Business Plan Final

ELLA PERFUME BUSINESS PLAN
PREPARED BY TEAM ELLA

Kevin Andrews, Meagan Brigham, Kirk Cushing, Adam Macleod
MGT2008 Business Plan Applied
Chris Castillo
April 1st, 2010
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1.0 Executive Summary ....................................................................................... 7
2.0 Company Profile ............................................................................................ 9
2.1 Description of Business ................................................................................................................................ 9
2.2 Business Address & Contact Info .................................................................................................................. 9
2.3 Owners/Principals ....................................................................................................................................... 9
2.4 Business Advisors ...................................................................................................................................... 10
2.5 Vision & Mission Statements ..................................................................................................................... 10
2.6 Business Opportunity................................................................................................................................. 10
2.7 Business Goals & Objectives ...................................................................................................................... 10
2.8 SWOT Analysis ........................................................................................................................................... 11
2.9 Key Success Factors .................................................................................................................................... 11
3.0 Marketing Plan ............................................................................................ 12
3.1 Industry Trends & Market Analysis ............................................................................................................ 12
Size of the Industry ............................................................................................................................................. 12
3.2 Product & Service Description ................................................................................................................... 12
Future Products/Services .................................................................................................................................... 13
3.3 Unique Selling Proposition ......................................................................................................................... 13
3.4 Target Markets .......................................................................................................................................... 13
Size of the Market ............................................................................................................................................... 15
3.5 Market Research ........................................................................................................................................ 16
3.6 Competitive Analysis ................................................................................................................................. 18
Key Competitor(s): .............................................................................................................................................. 18
Location: ............................................................................................................................................................. 18
Years in Business: ................................................................................................................................................ 18
Product/Services Sold: ........................................................................................................................................ 18
Pricing: ................................................................................................................................................................ 19
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House of Operation:............................................................................................................................................ 19
Customer Profile: ................................................................................................................................................ 19
Marketing Strategies: .......................................................................................................................................... 19
Size of Company: ................................................................................................................................................. 19
Promotion: .......................................................................................................................................................... 19
Observations: ...................................................................................................................................................... 19
Analysis of Strengths: .......................................................................................................................................... 20
Analysis of Weaknesses: ..................................................................................................................................... 20
Strategy: .............................................................................................................................................................. 20
Worst Case Scenarios and Contingency .............................................................................................................. 21
Direct Competitors .............................................................................................................................................. 22
Indirect Competitors ........................................................................................................................................... 22
3.7 Marketing Goals & Objectives.................................................................................................................... 22
3.8 Positioning Statement ............................................................................................................................... 23
3.9 Promotional Strategy ................................................................................................................................. 24
Advertising .......................................................................................................................................................... 24
Sales Promotion .................................................................................................................................................. 25
Personal Selling ................................................................................................................................................... 25
3.10 Online Strategies...................................................................................................................................... 25
3.11 Pricing & Sales Strategy ........................................................................................................................... 26
3.12 Location/Distribution ............................................................................................................................... 27
Location .............................................................................................................................................................. 27
Distribution ......................................................................................................................................................... 28
4.0 Operations Plan .......................................................................................... 29
4.1 Management Team & Advisors .................................................................................................................. 29
4.2 Organizational Chart .................................................................................................................................. 32
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4.3 Suppliers .................................................................................................................................................... 33
4.4 Equipment & Office Supplies ..................................................................................................................... 33
4.5 Manufacturing Plans .................................................................................................................................. 34
4.6 Building and Lease Information ................................................................................................................. 37
4.7 Online Location .......................................................................................................................................... 38
4.8 Floor Plan ................................................................................................................................................... 38
4.9 Operating Procedures ................................................................................................................................ 39
4.10 Operating Regulations ............................................................................................................................. 41
4.11 Human Resources .................................................................................................................................... 45
Job Descriptions .................................................................................................................................................. 45
Recruitment, Selection & Appointment Proccess ............................................................................................... 48
Ella Employee Benefits ........................................................................................................................................ 52
4.12 Risk Analysis ............................................................................................................................................ 53
4.13 Implementation Plan & Scheduling .......................................................................................................... 53
5.0 Financial Plan .............................................................................................. 54
5.1 Assumption Sheet ...................................................................................................................................... 54
5.2 Sources and Application of Funds .............................................................................................................. 55
5.3 Opening Balance Sheet .............................................................................................................................. 56
5.4 Pro forma Cash Flow Statement................................................................................................................. 57
5.4.1 Year One, Monthly Cash Flow (Best, Worst, and Realistic Scenarios) ....................................................... 58
5.5 Projected First Year Income Statement ...................................................................................................... 59
5.6 Closing Balance Sheet ................................................................................................................................ 60
5.7 Break-even Analysis ................................................................................................................................... 61
5.8 Ratio Analysis ............................................................................................................................................ 61
Current Ratio - Current Assets / Current Liabilities ............................................................................................ 61
Working Capital - Current Assets Current Liabilities ........................................................................................ 61
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Quick Ratio - Most Liquid Assets / Current Liabilities ......................................................................................... 61
Proprietorship Ratio - Owners Investment / Total Assets ................................................................................. 61
Debt To Equity Ratio - Total Liabilities / Owners Equity .................................................................................... 61
Gross Profit Ratio Gross Profit / (Sales/Income) .............................................................................................. 62
Net Profit Margin - Net Profit / (Sales/Income) .................................................................................................. 62
Return on Investments Net Profit / Total Assets ............................................................................................. 62
Return on Owners Equity Net Profit / Owners Equity ................................................................................... 62
Return on ASSETS (Net Income + Interest Expense) / Total Assets ................................................................. 62
Return on Equity (Net Income / Shareholders Equity ..................................................................................... 62
Appendices ....................................................................................................... 63
1.0 Resumes .................................................................................................................................................... 63
C-STEP Analysis (Environmental Scan) ............................................................... 65
Direct and Indirect Competition ...................................................................................................................... 65
Direct................................................................................................................................................................... 65
Indirect ................................................................................................................................................................ 65
Social and Environmental ................................................................................................................................ 65
Technological................................................................................................................................................... 65
Economical ...................................................................................................................................................... 66
Political and Legal ............................................................................................................................................ 66
Secondary Research .......................................................................................... 67
Top key findings from the Premium Market Report 2008 ................................................................................ 67
Continual fragrance launches .......................................................................................................................... 67
Why Users Switch Perfumes ............................................................................................................................ 67
Fragrance types and propensities .................................................................................................................... 67
Purchase decision making and behaviour ........................................................................................................ 68
Market Growth ................................................................................................................................................ 68
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Gifting Perfume ............................................................................................................................................... 68
Female Usage .................................................................................................................................................. 68
Trends in Online Shopping ............................................................................................................................... 69
Market Research Summary Conclusion ............................................................. 70
Survey Monkey Results ..................................................................................... 71
Focus Group Plan .............................................................................................. 72
List of Fixed and Variable Costs ......................................................................... 73

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1.0 EXECUTIVE SUMMARY
Ella Perfume is the next evolution in how people express themselves through scent. By allowing customers to be
directly involved in making their own custom perfume, Ella Perfume will be a unique and fun way to design
perfume.
The core of this business plan is based on four principals; research, marketing, operations and financial planning.

