COST AND BENEFIT ANALYSIS: Beauty Store Project

TABLE OF CONTENTS I Introduction Company background ………………………………………………… 2 History and current situation ………………………………………… Future orientation …………………………………………………… II Market Analysis Vietnam cosmetic market …………………………………………… SK-II market in Vietnam …………………………………………… III Business Strategy SWOT analysis ……………………………………………………… Orientations ………………………………………………………… Assess Project's Impact on the Surrounding Area …………….10 IV V Project Benefit and Cost Analysis Total fixed investment ……………………………………………… 10 Working capital …………………………………………………… 14 Ba Dinh showroom construction capital …………………………… 14 Funds for project implementation ………………………………… 14 Capital resources …………………………………………………… 15 VI Analyze Financial Performance Depreciation of fixed assets ………………………………………… 16 Assumptions of revenue …………………………………………… 17 Cost Assumption …………………………………………………… 18 Economic indicators of the project …………………………….…… 21 Project cash flow statement ………………………………………… 22 Conclusion …………………………………………………………… 24 VII I INTRODUCTION Company background  Company’s name: Beauty Store Company  Cooperation company: SK-II Company  Headquartered: Japan  Founded: 2016  Legal representative in Japan: Hirokazu Kore-Eda – Director  Legal representative in Vietnam: Mrs Phung Thi Hao – Director  Type of business: Skin care History and current situation 2.1 History Beauty Store was established on April 21, 2016 with the main purpose of bringing beauty and youthful life to Vietnamese women Understanding that beauty is an endless need and cosmetics the way for women to reach true beauty, the company decided to choose Japanese SK-II products to replicate in Vietnam – which is famous with ingredients of natural origin The company has nearly years operation and experience as an online shop selling hand-carried Japanese goods, currently orienting and expanding genuine showroom stores affiliated with SK-II Japan 2.2 Main products For face SK-II Facial Treatment Mask SK-II Whitening Source Derm Revival Mask SK-II Skin Signature 3D Redefining Mask SK-II Signs Eye Mask Serum SK-II RNA Radical New Age Serum SK-II Genoptics Aura Serum SK-II Facial Treatment Repair C Serum SK-II LXP Ultimate Perfecting SK-II R.N.A Power Radical New Age SK-II Cellumination Deep Surge EX SK-II R.N.A Power Eye Cream Radical New Age SK-II LXP Ultimate Perfecting Cream SK-II Facial Treatment Essence SK-II Facial Treatment Clear Lotion SK-II Atmosphere Airy Light SPF50+/PA++++ Facial Treatment Cleansing Oil For body SK-II body lotion SK-II Skin Rebooster SK-II whitening source derm brightener Pressed Powder Powder SK-II Advanced Protect Powder UV Foundation Powder SK-II Clear Beauty Artisan Brush Foundation Moist SK-II Color Clear Beauty Powder Foundation Face Massage Stick SK-II Magnetic Booster Makeup brushes SK-II Makeup sponge SK-II Other products Make-up products Accessories Future orientation In the following time, our company will promote business development and exclusive distribution of domestic SK-II cosmetic from Japan to Vietnam In the first phase, the company's main development goal is to open official showrooms in Hanoi - the capital of the country and a city with a dynamic and developed economy II MARKET ANALYSIS Vietnam cosmetic market Before 1997, the Vietnamese cosmetic market had not received much attention because women's income was still low and their budget for cosmetics was too meager The skin care and makeup products on the market at that time were mainly smuggled goods from China (cheap brands) and domestic goods, a few foreign ones However, currently, the Vietnamese cosmetic market is very potential according to the forecast of Nielsen Vietnam (the world's leading market research firm) The cosmetic market in Vietnam is divided into main levels:  Level 1: The noble line (lady): Currently on the market is very rare, not widely sold in commercial centers, supermarkets but only in spas and beauty salons Although the sales are small, the sales of the lady line are very high because the price is at least 18-20 million VND/skin care set (including bottles of skin care, rose water and facial cleanser), not to mention using other products Some lady brands are Wigleys, Clinique, Estee Lauder, Lancome…  Level 2: High-class cosmetics: To be at this level, manufacturing enterprises must be located in places with certified cosmetic scientific research institutes There are only countries in the world that