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Be U
BUSINESS PLAN FEASIBILITY ANALYSIS &

CIARA HOFFERTH, BIANCA ROBLES

Be U P.O. Box 992 Gilbert, AZ 85234 1 (480) 326-9050

[email protected]

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I. TABLE OF CONTENTS I. Table of Contents II. Mission Statement III. IV. Executive Summary General Company Description I. The Convenience VI. Marketing Plan I. Profile of Customer II. Market Research III. IV. VII. VIII. IX. Competition Pricing Sales Forecast Management and Organization Financial Projections I. Balance Sheet II. Income Statement III. Cash Flow Statements X. Cited Works

V. Our Product

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II. MISSION STATEMENT

Be U seeks to prioritize innovation and product development in airbrush makeup. Our goal is to increase our customers appreciation for the science, technology and creative outlet cosmetics that are offered to them.

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III. EXECUTIVE SUMMARY

Women appreciate the science, technology and creative outlet cosmetics offer them.
- Ciara Hofferth Our product is an airbrush designed to make applying foundation a quick easy task for busy women. Our main customers will be women, with a target age between 18 and 32, as well as professional makeup artists and other individuals who express an interest in makeup. We expect a rather quick rise in profits once initial marketing has taken effect. The promotion of our product will be possible through several ways, including brochures, a website, and promotions featured by makeup bloggers. Due to the makeup industry being a roughly 10 billion dollar industry, we are certain that Be U will remain strong, as a result of high demands for foundation applicators.

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IV. GENERAL COMPANY DESCRIPTION

Our main plan is to be the leading commercial airbrush makeup company that remains unintimidating to the masses but respected and used by industry professionals. The objective is to reach retail presentence in stores like Sephora and Ulta. We also hope to establish lifetime customers with great product and customer service. Our success in outlets would such as these encourage us to expand our product range. Be Us applicator is marketed to the lively young woman who is willing to try the best next product. Since our products life cycle is expected to be short, our solution is to provide a variety of sizes instead of just one. Our company's leading strength is its buzz worthy dispersion technology. Be U is the first in its to combine the familiar aerosol and airbrush application. Backed up with its managerial experience in cosmetic marketing through social media and great customer service, Be U has a strong foundation. Competitively online distribution allows Be U to keep a competitive price point and be able to properly manage its interaction with customers. Be U will be organized as a limited liability company (LLC) due it being the most advantageous for the structure of our company. Since there would be fewer restrictions on sharing profit within this entity, we will be allowed to decide who has earned what percentage of profit as we see fit.

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V. OUR PRODUCT
Putting the U in Beautiful

No longer are the days that a flawless face is reserved for special occasions. Be U simplified the technology of the airbrush machine with the design and convenience by providing its customers with an aerosol applicator. This reinvented airbrush foundation application does not compromise the soft focus diffusion and provides buildable coverage. Whats revolutionary about this product is its patent engineering technology that allows you to maintain the foundation youve been using without clogging the dispersion system. THE CONVENIENCE Be U will not require a particular kind of liquid foundation to be inserted. Since there is such an inconsistency with womens skin behavior, we want our customers to be able to customize their own make up kit, rather than sticking entirely to just one brand. Once again, our plan is not to establish our own make up, but to create a utility that

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allows that our customers to handle her beauty in her own way without having to go over her budget. Since our products life cycle is expected to be short, our solution is to provide a variety of sizes instead of just one. Not to mention, in case our customers decide to go on a trip, they wont have to carry around a whole machine, as they will only have a small piece of equipment. Overall, we have three benefits of our product: affordable, customizable, and travel-size. SIZE/PRICE CHART Take Me With U 2 fl oz Just Right 4 fl oz I Need U 6 fl oz $100 $85 $60

VI. MARKETING PLAN

PROFILE
OF

TARGET CUSTOMER

100% women, though this product welcomes anyone willing to use it Median age 24, with a range from 18-32 Likely to be working in the Cosmetology field Interested in social media and beauty trends Likely to live in a heavily concentrated urban area Likely to be graduated from college Average individual income ranging from $26,000 $33,000 Famous beauty bloggers like users Fashionista804 and Carlibel55 are primary examples

