DEPARTMENT OF BUSINESS ADMINISTRATION

SUBJECT: Entrepreneurship
Project
Topic Name: Business Plan
Instructor name:
Sr. Tanveer Abbas

Submitted by:
Azin Zahra

(2016-BBA-008)

Syeda Zoya Maqsood

(2016-BBA-0)

Saba Alvi

(2016-BBA-0)

Submission date:
10th -December- 2019

Fatima Jinnah Women University Rawalpindi

ENTREPRENEURSHIP

ACKNOWLEDGEMENT
First of all we would like to thank the ALLAH ALMIGHTY for giving us strength and
attitude to complete this assignment with in due time. We deeply indebted to our course
teacher Sr. Tanveer Abbas we are also express the depth of our appreciation for our
honorable course teacher for his suggestions and guidelines which helped us in completing
this assignment. It was great experience for us to work and study.

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DEDICATION
We are dedicating our assignment of ENTREPRENEURSHIP to our respected instructor Sr.
Tanveer Abbas for his efforts to transfer essence of his experience and knowledge to his
students.

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Table of Contents
1. Executive summary of SFK Herbal Limited: ............................................................................. 6
2. Industrial analysis:........................................................................................................................ 6
2.1. Porter’s Five Forces Analysis: ............................................................................................. 6
Rivalry among competing firms .................................................................................................. 6
Potential Entry of New Competitors ........................................................................................... 6
Potential Development of Substitute Products ........................................................................... 7
Bargaining Power of Suppliers .................................................................................................... 7
Bargaining Power of Consumers ................................................................................................. 7
2.2. Industry size and growth:..................................................................................................... 8
2.3. Nature of participants in cosmetic industry of Pakistan: .................................................. 8
2.4. Key success factors: .............................................................................................................. 8
Attract the Target Market ........................................................................................................... 9
Select Multichannel Distribution ................................................................................................. 9
Monitor Industry Trends ............................................................................................................. 9
Adhere to Federal Regulations .................................................................................................... 9
2.5. Industry trend: .................................................................................................................... 10
2.6. Long-term prospects:.......................................................................................................... 10
3. Company description:................................................................................................................. 11
3.1. Mission: ................................................................................................................................ 11
3.2. Vision: .................................................................................................................................. 11
3.3. Products: .............................................................................................................................. 11
3.4. Current status: .................................................................................................................... 11
3.5. Legal status and ownership:............................................................................................... 12
4. Market analysis: .......................................................................................................................... 12
4.1. Target market: .................................................................................................................... 12
4.2. Market segmentation: ......................................................................................................... 12
4.3. Potential customers:............................................................................................................ 12
4.4. Competitor analysis: ........................................................................................................... 12
4.5. Market evaluation ............................................................................................................... 13
5. The economics of the business: .................................................................................................. 13
5.1. Start-up cost: ....................................................................................................................... 13
5.2. Fixed and variable cost:...................................................................................................... 13
5.3. Situational audit: ................................................................................................................. 13
Strengths ...................................................................................................................................... 13
Weakness ..................................................................................................................................... 14

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Threats ......................................................................................................................................... 14
Opportunities............................................................................................................................... 14
6. Marketing plan: .......................................................................................................................... 14
6.1. Marketing strategies: .......................................................................................................... 14
Advertising................................................................................................................................... 14
Pricing strategies ......................................................................................................................... 14
Distribution strategy ................................................................................................................... 15
Equipment needed ...................................................................................................................... 15
6.2. Estimates achieved: ............................................................................................................. 15
6.3. Sales tactics:......................................................................................................................... 16
7. Proprietary status of SFK Herbal limited: ............................................................................... 16
References:........................................................................................................................................... 17

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1. Executive summary of SFK Herbal Limited:

2. Industrial analysis:
2.1. Porter’s Five Forces Analysis:
Every industry has its peculiarities, which are sometimes hard to understand. Thus, in order to
better understand the context in which this or that the company operates, it is crucial to use
Michael Porter’s Five-Forces Model. There are following five forces that influence the
cosmetic industry of Pakistan. Moreover will influence our organization to influence;

Rivalry among competing firms

o Number of competing firms
o Product differences
o Fixed costs/Value added
o Industry growth
o Switching costs

The number of competing firms matters a lot. The difference of cosmetic is wide, so there is
an opportunity for rivals to sell different products. The industry growth influences the
development of competition. If fixed costs are high and switching costs are low, they increase
the rivalry in the industry. But our company is launching to products on the basis of
differentiation which are Scrub soup and Herbal Izoo freshener which unique products in the
cosmetic industry of Pakistan. So, there is chance that our company will face less difficulties
in term of competition.

