1.0 Executive Summary
The purpose of this business plan is to secure $125,000 of private investment capital for the development of a unique skincare product line. Deutsch SL Group LLC (“the Company”) was founded by Matthew Deutsch with the intention of providing the general public with a wide range of skincare products that principally use avocado oil as the base ingredient. This input has proven to moisturize skin will also assisting in the healing process. The formulation will also include aloe as well as other components that will make the product line sun protection friendly. The Company is based in California.
Operations
In regards to revenue generation, the company will principally produce its income from direct sales to consumers. The business will maintain an expansive online presence through a Shopify powered website. The Company anticipates a target pricing of $15 to $30 per item depending on the volume. The business will also implement an auto refill program that will produce highly recurring reams of revenue for the business.
As the brand name of MDLD Healing Skincare increases, the business will also engage in wholesale distribution of its products. While this will be a lower margin aspect of the Company’s operations, this will produce substantial revenue as major buyers from noted personal care retailers are expected to make large scale orders.
The third section of this skincare business plan will further document the operations of the business.
The Financing
As noted above, the Company is currently seeking $150,000 for a private investor. The funds will be will use for the following:
• Initial skincare product inventories
• Marketing
• Working capital
The business would be an excellent candidate for ongoing expansion financing on an as needed basis. Given the highly predictable streams of revenue that will be produced from direct-to-consumer sales as well as wholesale distribution, the Company could easily secure additional equity capital or a revolving credit facility to further fuel the growth of the business.
The Future
Over the next five years, management will continually expand the number of products that are offered through the Deutsch SL Group ecosystem. This will include new formulations that specifically seek to revitalize and nourish the skin. The Company may also expand its operations to include complementary products for hair care.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The $150,000 or private investment will be allocated as follows:
2.2 Management and Investor Equity
The exact ownership percentage that Management will share with an investor will be determined during negotiation.
2.3 Exit Strategies
As skincare products is a highly competitive industry, there is a substantial demand for companies that have established a strong foothold in this market. In all likeliness, the Company will be sold to a larger skincare and personal care product conglomerate that is seeking to expand their portfolio of brands. In this event, the Company will coordinate these efforts with a qualified investment bank in order to ensure that the business receive a fair market price will also ensuring a seamless transition.
3.0 Operations
As noted, the executive summary, the Company will primarily generate its revenues on a direct-to-consumer basis through its expansive of line of avocado infused skincare products. The Company’s product line will be certified as organic, as these types of products are highly in demand among consumers.
The Company’s website will be a state-of-the-art platform that showcases all products offered by the business while also integrating e-commerce functionality. The business will use Shopify as its e-commerce engine. This platform will also have subscription-based features so that individuals can receive a specific quantity of products that will be automatically delivered to them on a monthly basis.
Starting towards the end of the first year of operation, the Company will conduct extensive direct outreach with personal care stores, beauty stores, and other related retailers that will carry MDLD Healing Skincare products within their respective locations. This will drastically expand the revenue of the business well also contributing to a greater degree of brand visibility. It is fully expected that customers that have purchased the Company’s skincare products at retail stores may also acquire these product products from the website as well.
4.0 Overview of the Organization
4.1 Registered Name
Deutsch SL Group LLC. The business is registered as a limited liability company in the State of California.
4.2 Commencement of Operations
Full scale revenue generating operations are expected to commence in the second quarter of next year once the capital has been secured and the formulations have been finalized.
4.3 Mission Statement
To provide an exceptional line of skin care products that seek to nourish and improve skin health.
4.4 Vision Statement
To become widely recognized as a preeminent skincare line within the United States.
4.5 Organizational Objectives
• Adhere to all regulations regarding the production and distribution of products that are meant for a human use.
• Implement numerous marketing campaigns that will draw the attention of a wide spectrum of demographics that will use the Company’s skincare products.
• Provide sales staff with highly competitive compensation packages for each new wholesale purchase order that they acquire.
• Continue expand the scope of products offered to the general public, including the potential integration of hair care products.
• Acquire endorsement from a noted internet personality or celebrity.
• Continue to conduct direct outreach campaigns with dermatologists that will support the use of the MDLD Healing Skincare product line.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the skincare business plan will document the current economic climate, the industry, the demographics of the Company’s consumers, and the ongoing competition at the business will face.
At this time, the economic climate within the United States is moderate as a result of changing trade policies as well as adjustments to national economic policy. As a result of this, the inflation rate has been higher than expected. However, the Federal Reserve, as well as other government agencies are applying appropriate fiscal policy that will ensure that inflation comes down while also fostering ongoing economic expansion.
The business will be able to remain economically viable even during challenging business climates. The demand for quality skincare products that are cost-effective and assist with ensuring skin health typically remain strong in an economic climate. The multiple distribution channels that Deutsch SL Group will use for further contribute to the economic stability of the business.
5.2 Industry Analysis
As of this year, there are 5,200 companies that are actively involved with the production and distribution of skincare products. These businesses aggregately produced $41 billion revenue while providing jobs for 72,000 people.
A major shift in this industry has occurred as many skincare product producers now directly sell their products on a direct-to-consumer basis. As has been noted throughout this document, Deutsch SL Group will capitalize on this trend through its Shopify based e-commerce platform. This will be complimented by the direct outreach campaigns that the Company will undertake in order to drive wholesale distribution.
5.3 Customer Profile
Any individual that has an interest in maintaining good skin health is a potential customer of Deutsch SL Group. The MDLD Healing Skincare product line will have wide applicability for both men and women. This will be one of the primary differentiating factors that will be noted during the course of its marketing operations. Generally, these consumers will have an annual household income of $75,000 and will typically reside within 100 miles of a major metropolitan area.
