Entrepreneurship and New Venture Creation Herbal Cosmetics

Business Idea:
Herbal Cosmetics

Module Code: ADipBA06

Module Title: Entrepreneurship and New Venture Creation

Module Leader: Mr.Kelvin Ng (MBA, University of Cambridge)

Module Lecturer: Dr.Vedesh Chandra Lal Das

Coursework Type: Individual

Submitted To: RTE

Submission Date: 15TH April, Wednesday, 4 pm

Student Name Student Id
Rijul Karki NP02A170071

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Acknowledgement

In preparation of my assignment, I had to take the help and guidance of some

respected persons, who deserve my deepest gratitude. As the completion of this

assignment gave me much pleasure and also I got an opportunity to learn about
“Entrepreneurship” during my report research.

As our module leader Mr. Kelvin Ng (MBA, University of Cambridge) who had

design such module for the better educational purpose of students and our module

teacher Dr. Vedesh Chandra Lal Das who had taught us more than we could ever

give them credit for here.

Nobody has been more important for us in the pursuit of this report than the member
of Merryland College Biratnagar whose guidance, support and unending

inspiration had always been with us.

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Table of Contents

Acknowledgement ...................................................................................................... 2
Executive Summary ................................................................................................... 4
Chapter 1: Description of the problem/ Opportunity of idea ...................................... 5

Chapter 2: Description of the idea ............................................................................. 9

Chapter 3: Business Model of the Idea.................................................................... 12

Appendices .............................................................................................................. 17
References ............................................................................................................... 20

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Executive Summary

The main purpose of this report is to present our business idea which would sustain
in the market. The business idea which I have presented through this report is about

Herbal Cosmetics named as “Heavenly Herbs” along with the tagline of “Let nature

nourish your beauty.”

The first chapter of this report discusses about the existing problem of the market
and opportunity for the Herbal Cosmetics in the local market of Biratnagar and
Itahari, as well as in overall Nepal through online platform. Similarly, the second

chapter explains clearly about how business activities will be performed, what will be
the product line of my business, especially this chapter is focused on description of

the business idea.

Lastly, the third chapter focuses on overall business model for Herbal Cosmetics
which describes about location, employees, raw materials, investment, estimated
cost and sales of the presented business idea.

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Chapter 1: Description of the problem/ Opportunity of idea

As the name itself is enough to drive people’s attention towards it which is “Herbal

Cosmetics” also known as natural cosmetics was used by humans since the beginning

of the civilization because of the mankind who had magnetic dip towards impressing
others with their appearances. There were no any cosmetic surgeries or expensive

fairness creams to enhance their appearance and the only thing which they had was
the information of nature, accumulated in the Ayurveda. Either for the purpose of

personal care or beauty, it is very beneficial when one uses natural products.

1.1. Existing problem in the market :-

 Skin problems due to synthetic cosmetics: Many people who use

cosmetic product on a daily basis faces a lot of issue related to their

skin. Skin is one of the most sensitive part of our human body. The

number of synthetic chemicals used in some synthetic cosmetics have

been linked to cause irritation in skin which may further lead to cancer
if used excessively and other problems are also seen such as hair-fall

problems, acnes, eye infections, premature ageing, and hyper-

pigmentation and so on.

 Less availability of herbal cosmetics: After the survey result, it was clear

that many people are willing to buy herbal cosmetics for their better skin
and hair but are still facing problem to get the best products. From the

result of survey response, it was found that the main problem faced by

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(66.7%) of people especially here in Biratnagar and Itahari was less

availability of herbal cosmetics in local market.

Figure 1 : Difficulty in buying Herbal cosmetics

 Lack of herbal cosmetic products variety: Though there are many

competitors of herbal cosmetics here in Nepal such as Dekar, Enricher,

Himalaya Herbals, Lotus Herbals, Vaadi Herbals and Patanjali but still
all those brands lack wide range of product variety. The brands

available in Nepal are not being productive enough and some qualitative
products of international market are not easily available in the Nepalese

market.

1.2 Opportunities of the idea:-

So after finding out the existing problem in the market, it can be seen that
people are really in need of more varieties of Herbal cosmetics in local market
of Biratnagar and Itahari as they are also ready to pay a bit higher price than
that of synthetic cosmetics as per the survey. Nowadays, because of the

negative effects of synthetic materials on health and environment, the trend of

using and seeking natural products is on the rise. According to the Kathmandu

Post, “Nepali herbal products have immense potential for even export of

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products but due to lack of proper research, absence of proper processing and
failing to label appropriate specifications, Nepal is lagging behind to
manufacture wide varieties of herbal cosmetics.” (The Kathmandu Post,

2018) The herbs found at an altitude of 3,000 meters and above are rich in

natural chemicals to make the herbal cosmetics.

