creations will comprise four
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full-time employees. In addition the organisational structure of the company will set based on
hierarchy with respect to the involvement of the people. Initially, there will be owners,
manager, and staff members. Contextually, in relation to the management, it focuses on the
involvement of other members. With respect to the hierarchy at the top level, there will be
CEO or the owner. In the middle level, there will be operation manager and an assistant
manager. Furthermore, on the lower level, there will be staff. The operation manager of the
company will mainly deal with operational activities, which can enhance organisational
development. In addition, the assistant manager will provide service to the other employees
with the assistance of operational manager. Moreover, they will report to the CEO or the
owner of the company. The members will emphasise more in meeting the business objectives
such as selling the products to the other organisations (Ward, 2019).
Marketing Plan
An effective marketing plan can help in developing both products along with the services and
meet the need of the customers from the company. In this context, the herbal products of the
company can be used by individuals of all the age group and are also useful for those, who
are using the chemical products. It can be stated that the use of herbal products, the customers
will be able to live a healthy life. The raw materials will be imported from the local firms in
order to manufacture the product. In addition, few raw materials will be obtained from the
higher range of the Himalayas and jungle of Amazon. The purest form of the medical herb
can get be imported. Herbal health products are found to be highly dominating sales. On the
other hand, the popularity of the herbal beauty product has been growing over the years,
mostly due to its benefits. It can be stated that there are approximate 9,000 to 10,000 herbal
product companies, which are engaged in selling herbal products, thus the competition will
be high in the respective market. In such cases, it has been observed that there are companies,
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which are operating their business regionally and 10% of the companies are conducting their
business nationally. Most of the companies compete with other regionally. Though, these
companies are dominating the national market, ’The Delicate Touch Creations’ should focus
on the small companies that are serving their products in the regional market. However, many
of the companies have been aggressively seeking new products, which can add extra value to
the product line. In addition, the herbal market has been developed into a large industry over
the last few years. Thus, it can be stated that the opportunities for the small firms have
decreased as compared to the larger herbal companies. On the other hand, the size of the
suppliers can range from one person to another. Additionally larger companies are always
facing problems to win the greater market. Being a start up company, the company should
look for the additional product, which will enhance the advantage in the market. In addition,
the target investor of the company will be medical companies such as Unilever, Dabar,
Patanjali, Bank, and Share Market Investors (Business.gov.au., 2018).
Competitor Analysis
Competitor analysis is highly necessary for determining strengths and weaknesses. It mainly
comes under the marketing plan. In addition, through competitor analysis, it should be
evaluated how it will directly compete with the market share of the company. It should be
advised that comparing the product and the service should be done in an effective manner. In
addition, the key features along with the characteristics of the products should be evaluated
by the analysis. However, the target market should also emphasize the analysis. It can be
stated that quality is an important factor to operate the business. These are essential to be
successful in the herbal product company. Quality can be considered to be an important
factor, as it is one of the strongest marketing tools with respect to herbal products. In
addition, the success of the herbal product may lead to a greater improvement in the large
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company. In addition, there are some unique products, which can be offered by the company.
This unique product can generate demand for herbal products within the customer
(Entrepreneur Media, 2019).
Financial Analysis
Financial analysis is an important aspect with respect to the company. It includes the
evaluation of the past data, which helps in understanding the present along with potential
financial health of the company. Financial statement analysis of the company helps in
understanding its own performance over a precise time period (Audit IT, 2019). In addition,
financial report also helps in conducting an efficient business decision-making (Anđelić &
Vesić, 2017). In case of the start-up business, it needs assumptions. These assumptions
mainly deal with forecasting.
The initial expenditure for The Delicate Touch Creations will be $100,000. On the other
hand, the start-up expenses relating to funding will be $41,600 and the start-up asset to fund
is $58,400. Moreover, it can generate revenue by up to 25%, which is expected to be $25,000
per annum.
Particulars Cost
Operational Cost (Legal, administration & accounting fees) 72,000.00$
Product Development 28,000.00$
Total 1,00,000.00$
Table 1: Total Expenses
The operational cost of The Delicate Touch Creations will be $72,000.This will include legal
along with accounting and administration fees. In addition, the company will incur a cost of
$28,000 for product development.
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Risks and Challenges
There are certain challenges, which can arise while starting the business, especially during
the verification toxicological and epidemiological data. It has been observed that the use of
herbal products has increased extremely over the years (Ekor, 2014). Moreover, there are
certain issues in relation to raw materials, which will be used in the production process. In
addition, there can be risk with respect to the management, which can be considered to be one
of the issues that the company will face. There will be uncertainty in communication. On the
other hand, Pharmacovigilance is also perceived as a key issue related to herbal products. It
has been observed that the company may face issue relating to safety and efficacy assessment
(Vanan, 2014).
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References
Anđelić, S & Vesić, T 2017, ‘The Importance of financial analysis for business decision
making’, Financial Reporting, pp. 1-18.
Audit IT 2019, Financial statement analysis, Introduction to Financial Statement Analysis,
viewed 26 September 2019,
<https://www.readyratios.com/reference/analysis/financial_statement_analysis.html>
Bijauliya,R, K, Alok, S, Kumar, M, Chanchal, D, K & Yadav, S 2017, A comprehensive
review on herbal cosmetics, International Journal of
Pharmaceutical Sciences and Research, viewed 26 September 2019, <http://ijpsr.com/bft-
article/a-comprehensive-review-on-herbal-cosmetics/?view=fulltext>
Business.gov.au 2018, Why do I need a marketing plan, Marketing Plans, viewed 26
September 2019, <https://www.business.gov.au/planning/marketing-plans/why-do-i-need-a-
marketing-plan>
Drugs.com 2019, Herbal products, What are Herbal Products, viewed 26 September 2019,
<https://www.drugs.com/drug-class/herbal-products.html>
Ekor, M 2014, ‘The growing use of herbal medicines: issues relating to adverse reactions and
challenges in monitoring safety’ Department of Pharmacology, vol.4, no. 1, 1-10.
EntrepreneurInsight 2019, Business plan – operations & management plan, Location and
Facility Management, viewed 26 September 2019,
<http://entrepreneurinsight.com.my/business-plan-operations-management-plan/>
GKToday 2019, Importance of marketing planning, Minimize future uncertainties, viewed 26
September 2019, < https://www.gktoday.in/gk/importance-of-marketing-planning/>
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Entrepreneur Media 2019, Competitive analysis, Entrepreneur, viewed 26 September 2019,
<https://www.entrepreneur.com/encyclopedia/competitive-analysis>
Shivanand, P., Nilam,M., & Viral, D 2010, ‘Herbs play an important role in the field of
cosmetics’, International Journal of PharmTech Research, vol.2, no.1, pp. 632-639
Vanan, T 2014, ‘Challenges, constraints and opportunities in herbal medicines – A review’,
International Journal of Herbal Medicine, vol.2, no. 1, pp. 21-24.
Ward, S 2019, The management plan section of the business plan, Business Plans, viewed 26
September 2019, <https://www.thebalancesmb.com/management-section-of-business-plan-
2947028>
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