This business plan is intended for a cosmetic company or any other business type. The process of writing a feasibility study remains thesame, all you have to do is to fix and replace the words in bracket to your own suitable words. You can always get a feasibility study or business plan from us, all you have to do is to Contact Us
Executive Summary of this business.
(Write
Business name here) Cosmetic is a start-up business specialization in hand-made
herbal products created by (owner’s name here), the company founder. These
products include herbal therapy packs, soaps, Saint- John’s wart oil, balsam
eye packs, salves, moisturizers, herbal bath bags, and bath powder. All (Write
Business name here) Cosmetic are made from herbs that are either garden grown
or gathered in local fields or wooded areas when they are at their peak of maturity
and the concentration of active ingredients is highest. Herbal products have
grown in popularity with consumers over the past ten years. Herbal products
industry exceeded N4.3 billion naira in sales last year where once a customer
would have to go to a specialty shop to purchase herbal products, now those
same products are available at the local supermarket. The demand has created a
cottage industry of supplying herbal products to companies who then market the
product under their own brand name.
(Write
Business name here) Cosmetic will sell its product line to herbal product
companies that sell baskets with specific themes such as balsam salve and eye
packs. (Owner’s name here) has seven years of experience in the herbal product
industry. He has worked as a Product Manager for Tom’s Herbal Products. He has
maintained his contacts with Forest Meadows Products and Wind Walker Products
to supply herbal therapy packs, salves, balsam eye pack, and Saint-John’s Wort
Oil (this is an example).
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The
report and recommendation relate to the proposal by (owner’s name here) to
establish a cosmetic factory at (name of LGA) in (name of state) called (Write
Business name here) Cosmetic Factory.
The
project requires a start-up capital of N100,000
made up of N50,000 fixed capital an N50,000 working capital.
The
vision of the enterprise is to be the most creative herbal products that heal,
smooth and cleanse our customer in and around (places) in particular.
The
project will be located in (name of LGA) because of its market target that is
very accessible to consumers.
A
huge market is available for the market to serve.
BUSINESS
DESCRIPTION:
(Write
Business name here) Cosmetic Background is a powder of herbal products
including herbal therapy packs, soaps, Saint-John’s-Wort Oil, balsam eye packs,
salves, moisturizers, herbal bath bags, and bath powder. (Write Business name
here) Cosmetic sells its product lines to herbal product companies that sell
baskets with specific herbal themes. The company will be organized as a Sole
Proprietorship.
Mission
The mission for (Write Business name here) Cosmetic is
as follows:
·
Achieve sales
goal of N120,000 during first year of operation.
·
Achieve a regular
customer base of 10 companies.
·
Increase sales by
15% during the second year of operation.
Company Ownership
(Write Business name here) Cosmetic is owned by (owner’s
name here).
Start-up Summary
The
start-up expense for the (Write Business name here) Creations is focused
primarily on production and extraction equipment will invest N50,000. In addition, he will secure a N50,000 loans.
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Start-Up Requirement and Start-Up
Expenses
Legal N600
Stationery etc N100
Insurance N300
Rent N600
Expensed Equipment N40,000
Total Start-up Expenses N41,600
Start-Up Assets
Cash required N33,400
Start-up Inventory N5,000
Other Current Assets N5,000
Long-term Assets N15,000
Total Assets N58,400
Total Requirements N100,000
Start-Up Funding
Start-up Expenses to Fund N41,600
Start-up Assets to fund N58,400
Total Funding Required N100,000
Assets
Non-cash Assets from Start-up N25,000
Cash Requirements from Start-up N33,400
Additional Cash Raised N0
Cash Balance on Starting Date N33,400
Total Assets N58,400
Liabilities
Current Borrowing N0
Long-term Liabilities N50,000
Accounts payable (outstanding Bills) N0
Other Current Liabilities
(interest-fee) N0
Total Liabilities N50,000
Capital
Planned Investment N50,000
Other N0
Additional Investment Requirement N0
Total Planned Investment N50,000
Loss at Start-up (Start-up Expenses) N41,600
Total Capital N68,400
Total Capital and Liabilities N100,000
Company Locations and Facilities
(Write
Business name here) Cosmetic is located in a 2,000 square foot manufacturing
space in (name of LGA) – (name of state). The location factors are: (a) (name
of LGA) is very close to market material source. (b) There is availability of
basic amenities for the production. (c) There is also cheap labour and high
rate of customers.
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PART III
Products
The
product line of (Write Business name here) Cosmetic is as follows:
·
Herbal Therapy
Packs for back and neck pain and relief of muscle aches, filled with wheat
berries and flax seed and 10 herbs. These are made of natural cotton or
patterned flannel and can be heated in the microwave oven or cooled in the
freezer for optimum benefit.
·
Saint-John’s wort
oil for use as an anti-inflammatory or for burns, in a roll-on applicator.
