Chelsea Feltham

Vegan Cosmetics Business Plan

May 2015

Contents 1. Executive Summary 1.1 Mission 1.2 Overall vision and purpose 1.3 Passion and Commitment 1.4 Benefits to customers and sponsors of innovation 1.5 Competitors

2. Company Summary 2.1 Objectives2.2 Core Values 2.3 Brand Personality 2.4 Required skills and attributes 2.5 Innovation

3. Market Analysis and Sales Plan 3.1 Market segmentation 3.2 Route to market 3.3 Customers’ Needs 3.4 Anticipated Demand 3.5 Competitors Map 3.6 Size of Market 3.7 Product, Price, Promotion 3.8 Questionnaire Conclusions

4. Financial and Legal Matters 4.1 Legal Entity 4.2 Health and Safety 4.3 Licensing Summary 4.4 Contract Law 4.5 Consumer Protection

5. Financial Plan 5.1 Profit Calculation 5.2 Break Even Analysis 5.3 Projected Cash Flow 5.4 Financial Conclusions and Risks

Chelsea Feltham 1. Executive summary

1.1 Mission

To encourage customer’s health and happiness through our cosmetics, while maintaining ethical morals and staying beneficial to the environment and the local community.

1.2 Overall vision and purpose

The overall vision and purpose of my business is to improve my customer’s health and happiness while still being ethical and beneficial to the environment and the local community. My products range from

hair, skin, nail, make-up, music, candles and other creations which encourages confidence and a healthy living lifestyle. One of the purposes of my business is to be completely homemade, improve

customer’s confidence, vitality and inner wellbeing. I believe in bringing people products which don’t play on insecurities but enhances natural beauty to make people happy, content and feel confident. I would offer products that source the finest raw ingredients from around the local area, brought home and crafted into something beneficial to people with love and care. Additionally, I would like to show people that even with a small amount of cosmetics involved in their daily routine that they can feel

more beautiful and they can enhance and embrace their features.

1.3 Passion and Commitment

The reason why I have chosen this particular business idea is because I have a passion for business or more specifically, making people happy. I am committed to offering people ways in which they can

embrace positivity. I aim to leave a footprint in the sand and I will express this through my business. I would like to help people become more confident and I feel my business offers the opportunity to

achieve this. I am committed to giving exceptional customer service and giving people what they want and deserve. Additionally, I believe there is a gap in the market for homemade, ethical health and

beauty products. I would like people to know that it’s not just about contouring and highlighting the face but contouring and highlighting the inside and the world we live in.

1.4 Benefits to customers and sponsors of innovation

I believe this will benefit the customer because they are provided raw and fresh ingredients at a reasonable price which actually benefits there health and general happiness. The products I provide

will meet my customers’ needs because they want value for money and they aspire to find quality products for an inviting price. My products will increase health and happiness therefore we are meeting customer needs because they want products which are beneficial to them but are still

enjoyable to use.

Chelsea Feltham 1.5 Competitors

My competitors will be local health and beauty businesses which provide people value for money products such as Lush, Origins and The body shop. I believe I provide a different service to customers as my products will be totally vegan and animal cruelty free. The businesses I have named do provide

certain vegan products but not all go without using an ingredient that is derived from animals. A popular example of an ingredient that is derived by many health and beauty businesses could be bees wax. I therefore offer a service where you don’t feel you are compromising for a lesser product when chosen something labelled vegan. Customers can then have the confident to shop freely knowing that

everything provided by myself will be vegan and animals cruelty free.

2. Company summary

2.1 Objectives

To produce honest and ethically made vegan cosmetics to customers Source all ingredients from within Devon. Develop close relationship and strong supply chains with local suppliers and customers. Provide learning opportunities to all customers about veganism, animal rights and how

important our work is in the developing future. Run website online via Wix.co.uk

SMART criteria, which stands for specific, measurable, achievable, realistic and timed. Following this, my marketing objective is to provide people with ethically made health and beauty products that are value for money. I want to improve customer’s confidence and wellbeing by improving

their health and providing them with ways to enhance them-selves. Overall, my core values for my business are to provide people with quality products, at a quality price, prepared with quality and efficiency. I want to make people happy through my products which will reduce negative aspects

of people’s lives such as stress and acne etc. My objective is to offer customers an additional service to the norm by providing them with vegan cosmetics which I believe (from my market

research) is a gap in the market and the population are showing a general interest in veganism. I will measure my progress by creating a financial plan and keep records of all achievements made. I

believe that this objective is realistic and that there is a general interest that I am targeting. The time period to achieve this marketing objective will be within my second academic year.

