Khởi nghiệp son organic, phân tích thị trường, phân tích marketing stratery và bảng cân đối kế toán, Quản trị doanh nghiệp son dưỡng organic với vốn của cá nhân đóng góp và vay mượn ngân hàng
HOCHIMINH CITY UNIVERSITY OF FOREIGN LANGUAGES AND INFORMATION TECHNOLOGY DEPARTMENT OF BUSINESS ADMINISTRATION -*** SMALL BUSINESS MANAGEMENT FLORE ORGANIC LIP BALM Student’s name Class: Instructor: Ho Chi Minh City, December 2021 TABLE OF CONTENTS CHAPTER I: INTRODUCTION 1.1 Product introduction 1.2 Objectives 1.3 Mission .2 1.4 Keys to success 1.5 Start-up expenses summary 1.6 Company ownership 1.7 Management team CHAPTER II: PRODUCT AND SERVICE EVALUATION .6 2.1 Product description 2.2 Company locations and Facilities .6 2.3 Sourcing .6 2.4 Technology 2.5 Future product 2.6 Market growth CHAPTER III: FEASIBILITY ASSESSMENT 3.1 Executive summary 3.2 The business concepts/value proposition 10 3.3 Industry analysis 11 3.3.2 Main Competitors 12 3.3.3 Other Competition .13 3.4 Market Analysis .14 3.4.1 Market Segmentation 14 3.4.2 Target Market Segment Strategy .16 3.5 Management team/Organizational structure 17 CHAPTER IV: STRATEGY AND IMPLEMENTATION SUMMARY .20 4.1 Strategy Pyramid .20 4.2 Competitive Edge 21 4.3 Marketing Strategy 23 4.3.1 Promotion Strategy 23 4.3.3 Marketing Programs 24 4.3.4 Pricing Strategy 25 4.4 Sales strategy 25 4.4.1 Sales forecast 25 4.4.2 Sales programs 28 CHAPTER 5: FINANCIAL PLAN 29 5.1 Break-even analysis 29 5.2 Projected profit and loss 30 5.3 Projected balance sheet 31 5.4 Financial ratio 33 REFERENCES 36 LIST OF TABLES Table 1.1 Start-up Expenses and Assets Table 3.1 Main competitors 13 Table 3.2 The four bases of market segmentation 15 Table 4.1 SWOT analysis 23 Table 4.2 Sales forecast in the first three years .27 Table 5.1 Pro Forma Profit and Loss (Unit: VND) 31 Table 5.2 Pro Forma Balance Sheet (Unit: VND) .32 Table 5.3 Financial ratio 33 LIST OF FIGURES Figure 3.1 Distribution channel diagram of Flore Organic Lip Balm 12 Figure 3.2 Organization chart of Flore Organic Lip Balm 19 Figure 4.1 Sales forecast for year 28 Figure 4.2 Sales forecast for year 28 Figure 4.3 Sales forecast for year 28 CHAPTER I: INTRODUCTION 1.1 Product introduction Since the dawn of time, cosmetics have been in high demand The emphasis these days is on organically derived cosmetic products Lip balm formulas are the most commonly used cosmetic product to improve the beauty of lips and provide a glamorous touch to makeup Lip balms are an all-natural approach to keep and encourage healthy lips Current cosmetic lip products rely on massive chemical components with a variety of adverse effects So we created an organic lip balm container manufactured with naturally occurring base, oils, extract, color, and flavoring ingredients that can be assessed for temperature fluctuation resistance, pleasant flavor, and smoothness during the application, adherence, and simple purposeful removal Chapped lips are a typical occurrence Because of the numerous things that come into contact with the lips, such as dust, rain, or sun, as well as harsh weather conditions, many of us use lip balm or balm regularly to maintain our lips soft and smooth membrane When it comes to a good natural skincare routine, we must take care of our lips As a result, we have created a range of organic lipsticks and organic balms in a variety of tastes and hues for clients to pick from that are comfortable and ideal for their lips 1.2 Objectives Flore Organic Lip Balm (FOLB), as a start-up, has three objectives to achieve over the next three years First, businesses can reach more than 70% of potential customers aged 16 to 35 in Ho Chi Minh City Next, develop the enterprise's e-commerce channel so that customers across the country can reach it through advertising And finally, profit after tax can exceed 20% of sales 1.3 Mission Flore Organic Lip Balm's mission is to bring organic cosmetics closer to everyone who loves beauty and good product quality for healthy lips 1.4 Keys to success For a start-up to be successful, many factors need to be considered Some important success keys that Flore Organic Lip Balm is passionate about, are: Product origin This is very important to build customer trust And the product quality is always our top priority Service attitude: We are always dedicated to answering customers' questions, as well as providing the best shopping experience at Flore Organic Lip Balm Good control of cash flow: Our business will make a specific financial plan to predict the revenue and expenses of the business every month Based on cash flow prediction, our business will be able to have a plan to raise capital in case of a cash flow shortage This gives us security during times of uncertainty Good control of inventory: Because our business produces lipsticks in many flavors Therefore, we have to check our inventory regularly to know what the best-selling scents are so that we can plan to import more in time As for the items that are in stock and have a lot of stock with a long time in stock, we will offer reasonable discounts and promotion policies to promote sales faster This helps