Business

Executive Summary
The current stiff competition in the business world calls for equivalent strong marketing strategies. Most importantly it is prudent for business oriented individuals to come up with strategic plans and effective business plans in order to address the current increase in the demand for products globally. One way of solving the problem of inequality in the supply and demand of products is through initiating small and micro enterprises. In this regard the needs of middle class and the low class individuals who have been ignored by the large business entities will be effectively addressed. Similarly, marketing strategies including advertising, marketing research, promotion and pricing cannot be overlooked in ensuring that quality products effectively reaches the consumers at the right time. This business plan will keenly highlight all the areas that a business should put in place in order to be in a competitive edge. The plan will also discuss the marketing strategies that should be put in place, the budget allocation of various departments and the expected sources of funds to make the business venture a success.

Introduction
My business idea is to initiate a small and medium enterprise in the United Kingdom dealing with wide range of cosmetics. I will work full time in my shop with the support of few employees who will handle various tasks in the operations of the company. The business will focus on distribution of cosmetic products, initially within the city London and then expand it to cover other major cities. Much of the work will entail customer service, marketing and promotion activities as well as delivery of the products to customers. This kind of business gives me the opportunity to expand in future based on the exposure that I will gain from my new venture which requires less capital. I expect this business to expand and grow rapidly by reinvesting part of the profit back to the business. Initially, most of my customers will be located in London city 5 Conduit Street. Within London, there is a big population of people who apply body care creams, lotions, perfumes, hair care products and powders. The main features that will attract my customers are personalized customer service, quality natural products and competitive prices. Having worked with large cosmetic chain retailers, I have gained adequate experience in the cosmetic industry. In my previous job, I have served several clients who have recommended my good customers care services to their friends. With this network of customers and their friends, I expect to acquire and retain more clients through customer-focused experience. With industry experience, quality products and customer focus, I expect the business to grow steadily without major risks.

Business name
The name of my business is Natures Beauty. This is a cosmetic shop which will deal with a wide rage of products to serve the high number of customers in the UK who have recently increased their demand for beauty products. The name was chosen for its simplicity, visual element associated with natural beauty, and positive emotions that are associated with the word beauty. The name is simple to spell and the customer can identify themselves with the word beauty, which is the reason why people purchase cosmetics. The word nature in the business name brings in the concept of safety and quality of the products.

The products
Natures Beauty shop will stock a wide variety of cosmetics including skin care creams, hair care products, perfumes and body lotions. This shop will focus mainly on natural and high quality products. The assurance we have for the customer is that the products will not only pass the recommended regulatory authority compliance, but also meet Natures Beauty Shop internal quality requirements.

Location
Natures Beauty will be located in 5 Conduit Street in the city of London. This is based on the fact that the location is central and hence it will have a great effect in terms of exposing the business to many potential customers. Likewise, 5 Conduit Street is an area that displays a lot of business opportunities in future due to the good infrastructure system that has been put in place by the UK government.

Marketing strategies
Marketing strategies refers to the tactics that Natures Beauty will employ to meet its objectives of satisfying the customers and effectively utilizing available resources to enhance its competitive advantage. This section highlights some of the vital areas that the business will emulate in its marketing techniques for the purpose of giving quality products and services to its consumers.

Market research
Market research defines the process that I will use to gather vital information about the market and the target customers. Market intelligence is a powerful avenue and a strong collection tool that can support decision-making processes. Through efficient market research, my business will identify among other things customers buying behavior, what they need and their expectations. The market research will also identify market information like the prices of cosmetics offered by the competitors and the demand and supply dynamics. This will be conducted across the whole city using primary and secondary data techniques. Market segmentation is another area that my market research will examine. This will determine the difference in demographic characteristics, motivation and product differentiation. A keen look at the competitive environment will also reveal my competitors and the reactions I expect from them.

Market penetration strategies
Market penetration strategies describe the tactics that will be employed to launch the business operations. These tactics will be formulated from the market intelligence reports generated by the market research. In this regard Natures Beauty will adopt penetration pricing strategy and high quality cosmetics products.

Penetration pricing
One of the tactics that will ensure that Natures Beauty gain competitive advantage is the use of penetration pricing. I propose to keep initial profit margins small by lowering the prices of cosmetic products. Due to the recent economic crisis, lower prices and quality products will attract many customers. This will get my competitors unaware and before they respond by making any price adjustments, Natures Beauty shop will have won most of the customers.

