Are you about starting a starting a perfume production business? If YES, here is a complete sample perfume line business plan template & feasibility report you can use for FREE.
Perfumes have always existed for a very long time and this came about from the desire of people to look good. Starting a perfume production business requires that you not only know about the business but also be artistic as well. Even though one needs to have a knowledge of science especially chemistry, you can still experiment mixing several scented essential oils and having a good nose to sniff out fragrances that are likely to make clients fall for.
Starting this business requires several researches into the kind of bottle you want to use for your business, and what shape and sizes they should come in. This would mean getting in touch with wholesalers of these kinds of bottles and knowing how many bottles you can purchase at a minimum and how much it is likely to cost you.
A Sample Perfume Line Business Plan Template
Table of Content
- 1. Industry Overview
- 2. Executive Summary
- 3. Our Products and Services
- 4. Our Mission and Vision Statement
- 5. Job Roles and Responsibilities
- 6. SWOT Analysis
- 7. MARKET ANALYSIS
- 8. Our Target Market
- 9. SALES AND MARKETING STRATEGY
- 10. Sales Forecast
- 11. Publicity and Advertising Strategy
- 12. Our Pricing Strategy
- 13. Startup Expenditure (Budget)
- 14. Sustainability and Expansion Strategy
1. Industry Overview
The perfume industry is said to be a $3billion revenue generating industry, with a projected annual growth of 3.4%. Having performed wonderfully well between 2010 and 2015, the industry is expected to continually grow stronger over the next five years.
Even though the recession caused a dip in earnings, the growth has caused customers confidence to grow back and revenue to leap as well. Asides, the growth of revenue caused by domestic customers, international customers has also played their part in increasing revenue and this is expected to continue till 2021.
This industry is one that is highly capital intensive which is due to the manufacturing equipment and machineries as well as facilities. Most large scale companies in this industry usually have a low scale of cost especially as they use an automated system which depends less on labor input. However, capital costs are most usually high during start-up and drastically reduce after the initial investment.
Sales for perfumes and fragrances in the united states according to statistics from Cosmetics Design group slowed in 2012 due to low demand which was a great departure from the growth experienced in 2011. According to the report, the reason was chiefly due to two factors – a drop in earnings and a lack of celebrity inspired fragrance.
Even though the female fragrance remained the largest market for production companies, the male fragrances are also holding steadily in the market. Also, premium fragrances reports strong sales, this shows that niche markets perform well despite the state of the economy, especially as those in this market rarely need to hold off spending for fragrances as they are deemed essentials.
Due to the explosion of scents and fragrances, which has caused a glut in the market; customers have been left confused especially as most brands find it difficult to stand out. However, the market segment of teenagers between the ages of 13 and 19 has pushed the worth of fragrances globally to more than $250 billion, and has caused several perfume production companies to tap into this segment.
Celebrity fragrances are popular niches that have grown but which heavily depend on the celebrity as companies seek well known celebrities to endorse their fragrances. The celebrities must also have good credibility and must be considered a success in his or her field of endeavor.
Another niche that is also said to be developing are niches that target holistic and aromatherapy practices. This niche grew at 4% in 2008 and is mostly considered as fragrances that are produced en-masse. Other emerging niches are those that are environmentally conscious of how the product degrades or improves the environment and so push for use of natural ingredients to be used in products.
2. Executive Summary
Alba Pure Fragrance Perfume Production LLC is a fragrance business that intends to be based in Los Angeles, USA and established for the purpose of catering to clients that are both domestic and foreign in nature. We also intend to produce a variety of fragrances to cater to our teeming customers. Asides our products, we intend to offer consultancy services and franchises as well.
Our vision which is to be the leading perfume and fragrance industry in Los Angeles as well as the whole of the United States will be achieved as we have put together the best strategies to ensure that these goals and missions are achieved.
To this end, we have employed the best professionals who have the necessary vast experience needed to run and grow the business. We intend to ensure that our professionals become the best in the field by constantly offering training them to upgrade their skills.
