Business Planning

This section provides a step-by-step guide to business planning. To make the process even easier, we’ve included a step-by-step video tutorial alongside our written instructions for both web and desktop.

Managing a cosmetic business involves more than just creating products. You need to make a profit and there are so many elements that influence the final price of your products. So not accounting for these is risky business. The Business Planning module in Ingrevo captures all of these elements in 6 tabs to provide a simple way to forecast your profit. 

Creating a Business Plan

1. To create a new business plan, click Planning on the main menu, then add business plan. A pop-up form will appear where you can enter the necessary details.
2. Once complete, click Save to confirm your changes or Discard to cancel. Once saved, the business plan will be added to the Business plan table.
3. To edit a business plan, click Edit. Modify the details in the pop-up form as needed, and click save to confirm the changes. 
4. To delete a business plan, click Delete. This action is permanent and cannot be undone.
5. To export a business plan, click Export. This will download your plan as a word file.
6. To begin creating a business plan, click View. This opens the Business Planning module on the overheads tab. All of the tabs are optional but the more information that is provided the more accurate your business plan will be.

Overheads

The Overheads tab is where you calculate your business overhead costs and is divided into three sections: Yearly non-resource costs, yearly resource costs, and an overheads costs. Enter 0 for any item that is not required.

1. To calculate click Save.
2. To download only this tab click export.

Formulas

The Formulas tab is where you select the products to be included in your business plan and is divided into three sections: In Manufacturing quantity section enter the amount in Kilograms of product per formula that you wish to include in your business plan. Then enter the sales size of each product. 

The formulas section contains a list of all your formulas. You can select which formulas to include by checking the box. The production totals section summarizes the total amount of product that will be included and the number of sales units this amount will make. Enter 0 for any item that is not required.

For example if you wanted to include 10 kilograms of product per formula, sell the product in 200 grams bottles and had 2 formulas. The total production kilograms would be 20 and the total number of sales units to be created would be 100.   

1. To calculate Click Save.
2. To download only this tab click export.

Ingredients

The Ingredients tab, is where you can enter supplier and price information for the ingredients needed for your selected formulas. The ingredients tab is divided into two sections. 

The ingredients amount required section lists all of the required ingredients, their INCI names and required order amount. Here you can enter the supplier name, order quantity and price to be included in the business plan. Ingrevo calculates the total amount of each ingredient required to create all of your product. Where ingredients are shared across different formulas, these will be grouped together to ensure that you benefit from economies of scale. This is where the individual price per gram decreases as the quantity purchased increases.

The totals section summarizes the total price to purchase all of the ingredients for your products and the total price per kilogram. Enter 0 for any item that is not required.

1. To calculate Click Save.
2. To download only this tab click export.

Packaging

The Packaging tab is where you can enter supplier and price information for the packaging needed for your products. The packaging tab is divided into two sections: The Packaging costs section contains a list of common packaging items, their description and required quantity. Here you can enter the supplier name, order quantity and price to be included in the business plan. Ingrevo calculates the capacity and quantity required to create all of your products. To benefit from economies of scale all products are calculated to be sold in the same style packaging. 

The totals section summarizes the total price to purchase all of the packaging for your products and the total price per sales unit. Enter 0 for any item that is not required.

1. To calculate Click Save.
2. To download only this tab click export.

Manufacturing

The Manufacturing tab is where you can input manufacturing costs to create your products. It contains three sections: The manufacturing costs section contains a list of common expenses and the total production cost associated with producing and bottling products. An option when growing your cosmetics business is to outsource production or bottling. These services will have minimum quantities and provide the fees in per kilogram and per bottle. The Total manufacturing costs section summarizes the total production quantity, unit quantity, number of sales units, total price, price per kilogram and price per unit for easy reference. The product manufacturing costs section displays the ingredient, packaging and production costs per formula. This allows you to quickly compare the costs for each of your formulas.   

1. To calculate, click Save.
2. To download only this tab click export.

Marketing and Finance

The Marketing and Finance tab is the final tab of the Business Planning module, and is where you can input marketing and financial costs. This tab brings together all of the previous costs to present a complete picture of your business plan. This is calculated using a quarterly time period. It contains five sections: The Quarterly sales overview section calculates quarterly, monthly and daily sales, revenue, spend and profit projections. The Quarterly plan summary section provides an overview of key information and costs for the business plan.  

The marketing section is where you can enter your required profit in percentage and target ROAS. ROAS stands for Return on Ad Spend. 

For example if your product costs £10 and you spent £2.50 on advertising to obtain the sale. Then your return on ad spend would be 4. This is because you generated 4 times the amount you spent.

The financing section calculates the total cost needed to implement your business plan and provides an option where you can enter a loan interest rate. An option when growing your business is to obtain an external investment. An investment will provide funds to finance your plan, which you will pay back in installments, in exchange for an additional monies to be repaid as interest. 

The RRP section is where the recommended retail prices for your products are calculated. This section is extremely important in determining whether your business plan is feasible. For each formula Ingrevo calculates, the RRP based on the unit cost before marketing, the RRP based on breaking even including marketing and the RRP including profit. Here you can enter your desired RRP for your product.

When entering an RRP the tab will recalculate, as RRPs affect your marketing, financing, and profit projections.  

1. Once complete click Save.
2. To download only this tab click export.