NFTE Written Business Plan

2018-201
9

Unit 1 - Opportunity Recognition

1.1 Pitch Deck Slides
Business Opportunity 2:​ Problem/Opportunity ​(Problem being solved)
3:​ Value Proposition ​(Solution to problem)
4:​ Underlying Magic ​(Description of product/service)

Most businesses fail to realize or care about the urgency and importance of going
completely green, cruelty free, and biodegradable. According to Byrdie.com, only 31% of
plastic waste is actually recycled. As climate change continues to negatively impact the world,
tons of waste from makeup products are carelessly thrown into landfill. When waste starts to
emit methane gas, our already polluted environment starts to go downhill.
Our team did some primary research and noticed that people want natural, organic,
chemical free, moisturizing lipstick that is also environment friendly, which is why we took this
business opportunity to create a lipstick that will not only moisturize your lips, but will give a
nice pop of color, while being 100% natural, so that our customers won’t feel guilty about
harming the environment when they apply lipstick.
Because our product is an organic lipstick with biodegradable packaging, we solve our
consumers problem because we combat plastic waste (plastic polypropylene), which
according to ​www.thebalance.com​, can take up to 1,000 years to degrade while our
biodegradable product would only take a few months.

1.2 Pitch Deck Slides

Type of Business 9:​ Cost Structure

Our company is a manufacturing company. We chose this type of business because we

care about the environment and are aware about the amount of waste that traditional makeup
products produce. We chose to be the manufacturers of our lipsticks because we want to
know exactly what is going into our product since we want our product to only be composed
of organic, vegan, cruelty free ingredients to satisfy our consumers need for safe, organic,
and environmentally friendly makeup products.

1.3
Type of Business Ownership
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​We are a partnership with two owners. We chose this type of business ownership because
we both share passion and knowledge for this industry. Also, the cosmetic industry requires a
lot of creativity when it comes to making products, so having two owners to share and critique
ideas is good; we can rely on each other for knowledge or creativity. In addition, because we
share expenses, startup costs will be low, and we will also have more capital than a sole
proprietorship as well as more loans and fewer tax forms.
Before we chose this type of business ownership, we analyzed the pros and cons of a
partnership with two owners. Pros of this is that we can rely on each other for entrepreneurial
skills and financial backings. However, partnerships also come with cons: one partner might
do more work than the other partner, which will make this partnership unfair.
After analyzing the pros and the cons of a partnership, we decided to choose this
partnership because we will have each other to rely for both creativity and labor. We decided
to compromise when it comes to disagreement within our business and we agreed to
compromise and to be flexible with each others ideas and beliefs.

1.4 Pitch Deck Slides

Mission Statement 3:​ Value Proposition

​We want change now! Copious amounts of waste is continuously being added to our
already polluted environment! Pollution is increasing exponentially, and we need to take
action now! We want a cleaner world for our future, our children, and our family, which is why
we decided to facilitate this battle against pollution and reckless environmental damage with
our makeup product. From the packaging, to the container, to the ingredients in our lipstick,
we assure you that our lipstick is 100% organic, vegan, and cruelty free. Not only that, but it
will give you a nice pop of color and moisturization on your lips. Our customers will be able to
feel good about their lips without having to worry about doing damage to our environment. We
are the best because we take in all aspects of a cleaner environment such as cruelty free,
minimal pollution, and biodegradable packaging.One step at a time, we can normalize and
encourage the use of environmental friendly makeup products, which will benefit our
environment for the better.

1.5 Pitch Deck Slides

Social Responsibility 3:​ Value Proposition ​(Social responsible practices)
10:​ Current Status and Future Plans ​(Future philanthropy)
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​Our company is promoting a cleaner environment by decreasing the amount of waste

from makeup products. We are socially responsible because we promise to only use
organic, all natural, biodegradable ingredients and materials in our product. This way, we
can help decrease waste from makeup products and raise awareness about the importance
of taking care of our environment. In addition, We plan to donate a percentage of our income
to marine life charities that save and rescue marine life in danger due to anthropogenic
reasons.

