Comprehensive Business Plan: The Sirius Candle Manufacturing Project

This assignment presents a comprehensive business plan for 'The Sirius,' a candle manufacturing company based in Central London, UK. The plan outlines the company's concept, which centers on producing and selling organic candles, including therapeutic and massage candles, a unique selling point in the market. It encompasses an in-depth industry analysis, exploring market segmentation, competitor analysis, and a marketing plan that includes strategic analysis and SWOT analysis. The business model, operational issues, and financial projections are detailed, including funding requirements, sales projections, cash flow statements, profit and loss statements, balance sheets, and break-even analysis. The plan also addresses intellectual property, management structure, and contingency plans. The company aims to capitalize on the growing candle market, targeting both online and offline sales channels, and projects significant revenue within its first year of operation.

Table of Contents
EXECUTIVE SUMMARY.......................................................................................1
INTRODUCTION.....................................................................................................1
Business opportunity.................................................................................................1
Company Description................................................................................................1
Concept of the business.............................................................................................1
Industry Analysis.......................................................................................................2
Exploratory research, market segmentation and market accessibility...............2
Analysis of the industry.....................................................................................3
Competitors analysis..................................................................................................3
Comparison of the prices with the competitors.................................................3

Marketing Plan..........................................................................................................3
Marketing plan...................................................................................................3
Strategic analysis.......................................................................................................4
SWOT Analysis.................................................................................................4
Competitive advantage......................................................................................4
Strategy for the business....................................................................................5
Business Model.................................................................................................5
Operational issues......................................................................................................5
Requirement of facilities and equipment’s........................................................5
Location.............................................................................................................6
Cost of development..........................................................................................6
Issues related to intellectual property................................................................6
Management team and structure of the company..............................................6
Financial plan............................................................................................................7
Finance of the product development.................................................................7
Requirement of funding and its sources............................................................7
Sales projection for the first year.......................................................................7
Cash flow projections for one year....................................................................8
Profit and loss statement for 1 year...................................................................9
Balance Sheet for 1 year....................................................................................9
Breakeven point...............................................................................................10
Standby arrangement of finance for contingencies.........................................10
REFERENCES........................................................................................................11

Index of tables
Table 1Sales forecast.................................................................................................5
Table 2Cash flow statement......................................................................................6
Table 3 Profit and loss account.................................................................................7
Table 4Balance sheet.................................................................................................7
Table 5Breakeven point.............................................................................................8

Index of Illustrations
Figure 1Revenue of competitor's company...............................................................2
Figure 2 Central London...........................................................................................6

EXECUTIVE SUMMARY
‘The Sirius’ is a candle manufacturing company who wants to create business through the sale of organic candles. This company makes wide variety of candles and make it available to the
customers. It includes, wick, therapeutic and massage candles, container candles etc. The usage of these candles in massage and therapies will reduce the risk of spasm and muscle pulls. The
company will follow direct selling model and will set up a brick and mortar store in Central London, UK.
From the market research it can be assessed that therapeutic and massage candles are not offered by any of its competitors and hence it is new in the market. Young and old will get
benefit out of it. Further, the candle making industry is growing and the company will be able to generate higher profits in the next coming year It is estimated that it will be able to develop
approximately 2,527,234 sales revenues in next 12 months of its functioning.
Total estimated fund for the company is 8000000 which includes, personal funding and loan from banks. The company will get its name patented so that it cannot be used by any other
company. Since, the business plan seems to be beneficial and hence the team must take the plan forward towards its establishment.
INTRODUCTION
Business proposal is a blueprint of the estimated made by the company. It helps the company to stay focussed and assess its potential. Below is the plan prepared to establish a successful
venture in UK.
Business opportunity
The candle making business is growing and its demand is never ending. Its usage in rituals and home decor is increasing day by day. It is also used in salons and Spas as a decor item to
attract large amount of customers. Considering this need of candles, a plan has been developed aligned to the goals of the business to earn large market share in this industry.