Additionally, after using survey monkey, I wish to make the percentage of customers who gave mixed responses to the prospect of how often they would purchase vegan cosmetics less mixed

and more towards the “often” mark. The percentage of all responses who voted “often” or “all the time” was 49% and my marketing objective is to realistically increase this towards the 60% mark.

Chelsea Feltham 2.2 Core Values

My core values are to provide people with ethically made health and beauty products that are value for money. I want to improve customer’s confidence and wellbeing by improving their health and providing

them with ways to enhance them-selves. An example of a potential product could be a lipstick made from blended berries and additional ingredients to preserve the product or make it moisturising etc. Overall, my core values for my business are to provide people with quality products, at a quality price, prepared with

quality and efficiency. I want to make people happy through my products which will reduce negative aspects of people’s lives such as stress and acne etc.

2.3 Brand Personality

My brand personality would be somewhere or something which looks quality but also is ethically made and reasonably priced. I want people to assume my product will be expensive and then be surprised by the price tag and then what to purchase my product. I want colours to consist of whites, blacks, greys and

greens or woody colours to represent professionalism yet ethical knowledge. I want my product to have aspects of natural life on them such as trees and plants to give the impression that my products are natural

and consist of raw ingredients.

2.4 Required skills and Attributes

The skills I would need are to be unique and show my passion for quality through my product. Due to “remedies news”, health and beauty businesses achieved the highest success rate reaching more than 55%

making it within the first three years. I will need to be confident and determined to provide people with best service and not be willing to compromise. I will need to know how to sell products with efficacy and I

will need to strive for success and keep my ethical attributes to an exceptional standard.

2.5 Innovation

I believe I am offering an alternative to the regular cosmetics provided with the health and beauty industry. In recent years, there has been a lot of awareness of such things as animal testing and being ethical to not only animals, but the world around us too. The issue is, I believe there isn’t enough vegan cosmetics out there that can compete with dominating competitors. Organisations such as Lush or The body do offer

vegetarian cosmetics but none provide vegan options and their products are still deprived from animals. Such a product could include the “Honey bee bath bomb” which has honey included in the ingredients

which is derived from bees.

Chelsea Feltham 3. Market Research, Analysis and Sales Plan

3.1 Market segmentation

My market segmentation or potential customers to whom I plan to sell my product to be 14 – 35 year olds who have an interest in keeping healthy and feeling confidant. The attributes of the people I will be targeting are those whom are aware and care about their perceived image. My targeted market could also include individuals who are fashionable and in no means is the market segmented by any

other attributes such as different ethnicities. Therefore, my potential customer could well be anybody; however, I will be targeting my products at people who include such things as written above. Other

attributes of 14 – 35 year olds might include being active online or generally being more aware of what companies should deliver in regards to being ethical and sustainable. I believe my target group want

something engaging so therefore something colourful, interesting and diverse.

3.2 Route to market

My products will be sold via e-commerce and my website will offer a way of purchasing the buyers selected products and delivered to them. I also plan to set up a stall when the Rugby world cup comes to Exeter as this will increase the foot fall. I might also use a free sample method to people who filled

out my questionnaire as this might encourage them to actually purchase the real thing. My target market, as described, is already quite well-informed on cosmetics and other environmental issues.

Many of the customers are already linked into social, information and professional networks and can be communicated with very efficiently by this means.

3.3 Customers’ needs

I understand from drawing what I have learned from my market research is that there is a general interest in vegan products and not many people are buying them, it could be said that there is a gap in

the market for vegan health and beauty products. These respondents also showed a strong interest when answering if they think “cosmetics deprived from or tested on animals is wrong”, which further

demonstrates the legitimate interest and understand of animal welfare. In conclusion, there were mixed responses when participants were asked if they would consider purchasing vegan cosmetics

themselves. This makes me wonder if people are confused on attributes such as price etc. Therefore, they don’t know how to respond when faced with the idea of actually purchasing such a product. I

definitely believe there is a general interest and gap in the market for vegan health and beauty products and this conclusion is supported by the market research results.

3.4 Anticipated demand

The demand will be small as I am only targeting a small minority within Exeter. However, I anticipate that I will generate around 10 – 15 sales within the first few months. The demand for vegan products

is there as shown by my market research but marketing my actual product will be the hardest objective to achieve as budgets are small. Where I plan on marketing my product, I can imagine that

demand will steam from people who visit Exeter central often and use the internet on a regular basis.

Chelsea Feltham 3.5 Competitors Map

My competitors will be local health and beauty businesses which provide people value for money products such as Lush, Origins and The body shop. I believe I provide a different service to customers as my products will be totally vegan and animal cruelty free. The businesses I have named do provide

certain vegan products but not all go without using an ingredient that is derived from animals. A popular example of an ingredient that is derived by many health and beauty businesses could be bees wax. I therefore offer a service where you don’t feel you are compromising for a lesser product when chosen something labelled vegan. Customers can then have the confident to shop freely knowing that everything provided by myself will be vegan and animals cruelty free. My main competitors based in

Exeter as a geographical location are Lush, The body shop and Origins.