Our marketing plan revealed this about our target market:
18 55 years old
Female
Has an income range of anywhere between $10,000 $100,000 per year
Has a degree/diploma or has spent some time in a post-secondary institution
Will spend anywhere from $20 - $80 on a single bottle of perfume
She often gets perfume as gifts
She buys perfume every couple of years
Her favourite scents are vanilla, passion fruit, lilac, citrus, ocean breeze
Enjoys a perfume that has a moderate potency. (Likes perfume that can only be smelled by her and
people very close to her)
She makes online purchases every couple of months

For our operations plan we have three important advisors on our team. David Phipps (Senior Financial Advisor at
Assante Wealth Management) will be on our team to help us with financial advice. Chris Castillo (Founder & CEO at
Master Entrepreneur International Inc.) is our marketing expert. Finally we have Michael Andrews (Founder and
senior partner of Andrews Robichaud) to help us with the legal aspects of the business.
Our organizational chart (section 4.2) shows that this company is rather flat. We believe a flat company can move
more quickly than one that is bogged down with many levels of management. The presidents role in this company
is really only a title, but with one important responsibility; it will be the presidents responsibility to make decisions
when the vice presidents cannot come to a consensus. This is to ensure theres no stalemate, and that the
company stays mobile.
Our suppliers listed in this plan (section 4.3) will supply us with the core ingredients of our product. They are
industry leaders in their fields and we know that doing business with them will be painless. See section 4.3 for
more information about our suppliers.
Our direct and indirect costs total in-between $5,860.00 - $11,815, with 8,750.00 being pegged as our realistic
estimate. Please refer to section 4.5 for our manufacturing plans.
Strategic
Business
Planning
Research
Marketing
Plan
Operation
Plan
Financial
Plan
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We have identified a location which will supply us with office and warehouse space. We also included a mockup of
our homepage as well as a 4 step plan to improve our online location through search engine optimization. Please
see section 4.6 4.8 for more information.
In this plan you will find job descriptions for all levels of the company, with salaries included. The salaries are based
on industry averages, and will be further tailored once the financial plan is completed.
Of course, a business cannot legally operate without understanding the legal environment in which it has to
conduct business. Please see section 4.10 on Operating regulations for all the applicable laws and regulations that
will apply to Ella Perfume.
We have in this plan a detailed, 15 step process for selecting the right candidates to work for the company. The
process we have in this plan shows how the VP of Marketing would select his subordinates. The same process
applies to the other VPs when they are hiring personnel. Please see section 4.11 for more information about
Human Resources.
For our financial plan, the core of our strategy is this: The main goal most businesses have for their first year is to
not run in the red. We have decided instead to operate our business part-time for the first year, take no loans, and
finance everything ourselves. This will allow us to do all kinds of testing before we go to a bank and really start
production. We simply do not believe any banking institution would hand out a large loan to a non-existent
business, because as students we have no collateral to put against such financing.
If we find out in the first year that this business will not float, then we will divide up the remaining assets and move
on. If we find out that it has growth potential, we will look to outside institutions to finance the growth of the
business.
We have projected that a large majority of our sales will come in the months of November and December. This is
because our research shows that perfume is often purchased as a gift around the gift giving season.
It should be noted also that we would not be incurring rent expenses if it was not a requirement to this project.
-Team Ella

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2.0 COMPANY PROFILE
Form of business: Partnership.
Owners/Principals: Kevin Andrews, Adam MacLeod, Meagan Brigham, Kirk Cushing.
Name of business: Ella Perfume.
Start date: September 1st, 2010.
Business operation: Full time venture, Monday to Friday, 9:00am to 5:00pm.
Business description: Ella is an online retailer of perfume. The product is sold using a unique matching system to
tailor a perfume to the customers satisfaction. They can select a perfume based on their personality and
customize it with bottles and labels.
Location: Online.
Contact information: Kevin Andrews, (613)262-6510. 2167 Halifax Drive. Ottawa, Ontario. K1G 2W3.
Business advisors:
Chris Castillo, Founder & CEO at Master Entrepreneur International Inc.
Michael Andrews, B.A., LL.B., Founder and senior partner of Andrews Robichaud
David Phipps, Senior Financial Advisor at Assante Wealth Management
2.1 DESCRIPTION OF BUSINESS
Ella perfume is a new way to experience perfume. By enticing customers with a sophisticated web store, they can
discover their own signature scent. Customers will be able to customize their perfume by scent, colour, bottle, and
label.

2.2 BUSINESS ADDRESS & CONTACT INFO

Address: 1010 Polytek Street, Unit: 22, Gloucester, ON, K1J 9J1
Phone: (613)262-6510
Email: kev.andrews@hotmail.com

2.3 OWNERS/PRINCIPALS
Kevin Andrews, Meagan Brigham, Kirk Cushing, Adam Macleod.

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2.4 BUSINESS ADVISORS
Marketing Advisor: Chris Castillo, Founder & CEO at Master Entrepreneur International Inc.
Legal Advisor: Michael Andrews, B.A., LL.B., Founder and senior partner of Andrews Robichaud
Financial Advisor: David Phipps, Senior Financial Advisor at Assante Wealth Management

2.5 VISION & MISSION STATEMENTS
Our vision is to create a platform that SMEs can use to retail their custom products online.
Our mission is to prove the platform works by selling high-end custom perfume

2.6 BUSINESS OPPORTUNITY
Our opportunity with Ella Perfume is one of social change. More and more consumers want to not just buy quality
products, but they want those products to be tailored to their desires. Ella Perfume will capitalize on this
opportunity by inviting customers to create their own custom perfume.

2.7 BUSINESS GOALS & OBJECTIVES
Our Goals:
1. Position Ella Perfume as a high quality perfume that customers will want to talk about
2. Create an efficient online store
3. Provide amazing customer service wherever, whenever possible.
4. Build an online ad campaign that works
Our Objectives:
1. Finish this business plan, and prove that Ella Perfume will be a viable business opportunity.
2. Build a prototype website by July 1st, 2010
3. Run a focus group to discover what kind of customer service gets people talking about a company by May
1st, 2010
4. Research online advertising methods and test mock advertisements at previously mentioned focus group

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2.8 SWOT ANALYSIS

Strengths Weakness
Offering customization to customers
Corporate Social Responsibility initiatives
Competitively priced according to industry
standard pricing
User friendly storefront and customization
software
Brand awareness
Only sold online in start up
Located in Canada generating expensive
international shipping costs
Difficult to obtain perfume materials at wholesale
prices
Opportunities Threats
Other health and beauty products such as all
natural soaps and
Subscription program for new scents each month
Advertising with social networking technology and
Google AdWords
Affiliate program
Big name perfumes and brand loyalty. Only 5% of
perfume companies survive after two years
Anti-fragrance campaigns against use of perfumes
in public and private spaces
The holiday season (November to December)
brings its own challenges

2.9 KEY SUCCESS FACTORS
Our research has shown that, while there are a lot of new entrants into the perfume market, there is still a lot of
opportunity for a smart company to compete. Here are the challenges that our company must face if we are to
be profitable in a mass market:

1. Many of our respondents like the idea of making their own perfume, but admit that they often get
perfume as gifts. This explains why the North American market is saturated with celebrity brands of
perfume, as well as explains why 75% of sales are made in the months of November and December. In
order to have a strategic advantage, Ella Perfume will have to re-invent the way people consume
perfume.

2. The business of online business demands that new ventures be very unique. Our research shows that the
strongest advertising force for online stores is word of mouth. Also, if customers have a good experience
with an online store, they are 60% likely to buy again. This means that Ella is going to have to be a
remarkable company. Our USP cannot simply be that its convenient to buy perfume online. We have to
provide a service that gets our customers talking about us.

3. As an online business, there is a very important need for customer service. Not just in the sense of
treating your customers well, but also as a tool for reiterating and improving the processes of the
business. Ella will have to make extensive use of metrics and customer feedback in order to keep an edge
over the competition.