Company Description
Company name: The Sirius
Date of establishment: 25 October 2017
Head Office: Central London, UK
Type of company: Candle manufacturing company
Contact No. 0786945334
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Business email: [e-mail]
Concept of the business
An organic candle making company is proposed with the name “The Sirius” with the slogan “Lets illuminate life”. ‘Sirius’ is a star system and the brightest star in the Earth's night sky.
In the current market different sort of candles are available to customers such as container candles, floating candles, utility candles, ritual candles and therapeutic candles. Here, we produce
aromatic LED Candles which does not need batteries or a power output. The energy source is from a cup candle which is lit under the dome. The dome converts heat energy to Electrical energy
which in turns powers the led lamp which lasts for 8 hrs. This unit has also a scent diffuser and an inlet to fill aromatic oil. This is a portable and eco friendly product. The objective of the
business is to produce organic candles which can be used by the customers for therapies and spa as well. Several types of candles will be made including both scented and unscented which will
come in various shapes and sizes as well. These candles will also act as medicines to cure various pains and muscle pulls (Kumar and Phrommathed 2015).
Mission and Vision: To fulfil the need of the customer and provide best possible benefits to the clients
Objective of the business
Short term: To increase brand awareness of the company in order to earn high customer base in next one year.
Long term: To earn large market share in the candle making industry. Further, increase the presence all around the world in next 5 years.
Product: Different types of candles such as, container candles, floating candles, utility candles, ritual candles and therapeutic candles. These products will be available in both scented and
unscented manner. Candles can also be customised based on the occasion and demand of the customers as well. Option of approximately one thousand scents for candles will be introduced.
Price: The aim is to keep moderate pricing strategy in order to penetrate in the market and attract large number of customers. It will be ensured that fair prices are charged from the customers.
Moreover, the charges of customized candles will be different as per the preference made by the customers. Further, the prices will be slightly lower in comparison to the competitors in order
to develop a high customer base.
Place: It will be available in both online and offline modes. Customers can order their candles through the websites and social media handles as well. A brick and mortar store will also be set
up in the heart of the city, London from where the company will operate and connect to its customers.
Promotion: Promotional activities will be conducted in hotels, Spa centres and beauty salons. The business will also be introduces to youngsters through advertisement in colleges and
corporate hubs. It will be promoted through tie ups with the hotels as well.
Industry Analysis
Exploratory research, market segmentation and market accessibility
Candles making industry have major importance and it is one of the markets whose demand do not decrease. However, the disposable income of the consumers will be related to type of
candles they are purchasing. Increase in the craze of candles among youngsters gives rise to discover for various types of scents. It is the first thing that attracts a person towards a candle shop.
Revenue of the competitors company is growing.
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Figure 1Revenue of competitor's company
Source: Scented candles, 2017
Another important aspect is to look for different avenues that can lead to reach the customers which can be performed by tying up with hotels, spas and salons. The sale of candles is not
restricted to stores and social media. Rather, it is open to various outdoor events and fairs as well. A latent demand in the candles attracts to enter into the industry.
Candle market can be segmentation based on type of the candles required by different section of the society, Distribution channel and region wise as well. It will help in serving the
customers in better way. Moreover, it can also be segmented based on the income level of the customers. Customers falling in high range of income will require to be targeted for costlier
candles in comparison to that of candles.
In the initial stage of the business, it is important to concentrate on UK only as it will be feasible for the company. Afterwards, it can opt for expanding in other regions such as America
and Europe.
Market Analysis
Candle industry is always in demand and it cannot be diminished. As per the analysis performed, candle industry in UK is quite growing. During holidays and Christmas season, one
third of the sales take place. Moreover, market is getting attracted towards organic products which do not harm people and as well the environment ( Finch, 2016). Teens and youngster who are
involved in massage and Spas can take these therapeutic treatments through candles. It is used in decoration of the garden and exterior areas of the house. 74% people consider it as a house
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warming gift and birthday gift idea. Votives, container candles and pillars are the most popular types in UK. The preference of candles depends on its fragrance, colour, cost and shape. The
industry can be analysed though PESTLE analysis:
Political: Change in the policies of the UK government can affect the business. Level of corruption and bureaucracy can affect the business of Sirius (Barringer, 2012).