High quality and safe products
The penetration tactics for Natures Beauty will include the introduction of new quality products with attractive features like safety. The main reason for insisting on the quality cosmetic products formulations is to assure customers on the safety of these products. This gains more significance considering the concern many customers have about the effects of cosmetics on personal health and skins. In addition, this tactic will help Natures Beauty to create positive customer perception especially in the long term, which will be critical in enhancing customer loyalty.

The marketing mix
The marketing mix refers to the basic, tactics that will guide the Natures Beauty Shop marketing plan. This party keenly highlights some of the vital components of the marketing mix which will be applied by the new business venture in giving the UK customers excellent services.

Product strategies
Product strategies will focus on the three levels of the cosmetic products, which are the core product, the actual product and the augmented product. The core product will entail the benefits each product will give to the consumers. Natures Beauty Shop products are expected to give the customers the value of beauty. The augmented product level describes the tangible part of the product of which the customer can apply while the augmented product refers to the non-physical attributes of the product and the value added. The product life cycle will also be managed to strengthen business operations at each level of maturation.

Pricing strategies
After capturing a substantial competitive advantage and market share, Natures Beauty Shop is expected to change or adjust its overall pricing strategy from penetration pricing to product line pricing, premium pricing or value pricing since it may also be necessary. The premium pricing strategy will reflect the competitive advantage conferred by quality and safe products. Product line pricing on the other hand will be structured based on the range of products and the benefits of each product range. In response to external factors, Natures Beauty Shop will use value-pricing strategies to retain its sales and customers.

At the introductory stage, I propose that more emphasis will focus on promoting the business and its cosmetic products. Due to the presence of few competitors, a skimming price technique will augment the penetration strategy. At the growth stage, I expect Natures Beauty Shop market share to stabilize significantly. To deal with UK competitors at this stage the business will spend more on promotional activities aimed at building a strong brand. As the business products enter the maturity stage, the business will take steps aimed at product and brand differentiation to meet changing consumer tastes and preferences. It is also expected that the Natures Beauty Shop will minimize its expenditures on marketing at the decline stage while pursuing market diversification vigorously.

Promotion
Promotion refers to the communication channels that Natures Beauty will put in place to persuade the customers to buy more products. In the promotional mix, Natures Beauty Shop will apply different promotional tools to reach its customers effectively. For instance, the business will employ advertising tactics through television, magazines, newspapers, billboards as well as internet .Other components of the promotional mix that will be utilized is the personal selling, sales promotion and sponsorship.

Advertising
Natures Beauty will use paid communication channels to create customer awareness. This will involve use of combination of several communication media like television, print media as well as outdoor advertising.

Television advertisements
Based on the recent survey report indicating that the average television watching time is five to six hours in London, it is very clear that this medium will reach most of our customers. In addition, television advertising is powerful due to its audio-visual characteristics and the opportunity it offers for advertisers to design creative adverts. Moreover, television advertisement has a wide coverage and uses the power of motions to create the desired effect.

Print media advertisements
Natures Beauty will use print media to create more awareness on its products. This will involve placing advertisements on newspapers and magazines. The choice of print media is due to its ability to elicit loyal readership habits and specific audience segments. In this regard, Fashion magazines, one of the most purchased magazines in UK will be utilized by the business as a channel of its advertisements in the market.

Out door advertising
To complement the other advertising media, I will undertake outdoor advertisements using billboards and posters. The benefits of using outdoor advertisements include the assurance that an effective choice of location will effectively reach the audience.

Online advertisement
Natures Beauty will use the internet and World Wide Web to promote its products. Contextual advertisements will be placed on search engines while social networking sites will be utilized to advertise the cosmetic products. Email marketing will be employed to give information to specific customer segments. This method of advertisement is chosen due to its advantages over the traditional advertisements. Similarly, online advertising enhances the advertisement efficiency as it allows for customization of content. It is also a prerequisite preparation as Natures Beauty prepares to go global in the near future. The other advantage of using online advertisement is that due to its wide coverage especially for the consumers with access to the internet it will greatly enhance product awareness.

The table below indicates the advertisement expenditures that Natures Beauty Shop will incur.

Advertisement medium
Cost of advertisement (dollars)
television          8,000
magazines         3,500
newspapers         2,000
Online advertisement         3,000
billboard        4,500
posters       2,000
total        22,000

Personal selling
Natures Beauty Shop will use personal selling tactics to push for sales. This will be done by prospecting, communicating and selling the products to individual customers. Supportive service will also be offered to customers to ensure that they understand fully how to apply the products. The first advantage associated with this type of promotion is that it enhances personal attention to customers while giving room to demonstration and immediate feedback. Secondly, personal selling will serve the purpose of customer acquisition and retention due to the creation of long-term relationships. Sales people who will give presentations, trainings and incentives to customers will be given adequate orientation by the marketing department on how to undertake personal selling services. Telephone as a mode of communication, will be highly utilized to streamline conversation between the consumers and the sales teams.