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3.0 MARKETING PLAN
3.1 INDUSTRY TRENDS & MARKET ANALYSIS
SIZE OF THE I NDUSTRY
Operating revenues reached $536.0 million in 2007, up from $454.0 million in 2006. This was an increase of 18.1%.
Since 1999, operating revenues have increased 3.9% per year on average.
Source: http://www.ic.gc.ca/cis-sic/cis-sic.nsf/IDE/cis-sic44612rdpe.html
In 2006, there were 749 businesses, both incorporated and unincorporated, operating in Canada under the NAICS
code of 446120 - Cosmetics, Beauty Supplies and Perfume Stores.
Source:
http://www.ic.gc.ca/app/sbp/prfpls/prfl/rprtStp/sv.do;jsessionid=0000mMF43YsbPeWPQ4mX3rfzXVw:1247mpv0c
In the United States there are 10,796 businesses operating under the same NAICS code, with annual sales of 6.3
billion.
Source: http://www.census.gov/econ/census02/data/industry/E446120.HTM

3.2 PRODUCT & SERVICE DESCRIPTION
Ella is both a product and a service. We will sell each customized bottle of perfume as a product, with the service
being the added value we give it via custom labels and jars.
These are the features that a customer will be able to customize:
1. Custom scent
2. Custom label
3. A selection of jars
4. The colour of their perfume
Here are the benefits to our customers if they buy our product:
Their very own scent they can show off to their friends
The feeling of being unique
Resell their perfume to their friends
Here are the unique features of our service:
Nowhere else will you find a website that makes it easy to create perfume
Our delivery across North America will be top notch
You can order perfume at anytime from anywhere
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FUTURE PRODUCTS/SERVICES
Some potential future products might include custom made:
Body Lotions

Body lotions available for label customization could be sold along with our perfume.
From Wholesale Bath Supplies Plus (http://www.hodgepodgegifts.com/wholesale-lotion.html), a
1/2 Gallon of scented lotion goes for $15.00 and a whole Gallon at $28.50. This company offers a
wide variety of colorants, aromatherapy blends, and traditional scents.
Soap
Soaps available for label customization could be sold along with our perfume.
Through Adams Natural Soap Wholesale (http://www.naturalsoapwholesale.com/Natural-
Soap_c_19.html), a soap loaf block that equals out to 10 one inch bars, is $13-$15 depending on
product.
Bundles, Gift Packages

Offering bundles and gift packages creates great convenience to our customers shopping for
gifts. These packages would consist of same scented lotions and soap, selections of lotion, and
selections of soap.

3.3 UNIQUE SELLING PROPOSITION
Our USP: Why smell like a celebrity when you can be your own star? Be your own designer with Ella Perfume!

3.4 TARGET MARKETS

Primary:
18 55 years old
Female
Has an income range of anywhere between $10,000 $100,000 per year
Has a degree/diploma or has spent some time in a post-secondary institution
Will spend anywhere from $20 - $80 on a single bottle of perfume
She often gets perfume as gifts
She buys perfume every couple of years
Her favourite scents are vanilla, passion fruit, lilac, citrus, ocean breeze
Enjoys a perfume that has a moderate potency. (Likes perfume that can only be smelled by her and
people very close to her)
She makes online purchases every couple of months

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Secondary:
Men
30-55
Shop fairly regularly online
Are concerned about image and cleanliness
Have girlfriends they buy gifts for

Tertiary:
We currently do not have a tertiary customer in mind because as a start-up business we are solely focused
on serving our primary customer first and then we will look at potential tertiary markets as they come.
In talking with respondents of our survey we have also found out that these are the most important factors when
they are making their decision to buy:
1. Price. The more expensive a perfume is the more likely it is our customer will buy it. This has to do with
how the quality of the perfume is perceived. Our research shows that, of our respondents, those who
bought perfume most frequently also paid a higher price for it.

2. Reputation. As an online business, nothing is more important than conveying a store that is safe to make
purchases from. This means installing security features and maintaining a clean design to assure
customers that our website is reputable and professional. People will not give their credit card
information to a website that does assure them that it is safe to do so.

3. Advertising & Promotion. The perfume industry is an industry that is dominated by image. As an online
business our best bet is word-of-mouth advertising which is, by our research, the most effective form of
advertizing for online businesses. We will achieve this by first targeting our advertising on Facebook.

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SIZE OF THE MARKET

2009
Canada Male Female Canada Male Female
Age group Persons (thousands) % of total of each group
Total 33,739.9 16,732.5 17,007.4 100.0 100.0 100.0
0 to 4 1,837.7 943.4 894.3 5.4 5.6 5.3
5 to 9 1,799.3 925.7 873.6 5.3 5.5 5.1
10 to 14 1,974.6 1,011.8 962.8 5.9 6.0 5.7
15 to 19 2,252.1 1,153.3 1,098.8 6.7 6.9 6.5
20 to 24 2,321.4 1,192.6 1,128.9 6.9 7.1 6.6
25 to 29 2,347.9 1,185.6 1,162.3 7.0 7.1 6.8
30 to 34 2,261.7 1,131.7 1,130.0 6.7 6.8 6.6
35 to 39 2,303.0 1,160.6 1,142.4 6.8 6.9 6.7
40 to 44 2,484.7 1,251.8 1,232.9 7.4 7.5 7.2
45 to 49 2,790.1 1,402.8 1,387.3 8.3 8.4 8.2
50 to 54 2,575.4 1,282.9 1,292.5 7.6 7.7 7.6
55 to 59 2,216.8 1,093.2 1,123.6 6.6 6.5 6.6
60 to 64 1,887.6 925.9 961.7 5.6 5.5 5.7
65 to 69 1,407.1 681.7 725.4 4.2 4.1 4.3
70 to 74 1,080.8 507.3 573.5 3.2 3.0 3.4
75 to 79 908.0 408.8 499.2 2.7 2.4 2.9
80 to 84 675.6 275.2 400.4 2.0 1.6 2.4
85 to 89 412.7 143.4 269.3 1.2 0.9 1.6
90 and older 203.3 54.6 148.6 0.6 0.3 0.9
Source: http://www40.statcan.ca/l01/cst01/demo10a-eng.htm
There are approximately 8,476,300 women in Canada who fit our age demographic. If 50% of those customers
make online purchases every month to two months and 68% of those customers would like to buy our perfume
(see market research below) that means there are 2,881,900 potential customers in Canada.

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3.5 MARKET RESEARCH
Through use of primary and secondary data, we have researched the perfume industry and have found the
following points to be the most salient.

We have found that overall, 68% of our respondents would like to buy custom perfume.

We found that most of our respondents make online purchases every month to two months. This is what led to the
idea of having a subscription based model.
Do our respondants want to buy
custom perfume?
Yes
No
Frequency of Online Purchaces
Every week
Every couple of weeks
Once a month
Once every few months
Never
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We found that the largest slice of our customers spend between $20 - $39 on perfume; However, we found that
the respondents who most frequently bought perfume paid more per bottle, between $50 - $79.

Figure 1 - Sales and Operating Revenues in Canada between 1999-2007 for Cosmetics, Beauty Supplies and Perfume Stores (NAICS 44612)
Price Point
$1 - $9
$10 - $19
$20 - $29
$30 - $39
$40 - $49
$50 - $59
$60 - $69
$70 - $79
$80 - $89
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Figure 2 - Net Revenues in Canada: 1999-2007 - Cosmetics, Beauty Supplies and Perfume Stores in Canada (NAICS 44612)

3.6 COMPETITIVE ANALYSIS
KEY COMPETITOR(S):
Although we have several online custom perfume retailers, our main competitor is the Black Phoenix Alchemy Labs
because the best represent the style of business we are trying to produce.

LOCATION:
They are an online company at www.blackphoenixalchemylab.com. Their physical location is in North Hollywood,
California, USA

YEARS IN BUSINESS:
10 Years

PRODUCT/SERVICES SOLD:
The Black Phoenix Alchemy Labs sell unique perfumes that are ...intriguing, compelling body and household
blends with a dark, romantic, and sexual tone. They have over 700 unique scents. They have a sister company
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called the Black Phoenix Trading Post selling general merchandise of a similar nature to the scents including
jewellery, books, and t-shirts.

PRI CING:
Each perfume is between $15- $25 and is sold in a 5ml apothecary glass jar.

HOUSE OF OPERATION:
They are always available online; however, only sometime allow people to visit their in-house workshop in North
Hollywood, California.

CUSTOMER PROFI LE:
The Black Phoenix Alchemy Lab appeals to customers with an interest in all things occult, gothic, horror, comic
books as well as other related literary works and look for scents to go with their style and image. Their products
are meant to be very sensual and dark and mysterious. They tend to target people between the ages of 16-25 and
even older depending on the interests of the consumers.