5.4 Competitive Analysis
The ongoing competition that Deutsch SL Group will face as it introduces its MDLD Healing Skincare branded line of products is substantial. As noted above, this industry produces over $41 billion a year and has numerous market agents that provide competing products. The Company will maintain a major differentiating factor by having avocado oil as its primary ingredient.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Deutsch SL Group will have sustainable operations as a result of the following:
• The Company will use numerous direct consumer strategies that will drive substantial revenue growth in the coming years.
• An experienced CEO, Matthew Deutsch, who will be able to effectively brand MDLD Healing Skincare products as premium skincare goods.
• Limited competition among skincare enterprises that focus equally on the needs of both men and women.
• The Company will be able to scale it operations through celebrity endorsement.
6.2 Basis of Growth
The Company will expand via the following methods:
• Continued expansion of the number of skincare products offered under this brand name.
• Expansion of operations to include hair care products.
• Establish ongoing relationships with international trade brokers that allow the business to enter international markets.
7.0 Marketing Plan
7.1 Marketing Objectives
• Develop a substantial sales network that will conduct direct outreach with personal care stores that will carry the companies in inventories.
• Implement numerous online marketing strategies that will allow the business to be found quickly when searches for specialized skincare products are required.
• In time, seek celebrity endorsement in order to increase the brand visibility profile.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• Deutsch SL Group will launch operations through its MDLD Healing Skincare branded line.
• Revenue will reach $850,000.
Year 2
• The Company will drastically expand the scope of its marketing campaigns.
• Revenue will reach $1.1 million.
Years 3-5
• Management may integrate new products into the line.
• Revenue will reach $2.5 million by the fifth year of operation.
7.4 Marketing Strategies
Given the substantial competition within the skincare industry, Management will use numerous marketing strategies that will drive significant brand-name awareness in the coming years. As it relates to the Company’s website, this platform will ever go substantial for engine optimization including the ongoing development of articles related to proper skincare. This will ensure that the business is able to generate a substantial amount of traffic to the website, which will drive substantial sales. The Company’s search engine optimization campaigns were further throughout the life of the business.
Beyond the Company’s proprietary website, social media will be a special importance as many people have fall into the demographic profile frequently use social media platforms. On these pages, the Company will showcase the entire spectrum of MDLD Healing Skincare branded products. Links that go back to the Company’s e-commerce website will be featured on each social media posting. The business will also have video driven content created that showcases use of the proprietary formulations.
In time, the Company will also see endorsement from a noted internet personality or celebrity. This will drastically increase brand visibility as they use the product as part of their lifestyle. These operations will be conducted in tandem with an agency that specifically deals with sourcing this type of endorsement.
Once the business generates substantial revenue, the Company will take a print advertisement in fashion and beauty drifted magazines in order to further increase the visibility of a brand.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The Company will acquire $150,000 of private investment capital to establish operations.
• Deutsch SL Group will achieve a compounded annual growth rate of 31%, which will be heavily driven by the integration of new skincare products.
• The company will maintain its books on an accrual basis.
9.2 Financial Highlights
• Through direct-to-consumer sales, the Company will achieve contribution margins of 70%.
• For wholesale distribution, the business will generate gross profits of 50%.
9.3 Sensitivity Analysis
During a severe economic recession, the demand for premium skincare products may decline slightly. For many users, these products are considered to be an absolute necessity. The significant contribution margin generated from both direct-to-consumer sales as well as wholesale distribution will fully support the operations of Deutsch SL Group while ensuring that the business can remain profitable.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
SWOT Analysis
Strengths
• The Company is taking a unique approach to its marketing by targeting both men and women for use of its skincare line.
• A Founder and CEO, Matthew Deutsch, that has extensive experience with the development of proprietary personal care products.
• The Company can easily scale into international markets by establishing ongoing relationships with trade brokers.
• The Company can bring products under this age brand name to market with minimal lead time.
Weaknesses
• Substantial operational complexities given that these products must undergo substantial testing.
• Significant cost related to marketing.
Opportunities
• Expansion of the Company’s inventory to include a wide range of hair care products.
• Acquisition of celebrity endorsement will substantially increase for invisibility.
Threats
• Inflation could cause the acquisition of input inventories to increase significantly.
• Skincare product distribution is an extremely competitive industry.
Risk Analysis
Development Risk – Low
The initial formulations that will be used in the MDLD Healing Skincare branded product line have already been developed. The primary matter that needs to be addressed before establishing its marketing campaigns is the acquisition of the private investment sought in this document.
Financing Risk – Moderate
The $150,000 a capital required will be principal used for the acquisition of initial inventories as well as the initial marketing operations. Given the competition in this field, there is a slightly higher degree of risk as associated with its investment. These risks will be tempered given the substantial contribution margins generated from each skincare product sale.
Marketing Risk – Moderate
The Company will use the marketing strategies in chapter seven in order to drive substantial traffic to the company of Shopify enable website. This will be conducted in tandem with implementing numerous other marketing strategies that will create significant brand awareness.
Management Risk – Low
Matthew Deutsch is a highly experienced personal care products entrepreneur, and he will be able to effectively launch the operations of Deutsch SL Group and the MDLD Healing Skincare branded product line to profitability.
Valuation Risk – Low
The valuation risk is offset by:
• The Company can divest MDLD Healing Skincare branded skincare products domestically and internationally.
• The substantial profitability of the business will allow for reinvestment into expanded marketing operations.
• The business can bring complementary products to the market with minimal lead time.
Exit Risk – Low
Once a business achieves the size showcase in this document, there would be a substantial demand among other personal care product distribution business businesses to acquire the operations of the Company. These efforts will be conducted in tandem with a qualified investment bank.