Also, we know how important incentives are in motivating an employee, and as such we have welfare packages in place to ensure that our employees get the best that they should. Asides welfare, we have an effective structure in place to ensure that promotion is given to deserving employees as at when due.
We know how important it is to acquire the best machineries and equipment that will ensure production gives us optimal performance. Our maintenance team will be on hand to constantly give our machines a thorough check every now and then and ensure that major breakdowns are prevented from occurring.
Retaining our customers is a very strong suit for us and so we have strategies in place to ensure that our customers remain happy with our products and services. This can be achieved if we employ the best customer service executives who are adept at handling orders, promptly attending to complaints and inquiries. We also intend to provide a listening ear to our clients for feedbacks that will help make the company progress.
Our responsibility as a company means that at all ties we must demonstrate our corporate culture and ensure that our foundation remains solid by remaining proactive and modifying weak strategies to make them stronger.
Alba Pure Fragrance Perfume Production LLC is owned and established by Ms Amber Alba. Amber is a renowned business woman with several years of working in the perfume and fragrance field of the fashion industry, and is one who has amassed the right degrees to prove her mettle in this field, a degree in Chemistry and several certifications as well as an MBA from a prestigious business school.
3. Our Products and Services
Alba Pure Fragrance Perfume Production LLC intends to deal in all sorts of fragrances for both sexes. We will ensure that we constantly carry out researches so as to make new rare fragrances that will stimulate the senses of our various clients.
However, we know that it is important as a company that we create multiple sources of income through our offering of varied products and services so as to be shore up our revenue base. We do not intend to carry out any illegal activities and so all our source of making money will ensure that it properly follows with the laws and regulations of the state where we intend operating from, Los Angeles and that of the United States as well.
Some of our intended products and services are:
- Production and sale of pure perfumes
- Production and sale of Eau de Parfum
- Production and sale of Eau de Toilette
- Production and sale of Eau de Cologne
- Business consultancy and advisory services
4. Our Mission and Vision Statement
- Our vision is to have our fragrance in every household and be the referral perfume production business in and around Los Angeles, the whole United States and in extension the world.
- Our mission is to ensure that we produce fragrances that not only exceed our domestic customer’s expectations but also intrigue the senses of our business customers and make them strive to build a sustainable relationship with us.
Our Business Structure
As a business that knows the intention for which it was established, we intend to ensure that everything as regards our business structure is gotten right because we know how important this aspect is to a business, and why getting it right will save us from many futuristic challenges that might crop up.
The second most important component after financial resources is the human resources, as they are capable of either growing the business or running it to the ground regardless of how much start-up capital was pumped into the business. Finding capable and experienced hands therefore is very essential and it is something we intend to take seriously when we employ those who will help us run the business.
Due to our vast production plans and also services we intend to offer, we intend to employ several hands that will perform assigned tasks that is aimed at ensuring that the company becomes one to be reckoned with in the industry. The business structure we intend to build for Alba Pure Fragrance Perfume Production LLC is listed below;
- Chief Executive Officer
- Purchasing Manager
- Marketing Executive
- Human Resources
- Customer Service Executive
- Security Guard
- Truck Driver
5. Job Roles and Responsibilities
Chief Executive Officer
- Makes and communicates the overall strategic direction for the company
- Ensures that all departments have the necessary resources required
- Prepares the overall budget for the company and ensure there is a balance of resources
- Ensures a corporate culture is developed and communicated to staff
- Has final decisions on key areas that will affect the company
- Responsible for sourcing for and the placing orders with reliable vendors
- Ensures that a good relationship is maintained with these vendors for the good of the organization
- Responsible for contract negotiation, preparation as well as execution
- Possesses updated knowledge on the market trends and uses this to make several analytical decisions
- Works with the CEO to create a budget for the purchasing department
- Responsible for creating fragrances
- Develops formulas, processes as well as analytical methods
- Works with the CEO to ensure that company policies are maintained
- Ensures that awareness for the company brand is increased
- Places adverts in relevant media so as to increase orders for companies products and services
- Develops and implements a marketing budget by working with the CEO