increase revenue for the business Sales: Based on the revenue index to be able to assess the ability of the company to operate effectively or not If we not achieve the set KPIs, we will find ways to make timely adjustments to motivate employees to work more effectively 1.5 Start-up expenses summary Flore Organic Lip Balm’s startup expenses and assets are shown in the following table Most of this money will be used to build the first facility, pay rent for the location, provide funding for 6months operating expenses, and other one-time expenses Our company will borrow capital from the bank for the first few months of operation Table 1.1: Start-up Expenses and Assets Startup expenses: Cost (VND) Rent Location 60,000,00 Office equipment - 11,800,00 Computer for employees 10,000,00 - Packaging for 700 products 1,800,000 Outsourcing expenses for 700 672,000,0 products Salaries 00 of employees person) ( 36,000,00 Wages for part-time ( people 30,000,00 ) Marketing expenses 60,000,00 Web Site Development and 12,000,00 Hosting Other utilities (electricity, 6,000,000 water, ) Total Start-up Expenses 887,800, 000 Start-up Assets Borrow from a bank 200,000,0 ( liabilities ) 00 Working capital 600,000,0 00 Total assets 800,000, 000 Total expenses and assets 1687,800 ,000 Table 1.1, continued 1.6 Company ownership Flore Organic Lip Balm intends to use a portion of the shares to raise capital The plan calls for the sale of membership units in the company to family members, friends, and private (angel) investors Each membership unit in the company is priced at 100 million VND but the CEO invests 200 million VND Additionally, the company borrows 200 million from the bank when Flore Organic Lip Balm completes its financing, Hang will maintain ownership of 36% percent of the company 1.7 Management team Mrs Truong Thuy Hang will take the position of Chief Executive Officer, responsible for managing all departments in the company Mrs Hang has a high entrepreneurial spirit and FOLB will double its advertising and promotional budgets in the third year, with the majority of the advertising budget going to commercial channels As in previous years, the company will still maintain the deduction of profits from the sale of products to contribute to charity funds to demonstrate the community value and humanity of the business 4.3.4 Pricing Strategy On the market, the average price of an organic lip balm is not less than 300,000 VND But to match the customer segment that the company is targeting, the company only sells 300,000 VND /stick Although the price is lower than similar items on the market, we always strive to ensure that the product is of the highest quality, extracted from the most benign and safest ingredients On the package, the product will be fully described so that customers can refer to it to avoid irritation with inappropriate ingredients In case the customer is irritated, we will find out the cause If the responsibility belongs to the company, we will bear all the costs of treatment and compensation Packaging for 700 products is 300,000 VND Outsourcing expenses for product = 160,000 VND Total: 160,428 VND/ product 4.4 Sales strategy Our company will focus sales on both in-store and e-commerce FOLB opens regular workshops to educate customers about our organic products Besides, there will be promotions on holidays 36 to attract customers As for the online sales channel, we will introduce products through potential customer groups and social media advertising campaigns as mentioned above 4.4.1 Sales forecast Through the MA method, we predict the sales within years In the first year, we took a long time to educate our customers and build credibility So the sales won't increase much and there will be a slight increase or decrease in a month In the years and 3, sales are expected to increase 2-2.5 times from the previous year And the company predicts it will sell 700 units in the first month And in the following months, we expect sales to increase by 10% month-on-month Table 4.2: Sales forecast in the first three years Month Year Year 210,000,000.0 360,978,212.01 629,621,160.62 00 Year 5 231,000,000.0 397,076,033.21 661,102,218.65 00 254,100,000.0 436,783,636.5 694,157,329.58 00 38 279,510,000.0 480,462,000.19 728,865,196.06 37 00 307,461,000.0 528,508,200.21 665,308,455.87 00 00 273,947,751.0 470,900,806.3 725,225,425.49 00 88 246,552,975.9 517,990,887.02 761,486,696.77 9 298,329,100.8 571,084,952.94 739,539,083.18 39 12 271,208,273.4 543,890,431.37 719,561,031.60 90 11 304,386,390.0 428,091,642.17 763,395,184.73 00 10 338,207,100.0 475,657,380.19 703,573,878.66 00 8 328,162,010.9 599,639,200.59 781,516,037.34 23 38 Year 400,000,000 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 Demand 10 11 12 Column1 Figure 4.1: Sales forecast for year Year 700,000,000 600,000,000 500,000,000 400,000,000 300,000,000 200,000,000 100,000,000 Demand 10 11 12 11 12 Column1 Figure 4.2: Sales forecast for year Year 900,000,000.00 800,000,000.00 700,000,000.00 600,000,000.00 500,000,000.00 400,000,000.00 300,000,000.00 200,000,000.00 100,000,000.00 0.00 Demand 10 Column1 Figure 4.3: Sales forecast for year 39 4.4.2 Sales programs We will have incentives for customers such as: We will give a 10% discount for the first 50 customers to purchase on an opening day This is to help attract customers as well as promote our products to everyone Besides, on holidays, Tet, and special days such as Valentine's Day, International Women's Day We will also have accompanying gifts when customers buy Flore organic lip balms Especially, when the Covid-19 epidemic is happening quite complicatedly Customers will probably be hesitant to go to the store to buy, so we will focus on selling on e-commerce sites We will post articles about our products on the fan page and Instagram every day Sometimes, we will also a few Giveaway programs to attract more customers In addition, to optimize inventory, we will also have many other promotions such as when buying products, you will receive accompanying gifts 40 CHAPTER 5: FINANCIAL PLAN Our company forecasts that revenue in the first year will not be stable, or increase little Because this is a new company, it takes a long time to adapt In the following year, sales are forecast to grow about times year over year Because we recognize shortcomings in the management of sourcing and staff Positive financial picture in year 3, promoting further development of the company During this period, the company's financial position was quite stable and steadily increasing The company's finance is contributed by each shareholder and will borrow more capital from the bank to finance its operation within years We will focus on product development by creating a variety of new scents to meet customers' needs as well as improving quality to create trust In addition, we set aside an amount in the investment budget for the company's marketing campaign All of this creates financial stability for Flore Organic Lip balm 5.1 Break-even analysis FOLB estimates its break-even point to be 147,966,666.6 VND per month, based on a monthly average revenue per unit of 300,000 VND and fixed operating costs of 89,000,000 VND This equals 494 goods being sold per month Break-Even Analysis Monthly Units Break-Even 494 Monthly Revenue Break-Even 147,966,666.6 Assumptions 41 Average Per-Unit Revenue 300,000 Average Per-Unit Variable Cost 9,000 Estimated Monthly Fixed Cost 89,000,000 5.2 Projected profit and loss Flore organic lip balm is expected to grow strongly over the next three years, achieving steady profits and breaking even in the first year In the first year, we expect to sell 700 units per month In the following months, our products will also become more known to the public, so we plan to produce more products and expect to increase 10-15% of each unit sold out monthly 1year sales we estimate will be 3,342,864,602 This is a very successful result in the first year of operation We think that year will be very difficult for our product to be known to many people So I used the revenue I earned to focus my investment on marketing expenses After deducting all expenses, our company's profit in the first year is forecast to reach 1,219,632,301 VND In the 2nd year, our products are also known to more people, so we expect the sales will also increase compared to year Therefore, the revenue forecast in year will be higher is 5,811,063,383 VND (2 times higher than year 1) At this time, we will also spend some money on advertising but it is not much compared to year We will focus more on product design We will design the packaging as well as add more flavors to the lipstick so that we can create more novelty for the product After 42 deducting all expenses, the profit in the 2nd year of our company is forecasted to reach 2,463,726,691 VND In the 3rd year, we now predict the company has gained a position in the market so we will have more competitors At this time, we focus more on creativity and product innovation so that we can have more novelties for our customers We will also cover marketing expenses, but it won't be too much compared to years and Sales forecast in year will increase 2-2.5 times compared to years and Profit will also increase and is estimated at 3,093,125,849 VND Thus, it can be seen that, in years of operation in the market, our company has always obtained stable profits and increased year by year This shows that we will be able to operate longer in this industry Table 5.1 Pro Forma Profit and Loss (Unit: VND) Sales COGS Gross profit Salary Rent Year Year Year 3,342,864,6 5,811,063,3 7,053,351,6 02 83 99 1,671,432,3 2,905,531,6 3,526,675,8 01 91 49 1,671,432,3 2,905,531,6 3,526,675,8 01 91 49 132,000,00 132,000,00 132,000,00 0 120,000,00 120,000,00 120,000,00 0 43 Utilities 17,000,000 16,005,000 16,750,000 Advertising 100,000,00 91,000,000 82,000,000 Insurance 20,000,000 20,000,000 20,000,000 Payroll taxes 19,200,000 19,200,000 19,200,000 Depreciation 30,000,000 30,000,000 30,000,000 Office expenses 13,600,000 13,600,000 13,600,000 operating 2,123,232,3 3,347,336,6 3,960,225,8 01 91 49 1,219,632,3 2,463,726,6 3,093,125,8 01 91 49 Total expense Total operating profit 5.3 Projected balance sheet Through year-end sales figures, we