Potential Entry of New Competitors

o Barriers to entry (rights)
o Economies of scale
o Capital requirements
o Brand equity
o Switching costs

If there are no considerable barriers to enter, there may be many new entrants (Berger, 11). For
the cosmetic industry, the most important barriers are the exclusive rights and economies of
scale. However, this industry has large capital requirements since the differentiation of

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products that are sold in it. Moreover, cosmetic retail is more widespread as chain stores or
exclusive brand retailers, which also make up chains.

Potential Development of Substitute Products

o Ease of substitution
o Buyer inclination to substitute
o Buyer switching costs
o Relative price performance of substitute
o Quality depreciation

For the cosmetic industry the crucial issue is the way for buyers to substitute and their willing
to do this. For the retailers it is better to sell unique products, for example to sell one cosmetic
brand. The less valuable is the change of quality, due to the fact that retailer cannot influence
the quality of products they sell.

Bargaining Power of Suppliers

o Supplier concentration to firm concentration ratio
o Strength of distribution channel
o Impact of inputs on cost or differentiation
o Switching costs of firms in the industry
o Differentiation of inputs

Suppliers tend to have very little power in the retail industry. However, for the cosmetics the
exclusive suppliers matter a lot and influence the market. They can make retailers have large
inputs on the scale of orders. If the supplier is exclusive, the switching costs are very high. As
for the cosmetic retail, the inputs are slightly differentiated, so this variable is less crucial.

Bargaining Power of Consumers

o Buyer information
o Substitutes available
o Brand identity
o Buyer volume
o Price sensitivity

As for cosmetics retail, “buyers are fragmented; no buyer has any particular influence on the
product or price” (Porter’s Five Forces:A Model For Industry Analysis, para. 18). Still, buyer
has to be provided with the information and has a choice of substitutes. Some buyers tend to

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choose only one brand. Buyer volume and price sensitivity are less important because cosmetic
is what people tend to buy all the time, and prices do not react on the slightest changes. (David,
2019)

2.2. Industry size and growth:

The beauty and personal care category is considered inflation resistant. This is primarily
because the key drivers of shopper conversion in this category are perceived product
effectiveness, the quality of the ingredients and the emotional need that these products fulfil,
rather than price alone. This explains why, in spite of rising global inflationary pressures, the
category registers year-on-year growth. In 2017, the beauty and personal care market size was
valued at $455.3 billion with expected estimates of a 5.9% compound annual growth rate
(CAGR) until 2025. The size of the pie has increased by almost 19% in the last seven years
from 2011, with the emerging markets of the Asia Pacific region leading the way. (Shaikh,
2018)

2.3. Nature of participants in cosmetic industry of Pakistan:

Traditionally, Pakistan’s beauty market has largely been dominated by global conglomerates –
Colgate Palmolive, Johnson & Johnson, P&G and Unilever, with L’Oreal and Reckitt
Benckiser (RB) relatively late entrants. Holding their own against these giants, albeit with a
comparatively smaller, yet loyal consumer base, are several heritage brands, including Hashmi,
Kala Kola, Medora, Saeed Ghani and Tibet to name a few. An interesting development on the
competitive landscape has been the launch of a host of homegrown personal care and beauty
brands. J. Cosmetics and Fragrances is perhaps the most noteworthy, with offerings providing
the trifecta of functionality, quality and variety that until now was exclusive to the global
brands. (2019)

2.4. Key success factors:

These factors are variable, and when they're not factored in, your business may see a reduction
in profits.