- Responsible for sourcing for, screening and then employing the right hands to assigned tasks
- Ensures that there is safety in the workplace for workers
- Handles the compensation and benefits for workers
- Provide necessary training and development tools for employees
Customer Service Executive
- Works with the CEO in drafting customer service policy and ensuring that these policies are implemented
- Handles enquiries of customers on behalf of the company
- Receives orders from clients and ensure that the orders are passed to the appropriate channels
- Creates accurate customer database on behalf of the company
- Uses feedback from customers to ensure that services are improved on
- Assists the CEO in drafting corporate strategy especially part that deals in finance
- Helps the business reduce cost by cutting costs where necessary
- Help sin creating as well as communicating financial information
- Has oversight over all financial related matters
- Prepares accurate tax information
- Ensures that the premises and properties of the company are adequately protected from threats
- Is constantly in touch with law enforcement agents to provide or receive information
- Communicates security tips and advices to employees on what to do during emergencies
- Makes accurate security observation and passes information to the relevant authority
- Scrutinizes entry and exit of individuals to and from the facility
- Responsible for accurate distribution of goods to wholesalers and retailers
- Combines logistics as well as administrative tasks to ensure that job is done
- Takes inventory of goods by supervising loading of truck
- Maintains a log book that details all transactions from delivery, invoices as well as obtaining of customer’s signature
- Carries out proper maintenance of truck and carry out light repairs
6. SWOT Analysis
Every strategy created for any business must take into account the strengths and weaknesses of the business and if it will bear positively or negatively on the strategies. In order to ensure that we get a honest SWOT analysis, we hired a business consultant who conducted a thorough market research on our existing customers, the results which were then used to thoroughly create a good picture of how our business is perceived in the marketplace.
Also, the essence of the analysis was to ensure that we become a better brand than we currently are. Also, the analysis will help in deciding if this is a suitable business, how our growth should be paced and what sustainability measures would be best for us in Los Angeles and the United States of America as a whole.
Below is an analysis of the SWOT analysis that was conducted by for Alba Pure Fragrance Perfume Production LLC by our business consultant;
Our strengths are numerous and lie in the fact that our excellent customer service is top notch as we run one that is not only flexible but personal to each clients leading to a high retention rate for our company. Also, we have employed professional hands who have specialist skills added to vast experience that will not only help in ensuring the company operates efficiently but also grow to enviable heights.
Our employees work in a very conducive environment with welfare packages that are second to none in the whole industry, making them the envy of our competition. We also give our workers continuous trainings that ensure that their efficiency and productivity rate are at top notch. Lastly, our strength is in our varied product lines that keep our clients intrigued especially as fragrance development department constantly churn out fragrances that cannot be ignored.
Due to the rising costs of production, financial resources might act as an impediment to our fast growth. Also, since we are relatively new in the industry, and with the stiff competition in Los Angeles, our weakness lies in the fact that we do not as yet have an established reputation. To combat this, we would need to roll out effective publicity and advertising strategies that will ensure that we garner positive attention.
The opportunities in this field are numerous. The internet is one of the opportunities we intend to explore for our perfume business and to use in penetrating the market. There is also boundless opportunity in the business aspect, as important personalities and celebrities are looking to create a fragrance line as a venture for themselves. Los Angeles has a lot of such people and we are poised to take our share of these market.
Threats always abound for any business either new or existing. The arrival of new competitors to same location, the emergence of imitation and a downturn in the economy are all threatening factors that are likely to affect our business. However, there are strategies in place to combat these threats.
7. MARKET ANALYSIS
- Market Trends
The perfume industry is one that looks a bit saturated with only few perfumes and brand names making it to the top in the industry. As a result of this fact, we intend to ensure that we constantly engage in research and development that will see to the growth of not only for our fragrance line but for the company as a whole.
We know that to remain afloat we must produce rare fragrances that will intrigue the senses of our customers and set us apart from other perfume production companies.
Another trend is in ensuring that we do not produce only one range and line of fragrances by sticking to just perfumes but produce others as well, for clients who like a whole range or who prefer other fragrances that are not perfumes alone.