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of who would purchase Be U. MARKET RESEARCH According to website ReportLinker, the global makeup industry generated roughly $35 billion in 2010. They also recorded yearly growth in excess of 4% for the four previous years, as reported by MarketLine. Face cosmetics represented the leading market segment, with over $12 billion in sales revenue in 2010 and accounting for more than 35% of overall market value, reported the website. They also predict that the market growth is expected to remain about the same until 2015; at this year, ReportLinker believes the market should be valued at $42 billion. COMPETITION Companies Dior and Temptu are well known and quite popular throughout the market of beauty, specializing in airbrush make up like Be U. As of last year, Temptu continues being the most popular selection for airbrush makeup, followed by French company, Christian Dior. On the site of Makeup Alley, only 57% of 26 reviews said they would not purchase Temptus Air Pods again. The following below are two of the 1/5 star reviews:

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Had this unit for a year. Messy app gets in my hair.

Also, unit takes up too much counter space and I've had several pods clog. Too much trouble switching pods, m/u, blush, highlighter.
After spending a fortune you realize that this system

doesn't work at all. I find it impossible to spray my face all over evenly without missing somewhere! Also the actual foundation is too greasy/shiny for my liking and the shades aren't exactly brilliant either! Save your money and get a bobbi brown foundation!
SWOT ANALYSIS WEAKNESSES

STRENGTHS

Management experience Customer service skills Technological skills Considerably product

Dependent on main competitive advantage No specific location to order online

innovative because customers have

OPPORTUNITIES
Add possible complementary products Could co-brand with makeup manufacturers

THREATS
Airbrush makeup may decrease in popularity Competitors have superior access to many distribution channels

PRICING

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Both set their airbrush makeup kit at an average price of $120, but this includes both the machine and the foundation it provides. In contrast, Be U will only be providing a miniature spray gun, allowing the customers freely to choose their own foundation to apply only at the minimum cost of $60. Compared to our competitors, it may seem relatively cheap, however, it is nearly half of what Dior and Temptu sell because the product will not include a supplied foundation. With this in mind, any skeptical thoughts of our price should be diminished. Overall, we have made our decisions based on duly noted market comparisons and adjusting our size of packaging.

CRITICAL RISK FACTORS

1. UNFAMILIARITY Be U is a simple start-up business. Many people might be skeptical of the product and service we will provide due to our unfamiliar brand. 2. SMALL
AND

LIMITED MANAGEMENT

Our company will be almost entirely dependent on the management team. The loss of any of these members could have a material adverse effect on Be U. 3. ECONOMIC CONDITIONS The financial success of the Be U may be sensitive to ultimate changes in general economic conditions in the United States. Factors such as recession, inflation, and interest rates, may reduce demand in the marketplace for the companys product.

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PROMOTION Our goal is to create a business website of high quality; it would be here where customers would order the product. Although customers will have to order online, we will take the action to distribute brochures throughout our selected distribution channels. Examples of the channels that fit our product would be a dermatologists office, a local beauty salon, and nail spas. Since the majority of these shops customers considerably have an interest in cosmetics, we have selected these to be our primary channels. As for getting our message out through the media, we will set up a blog on a website called Tumblr. This site allows its users to subscribe to blogs according to their special interests by categorizing every blog in sections like Entertainment, Video Games, etc. ours would be under Beauty. In order to achieve publicity, we will contact Youtube beauty bloggers, particularly those with at least 10,000 subscribers, via email so that they may promote our product through a featured video.

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VIII. SALES FORECAST

BE US SALES FORECAST
SALES & REVENUE COST
OF

YEAR 1 2014

YEAR 2 2015

YEAR 3 2016

$16,333.34 ($1,500) $14,833.34

NOTE: THIS

$30,626.25 ($3,000) $27,626.25

$40,835 (5250) $35,585

GOODS

SOLD NET INCOME

WHOLE TABLE IS BASED ON ESTIMATION.