3.6 Size of Market

My market segment is 14 – 35 year old, male and females within Exeter which includes approximately 50,908 people. I understand the size of the market because I used neighbourhood statistics to give me

secondary research upon substantial data about my market.

Chelsea Feltham 3.7 Product, Price and Promotion

As mentioned in my business proposal, I wrote that “I believe my target group want something engaging so therefore something colourful, interesting and unique.” This statement has steamed me

to create a set of three products including a moisturiser, cleanser and exfoliator serum. This set of products will be displays via glass cork bottles that are modern and interesting to look at. To add to the

colourful element, my products will be packaged within a “Celery Green Gift Bag”. Inside I wish to decorate the bottles and content of the bag with artificial plants of some sort and a clean white a

muslin cloth.

Each set of three products (moisturizer, cleanser and an exfoliator serum) will be priced at £18.50 to compete with competitors such as “The body shop” who offer a “wild argon oil beauty bag” which

includes three similar products similar to mine and a sponge similar to my muslin cloth. However, my vegan beauty bag will include products with a much higher quality so I can charge a premium price.

I will communicate to my customers and assist them in the decision to buy my products by marketing my USP which involves all my products being totally vegan. Another promotional method I will use is to explain that all my ingredients are local within Exeter and if you took part in completing my survey

you will receive a free sample.

Chelsea Feltham

3.8 Questionnaire Conclusions

The first conclusion I have drawn from my market research is the majority of people who participated within this questionnaire are female. Out of the total twelve responses, only two of these responses were male. This could suggest that the questionnaire title “Vegan cosmetics” attracted more female

attention; however, I believe there weren’t enough responses to justify this further. On the other hand, I wouldn’t feel any hesitation in suggesting that females or people with a more feminine nature

would have more of an interest in regards to cosmetics in general.

Out of all my responses, 91.67% were below the age of 24. From this statement, I can conclude that the statistics demonstrated will be the opinions of people who are young adults. Unsurprisingly, not one respondent answered anything other than every day when asked how often they use health and

beauty products. This gives me a clear understanding that in no way is my market strained by individuals who don’t participate in what I am providing. My market research gives me the confidence

to say that the majority of people use health and beauty products everyday no matter what the attributes of the individual actually are. Furthermore, when the respondents were asked “Would you

be interested in purchasing vegan cosmetics?” a respondent did skip but 63.64% of participants answered that they would be interested and a further 27.27% answered maybe. Although one

respondent answered no, this encourages me to believe that there is a general interest in the market for vegan cosmetics and overall the people in this questionnaire believe that vegan cosmetics is

something they would engage within. From asking if the respondents have actually purchased vegan cosmetics, I can see that a lot of them are either confused or haven’t purchased this kind of product.

Taking this into account, understanding that there is a general interest in vegan products and not many people are buying them, it could be said that there is a gap in the market for vegan health and

beauty products. These respondents also showed a strong interest when answering if they think “cosmetics deprived from or tested on animals is wrong”, which further demonstrates the legitimate

interest and understand of animal welfare. In conclusion, there were mixed responses when participants were asked if they would consider purchasing vegan cosmetics themselves. This makes me

wonder if people are confused on attributes such as price etc. Therefore, they don’t know how to respond when faced with the idea of actually purchasing such a product. I definitely believe there is a

general interest and gap in the market for vegan health and beauty products and this conclusion is supported by the market research results.

I believe I will need to carry out further research as only twelve total respondents participated in the questionnaire and this simply isn’t enough respondents to produce substantial data for my business

plan. The more respondents, the more reliable my data will be and the more accurate my conclusions will become.

Chelsea Feltham 4. Financial and Legal Matters

4.1 Legal Entity

I have chosen to register with HM Revenue and Customs (HMRC) as a sole trader as I will be working independently or as “self-employed” within this business. This means I will be fully responsible for the business and any attributes than come with such as paying income tax, registering for VAT etc. Ideally,

I would like to set up as a social enterprise with a legal form of private limited company. This is because I am not profit driven and my primary social objective whose is too reinvested for that

purpose of the business or within the community. I also ideally would want to register as a private limited company which is limited by guarantee. This then means the members of the business

financially back us if anything were to happen and this is over an agreed amount. These members aren’t called shareholders and are financially investing into the business because of moral reasons and

not for profit.