Knowing what to produce was done after we carried out a feasibility study and a thorough market survey. Lastly, we know how important customers are to a company and how important it is for a company to be close to its customers. This we intend to do by deploying several means to keep in touch with our customers.
We intend to develop a mobile app that will ensure that our existing and potential clients can have a view of our products, as well as our new fragrances immediately they hit the shelf. This will keep them not only informed but allow them feel closer to the company, while on the other hand, it will allow the company to have a healthier bottom line.
8. Our Target Market
Everyone wants to reek of a good fragrance as this is what stands them out and boosts their confidence as well, and so our target market will not be restricted to basically just a few people. We intend to produce fragrances for everyone who loves to smell good and even for those who want to try out fragrances that are adventurous. Our location in Los Angeles makes us quite suitable to ensure that our vision for this materializes.
Knowing how important it is to stand out in this market and be amongst the top leading brands, we have conducted a thorough market survey so as to know what will be required from us by our target market. We have identified our target market and broken them down into definable categories that will help our marketing and customer care executives better attend to them whilst carrying out their tasks. Our target market includes;
- Business People
- Corporate Executives
- Sporting Personalities
- Perfume Line Businesses
Due to the fact that there are several perfumes production companies in existence, achieving our vision of becoming a leading brand in Los Angeles and in the United States won’t come easy. It is due to this fact that we have drafted several competitive advantage strategies that will ensure that we not only compete favorably with our competitors in the same field but that we achieve our goals and objectives as well.
One of our first competitive advantages is to ensure that we employ only those who have the experience and the necessary capability in working in and running a perfume production business. Our chemist for instance would not only how to mix several scented essential oils to achieve a fragrance but look towards achieving a mix of rare fragrances in line with the company’s vision of offering customers unique fragrances that will intrigue the senses.
Another competitive advantage is also in ensuring that our staffs work in the best possible environment, while also having one of the best welfare packages required in the business. We would make sure that we also reward hard work by promoting staffs as at when due so as to improve their overall productivity rate.
We intend to ensure that our customer service is second to none and so we intend to employ professionals who not only have a vast knowledge of the perfume industry but are also equipped with listening ears and an attention span that would ensure that all customers are patiently attended to.
Our customer care executives would ensure that our customers’ database is always updated, that way we can always send out information to all our customers when we need to. Lastly, we know how important technology is in this age and so we intend to ensure that our official website as well as social media platforms are active and engaging to our existing as well as well as potential customers.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Alba Pure Fragrance Perfume Production LLC sole’s aim of establishment is to make profit in the different fragrance lines it intends to produce. Knowing the market well, we intend to ensure that our fragrance line caters to all segment of the market as we intend to produce perfumes for men and women of different age groups.
Alba Pure Fragrance Perfume Production LLC intends to generate its income through sales from the following sources;
- Production and sale of pure perfumes
- Production and sale of Eau de Parfum
- Production and sale of Eau de Toilette
- Production and sale of Eau de Cologne
- Business consultancy and advisory services
10. Sales Forecast
Due to the fact that people would always want to smell good no matter the occasion, this therefore means that there will always be a demand for perfumes.
After a critical evaluation of the perfume industry, we have found that we are strategically located in Los Angeles and that this would allow us meet and even exceed our target of generating enough revenue to cover our operating and overhead expenses within the course of a year.
Our sales projection weren’t carried out by us alone as we hired a reputable business consultant who used accurate research prediction variables that allowed us make the sales forecast that we came up with. The information for the analysis were gathered in Los Angeles and in major parts of the United States and used statistics from start-ups especially those in the perfume industry.
Therefore we can safely say that the sales projection below for Alba Pure Fragrance Perfume Production LLC is accurate based on certain factors such as our location and our products line:
- First Fiscal Year-: $650,000
- Second Fiscal Year-: $1,300,000
- Third Fiscal Year-: $2,650,000
N.B: It is safe to say that the projection done for our company is based on may assumptions which are that the economy would continue to grow favorably and that there won’t be any new major competitor into same location within the projected sales forecast period above. Any slight change in these factors might result in a higher or lower change in figures.
