Business Plan CNaturals, Inc. 12 Reinman Road Warren, NJ 07059-5122 888-99-CNATURALS 908-822-8678 (Fax) www.cnaturals.com
Prepared By Sahana S. Barade
Nature Tested, Nature Approved…CNaturals Approved…CNaturals…Healthy, …Healthy, Beautiful, Sustainable
TABLE OF CONTENTS
Executive Summary
3
Business Description
4
Market Analysis
4
Vision Statement
7
Vision Trigger
7
Mission Statement
7
Business Objectives
7
Business Operations
8
Marketing
8
Competitive Analysis
9
Legal Structure
10
Management Expertise
10
Support Personnel
11
Financial Information
11
Summary
14
Page 2 of 14
EXECUTIVE SUMMARY
The purpose of this business plan is to furnish information to persons of business interest to the firm. The business is owned by Sahana S. Barade and is located in owned space at 12 Reinman Road, Warren, NJ 07059. The business produces pure natural, organic cosmetics including. vegan lip & eye products, mineral make-up powders, skin creams, body lotions, masks, aroma therapy, natural handmade soaps, for wholesale and retail sales. Based on the financial and competitive analysis presented in this plan, CNaturals, Inc. will be successful. It is anticipated that CNaturals, Inc. will become the leader in market share of its business level (small to mid size) market within six years. CNaturals, Inc.’s vision trigger, “Nature Tested, Nature Approved…CNaturals…Healthy, Beautiful, Responsible” will assist the company in distancing itself from its competitors. The President, Sahana S. Barade, has had extensive generational experience in the herbal cosmetic and skin care field following the the long tradition of her family. She also holds a Masters in Telecommunication Engineering from the New York Institute of Technology, one of the premier engineering schools in the nation.
Page 3 of 14
THE BUSINESS DESCRIPTION
CNaturals, Inc. was incorporated (S Corporation) in the year 2005 in the state of New Jersey with its Corporate office located at 12 Reinman Road, Warren, New Jersey 07059. Mrs. Sahana S. Barade is its President and Chief Executive Officer. Mrs. Barade comes from a family of Ayurvedic (Herbal) Medicinal. While she is a Telecommunication Engineer by education, having done her Masters in Telecommunication Engineering in the United States and having worked in large Communication firm as a Network Engineer, she has always been a Ayurvedic practitioner at heart and decided to choose the line of the family. Her interest in using her family’s knowledge learnt over several generations compounded with an increased global awareness of health concerns due to prolonged use of chemicals in skin care products as well as generational change in outlook towards sustainable practices propelled her to start CNaturals, Inc. CNaturals, Inc. produces/sells pure natural, organic skin care and hair care products that are vegan (non-animal tested). tested). These products include lip products, eye products, mineral mineral makeup powders, skin creams, body lotions, masks, aroma therapy and natural soaps. CNaturals, Inc. will be successful based upon the impressive response received from the users of the test product for its effectiveness, natural ingredients, exponential growth of the target market and the marketing strategy adopted by the firm.
MARKET ANALYSIS Target Market:
CNaturals, Inc.’s customers in general are the U.S. and global markets. The target markets in particular are the following four – •
Lifestyles of Health and Sustainability (LOHAS) Page 4 of 14
•
“Beauty Buyers”
•
Natural Trade show attendees
•
Retailers & wholesalers LOHAS is a demographic group related to sustainable living, "green" ecological
initiatives, and generally composed of a relatively upscale and well-educated population segment. LOHAS is a recognized market segment in the USA, Western Europe and South East Asia. Progressive Asian countries, including Japan, Singapore and Taiwan have similarly aligned interests. This market of late has been spearheaded by many a popular Hollywood celebrities. According to Worldwatch Institute and Natural Marketing Institute (NMI), “LOHAS”, was estimated at $300 billion/40 million Americans in 2007. Beauty Buyers are people who value the quality and are sensitive the manufacture process, ingredients of the products that they use and are conscious of the long term effects of the products and value these items over sheer price of the products. Natural Trade show attendees are very attractive population segments who are a much targeted market for the products. These customers are very focused on what sort of products they are looking for and so choose the Natural trade shows which occur throughout the year at various locations throughout the world with the largest ones being in Anaheim, California; Boston, Massachusetts; Hong Kong, China; London, United Kingdom; Dubai, UAE; Tokyo, Japan. Finally, retailers & wholesalers (such as Spas, other resellers) who either access the impressive website of CNaturals, Inc. or through contacts generated directly by the marketing end of CNaturals based upon leads received through various channels, who are generally very knowledgeable about the market/price structures and are very attractive for a firm such as
Page 5 of 14
CNaturals, Inc. which had a competitive advantage over several other similar market firms in terms of product quality as well as the cost. Market Size:
The US market was over $7 billion last year (per various organizations), small but fast growing part (17% more than in 2006) of $56 billion health & beauty care industry. Global market grew by 5% in 2006 to reach $25.1 billion, with 28% increase forecasted by 2011. Market Capture Projections: Table 1 - Market Capture Projections For Next Five Years
Year
2010
2011
2012
2013
2014
Amount, U.S. Dollars
$0.5 $0.5 Millio Million n
$1.0 Millio Million n
$2.0 Millio Million n
$3.0 Millio Million n
$4.5 Millio Million n
Marketing Plan:
The firm intends to market the products to their target market through trade shows, trade community networks, company internet website, traditional methods such as trade magazine advertisements, networking, contacts developed through experience and good old fashioned word of mouth. Competitive Positioning:
The firm expects to be in top tier of business level (small to medium size) in 6 yrs. Strategic Partners/Market Research:
Active participation in many networking groups, deep relationship and links to major websites is central to our partnership strategy. Many allied trade organization memberships gives us the market research information on a daily basis.