4.2 Health and Safety

As a business making cosmetics from scratch, I will need to consider the Cosmetics Products Regulations Act 2008. Under the General safety requirement, it states that “no person shall supply a

cosmetic product which may cause damage to human health when applied under normal or reasonably foreseeable conditions of use”. In regards to this provision, I will only use ingredients in my

products that are natural and aren’t damaging to human skin in any way.

I will also follow the “Interpretation” provision which gives the correct definitions for relevant words that cannot be used to misinform or mislead the customer. The provision states that, “cosmetic

ingredient” means any “chemical substance or preparation of synthetic or natural origin, except for perfume and aromatic compositions, used in the composition of a cosmetic product”. Furthermore, “cosmetic product” means any “substance or preparation intended to be placed in contact with the various external parts of the human body or with the teeth and the mucous membranes of the oral

cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, correcting body odours, protecting them, or keeping them in good condition except where such

cleaning, perfuming, protecting, changing, keeping or correcting is wholly for the purpose of treating or preventing disease”. Thirdly “preservative” means a substance which is added to a cosmetic

product for the primary purpose of inhibiting the development of micro-organisms in that product”. These are examples in the interpretation provision that I will use on product labels and descriptions as

such and I will use them correctly so the customer will not be misinformed and put out of safety.

Chelsea Feltham 4.3 Licensing Summary

One license that I may need to apply for is the “Hazardous waste producer registration”. Hazardous waste producer registration is a license that refers to anything that can be harmful to human health or the environment. These hazards can include pesticides but in this case, I will need this licence as I will be providing hazardous packaging waste to customers. The packaging will be made of glass but when

handled with care, all hazards can be prevented.

4.4 Contract Law

In the short term future, I will be running my business independently as a sole trader and as a self-employed personnel. However, in the foreseeable future, I may consider employing somebody to help with expansion or any growing demand. In this case, I will need to exercise contract law and relevant terms include providing a safe and secure working environment and right to minimum of

5.6 weeks’ paid holidays. This will mean that I will need to undertake a risk assessment to spot possible health and safety hazards where I would proceed to make my vegan products. I will need to make the workplace safe and risk free by ensuring work practices are followed, provide first aid facilities, create awareness of any potential hazards, avoid manual handling and make sure that ventilation, temperature, lighting, toilet, washing and rest facilities all meet health, safety and

welfare requirements.

Holiday entitlement or annual leave is legally entitled to any worker and any employee is entitled to 5.6 weeks’ paid holiday per year. I will need to calculate their leave entitlement depending on

worked hours and let them be aware of their statutory leave entitlement. This will impact my business as depending on circumstances I will be with less assistance but I will prepare the

arranged hours away in advance so I don’t impact from any sudden changes.

4.5 Consumer Protection

Consumer protection laws are designed to protect the rights of consumers and prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors. The

Consumer Protection Act 1987 prohibits the manufacture and supply of unsafe goods and misleading price indications. To follow up on providing customers safe goods, I will meet the standards of the British Standard Institution so I can be given a CE Mark to show government official that my products confirms to a standard, which enables it to be legally placed on the

market with the UK.

Secondly, under Section 21 of the Consumer Protection Act 1987, misleading scenarios include that the price is less than it in fact is or additionally charges not specified. I will avoid these types of

false indication on the goods and services I will be providing. This will impact me in a way which I will need to revise any sort of information shared with customers to make sure all information is

honest and fair. This will be time consuming but customers will eventually cushion relationships on trust and honesty which people will hopefully appreciate and acknowledge.

Chelsea Feltham 5. Financial Plan 5.1 Profit Calculation for 50 products

Total revenue (£925) – Total costs (£598) = Net profit £327

5.2 Break Even Analysis

Chelsea Feltham 5.3 Projected Cash Flow

5.4 Financial Conclusions and Risks

Conducted from my financial statements I have concluded that I will breakeven when I sell a total of six products at the price of £18.50. My cash flow diagram shows my closing balances for the first twelve months of business and a total of £200 investment in the first month of running. Furthermore, my initial retail price is £18.50 per vegan beauty bag, however, from analysing my cash flow forecast, I understand that I can afford to bump the price down from time to time to act as a marketing method to attract potential customers. My other conclusions suggest that I will need to make at least ten sales each month to make enough profit to cover expenditure costs. Ten sales per month will be achievable if I follow my written play on my “route to market” where I will be marketing my product to potential customers via e-commerce. Referring back to being able to be flexible with my retail price, I will also use this as an opportunity to attract buyers, as well as promoting my product when the rugby world cup is being held in Exeter in 2015.

Drawing conclusions from my financial statements, overall, financially I am in a comfortable position because I am set to make an acute profit each month.

c) Accurately analyse your financial forecasts to assess the financial prospects of your business.

d) Describe what your financial response would be if you were not on target after 6 months.

Chelsea Feltham