- Marketing Strategy and Sales Strategy
Marketing is a very important aspect of any business because without it your wonderful business is likely to crash, especially as marketing helps generates revenue to help make the business a going concern. It is therefore important that effective marketing strategies are drafted so as to help shore up revenue base for the company.
Before marketing strategies can be drafted, a market survey is necessary so as the necessary information can be garnered that will help produce sound strategies.
The intention of marketing strategies is to ensure that our perfume products and other services that are likely to be offered meet with the needs of our customers, whilst also maintaining our sustainability and expansion goals and objectives.
Our strategies are also flexible enough so as to be able to accommodate changing customer trends and lifestyles. Our marketing strategy intends to help serve a dual purpose which is to ensure that our brand is identified and the benefits of our products and services communicated to our customers both existing and potential.
We also intend to monitor and evaluate how effective our strategies are by ensuring that our marketing team are empowered to carry out a constant review of these strategies and modify or drop strategies that aren’t effective or achieving the overall brand strategy.
Our marketing strategies at Alba Pure Fragrance Perfume Production LLC will leverage on the below strategies to ensure that our perfumes and other products and services are effectively marketed;
- Ensure that our perfume business is adequately advertised in beauty magazines, local newspapers as well as on radio and television stations
- Make use of our official website to market our business as well as advertising our business on other relevant websites
- Ensure our perfume business is listed in online and offline directories
- Launch our company with a pageantry show that will attract clients and generate interest for our company
- Empower our marketing team to engage in direct marketing
- Share our fliers and handbills in various strategic areas
- Encourage our loyal customers to participate in our referral programme
- Use our social media platforms such as Facebook and Google Plus to sell our products and sales
- Ensure we give out free samples anytime we create a new fragrance
11. Publicity and Advertising Strategy
As a company we know the importance of constantly publicizing and advertising one’s company. Engaging in these two acts help increase the awareness of potential customers about the business, increase the retention rate of existing customers, and also make more money for the company as a whole.
Alba Pure Fragrance Perfume Production LLC intends to compete favorably with other leading brands in the industry and so all efforts will be made during publicity to achieve this aim.
Our location is deliberately in Los Angeles because not only are there favorable laws to aid start-ups but the state is positioned in to reach all over the United States and has favorable shipping laws and regulations towards shipping to other countries.
We however will intensify publicity so as to be known in Los Angeles and thrive there, before venturing out to other states in the United States. We intend to strongly communicate our brand through publicity. The various platforms that will be adopted to effectively communicate and advertize our brand are:
- Advertize vigorously in beauty and lifestyle magazines
- Sponsor community and school pageants by giving out our perfumes to winners
- Vigorously use the internet such as our official website to promote our products and services
- Leverage on our social media platforms such as Facebook, Twitter, LinkedIn, and Google Plus – to increase the awareness for our products and services
- Place adverts on radio and television stations as well as local newspapers
- Have our billboards installed in various conspicuous but strategic locations
- Ensure that our fliers and handbills are distributed in target areas
- Create a unique logo and slogan for the company to enable us be quickly identified by existing and potential clients
- Ensure that our employees have customized Alba Pure Fragrance Perfume tee shirts and also that all our official cars and our distribution trucks are branded with our unique logos
12. Our Pricing Strategy
We intend to produce the rarest and best quality of fragrances and as such will need to ensure that we get the right price that will cover all costs – overhead and operating, which also includes packaging and inventory. We would ensure that our pricing packages are categorized so that it would be affordable to the clients that fall into that category. Also, our pricing will be determined by the size of the products we intend to sell.
This does not mean that we would set a price that will not allow us compete favorably in the market against our competitors. We will during the first few months of production strive to ensure that we sell at a lower price than what our competitors in Los Angeles would be offering to their customers, this is so as to be able to attract the required customers that we would need to us.