1.6 Pitch Deck Slides

Qualifications 4:​ Underlying Magic ​(Unique knowledge)
8:​ Qualifications ​(Personal experiences)

First, we both are passionate and knowledgeable about the makeup industry, and we are
both aware about makeup trends, well known makeup artists, and what people usually want
in a makeup product (easy to use, smooth, looks natural, long lasting, doesn't look cakey).
Secondly,Michelle here takes an environmental science class, which will help us decide the
best environmentally friendly products and ingredients to include in our product. Lastly, Mei
has experience in making lipsticks products out of natural ingredients. Because we have
knowledge about makeup we can think like consumers, and know what consumers want in a
product. Also because we have environmental science knowledge we know what to package
and put into the product, so that the environment is not harmed further.

Unit 2 - Market Research

2.1 Pitch Deck Slides
Market Research 2:​ Problem/Opportunity ​(Data to support opportunity)
5: ​Target Market (Potential market size)
7: ​Competitive Analysis ​(Industry data)
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Our business belongs to the cosmetics industry, and it fits into this industry because we
are creating cruelty free/green lipstick which is makeup which belongs to the cosmetic
industry.The cosmetic industry is enormous, generating about 62.46 billion dollars in revenue
annually. The cosmetic industry trends are constantly moving due to the popularization of
social media and Youtube. Tutorials from beauty gurus increase the knowledge of makeup
because many people are now better understanding of how makeup is applied. The cosmetic
industry includes not only makeup but skincare, and nail care as well with skincare being the
forefront of the cosmetic industry.The industry is now inclusive towards males who use either
makeup or skincare. We think with the ever increasing awareness of what goes into what we
use and consume because of TV media and scientific research, people will try to go more
organic and cruelty free. Like the growing market at Trader Joe's and Whole Foods because
of the consumer awareness of factory farms etc. We predict that are potential size will be at
least 3/4 of people will be interested in our product. According to a survey we conducted, 75%
of the participants were willing to learn more or buy our product.

2.2 Pitch Deck Slides

Target Market 5: ​Target Market

Our demographic is females millenials who are caucasian and hold middle to higher paying
jobs and are part of the Green and Democratic Party. According to our secondary research
millennials tend to use makeup more often on a daily basis. We also believe millennials will
be more engaged in the idea of going greener because of the maturity. We perform research
and saw that most people from the Green or Democratic party tend to be caucasians and
females. According to GlobalWebIndex, Millennials are leading the way into going greener.
There is 20% larger demographic of females were in the party than males
Our demographic also focuses more on single women who are college level educated
because we think they understand the environmental impact more. We think they can
empathize more with the cause. Our consumers tend to be residing in big busy urban cities
where businesses are usually in downtown areas. We think our consumers work in large
companies where looking presentable is very important. Also the main issue of plastic
pollution happens in urban cities. Because overuse of resources are mostly in urban areas,
we want to target this area to lower their carbon footprint. Also because our other
demographic like female millenials that belong to the Green or Democratic Party tend to live
in large cities.
We think our consumers value a put together outer appearance, and they are environmentally
conscious. Makeup users tend to love to love put together either for work or for fun. Makeup
is used as a tool to enhance beauty. Our customer also has consumerism awareness and like
to know what goes into what they’re buying. They know the harm plastic is doing to the
environment and are ready to make a change. They probably are against animal cruelty. Our
customers would be purchasing other makeup products like lip gloss, foundation, concealer,
eyeshadow, eyeliner, mascara etc (usually cruelty free) due to the fact that they are beauty
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lovers. Also because our consumers are environmentally conscious they would buy green
items like cloth bags, biodegradable doggie bags and organic foods.