MARKETING STRATEGIES:
The BPAL use social networking tools to get their products recognized and start communities around their
business. Most of their advertising seems to come from these communities that link to other businesses and
groups with similar interests. They donate proceeds of their work to multiple charities throughout North America.

SIZE OF COMPANY:
Though not stated, they seem have 2-10 employees working for them. The company is led by a woman named
Elizabeth Moriarty.

PROMOTI ON:
The BPAL do most of their promotion through social networking sites to let customers know about their new lines,
sales, and contests. Currently, they have 3342 fans on Facebook and 1892 followers on Twitter. They are
associated with other gothic and occult stores and groups in Hollywood.

OBSERVATI ONS:
The Black Phoenix Alchemy Lab are an extraordinary company of hard working individuals who are dedicated to
creating scents that match they characters and themes of their passions and share them with like minded people.
Their website is very well organized and beautifully crafted with amazing illustrations by local artists. Although a
small company, they do not give off the image of being so. Their work is a labour of love and should be recognized
for their efforts. Although I enjoy the designs and ideas behind the perfumes, I am aware that not all will be
impressed with the craftsmanship, especially people with a more conservative perspective on things. The
perfumes themselves seem a bit expensive for how much you receive, though it may be that you do not require as
much with how strong they produce their perfumes. Overall I am impressed with this company and see them as
being a tough competitor in perfume sales.

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ANALYSIS OF STRENGTHS:
Having a sister company, Black Phoenix Trading Post, makes the Black Phoenix Alchemy Lab more diverse
in the products they sell allowing consumers to view more products and find similar items that meet their
needs. A second store may also act as overhead for the business depending on how well each is doing.
It must be said that they have a beautifully illustrated website. The sites layout is well done with a great
gothic theme and the accompanying images are beautifully done and match the style of the scents they
are selling. They give an image to scent.
The BPAL have been very effective in using social networking technology. They allow fans of the product
to connect to the business by learning about what is new and being able to make comments about what
they like and do not like about the products.

ANALYSIS OF WEAKNESSES:
Their products have been described as campy in that their products are ironic and cheesy by attaching
scents to certain characters and symbols. Many will dismiss these products because of this though some
will buy them BECAUSE they are campy.
Currently they only sell their products online and sometimes allow people to enter the workshop. By not
allowing people to smell the products, it may make some people weary about purchasing them. By
associating scents with thoughts and images, it may be unappealing to some even though they may enjoy
the scent.
The perfume arrives in a 5ml apothecary glass bottle and with a price tag of $15-$25 before shipping; it
may seem like too much for so little an amount, especially for international customers. Essential oils can
be purchased for a larger amount at about $5 as a comparison.

STRATEGY:
For Ella to compete against Black Phoenix Alchemy Lab we must address the Four Ps of Marketing:
Product- BPLA offers a great product with over 700 scents. We do not necessarily have to have more
scents, but we need to produce scents that will apply to the needs of a larger demographic keeping a
certain degree of myth that BPLA use in their products.
Price- Ella will be more competitively priced than BPLA by offering larger amounts of perfume at similar
prices.
Place- Being located in Canada allows Ella to target Canadian customers and those who enjoy buying
Canadian products overseas.
Promotion- Ella will effectively use social networking tools like BPLA to reach its customers and learn
about what they look for in their products and shopping experience.

All the information above was retrieved from the competitors official website as well as interviews with the
business owner and social networking sites Facebook and Twitter.

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WORST CASE SCENARIOS AND CONTINGENCY

Ella is committed to selling a designer quality, custom, and inexpensive perfume to our customers; unfortunately,
most perfume businesses fail within the first two years. The current economic situation does not help the business
world either in that consumer spending is down significantly. We have plans to introduce future health and beauty
products such as natural organic soaps to which we are in contact with a wholesaler at this time.

Our real investment is the online storefront system we hope to create allowing for full customization by the
consumer. This shopping experience software may turn out not be best suited for custom perfume; however, we
fell a good system would be beneficial for many other business models and are interested in the idea of selling the
architecture as a contingency plan or starting a brand new line of products.

SWOT Analysis for our main competitor; Black Phoenix Alchemy Lab (http://www.blackphoenixalchemylab.com)

Strengths Weaknesses
Counter culture image
Wide variety of different scents
Sexually and emotionally charged products to
meet the needs of target demographic
Sister company the Black Phoenix Trading Post
Beautiful illustrated website
Great us of social networking
Campy- very limited demographic
Currently only available online
Fairly expensive for amount ($25 for 5ml
apothecary glass vials)
Very strong scents
Located in the US making it expensive to ship
especially to customers in Canada
Opportunities Threats
Combined orders (all ready doing with
perfumes and matching t-shirts)
Affiliate programs
Selling to retailers with similar image interest
in these types of products
Strong charity work
Big name perfume companies selling perfumes
at wholesale
Anti-fragrance campaigns
Not a household name, not a product most
would buy as gifts. Its a very personal
approach to perfume
Blocked by internet filters for mature content

22

DIRECT COMPETITORS
Black Phoenix Alchemy Lab
http://www.blackphoenixalchemylab.com
$15 for .17 oz

Scent Crafters
http://www.scentcrafters.com/home.html
$39 for 3.4 oz

Esens
http://esens.com/
$100 0.3oz (9-12 months)

Raffy Perfumes
http://www.parfumsraffy.com/customblends.htmlIndirect
$39 for 1.7oz
INDIRECT COMPETITORS
Most perfume companies are selling an image not a scent.
Some examples of stores:
o The Body Shop
o The Bay
o Boutique stores
Horizontal marketing
o Industries selling deodorants, essential oils, soaps, and similar products

3.7 MARKETING GOALS & OBJECTIVES

Our Goals:
Build the Ella website and start selling perfume by October 1
st
2010
Build a great online ad campaign
Continue to conduct market research in order to better understand our customers

Our Objectives:
Finish the rest of this business plan by April 1st, 2010
Create a mock website and test it by July 1st, 2010
Run a focus group by April 1st, 2010
Perform focus testing by April 1st, 2010

23

3.8 POSITIONING STATEMENT
Our online custom perfume lab is the only place that classy women can create their own signature scent.
We want to position Ella as a high quality perfume. Please refer to the perceptual map below. Our target is to
compete against designer perfumes by offering our customers a chance to be the designer themselves.

Figure 3 - Perceptual Map of the Perfume Industry

24

3.9 PROMOTIONAL STRATEGY
ADVERTISING
Since Ella is primarily an online business, we will focus our advertising on the internet. Using social networking sites
like Facebook, we can create buzz about the company and its services at a low cost.
Facebooks users put so much information on their pages that zeroing in on potential customers is made easy.
Facebook ads allow you to target specific groups of people with specific interests. Using this method of advertising,
we will target women ages 18 and up, all relationship statuses and sexual preferences, who are interested in
beauty, cosmetics, perfume, and dating.
Advertising on Facebook can be a cheap way to get your name out to a specific market because you are charged
per click, according to your own set budget. You can spend as little or as much as you like, and you will only get
charged when someone actually clicks your ad. Even if people arent clicking the ad, you are still raising brand
awareness.
Creating a Facebook fan page for our company and products will result in users advertising for us. Our company
and products will gain awareness through Facebook users networking.

Facebook Ad

25

SALES PROMOTION
To promote sales, Ella perfume will offer mail out samples. When we conducted our market research, many
women said they would not purchase perfume they had not personally smelled first. Making free samples available
to our customers will increase sales, as they will have experienced the scent and are more willing to pay for a
product they know they like.

PERSONAL SELLING
Ella custom perfume will use personal selling in the form of booths at festivals (eg: the tulip festival) and
tradeshows. This will raise awareness outside of the internet, of our company and products.

