Week 4 team assignment

The cosmetic, beauty and personal care industries are growing at a high rate, with the cosmetic market expected to gain up to $429.8 billion by 2022 (Allied Market Research). According to research, the beauty industry in the United States generates close to $70 billion in revenue annually (Duncan, 2008). This shows beauty, personal care, and cosmetic businesses are among the most lucrative around, with women as the primary consumers. The most significant advantage is that chances of operating a successful cosmetic and beauty business are high due to the large customer base. At one point, everyone consumes cosmetic products starting from hair, skin and sun care products to deodorants and fragrances. The major challenge, however, is the existing or possible competition, change in consumer preferences as well as potential regulatory changes (Allied Market Research). This paper presents a business design outline for a medium-sized beauty shop operating on both wholesale and retail basis.

Starting a cosmetics store is not as hard because the business is not such labor or capital intensive. The trick is getting the correct brands preferable by the target market, proper recordkeeping, and marketing. To capture a bigger market, the business will deal with a broad category of cosmetics including skin and haircare products, deodorants, makeup and fragrances for both genders. The company will operate under the name ''Perida cosmetic store, '' based in Nevada U.S.A but to expand the operations to other cities through opening other franchise stores. The business will first operate on personal savings and an acquired loan.

Ensuring excellent inventory and cash flow systems is essential to achieve accountability as well as make sure what customers need is available through timely restocking. The initial step is to understand that profits and cash are two separate things and the time lag between cash receipt and sales (Accounting Coach). The management will come up with a well-structured cash flow and inventory management plan detailing the most proper cash flow and inventory management system and strategies. Besides, we will invest in a model that will ensure appropriate forecasting of sales, cash inflows and outflows, and the latest technology to conduct an inventory check.

Pricing is an essential factor that provides leverage to wholesale and retail businesses. Usually, consumers will shop around for the most affordable options. To maintain our position in the market, we will ensure prices charged are competitive with those of other stores. Additionally, customers prefer different payment options, and we will make sure we provide a variety of payment options to suit all clients. All the account details will be available on business websites and marketing platforms.

Supply and distribution: The required stock will be sourced from wholesale beauty product distributors in Dubai and Korea. More specifically from ''Chinabrands' a wholesale cosmetic distributor based in Dubai and other wholesale stores offering competitive purchase terms around the U.S. Our business will offer a variety of purchase options including on-premises and online purchases. We will invest in business vans to provide transportation in case of wholesale purchases and avail customer care desks to take care of client concerns as part of the after-sale services. Besides, to ensure excellent performance, employees will be offered incentives and competitive compensation.

Cosmetics businesses are very profitable, but just like every other business, it requires well-designed strategies of operation before commencing business. A proper market analysis should be carried out to assess any potential market risks so that proper measures are taken in advance.

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