Comprehensive Business Plan for B&B Organic Lipstick and Lip Balm

The document is a comprehensive business plan for B&B, an organic lipstick and lip balm brand. It begins with an introduction and details the proposed future plan, including product specifics, pricing, and distribution through retailers like Tesco and Boots. The plan outlines the target customers (women in the UK), analyzes competitors (MAC, L'Oreal), and identifies the skills required for success, such as sales, marketing, risk assessment, and communication. Financial projections include profit and loss statements, cash flow projections, and break-even sales analysis, with a focus on personal savings and bank loans as potential funding sources. The plan also details startup costs, required management accounting systems (cost management and price optimization), and the company's vision for future growth in the cosmetic market. The plan emphasizes the importance of innovation, financial planning, and effective marketing to achieve success. The report concludes with a discussion of key business plan elements and includes references and financial appendices.

Enterprise
and
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Entreprene
urship
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INTRODUCTION...........................................................................................................................3
BUSINESS PLAN...........................................................................................................................3
Proposed future plan....................................................................................................................3
Customers....................................................................................................................................3
Competitors..................................................................................................................................4
Skills analysis..............................................................................................................................4
Projection of profit & loss and cash flow....................................................................................5
Source of funding........................................................................................................................6
Breakdown of start up cost..........................................................................................................6
Type of management accounting systems required to control business......................................6
Vision...........................................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
Appendix:........................................................................................................................................9
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INTRODUCTION
Business plan described by Entrepreneur is a written report outlining the essence of the
company, marketing and sales strategies and financial history, with a forecast statement of profit
and loss (Amberg and McGaughey, 2019). Furthermore, the company plan may serve many
different purposes. This report is based on new business plans which introduce organic or
chemical free lipstick cum lip balm which is called B&B. This business plan includes several
aspects such as product details, target customers, competitors, financial projections, skills
required to perform task etc.
BUSINESS PLAN
Proposed future plan
New product is going to introduce in the cosmetic market that is B&B which is organic lip
balm or lipstick. It is beauty product for all range type of woman and it’s available at several
supermarket stores like Tesco, Aldi, and Boots etc. Price range of this new product is from £ 10
to £ 40 accordingly to the size. Lipstick or lip balm is highly demanding product in the market,
so new business idea offer multiple colour and shades variety in the market. Company protect
their rights and products from their competitors, so they take patent or copyright for their
products which include the name, packaging and tag line as well. For its promotion, company
sell its samples to the vloggers who give demonstration and it is a new way to promote their
product because they influence many people who watch their vlog regularly.
Customers
Target customer of this organic lipstick is every woman in the UK because lipstick is the
beauty product which is always in demand and demanded by every age group people
(Batkovskiy And et.al., 2018). This product called B&B also used as lip balm which includes
natural ingredients such as Shea butter oil, Coconut oil and Hemp seed oil. They offer
several shades such as pink pallets from Apple Red, Rosy Nudes and Bright Coral, etc. It is
suitable for every sin type or shade. It contains vitamin A and C, and includes vitamins oil. The
new B&B organic lipstick is chemicals-free and will be delivered at a reasonable price to
consumers. The wrapping is made of grass leaf, to make it environmentally friendly.
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Competitors
Every business has several competitors which become barrier for the new organizations. In
order to make their place in the market, new business has to come with unique idea which
provide them peek when they introduce their product in front of customers. B&B is new product
that is range of Lipstick and lip balm (Galvão, Ferreira and Marques, 2018). Each business is
facing a great deal of market competition. There are only a few companies which do not face
pressure that have either cost control or distinguished leadership. Our organic lipstick company
faces a medium degree of competition from its rivals such as MAC, Loral, etc. It may happen but
being an organic lipstick producer, it has a differentiated attribute from its rivals. That allows
everyone to hold onto the market a differentiated lead. And when they think about the prices,
company have some rivals. It is also observe that, customers will prefer B&B products because
they offer chemical free or organic beauty products and it is price effective which can be afford
by the lower to middle class people.
Skills analysis
There are several skills which required by people who going to launch new business such
as B&B product that is organic lipstick or lip balm. Some of them are as follow:
Sale and marketing: Sales are the most significant skill they need to develop a business
(Hatt, 2018). They will have to sell certain ideas, goods and the name to potential buyers and
partners in return for their products or services, which will give the business profits.
Risk assessment: Effective entrepreneurs know when to take big risks which will help
their company to grow through avoiding potential company threats.
Communication: If the planning and execution teams cannot efficiently convey the
priorities and strategies of the company leadership, the project is destined to fail.
Above mention skills required to run their business idea into execution and help the people
to perform their task or achieve business goals. In order to increase the sales of lipsticks and lip
balm, they need to done effective marketing to promote their products. Identify the risk which
can affect the organization as well as sales with the help of risk assessment. In addition,
communication is the most effective as well as common skill which required sharing information
to another person.
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Managers of the company should minimise the skills gap through continue working on it
and provide several training which helps in improving individual skills to run their new business
in the market or maximise the customer base.
Projection of profit & loss and cash flow
Projection of profit and loss statement:
Projections are a forecast about how much money they are going to be bringing in by
offering goods or services as well as how much income you are going to make from those sales.