2.3 Pitch Deck Slides

Competition 7:​ Competitive Analysis

Some​ of our indirect competitors include lip balm brands like Vaseline, Chapstick etc. Also
other brands who are our indirect competitors include Physicians Formula and Kylie
Cosmetics. They are our indirect competitors because we both create lip products who share
little similarities like Physicians Formula is also hypoallergenic. Also, all these products listed
are in the same industry as ours which them potential competition. Both of these brands are
well established and will be very hard to compete with because the have loyal customers.
Physicians Formula charges about $8.50 and Kylie Cosmetic charges almost $30 for each
lipstick. We charge $12 because we want to be affordable, but as a brand who takes a lot of
problems into consideration, creating our lipstick takes a lot of labor and effort, so we charge
a bit more for our product. Kylie Cosmetics and Physicians Formula are sold online and in
stores (Pop-up stores for Kylie Cosmetics).
Our direct competitors include Be Natural, 100percentpure, and Ecco Bella. Be Natural
shares many similar features as us such as them being also vegan, organic, cruelty free, and
gluten free because our product share so many similarities they are a direct competitor.
Another brand who does very similar concept as us in Be Natural who are also organic,
toxic/chemical free and their packaging are also biodegradable. Be Natural and 100 percent
pure are online stores while we sell through a second party (Etsy). Be Natural charges $16 for
their lipsticks, and 100 percent charges $30. Be Natural focuses on many similar problems as
us. Our third competitor includes Ecco Bella are ​created with the formula of vegetable waxes,
oils, and mineral pigments. They are also vegan like us. They share many similarities as us.
These direct competitors are also makeup brands that sell natural makeup with cruelty free
makeup. They also focus or natural and organic products. The products also fulfil the need of
being environmentally conscious. However, the indirect competitors are just makeup that fulfill
the need of makeup. Covergirl is cruelty free, physicians formula is also cruelty free and the
rest are as well. Be natural is cruelty free and natural, so our product is very similar

2.4 Pitch Deck Slides

Competitive 7:​ Competitive Analysis
Advantage
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Our competitive advantage is that we use biodegradable containers, and our lipsticks are cruelty
free. This means in no way is the environment or animals harmed in the process of creating and
discarding the product. While our competitors only focus on one of these factors, we focus on both
because without both the environment and its inhabitants is still harmed in the process of creating
makeup.
Our ingredients are all natural and our packaging is biodegradable. The product is all cruelty free.
We provide the knowledge that your makeup is environmentally safe. While other competitors can
only ensure only little protection of the environment. Large companies like Covergirl is cruelty free,
but it does not focus on biodegradable packaging
Since our product is small and weighs little, we can sell online, or in wholesale packs of 6 lipsticks
(each will be a different color). Our competitive edge is cheap worldwide shipping since our product
is small, which means shipping will not be expensive.
We meet the customers needs/ wants because our lipstick moisturizes the lips, provides a pop of
color, looks natural when applied, is vegan, animal cruelty free, hypoallergenic, and free of
chemicals. Also, our product is all natural and the container is biodegradable. We provide knowledge
that with our product you do not have to feel guilty about harming the environment.
3 competitive advantages that we have are is that our product is all natural, our container is
biodegradable, and our lipstick keeps your lips moisturized while lipsticks are drying.

Beauty balm (us) Ecco BElla Be natural

Factor 1: Worldwide Worldwide Worldwide

Location

Factor 2: Own website Their own website

Delivery method Etsy (Benaturalorganics.com)

Factor 3: Simple Cruelty free Hypoallergenic

Unique factors Cruelty free Better Well known Fragrance free
Organic Made in USA Paraben free
Vegan vegan Gluten free
Safe Gluten free Oil free
Made in USA