·
Balsam eye packs
in eye-pleasing patterns that help relieve sinus discomfort and eyestrain.
·
Salves with
comfrey for healing cuts, Goldenseal, Balsam and other herbs for use on split
skin cause by the drying effects of heat, cold or water.
·
Moisturizer for
face and hands with various scented oils.
·
Soaps created
with such herbs as powdered balsam and rose petals marbleized throughout each
cake, gently scented.
·
Herbal bath bags
of lavender, peppermint, oatmeal and herbs.
·
Bath powder made
from arrowroot, cornstarch, rose petals and other herbs.
Market Demand
(Write
Business name here) Cosmetic is located at (name of LGA) – Imo. It is very
close to (names of markets) where the demand for (Write Business name here)
Cosmetic is very high at 70% for the past five years of the product and it is
expected to grow totally 85,000.
Projected Annual Demand for (Write
Business name here) Cosmetic in (name of LGA) and her nearby towns:
S/N
|
Years
|
Annual
Growth Rate
|
Projected
Demand
|
0
|
2012
|
10%
|
85,000
|
1
|
2013
|
10%
|
93,500
|
2
|
2014
|
10%
|
102,850
|
3
|
2015
|
10%
|
113,135
|
4
|
2016
|
10%
|
124,450
|
5
|
2017
|
10%
|
136,895
|
6
|
2018
|
10%
|
150,585
|
Total
|
70%
|
806,415
|
|
Average
|
8.75%
|
115.202.14
|
Projected Supply for (Write Business
name here) Cosmetic in (name of LGA) and its environs:
The
supply of the product is not adequately covered by the demand. The supply is
short of about 20% of the demand.
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PART IV
MARKET ANALYSIS
Herbal
products have grown in popularity with consumers over the past ten years. The
herbal products industry exceeded N4.3 billion in sales last year where once a
customer would have to go to a specially shop to purchase herbal products, now
those same products are available at the local supermarket. The demand has created a cottage industry of
supplying herbal products to companies who then market these products under
their own brand name.
Currently,
the industry can be divided into two segments:
1. Herbal Health Products
2. Herbal Beauty Products
MARKET SEGMENTATION
(Write
Business name here) Creations will focus on two target companies:
Herbal health products: The Southeast is home to a number of small to medium
size herbal health product companies such as comfort zone and Health Smart in (place),
GHK Natural Products and Wise Herb in (place) and Silver Dream and Simple Life
in (place). All of these companies buy raw or finished product from third party
vendors. These companies generated sales in excess of N40 million last years.
Their products are sold in health and natural food stores on the East City and
Midwest.
Herbal Beauty Product: The Southeast is also home to a number of
small-to0medium size herbal beauty product companies such as Glow and Nature’s
Way in (place), Garden Dream and Rising Sun Products in (place) and Carpe Diem
Natural Products and Simple Life in (place). All of these companies buy raw or
finished product from third-party vendors. These companies generated sales in
excess of n60 million last years. Most of their products are sold in health and
natural food stores.
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
|||
Potential
Customers
|
Growth
|
CAGR
|
|||||
Herbal
|
1%
|
20,000
|
20,200
|
20,402
|
20,606
|
20,812
|
1.00%
|
Health
Products
|
|||||||
Herbal
Beauty Product
|
2%
|
4,000
|
4,080
|
4,162
|
4,245
|
4,330
|
2.00%
|
Total
|
1.17%
|
24,000
|
24,280
|
24,564
|
24,851
|
25,142
|
1.17%
|
Target Market Segment Strategy
Herbal
Health products dominate sales but herbal beauty products have been growing in
popularity each year. There are 10,000 herbal product companies that are
competing for market share among consumers. Most of these companies are regionally
focused but 15% of these companies distribute their products nationally. This
is compared to only 2,000 herbal beauty product companies. Most of these companies
also only compete regionally though there are a handful (4%) that dominate the
national market. As sales grow in herbal beauty product, more new companies
will enter the market place.
(Write
Business name here) Products will focus on the small companies serving the North,
East, West and South Coast Region Market. Many of these smaller companies
aggressively seek out new products that they can add to their product line. The
cost of manufacturing all these items themselves is prohibitive so they
contract with third party vendors to supply product.
Service Business Analysis
As
the herbal market has grown into a multi-billion dollar industry, so has the
opportunity for small firm and farms to product to larger herbal companies that
then repackage and market the product under their own brand. The size of these
suppliers can range to a one-person operation to a small farm that can have 20
or more employees.
At
the larger and second tier companies face off to win greater market shares,
they are constantly looking for additional product item that will improve their
advantage in the marketplace. Routinely, a product like an herbal therapy pack
is an attractive cost efficient addition to a product line.
