Cosmetics Manufacturing
Business Plan
Maria is here with a company that has created a brand
concept consisting of both skin care and athletic apparel
utilizing multiple channels of distribution. We are seeking
recurring investment to fund the growth of the brand, and
position the company for an IPO. The plan that follows explains
our market, our value proposition and our market segmentation
strategy. The detailed financial plans provide a clear view of
our sales and profit forecasts. These plans show how it
will reach profitability in our third year of operation and
generate shareholder return on equity within five years.
Mission
To establish Bluespa as an important brand that represents
quality in skin care, fitness apparel and accessories.
We will accomplish this using high quality manufacturing and
research, a creative marketing program, and a comprehensive
distribution network using both brick and mortar retail outlets,
internet presence, and a consumer catalogue.
By utilizing this multi-channel approach we will be able to reach the
niche market for quality personal care products rapidly and efficiently.
It will allow us to develop Bluespa as the brand for quality skin
and body care products within our target market.
The Company
Bluespa is an Oregon corporation. The company is 100%
owned by Ray and Barbara Brunner, the founders.
The board will consist of seven members: Mr. R.G. Brunner,
one additional member of management, three outside directors
appointed by Mr. Brunner, and two representatives appointed
by the major investor(s).
Together, Mr. and Mrs. Brunner have 65 years worth of combined
experience in the retail industry. Both of them have held senior
management positions with major companies in this area.
The company's main office is located in Portland Oregon.
The leased office space should be sufficient for planned staff size
growth within the first few years.
From Year 1 through Year 5 we will grow in head count from ten
to sixty-five. The majority of this growth will come in store personnel,
the rest will be support staff. We believe the plan shows
a controlled and conservative ramp up of personnel.
Products
Skin and body care products will be developed and produced at
our contract facilities in France and California. Production of apparel
products will be managed through our contract manufacturer of
sport-related apparel. Production of accessories will be managed
through a contract with a manufacturer of quality sports-related
accessories including: bags, hats, totes and socks for the
wholesale market.
Bluespa will have two product lines, skin care and fitness apparel.
Within the skin care line we will offer a wide array of products
including eye makeup removers, cleansing creams, facial scrubs
and masks, and body lotions. Within the fitness apparel line we
will first offer Lycra products such as tights and shorts,
plus polyester and cotton tops.
Our pricing strategy is to position our products with a shelf price
that is in the mid to lower quadrant of high-quality products and
brands. We have accomplished this by making careful market
comparisons and adjusting our packaging size.
We believe our ability to create future product opportunities and
growth will only be limited by our imagination and our ability to
attract talented people who understand the concept of branding.
The Market
Bluespa will occupy a unique market position. No other brand
offers a specialty line that includes skin care, cosmetics,
fitness apparel and accessories. However, within each category
significant brands do exist. Quality and price vary widely within
each group. Bluespa will be positioned as a quality brand.
The U.S. cosmetics market has seen large annual growth rates
over the past decade. Last year alone, the market grew by over
$1 billion. Clear divisions between traditional categories are
becoming blurred and new lines, such as aromatherapy are
also emerging, creating new openings for profit.
In fitness apparel and accessories there is a tremendous
opportunity since the female customer has been grossly overlooked.
Most major companies do not produce products focused specifically
on the female customer. Puma is the only brand that has developed
a line of fitness apparel fro women. Early sales for them have been
exceptional, further highlighting the potential within this category.
In the skin care and cosmetics category the competition can be divided
into three groups: Commercial--i.e. MAC, Origins, Philosophy,
Erno Laslo and Shesheido; Clinical--i.e. Kiehl's, Clinique,
Clarins and Dr. Hauscha; Spa--private label brands associated
with spas.
The Customer
Because Bluespa is a combined retail (direct to end user) and
wholesale (to the end user through a reseller) strategy our target
customer must be broken into two distinct groups, the end user
and the reseller.
Our targeted end user is between the ages of 24 and 65.
They are female urban professionals with at least some college.
This consumer has an active lifestyle. They are concerned about
social and environmental issues. Mind and body wellness are
important to them. They belong to a health club; take yoga, pilate's
or tai chi lessons. The effects of aging and the maintenance of
a youthful appearance are a part of their life.
Our target customers (vs. end user) for wholesale distribution will
be resellers who recognize the needs of this consumer and who
she identifies with. We have used the term resellers because they
will not be limited to retailers. We will reach the consumer through
four distinct reseller channels. Spas and Health Clubs, Lifestyle
Retailers, Cosmetic Specialty Retailers, and Boutique Department
Stores.
There are a number of new demand trends that have impacted the
market and created greater opportunities. These trends include a
returning to age old, time proven, natural remedies; more consumers
that are looking for more holistic and healing benefits from her skin
care products, and today's consumer being more informed and more
inquisitive about the benefits of her personal care products.
Financial
In order to launch its unique product line Bluespa requires an initial
outlay. Sales at Bluespa retail stores are planned to grow rapidly
from Year 1 through Year 5. During this time frame our wholesale
revenues are planned to grow enormously. Bluespa will become
profitable in our third year of operation. Initial growth will be financed
by a combination of equity investment and debt financing.
Our ratios are well within prudent limits and our growth plans are
challenging, but realistic.
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