The Business Plan
Verdure is an exciting emerging brand of luxury environmentally friendly sunglasses, bringing you the most cutting edge and innovative styles. Our passion for the environment inspired us to create this unique way of producing eyewear mainly aimed at women aged from 25-‐35 but will be unisex and for all ages. The business opportunity we see ourselves in is the luxury market. We offer high quality, hand crafted frames made from all recyclable resources, what most eyewear companies don’t, even our packaging. We are sourcing ways of making everything as eco-‐friendly as possible but still keeping that fine high quality feel. Eliminating the aspects of arms and putting a completely new spin to sunglasses are the chains and weights to balance on the face giving it a refreshing touch. The originality and craftsmanship of our eyewear where we create beautiful shapes and styles that would suit any face shape is what gives us that level of luxury, targeted at high end customers selling in London’s big department stores, i.e. Selfridges, Harrods and Liberty of London and hoping to expand into our own boutique. Financial Projections Our prices range from £150 -‐ £350. The average cost of our sunglasses is £240. If we sold 6/7 pairs of sunglasses a week we would sell 360 pairs annually, this will make us a profit of £86,400. The cost of the materials for 360 pairs would be £867.60. The cost of the materials for packaging would be £2953.44. All together the expenses would come to £3821.04 although this is a variable cost. Other costs include labour £4160.00, distribution £2540.00, advertising £400.00 and copyright & patents £269.50. This all comes to £7369.50. So expenses altogether comes to £11190.54 So we would make a profit potential of £75209.46.
Verdure – Lush Green Vegetation. Arriving from the French word ‘Verd’ meaning Green, we chose the name Verdure to show our enthusiasm for the environment and our brand ethos – being green! We are a brand new company, striving for an environmentally friendly, fashionable product. We have come together as 5 individuals, all with the same passion for the environment. The market we are heading into is, we believe, the perfect market to be setting up a new brand. Eco friendly and stylish eyewear is difficult to find, we are in such a niche for a product that we believe is highly desired by our future customers. We will be launching this brand straight in to the deep end. Being a high-‐end luxury brand, we aim to being selling in the big London department stores, i.e. Selfridge’s, Harrod’s and Liberty of London. We are hoping to expand as soon as possible to open our own boutique in London. We are a brand accessible to all, whilst we aim our range at women aged from 25-‐35, our designs will be unisex and for all ages. Our customer is a full time worker in possibly a creative area such as graphic design or film; they are the new generation that is thinking more about the world and their own personal effect on it. Our customer values fashion and is the kind of person to spend a reasonable to high amount of money on a few items as appose to the same amount of money on lots of cheaper items to only lay around their flat. Our customer is considered and unique, so will love the idea of being able to customize his or her own pair of Verdures. Verdure, like our customers, is unique; to come across a brand that incorporate style with being environmentally friendly, can be difficult. Not many brands view environmental issues as a high priority. Linda Farrow is one of our main competitors in terms of style but when asked about environmentally friendly eyewear their Retail Manager said ‘I don’t think we have thought about it yet, I guess the reason why is because we’re still really young.” Born in the 1970s and reborn in 2003, Linda Farrow is our main competitor. With a boutique store on mount street, London and selling in Selfridges LF are a mirror image of where our brand our heading.
Business opportunity Verdure’s USP: We are an eco friendly brand using Arborform, a material that hasn’t yet been used before on eyewear. Our sunglasses use chains and weights on our designs instead of arms making our eyewear unique and different to other eyewear brands. Verdure is striving for an environmentally friendly, fashionable product. We believe the sunglasses industry are far behind the technological advances that make it possible to have eco friendly products. By making our products out of recycled plastics, we have come up with ground breaking and innovative designs. Verdure is at an advantage because there aren’t many luxury/exclusive brands that are selling eco friendly sunglasses. Our eyewear also uses Arborform, which hasn’t yet been used before on eyewear, it is an eco-‐friendly material that can be injection-‐moulded into any shape. Arborform can stand intensely high heat and therefore will be perfect for hot weather. The cat eye shape tends to suit most face shapes and will be our main design for our sunglasses, the centre of the glasses will have the logo embedded into the frame work, making the design easily recognisable. The Chain and weight can be made from silver that is sustainably sourced and is regarded as highly ethical. Company strategy We are going to do this by word of mouth and gaining a strong social media presence mainly on Twitter, Facebook, Instagram as well as YouTube, Google plus. Because our brand is an exclusive, niche brand we want to keep that exclusivity by not overly promoting the brand e.g in magazines or television ads. We want the consumers of our brand to feel connected and associated to us, we will do this successfully because our brand has a strong ethos and brand identity. Which can be seen through the following: • • • • • •
Logo Products and services Packaging Visual Merchandising Promotion, Advertising and PR Website
Benefits and Needs To help us decide who our target market was, we decided to do an online survey. Below are a few images from our survey and mostly students answered our survey, we decided our target market would be aimed towards women 25 – 35. This is because they will have a steady income compared to students who wouldn’t want to spend more than £100 on sunglasses.
We see our sunglasses being sold in Selfridges and Liberty’s then in about 8 years time depending on the success of the brand we should be looking to create a tangible retail experience, by opening our first boutique store in London.