Use Quality Ingredients

Quality ingredients can ensure the integrity of your cosmetics brand, whether you offer an
organic line or not. Customers look for ingredients that ensure their cosmetics, such as eye
wear, are long lasting and won't disappear by the end of the day. Customers also search for
products that protect and improve their skin. If customers discover that your cosmetics lack

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quality, they may switch to another brand. Ensuring the quality of your ingredients means you
need to spend time in the lab working with developers to create formulations that fit your
budget and brand. So, SFK Herbal limited is offering both organic and skin protecting products
for their consumers.

Attract the Target Market

You can have a perfectly packaged cosmetics line with a wide range of items to choose from a
reasonable price-points, but if you lack the ability to attract your target market, your business
is doomed. Cosmetic companies must take into account the strategies and tactics they use to
gain entry into the market, maintain their positions and attract larger market shares. Market
activities can range from setting up a pop-up store in a busy urban neighborhood to launching
online makeup tutorials with customers showing looks they achieve with your products. Our
company is attracting their customers through social media and word of mouth.

Select Multichannel Distribution

Cosmetics products are available for sale in a variety of locations, including through direct
selling home parties, catalogs, online stores, department stores, boutiques and discount
retailers. As a cosmetics entrepreneur, how and where your customers get their cosmetics will
reflect your company's brand and culture. If your aim is high-end with a lofty price tag, you
might avoid discount chains whereas you should embrace discount chains if your goal is to
provide inexpensive cosmetic choices. By selecting a multi-channel distribution system, you
can increase visibility of your cosmetics brand. SFK Herbal limited choose the retail channel
and personal channel for distribution.

Monitor Industry Trends

Keeping up with trends and reports can help you carve a niche for your business, stay ahead of
the competition and deliver products that customers need and want. So, SFK Herbal limited
offering the products according to their customer’s needs.

Adhere to Federal Regulations

While the FDA does not approve cosmetics before they hit the market, you must follow the
Federal Food, Drug and Cosmetic Act and the Fair Packaging and Labeling Act, which affect
cosmetics' safety and marketing. Several ingredients exist that you cannot include in your
cosmetics, such as bithionol, mercury compounds, vinyl chloride (in aerosol cosmetics),
halogenated salicylanilide, zirconium (in aerosol cosmetics) or chlorofluorocarbon propellants.

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Moreover, SFK Herbal limited is following the all law and regulations prevailing in the
Pakistan. (Brookins, 2019)

2.5. Industry trend:

As is the case with many ‘under-regulated, high value’ industries in Pakistan (think real estate),
the lack of documentation, coupled with the existence of huge informal and grey segments,
make it impossible to determine the real worth of the beauty and personal care market. As per
Euro monitor and some scattered commissioned reports by market research companies, the
ballpark figure of the worth of the domestic market is $1.7 billion, with an annual growth rate
somewhere around the 15% mark. The personal care companies and industry view that this
figure is an underestimation, for the simple reason that formal production and imports only
account for approximately 20% of the actual business. Which show that this industry has great
potential and increasing trend in future. (Subohi, 2015)

2.6. Long-term prospects:

While ‘clean eating’ and ‘conscious fashion’ were the buzz phrases of last year, it’s the ‘clean
beauty’ movement that is causing a stir in 2018. Around the world and in Pakistan, the talk is
all about going back to natural ingredients to solve skin and hair problems (the two largest
segments within personal care in terms of consumer spending). Haq explains that, “Pakistani
women are looking for solutions with natural goodness because they have grown up with
todkas about how herbs boost beauty. The modern consumer wants a specific benefit (fairness,
for example) through natural elements.” This explains the recent launch of Fair & Lovely
Herbal, which was introduced as a variant for people who wanted a natural solution to attain
flawless fairness.

In line with the rising demand for naturals is the expanding niche of ‘halal beauty’, which has
been identified as a significant growth driver for global personal care companies. With close
to 300 million middle-class Muslim families worldwide, projected to grow to 900 million
within a few years’ time, the interest in halal-certified products is understandable. However,
according to Dinar Standard, a growth strategy research and advisory firm focusing on the
Organization of Islamic Cooperation countries, the demand is also stemming from millions of
health-conscious, non-Muslim consumers who are looking for a holistic approach to realize
their beauty and wellbeing goals. This explains why between 2013 and 2016, halal product
launches accounted for 2.5% of all launches in the global beauty and personal care category,