Page 6 of 14
VISION STATEMENT
In six years, CNaturals, Inc. will become the premier skin and hair care product manufacturer and seller in the natural, vegan products market globally. VISION TRIGGER
The
main
vision
trigger
will
be
the
slogan:
“Nature
Tested,
Nature
Approved…CNaturals…Healthy, Beautiful, Sustainable” The vision trigger will emphasize the natural, healthy and effective qualities of the products sold to the target customers. MISSION STATEMENT
CNaturals, Inc.’s mission is presented below: We, the employees and management of CNaturals, Inc., make this pledge to you, our valued customers: We pledge that we will serve you in a prompt and friendly manner. manne r. We pledge that we will provide the skin and hair care products of the highest quality that you have expected of us. We pledge that we will be good community citizens, respectful of the environment, and conscious of our social responsibility. We pledge that we will always present a positive public image. We pledge that we will be responsive to your suggestions and concerns. BUSINESS OBJECTIVES
CNaturals, Inc. will have these business objectives du ring its first three years of operation: 1. Cash break-even by the end of Year 5. 2. Owner’s draw of $48,000 by the end of Year 6.
Page 7 of 14
BUSINESS OPERATIONS
The operations of CNaturals, Inc. will be described using the main functions of the business: marketing, competitive analysis, legal structure, management expertise, support personnel, and financial information. MARKETING
CNaturals, Inc.’s target market will be the LOHAS demographics, Beauty Buyers, Natural Trade show attendees and Retailers & wholesalers at both national (U.S.) and global level. Product
CNaturals, Inc. will sell the following: Lip products including Lipsticks, Lip Glazes, Lip Liners; Eye products such as eye liners, mascara, eye shadows, Mineral Make-Up Powders that include Blushes, Foundations, Eye Shadows. Additionally, CNaturals sells Skin Creams, Body Lotions, Masks, Aroma Therapy, and Natural Soaps. Price
Prices for CNaturals, Inc.’s products will vary according to the type, size and delivery mode of product required by the customer, and whether the product is sent as general sales product or customized to individual client specifications.
Place
As CNaturals sells product over the internet for the most part and has no retail presence, location of the facility from sales perspective is not critical for the current projected sales volume.
Page 8 of 14
CNaturals, Inc. will be located in an industrial/commercial zone area of a relatively wealthy town located in central New Jersey within proximity of major highways, airports (New York tri-airports), seaports (New York bi-Seaports), and in the shadow of two major cities (New York and Philadelphia) in the Northeast U.S. The headquarters is housed in an approximately 2500 square foot building that can be expanded. The building is owned by the founder. founder. Promotion
CNaturals, Inc. will be promoted with a variety of marketing methods: Colorful pamphlets with the various product descriptions will be emailed to various target customers. CNaturals, Inc. does not intend to use mass mailing due to environmental reasons keeping with the company philosophy. CNaturals, Inc. will also use their web site to reach direct customers, both at national and global level, through effective use of search engines. CNaturals, Inc. will advertise in trade magazines, through presence in Trade shows. CNaturals, Inc. also promotes through trade community networks, blogs, networking through contacts developed over the years and through word of mouth. COMPETITIVE ANALYSIS
CNaturals, Inc. faces competition both at national and global global level. As advancements are made in e-commerce, more and more businesses will become competitors. However, the new technology also works in the favor of CNaturals, Inc. as it will allow the company to distribute its products internationally as opposed to just nationally in an increasingly global market where some of the prominent players are emerging markets, notably Brazil, Russia, India and China, Middle Eastern (BRICME) countries.
Page 9 of 14
LEGAL STRUCTURE
CNaturals, Inc. will be operated and maintained as an S-Corporation presided by Mrs. Sahana S. Barade. MANAGEMENT EXPERTISE
The President and CEO, Mrs. Sahana S. Barade, has extensive experience with herbal products and has been involved in the nascent but highly evolving natural cosmetic product business. While working in a Communication Technology firm as a Network Engineer, she has nurtured and applied her family herbal experience into the skin and hair care area and looking at the impressive business model, she left her successful and fast rising career in the technology firm to follow her business acumen. Sahana S. Barade received her Bachelor of Engineering degree in Telecommunication and her Master of Science degree in Telecommunication Engineering. The Product Development Group is headed by Dr. Laina Karthikeyan, an eminent Scientist and Professor of Molecular Biology at a prominent University in New York, whose research interest is in Neurodegenerative diseases. Dr. Karthikeyan also has keen interest in the use of herbal medicines and brings her vast knowledge in both the ancient and modern sciences to the firm. CNaturals, Inc. is also served with Technical and Marketing Counsel by Mr. Sai S. Barade, who is the President of a successful Engineering Design Firm in New York City.
