BUSINESS PLAN AND FEASIBILITY STUDY A FOR COSMETIC SHOP IN NIGERIA



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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).

This is a sample............... You will see detailed breakeven analysis if You Click Here To Get a feasibility study / Business Plan from us.
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.
This is a sample............... You will see detailed breakeven analysis if You Click Here To Get a feasibility study / Business Plan from us.
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.

This is a sample............... You will see detailed breakeven analysis if You Click Here To Get a feasibility study / Business Plan from us.
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.

This is a sample............... You will see detailed breakeven analysis if You Click Here To Get a feasibility study / Business Plan from us. 

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. 
This is a sample............... You will see detailed breakeven analysis if You Click Here To Get a feasibility study / Business Plan from us.
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

N
N
N
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.

This is a sample............... You will see detailed breakeven analysis if You Click Here To Get a feasibility study / Business Plan from us.
                                                         
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
This is a sample............... You will see detailed breakeven analysis if You Click Here To Get a feasibility study / Business Plan from us.
 
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
N
Year 2
N
Year 3
N
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
N
Year 2
N
Year 3
N
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
N
Year 2
N
Year 3
N
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

  This is a sample............... You will see detailed breakeven analysis if You Click Here To Get a feasibility study / Business Plan from us.

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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