Perfume Business Plan Template
If you want to start a perfume business or expand your current perfume business, you need a business plan.
The following Perfume business plan template gives you the key elements to include in a winning Perfume business plan. It can be used to create a fragrance business plan and a perfume store business plan.
Perfume Business Plan Example
I. Executive Summary
Business Overview
[Company name] is a newly established perfume store located in [location]. The company will manufacture and sell a variety of perfume products and accessories, all made using natural ingredients found in nature. [Company Name]’s perfume products will be made using ethically and naturally sourced ingredients and will not include any harmful ingredients.
The company plans to manufacture all of its products in a small warehouse space and market and sell it locally at farmers markets, trade shows, industry events, etc. The company will also have a website where its perfumes will be sold online.
Products
[Company Name] will offer a variety of perfume products and accessories. The products include perfumes, colognes, body sprays, and lotions.
Customer Focus
[Company Name] will primarily serve the residents within a 1 to 50-mile radius of our location. The demographics of these residents are as follows:
- 3,462,789 residents
- Average income of $38,500
- Average household income of $75,600
- 49.62% married
- Median age: 36 years
[Company Name] will sell its perfume products to the local market initially, until it has achieved enough funding to begin to distribute nationwide and ultimately, globally.
Management Team
[Company name] will be owned and operated by [Founder’s Name], a local perfumer with a love for natural fragrances. [Founder] has been in the fragrance industry for over ten years, and previously ran the fragrance department at a large retailer where she learned the ins and outs of the industry. At this juncture, [Founder] is ready to take her knowledge and experience to the next level by creating her own brand.
From her knowledge in department stores and now as an independent perfume, [Founder] has plenty of management and operations experience as well as an understanding of how perfume companies operate on a day-to-day basis.
Success Factors
[Company Name] is uniquely qualified to succeed due to the following reasons:
- The company derives all of its ingredients directly from natural and ethically-motivated distributors.
- The company does not include harmful ingredients in its products.
- The fragrances are unique, refreshing, and mood enhancing.
- The owner is an experienced perfumer who knows the ins and outs of the industry and marketing her product.
- The pricing model is structured to be affordable to people from all walks of life.
Financial Highlights
[Company Name] is seeking a total funding of $725,000 of debt capital to launch the perfume business.
- Initial inventory: $200,000
- Manufacturing system: $100,000
- Down payment for manufacturing space in a warehouse: $50,000
- Brand development and marketing: $300,000
- Working capital: $75,000 to fund payroll, taxes, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company name] is a newly established perfume business located in [location]. The company will manufacture and sell a variety of perfume products and accessories, all made using natural ingredients found in nature.
The company’s founder, [Name], has worked for several years as an independent perfumer. During this time, she learned how to make fragrances by hand and became skilled in blending herbs and other natural ingredients to create unique scents. She also developed an expertise in the art of blending scents so that they complement one another, creating a harmonious blend of aromas when worn together. This experience has given her the confidence to start her own business manufacturing perfumes with the same attention to detail that she used when working on commission for clients at large companies such as [Company Name].
Currently, most perfume brands are produced by large corporations who use synthetic ingredients in their products, which can irritate customers’ skin or cause allergic reactions. By contrast, [Company Name]’s products are made using only pure essential oils extracted from plants grown on sustainable farms around the world. These oils have been used for centuries by healers because they contain natural anti-inflammatory properties that ease inflammation caused by skin conditions like eczema or psoriasis. [Company Name]’s perfume products will be made using ethically and naturally sourced ingredients and will not include any harmful ingredients.
The company plans to manufacture all of its products in a small warehouse space and market and sell it locally at farmers markets, trade shows, industry events, etc. The company will also have a website where its perfumes will be sold online.
[Company Name]’s History
[Founder’s Name] has completed her due diligence in regard to other perfume retailers, industry standards and metrics, and competitor profile. She realizes that she needs to start small and sell locally and on a small scale online in order to organically grow her perfume business.
Once the lease is acquired for the small warehouse space, [Founder’s Name] can begin to order the manufacturing equipment and hire a small manufacturing staff. Once she receives the funding, she can also hire an advertising agency to develop the perfume branding image and marketing campaign.