have this institute: France, Japan, and Switzerland Some high-class brands on the market are Shiseido, Carita, L'Oreal, Kanebo, Clarins, Pupa  Level 3: Brand name cosmetics: This line is currently occupying a large amount in Vietnam Some typical grand name brands are DeBon, Amore, Maybeline, Nevia…  Level 4: Ordinary goods such as Pond, Hezaline, Essance, Rohto and Vietnamese brands such as Lan Hao (Thorakao), Lana, Kao (Biore), Saigon cosmetics With a market of 90 million people, people's income People's population is constantly improving, especially women (accounting for more than ½ of the population) are increasingly participating in social activities, accessing knowledge, science, fine arts, art so the demand for cosmetics constantly increasing, from perfume, lipstick, makeup powder to lotion - hair care, so Vietnam is a huge market for domestic and foreign cosmetic manufacturing and trading enterprises SK-II products belong to level 2: high-class cosmetics with diverse price models Market trend Nowadays, natural beauty cosmetics are receiving the attention of girls, this is also a new trend in the cosmetic industry After a period of neglecting available natural ingredients, we have paid more attention to the valuable and healthy effects of skin care products and cosmetics of natural origin And almost in the field of cosmetic chemistry alone, now all products derived from nature are gradually regaining their position with higher development The advantages of natural cosmetics: - Completely natural: Extracted from flowers, fruits, plants, minerals - Safe use: Natural cosmetics are strictly tested and verified by dermatologists, cosmetics are not chemically processed, not contain synthetic and artificial ingredients - High compatibility with all skin types: Compatibility with many skin types and high skin safety index, for each skin type you can easily find the right cosmetics - Wide range of leather products - Affordable: Except for cosmetics extracted from rare materials, natural cosmetics are not expensive, suitable for all subjects - Not tested on animals: It is a plus point of natural cosmetics in terms of environmental protection and human life - No side effects: The natural ingredients used in these products are guaranteed not to cause any side effects; They don't clog pores, don't dry out or make skin oily, don't irritate so you can use them whenever you want SK-II in Japan is famous for its natural product line, which has good effect and no side effects SK-II market in Vietnam Currently SK-II cosmetics have a certain number of customers in Vietnam, but the products of this brand line have not been officially available in the market and still depend mainly on portable, floating and wholesale goods directly from the wholesale system with the title "Japanese domestic cosmetics" Currently, there is a unit to buy wholesale directly from Japan, avoid taxes in Hanoi, also set up a showroom, but there is no official cooperation with our distributor in Japan SK-II Faced with great demand and customer preference for SK-II product lines, SK-II Company will conduct exclusive distribution and development of this brand in Hanoi III BUSINESS STRATEGY SWOT Analysis Strengths  Good products with power results: SK-II produces quality premium skin care products which are largely successful as seen from their market share in the fragmented markets  Having a strong brand image and being highly recognisable  Loyalty customers: Majority of the SK-II current users adore the products and are very loyal to the brand Weaknesses  Niche market: By capturing only the top of the pyramid, SK-II is will not be able to maximise its market share as there will be many consumers unable to afford their products  Narrow range of product: Khách hàng khơng tìm sản phẩm họ muốn mua hãng SK-II, làm khách hàng  Absence of retail flagship store:   Being a child brand under Procter and Gamble also ensures strong marketing support and other benefits associated with the parent company such as perceived quality and assurance since Procter and Gamble is big and famous international fast-moving consumer goods (FMCG) company High recognization Opportunities  Men industry: SK-II can hop on the bandwagon and launch a new product line targeting men Skin-care products targeting men are becoming more widespread in the recent years and this represents a new market segment that is yet to be saturated  Lauching make-up series: