launching a new venture

LAUNCHING A NEW
VENTURE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO 1.................................................................................................................................................3
P1 New venture and it’s target markets.......................................................................................3
M1 Competitive advantage method.............................................................................................4
P2 Resources that requires for launching new venture................................................................5
P3 Credible Proposal to launch new venture...............................................................................5
M2 Strengths and weaknesses of new venture............................................................................6
D1 Critique reflection of competitive environment with supporting contingency plan..............6
LO 2.................................................................................................................................................7
P4 Skills required.........................................................................................................................7
M3 Acquisition............................................................................................................................8
D2 Timescale required.................................................................................................................8
LO 3.................................................................................................................................................8
P5 Different promotional and pricing activities and channels for new venture..........................8
P6 Promotional activity plan for both launch and pre- launch....................................................9
M4 Evaluation of different promotional activities....................................................................10
D1 Critically evaluate different promotional activities.............................................................10
LO 4...............................................................................................................................................10
P7 Cash budget and cash flow forecast.....................................................................................10
P8 Legal form of the new venture.............................................................................................12
M5 Justification.........................................................................................................................13
D4 Anticipated Outcomes..........................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Launching of a new venture is an extensive process that involves collection of the different
entrepreneurial ideas and is normally based in innovation and unique demands (Villani, Linder
and Grimaldi, 2018). The current report will first identify the characteristics of the new venture
that is to be launched and then analyse its target market an conduct a competitive analysis. The
report further will include the evaluating of different skills that are necessary to start a new
venture and the promotional activity plan will be prepared before the launching of new venture.
A cash flow forecast will be prepared and lastly the appropriate legal form for the new venture
will be finalised.
MAIN BODY
LO 1
P1 New venture and it’s target markets
“Sustainable and eco-friendly makeup” is a new venture in which includes large number
of ethical makeup brands which are not only good for people but also for the environment. The
main goal of the venture is to improve quality of people life and keeps their skin healthy and
shiny. The ethical brands are Dab Herb Makeup, Fat and the Moon, Axiology natural organic
lipstick, plant makeup, clean-faced cosmetics, barefaced beauty and Elate beauty etc. are
sustainable and cruelty free makeup. This venture has large scope in across the world because
people who apply makeup on their faces, gets negative impact on their dermatology (skin). Non-
sustainable makeup is another reason of skin cancer because there are lots of harmful chemical
that are used to produce makeup products. In addition, it gives injurious impact on environment
as well because harmful chemicals like lead, arsenic, ammonia, bleaching agents, opalescent
agents and others uses to manufacture makeup products which releases harmful radiation in
environment and creates pollution. So, ethical makeup venture will highly promote by all
customers and keeps environment pollution free (Adomako and et.al., 2018). This ethical
makeup brands are purely manufactured it’s makeup brand from natural resources so these are
known as zero waste beauty brands. “Sustainable and eco-friendly makeup venture”is going to
launch in UK because there has high demand of sustainable and eco-friendly makeup. The main
target market of the new venture are women because they have high spending behaviour to keep
them more beautiful. This target market helps to build good brand image of new venture because
it offers sustainable and eco-friendly products to the customer.
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M1 Competitive advantage method
Porter’s Five Forces
It is a analytical framework that used for analysing competitive environment of business.
it comprises five forces that obtains new opportunities to achieve competitive advantage from the
competitors. This model is used for new venture to analyse it’s competitor’s strength and
opportunity for the new business (Greguras, Klopotan and Martincevic, 2019).
Power of suppliers
` The bargaining power of suppliers are quite weak because there has high availability of
suppliers in UK. It is golden opportunity for the new venture because it gets large of suppliers
who offers high quality products on lower cost than enables to gain high profit margin on
makeup products from the customer.
Power of customers
The bargaining power of buyers are also weak because there has limited or less
availability of sustainable makeup brands. The sustainable and eco-friendly makeup venture is
new innovative venture which is new theme for UK’s people. So, bargaining power of buyers are
too weak in the UK market so it helps new venture to generate high revenue in the business
market.
Threats of substitute products
UK is highly developed country whereas various innovative venture has captured large
market share due to high quality innovative products along with it’s attractive price. So, threats
of substitute force can be stronger because new venture’s makeup products are quite costly as
compared normal makeup products. in that state other brand can offer same products at lower
cost than there has high threat of switching buyers from one shop to others.
Threats of new entry
Threats of new entrants is moderate in UK market because such kind venture requires
high quality products which are quite costly because raw material obtains from natural resources.
It requires good financial planning and requires some familiar brands who can build brand image
in the business market which is not possible for the other new ventures. it is beneficial
opportunity for the sustainable and eco-friendly makeup venture to retail it’s products on wide
scale to the customer.