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while in the Asia Pacific region, with a predominantly Muslim population, the percentage goes
up to 72%. In Pakistan, Masarrat Misbah Makeup, Odho Cosmetics and Luscious Cosmetics
are three homegrown halal makeup options for consumers. However, claiming ‘halal-certified’
is complicated for the simple reason that every country seems to have a different set of
parameters. For Pakistan, it is the guidelines provided by the Pakistan National Accreditation
Council (PNAC), which is a member of the International Accreditation Forum (IAF) along
with more than 70 countries. With giants such as L’Oreal and Unilever having already stepped
up their game to acquire halal certifications for their personal care and beauty brands, the battle
to cash in on halal beauty will only intensify.

So, because of this trend our organization is coming with herbal products with skin solutions
to provide consumers with more effective results.

3. Company description:
SFK Herbal private limited is a cosmetic company. Which is found in Sep 10, 2019. Its main
focus is on organic beauty products production. As Pakistani market is going towards the
natural products usage to protect skin and use products with good effects for skin. So, this SFK
Herbal limited is come with organic solution of skin in the form of two beauty products.

3.1. Mission:
To provide herbal skin care products on the basis of consumers satisfaction.

3.2. Vision:
To be the leading herbal skin care organization of the Pakistan.

3.3. Products:
SFK Herbal limited is providing herbal skin care products which are following;

o Herbal scrub soup

o Herbal IZOO freshener

3.4. Current status:

SFK Herbal limited current status is not good but as the Pakistani market has more potential
for organic products. So, it is chance of to become one of the leading beauty company of the
Pakistan.

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3.5. Legal status and ownership:

SFK is private company with three partners, those are also the directors of the company.
Moreover, this company is registered with SECP of the Pakistan.

o Azin Zahra = Finace manager of SFK

o Syeda Zoya maqsood = Marketing manager of the SFK
o Saba Alvi = Human resource manager of SFK

4. Market analysis:
4.1. Target market:
The market will consist mainly of basically anyone who requires soap and face freshener for
this includes; individuals, homes, institutions, businesses, and industries. SFK Herbal limited
potential customers comprise of people who have an eye for quality and pocket-friendly
products and also have cleanliness in mind. Considering our target market, we are looking at
meeting the needs of over ten thousand people. Although it’s new products, we expect high
patronage and acceptance right from its inception because the product is distinctive, and is
priced attractively; below prevailing market prices. We expect to win our customers gradually
from the existing providers of similar products over time with attractive prices, packaging, and
customized services. This presents us with a wide range of clients to cater for.

4.2. Market segmentation:

SFK Herbal limited targets the middle class females those are conscious for their skin for
IZOO freshener and middle class people those are conscious for their skin care for herbal
scrub soup.

4.3. Potential customers:

The potential customers of our products are health conscious individuals who are ready to
practice hygiene of all forms and not only enjoy our products but also be ready to pay for it as
well. Our patrons are also people who do not only want the product we offer but also want
value for their money and whose buying decisions are based on quality. Our products are
distinctive and unique from those offered on the market. Each product is made from scratch by
undertaking the production without compromising the quality of the product.

4.4. Competitor analysis:

Indirectly, producers of other soaps and herbal face freshener have the potential of affecting
the business. Basically, our attractive prices, packaging, and customized services are our main

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advantage. Additionally, the accessibility of our products through marketing links and the fact
that the products are homemade produced will be placed ahead of our competitors. Quality
services will be offered to create a niche and therefore making it highly difficult for any stiff
competition. To sustain our competitive advantage, we shall continue to focus on the four
generic building block of competitive advantage (efficiency, quality, innovation, and clients’
responsiveness) to improve distinctive competencies that contribute to super performance.

4.5. Market evaluation

The market evaluation technique will basically entail personal interaction to receive patron’s
opinions, complaints, and recommendation on price, packaging and how the service delivery
can be tailored to meet their needs. Periodic administration of questionnaires to sample clients’
opinion to aid in ascertaining their changing preference and needs and respond to them
accordingly.

5. The economics of the business:

5.1. Start-up cost:
Since this will be a start business, it will be financed using savings & additional funds will be
borrowed from family friends. Additionally, the summary of the business plan will be used to
secure a 5-year $100000 loan from the Bank. The same amount from the loan will be used to
purchase the tools and equipment. As per the business plan, the loan will be repaid at an
interest rate of 10% per month. Money obtained from savings as well as money borrowed
from friends family will be used to cover working capital costs.