SK-II has also recently launched a new product line offering make-up, which contains their trademark Pitera, known for their skin care properties Expanding into a currently unprovided market serves as an opportunity for SK-II to better serve its existing consumers and reach out to gain an even wider market share  Collaboration: SK-II has also rolled out their exclusive boutique spa in collaboration with exclusive spa company, Senze Salus Future collaborations with other companies have signified a huge opportunity for SK-II to further strengthen their brand Unlike some of its competitors, SK-II does not own a flagship store By operating solely via departmental stores and specialty stores like Sasa and Sephora, their brand exposure is also much lesser Competition in departmental stores and specialty stores are also tougher as more brands are available for comparison Threats  Imitation: The threat of imitation is constantly present as consumers who are not well informed about the brand may purchase counterfeit goods online or via a third party This could lead to unintended negative word-of-mouth from consumers, whom preceive themselves using the original products  Other strong competitors: The beauty industry is also highly competitive as there are countless brands readily available for consumers to choose from These products range from mass production to premium and exclusive selections To gain new market share from consumers, whom are already loyal to their preferred brands will be challenge to all companies across the industry Orientations 2.1 Location Choosing a business location is a very important strategy and greatly affects the success of a business plan Having a good business location is already 40% successful but choosing a place to business in a large city with 30 districts like Hanoi is a difficult problem The orientation of building a chain of our cosmetics stores with famous Japanese brand SK-II for the middle and high class, targeting young people or active women Stores need to be located in places which have high dense populations, many students and many office workers From the above criteria, we used GIS data for analysis Below is a map of population density distribution of 30 districts in Hanoi We see that when we come further into the city center, the more the population density increases; districts such as Dong Da, Hai Ba Trung, Ba Dinh and Hoan Kiem are all located in urban areas with a density of 25,000-35,000 people/km2 with the most population living in the city Further analyzing spatially, we conduct data analysis of socio-economic points such as schools, hospitals, and companies to analyze and select suitable locations Through the map, we see that the districts of Ba Dinh, Cau Giay, Hai Ba Trung are the places where the majority of employees and offices are concentrated in the city and are near shopping centers, supermarkets, and commercial centers For showrooms in Cau Giay and Hai Ba Trung, SK-II has chosen a suitable rental location, which is home to many other high-end product lines, to be specifically our address for new showrooms are:  Cau Giay: Discovery Complex: third (3rd) floor: 42m2 with price 20,000,000/month  Hai Ba Trung: Vincom Trade Center Ba Trieu: second (2nd) floor: 36 m2 with price 18,000,000/month As for Ba Dinh district, our company decided to buy land and proceed to build a suitable showroom by ourselves Address: No 4, Van Cao, Lieu Giai, Ba Dinh The land price is 3.8 billion for 41m2 2.2 Human resources Each store is estimated to have full-time employees including the store manager, salesman, security guard and part-time collaborators Employees will be equipped with knowledge about cosmetics through training classes organized by company in association with teachers at the parent company in Japan - Employees are required to have the following qualifications:  Knowing how to display, manage and remember the items and uses of the SK-II cosmetic line  Knowledgeable about beauty care, have knowledge and have used many different cosmetic lines  Having good communication skills, cheerful spirit and enthusiasm when consulting and selling  Having beautiful skin, few defects and hving passion with beauty - Marketing strategy:  Advertise on online newspapers: hire PR articles on major websites with beauty care categories such as vn.express, dantri.com.vn, kenh14, ngoisao.net, soha.vn, tiin vn, zing.vn, 24.com.vn…  Advertise on beauty