Since incorporation, the Company has achieved the following milestones:
- Located a small warehouse space in an affordable industrial area
- Developed the company’s name, logo, and website located at [website]
- Priced out the manufacturing and bottling equipment
- Determined software and necessary supplies and equipment
- Began the FDA process to ensure all products made are safe and are in compliance with FDA regulations
- Began recruiting key employees that will assist with the manufacturing and promotion of the perfume products
[Company Name]’s Products/Services
Below are [Company Name]’s product offerings:
- Perfume
- Cologne
- Body Spray
- Lotions
- Shower Gel
III. Industry Analysis
Over the past five years the Perfume industry is expected to grow at an annualized rate of 1.9%. The industry will be driven by the following factors:
- The trade-weighted index (TWI), which measures the strength of the US dollar against the currencies of the country’s major trading partners, is forecast to contract, enabling more overseas consumers to afford US-manufactured goods and support industry exports.
- The rapid shift of both consumers and businesses to digital channels enabled industry operators to gain more insights on their consumers’ behavior. E-commerce will likely remain an important resource for industry operators to retain clients and create customized product offerings.
- Industry operators are expected to continue incorporating more responsible sourcing and sustainable packaging to appeal to conscious consumers. Many operators are reformulating their products to include all-natural ingredients and altering their manufacturing processes to eliminate environment-harming steps. Moreover, operators will likely invest more in emphasizing how synthetic and biotechnological ingredients can be sustainable while also being safe for long-term use.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve primarily all individuals over the age of 16 who frequently purchase soaps, shampoos, and fragrances that are ethically sourced in nature.
Typically, those who target natural ingredient products are adults who are eco-conscious and enjoy outdoor activities. They partake in outdoor activities such as hiking, yoga, meditation, running, and cycling. They have moderate disposable income and have at least two years of post high school education.
Customer Segmentation
The Company will primarily target the following three customer segments:
- Young Professionals: they are trendy, young, and are always looking for products that are new, fresh, and have a social awareness impact
- Nature Lovers: they don’t use anything in their everyday life that has harmful or non-ethically sourced ingredients
- People with skin conditions that are prone to skin issues such as psoriasis and eczema. They are required to only use products with natural ingredients.
V. Competitive Analysis
Direct & Indirect Competitors
The following businesses are located within a 50-mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Fauna
Fauna is an online retailer of perfume whose products are made with natural ingredients. The company was founded by two friends who started developing the products while in college, and they have continued their research in Costa Rica’s rainforests to source the ingredients and ensure they are not harmful to humans.
The perfumes are priced on the expensive side and are marketed to those that live a luxurious lifestyle. In addition, Fauna sources all of its packaging from sustainably-harvested trees in Costa Rica. Fauna’s goal is to provide consumers with a high quality product that is safe for both humans and nature, while also creating jobs for people in Costa Rica.
The business has been growing steadily since its founding in 2018. The owners plan to continue expanding their product line, which currently includes two scents: Rainforest and Savannah.
Everly’s Eden
Everly’s Eden is a more affordable line of fragrances. It is sold in large retail stores and can be found online as well. The company was founded over 60 years ago and gained mass appeal quickly. Their product line includes perfumes, lotions, cologne, after shave, candles, hair products, and body sprays. Their revenue is over a billion dollars a year.
The company’s product line contains chemicals that are not natural. Everly’s Eden products are mass-produced using these ingredients instead of using all natural ingredients like the other eco-friendly line of products. The company is one of the top perfume companies in the country because they have so many different types of scents available at an affordable price point.
Fig & Branch
Fig & Branch is a local company that was established a year ago. They use natural ingredients, manufacture the scents in their home, and only sell in local farmers markets. They source all the ingredients locally and have two signature fragrances – Wild Willow and Desert Flower. The company plans to grow organically and begin approaching larger retailers after they have gained a following.
The company’s mission is to create beautiful things that make people smile, and they strive to do this by using all-natural ingredients to create scents that are made with love and care. As their business grows, they hope to continue growing as an environmentally conscious company by reducing waste and using renewable energy sources whenever possible.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. Those advantages include:
- Good for the Environment: [Company Name] only uses ingredients that are found in nature and does not contain any harmful chemicals.
- Scents: [Company Name] has three popular scents that are fresh, light, and uplifting.
- Healthy for the Skin: [Company Name]’s lotions contain ingredients that are replenishing to the skin so that those with sensitive skin, eczema, or psoriasis will benefit from its products.
- Pricing: [Company Name]’s price point is in line with its quality of products. It is not priced too expensive, yet higher than typical retail fragrances.
VI. Marketing Plan
[Company Name] seeks to position itself as a popular local option in [location] where it will gain a following and increase its brand awareness.