2.5 Pitch Deck Slides

Business Growth 10:​ Current Status and Future Plans
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The awareness of what goes in consumers products create a market for a more organic and
cleaner makeup product. Also the rise in makeup for not only men and women create a larger
audience for our brand. In future we want to market to ales as well by advertising.
We would research on the ingredients that would provide the most quality and clean lipstick.
We want to create a good formula. We would also want to create more colors in a years time,
and because some colors require animal products we must do our research to create these
new products but keep them vegan. In terms of long term goals, we would like open to create
a line of makeup that are all eco-friendly. All types of makeup create waste, so we want a
whole line of makeup (lipstick, eyeliner, foundation etc.) that does not harm the environment.
When we created our company. we hope to change the cosmetic industry into a more eco
friendly industry. Our goal was to help the environment and in order to do so we must go
bigger and touch every inch of the makeup industry.

2.6 Pitch Deck Slides

Challenges 10:​ Current Status and Future Plans

Due to the fact that there are so many people enjoying makeup, there is an increase in
makeup brands. According Global News Wire, the cosmetic industry will grow to 863 billion
dollars by 2024. There are even increase in makeup brands that are being environmentally
conscious. Recently there has been several brands that do not test on animals because of
the societal awareness of the cruelty animals undergo. Because there are so many brands
that have been established and well known, we , a start up brand, must build customer loyalty
and attract customers. Many big brands like Olay own most of the popular makeup brands,
and they have large funding for advertising and production compared to us. To get around
this, we must create a very unique product to beat already existing products.
Money can also pose as an issue to our brand because we would need a lot of money to start
up and continue the brand. As teeneagers with no jobs and fundings, production will be slow
with no materials. We can't hire staff without money, and without more staff our productivity
will no increase.

Unit 3 - Business Financials

3.1 Pitch Deck Slides
Definition of One Unit 9:​ Cost Structure

Our definition of one unit is one lipstick of any color that’s .20 ounce
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3.2 Pitch Deck Slides

Production Process 9:​ Cost Structure
(or)
Delivery Process

1. Order our list of ingredients in bulk sizes (repeat every month)

a. Coconut oil 10.14 pounds
b. Beeswax 10.14 pounds
c. Beetroot 2.73 pounds
d. Hibiscus powder 2.73 pounds
e. Peach powder 2.73 pounds
f. Alkanet root powder 2.73 pounds
2. Order utensils ( replace all utensils every other year )
a. Refrigerator
b. Dell laptop
c. 7 Lipstick molds
d. 2 Saucepans
e. 6 bowls
f. 2 stoves
g. 2 measuring cup sets
h. Pack of syringes
i. 6 spatulas
3. In a pot, melt 5.2 teaspoons of coconut oil and 5.2 teaspoons of beeswax on “medium
high” heat and stir for 6 minutes or until wax and oil is fully melted
4. Set the heat of the pan to “low” and mix in 14 tablespoons of each of the powder
ingredients (beeswax, hibiscus, peach, alkanet root).
5. Keep heat on low, and stir the mixture for 10 minutes
6. Melt all ingredients in a pan, stirring occasionally with a wooden spoon
7. When mixture is melted, pour the mixture into the lipstick molds (the batch of
ingredients should fill about 20 molds)
8. Place the the mixture filled lipstick molds in the fridge and let it cool for 1 hour.
9. When lipstick is cooled, place each lipstick into the biodegradable container.
10. Customers will go on our etsy and purchase their desired lipsticks
11. We print shipping labels and pack the products
12. We ship out the packages to the customers
13. Customers leave reviews, and rate our product on our website
14. Advertise on instagram ( pay $6.70 for every 1,000 views )
15. Customer reviews and instagram will accumulate more customers/purchases

3.3 Pitch Deck Slides

Variable Expenses 9:​ Cost Structure
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Materials