forums, share knowledge and have good review for SK-II products  Setting up an official website and announcing information from the co-operarion company: the exclusive distributor SK-II in Hanoi for the purpose of creating trust, introducing products, consulting products and sharing ideas as well as ordering direct goods  SEO keywords "cosmetic", "SK-II", "reduce dark spots, treat acne"  Advertising on social networking sites: Facebook, Instagram, Tiktok in cooperation with KOLs to promote product uses - Discount promotion:  Issue deals and vouchers on famous website: http://nhommua.com, http://hotdeal.vn, http://muachung.vn, http://cungmua.vn, http://www.123mua.vn, http http://www.cucre.vn, http://51deal.vn, http://khuyenmaivang.vn, http://vinadeal.vn/, http://www.diadiemvang.net/  Discounts on holidays and anniversaries - Type of advertisements:  Outdoor advertising: Pano, poster, LED light  Advertise on means of transport (bus)  Invite famous people to participate in the company's product promotion program to add value and trust about the product  Other types of advertising + Advertising through business directory publications (golden pages, business information ) + Advertising through product introduction programs in public places: discounts, groupon giveaways at community events (student day, International Children's Day, International Women's Day ) + Advertising through packaging (bags, delivery bags) 2.3 Promotion Promotion is an important process in making SK-II a familiar brand for everyone in Vietnam Since then, Beauty Store (SK-II co-opreation in Hanoi) must:  Inform customers about the presence of genuine SK-II on the market, especially in Hanoi  Encourage customers to buy products, promote faster and more purchases  Compare with other products for customers to see that the quality of service and after-sales is better than other competitors in the market  Convince customers to believe in SK-II's product qualities  Remind consumers of product availability and benefits In the initial stage of bringing the product to the Vietnamese market, in order for customers to know about the products distributed by the company, the company should let customers try the product through small packages of free products The company should also carry out programs for the community to bring its brand to everyone and create a beautiful image of the company in the public mind such as campaigns to support poor children, campaigns to protect environment IV ASSESS THE PROJECT'S IMPACT ON THE SURROUNDING AREA For showrooms in Cau Giay and Hai Ba Trung District The company applies the form of renting kiots at large department shopping center, so electricity and water are relatively quite stable, we just need to fix and connect them to a suitable location However, this repairation also takes time for about week and causes noise effects by drilling machine and freight transportation Realizing that the commercial shopping centers start to open to welcome guests from about 9:30 am and close at 10 pm; 10 therefore, construction workers can start from am and finish work until am, which will not affect shoppers as well as the shops around For showroom in Ba Dinh District The entire store needs to be built from the beginning, so it may have some impact on the residential area as well as the surrounding shops These impacts only take place during construction and have no impact on the environment after completion It is expected that the showroom will take about months to build, starting from November, 2021 and finishing at March, 2022 Below, there are steps that need to built our new showrooms: + Preparing the ground, gathering materials before construction: week + Making the foundation, pressing piles, reinforcing the foundation: about 20 days to month + Construction of rough parts (building of walls, beams, floors, columns, roof ): about - 2.5 months depending on weather conditions (the humid weather will be detrimental and prolong the time) + Completion time (ceiling, flooring, wall cladding, door installation, stairs, wall painting, sanitary equipment installation, electrical equipment): month or 45 days + Time to install furniture and decoration: weeks In months of construction, the showroom has the following effects:  Noise Table content – Maximum permissible limits on noise (according to sound level equivalent), dBA No Area Special Area Common Area From a.m to 21 p.m 55 70 From 21p.m to 6a.m 45 55 