The [Company Name] Brand
The [Company Name] brand will focus on the Company’s unique value proposition:
- Good for the Environment
- Good for Healthy Skin
- Fresh, Clean Scents
- All Natural Ingredients
- Affordable Pricing
Promotions Strategy
[Company Name] expects its target market to be individuals who are nature lovers who regularly purchase sustainable products. [The Company’s] promotion strategy to reach these businesses includes:
Billboards/Signage
[Company Name] will invest in attractive signage and billboards to increase the brand awareness of the local perfume brand.
Local Publications
We will also invest in advertising in selected larger publications such as newspapers and local publications.
Website/SEO
[Company Name] will invest heavily in developing a professional website that displays all of the products the company will have for sale. The website will also include an emphasis on the perfume company’s eco-friendly focus. It will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.
Farmer’s Markets
[Company Name] will invest in purchasing table space at local farmers markets to display and sell their perfume products. [Owner] looks forward to interacting with customers and having them smell her perfume fragrances.
Social Media
[Company Name] will utilize the most popular social media platforms for ads since the majority of the clientele will be active on social media. The company will also have business accounts on each major platform to post regularly of new fragrances it has developed.
Collateral Material
[Company Name] will develop numerous collateral material to have on hand to give out to potential customers at the local farmers markets or pop-up events. It will also ask local businesses such as salons or spas for permission to hang or display their collateral material in highly trafficked areas.
Pricing Strategy
[Company Name]’s pricing will be moderate, so clients feel they receive great value when purchasing the perfumes.
VII. Operations Plan
Functional Roles
[Company Name] will carry out its day-to-day operations as a perfume business. There will also be numerous administrative functions involved.
In order to execute on [Company Name]’s business model, the Company needs to perform several functions. [Company Name] In order to achieve this goal, [Company Name] will need to expand its online presence as well as its physical presence. To do this, the company will need to hire more employees, purchase more equipment, and invest in marketing campaigns. The company will need to hire at least one full-time employee who can manage all aspects of operations including manufacturing, distribution, sales and marketing.
The company will also need to purchase additional equipment such as a second stove top so that they can continue manufacturing scents while simultaneously producing other products like candles or soaps. They will also need to invest in new packaging materials so that they can expand their product line into gift baskets or other items for sale at retail locations like Whole Foods Market or Trader Joe’s.
Service Functions
- Small team to assist with manufacturing and bottling
- Small team for distribution
Administrative Functions
- General and administrative functions including tax payments, marketing, bookkeeping, etc.
- Filing and maintaining accurate records and files of all sales
- Brand management/social media
- Retailer outreach
Milestones
The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is owned and operated by [Founder’s Name], a local perfumer with a love for natural fragrances. [Founder] has been in the fragrance industry for over ten years, and previously ran the fragrance department at a large retailer where she learned the ins and outs of the industry.
[Founder] will hire 2 – 3 manufacturers and distributors to assist developing the perfumes in large quantities and delivering them to local stores and/or events.
Hiring Plan
[Founder] will serve as the Owner of [Company Name]. In order to launch, she needs to hire the following personnel:
- Shift Managers: 2-3 part-time employees to manufacture the perfumes and bottle them. They will be full-time once the demand increases.
- Marketing Professional: 1 person who will manage the outreach to retailers and focus on customer outreach.
- Accountant: 1 employee who will manage the accounting, clerical, bookkeeping, tax payments, records manager, and any administrative task required.
- Brand manager: 1 part-time employee who will be responsible for developing and launching the brand; manage the website, and social media accounts.
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from the sales it receives from the perfume sales.
The warehouse lease, utilities, supplies, marketing, and labor expenses will be the key cost drivers of [Company Name]. The major cost drivers for the company’s operation will consist of:
- Payroll
- Inventory and equipment
- Marketing
- Business insurance
- Lease on warehouse space and utilities
- Taxes
Capital Requirements and Use of Funds
[Company Name] is seeking a total funding of $725,000 of debt capital to launch the perfume business.
- Initial inventory: $200,000
- Manufacturing system: $100,000
- Down payment for manufacturing space in a warehouse: $50,000
- Brand development and marketing: $300,000
- Working capital: $75,000 to fund payroll, taxes, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of wholesale contracts per year | |
|---|---|
| FY 1 | 5 |
| FY 2 | 10 |
| FY 3 | 15 |
| FY 4 | 20 |
| FY 5 | 25 |
| Average order | $250 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
