Entrepreneurship and New Venture CreationHerbal 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

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

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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.

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

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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 : As per the survey, I came to
know 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 I got, I found that the main problem faced by
(66.7%) of people especially here in Biratnagar and Itahari was less
availability of herbal cosmetics in local market.

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Figure 1 : Difficulty in buying Herbal cosmetics

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 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
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.
 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, I got to know 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, I think this business will 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 my
products 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

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range of the products will be in such a way that the people of the city can easily
afford it as I have already mentioned that people are also ready to pay slightly more
if qualitative products are available.

Below mentioned are the varieties of products that I will be providing to the
customers which they are seeking for to attract them and to make my 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:-
 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 my 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 I could save the rental cost required for manufacturing.
Herbal cosmetics processing does not require large manufacturing setup so I
can bring all the raw materials and with the help of tools and equipment, I can
make them from my own house.

 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 I can also add up some employees. I
would be handling the overall management, account section, Inventory
management, purchasing of raw materials and promotional activities of Herbal
cosmetics.

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 Raw Materials: Several farmers from different corners of Nepal have organic
herbs cultivated in their farm. So, I 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 which are as follows:[ CITATION Nep201 \l 1033 ]

a) Verifying the uniqueness of the proposed name of business i.e.

“Heavenly Herbs” which takes just 1 day.
b) Secondly, any professional verifies and certifies the
memorandum/articles of association which takes about 5 days.
c) Thirdly, stamp should be bought to be attached to registration form
which also takes 1 day.
d) Fourthly, documents should be filed in the business related registrar’s
office, Department of Industry which takes about 15 days.
e) Fifthly, “Heavenly Herbs” rubber stamp should be made which just
takes 1 day.
f) Sixthly, “Heavenly Herbs” should be registered for VAT and income tax
which takes 5 days.
g) Employees of “Heavenly Herbs” should be enrolled in the provident
fund.

 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

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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
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 .

Total cost required for business: One million and nine hundred thirty two thousand
only. (NRs. 19, 32,000)

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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, I think “Heavenly Herbs” will be able to attract the targeted customers
because of its qualitative variety of products. As I have already estimated the annual
profit which my business will be gaining after the sales of different products. I have
also planned to sell my products online so I will also be updating the customer’s
reviews in the social media which will motivate others to buy as well and will help my
business to grow. I will also be providing free samples of mini-size to some potential
buyers who are very interested towards my 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 my products I have planned to provide gift boxes to do unboxing and
review about my products to some Nepali beauty influencers so that customers can
see that and be interested to buy. To keep my customers happy and to make them
purchase again and again, I have to take feedback of my products frequently as well
as I will also provide special offers on Nepalese occasions/festivals. I think my idea
is financially attractive for the investors to invest in my business because of the
perfectly estimated investment, cost and sales for the 1 st year and also because of
properly planned idea about what products to sell in the market to fulfill customer’s
requirements.

Appendices

The survey questionnaire prepared for primary research is as follows:

Herbal Cosmetic Survey

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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) Nepal.gov.np, 2020. The official portal of government of Nepal. [Online]
Available at: http://nepal.gov.np:8080/NationalPortal/view-page?id=14
[Accessed 12 april 2020].
b) 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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