3.10 ONLINE STRATEGIES
This is the basis of our online strategy:

Online Advertising
draws attention
Customers try our
service
Customers give
word of mouth
Generates more
customers
Generates revenue
for online
advertising
26

3.11 PRICING & SALES STRATEGY
Here is a summary of our break even analysis. For a more detailed look at our fixed and variable costs, please refer
to the spreadsheet in the appendix.
Estimate Fixed Costs Per month Price Point Per Unit Cost # of Units to Break Even
Low 5,860 $39.99 $18.00 266.5
Medium 8,750 $39.99 $18.00 397.9
High 11,815 $39.99 $18.00 537.3

2.9 Million Potential
Customers
Price Point
% That Become
Customers
$29.99 $49.99 $69.99
1% 29,000 $869,710.00 $1,449,710.00 $2,029,710.00
2% 58,000 $1,739,420.00 $2,899,420.00 $4,059,420.00
3% 87,000 $2,609,130.00 $4,349,130.00 $6,089,130.00
4% 116,000 $3,478,840.00 $5,798,840.00 $8,118,840.00
5% 145,000 $4,348,550.00 $7,248,550.00 $10,148,550.00
6% 174,000 $5,218,260.00 $8,698,260.00 $12,178,260.00
7% 203,000 $6,087,970.00 $10,147,970.00 $14,207,970.00
8% 232,000 $6,957,680.00 $11,597,680.00 $16,237,680.00
9% 261,000 $7,827,390.00 $13,047,390.00 $18,267,390.00
10% 290,000 $8,697,100.00 $14,497,100.00 $20,297,100.00
With a market size of approximately 2.9 million people, if we reach our goal of serving 5 percent of the market,
then our sales will be between 4.3 10.1 million.

27

3.12 LOCATION/DISTRIBUTION

LOCATION
When considering a location for Ella Perfume, as an online store, we must address our online and physical
locations of business. Our online location will have to address search engine optimization as a way to position
ourselves in prime online real estate. Our physical location will have to meet our manufacturing and storage
needs as well as daily operations; a warehouse with additional office space would meet our production and
operational needs.

Online location is essential to the success of our business; therefore, we must be vigilant in making our store
visible and easily accessible. To do this, we will be using search engine optimization (SEO) which although does not
guarantee success, offers invaluable tools for being a top search result in search engines such as Google, Yahoo,
and Bing. The following are tips and tools we plan to use for optimizing our webpage as recommended by Googles
Search Engine Optimization Starter Guide:
Create unique, accurate page titles
Make use of the "description" meta tag
Improve the structure of your URLs (easy to understand and flow well)
Make your site easier to navigate
Write better anchor text (displays each pages content to be seen and displayed by search engines)
Use heading tags appropriately (important for page structure)
Optimize your use of images (accurate alt text descriptions)
Make effective use of robots.txt (information allowing search engines to crawl or search your site)
Be aware of rel="nofollow" for links (reduce site reputation)
Good practices for promoting your website
Blog about new content or services
Don't forget about offline promotion
Know about social media sites
Add your business to Google's Local Business Center
Reach out to those in your site's related community
Take advantage of web analytics services

Ella Perfumes physical location will be just as important as the online location. Since we will bottle, labelling,
shipping, and storing the product ourselves, we will require a workplace in a commercial area to do this in a safe
and efficient way. We also require an attached office space which will act as our head office and computer
mainframe for our entire computer infrastructure required to run an online business. We estimate an available
space of 950 square feet will suffice and were successful in locating these times of facilities in The Canotek
Industrial Park in Gloucester, Ottawa, ON. The estimated cost of these facilities is $1150/month + GST. Further
discussion with the proprietor will determine the lease type available for these facilities

28

DISTRIBUTION
Ella perfume will be distributed online through ellaperfume.com. The online store will allow customers to select
scents that appeal to them and customize their orders in areas including bottle style, labelling and in some cases
the scents themselves. Orders will be processes by the Ella team and carried out within same day of online
payment. All orders will be delivered through the Canadian Postal Service to the shipping addresses described by
the customer. We believe that by selling our products online, we are able to lower costs and pass on the savings to
the customers.

We have discusses the possibility of kiosks in shopping malls and local events to try to promote Ella but not to sell
the products directly. Based off of the Dell model of marketing and advertising, our kiosks will allow potential
customers to look, feel, and smell the products we sell to have a better idea as to what Ella perfume is about and
the products we offer.

29

4.0 OPERATIONS PLAN
4.1 MANAGEMENT TEAM & ADVISORS
Financial Advisor
David Phipps, Senior Financial Advisor at Assante Wealth Management
Assante Capital Management Ltd.
2725 Queensview Drive
Suite 300
Ottawa, ON , K2B 0A1

Email: dphipps@assante.com
Phone: (613) 729-7526
Fax: (613) 729-7199

For more than 17 years, David has been a financial advisor helping individuals and families achieve their financial
planning goals, by providing advice on Investment Planning; Insurance Planning; Tax Planning; Retirement
Planning; Estate Planning; Intergenerational Wealth Transfer Planning; and Educational Savings Planning. Working
with a network of highly skilled professionals in Ottawa he is dedicated to providing high-quality advice and
integrated wealth management solutions that simplify and enhance the quality of his clients' lives.
David became a licensed financial advisor in 1993 with Manulife Financial in Ottawa. He completed the Chartered
Financial Planner and Chartered Life Underwriter designations in 1995, Registered Financial Planner and Certified
Financial Planner designations in 1996, Professional Financial Planning Course in 1997, Chartered Financial
Consultant designation in 2001, Branch Manager's Course in 2002, Retirement Plans Associate designation in 2004,
and Registered Trust and Estate Practitioner in 2006. In addition to his financial planning training, David has a BSc
and MA from the University of Guelph.
David served for five years on the National Best Practices Committee of Advocis, The Financial Advisors Association
of Canada, and has served as the Best Practices Chair and Professional Conduct Chair for Advocis in Ottawa. In
these roles, his mandate was to provide leadership to other financial advisors on ethics and best practices. David is
also a CFP Ambassador for the Financial Planners Standards Council, and has been quoted as a financial advisor on
financial planning issues in both the national and local media, including the Globe & Mail, Toronto Star, National
Post, Wall Street Journal, CBC Radio, CTV News, Canadian Economic Press News, Ottawa Business Journal, TD
Performance Magazine, Advisors Edge Magazine, Forum Magazine, Forever Young News, and Commerce Times.
David is a member in good standing of the following professional associations and licensing bodies: Financial
Planners Standards Council and The Society of Trust and Estate Practitioners.
(Assante Wealth Management website, 2008; http://www.assante.com/advisors/dphipps/)
30

Marketing Advisor
Chris Castillo, Founder & CEO at Master Entrepreneur International Inc.
Email: castilc@algonquincollege.com
Phone: (613) 727-4723 Ext: 7159
LinkedIn Public Profile: http://ca.linkedin.com/pub/chris-castillo/0/3a7/361
Chris Castillo, Founder & President of Master Entrepreneur International Inc., is an experienced and dynamic
entrepreneur. www.masterentrepreneur.com
As an entrepreneur, Chris has started various businesses ranging from a fast-food restaurant, coffee shop to a
successful marketing and business consultancy business in Vancouver, B.C.
As an experienced business consultant, Chris provides business services such as business strategy development,
marketing research, feasibility studies, marketing planning, corporate identity programs including logo and
branding strategies, business planning and business coaching.
As an international business and entrepreneurship consultant, Chris has provided consultancy services to such
clients as Street Kids International, Taka Hirano Security Systems and Consultancy (Japan), In Ho Lim Enterprises
(South Korea), Emerge Research and Consultancy Inc. (Japan), and Retis Internet-Architect Consultancy (Mexico).
(Blackboard Staff Information, 2010;
http://online.algonquincollege.com/webapps/portal/frameset.jsp?tab=courses&url=/bin/common/course.pl?cour
se_id=_220548_1&frame=top)

31

Legal Advisor
Michael Andrews, B.A., LL.B., Founder and senior partner of Andrews Robichaud
Phone: (613) 237-1512 Ext. 251
Email: mike.andrews@andrewsrobichaud.com
Michael is a founding and Senior Partner of Andrews Robichaud. He is an Intellectual Property and Business lawyer
and a Registered Trade-mark Agent, and advises on regular and complex trade-mark, copyright, patent and
industrial design matters, including the searching, filing, prosecution, registration, litigation and enforcement of
trade-marks, copyrights, patents and industrial designs in Canada and internationally through a world-wide
network of qualified associates. His clients range from small business owners to Fortune 100 companies and
include industry sectors spanning business, high technology, biotechnology, consumer products, entertainment,
sports, and the arts. Mike is routinely retained to act on behalf of well-known and famous brands and
personalities.
In addition, Mike has significant transactional and financial expertise. Applying his business and legal background,
he assists clients in protecting and expanding their domestic and international knowledge-based businesses using
licensing, syndication, financing and tax strategies. Mike has developed and implemented intellectual property,
business, branding and financial strategies and initiatives for state-of-the-art biometric identification systems,
biotechnology developers, international syndication, prime time television, news media, feature film, Internet and
web-enabled application service providers, and leading fashion and consumer product businesses. He also is an
experienced negotiator and litigator.
Mike is a frequent speaker and author on Canadian and international business, litigation and tax strategies as they
relate to trade-mark, copyright, patent and intellectual property licensing and related issues. He is equally
comfortable addressing the technical issues of concern to intellectual property professionals and the interests of
branding and licensing audiences.