Material Description Bulk Price Bulk Quantity Cost per Unit

Quantity per Unit

Cardboard container 1,800 3000 1 $0.60

Shea butter 44.85 10.14 pounds 0.26 $0.01

teaspoons

Coconut oil 26.8 10.14 pounds 0.26 $0.01

teaspoons

Beeswax 87.85 10.14 pounds 0.26 $0.03

teaspoons

Beetroot 43.8 2.73 pounds 0.07 $0.01

teaspoons

Hibiscus powder 61.6 2.73 pounds 0.07 0.02

teaspoons

Peach powder 52.99 2.73 pounds 0.07 0.02

teaspoons

Alkanet root powder 60.56 2.73 pounds 0.07 0.02

teaspoons

Total Material Costs per Unit $0.72

Labor

Cost of Labor per Hour Time (in hrs) to make one Total Labor Costs per
unit Unit

$40 3 mins $2

COGS/COSS

Material Costs Labor Costs TOTAL COGS/COSS

$0.72 $2 $2.72
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3.4 Pitch Deck Slides

Economics of One 9:​ Cost Structure
Unit

Selling Price per Unit $​12

Variable Expenses per Unit \
Costs of Goods Sold
Materials $0.72
Labor $2
Total Cost of Goods Sold $2.72
Other Variable Expenses
Commission $0.60
Packaging $0.21
Other
Total Other Variable Expenses $ 0.81
Total Variable Expenses $3.53
Contribution Margin per Unit $8.47

3.5 Pitch Deck Slides

Fixed Expenses for 9:​ Cost Structure
ONE MONTH

Expense Type Monthly Cost Explanation

Insurance $62 We picked general liability insurance to

cover our property damage and bodily
harm etc...

Salary $0 We work for ourselves

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Advertising $10.5 We want about 150 pay per clicks, and

on instagram each pay per click will
cost $0.07

Interest $0 We don't have any loans out.

Depreciation $0 We own nothing that depreciates in

value.

Utilities $48.25 Our company pays water bills ($22.5)

and electricity bill ($22.75) and a trash
bill ($3) ( we only use a quarter of
water, electricity, and trash compared to
the average family)

Rent $100 We are renting michelle’s basement

Other Fixed $0.20 Listing for etsy

Expenses

Total Fixed $1120.95

Expenses

3.6
Income Statement

A REVENUE selling price ​× ​units sold $432,000

B Gross Sales selling price ​×​ units sold $432000

C Sales Returns selling price ​x​ units 0

returned

D Net Sales B ​–​ C $432,000

VARIABLE EXPENSES
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Costs of Goods Sold

E Materials cost of materials ×​ ​ units $25,920

sold

F Labor cost of labor ×​ ​units sold 72000

G Total Cost of Goods E ​+​ F $97920

Sold
Other Variable
Expenses

H Commission cost of commission ×​ $21,600

units sold

I Packaging cost of packaging ×​ ​units 7560

sold

J Other cost of other costs ​× ​units 0

sold

K Total Other Variable H ​+ ​I ​+ ​J $29160

Expenses

L Total Variable G +​ ​K $127,080

Expenses

M CONTRIBUTION MARGIN D –​ ​L $304920

FIXED OPERATING
EXPENSES

N Insurance cost of insurance ​×​ 12 $744

months

O Salaries cost of salaries ​×​ 12 $0

months

P Advertising cost of advertising ×​ ​ 12 $126

months

Q Interest cost of interest ×​ ​ 12 0

months
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R Depreciation cost of depreciation ​×​ 12 0

months

S Utilities cost of utilities ×​ ​ 12 579

months

T Rent cost of rent ×​ ​ 12 months 1200

U Other fixed expenses cost of other ​×​ 12 months 2.40

V Total Expenses N ​+​ O +​ ​ P +​ ​ Q +​ ​ R ​+​ S +​ ​ T $2651.40

+​ U

W PRE-TAX PROFIT M ​– ​V $302,268.60

X Taxes (15%) W ​× 0.15 $45,340.29

Y NET PROFIT W ​– ​X $256,928.31

3.7 We can afford most of these expenditures except the refrigerator

Startup Expenditures and laptop, which are a bit out of our price range.
We would need at least 400 dollars to buy everything because
everything that we can’t afford adds up to about 400 dollars.