For the first year, we expect at least 200 people to purchase our product. Taking the average selling price, $81.67, we multiplied these two together and came up with the estimated sales and revenue. In 2015, were thinking that the number of customers will bounce up to 375, increasing the revenue once more. In the last projected year, were pushing it to 500 customers. As for the cost of goods sold, we considered purchasing 250 aerosol bottles at the cost of $6 each. With the expectation of increased sales throughout the next couple of years, we doubled the COGS result for Year 2, as for the final; we took half of that last estimate, and added it again.

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IX.

MANAGEMENT AND ORGANIZATION

Board of Directors Bianca and Ciara

Management Pamela

Consultants

Accountant

Attorney

Insurance Agent

Banker

BIANCA ROBLES - President

Robles embarked her first trip out of the country to visit China as an undergraduate business student the summer of 2013. With her heart moved by the amount of effort towards social media, she noticed a pattern of several businesses using charity and sympathy as their main selling point. Robles then realized that compassion could not be the only moving force towards a successful business.

CIARA HOFFERTH - National Sales Director

As an undergraduate student at ASUs W.P Carey School of Business, Ciara wishes to continue her career in customer service. With this goal set in mind, she made a commitment to assisting Robles in market research. Together, Hofferth and Robles maintain a professional friendship, discussing and reviews on the latest trends in the cosmetic industry, and discovered a great need for a shift in airbrush technology.

PAMELA MARY Retail Sales Manager

Page 14 of 18 Always having a strong interest in cosmetics, Pam has taken the opportunity to join Robles and Hofferth in their adventure of starting a business. With her experience as an assistant manager in retail, she will try her best to initiate the progression of Be U.

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IX. FINANCIAL PROJECTIONS

START-UP EXPENSES &
ITEM Start-up Expenses Accountant Fees Legal Fees Insurance Marketing Materials Website Brochures Advertisement Web fees Product Testing Income Buiding Rent Utilities Travel Research and Development Other Total Start-Up Expenses Start-Up Assets Start up Cash Equipment Aerosol bottles Other Rent Deposit 500 $3,000.00 $1,200.00 $1,500.00 $600.00 $25,000.00 $26,347.50 $1,000.00 $900.00 1 250 $500.00 $437.50 $750.00 $200.00 $2,000.00 $14,960.00 $1,500.00 $300.00 $2,500.00 $500.00 $700.00 $100.00
CAPITALIZATION

QTY

COST

Page 16 of 18 Total Start-up Expenses $31,300.00

Total Capital Needed

$57,647.50

BREAK-EVEN ANALYSIS PROJECTED CASH FLOW STATEMENT PROJECTED BALANCE SHEET SUMMARY PROJECTED INCOME STATEMENT

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XI.

CITED WORKS

Browne, Clayton. "How to Market Cosmetics." Chron. Demand Media, n.d. Web. 17 Dec. 2013. Chemists Corner. Start Up Costs for a Cosmetic Business N.p, n.d. Web. 12 Dec. 2013. <http://chemistscorner.com/what-are-the-startup-costsfor-a-cosmetic-business/> Industry Report, ed. "Make-Up Industry: Market Research Reports, Statistics and Analysis." ReporterLinker. N.p., 2013. Web. 10 Dec. 2013. Mulliez, Christian. "L'Oreal Finance: Half-year Financial Report." Loreal. Loreal, 29 Aug. 2013. Web. 10 Dec. 2013

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TEMPTU. "Airbrush System." MakeUp Alley. N.p., n.d. Web. 10 Dec. 2013.

<http://www.makeupalley.com/product/showreview.asp/ItemId=1 22989/ Airbrush-System/TEMPTU/Misc-Beauty-Tools.>. U.S. Department of Commerce. "State and County Quick Facts." U.S. Census. United States Government, 2010. Web. 10 Dec. 2013