According to the table above: + Special areas: are areas within the fence of medical facilities, libraries, kindergartens, schools, churches, communal houses, pagodas and other areas with special regulations + Common areas: Including: apartment buildings, separate or adjacent houses, hotels, motels, administrative offices Our showroom construction area is located in the normal area, through surveying and investigating the living rhythm of the surrounding residents, our company decided to proceed with the construction of the project from am to 11 am as well as from 2pm to 5pm This is the time when most people have left their houses and gone to work and school, hence the noise can be minimized  Dust The pouring of soil, sand and construction materials during this period causes the vehicles to operate continuously; the amount of work for leveling the ground as well as 11 building items, installing equipment such as foundations If deployed in the dry season, the dust pollution for the whole area is the highest The dust concentration can exceed many times the allowable standard but will decrease when the construction is completed The dust components are mainly soil, rock, sand, cement dust, smoke dust during the construction phase, dust concentration may increase and exceed the allowable standards; however, the above source does not spread far, only affecting workers on the construction and people passing across and around the construction area  Solid waste This waste is mainly the packaging of cement materials, rubble, stones, stones used to pour concrete slabs It can also be the waste of excess material, excavated soil, scattered materials, waste, packaging, wooden crates This amount is not much, but they are substances that are difficult to decompose and can be utilized and collected during the construction process depending on the type Solid waste in daily life of workers is relatively diverse such as biodegradable organic matter, besides, there are also packages, nylon, plastic bottles, canned goods, etc Because the construction area is quite small and only one floor is built immediately in the aim of selling SK-II products, these wastes can be collected and sorted without much impact on the environment  Economic and social impact SK-II products belong to the cosmetic segment suitable for people with middle-high income, in addition, this is the first genuine store to cooperate directly with SK-II company in Japan The construction of shops is on the main road, where there is a dense population and an enough amount of shops having the same price range, this will push up the general land price here and attract more shops to rent or build in this place Thereby, our showroom is contributed to creating the increasing the economic value of the region V Project benefit and cost analysis Total fixed investment for the stores To calculate the business efficiency for a chain of stores, the most necessary is to calculate the investment efficiency of a store Total investment for interior decoration and business services of the store is: 346,600,000 VND This cost includes: + Expenses for interior decoration: in accordance with regulations and general style in terms of images, colors and product layout + Equipment cost for the store + Deposit rental for showrooms in Cau Giay and Hai Ba Trung + Advertising costs + Service cost of the shopping center + Provision fees (calculated by 10% of the investment value of furniture and equipment) 12 Summary table of fixed investment costs Category Quantity Unit Unit Price Expenses for interior decoration Showroom interior decoration Total Price 60,000,000 40 m2 1,500,000 60,000,000 131,000,000 Equipment cost for the store Cashier's desk piece 8,000,000 8,000,000 Retail receipt printer piece 1,300,000 1,300,000 Calculator piece 15,000,000 15,000,000 Speak piece 7,000,000 7,000,000 Panasonic air-conditioner piece 16,000,000 16,000,000 Exhibition counter counter 30,000,000 30,000,000 Product display table table 20,000,000 20,000,000 Uniform resource locator 15 set 200,000 3,000,000 Landline piece 2,000,000 2,000,000 Light box board piece 10,000,000 10,000,000 Skin analyzer LD - 6021 piece 18,000,000 18,000,000 Closet piece 700,000 700,000 Deposit of rent Deposit for months' rent 120,000,000 showroom 120,000,000 Advertising costs Service charges for shopping malls 120,000,000 15,000,000 showroom 1,500,000 1,500,000 13 Provision fees (10%) 19,100,000 Total 