Mike is a member of numerous national and international legal and intellectual property organizations, including
the Intellectual Property Institute of Canada (IPIC), the Canadian Bar Association (CBA), the Law Society of Upper
Canada (LSUC), the Carleton County Law Association (CCLA), and the International Trademark Association (INTA),
where among other duties he served on the Meetings Committee for planning seminars and sessions for future
Annual and Leadership meetings. Most recently, Mike has just been appointed for a two year term to the INTA
Bulletin Committee responsible for Policies and Procedures Special Features. He has also been appointed as one
of only a handful of senior Canadian trade-mark lawyers for a four year term to the INTAs Panel of Neutrals (PON),
the worlds only international panel of neutral mediators who are both experts in trademark and unfair
competition law and trained in the art of mediating disputes. For several years, Mike also served as the Chair for
the legal seminars for international licensing conferences, including the Worldwide Licensing Exhibition (WLE) held
in London, England, and the Licensing in Latin America (LILA) conference, held in Miami, Florida.

32

4.2 ORGANIZATIONAL CHART

Our organizational chart shows that this company is rather flat. We believe a flat company can move more quickly
than one that is bogged down with many levels of management. The presidents role in this company is really only
a title, but with one important responsibility. It will be the presidents responsibility to make decisions when the
vice presidents cannot come to a consensus. This is to ensure theres no stalemate, and that the company stays
mobile.
The Vice Presidents are where the core decisions are made. It is through their collaboration that Ella will flourish.
Each Vice President is a manager and is expected to manage the employees below so that they have clear direction
as to what their job expectations are.
Note: we will not assign roles until the whole business plan is complete.

President
VP of
Marketing
Marketing &
Sales
Representative
VP of
Operations
Perfumer
Customer
Service
Representative
VP of Finance
Bookkeeper Accountant
33

4.3 SUPPLIERS

Here is a list of our suppliers:
o Perfume
New Directions Aromatics
http://www.newdirectionsaromatics.ca/
21 Regan Road, Suite B
Brampton, Ontario L7A 1C5
Canada
Local Tel: 905-840-5459
Local Fax: 905-846-1784
o Bottles
SKS Bottling Company
http://www.sks-bottle.com/
Phone: 518-880-6980 Ext 1
Monday - Friday 8:00am - 5pm EST.
Fax: 518-880-6990
o Boxes & Bubble Wrap
Uline Shipping Supply Experts
http://www.uline.ca/Cls_04/Boxes-
Corrugated?pricode=DB025&gclid=CJPd2Zj_sKACFQTyDAodLUzaUA
60 Hereford St
Brampton, ON L6Y 0N3
Phone: (905) 452-3190
Fax: 1-800-295-5571
o Cards
Vistaprint
http://www.vistaprint.ca/vp/welcome.aspx?xnav=welcomeback&rd=2
447 Advance Blvd.
Windsor, ON, N8N 5G8
o Labels
We will print our own labels so that they can be customized on the fly
Avery Canada
http://www.avery.ca/avery/en_ca/
Consumer Service Center
1840 Clements Road
Pickering, ON L1W 3R8
Toll Free: (800) GO-AVERY
o Color dye
A local grocery store
4.4 EQUIPMENT & OFFI CE SUPPLIES
34

We really dont need any specialized equipment or supplies. Here is our basic list of office equipment:
A list of office supplies:
o Chairs
o Desks
o Stationary
o Computer Equipment
Office Computers
Dedicated Server
o Printer/Fax

4.5 MANUFACTURING PLANS
Production Methodology
Productivity = Total Output/ Units of Factor
Technical Efficiency- output produced using the fewest possible inputs
Productive Efficiency- output produced at the lowest possible cost
The choice of production method and the factor inputs depends on such things as:
o the nature of the product
o factor costs
o the scale of production
Batch Production/ Craft Production
Research and Development (time invested, future requirements)
Ella Perfume is committed to creating perfumes that REALLY work for their customers and encourage return
customers. To do so, we need to develop a viable manufacturing process to deliver better and more diverse
products to our customers. We are currently looking into future products that customers may meet our customers
needs and wants; we will either develop them ourselves or seek out products from wholesalers. For information
on future products, see section 3.2 of the Marketing Plan.

Future requirements for the business include a physical location or kiosks for physical promotion of our products.
Depending upon sales success,
Cost Analysis (Overhead)
Fixed Costs Low Medium High
Rent
Warehouse $725.00 $1,150.00 $1,575.00
total $725.00 $1,150.00 $1,575.00
Salary
current wage $9.50 $9.50 $9.50
hours per week $8.00 $8.00 $8.00
35

days $30.00 $30.00 $30.00
employees 2 3 4
total $4,560.00 $6,840.00 $9,120.00
Accountancy Costs
Size of business $56.00 $75.00 $94.00
Marketing
Google Adwords $175.00 $200.00 $400.00
Yahoo $175.00 $175.00 $175.00
Prints $50.00 $100.00 $150.00
Facebook $50.00 $75.00 $100.00
Other $50.00 $100.00 $150.00
total $500.00 $650.00 $975.00
Utility Costs

Utility bills $75.00 $90.00 $105.00
Other (parking, etc) $0.00 $20.00 $40.00
total $75.00 $110.00 $145.00
total $5,860.00 $8,750.00 $11,815.00
Equipment and Plan Requirements
The equipment we will be using in both the manufacturing and sales departments have no special requirements
associated with them beyond standard operating procedures. The computer equipment will require a certain
degree of expertise when creating and managing an online store but this role will be fulfilled by an Information
Technological Advisor.
Sub-Contracting Arrangements
Although Ella Perfume does not have any confirmed sub-contracting agreements, we would be open to
agreements and opportunities in terms of future products and perfume suppliers. At the moment we are
considering an agreement with Adams Handmade Soap in the United States to sell organic soaps through Ella.
Prototype Development
Kevin Andrews is responsible for developing a test product of Ella and so far seems successful in his work. We are
currently trying to find out which combinations work best and how to bottle and label our products. In terms of
the website, we are currently in development of a digital store front to sell Ella perfume and will begin testing for
compatibility and usability.
As you can see, our overhead is
between $5,860 and $11,815 depending
on low, medium or high direct costs.
36

Municipal Zoning and Bylaws
The zoning information for 1010 Polytek Street; Unit 22 is:
Zoning Pin: 153450000
Ward Number: 11
Legal Description: CARL CONDO PLAN 345 LEVEL 1; UNIT 1

Intellectual Property
Basic Package for Copyright Registration with Business Development Canada
Our Fee $50.00
Completion of government forms. Included
Filing of Copyright Application Included
Government Filing Fee: $50.00
Shipping & Handling $15.00
Taxes (GST) $3.25
Total $118.25
Basic Package for Trademark Registration with Business Development Canada
Our Filing Fee $99.00
Basic Trademark Search $39.95
Preparation
of the Trademark Application
Included
Filing of the Trademark Application Included
Government Filing Fee: $250.00
Final Report $15.00
Taxes (GST) $7.70
Total $411.65

37

4.6 BUILDING AND LEASE INFORMATION

Details:
Size: 950 sqft

Description:
The space is a small warehouse with a garage door with a small attached office, a private entrance and
private washroom.