have established a balance sheet as shown below Our estimated total assets after year is 1,265,600,000 A tight balance sheet will contribute to increasing prestige, thereby attracting more investment cash flows into the project In year 1, we made profits, and dividends were distributed equally to the shareholders of the company The CEO is 20% of the dividend value, the remaining members are each 10% The remaining money will be used to invest and promote the next projects to develop Table 5.2 Pro Forma Balance Sheet (Unit: VND) ASSETS Current assets 44 Cash 600,000,000 Accounts receivable 40,000,000 Inventory 450,000,000 Total current assets 1,090,000,000 Fixed assets Office equipment 13,600,000 Less depreciation 30,000,000 Furniture and fixture 112,000,000 Less accumulated depreciation Total fixed assets 20,000,000 175,600,000 Total asset 1,265,600,000 LIABILITIES AND OWNER'S EQUITY Current liabilities Loan payable 50,000,000 Bank Loan 200,000,000 Accounts payable 50,000,000 Total Liabilities 300,000,000 OWNER'S EQUITY Owner 200,000,000 Owner 100,000,000 Owner 100,000,000 45 Owner 100,000,000 Owner 100,000000 STATEMENT OF RETAINED EARNINGS Retained earnings begin Net income 154,618,385 Dividend paid to shareholder 60,981,615 Retained earnings 150,000,000 Total owner's equity 365,600,000 Total liabilities and owner's equity 1,265,600,000 5.4 Financial ratio Table 5.4 Financial ratio FOLB Liquidity ratio Current ratio Quick ratio Leverage ratio Debt ratio Debt-to-net-worth ratio Operating ratio Average-inventory-turnover ratio Average-collection-period ratio Average-payable-period ratio Net-sales-to-total assets ratio Profitability ratio Net profit on the sales ratio Net profit to assets ratio Net profit to equity ratio 46 Industry 2.63 0.82 5.35 1.20 0.24 4.57 0.21 0.47 3.71 13.1 days 10.9 days 2.64 6.3 18 days days 1.19 4.63% 12.22% 42.29% 7.51% 8.65% 23.21% Liquidity ratio Our company's current ratio is higher than one, but it's lower than the industry average We can pay current or short-term liabilities (debts and payables) with current or short-term assets like cash, inventories, and receivables In the medium term, the company has sufficient financial resources to keep solvent The quick ratio for the company is 0.82, which is lower than the industry average We may not be able to pay off all of our current liabilities in the near future, but a corporation with a quick ratio greater than one can pay off all of its current liabilities immediately With a quick ratio of 0.82, we have $0.82 in liquid assets to pay each $1 in current liabilities Leverage ratio Debt ratio: FOLB purchases products with 24% debt, which is more than the industry's 21% Debt has been used to fund the company's expansion Because of the added interest charge, this could result in unpredictable profitability If the company's interest expense rises too high, the risk of default or bankruptcy rises In comparison to the industry, our company has a debt-tonet-worth ratio of 4.57 To stay solvent, FOLB's $1 must take on $4.57 in debt In the future, the corporation will be unable to borrow money and purchase a large number of assets if it relies on equity Operating ratio FOLB has a 3.71 average -inventory -turnover ratio, which is approximately half that of the industry Because we lack experience, the company's capacity to dispose of goods is 47 relatively limited In order to grow revenue, the company plans to expand its sales channels in the future FOLB collects the debts that our company allows clients to buy by debt in 13.1 days, which is faster than the industry average of 18 days This index is good in comparison to the industry, and it helps us save interest Because of its inability to recover capital, our company has to enhance its average-payable-period ratio The loan takes nearly 11 days to repay, compared to the industry average of days Although there are occasional concerns with the company's cash flow, it is generally stable FOLB's Net-sales-to-total-assets ratio is outstanding (almost times greater than the industry) due to the price strategy, and the ideal location Profitability Ratio: Net profit on sales ratio is lower than industry 3.08% This shows that the company is not yet profitable FOLB will increase sales by extensive advertising in the following years The net profit to assets ratio indicates that for every $1 invested, the company will profit $12.22, which is more than the industry average of 4% This is an excellent ratio FOLB generates 42.29 cents on the dollar in operating expenses, which is more than the industry average, indicating that the company's rate of return on investment is solid and efficient 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Nanotechnology) 2.5 Future product Flore organic lip balm hopes to develop additional organic cosmetics for consumers in the coming future The first is an extensive collection of organic lipsticks Toners, serums,... glosses and to expand the image of Flore Organic Lip Balm in the cosmetic business via the sale and marketing of Flore Organic Lip Balm 30 The Flore Organic Lip Balm Company's mission is to establish