In good times, they do it to ensure enough revenue comes in to cover the costs of supplying the
goods and services, and they can make a decent profit. In difficult times, your P&L will play an
important role in telling you what kind of a strategy will might need to come back and break so
you can live before better times come. Projection of profit and loss for the new business idea is
to sell 1000 units in first year and in next year sales will be increases by 10%. Cost of the
produce is £ 5 per unit and selling price is £ 10 per unit. Overall profit projection for the first
year will be £ 5000 and for second year it will be £ 5500. In addition, profit margin over the cost
is total 50% which means introducing organic lipstick cum lip balm is profitable business idea
for them.
Cash flow projection:
Operating balance is £ 5000 and cash from sales will £ 10000, so total cash recipe is £
15000 and total cash payment is £ 2570. Overall cash flow of the new business idea will be £
12,430. All the figures are in favourable which means they can implement this plan int5o reality
to generate profit or capture the market with this business plan.
Break event sales:
Break even sales = Foxed cost / Contribution margin
= 240 / 80%
= 300 units.
Contribution margin = (Sales – Variable Cost) / Sales * 100
= (10000- 2000) / 10000 * 100
= 8000 / 10000 * 1000
= 80 %
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Source of funding
There are several sources which acquire by the organizations to run their business
operations and perform daily basis activities (Henry and Lewis, 2018). In order to launch B&B
lipstick, company can fulfil their requirements from several sources such as:
Personal savings: It is the most common form of business financing. The two problems
with financing of this sort is how much savings you have and how much savings you are
prepared to risk.
Bank loan: In this source of finance, small or new business can take loan from banks with
fixed rate of interest and it should be pay off at foxed time period.
Friends and family: Trying to contact the closest relations is a critical step for small
companies to invest.
In this new business, company select bank loan as a most suitable source of funding and
focus on Lipstick production on timely basis.
Breakdown of start up cost
Particulars Cost
Rent 120
Salary 100
Market research 150
Advertisement, marketing and promotions 200
Cost of material of equipment (2*1000) 2000
Equipment 1000
Total 3,570
Type of management accounting systems required to control business
There are several management accounting systems such as inventory management, cost
management, price optimization etc. For the manufacturing of new product that is B&B,
company initially required to follow cost management system to evaluate each unit cost to set
product price or formulate budget. In addition use the price optimization system to identify the
most suitable price for lipstick range where a customer will be ready to purchase. This new
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business idea is comes under flat organization where individual hold all the expertise and
manage each and every activity by themselves.
Vision
As far as the lipstick business is concerned, it is assumed that launching a lipstick business
requires commitment and the right moment for launch to be competitive in the market. Lipstick
is being used by worldwide woman and all type of categories (Lyne, Ngin and Santoyo-Rio,
2018). It is a fantastic company with great rewards because it has little effect on the economic
downturn. In future, hard work and evaluating consumer preferences efficiently will start this
company from a limited to massive scale. New lipstick cum lip balm is seen to have the ability to
show specific customer mindsets.
CONCLUSION
From the above business plan, it is concluded that at the time of building new business plan,
individual have done intense research for several activities. These are essential to implement
their business plan that is why planning is most important factors of new business. This planning
includes the innovative products and then target the audience accordingly. Introduce item should
be innovative because it is possible that its substitute or competitors also available in the market.
Financial calculation also essential because it helps in estimating each product cost and further
set the selling price after estimating their profits.
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REFERENCES
Books & Journals
Amberg, J. J. and McGaughey, S. L., 2019. Strategic human resource management and inertia in
the corporate entrepreneurship of a multinational enterprise. The International Journal of
Human Resource Management. 30(5). pp.759-793.
Batkovskiy, A. And et.al., 2018. Conficuration of enterprise networks.
Galvão, A., Ferreira, J. J. and Marques, C., 2018. Entrepreneurship education and training as
facilitators of regional development. Journal of Small Business and Enterprise
Development.
Hatt, L., 2018. Threshold concepts in entrepreneurship–the entrepreneurs’
perspective. Education+ Training.
Henry, C. and Lewis, K., 2018. A review of entrepreneurship education research. Education+
Training.
Lyne, I., Ngin, C. and Santoyo-Rio, E., 2018. Understanding social enterprise, social
entrepreneurship and the social economy in rural Cambodia. Journal of Enterprising
Communities: People and Places in the Global Economy.
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Appendix:
Profit and loss statement:
Particulars 1st year (£) 2nd year (£)
Units sold 1000 1100 ( 1000 @10 % )
Sales ( 10 Per unit ) 10,000 11,000
Less: cost ( 5 per unit ) 5,000 5,500
Profit: 5,000 5,500
Profit margin: Profit / sales * 100 5000 / 10000 *100 55000 / 11000 * 100
50% 50%
Cash flow projection:
Particulars Amount (£)
Opening cash balance 5000
Cash receipts from sales 10000
Total (A) 15000
Cash payments:
Rent 120
Salary 100
Market research 150
Advertisement, marketing and promotions 200
Cost of material of equipment (2*1000) 2000
Total (B) 2570
Closing balance (Total A - B) 12,430
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