Cosmetic start up, Kuala Lumpur

Cosmetic start up, Kuala Lumpur

Project Cost: RM60 000

Amount Invested : RM10 000

Amount Required : RM 50 000

Knowledge / Experience Required: finance

Proposed Investor’s Role: as mentor

Industry: manufacturing

Project Stage: start-up

EXECUTIVE SUMMARY:

Company History:

Chung Yueh Chyn is a chemist who has been working on hair dye synthesis from her own garage for about a year. She is now looking to market her products in the premium hair dye market in the region. She is a graduate from Northwestern University, one of the best research universities in the world. She is also a JPA scholar who has secured a scholarship based on academic merit, thus proving her intellectual capacity as required in the start-up business.

Product / Service Description:

Chemamore is an innovative, revolutionary start-up cosmetic company, a premium cosmetic line that provides beauty products ranging from skincare, haircare, and color cosmetics to fragrance. Our strength relies on constant and speedy product innovation that meets growing and changing customer needs. We rely on our team of production engineers to design new products that cater to current beauty trends. Our strength relies on our marketing strategy coupled with product innovation.

Business Opportunity:

Cosmetics has been around since the ancient Egyptian civilization. The opportunity for this business is an inherent part of human desire. What we do is to fulfill the desire of people to look good and healthy. However, our extra edge would be our flexibility, leanness, and adaptibility to more sophisticated consumer demands in this industry and our better product range, innovation and focus at every step of our expansion.

Revenue Model:

At the initial stage, we rely on creative product launches that will establish our brand presence in the market. We target middle to high income consumers, especially older women who are the biggest target group for hair dyes. Trends these days include customization and we have a marketing plan that would provide customized hair dyes according to customer’s requirement. in order for this plan to work, we need a team of web page designers who can provide online features that allow customers to choose their specific color shade, moisturizing effect,fragrance, natural blend, botanical extracts with health benefits, and customization for different hair types. This type of marketing strategy requires great financial discipline, small size of company in order to cater to different customer requirements, speedy engineering team, good relation with supplier, cheap labor, good sales team, and an online presence to sell to customers worldwide. Our success hinges upon the receptivity of consumers to customized hair care solutions, and big, established companies with large manufacturing capacities cannot achieve this. Therefore, as a start-up, with adequate capital backing, I believe that it is a marketing strategy that is worth trying considering the growing size of this industry and the higher disposable income of working females, baby boomers, retirees, and young, affluent fashion-conscious adults.

Management Team:

We strive to find the best talent for our ambitious project. We will hire talent wherever they are and create a team of web developer, advertising and design manager, energetic sales team, and flexible, knowledgable formulation chemist.

Current Status:

We are at the concept stage. Without adequate capital, it is impossible to hire people to execute our marketing and sales strategy. However, product development is already underway although our laboratory facilities are inadequate.

Funding Milestone:

We need at least RM50 000 to complete initial 5 000 units and to assemble a sales team to make our first brand launch in Singapore. We have a creative marketing concept for our launch and what we need is the capital to see that happen. We choose Singapore due to the fact that there are more working females with higher disposable income and also to maintain our brand image as a premium line that establishes itself in one of the most vibrant developed country in the region.

Business Valuation:

We would grant all profits from the initial launch to the investor(less COGS, depreciation, operational expenses, salaries, taxes, sunk costs). We expect to be able to renegotiate a different deal for our expansion and growth stage should this project be successful,depending on future growth and revenue expectation.

Expected Return On Investment:

Our rough estimate on the cost of the first launch is as follows(5000 units produced):

Rent (RM800X12 months contract) = RM 9 600
Premium packaging = RM 10 000
Contract labor (3months )= RM 30 000 (approx)
Advertising and launch expense = RM5 000
Total cost = RM 55 000 (approx)
Unit price = S$20 (RM 50)
Break even unit = 1000

If 5000 units sold, gross profit = RM200 000(ROI=400%)

Note: These are rough estimates. Within realistic view, our initial launch may cost more and revenue may not be forthcoming. However, as promised, first 5000 units profit will go to the investor. Investors are advised to make risk calculations on their own.

Investment Risk and Mitigation:

The greatest risk is that our marketing strategy is unsuccessful. However, mitigation is quite straightforward in the sense that we could switch our strategy quickly enough due to our small fixed capital. Our products can be reengineered to fit a different marketing strategy. What is important is to constantly evaluate the effectiveness and profitability of our marketing plan and to have our production team on the standby to re-engineer products to fit new strategies.

Exit Strategies:

If, after the first launch, the investor finds this effort not worth the investment, he can call off the investment and savage whatever unused capital that has been poured into the project. At the initial stage, we try to make agreements that are as short-term and low expense as possible in case this project turns out unsuccessful. We hire people on short-term contracts and they can be dispensed with if this is called off. Also, our production site is can be rented out to another party and therefore the real estate capital may not be sunk. Chemicals are purchased at the expense of the founder. Inventories could be sold to interested third-party buyers. We do not plan to invest in machines at the moment.

CONTACT INFORMATION

Jeannie ( yuehchung2012@u.northwestern.edu)

Company Name: Chemamore
Postal Address :
State : Kuala Lumpur
Post Code : 54000
Country : Malaysia
Telephone : 60166927389
Website :
Mobile: 60166927389

 

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