Address:
1010 Polytek Street
Unit: 22
Gloucester, ON
K1J 9J1

Cost: $1100 + GST
Net Rent Lease

Real Estate Representative:
Shlomi Meena (613-601-5925)

Images:

38

4.7 ONLINE LOCATION

Since retail is all about location, location, location, and Ella Perfume is an online business it will be prudent to plan
out how Ella plans to have a great location in cyberspace:
The most important factor is raising the businesses ranking is search results. This is called Search Engine
Optimization.
We have 4 strategies to get results:
1. Use Google Adwords keyword tool to find the most popular keywords related to perfume
2. In our TITLE tag we will add in those keywords
3. Each page will have good descriptions in their meta tags
4. Use keywords in our URLs whenever possible

4.8 FLOOR PLAN

Here is how our office space will be laid out:

39

4.9 OPERATING PROCEDURES
Retail/Service/Wholesale
Ella is a strictly online retail store.
Leasehold Improvements
At this time, the facilities we hope to use require no leasehold improvements; however, we will account for any
future improvements that may be necessary and/or beneficial to the company.
Furniture, Fixtures, and Equipment

Furniture
Chairs
Desks
Work Stations
Stationary

Fixtures
Desk Lamps
Shelving Units
Garage Door

Equipment
Computer
Office computers
Operations computer
Dedicated server (retail purposes)
Printer/Fax
Perfume materials
Perfume
Bottles
Boxes
Shipping
Personalized cards
Labels
Warehousing Requirements

Ventilation
When working with hazardous substances, it is essential that the workplace has proper ventilation to allow for the
exchange of clean air in the manufacturing process.

Lighting
We will require sufficient lighting for the manufacturing process; without said lighting, the perfume process would
be difficult and potentially dangerous.

Storage Space
We require sufficient storage space for our supplies and end products. For safety purposes, we feel that a
warehouse has the best space available for our needs while remaining a clean and safe environment to work in.

40

Running Water
We will require running water for the perfume itself as well as proper cleans up and maintenance. We will need an
industrial sink and storage container for brown water.

Waste Management
We require waste pick up once a week.
Operating Hours & Procedures

Hours
Ella Perfume is a strictly online business at the moment therefore removing the need for regular store hours;
however, operations for Ella will take place Monday to Friday 9am to 5pm. Day to day office functions will happen
in the attached office of the building and manufacturing will occur in the warehouse during these times.

Standard Operating Procedures (SOP)
We have chosen the following model to build our Standard Operating Procedures Plan which will be completed at
a later date pending municipal and provincial legislation adherence. The plan is courtesy of Klariti Business
Templates.

Introduction
Purpose, Scope, Training, Definitions , Precautions, Responsibility, and Equipment

Procedures

Reference Documents

41

4.10 OPERATING REGULATIONS
Federal Regulations

Goods and Services Tax (GST)
In Canada, all businesses with annual taxable sales of over $30 000 must be registered and collect Goods
and Services Tax. Ella would require a Federal Business Number from the Canadian Revenue Agency which
should be retrieved after the business is registered.
The Business Development Centre of Canada offers a GST registration service for $35 which would save
time and allow for accuracy when registering.

Employee Source Deductions
Businesses in Canada are required to make deductions for Canadian Pension Plan (CPP ) and Employment
Insurance (EI) contributions.
The government of Canada provides a free Payroll Deductions Calculator (http://www.cra-
arc.gc.ca/pdoc/) as well as required T4 Forms.

Corporate Income Tax
Federal Income Tax Rates for Income Earned by a General Corporation (courtesy of KPMG Canada)

Export/Import
At this point, Ella does not deal in importing and exporting in international business.

Packaging & Labelling
Packaging and labelling must follow the consumer Packaging and Labelling Act and Regulations of Canada
Cosmetic products are subject to the requirements of the Cosmetic Regulations under the
Food and Drugs Act, as well as the Consumer Packaging and Labelling Act. For further
information regarding the Cosmetics Regulations, contact the office of the Product Safety
Bureau, Health Canada in your area or the following:
42

Head, Microbiology and Cosmetics Section
Cosmetics Evaluations
Product Safety Bureau, Health Canada
Statistics Canada Main Building, Wing 1000
Tunneys Pasture, AL 0301B2
Ottawa, Ontario, K1A 0K9
Telephone: (613) 952-9962
Fax: (613) 952-1994

Intellectual property
The Canadian Intellectual ProperyOffice
http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/home
The CIPO offers guides and information on patents, trademarks, industrial-design, and copyrights and fees
for those who wish to do process themselves. We chose a private company to take care of this process for
us. Section 4.5 Manufacturing Plans; Intellectual Property for the rates of copyright and trademark
registration with the Business Development Centre of Canada.

Product Standards Canada
Standards Council of Canada (Industry)
SCC represents Canada within the international standards community and serves as the countrys
national accreditation body. For organizations that develop standards and those that verify conformity to
standards, accreditation by SCC provides independent confirmation that they are qualified to do their
jobs. SCC accreditation is based on international guidelines and is recognized by numerous other
countries through mutual recognition agreements.

Personal Information & Electronic Documents Act (PIPEDA)
PIPEDA was enacted on January 1, 2004 and is responsible for the regulation of personal information by
businesses to keep the information safe and private.
The official statute (http://www.parl.gc.ca/PDF/36/2/parlbus/chambus/house/bills/government/c-
6_4.pdf)
Ella must be vigilant in following these regulations when collecting personal and financial information of
Canadian consumers

Corporate Income Tax
Combined Federal and Provincial Income Tax Rates For Income Earned by a General Corporation
(Courtesy of KPMG Canada)
43

Provincial Regulations

Provincial Sales Tax
8% in Ontario. 13% when combined with GST
Harmonized tax will come into effect July 1, 2010

Employer Health Tax
For a guide to Employer Health Tax (EHT) please see: http://www.rev.gov.on.ca/en/guides/eht/pdf/2436.pdf

Total Ontario Remuneration Rate
Up to $200,000.00...........0.98%
$200,000.01 to $230,000.00......1.101%
$230,000.01 to $260,000.00.......... 1.223%
$260,000.01 to $290,000.00......1.344%
$290,000.01 to $320,000.00......1.465%
$320,000.01 to $350,000.00......1.586%
$350,000.01 to $380,000.00.........1.708%
$380,000.01 to $400,000.00......1.829%
Over $400,000.00..............1.95%

Ontario Health Premium
44

The Ontario Health Premium is deducted from employee pay and pension cheques through the income
tax system.
The actual amount of the premium for the year is determined when you file your annual income tax
return.
Source: http://www.rev.gov.on.ca/en/tax/healthpremium/

Special Regulatory Acts
On December 1, 2004, Health Canada published amendments to the Cosmetic Regulations in Part II of the Canada
Gazette. The Regulations now require mandatory ingredient labelling on all cosmetic products sold in Canada.
Along with other changes to the Cosmetic Regulations, the protection of the health and safety of the Canadian
public with regard to the use of cosmetic products will be strengthened. The new requirements come into force on
November 16, 2006. This means that businesses selling cosmetic products in Canada will have to be in compliance
with all the new requirements by that time.

Source: http://www.hc-sc.gc.ca/cps-spc/person/cosmet/ingredient/faq_cons-eng.php

45

4.11 HUMAN RESOURCES

Please Refer to section 4.2 for an organizational chart
JOB DESCRIPTIONS
President
Overall Responsibility: The Presidents one and only responsibility is to make a decision when the vice presidents
cannot come to a consensus. This is to avoid a stalemate which could slow the company down.

Number of Positions: 1

VP of Marketing
Department: Marketing

Reports to: President

Overall Responsibility: The VP of Marketing is responsible for making key strategic decisions that will grow the
company. This will be done by constant attention to the macro environment so that Ella Perfume can take
advantage of any opportunities and minimize any threats that will arise every business cycle.