Economic: UK economy is considered to be the largest in Europe and hence its contribution towards the GDP is the highest. However, change in taxation policies and interest rates can affect
the business.
Social: A constant change in taste and preference of the customers is another factor. If a particular type of scent in candles is not liked by the customers then it will be a loss for the company.
Technological: Constant upgrade in the technology is required to fulfil the demands of the customers without hampering the quality of the product.
Legal: Changes in the laws of the country for retailers can affect the business of Sirius (Jones and Penaluna, 2013).
Environmental: Since, all organic products will be used there can be harm to the plants which the company need to take care of.
Applying five forces model on the Sirius, following observation can be made:
Threats of new entrants: Since, candle market is growing, entrants of any other manufacturer in organic products can reduce the market share of Sirius.
Suppliers power: Wax producing companies are less in the country. Hence, their bargaining power can act as an obstacle.
Buyers power: Customized and therapeutic candles offered by the company can be bargained by the consumers and they may not be satisfied with the prices of the products offered.
Threats of substitutes: Availability of various candle manufacturer can divide the demand. However, the entity will be pioneer for therapeutic and massage candles as it is not offered by any
other competitor. Rather, they can also opt for other medicated gels for massage and spas.
Competitive rivalry: Availability of large number of candle makers and other oils used for massage can reduce the market share of Sirius (Bartholmé and Melewar, 2016).
Competitors analysis
Comparison of the prices with the competitors
In order to penetrate in the market of candles Sirius will provide the products affordable prices to its customers. It will help to draw and edge over other candle manufactures. The main
competitors of Sirius in the candle industry are, the White company, Yankee candles and Reckitt Benckiser candles. However, therapeutic and massage candles are not offered by these
companies.
Further, introduction of different types of scented time to time is adopted by the competitors' company. It helps in bringing something new to the customers. They also tend to organize
sales during Christmas and New Year.
Marketing Plan
Marketing plan
In order to develop positive perception in the minds of the people, it is important to have effective and innovative marketing plan. It will help the company to reach to the desired results
and ensure that the entity is generating income.
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More efforts will be made in visuals of the products offered as it plays an important role. Further, free samples will be made available to the customers at corporate houses, events, fairs,
Spas, hotels etc.
Candle depicts calmness and hence the designed advertisement will very well satisfy this feature. Another important marketing strategy is to use appropriate publicity platforms. It
includes, stalls in trade fairs, engaging audience on social media platforms, networking with candle makers of London to understand the market well etc ( Scented candles, 2017). Further,
advertising in beauty and lifestyle magazines, newspapers, television and radio stations are some other methods that will be adopted by Sirius.
Pricing Strategy: Penetration pricing strategy will be followed by the company in order o attract large amount of customers. This strategy is followed at an initial stage by the entity in order to
penetrate in the market and make a brand name among the customers.
Sales process:
Step 1: Demonstrate different objects to the client
Step 1: Take order from the customers
Step 2: Customize their candles based on their taste and preferences
Step 3: Find appropriate scent for them
Step 4: Hand over the parcel to the client
Strategic analysis
SWOT Analysis
SWOT analysis can be conducted for the Sirius in the following manner:
Strengths: The greatest strength of the company is that is offers candles in all shape, sizes, colour and fragrances. Moreover, it provides therapeutic and massage candles as well which are not
offered by any of its competitors. Further, these candles are organic and hence won't affect the health of the users.
Weakness: Since, the company is only operating in London in its few initial months. Hence, it can be able to serve only the customers who belong to that location.