346,600,000 Working capital In addition to the investment in premises and equipment for business during the preparing period When the project comes into operation, it is necessary to supplement working capital for each store, which is estimated at 50% of net revenue per year: 250,000,000 VND/store Ba Dinh showroom construction capital Category Price 3,800,000,000 Money to buy land Rent for Mashome contractor (including cost of construction materials, cost of design and construction) Workers' transportation and travel surcharges Total price 130,000,000 10,000,000 3,940,000,000  Total investment of Ba Dinh shows: Category Fixed investment capital Working capital Ba Dinh showroom construction capital Total investment Price 918,300,000 750,000,000 3,940,000,000 5,608,300,000 Funds for project implementation Because Beauty Store has nearly years of experience in the cosmetics industry and has accumulated a good amount of capital, the company decided to borrow only 1,000,000,000 from the bank and apply the annuity repayment method with an interest rate of 10%/year Year Beginning balance Interest incurred during the period Amount of debt payment - Original - Interest Ending balance Annuity payment table 2022 2023 2024 2025 1,000,000,000 784,529,196 547,511,312 286,791,640 100,000,000 78,452,920 54,751,131 28,679,164 315,470,804 315,470,804 315,470,804 315,470,804 215,470,804 100,000,000 784,529,196 237,017,884 78,452,920 547,511,312 260,719,672 54,751,131 286,791,640 286,791,640 28,679,164 - 14 Capital resources 5.1 Using capital plan Capital using plan Total First month Second month Third month Fourth month Repair and renovate the ground 100% 70% 30% 0 Equipment for business 100% 70% 30% Ground rent deposit 100% 100% 0 Advertising costs 100% 60% 20% 20% Fee for shopping mall’s service in showrooms Cau Giay and Hai Ba Trung 100% 100% 0 Money to build Ba Dinh showroom 100% 50% 10% 10% 30% Preservation fee 100% 50% 30% 10% 10% Category 5.2 Progress of using capital Capital using progress Total First month Second month Third month Fourth month Repair and renovate the ground 180,000,000 126,000,000 54,000,000 0 Equipment for business 393,000,000 275,100,000 117,900,000 Ground rent deposit 240,000,000 240,000,000 0 Advertising costs 45,000,000 27,000,000 9,000,000 9,000,000 Category 15 Money for shopping mall service at showrooms of Cau Giay, Hai Ba Trung 3,000,000 3,000,000 0 Money to build Ba Dinh showroom 5,608,300,000 2,804,150,000 560,830,000 560,830,000 1,682,490,000 57,390,000 28,695,000 17,217,000 5,739,000 5,739,000 Preservation fee VI ANALYZE FINANCIAL PERFORMANCE Depreciation of fixed assets We will use the straight-line depreciation method The depreciation period applies according to Official Decree No 45/2013/TT-BTC in April 25, 2013 promulgating the regime of management, use and depreciation of fixed assets Fixed asset depreciation table Depreciation category Depreciation period (Quarter) Depreciation method Interior decoration 20 Straight line method Devices and equipments 28 Straight line method To be more specific: Year Investment in the period Interior decoration 180,000,000 Value at the beginning of the period 180,000,000 144,000,000 108,000,000 72,000,000 36,000,000 Depreciation 36,000,000 36,000,000 36,000,000 36,000,000 36,000,000 Accumulated depreciation 36,000,000 72,000,000 108,000,000 144,000,000 180,000,000 Ending value 144,000,000 108,000,000 72,000,000 36,000,000 - 16 Devices and equipments Year Investment in the period 393,000,000 Value at the beginning of the period 393,000,000 336,857,143 280,714,286 224,571,429 168,428,571 112,285,714 56,142,857 Depreciation 56,142,857 56,142,857 56,142,857 56,142,857 56,142,857 56,142,857 56,142,857 Accumulated depreciation 56,142,857 112,285,714 168,428,571 224,571,429 280,714,286 336,857,143 393,000,000 Ending value 336,857,143 280,714,286 224,571,429 168,428,571 112,285,714 56,142,857 - Assumptions of revenue Project’s revenue comes from: + Average revenue is about 500 million VND/month for each store + Estimated increase in selling price: 1%/quarter During the first year of operation: - Working capacity: 70% of maximum capacity - Operation time: whole year In the first month, the store will welcome customers with a 10% discount on the invoice value From the second year onwards: + Price increase: 3%/year + Operation time: whole year + Revenue in the following years may increase higher, but the project is calculated in a