5.2. Fixed and variable cost:

As both products are homemade. So, there is no fixed cost now but might be in future when
the business will increased in its market shares and the variable cost includes the all purchase
to form products.

5.3. Situational audit:

We conducted a survey on our target market to find out the strengths, weakness the
opportunities and threats in the business. These are some of the results of the research:
Strengths
o The strategic location of production (homemade)
o Access to sales points
o Direct interaction with customers/clients

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o Competitive advantage in terms of price, quality, and value.

o Closeness to our market.
Weakness
o Low degree of reputation
Threats
o Competition as a result of market growth may reduce sales.
o Costly new regulatory system.
Opportunities
o Increasing desire to practice good hygiene and live healthily.
o Market’s ability to grow rapidly because of the strong increase in market demand.

6. Marketing plan:
We plan to pursue personal selling techniques and in the near future advertising and publicity
to market our business and its product. Another form of promotion which will be useful in the
early stages of the business is sales promotion. A number of sales promotion activities would
be undertaken to market the homemade herbal scrub soaps and herbal IZOO face fresheners.
A one-to-one interaction between the customer and the seller will be used to reach potential
customers.

6.1. Marketing strategies:

Advertising
We intend to promote our products through posters, social media, and flyers. As the business
grows, billboard adverts will also be used. Advertising done in this manner can go a long way
in helping create a competitive position and improve the worth of our homemade products.
Pricing strategies
Appropriate pricing strategies need to be adopted in order to break even and eventually make
profits; we will adopt a number of pricing techniques over time to ensure that the profit-making
motive is met. Our business will adopt penetration pricing in the initial stages of production.
This pricing technique will charge a somewhat low initial entry price, than the normal market
price, to woo new buyers. We expect customers will opt to buy our products because of their
relatively lower price. This pricing technique will capture a large market. Differential pricing
will be another pricing method that will be adopted.

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Distribution strategy
We will strive to have a well-coordinated distribution system that will ensure that the gap
between the business and its clients are bridged. Steps will be taken to ensure that the business
outlets are strategically located to ensure that the products reach the target market.
Equipment needed
For soup:
o Silicone Spoons & Spatulas
o Containers for Mixing the Soap Batter
o Scale
o Containers for Measuring and Mixing Lye
o Water container
o Immersion Blender
o Thermometer
o Soap Molds
o Gloves & Goggles. Etc.
For face freshener:
o Aloe Vera plants
o Glycerin
o Ark-e-Gulab
o Vitamins B&C
o Silicone Spoons & Spatulas
o Containers for Mixing the Soap Batter
o Containers for Measuring and Mixing Lye
o Water container
o Immersion Blender
o Thermometer
o Gloves & Goggles. Etc.

6.2. Estimates achieved:

The business has achieved the following;
o Secured a production space
o Attracted and maintained a customer base
o Employed 4 key staff to assist in production and marketing
o Started production and distribution

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6.3. Sales tactics:

SFK Herbal limited is achieving its sales goals through direct selling their products to its
users and also using the retail stores to sell products.

7. Proprietary status of SFK Herbal limited:

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References:
Brookins. (2019). Critical Success Factors in the Cosmetic Industry. Retrieved from Chron:
https://smallbusiness.chron.com/critical-success-factors-cosmetic-industry-
12747.html
David. (2019). Porter’s Five Forces Model for Cosmetics Industry Analysis Example.
Retrieved from AvyPanda: https://ivypanda.com/essays/implementation-of-the-
porters-five-forces-model-on-the-cosmetic-retail-industry/
Pakistan Skin Care. (2019). Retrieved from Market Resaerch.com:
https://www.marketresearch.com/seek/Skin-Care-Pakistan/1554/1237/1.html
Shaikh, A. (2018). The Business of Beauty. Retrieved from AURORA:
https://aurora.dawn.com/news/1143226
Subohi. (2015). Booming Cosmetic Market. Retrieved from DAWN:
https://www.dawn.com/news/1214053/booming-cosmetics-market

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