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Competition and buying patterns
Quality
and timelines are the essential factors in being successful as a supplier to a
herbal product company. This is especially true when the product is re-packaged
as part of a gift basket. A delay in delivery will impact the company’s ability
to meet delivery will deadlines. Quality is also an important factor because
word of mouth is one of the strongest market tools with herbal products. The local
success of a herbal product many times leads to a longer company procuring the
product for their line. (Name of owner) has sold his herbal products at craft
fairs in the region for the past five years. The popularity and customer
satisfaction of these products was an important selling point when wind walker
products first approached Staff B about his herbal therapy packs.
PART V
MARKETING PLAN
(Write
Business name here) cosmetic will focus first on building a client base with
herbal health product companies. (Staff A) will be responsible for marketing
the company’s services to potential customers. Currently, the company has been
successful in acquiring 2 Contracts with the following companies:
1. Product A
2. Products B
Competitive Edge
The
competitive advantage of (Write Business name here) cosmetic is the consistent
quality of the herbs that are at the core of each product. The products have
been tested locally for years developing and establishing the customer
satisfaction level demanded by (Write Business name here) Cosmetics.
Sales Strategy
(Staff
A) has seven years of experience in the herbal product industry. He has worked
as a Product Manager for (name) Herbal Products. He has maintained his contacts
in the industry and has already signed contracts with “Products A” to supply
herbal therapy packs, salves, balm eye packs, and Saint-John’s Wort Oil.
(Staff
A) will build on these successes and market his product line to herbal products
companies through face-to-face selling.
Sales Forecast
(Write
Business name here) - anticipates that sales will start quickly. The first
billing will sent out in mid-May. The following sales forecast table is for
three years Monthly figures for the first year are in the appendix.
Sales Forecast
Sales
|
Year 1
|
Year 2
|
Year 3
|
N
|
N
|
N
|
|
Herbal
Products
|
282,000
|
540,000
|
420,000
|
Other
|
0
|
0
|
0
|
Total
Sales
|
282,000
|
340,000
|
420,000
|
Director Cost of Sales
|
Year 1
|
Year 2
|
Year 3
|
Herbal
products
|
141,000
|
170,000
|
200,000
|
Other
|
0
|
0
|
0
|
Subtotal
direct
|
|||
Cost
of sales
|
141,000
|
170,000
|
420,000
|
Marketing Strategy
(Staff
A) will market the company’s product line at regional craft fairs. He will
coordinate his fair participation with presentation meetings with herbal
company representative. In addition he will regularly send free samples to his
potential clients so that they can experience the quality of his products first
hand. The key to his marketing though will be face-to face sales.
Staff
B will also launch the (Write Business name here) cosmetic website. The site
will be designed to promote his products, list a calendar of his craft fair
appearances, and, initially, offer a selection of his most popular products for
direct web-sales. He will rely on the experts at Neo-giant.com Internet and
E-commerce consultants for the design, hosting, and search engine placements of
the websites.
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PART VI
Personal Plans
(Staff
A) has seen years of experience in the herbal product industry. He has worked
as a product manager for both toms’ Herbal products. He has experience managing
staff and getting their best performance. Over the past three years, Staff B
has built his business from a part-time craft activity to its current
production level. He current staff should be sufficient for the first two years
of operation. It is possible that there will be additional hiring during the
third year of operation.
Year 1
|
Year 2
|
Year 3
|
|
(Staff A)
|
N30,000
|
N32,000
|
N 34,000
|
P/T production
|
No
|
No
|
N 23,000
|
Total people
|
3
|
3
|
3
|
Total Payroll
|
N70,800
|
N 76,000
|
N 105,000
|
PART VII
Financial
plan
The following topics cover the financial plan for (Write
Business name here) products. The tables show annual figures..
Break-Even
Analysis
The monthly break- even is approximately N 17,000.
BREAK-EVEN
ANALYSIS
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N8,000.....................................................................
N6,000......................................................................
N2,000.....................................................................
N4,000...................................................................
(N2,000) ...................................................................
(N4,000) ...................................................................
(N4,000) ...................................................................
(N4,000) ...................................................................
(N6,000) ...................................................................
N6,000 ...................................................................
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N8,000.....................................................................
N6,000......................................................................
N2,000.....................................................................
N4,000...................................................................
(N2,000) ...................................................................
(N4,000) ...................................................................
(N4,000) ...................................................................
(N4,000) ...................................................................
(N6,000) ...................................................................
N6,000 ...................................................................
Break-even Analysis
Monthly
Revenue Break-even N17,188
Assumption:
Average
percent Variable cost 50%
Estimated
monthly fixed cost N 8,594.
Projected profit and loss
The
following table highlights the projected profit and loss for three years.