safe level, so it is only estimated according to the minimum revenue the store can achieve  Note: Ba Dinh showroom supposed to be completed in the last month of March 2021 and opened in early April 2021, so this store will officially operate and generates profit in April 2022 Revenue plan through the year 2022 Year Category Price increase Revenue per month 2022 Quarter I Quarter II Quarter III Quarter IV - 1% 1% 1% 1,000,000,000 1,510,000,000 1,661,000,000 1,827,100,000 17 Number of active months 3 3 Opening promotion for the first month (10%) 100,000,000 50,000,000 - - Revenue (excluding promotions) 900,000,000 1,460,000,000 1,661,000,000 1,827,100,000 Occasional discount promotions (3%/year) 175,443,000 Revenue 5,672,657,000 Revenue plan through the four years Category 2022 2023 2024 2025 Number of active months 12 12 12 12 Price increase - 4% 4% 4% Occasional discount promotions (3%/year) 175,443,000 176,986,898 184,066,374 191,429,029 Revenue per year 5,672,657,000 5,722,576,382 5,951,479,437 6,189,538,614 Cost Assumption 3.1 Salary costs Each store is estimated to have about full-time employees (5 sales employee and guard) with part-time associates The estimated salary of a sales employee mainly depends on the sales that the showroom achieved and is supported with a fixed extra allowance of about 3,500,000/VND month It is estimated that staff salaries increase by about 5% per year In addition, full-time employees also enjoy benefits from social insurance, health insurance, unemployment insurance, etc 18 Employee salary payment Staff’s position No Basic salary Allowance money Insurance Total (social, health, salary/month unemployment) Total salary/year Head of shop 4,500,000 500,000 100,800 5,100,800 61,209,600 Sales employee at the store 3,000,000 300,000 66,528 3,366,528 40,398,336 Sales assistance 2,000,000 200,000 - 3,500,000 26,400,000 Guard 3,500,000 500,000 80,640 4,080,640 48,967,680 Total 11 14,747,968 176,975,616 3.2 Operating expenses + Cost of renting space: with an area space of about 40 m2 for each store (located in Cau Giay and Hai Ba Trung district) with a convenient location, the rental cost is about 20,000,000 VND/month + Service costs at showrooms in the shopping centers that we rent + Cost of construction, design and renovation of Ba Dinh showroom (estimated to be completed in February 2022) + Cost of importing raw materials (cosmetic products) from Japan: The cost of imported crabs including transportation costs is about 110,000 VND/kg + Product cost: according to the agreement and policy of SK-II Japanese company for Beauty Store - our company + Advertising and selling expenses: it is necessary to use a fee for advertising, product PR, other promotional activities, deducting about 5% of revenue + Commission expenses for employees and collaborators: This cost is 3% of the sales revenue that they made for the store + Other expenses: 1% of revenue OPERATING EXPENSES PLAN IN 2022 Year 2022 Category Quarter I Quarter II Quarter III Quarter IV Rate of price increase - 1.25% 1.25% 1.25% Salary expenses 44,243,904 44,787,840 45,347,688 45,914,534 19 Rent/Hire expenses 120,000,000 120,000,000 120,000,000 120,000,000 Service expenses in shopping centers 9,000,000 9,000,000 9,000,000 9,000,000 The expenses of designing and renovating Ba Dinh showroom 60,000,000 Importing products expenses 150,000,000 225,000,000 225,000,000 225,000,000 Advertising and selling expenses 30,000,000 45,000,000 45,000,000 45,000,000 Commission expenses for employees and collaborators/assists 2,812,500 2,847,656 2,883,252 2,919,293 Other expenses 4,160,564 4,466,355 4,472,309 4,478,338 Total operating expenses 420,216,968 451,101,852 451,703,250 452,312,165 OPERATING EXPENSES PLAN FOR YEARS Year 2022 2023 2024 2025 Rate of price increase - 5% 5% 5% Salary expenses 180,284,967 189,299,215 198,764,176 208,702,385 Rent/Hire expenses 480,000,000 480,000,000 480,000,000 480,000,000 Service expenses in shopping centers 36,000,000 36,000,000 36,000,000 36,000,000 Importing products expenses 825,000,000 900,000,000 900,000,000 900,000,000 Advertising and selling expenses 165,000,000 180,000,000 180,000,000 180,000,000 Commission expenses for employees and collaborators/assists 11,462,701 12,035,836 12,608,971 13,182,106 Other expenses 17,577,477 18,433,851 19,290,224 20,146,598 Total operating expenses 1,715,325,144 1,815,768,902 1,826,663,371 1,838,031,089 20 Economic indicators of the