Item Why Needed Vendor Cost

refrigerator Our lipstick needs Hotpoint $150

cooling

Dell laptop To post our listing Dell $220

On etsy

7 Lipstick mold To shape our lipsticks TBK $144.55

2 Saucepans To cook our Amazon $28.98

lipstick/create our
lipstick
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6 Bowls To hold our colors and Dollar days $9.12

formulas

2 Stoves To make our formula Amazon $129.98

2 measuring cup sets To measure Amazon $13.34

ingredients

Pack of syringes To transfer lipstick mix Amazon 6.99

to container

6 Spatula To mix our formula Amazon $79.02

Instagram ad To promote our Instagram $6.70

product; to increase
sales (we need 1,000
views)

Total Start-up Expenditures $788.68

Emergency Fund ​(1/2 of startup expenditures) $394.34

Reserve for Fixed Expenses ​(covers 3 months of fixed expenses) 3362.85

Total Start-up Investment $4545.87

3.8 Pitch Deck Slides

Financial Ratios 9:​ Cost Structure
Return on Sales (ROS):

Annual Net $​256,928.31 59.5 $0.59

Profit %

Total Annual $432,000

Sales

Return on Investment (ROI):

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Annual Net $​256,928.31 5651 $56.

Profit % ≈ 5

Total Startup $​4545.87

Investment

Breakeven Units (Monthly):​

Fixed Monthly $​1120.95 132. 133
Expenses 35 units

$​8.47
Contribution
Margin

Unit 4 - Marketing and Sales

4.1 Pitch Deck Slides
Marketing Plan 6:​ Marketing Plan
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Our product is a ⅕ oz colored lipstick that is organic and no chemicals are used in the
process of creating this product. Our product also comes in a biodegradable cardboard tube
and packaged in cardboard boxes. Our biodegradable tubes has our company logo printed on
it and the color written on it. We intend to use these features and highlight them, so our
potential customers can know what differentiates our product from others.
Our first marketing strategy is focussed on place. We plan to sell our product online on Etsy.
Our customers can purchase through the website where we then get their info and payment
to then ship our product to our customers doorstep. We are using a third party system like
Etsy to avoid costs of our own website. We believe our customer base is very up to trends
and lead a busy life, so they would likely enjoy purchasing from the internet because it is
more convenient. In addition, our survey showed that our consumers prefer to order things
online rather than buy it from a drug store.
Our second marketing strategy is focussed on price. we are charging $12 for our product
which covers our COGS/COSS and labor. We generate about $8.47 in contribution margin.
We want our product to be a little more pricier than other lipstick because it is more
sophisticated product, but we also wanted to keep it moderate compared to brands that are
similar to ours because as a startup we want our potential competitors to pick us over other
brands, and the price can affect their decision on who they purchase from. Our target market
will be very happy to buy a biodegradable lipstick for only $12, because most traditional
lipsticks average at about $16. According to our survey, Our consumers are willing to spend
more than $10 on our product, but not willing to spend more that $12, so my partner and I
decided to price our product at $12 because it is cheaper than the average lipstick, and
because our consumers are middle to upper class, they will be able to afford our lipstick
product.
Our Third marketing strategy is focussed on people. We would like to do social media ads like
Instagram because our aimed market are millennial who tend to be on trend with social
media. We think our customer base is very technology based, so the best choice is on social
media. We can focus on people who are environmentally cautious and people who support
environmentalism (the green party).
Our Fourth marketing strategy is focused on our product. Our product is natural, vegan,
organic, cruelty free, and biodegradable. We decided to spend a little extra on biodegradable
lipstick containers because due to our primary research, our target consumers prefer
biodegradable products. In addition, this will appeal to the members of our target market
because middle aged white millennials tend to like vegan, organic products that are friendly to
the environment. If we create a product that will serve well to our target market, we will attract
a lot of customers and future potential customers.
Our target market is environmentalist or environmental and health enthusiast who are
caucasian female in the upper middle economic class.They also reside in urban areas and
are millennials.Knowing our target market we can decide where to promote, where to sell etc.
and also knowing that our customer base is millennials we can focus our promotion more
internet wise and the decision to sell online derives from the knowledge of who our customers
are going to be. We determine our price on what we think customers are willing to pay for a
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lipstick and knowledge that the lipstick is environmentally friendly. Our packaging are all
biodegradable and our ingredients are all natural, no animals will be harmed in the process,
and minimal waste will result from our product. Because we assume our customers are
environmentalist or just environmental or health enthusiasts we assume they would pay more
for our product.
Our strategy is to push the differentiators through ads and promotion to fit a large
demographic.