Rivalry among existing competitors
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Sustainable and Eco-friendly makeup ventures do not have to face tough competition
because existing competitors are quite less who retails similar products like new venture. In that
state new venture can easily capture large market share on it’s products and builds good
relationship with targeted customers.
From the above discussion of porter’s five force model is analysed that new venture has
wide scope in the UK market and will generate good revenue on it’s makeup products.
P2 Resources that requires for launching new venture
There are various resources that are required for start-up new venture in the UK market.
Resources are described as follows:
Tangible resources: Tangible are those resources that can be touch and measure
effectively. Sustainable and Eco-friendly makeup venture needs premises, equipment’s and IT
facilities. Premise gives physical existence to new venture in the UK market whereas customer
can buy makeup products accordingly their needs (Huynh, 2019).While equipment’s and IT
techniques are required to set infrastructure of premise which attracts customers towards new
venture to buy products.
Intangible resources: These resources do not measure by anyone or cannot touch by
others. resources are entrepreneurial skills and capabilities i.e. effective communication skills,
negotiation and risk-taking skills etc. are required for running a new venture effectively in the
business market. Apart from this, patent and licence are also required for launching and retailing
makeup products to the customers.
These are important resources that are required for launching new business venture.
Competitive advantage technique
Capital requirements: There are three categories of capital requirements i.e. human,
social and financial which are essential for the new venture because it helps to handle all
business activities effectively in the business market. This technique supports new venture to
achieve competitive advanatge in business market.
P3 Credible Proposal to launch new venture
Executive Summary
It included a business plan for the new business venture in which comprised resources,
background, strategy, budget and risk plan.
Background
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Sustainable and eco-friendly makeup is the new business venture which is going to
launch in the UK market. the targeted audience is women for the new venture. It posses’ wide
range ethical makeup brands and offers online and traditional retailing services to the customer.
Resources
The new ventures require premises, equipment, IT facilities and entrepreneurial skills and
capabilities for successfully established in UK market. these all are resources gives physical
evidence to new business venture while entrepreneurial skills and capabilities requires for
running new business venture.
Strategy
4P’s marketing mix
Product: It has wide product portfolio that are cruelty and pollution free which is major
specialization of new venture’s products.
Price: It is sustainable and eco-friendly makeup products so new ventures products are costly as
compared general makeup products.
Place: UK market is the targeted market for retailing it’s products to the customer.
Promotion: Online media is used for the promotion purpose by the new venture.
Risk factors/ Contingency plan
Pricing risk is the major challenge for the new venture because it’s product are quite
costly.
Budget Plan
It requires £ 1500.
M2 Strengths and weaknesses of new venture
 Strengths: New venture posses’ wide makeup product along with high features. in
addition, it is offers sustainable makeup products which is strengths of new venture.
 Weaknesses: Sustainable makeup products are costly as compared normal makeup
products which is major weakness of the new venture.
D1 Critique reflection of competitive environment with supporting contingency plan
From the above discussion of porter’s five force can be analysed that new venture has large
number of opportunities to promote it’s sustainable makeup products effectively in the
business market. There are some forces like threats of new entrants and others can become
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major threat for the new venture but with support of contingency plan enable to minimize
threats and generate high revenue in the UK market.
LO 2
P4 Skills required
The entrepreneurial venture that has been established in the form of Sustainable and eco-
friendly makeup is planned to being launched and hence the owner of the new venture must
possess a number of considerable skills that are necessary for the establishment and operation of
a venture successfully. There are certain skills which are a must for the entrepreneur such as
networking and communication, people management, finance management etc. and these can be
future illustrated in following manner:
 Communication and Negotiation: Both communication and negotiation can be termed as
critical skills in the success of a venture because the owner must know how to market and
promote their products and also develop important relationships (Martin and Javalgi,
2016). Good communication skills helps in putting the other person at ease and this will
ultimately benefit the customers that are visiting the shop. Negotiation skills are also
important as these help in obtaining profitable and fair deals in the new venture so that
the revenue generation can rise significantly.
 Financial Management skills: Every entrepreneur or owner of a new venture must have
some basic knowledge related to the financial management i.e. the revenuers that is being
generated, profit being earned, incomes and expenses etc. This will help in maintain a
control over the decisions that are being taken in the business based on the availability of
finances in venture.
 People Management: People management is one of the most important skills that the
owner of the new venture must possess because it helps in better management of not jut
customers that are visiting but also the employees that are working, suppliers and
contractors etc. This helps in increasing the productivity and the conflicts are reduced in
the business.
 Networking: This is another skill that affects the success of the new venture very much. It
is essential to build relationships and develop good rapport and networks with the
important people in the industry in which the business is operating (Li and Dutta, 2018).
It is essential to acknowledge that every time the problems that are being faced by the
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business cannot be simply made by the resource utilisation and sometimes the support of
the other people and their assistance is also critical.