PRO FORMA PROFIT AND LOSS
Year
1
|
Year
2
|
Year
3
|
|
Sales
|
282,000
|
340,000
|
420,000
|
Direct
cost of sales
|
141,000
|
170,000
|
200,000
|
Other
production Exp.
|
0
|
0
|
0
|
Total
cost of sales
|
141,000
|
170,000
|
200,000
|
Gross
margin
|
141,000
|
170,000
|
220,000
|
Gross
margin%
|
50,00%
|
50.00%
|
52.38%
|
Expenses
|
|||
Payroll
|
70,800
|
76,000
|
105,000
|
Sales
and marketing and other Expenses
|
4,260
|
7,200
|
8,500
|
Depreciation
|
4,800
|
4,800
|
4,800
|
Leased
Equipment
|
0
|
0
|
0
|
Utilities
|
4,800
|
5,300
|
6,000
|
Insurance
|
650
|
780
|
900
|
Rent
|
7,200
|
7,800
|
8,500
|
Payroll
Taxes
|
10,620
|
11,400
|
15,750
|
Other
|
0
|
0
|
0
|
Total
operating Expenses
|
103,130
|
113,280
|
149,450
|
Profit
before interest and taxes
|
37,870
|
56,720
|
70,550
|
Interest
Expense
|
5,158
|
4,340
|
3,050
|
Taxes
incurred
|
9,814
|
15,714
|
20,250
|
Net
profit
|
22,899
|
36,666
|
47,250
|
Net/profit/sales
|
8.12%
|
10.78%
|
11.25%
|
Projected cash Flows
The
following highlights the projected cash flow for three years
Cash Flow
Cash form
Operations:
Year
1
|
Year
2
|
Year
3
|
|
cash
sales
|
70,500
|
85,000
|
105,000
|
Cash
from receivables
|
161,300
|
244,675
|
300,759
|
Subtotal
cash from operations
|
231,800
|
329,675
|
405,759
|
Additional
cash received
|
|||
Sale
Tax,VAT,HST/GST
received
|
0
|
0
|
0
|
New
current Borrowing
|
12,000
|
0
|
0
|
New
other liabilities
|
0
|
0
|
0
|
(interest-free)
|
|||
New
long-term liabilities
|
0
|
0
|
0
|
Sales
of other current Assets
|
0
|
0
|
0
|
Sales
of long-Term Assets
|
0
|
0
|
0
|
New
investment Received
|
0
|
0
|
0
|
Subtotal
cash Received
|
243,800
|
329,675
|
405,759s
|
Expenditure
|
Year
1
|
Year
2
|
Year
3
|
Expenditure
from operations
|
|||
Cash
spending
|
70,800`
|
76,000
|
105,000
|
Bill
payments
|
173,564
|
232,719
|
263,829
|
Subtotal
spent on
Operation
|
244,364
|
308,719
|
368,829
|
Additional cash spent
|
|||
Sales
Tax, VAT,HST/GST paid out
|
0
|
0
|
0
|
Principal
Repayment of current Borrowing
|
3,000
|
6,000
|
3,000
|
Other
liabilities principal Repayment
|
0
|
0
|
0
|
Long-term
liabilities principal repayment
|
8,400
|
8,400
|
8,400
|
Purchase
other current Assets
|
0
|
0
|
0
|
Purchase
long-Term Assets
|
0
|
0
|
0
|
Dividends
|
0
|
0
|
0
|
Subtotal
cash spent
|
255,764
|
323,119
|
380,229
|
Net
cash Flow
|
11,964
|
6,556
|
25,530
|
Cash
Balance
|
21,436
|
27,993
|
53,522
|
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Legal Issues
Legal Issues
(Write
Business name here) cosmetic factory plans to operate business as a sole
proprietorship. It is therefore recognized to register the business with the
local government council of (name of LGA). All the needed documents have been
obtained and is therefore legal to operate.
Environment
The
(Write Business name here) cosmetic factory plans to dig a big whole where all
the waste material and other chemicals could be taken care of in order to avoid
degradation of the environment.
Social
The
social project will bring development in both social and economic otherwise by
creating job and wealth for the citizens
Risk Analysis
(Write
Business name here) cosmetic project has been analyzed and some risks are
identified such as low patronage, and insufficient power supply from PHCN,
However, the firm has a plan B to ensure that these constraints do not pose a
threat by embarking on aggressive promotion and provision of stand-by Generator
to caution the effects.
SWOT Analysis
Strength: The location of the cosmetic factory makes it easy and
accessible to consumers. The various product of the firm is one of the
strengths of the factory. The firm is located at the heart of (name of LGA) the
trade center of (name of state).
Weaknesses
·
Lack of
sufficient start-up capital
·
Inadequate
awareness of the product
·
Stile competition
from Rivalry Company.
9.3 Opportunities
The product has high rate of demand because of its
quality.
Threats:
·
There is more
competition as other firms do the business.
·
There is low
supply of raw material because of high demand by the producers.
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