Are you an expert in beauty products and have the ambition to build your brand? This will not happen without the establishment of a cosmetics brand business plan.
In this guide, we go over the steps needed to make it happen. Follow the leader!
What is the purpose of a business plan for a cosmetics brand?
The cosmetics brand business plan will serve, above all, to ensure the financial viability of the project. You will thus avoid embarking blindly on a project with little hope of being profitable.
It will be the main asset to set up an analysis that will allow us to know if the company can be profitable and evaluate the need for financing the project over the years to come.
The cosmetics brand business plan will serve as a benchmark and accompany you in the first years.
Finally, it will be the essential document during your search for financing to convince bankers and investors to follow you in the adventure.
What information is needed to set up the business plan?
Before realizing the cosmetics brand business plan, it will be necessary to study the commercial opportunity by carrying out a detailed market study.
This study will be essential for you to achieve your sales forecast and defend your commercial strategy with your financial partners.
You will also need to have identified the commercial actions to be implemented to make your brand known and to have estimated the communication budget you will need.
You will also need to draw up a list of the human and material resources necessary for the company's operation and have approached suppliers to obtain quotes that will allow you to quantify each item of expenditure precisely.
The financial forecast of the cosmetics brand business plan.
The business plan consists of a first part called the financial forecast. Let's see together how it looks.
The forecast income statement
This first painting will not be the least. It will allow you both to keep an eye on the turnover growth and ensure that the company succeeds in reaching the break-even point.
If you want to learn more, we've put together a guide to the income statement.
The provisional balance sheet
This table allows you to view the assets owned by the company at a given time (fixed assets, inventory, trade receivables, etc.), as well as these debts (suppliers, loans, etc.) and shareholders' equity.
In particular, it makes it possible to analyze the company's level of indebtedness and the weight of its working capital requirement.
The cash flow statement
Thanks to the cash flow statement, you will understand how much cash is generated each year and how it is used.
We invite you to consult our guide on the projected cash flow statement to learn more.
The initial financing plan
The initial funding plan shows the distribution and use of funding during the creation of your brand.
It makes it possible to observe the amount of the initial financing need and analyze the risk distribution between the various stakeholders (partners, banks).
For more information, do not hesitate to consult our guide on the initial financing plan.
The editorial part of the cosmetics brand business plan
The editorial part of the cosmetics brand business plan will allow you to show that you have carefully thought about the project and, in particular, the risks associated with it and how to manage them.
Your explanations will highlight the project's strengths and provide the necessary context so the reader can judge the credibility of your figures.
The summary or executive summary
This is to present the project in broad outline, and in particular, to make the banker or investors want to continue reading.
Company
You will indicate here the administrative characteristics of the project, in other words, the leaders' identity, their share in the company's capital, the registered office, or the SIRET number.
Products and services
From composition to manufacturing, you will describe the cosmetic products you will market and their different characteristics in this part. Again, be as specific as possible.
Market research
Here you will present the results of your market research to convince the reader that there is indeed a business opportunity.
Strategy
This part will present the different elements of your commercial strategy, such as your prices, your communication actions, and the risks related to the project.
Operations
The operational functioning of the company will be detailed within this part, which will include, in particular, your plan or the presentation of the main suppliers you will use.
Cosmetics brand business plan financial plan
You will illustrate the tables of the financial forecast by explaining the hypotheses related to them for your first years of activity.
Three tips for creating a cosmetics brand business plan
- Do not neglect the regulations in force: the cosmetics industry is subject to changing legislation. Keep up to date with changes that could lead to unexpected investments in the years to come.
- Plan a communication budget to match your ambitions, especially if you only launch online.
- It is important to know how the company works, especially for someone who has no experience in the world of cosmetics. Explain your production chain to the reader.
Which solution to use to set up a business plan?
Use Word or Excel
Making your business plan using office tools is attractive since these tools are not very expensive. However, the disadvantage of this solution is that to succeed in making an error-free financial forecast on a spreadsheet requires solid accounting and financial modeling knowledge.
Hire a consultant or chartered accountant
We are using the services of an accountant or a consultant to make your forecast can be a good solution to save time and have reliable calculations.
The disadvantage of this solution is its cost. As an indication, count around €750 excluding tax for a financial forecast including income statement, balance sheet, and cash flow forecast, and €1,500 excluding tax for a business plan including the estimates and the editorial part.
If you opt for this solution, favor an expert in the cosmetics sector so that he can give you a critical look at your figures. And make sure the services include the ability to change the forecast as your project matures.
Use online business plan software.
You can also use online business plan software.
The use of specialized software has several advantages:
- First, you enter your data and let the software handle the calculations.
- Second, you are guided through the writing with examples and step-by-step instructions.
- Third, you are inspired by complete business plan models already written.
- Finally, you get a professional document formatted and ready to be sent to the banker.
- All for a reasonable price
See also on The Business Plan Shop.
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