Page 10 of 14
SUPPORT PERSONNEL
The business will operate with a total of four full time equivalent (FTE) employees: a manager (full-time) and one administrator (part time) and two manufacturing employees (parttime). The owner intends to train the workers so she can focus her efforts on the financial and marketing aspects of the business. The part-time workers will be paid at a rate of $10.00/hr initially with a structured plan for pay increases. A policy of promotion promotion from within within will be adopted. Within five years, the owner plans to add ten full-time full-time employees who will assist in the expansion of sales in the national and global markets. FINANCIAL INFORMATION Financial Objectives
The following objectives are for the first five years of CNaturals, Inc.: 1. Cash break-even by the end of Year 5. 2. Owner’s draw of $48,000 by the end of Year 5. One-Year Cash Flow Projection
The items in the Exhibit 4, One-Year Cash Flow Projection, have been arranged in a specific way: sources of cash (cash receipts), cash needed to purchase assets (equipment), cash needed to pay expenses (rent), cash need to pay liabilities (payroll taxes), and owner’s draw. Sources of Cash 1. Personal Funds. The owner has invested $80,000 into the business.
using $50,000 Business Business Credit Line for Wachovia 2. Loan Proceeds. The owner has been using Bank.
Page 11 of 14
3. Cash Receipts from Business. Cash receipts based upon projections indicated in Market
Capture Projections is estimated. Uses of Cash 1. Equipment. This expenditure includes Manufacturing, Mixing, Compounding, Packaging
and labeling equipment. 2. Marketing – This expenditure includes Web Site operation and upgrades, advertisements,
traditional marketing, Exhibition Displays. 3. Real Estate. Real estate expense is included in lease expense. 4. Fixtures.
Fixture costs will total $5,000 based on an estimate from City Manufacturer
Fixtures Supply, Inc. These costs will include purchasing work tables, chairs, and removable removable service items. 5. Cost of Goods Sold. Cost of goods sold is based on the sales projection of $372,000 and is
estimated to be an average of 25% of sales totaling $108,000.
This information information was
calculated using average sales of 30 units priced at $1,200 each per month (information estimated from competitive company). 6. Telephone and Utilities.
Local companies estimate telephone and other utilities at
$1000/month for an annual total of $12,000. 7. Repair and Maintenance. It will cost an estimated $10,000 to maintain and repair machines
to manufacture at required standards and assure product quality. 8. Lease/Rent. None at this point. 9. Business License Fee. None at this point..
Page 12 of 14
10. Insurance Premiums.
Valley Insurance Agency estimated annual premiums at $2,000.
These premiums will cover business liability, property damage, workman’s compensation, and all other types of insurance. 11. Office Expense. This item includes all office-related expenses including copying, paper
supplies and business cards. The owner and manager will perform perform office office duties. Total is estimated at $2,000 annually based on the owner’s previous experience. 12. Legal And Accounting.
Pandya Kapadia Associates CPA’s firm will provide basic
bookkeeping, accounting services. The firm provides low cost bookkeeping services and will be providing tax preparation and other professional services. The total estimated annual cost is $4000. 13. Advertising and Promotion.
2% of total revenue will be allocated to advertising and
promotion. 14. Real Estate and Other Taxes. None at this time 15. Miscellaneous Expenses. $10,000 is estimated for miscellaneous expenses based on past
experience. 16. Payroll Taxes and Benefits. These are estimated to be $13,800, 20% of wages.. 17. Payroll. Wages total $70,000. This total includes three part-time workers, each working 25
hours a week at a rate of $10/hour, for a total of 52 weeks. Payroll includes the manager’s manager’s annual salary, employer taxes such as FICA, unemployment insurance, and worker’s compensation, but does not include withholdings. Interest). All of the $130,000 loan allocation will be used 18. Loan Payments (Principal and Interest). during the fifth and sixth year of operations. Assuming this this amount was available at the beginning of the business’ fiscal fiscal year, interest at 10% totals $15,000.
Page 13 of 14
In addition, according to the loan agreements, a principal payment of 25,000 is required. One semi-annual payment $12,500 will be made during the fiscal year while the second payment will be made at the beginning of the second fiscal fiscal year. The total payments for this category will be $27,500 (interest and principal). 19. Owner’s Draw.
This information was obtained from Exhibit, Monthly personal Living
Expenses, and is $4,000 per month or $48,000 annually. SUMMARY
CNaturals, Inc. will be successful.
This business business plan has documented that the
establishment of CNaturals, Inc. is is feasible. All of the critical factors such as industry trends, marketing analysis, competitive analysis, management expertise, and financial analysis support this conclusion.
Page 14 of 14