 High demand of interested customers: According to the survey, 65.2%

of people are willing to replace their synthetic cosmetics with herbal

ones if easily available in the market and rest of the people are still not
sure about the usage maybe because those people are unable to get
the products which they are searching for. So, we can see the high

potential in the market for herbal cosmetics if made properly by utilizing

the natural herbs of Nepal.

Figure 2: Percentage of people replacing synthetic cosmetic with herbal ones

 Unique selling proposition(USP): There are various factors that will

differentiate “Heavenly Herbs” from synthetic cosmetics as well as its

competitors are as follows:

a) Pure and Organic ingredients

b) Compatible for all skin types

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c) Do not provoke to allergic reaction and free from side

effects
d) Eco-friendly packaging

e) Even with small quantity they are effective enough as

compared to synthetic ones.

f) “SWADESHI” products as they will be made by collecting

the herbs of overall Nepal.

g) Affordable price
 One brand, various product variety: People are facing difficulty in

finding that one special Herbal brand and to get constantly used to it
because of less product variety in the market. Launching Herbal

cosmetics and selling them in local market as well as in online platform

is one of the main market opportunity for “Heavenly Herbs” to grow,

expand and sustain in the market. It will make easier especially for the

people of Biratnagar and Itahari to find genuine herbal cosmetics with

large product variety under the same brand.

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Chapter 2: Description of the idea

Herbal cosmetics are becoming the recent trend in the field of beauty and fashion.

Many women worldwide are shifting towards using natural products rather than
chemicals for their personal care to enhance their beauty . As the whole world is

running after the “Go green” slogan and after analyzing the increasing demand of

people for Herbal cosmetics here in Biratnagar, I thought this idea will be helpful to
fulfill the need and demand of overall people of Nepal.

The idea is to launch Herbal Cosmetics named as “Heavenly Herbs” here in Nepal

and distributing varieties of products to the interested retailer especially in local market
of Biratnagar and Itahari in the initial phase and also to sell the products directly to
customers through online platform. During the research, it was clear that Nepal is a

country that is not only geographically rich but also has more than 7,000 species of
flowering plant and out of those at least 1624 of these pieces are identified as having
medicinal and aromatic properties. From the tropical plain of Terai region of

Nawalparasi, Chitwan, Nepalgunj, Bardia, Dhanusha, mid hill region of Makwanpur,

Syangja, Kaski, Lamjung, Dolakha, Parvat, Illam, Ramechhap, Nuwakot to the high
Himalayan slopes of Dolpa, Mugu, Humla, Jumla, Manang, Mustang and Solukhumbu,
a wide variety of precious world famous lifesaving herbs, species and minerals are
available here. So by collecting herbs from various parts of Nepal, Herbal cosmetics

will be made through different procedures.

According to the survey, 65.2% of people are willing to replace their synthetic

cosmetics with herbal ones if easily available in the market and rest of the people are
still not sure about the usage maybe because those people are unable to get the

products which they are searching for. So, as per my perception this business will

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prosper in future because many people are in search of variety of herbal cosmetics.

Teenagers who have to face many issues related to skin along with their growing age
due to hormonal imbalance, likewise men and women both who are very conscious
towards their whole body care(including skin and hair) will be target customers of

“Heavenly Herbs” especially of the age group from (18-50). The price of different

product may vary according to their size and quality but it will not be on the higher

side. The price range of the products will be in such a way that the people of the city

can easily afford it.

Below mentioned are the varieties of products that “Heavenly Herbs” will be providing

to the customers which they are seeking for to attract them and to make the brand

altogether different from competitors are listed below:

1. Herbal beauty/skincare products :-

 Moisturizer, Essential oils, Facial cleanser/scrubs, Toner, Powder

foundation, Skin brightening creams, Anti-aging creams, Anti-

pigmentation creams, Lipsticks, Eyeliner, Facial Masks,

Highlighter/Blusher, Facial gels, Lip balm, Facial serums.

2. Sun care products:-

 Sunscreen Lotion and Sunburn Gel

3. Haircare products:-

 Essential hair growth oils and serum, Hair packs, Shampoo/Conditioner,

Henna powder
4. Body care products:-

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 Body Lotion, Massage oils, Body wash/soap, Perfumes, Body scrubs,

Herbal wax powder.

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Chapter 3: Business Model of the Idea

 Location: As the business plan is to launch herbal cosmetic items so I have

decided to set up all the equipment and tools required in open space of my

home itself so that rental cost required for manufacturing will be saved. Herbal

cosmetics processing does not require large manufacturing setup so we can

bring all the raw materials and with the help of tools and equipment, we can
make them from the house itself.