4.2 Pitch Deck Slides

Promotion 6:​ Marketing Plan

Instagram’s demographics shows that 68% of Instagramers are female and that more than
half of the instagram users are adults, which is why we chose to advertise on Instagram since
our target consumers are adult females, and we will be able to reach our audience more. Also
we believe that our target market is very technology based, so they would use social medias
more. We want to use eye catching ads that highlight our primary features. We will use social
media to appeal to our target market because our target market tends to use social media a
lot. (more females ages 18 to 49 use social media than teen males). Instagram is effective for
reaching our target market because of their algorithm for advertisements. According to our
research, instagram personalized advertisements by looking at a persons interests,
followers, liked posts, and social media behavior to make sure that the advertisements are
reaching a possible customer. For example: if Instagram notices that a person followed a
makeup guru or liked pictures of makeup products, Instagram will likely promote our product
to that person.
Second, we plan to promote our product through the radio. Specifically well known bay area
radio stations like 99.5 and 99.7 now, as well as through podcasts because our target market
( middle aged white millennials) tend to listen to the radio/podcasts on their way to work or on
their way home from work. We plan to play our advertisement around 6AM to 8AM in the
morning and between 5PM and 6PM at night.
Third, We plan to do eye catching flyer ads near or inside of stores that sell lots of organic
and vegan foods. Stores that we will focus on is whole foods and trader joe's because our
target market tends to purchase organic foods, which is why we decided to place eye
catching flyers in trader joe's and whole foods. These ads will likely be seen by people of our
target market since most of our target market shop at these locations. Fourth, we plan to have
our product promoted through word of mouth by having a reward card system. We will reward
customers with one point for every friend they recruit to sign up for an account with us ( when
the friend signs up, we will ask that friend if they would like to receive promotional emails from
us). Once that friend signs up for an account with us, we will them promote our product
through emails to gain consumers. We will hold these promotional sales during seasons
where sales are higher. We think this is a smart decision because everyone is purchasing so
much and everyone loves sales, and especially if they’re buying in bulk.We chose this as one
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of our promotional strategies because our target market live in urban areas, and since people
in urban areas tend to use reward points ( such as 5 stars, etc... ), we decided to use this as
one of our promotional strategies.We anticipate that this combination of reward points and
emails will serve a double purpose; it will keep our consumers loyal and help us reach new
consumers.
Our Fifth promotional strategy is to respond to a breaking news story, for example, a male
being bullied for wearing makeup etc...Because this is still a major issue in society, we have
decided to join into the conversation, and to fight for change. We will start campaigns and
fundraise to donate profitted money from those campaigns and fundraisers to raise
awareness. Our 6th promotional strategies is to do giveaways and free samples. These forms
of sales promotions will be effective for reaching our target market because these giveaways
and free samples, will not only help our brand gain more recognition, but it will allow
consumers to test out and love our product. Also, our discount codes will encourage
consumers to buy our products, and will make our consumers happy after they had
purchased our item because they saved money! Because our consumers tend to care about
their appearance, they will likely want to try our product first to see how it looks on them. We
predict that our consumers will try our lipstick, and love it especially because it gives a nice
pop of color and is cruelty free. We also want to host big giveaways once a month. We plan to
do advertisements on our youtube channel (Beauty Balm Lipsticks YT), and every month, we
plan to choose one subscriber who liked our video to win a set of 6 different colors of our
lipsticks for free. All they have to do is like our video, comment, and subscribe! These
giveaways will keep customers engaged in our product, and will give us a really good
reputation because of our generosity, and fun giveaway events!
In conclusion, we will use multiple promotional strategies because we want to really get our
name out there to kickstart our new business, and we also want to raise lots of awareness for
animal cruelty products that lead to pollution.