Organisation structure Verdure is a group of 5 creative individuals that have each initiated this brand into the concept that it has now become, each giving a different approach and taking on roles that will project it into something brilliantly tangible. Although there are individual sections, we have all helped to intermingle and given a joint effort on each development of Verdure.
Although Verdure has been a group effort, we have all needed to follow the lead and direction of others. The creative director will inform everyone within the organization of where Verdure should be heading and has a strong vision of the Verdure image. The Brand strategist has a clear understanding of Verdure as a pioneering company, how we want to present ourselves and will guide the marketing director and designers on what the customer wants. As the Marketing Director, Emma guides the designers with portraying whom the market is but looks for guidance from both the creative director and brand strategist. Funding Requirements Verdure is a luxury brand, and to be able to enter the market at such a high level, costing will be large. With the extra unique selling point of using sustainable, biodegradable and totally eco-‐friendly materials this enlarges the cost further. A solution to sourcing the funding for this venture, Verdure shall need a bank loan to cover the initial costs.
One off costs (PA) Advertising
£400.00
£269.50
£3823.20
£4160.00
£2540.00
Copyright & patents Variable costs (PA) Materials Labour Distribution Risk Management Plan The points below must be carried out in a dedicated manner in order for the business to be a success. If these provisions are undertaken, there shall be a much smaller risk to business failure. Financial markets • • • •
By ensuring enough capital is obtained to make all parts of this venture work sufficiently Costs should be kept to a minimum, yet the luxury appeal must be a higher priority A product that is very well designed; which provides a solution to customer needs and is of high demand; aesthetically and visually pleasing Providing a product that can be obtained by its targeted market. Considering price point and ability to provide stock as demand is made
Project failures
• • •
Using correct and indepth market research which shall inform the entire venture Ensuring the product is tried and tested. Quality assurance is considered. Branding needs to aimed correctly at the customer
Production issues • • •
By using well known, reliable companies that are ethically sound Staying UK based while the company is small shall help to keep control over production and quality assurance. Having a good, close relationship with all sections of the company, including production, shall help all elements to run smoothly.
Legal Copyrights and patents shall be made intricately as the business moves forward To avoid legal issues with customers, we must keep a close relationship with them and must provide them with the ability to contact us effortlessly. Accidents • •
•
By adhering to health and safety regulations
Verdure – Raising Capital/Finance Due to the uniqueness of the product offering, it is essential that Verdure raise finance to launch its luxury, eco-‐friendly sunglasses range. As the average price to create our sunglasses is £2.40, it is imperative we reach our target market effectively and swiftly. Despite Verdure’s USP surrounding individual designs, the ability to mass-‐produce to supply and service existing orders is essential. There are several ways that Verdure can raise finance to fulfil its aims of becoming the leading designer & manufacturer of sunglasses in the UK. These are listed below: Options: * Bank Finance * Seed Capital – Angel Investment (equity) * Seed Capital – Crowdfunding * Government Start Up Loan
* Family Loan * Personal Investment * Building Society Finance * Venture Capitalist/Private Equity investment As Verdure is a start-‐up business, with no current clients/customers, but a strong commercial team with established industry links, the most useful form of financing for the business would be Seed Capital (both Angel & Crowdfunding) and a Government Start Up loan. This is due to the level of financing available, with low payment terms and an excited and emotionally invested customer base already, through the Crowdfunding option. To create a successful start up business, we would need a total of £5,000. Please find the Pros & Cons of each financing option below to demonstrate how we arrived at our decision. Pros Bank Finance à Reliable source, large amounts available, low interest, no equity, comprehensive & experienced support Seed Capital – Angel Investment (equity) à Existing network & partnerships, fast turnaround on cash, existing industry knowledge, personal face to face service Seed Capital – Crowdfunding à emotional investment from high number of potential customers, unlimited funds, massive network of those who provided finance Government Start Up Loan à dedicated business coach/team, low interest rates, flexible repayment terms Family Loan à fast turnaround on finance, little/no equity, flexible repayment, friendly creditors, support from family network Building Society Finance à fast turnaround on finance, low interest rates, community feel, support for networking, long term relationship Venture Capitalist/Private Equity Investment à High levels of finance, strongest support network, access to existing industry relationships, quick turnaround on finance, unlimited opportunity for growth Cons Bank Finance à Slow turnaround on funding, high bureaucracy – focus is on previous credit history over previous & potential success, poor relevant industry contacts Seed Capital – Angel Investment (equity) à Equity must be sacrificed, you have someone to answer to, reporting is highly stressful as targets are monitored more closely
Seed Capital – Crowdfunding à Equity is with large number of people, these ‘investors’ provide no benefit or networking opportunities Government Start Up Loan à Slow turnaround on financing, high levels of bureaucracy, low levels of understanding for relevant industry Family Loan à Low levels of financing available, poor networking & coaching opportunities available, potential for emotional fallout with close family members Building Society Finance à Not as many opportunities on a national basis Venture Capitalist/Private Equity Investment à Equity must be sacrificed, you have someone to answer to, reporting is highly stressful as targets are monitored more closely