Sales promotion
The use of media and non-media communications will increase sale volumes. When designing the promotional strategy focus will be on consumer attitudes, advertising tactics and the competitive strategy. I propose that with each purchase offer the customer will be given a gift. Cash discounts will also be an initiative that will be adopted by the Natures Beauty shop in order to make customers purchase products in cash.

Sponsorship and public relations
My business will sponsor beauty contests within the city of London. Natures Beauty will also invest in gaining positive public image by contributing to charity. The shop will contribute to environmental conservation efforts by collaborating with environmental agencies. This being one of the corporate social responsibilities will have positive effects on the business in that it will enhance the public image of the shop.

Table of the cost of sponsorship
activityCost (dollars)periodBeauty contest sponsorship1,000Once yearContribution to charity1,000Once yearTotal 2,000Once yearThe customer

Customer retention and relationship building
To understand our customers better, steps will be undertaken to enhance customer retention rates. This will involve creating customer loyalty by focusing on satisfying customer needs and providing an experience that exceeds the expectations. At Natures Beauty Shop, value to customers will be the core aspect of all operations. Efforts will also be made towards the creation of positive perceptions among the customers.

Quality standards
All operations at Natures Beauty Shop will comply with specified quality levels. This includes the pre-transaction period where each customer must be given due attention and records made even if no purchase has been made. Every member of staff must receive customers warmly. Customers are to receive timely and quality services and if they raise any question about any product, the staff will provide adequate explanations. Customers relations department will be adopted to handle all inquiries.

Identifying the customer
In order to serve the customers better, Natures Beauty will employ appropriate market segmentation strategies. This is the division of the market into categories of individual markets each market with unique characteristics. The segmentation criteria will categorize customer groups in terms of gender, age, family size and social class. The use of gender in this case will enable the cosmetics shop to meet the expectations of both men and women. The women segment is especially vital because it is the biggest consumer segment for cosmetic products. The identification of this group of consumers will go ahead and deliver a product that can meet the expectations. The men category is growing steadily as more men are becoming more conscious about their glooming habits. Aftershaves and perfumes are gaining wide acceptance among men of all races in London. This means that to promote the use of cosmetic products among men, efforts should focus on delivering just what they need in a cosmetic product. Age group will also be used to categorize consumer groups. This is especially important considering the fact that children have sensitive skin, which requires the application of gentle and subtle cosmetics. Young women represent a sub segment that forms the buck of cosmetics consumers.

It is also expected that the shop will pay special attention to the needs of the youth as another vital segmentation technique. Natures Beauty Shop will also embrace an approach that utilizes consumer segmentation to retain its customers. This will entail implementing strategies aimed at retaining profitable customers by using appropriate tactics. These tactics will consider consumer behavior and business prospects to determine the most profitable customers. Some of the factors to consider include the risk of the customer becoming a non user of our products, the prospects of maintaining the customer in terms of profitability and the strategies that will improve the retention rates.

Positioning
After the segmentation process is through, the business will embark on positioning plans. The positioning policy will focus on creating positive perceptions about the products we offer and the pricing aspects. This will involve the marketing and communications strategies, which will strengthen positive perceptions.

Distribution
This is the link between the production and consumption of the products. Natures Beauty Shop will use the two level distribution channel, where it will operate as a retailing store. In this case, products will be obtained from quality cosmetic product manufacturers and sold directly to the customers. The advantage of this distribution channel is that it will enable the shop to concentrate its efforts in distribution and customer service. This means that the shop will have greater focus on customer dynamics. Elimination of costs associated with wholesalers and other intermediaries is another benefit that Natures Beauty is going to enjoy. To serve each customer effectively, the shop will employ competent sales people. According to this business plan, the shop will employ three full time sales people and seven part time sales representatives in its initial stages. As the number of customers grows, I expect the number of sales people to increase.

Management
This refers to the top leadership that will make vital business decisions on a routine basis. It is imperative to note that without effective management system, the success of the business is not possible. This part analysis the management strategies that will be adopted by Natures Beauty shop.