4.3 Pitch Deck Slides

Sales Methods 6:​ Marketing Plan

Our overall selling strategy will be to advertise on Instagram and Youtube, give out
freebies/samples, and to have a reward system to ensure that consumers will keep coming
back. We want to build customer loyalty especially in a super competitive industry like ours.
Many brands have already established loyalty, so we need to give incentive for people to give
our product a try like freebies which will let people feel our moisturizing and colorful lipsticks .
Establishing a reward point system will make customers keep coming to fill their points and
get a reward. We think we can build loyalty by offering samples, so people can test out our
product. Also, we will do promotions around holidays where makeup are sought more often
like wedding season. If we do this people will be enticed by the cheaper price and decide to
purchase us over others. We also want to push our unique factors heavily. By pushing our
unique factors we can reach our target market better. Since our target market live busy lives,
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we believe that our target market will prefer to buy stuff online, which is why we plan to sell
our product through etsy, because it is a well known reliable website, and it is generally a
website used to sell homemade goods ( which is similar to our product since we make our
lipsticks ). Our target consumer ( middle to high class millennials) will likely like websites that
sell homemade goods, which is why we think etsy will be a good website to sell on. In
addition, when we start our business, we plan to rent a kiosk at a local mall ( since we want to
to target people in San Francisco in our earlier development process of our brand ). In that
kiosk, we will sell our lipsticks, give our samples, and have a licensed dermatologist there with
us to explain to our consumers about the benefits of our biodegradable, all natural lipsticks.
We plan to sell and give our free samples in our first couple months of starting our business to
gain a little extra money to help us promote and start our business.

4.4
Sales Estimates

​ ur first year sales estimate is about 3,000 units and in 12 (months ) we would have an
O
estimate of 36,000 units.
Our maximum capacity is 3,500; since Michelle and I are the only laborers, we can work
overtime and produce an extra 500 units a month if there are over 3000 orders that month.
We think if we work overtime if we had to we could make extra 500 units.
We have to sell and deliver over 94 units per month to break even for ONLY our fixed
expenses per month. We need to sell over 1054 units ONLY to break even with our fixed and
variable expenses.
We can reach about 2000 of our customers in our target market per month because we will
be selling about 3000 units per month and about ⅔ of our customers will be from our target
market segment. We think we will have have customer who are outside of our typical target
consumer, but the majority of our orders will be from our target consumers.
Typically around christmas, wedding season (summer) , and graduation season, and
valentines day, our sales will increase. Usually around this time people are going out more
often either because it's wedding season or for vacation. This is a time where people would
invest more into their appearance. Because our sales are going to increase around these
seasons, we will have to produce more lipsticks during these seasons, or make extra batches
of lipstick ahead of time. Plus, during this time we can have some promotional sales.

Month Units Revenue

January 3000 $36000

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February 3000 $36000

March 3000 $36000

April 3000 $36000

May 3000 $36000

June 3000 $36000

July 3000 $36000

August 3000 $36000

September 3000 $36000

October 3000 $36000

November 3000 $36000

December 3000 $36000

Annual Total 36000 $432000