 Bootstrapping: Bootstrapping is also an important skill where the entrepreneur tries to
get out of difficult situations with the help of the resources that are available to them thus
helping in meeting the situation of crisis or difficult situations easily. This skill can be
used for the benefit of the venture overall and increase productivity of the venture.
Therefore, collectively the analysis of the different skills indicates that the possession of
these skills is necessary in the owners if the new ventures so that the chances of success increase
for the business.
M3 Acquisition
The skills that have been acquired can be critically identified and developed on the basis of the
different tools and methods. The financial management skills can be developed by registering
into a professional course, communication skills can be developed using the practice sessions,
networking can be done by developing a correct personality and attitude etc.
D2 Timescale required
The time required for development of communication skills would be 5 months, for financial
management skills, it could be 3 months, people management skill can be developed within 8
months, the networking skills can be developed in 2 months and the bootstrapping skills can be
developed within 1 year.
LO 3
P5 Different promotional and pricing activities and channels for new venture
There are various promotional activities i.e. advertising, direct marketing, sales
promotion and social media activities and channels are supply chain distribution and Just in time
(JIT) etc. essential for the new venture before launching it’s business.
Advertising: It is important promotional activity that will use to influence awareness in
customer about new business and specialization of it’s new products.
Direct marketing: With this promotional activity new venture enables to sell it’s products
direct to the customer without involvement of third parties (Muegge and Mezen, 2017). This
promotional activity also builds good relationship with customers and influence their purchasing
behaviour in the UK market.
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Social-media: UK has good technology performance whereas people are highly updated
for e-commerce market and love to do shopping online instead of traditional shopping. With the
social media new venture can directly communicate with people and aware them about new
business and it’s products. The new venture has attractive name that automatically encourages
targeted customers to visit on the site again and again. Thus, social media is the best promotional
tool to aware customer about new brand and it’s products (Njau, Mwenda and Wachira, 2019).
Supply chain distribution: it is major channel that helps new venture to deliver it’s
products to the customer on time. A strong supply chain distribution always attracts customer to
buy products from particular stores. So new venture requires supply chain distribution to supply
it’s products to the targeted customer effectively.
P6 Promotional activity plan for both launch and pre- launch
Pre-launch activities
 Sample
New venture uses this promotional activity before launching it’s business so that people ensures
about new brand and it’s product that it is trustful brand by offering sample of new makeup
product to them.
 Trial sale
It is another promotional activity that apply by new venture to aware people about new business
and it’s product by offering products on lower cost for the trial perspective. It is highly effective
pre-launch activity for the new venture.
Promotional package plan at start up new business
 Key promotional message
The key promotional message of new venture is to “first sustainable and eco-friendly makeup
venture in the UK market”. it is main logo of new venture as well because it is first new venture
which is beyond the expectation cosmetic industry. This message attracts targeted customers
towards visiting and buy makeup products from this new venture.
 Website creation with e- commerce capabilities
New venture creates own website for the customer so that they can visit in it’s site. In addition, it
offers online retailing facilities to the customer by using e-commerce capabilities to attractthose
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customers who prefer online shopping instead of traditional shopping. New ventures provide
secure online payment facilities as well to the customer which assures them no money will take
from the customer from illegal manner (Younger and Fisher, 2020).
 Cost effective promotional techniques
There are various promotional tools i.e. social media, podcast, video clip and image captions etc.
uses by new venture to promote it’s products to the customer and aware them about
specialization of each make branded products. These are cost-effective and more popular
promotional tools that are used by numerous organizations to promote it’s products.
M4 Evaluation of different promotional activities
There are two type promotional activities plans pre-launch and launch which are used for
new venture to aware customer’s about new brand while launch plan is used to promote nre
venture’s makeup products in the UK’s retail market. these plans are quite effective for
successfully established brand image in the market.
D1 Critically evaluate different promotional activities
Direct marketing, advertising, JIT, supply chain distribution and social media are main
promotional activities which helps new venture to promote brand image and builds large
customer base. The major drawbacks of the promotional activities is that it requires high
maintenance on daily basis which is not easier task for new ventures.
LO 4
P7 Cash budget and cash flow forecast
Formulation of a cash budge prior to the launch of the Sustainable and eco- friendly
makeup will help the manager and owner of the venture in ascertaining what are the potential
areas of expenses and the expected amount that they will have to spend before the launch of the
venture (Frederiksen and Brem, 2017). It helps in distributing the total financial resources that
are available in the business over the different expenditures. For Sustainable and eco- friendly
makeup, it can b developed as:
Particular Amount (in £)
Technological requirements 100
Human resources 300
Marketing and promotions 500
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R&D expenses 250
Other expenses 350
Total £ 1500
Further a pre- launch asset budget can also be developed:
Particular Amount (in £)
Raw Materials 600
Machinery and equipments 2000
Cash 1200
Physical Outlet (On rent) 1200
Other Assets 300
Total £ 5300
Apart from the budget, the potential cash flow forecasting can also be done for the
business for a time period of 12 to 18 months and this will help in identifying what are the
sources of expense and revenue for the business and how will it perform in the initial months.