Organizational structure
The shop will have a structure that emphasizes the concept of subordination and collaboration to contribute to common objectives. The management will constitute three departments whose managers will report directly to the chief executive officer. These divisions are the sales and marketing department, finance department and the human resources department. The marketing department will be responsible for all sales and marketing planning. Financial department will handle financial control and planning issues. The human resources department will focus on employee satisfaction, recruitment, hiring, human resource training and development as well as guiding the business to comply with labor laws. Special desks will also be set up under each department. The customer complaints desk will operate under the sales and marketing division. This desk will handle customer related issues and its major responsibility is to enhance customer loyalty. Quality control desk will operate under the finance department. This desk will manage the general quality systems by implementing internal and external quality standards. The quality assurance desk will collaborate closely with all other divisions to effectively shape the general quality policy.     This organizational structure will give room for allocation of responsibilities and coordination of business processes. The benefits of this organizational structure are that it improves efficiency and creativity and instills sense of responsibility. It also permits rapid response while giving room for individual participation hence enhancing flexibility. The Natures Beauty Shop organizational structure is simple thus encouraging decentralized reporting and eases the monitoring process (Sullivan et al, 1996).

Table showing salaries for top management
post
Salary per year (dollars)
Chief executive officer8,000
General manager6,500
Human resources manager6,000
Marketing manager6,000
Internal auditor4,000
total30,500

Table showing payment for subordinate staff
post
Salary per year (dollars)
Full time sales assistants         (3)    10,500
Part time sales representatives (7)    7,000
Driver                                       (1)    2,000
Mechanic                                (1)    2,000
Security personnel                (1)   1,000
Total                                       13   22,500

Staff recruitment
I expect to attract talented and competent employee to work in various sections of the shop. The process will start by identifying a need for a new staff or the need to replace an existing one. It will also entail creativity to weigh out the possibility of doing the same task without adding new staff or making any replacements. The human resources department coordinates the hiring process by assembling a panel that must include top management, a subordinate staff and one customer representative. The human resource officer will also generate a systematic checklist to track the hiring and recruitment process. The recruitment will focus on matching personal skills and abilities to the task.

Motivation and benefit scheme
Natures Beauty employees will be adequately motivated in order to increase their productivity. For example, the marketing team will enjoy extra rewards when they meet specific sales targets. In addition, staff will have freedom to choose when to go for leave or the number of working hours for sales representatives. Outstanding performers will also be identified and a reward given to them.

Training and development
Performance appraisals will be done regularly to determine if performance improvement is required. The business will also implement an overall professional development program. There is need to ensure that all employee are well trained to handle the responsibilities accorded to them. Staff will also be encouraged to do refreshment courses especially those pertaining to customer service. The training will focus on key business processes like communications, customer service, computer skills, human relations and good relations. These skills will increase employee motivation, job satisfaction, enhance efficiency and creativity as well as reduce employee turn over. The Nature Beauty Shop will also reap the benefits of improvement in company image.

Trading status of the business
Natures Beauty Shop will operate as a partnership entity. The business will have four equal partners whose legal structure is governed by a partnership agreement. The name of the partnership will be registered under the registration of Business Names Act. The main features of the Natures Beauty Shop include capital contribution by all partners with no appeal for public subscription, each partner will act as an agent of the shop with clear authority to enter into contracts under agreed terms, and each partner will equally share any debts of the business. Likewise, profits and losses will be shared under the agreed terms. The choice of this type of partnership is based on the benefits of trading under such an agreement. First, partnerships are easy to form and less costly. To launch the cosmetics shop will require substantial amount of capital. In light of this, partnership will raise more capital than operating as a sole proprietor. Exemption from taxes is another advantage of the partnership business. This is due to the fact that partnership is not a legal business entity and therefore it does not pay certain taxes paid by big companies. With this business arrangement, it is possible for members to take those tasks that suit them best hence encouraging creativity and innovation. Sharing of debts and profits will motivate the partners to work hard with the interest of the business taking the priority.

Sources of business finance
Sources of capital describe the sources that the partners will use to raise financial capital to launch the business and run it successfully. Natures Beauty Shop will use different sources to raise funds. These sources will be vary in application due to their difference in terms of costs and risks involved, effect on the ability of management to have control and the period upon which the funds will be available.

Internal sources of finance
The partners will contribute equally form their own savings, to raise funds for financing the Natures Beauty Shop. The advantage of this type of contribution is that the funds are made available immediately. It is also notable that this type of financing has minimal risks because it is from partners contributions and therefore no interest is charged. The management will also have full control of this type of financing because there are no other conditions attached to it other than what the agreement among the partners.