Opportunities: Candle making industry has epitome of opportunities as its demand never goes down. Further, Sirius can expand outside London and UK as well in the coming years after its
establishments.
Threats: Since, the concept is new, arrival if competitors will be quite fast. Another threat can be degradation in the economy which can affect buying behaviour of the customers.
Competitive advantage
The Sirius is the candle making company. However, it is important to have competitive advantage in order to achieve higher market share. It offers candles in all shape, sizes and
fragrances. It has more that 1000 fragrances in the store which are trendy as well as liked by both young and old. Further, therapeutic and massage candles are also offered by the Sirius which
can be used by various massage centres, Spas and salon to give treatment to their clients. These candles have healing and muscle relaxation properties that can be utilised to treat muscle pull
and sprains as well. Its cooling effect helps in reduction of pain to the consumers.
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Another competitive advantage is that it will provide excellent customer services by understanding the needs of the customers. The Finest professional will be hired to experiment with
the new scents and research unique fragrances to attract the customers.
Further, customized candles based on the taste and preferences of the customers are prepared by the Sirius. It helps in fulfilling the needs of the customers in better way. These are some
of the properties of entity that is not commonly offered by any other competitors. It makes it different from other enterprises and can help in building market share in the candle industry as
well.
Strategy for the business
It is important to satisfy the needs of the customers in order to sustain in the market. The competitive employees play an important role in this case. Further, competitive business
structure is another important measure considered by the business. Another important aspect is related to division of profits. As a business strategy it is decided that the profits will be shared by
the top level management. However, performance based incentives will be given to the other employees working in the organization.
The Sirius is planning to open its store in Central London which will be expanded to the whole UK in the following months. The expansion will totally depend on the revenues and
profits earned by the company.
Business Model
Different types of candles offered by the Sirius to its customers. It will first set-up in central London and then will be expanded in the whole UK in the coming years. The business model
of the plan suggests that the company will have adequate amount of profits margin in its products so that it can cover the variable and fixed cost involved.
A venture with hotels, Spa and massage centres will be performed which will help in making wide availability of the products. It will increase the presence of the products as well as act
as a branding strategy for the company as well. The company can further expand in pure wax, oils and perfumes as well.
Operational Plan
Requirement of facilities and equipment’s
‘The Sirius’ need to concentrate on the following business functions in order to operate the business successfully. Some of them are mentioned below:
 Moulds of different sizes and shapes
 Fragrance agents
 Wax
 Wax Melters
 Wax filling machines
 Colouring agents
 Walk in refrigerators
 Chilled rooms and cabinets
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 Temperature controlled environment
 Work stations
 Storage areas
 Employee facilities
 Lighting
 Utility cabins
 Fire safety equipment’s
Location
The brick and mortar store of Sirius will be located in Bromley High Street on its initial stage. Further, it will expand in all around UK based on the profits earned by the company. It will
satisfy the needs of the customers by taking order through its websites and social media page. Hence, making delivery of the products at their door steps.
Figure 2: Bromley high Street
Source: What’s it like living in Central London. 2016
Cost of development
Since, the entity is involved in production activity; there is a good amount investment that is required to be initiated by the establisher. Moreover, arranging the equipments requires in
making the candles is the another aspect which includes, was heaters, melter, moulds and wax refrigerators. Adequate amount of labour will also be required to initiate the production.
Further, another important requirement of the business are, inventory cost, operations cost, storage facilities, fees of business incorporation and license, cost of launching official website
and other utilities etc. Hence, an adequate amount of funds will be required by the company in order to run the business smoothly.
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Issues related to intellectual property
Since, the idea of the Sirius is new and innovative, it is important to get the idea registered and patented so that it can not be used by other companies. It also needs to have copyrights of
the name 'The Sirius '. It will restrict other company in keeping similar names.