This can be prepared in following manner:
(Amount in £)
Particular Quarter 1 Quarter 2 Quarter 3 Quarter
4
Quarter
5
Quarter 6
Opening
balance
0 13500 36550 68750 98450 115600
Cash sales 17000 20000 25000 21000 22000 40000
Receivables 11000 14500 18000 20000 20500 21000
Sales of
assets
20000 0 0 0 5000 0
Total cash
received
48000 48000 79550 109750 145950 176600
Cash
Expenses
Direct labor 2000 2000 1800 1600 1800 1600
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Direct
material
1500 2100 2200 2300 2000 3000
Selling &
distribution
o/h
4500 4200 4000 4400 3600 3900
Manufacturin
g o/h
1500 3150 2800 3000 2950 2500
Assets
purchased
25000 0 0 0 20000 90000
Total Cash
expenses
34500 11450 10800 11300 30350 101000
Net cash flow 13500 36550 68750 98450 115600 75600
P8 Legal form of the new venture
Every new venture has a multiple number of options that they can utilise in order to create
a legal form of business (Coleman, 2016). In UK, some of the popular options that can be
selected in order to create a new venture include the options of Sole proprietorship, company,
LLP, Partnerships etc.
 Sole Proprietorship: The sole proprietorship is owned by a single individual and in
maximum cases; it is operated single handed with the assistance of tow to three helpers.
This is the simplest form of business but all the profits as well as liabilities are to be
borne by the owner themselves.
 Partnership: Partnership is a legal venture in which two or more than two individuals
work collectively in a single business and share the profits and losses in a profit sharing
ratio. The liability of the partners is also borne in the profit sharing ratio only and the risk
is borne by the partners collectively.
 Limited Liability Partnership: The LLP is also similar to the normal partnership but the
difference here is that the liability aspect of the partners is limited to that of the pre
determined ratio or limit (Barringer, 2015). This is an easy form of partnership where the
partners can enjoy profits at a higher scale but it is very expensive to operate.
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Amongst the variety of options that were discussed above, the best option right now for the
Sustainable and Eco- friendly Makeup is the sole proprietorship. Since the venture right now
operates at a limited scale with a limited number of stores and reach to the customers, the owner
alone can handle the maximum of the business duties. This will help in retaining maximum of
profits and investing them back in the business in the initial years. Also, the owner always will
have the option to convert the sole proprietorship into any other legal form when the venture
expands in the future. Therefore, right now the appropriate legal form for the Sustainable and co-
friendly makeup is to decide the sole proprietorship and generate maximum benefits.
M5 Justification
The cash flow that has been prepared is exhaustive and covers all the aspects and potential costs
that can arise. Further the contingency finds are also segregated in the overall budget.
D4 Anticipated Outcomes
The cash flow forecast prepared above for the period of 18 months clearly indicates that the
Sustainable and Eco friendly Makeup is an extremely well planned venture and is expected to
generate profits in the upcoming months as in the initial months only, the venture is expected to
earn a fair share of revenues and it is constantly rising. Therefore the future position of the
venture looks strong.
CONCLUSION
The research conducted in the report above concludes that there are a variety of decisions
that need to be taken in new venture. First of all the target market and competitive analysis was
conducted for the new venture Sustainable and Eco- friendly Makeup. Then the resources that
would be required were identified and a proposal was presented. Further the report analysed the
critical skills that would be necessary to make the new venture successful and then the
promotional activities that should be carried on were identified and analysed. Lastly the report
analyse the cash flow forecasting for the business and an appropriate legal form was decided
upon for the Sustainable and Eco- friendly Makeup i.e. sole proprietorship and the benefits of
this were highlighted.
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REFERENCES
Books and Journals
Barringer, B.R., 2015. Entrepreneurship: Successfully launching new ventures. Pearson
Education India
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Springer, Dordrecht
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472.
Frederiksen, D. L. and Brem, A., 2017. How do entrepreneurs think they create value? A
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Greguras, M., Klopotan, I. and Martincevic, I., 2019. MEDIA AND COMMUNICATION
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Huynh, N.M., 2019. STAGES OF NEW VENTURE CREATION.
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Villani, E., Linder, C. and Grimaldi, R., 2018. Effectuation and causation in science-based new
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Younger, S. and Fisher, G., 2020. The exemplar enigma: New venture image formation in an
emergent organizational category. Journal of Business Venturing, 35(1).
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