Borrowing from external sources of finance

Bank credit
Natures Beauty Shop will also approach commercial banks for short term loans in the form of overdrafts. The bank overdraft will be given on a formal agreement between the bank and the business concerning the maximum amount by which the partners may overdraw the account. However, this will depend on the personal judgment of the bank on issues such as trade situation and the economic environment. The advantage of bank credit is that it is cheap and convenient source of business finance.

Trade credit
The business will also use credit from suppliers as a source of finance. The business will have an agreement with selected cosmetic manufacturers to be supplied with some products and the payment to be made later. The advantage of this type of financing is that it is a cheap and convenient short-term source of capital. This will also give the shop the benefit of extending credit to customers in the long-run while maintaining flexibility.
Table showing sources of business finance
Source of finance
Amount (dollars)
Partners contribution40,000
Bank credit60,000
Trade credit45,000 (worth of cosmetic products)                                      

Sources of support and advice
Natures Beauty will source for business support and advice from impeccable business institutions. The partners agree that for the management to competently handle the start up logistics there is need to seek the advice from professionals. The management will also receive support and training from these professional in order to enhance business performance through the acquisition of critical skills on financial management, marketing strategies and customer satisfaction. Information on financial management will be sourced from banks and financial advisors in the United Kingdom. Legal advice from professional lawyers will help the company to streamline its operations in line with the stipulated laws and regulations in the United Kingdom. The partners will also seek the advice of professional insurers to evaluate the need and benefits of implementing insurance policies.

Implementing the plan
Natures Beauty Shop is expected to commence its operations on 1stDecember this year. The choice of this date is due to the Christ-mass season and new-year festivity, which is a period when people spend a lot in cosmetics. This implies that the business will break the ground running by making huge sale volumes as people rush to make cosmetic gifts. The business will operate full time to enable shoppers and patrons the opportunity to purchase as much as they want and to get information about the shop. Before the start of trading, it is expected that staff recruitment process will be through for both part time and full term employee. The business premises will have been rented and a complete fit-out done to ensure that everything is ready. Furniture and other minor equipment will also be installed one month before the opening. Advertisements and marketing activities will start two months before the opening to give the shop enough publicity. The marketing campaign will start by using television advertisement to create public awareness on our products. This will be followed briefly with the introduction of billboards in strategic locations to emphasize on the cosmetics we offer. Advertisements will also be placed on magazines to attract customers who use magazines to search for information on fashion and beauty. After breaking the ground, Natures Beauty Shop will employ other marketing tactics to increase sales.    

The possibility of delay
The chances for delaying the start of this business are very slim. However, the business may not have control over for some things. The business may not have a lot of control on what time the business finance may be available for use. In this regard, it is therefore notable that a delay in disbursing the funds may affect the start up dates. Supply arrangements may also take some time to conclude meaning that the process may delay as we finalize the deals.

Compliance to legal requirements
Our business will have complied with all legal requirements by the end of august this year. These legal requirements include the trading license, registration, environmental health requirements and planning regulations.

Risk analysis
One of the greatest risks that may face Natures Beauty Shop is the risk of inadequate business finance. This is based on the fact that the partners will fund much of the capital through borrowing. This exposes the business to the risk of delayed disbursement of finances. Lack of finance will affect the business especially at the initial stages. This is due to the fact that the business will heavily rely on finances for most of its operations like marketing and promotions. To minimize the impact on the business, the partners have the option of borrowing from friends and seeking for grants from well-wishers. Although this type of borrowing may not fully offset the deficit, it will be useful in stabilizing the financial situation. There is also the risk of failing to get adequate supply from the suppliers. This may mean that the business will operate at a lower capacity than expected. To minimize the risk posed by inadequate supply, the partners have identified optional suppliers who can fill this gap.

Monitoring and control systems
The business will use several strategies to monitor and control its operations. In the financial department, an effective accounting system will be employed to improve accountability and transparency. This will involve the use and documentation of Sage accounting systems, petty cash book, preparation of annual financial reports and routine cash flow monitoring. In the total quality department, it will focus on customer satisfaction. To enhance customer loyalty, the business will regularly analyze sales orders, respond to customer questions and ensure compliance to quality specifications. The sales and marketing department will monitor sales revenues and the achievement of sales targets. The effects of promotion will be evaluated to determine the profitability of such activities. A market analysis and intelligent reports will be performed occasionally to determine market trends and changes in the competitive environment. To ensure that the human resource remains productive, the business will do employee performance review to identify areas that need improvement to enhance productivity. Training needs and the effect of motivation will also be analyzed to aid in decision-making process.