CNaturals Dream Business Plan

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…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

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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 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.

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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). These products include lip products, eye products, 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

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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 Million

$1.0 Million

$2.0 Million

$3.0 Million

$4.5 Million

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.

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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. 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 during 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.

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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.

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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. 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 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.

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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.

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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 from within will be adopted. Within five years, the owner plans to add ten 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. 2. Loan Proceeds. The owner has been using $50,000 Business Credit Line for Wachovia Bank.

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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 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 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..

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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 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 annual salary, employer taxes such as FICA, unemployment insurance, and worker’s compensation, but does not include withholdings. 18. Loan Payments (Principal and Interest). All of the $130,000 loan allocation will be used during the fifth and sixth year of operations. Assuming this amount was available at the beginning of the business’ fiscal year, interest at 10% totals $15,000.

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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 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 plan has documented that the

establishment of CNaturals, Inc. is feasible. All of the critical factors such as industry trends, marketing analysis, competitive analysis, management expertise, and financial analysis support this conclusion.

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