 Employees: Firstly, I am planning to take herbal cosmetics preparation

workshop at the beginning from any reputed training center. Then I will hire at

list 10 women from my community who are willing to work and are in search for
job opportunity. They can help me in all the processing steps to make the work

flow smoothly. Later on, if required some employees can be added. I would be

handling the overall management, account section, Inventory management,

purchasing of raw materials and promotional activities of Herbal cosmetics.

 Raw Materials: Several farmers from different corners of Nepal have organic

herbs cultivated in their farm. So, “Heavenly Herbs” will be contracting with

those farmers from different districts in order to get organic and safe herbs to
make my products.

 Registration process: There are basically 6-7 steps to register any business

in Nepal before starting it, so “Heavenly Herbs” will be registered in Itahari Sub-

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Metropolitan City office and Department of commerce Itahari for legal

procedures fulfillment.

 Investment: The total initial investment required will be about NRs. Seventeen

lakhs. The investment seeking from investor is NRs. Fifteen lakhs and

remaining NRs. Two lakhs I will be adding from my own savings. The detail

amounts for the investment are as follows:

Items No. of item Total value

Small Containers 30 1800
Large Containers 20 12,000
Weighting equipment 2 2000
Mixers 1 mixer 3,00,000
Blenders 3 blender 2,50,000
Heating equipment 2 14,500
Cooling equipment 2 1,30,850
Stainless steel table 3 15,000
Measuring cups 15 1800
Kitchen equipment - 1,09,550

Beakers 15 1500
PH test strips 100 pcs. 6,000
Cosmetic container - 3,00,000
Total - 1145000

Table 1: Investment detail

The estimated amount for starting Herbal Cosmetic Brand is about eleven lakh forty

five thousand only. The operating cost for buying raw materials is separated of five

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lakhs forty thousand only and the cost for registration of business is separated of
fifteen thousand only.

 Financial Projection for the 1st Year

Estimated cost on the basis of Annual

Cost Monthly / (NRs.) Yearly (NRs.)

Employees 10000*10 12,00,000

Electricity 6000 72,000
Packaging 20,000 2,40,000
Product Label Printing 25,000 3,00,000
Delivery to Retailer 10,000 1,20,000
Total 1,61,000 19,32,000

Table 2: Estimated Cost Detail

In words: One million and nine hundred thirty-two thousand only.

Estimated Sale on the basis of Annual

Sale Monthly Yearly

Beauty/Skincare products 60000 720000
Sun care products 40000 480000
Haircare products 40000 480000
Body care products 60000 720000
Total 200000 2400000

Table 3: Estimated Sale Detail

In words: Two million and four hundred thousand only.

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Total cost required for business: One million and nine hundred thirty two thousand

only. (NRs. 19, 32,000)

Total sales amount obtained: Two million and four hundred thousand only. (NRs.

24, 00,000)

Total profit (annual): Four hundred sixty-eight thousand only. (NRs. 4, 68,000)

Now, the annual profit will be about NRs. 4, 68,000 which is about 28% of the total
investment.

In a nutshell, we think “Heavenly Herbs” will be able to attract the targeted customers

because of its qualitative variety of products. As the annual profit of “Heavenly Herbs”

has already been mentioned which is gained after the sales of different products. We

have also planned to sell the products online so we will also be updating the

customer’s reviews in the social media which will motivate others to buy as well and

will help the business to grow. We will also be providing free samples of mini-size to

some potential buyers who are very interested towards the products and get feedback
from them. In today’s world, traditional marketing is dying and word-of-mouth

marketing is kicking in where people tend to trust the opinions of others more than any
ads. So, after launching the herbal products we have planned to provide gift boxes to

do unboxing and review about the products to some Nepali beauty influencers so that
customers can see that and be interested to buy. To keep our customers happy and

to make them purchase again and again, we have to take feedback of our products
frequently as well as we will also provide special offers on Nepalese
occasions/festivals. I think this idea is financially attractive for the investors to invest

in my business because of the perfectly estimated investment, cost and sales for the

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1st year and also because of properly planned idea about what products to sell in the
market to fulfill customer’s requirements.

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Appendices

The survey questionnaire prepared for primary research is as follows:

Herbal Cosmetic Survey

This survey is conducted to know about customer demands and needs for launching
Herbal Cosmetics in Biratnagar. I would be grateful for the assistance you can provide

me in carrying out this project. So, please kindly take a moment to help me by filling

the survey as your opinions are valuable to me. This survey is taken for academic

purpose. It is a part of my assessment work given by Merryland College Biratnagar.

Thank you.

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Link of the survey response: https://drive.google.com/open?id=19xgkKI41mhSlANL-

IUDPxedBiQuPTv8WhAQzeqNiwzg

References
a) The Kathmandu Post, 2018. The Kathmandu Post. [Online]
Available at: https://kathmandupost.com/money/2018/10/17/potential-of-
nepali-herbal-products-still-untapped
[Accessed 10 04 2020].

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