- Payment Options
Alba Pure Fragrance Perfume Production LLC intends to ensure that it brings forth a payment policy that will suit the different classes and levels of clients in a bid to ensure that customers do not get inconvenienced whenever they decide to pay for a product. The available payment options are;
- Cash payment
- Point of Sale (P.O.S) Machine payment
- Payment via bank transfer
- Payment via check
- Payment via online transfer
Our platforms were carefully chosen in partnership with our bank so as to ensure that customers have fewer hitches during payment.
13. Startup Expenditure (Budget)
Setting up a standard perfume production company can be capital and labor intensive, especially as equipment for researching fragrances, and making these perfumes have to be bought. Also, getting inventory and paying employees that will help run the company till it makes enough money to start paying off itself is another factor that eats into the start-up capital.
Listed below are the areas where we intend to spend the bulk of our capital on:
- Total fee for incorporation and handling of other legal affairs – $1,000
- Cost of acquiring licenses and permits to run the business – $1,000
- Cost of acquiring perfume making machines (water treatment reverse osmosis water purifier system, perfume freezing filter perfume mixing machine, perfume filling machine vacuum filler equipment, high precision magnetic pump filling machine, perfume capping machine) – $50,000
- Installation expenses for the machines – $1,000
- Leasing and renovation of facility for at least a year – $40,000
- Packaging machine (labeling machine, packing machine) – $5,000
- Start-up inventory (raw materials) – $10,000
- Operational cost for the first six months (employee salaries, utility bill payment) – $150,000
- Insurance (general liability, equipment and property insurance, workers’ compensation) – $3,000
- Storage and packaging materials – $5,000
- Cost of hiring business and marketing consultants – $10,000
- Other start-up expenses (phone, computer, printers, furniture) – $10,000
- Cost of purchase of perfume distribution truck – $50,000
- Cost of launching an official website – $500
- Storage facilities and equipment – $10,000
- Marketing promotion expenses for at least a year and inclusive of publicity materials for official launch – $5,000
- Cost of official launch party – $5,000
- Miscellaneous – $5,000
From the above estimate, we would require at least $361,500 to be able to successfully set up a perfume production business in Los Angeles, USA. The amount is inclusive of facility rent for one year and employee salaries for at least six months of initial operation.
Generating Funding / Startup Capital for Alba Pure Fragrance Perfume Production Business
Alba Pure Fragrance Production LLC is a business that is owned and run by one person – Amber Alba, who is a renowned business woman with several years of working in the perfume and fragrance field of the fashion industry, and has also amassed the right degrees to prove her mettle in this field. Amber is deciding to source for capital through 4 sources;
The areas for the intended capital generation are;
- Approaching friends and family for a loan
- Approaching private investors
- Sourcing for loan from bank
- Generating the capital via sale of personal stocks
N.B: From the four mentioned sources $40,000 was generated from sale of personal stock, $21,500 was gotten from friends and family, $150,000 was gotten from a private investor and $150,000 is being sourced for from the bank. The loan application has past the review stage and is nearing completion.
14. Sustainability and Expansion Strategy
Every established business with serious owners know that it is important to have strategies that would ensure that not only will be the business be sustained but also prepped for steady expansion and this can only be achieved if certain factors such as capable employees, loyal customers are in place.
At Alba Pure Fragrance Perfume Production LLC, we intend to build a company that becomes a leading brand in the industry and this can be possible if we apply certain measures to ensure that this becomes a reality. One way by which we intend to ensure we retain our customers is by always coming up with fragrances that will appeal to a large section of our target market.
We also intend to employ a referral system that will award our loyal customers, while also rolling out programs that rewards our customers from time to time.
Another area we intend to invest in is in our employees. We intend to source for and recruit the best and experienced professionals who understand how to help grow a business, and who would understand and key into our vision of becoming a reckoning force in the industry.
We also intend to ensure that our staffs have the best welfare package in the industry and also work in a very conducive environment that will make for favorable achievements so as to enhance their productivity. These two factors may seem little but if done rightly they will greatly aid our sustainability as well as expansion strategy and in extension the Alba Pure Fragrance Perfume Production brand as well.
Check List / Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting feasibility studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party / launching party planning: In Progress
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
- Purchase of trucks: Completed
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