project Expected business results Category 2022 2023 2024 2025 Net revenue 5,672,657,000 5,722,576,382 5,951,479,437 6,189,538,614 Operating expenses 1,715,325,144 1,815,768,902 1,826,663,371 1,838,031,089 92,142,857 92,142,857 92,142,857 92,142,857 3,865,188,999 3,814,664,623 4,032,673,209 4,259,364,668 785,323,514 775,218,639 818,820,356 864,158,648 3,079,865,485 3,039,445,984 3,213,852,853 3,395,206,020 Depreciation of fixed assets Earning before tax (EBT) Taxes Earning after tax (EAT) The project financial indicators are demonstrated as follows table: Financial indicators Results Total Net Revenue 23,536,251,433 Total operating costs 7,195,788,506 Total Earning before tax (EBT) 15,971,891,499 Total Earning after tax (EAT) 12,728,370,342 EBT/Revenue ratio 0.679 EAT/Revenue ratio 0.541 Average Net Revenue 5,884,062,858 Average Earning before tax (EBT) 4,054,401,446 Average Earning after tax (EAT) 3,243,521,157 21 Conclusion and notes: + Total revenue after years of operation: 23,536,251,433 VND + Total cost in years of operation: 7,195,788,506 VND + Total earning before tax (EBT): 15,971,891,499 VND + Total earning after tax (EAT): 12,728,370,342 VND + Average revenue/year of operation: 5,884,062,858 VND + Average earning before tax (EBT): 4,054,401,446 VND + Average earning after tax (EAT): 3,243,521,157 VND + The EBT/revenue ratio is 0.679 representing that dong of revenue generating 0.679 dong of pre-tax profit + The EAT/revenue ratio is 0.541, showing that dong of revenue generates 0.541 dong of after-tax profit Project cash flow statement Analyze project performance within years will be illustrated in the table below: Cash flow in years Year 2021 2022 2023 2024 2025 Cash inflow 1,000,000,000 5,672,657,000 5,722,576,382 5,951,479,437 7,383,967,186 Net Revenue 5,672,657,000 5,722,576,382 5,951,479,437 6,189,538,614 Liquidation of fixed assets 204,428,572 Working capital recovery 750,000,000 Refund of deposit for space rental 240,000,000 Bank loan Cash outflow 1,000,000,000 5,608,300,000 1,930,795,948 Fixed capital 918,300,000 Working capital 750,000,000 Ba Dinh showroom 3,940,000,000 2,052,786,786 2,087,383,043 2,124,822,729 22 construction capital Operating expenses 1,715,325,144 Repayments bank loan 215,470,804 1,815,768,902 1,826,663,371 237,017,884 260,719,672 1,838,031,089 286,791,640 Net cash flow 5,608,300,000 3,741,861,052 3,669,789,596 3,864,096,394 before tax (EBIT) 5,259,144,457 785,323,514 864,158,648 Taxes 775,218,639 818,820,356 Net Cash flow -4,608,300,000 2,956,537,538 2,894,570,957 3,045,276,038 4,394,985,809 Financial ratio table Indicators Tỷ lệ chiết khấu Benefit and Cost Ratio (BCR) Net Present Value (NPV) Internal rate of return (IRR) Payback period (PP) Results 14.11% 1.864 4,847,658,339 56.33% 10.5 months Comments: + BCR = 1.864 > + NPV = 4,847,658,339 > + 56.33% > discount rate In the year 2021, Beauty Store was having to invest in furniture, design, and building stores as Ba Dinh showroom This showroom will be finished in the last month of first quarter in 2022 and officially come into operation in April-2022 Therefore, the Net Present Value (NPV) of this project just has a small change between 2022 and 2023; but the project still has NPV growing year by year The internal rate of return (IRR) is very high and potential with 56.33% and quick payback period in 10.5 months, this is absolutely a project worth the investment  Our company rating for project: Effective project 23 VII CONCLUSION This business plan is the basis background and formal information for the investors to deploy resources to develop the SK-II cosmetic store chain in Vietnam to serve the beauty needs of customers The analysis shows that this project is not only economically viable but also very feasible through financial parameters This shows that the project brings high returns to investors 24 ... History and current situation 2.1 History Beauty Store was established on April 21, 2016 with the main purpose of bringing beauty and youthful life to Vietnamese women Understanding that beauty. .. strengthen their brand Unlike some of its competitors, SK-II does not own a flagship store By operating solely via departmental stores and specialty stores like Sasa and Sephora, their brand exposure... flagship store:   Being a child brand under Procter and Gamble also ensures strong marketing support and other benefits associated with the parent company such as perceived quality and assurance