Management team and structure of the company
To conduct the operations in effective manner, it is important to have competent team. There will be five people involved as founders in the business who will lead four different
departments in the following manner:
Financial plan
Finance of the product development
Entire amount will be finance from banks and some of amount will be taken from personal savings. By doing so an attempt will be made to control cost of finance in the business. Total
amount of bank loan that will be taken in the business is equal to 300000 and personal capital will be 500000. This means that overall there will be moderate proportion of debt in capital
structure.
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Requirement of funding and its sources
As mentioned above funding will happened from two sources debt and equity. Optimal proportion of debt and equity will be kept in capital structure.
Sales projection for the first year
Table 1Sales forecast
(a) SALES
FORECAST
month
1
month
2
month
3
month
4
month
5
month
6
month
7
month
8
month
9
month
10
month
11
month
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Year 0 1
(a) Sales Value 118,182 130,000 143,000 157,300 173,030 190,333 209,366 230,303 253,333 278,667 306,533 337,187 2,527,234
Cash flow projections for one year
Table 2Cash flow statement
Net Cash Flow for
period
782200 -18920 -15758 -12280 -8454 -4245 384 5477 11078 17280 24018 31474 -19324 -19324
Opening cash
balance
0 782200 763280 747522 735242 726788 722543 722928 728404 739483 756723 780741 812216 812216
Closing Cash Balance 782200 763280 747522 735242 726788 722543 722927 728405 739482 756763 780741 812215 792892 792892
Profit and loss statement for 1 year
Table 3 Profit and loss account
Year Summary
Revenue 1710315
VAT (1%) 0
Cost of Sales 1034144
Gross Profit 676171
Expenses / Overheads
Premises (rent, rates) 12000
Wages and salaries 576000
Administration expenses 6000
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Communication expenses 8400
Marketing expenses 9600
Rates 2400
Insurance 1080
General expenses 3000
Interest charges 20000
Lease payments 2000
Other expenses 3800
Total expenses / overheads 644280
Profit before tax 31891
Tax @25% 7973
Profit after tax 23918
Transfer to reserves 31891
ROEI 5%
Balance Sheet for 1 year
Table 4Balance sheet
Assets Year 0 Year 1
Cash 782200 812891
Premises
Advance
12000 12000
Prepaid expenses 3800
Leased assets 2000 7000
Total 800000 831891
Liabilities Year 0 Year 1
Loan 300000 300000
Share Capital 500000 500000
Reserves 31891
Equity 500000 531891.1
Total 800000 831891
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Breakeven point
Table 5Breakeven point
Revenue Contribution
Fixed
Cost Profit
391182 195590.9091 161070 1.2143224
520663 260331.5 161070 1.61626312
693002 346501.2265 161070 2.15124621
922386 461193.1325 161070 2.8633087
Standby arrangement of finance for contingencies
In order to ensure that finance will be available in contingent situation in advance contact will be established with bank manager and it will be ensured that working capital will be
available on time. Steps will be taken to ensure that interest amount is paid on time so that good image can be maintained among financers and easily loan can be obtained for business.
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REFERENCES
Books and Journals
Barringer, B., 2012. Entrepreneurship: Successfully Launching New Ventures, (2012).
Bartholmé, R. H. and Melewar, T. C., 2016. The end of silence? Qualitative findings on corporate auditory identity from the UK. Journal of Marketing Communications. 22(4). pp.419-436.
Finch, B., 2016. How to write a business plan. Kogan Page Publishers.
Jones, C. and Penaluna, A., 2013. Moving beyond the business plan in enterprise education. Education+ Training. 55(8/9). pp.804-814.
Kumar, S., and Phrommathed, P., 2015. Research methodology (pp. 43-50). Springer US.
Online
Scented candles, 2017. [Online]. Available through :< https://biotone.com/aromatherapy/scented-candles>. [Accessed on 25th September 2017].
What’s it like living in Central London. 2016. Available through < http://www.jobsite.co.uk/worklife/whats-living-working-central-london-21607/>. [Accessed on 27th September 2017]
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