Consults With: The VP of Operations, the VP of Finance, the President

Term of Employment: 12 months

Qualifications:
College degree in Marketing
Great organizational skills
Leadership qualities
2 years management experience
Excellent communication skills

Salary: $80,000 / year


VP of Operations
Department: Operations


Overall Responsibility: Managing the output of the company, by hiring/firing the right perfumers and customer
service representatives. The VP of Operations is also responsible for the management of the web store.

Consults With: The VP of Marketing, the VP of Finance, the President

46

Qualifications:
College degree in management



VP of Finance
Department: Finance


Overall Responsibility: Maintaining the financial health of the company by forecasting cash flow and working to
minimize expenses.

Consults With: The VP of Marketing, the VP of Finance, the President


Qualifications:
College degree in Accounting/Finance



Marketing & Sales Representative
Department: Marketing

Reports to: VP of Marketing

Overall Responsibility: To present and sell company products to prospective clients. To field test our products in
order to discover new potential markets and how to reach then with the most cost effective means of marketing
as well as discovering ways to improve our product.

Qualifications:
College degree in Marketing
2 years marketing experience
47



Perfumer

Reports to: The VP of Operations

Overall Responsibility: Creates perfumes for our customers by taking their orders and turning it into the final
product, ready for shipping.

Consults With: Customer Service Representative


Qualifications:
Time management skills
Reliable
Autonomous
2 years experience in a customer service oriented field

Salary: $12-$15 / hour


Customer Service Representative

Reports to: The VP of Operations

Overall Responsibility: Fields comments, concerns, and complaints from our customers. Is also responsible for
returns, issuing refunds and credits.

Consults With: Perfumer


Qualifications:
Time management skills
2 years experience in a customer service oriented field
Can use Microsoft Office Products
Exceptional communication skills


48

Bookkeeper
This job will be outsourced
It is the VP of Finances responsibility to make sure all bookkeeping duties are met

Accountant
This job will be outsourced
It is the VP of Finances responsibility to make sure all accounting duties are met

RECRUITMENT, SELECTI ON & APPOINTMENT PROCCESS

Step 1: Identification of available job
Ella Perfume will need to hire marketing and sales representatives. The recruitment and selection process for this
position will be one of the most important hiring positions within the company.
Step 2: Review job availability
The VP of Marketing at Ella Perfume will review the short/long term requirement for the marketing and sales
representatives and the need to fill the position. In the selection potion of the recruitment process our managers
will consider:
- The current salary and training budget for the position
- Staffing plan and future business profile for the work area
- Current and future Requirements
- Job Skill Requirements
- Occupancy required to meet need (eg. ongoing, fixed term)
- Adequacy and accuracy of position description
- Whether the position is approved and established
- Note: This review may involve other VP members within the company and/or the President
Step 3: Recruitment strategy
The Line Manager will consider and assess the best way of attracting a pool of suitably qualified candidates, who
will meet the needs of the business. Ella Perfume will attend local University and College job fairs, and have job
postings on websites such as Craigslist, Kijiji and Job Canada.
Ella Perfume will also look into several other areas for recruitment. The following are a few different methods for
acquiring a pool of candidates:
- Internal staff (Advertisement)
- Internal staff (Redeployment)
- Candidates from recent/previous
recruitment activity
- Professional/Industry Organisations
- Recruitment Agencies/Job Network
- Advertising
- Internet
- Journals
- Newspaper
Step 4: Initiating recruitment documentation
The VP of marketing will complete and forward to the HR Account Manager the Request to Recruit form and
attach all necessary information, including:
- 'Request to Recruit' form
- Position Description and Selection Criteria
- Draft Advertisement, where applicable (where necessary)
- Proposed Selection Panel (where appropriate)
- Recruitment agent information (where applicable)
Step 5: Handling recruitment activity
Ella Perfumes VP of Finance will ensure the appropriate recruitment activity is in accordance with the approved
request to recruit.
Step 6: Selection Panel & Selection Methodology
The VP of Marketing will determine the composition of the selection panel in accordance with the Ella Perfume, to
ensure that proposed members have been trained, secure panel membership, brief members on their role and the
vacancy details and plan logistics (availability, meeting times etc). The selection panel will reach a shared
understanding and/or agree on:
- position role and accountabilities
- selection criteria
- method(s) for short-listing or pre-selection
- method(s) of assessment of shortlisted candidates
o interview
o reference check (eg. Written, telephone, at what point in the process)
o skills test
o presentation

It is the responsibility of the Chairperson to ensure that all selection panel members are fully aware of their legal
and procedural obligations.
Step 7: Receive and Collate Applications
The VP of Marketing will arrange for receipt and collation of applications.
The Chairperson of the Selection Panel will receive the Vacancy File containing the following:
- Original Applications
- List of Applicants (for QA purposes)
- Position Description
- Recruitment Process Check List
- Selection Panel Guide

Ella Perfume Business Plan April 1, 2010
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Step 8: Shortlist of Candidates
Ella Perfumes chairperson for the selection panel will ensure that all members or a representative sub-group have
access to the applications, consider the information and facilitate a short-listing process to identify the most
competitive candidates. The selection panel (or representative sub-group) will compile a summary assessment and
ranking of the candidates against the selection criteria for inclusion in the selection report.
It may be necessary at this step to consider pre-selection interviews or other assessments tools to identify a
manageable shortlist.
Candidates not shortlisted will be advised that they were unsuccessful.
Step 9: Assess short listed candidates
The selection panel will conduct interviews and/or apply other relevant assessment methods to acquire
information relevant to the universitys business needs, position role & accountabilities and selection criteria. The
assessment methods should be consistently applied to all candidates for a vacancy and may include, but not be
limited to:
- Interview
- Skills/aptitude test
- Work samples/simulations
- Psychological testing
- Reference check (mandatory for the recommended applicant)

Following the collation of information from the various sources, including the candidates application/resume, the
selection panel will review all the information and determine a ranking of the candidates. The ranking will identify
the candidates who meet the criteria and order of merit.
Step 10: Recommend Outcome
The Chairperson will ensure that the recommendation is included into a Selection Report.
The Selection Report will contain:
- Documentation of the short-listing process
- Summary of assessment against the selection criteria for each shortlisted candidate
o Interview notes, Referee reports
- Recommendation of preferred candidate(s), remuneration to be offered and probation conditions
- Relocation budget (where appropriate)
- Ranking of shortlisted candidates (where appropriate)
- Documentation of referee(s) comments (where applicable)
- Endorsement by selection panel members

The Selection Report should be completed within 1 day of the finalisation of selection activities.
Step 11: VP of Marketing Delegations
The Chairperson obtains endorsement and approval of the recommendation. This should be obtained within 1 day
of submitting the Selection Report.
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Step 12: Employment offer and terms & conditions
The relevant Line Executive/Chairperson/Line Manager makes contact with the recommended candidate and
informs them of the offer subject to relevant conditions. The contact may address:
- Remuneration package details
- Relocation budget/costs
- Availability for commencement
- Clarify terms and conditions of appointment including tenure, probation etc.

This should be undertaken immediately on receiving approval of the recommendation.
Step 13: Written Employment Offer
VP of Marketing will arrange for the formal written offer and contract of employment to be prepared (in
accordance with the selection report) and dispatched within 1 day of receipt of the approved Selection Report and
recommendation.
Step 14: Unsuccessful Candidates & Feedback/Counseling
The Chairperson of the Selection Committee will ensure that unsuccessful (shortlisted) candidates are advised of
the selection decision, in a timely manner preferably immediately following contact with the recommended
applicant. The Chairperson is encouraged to offer and/or proactively provide feedback to candidates.
Step 15: Arrange appointment and commence induction process
VP of Marketing will ensure that all appointment documentation is stored on the Vacancy File and the
appointment is finalized. This will include:
- Obtaining a signed contract of employment
- Update of all information/records (eg. ALESCO System)
- Ensure induction is planned and conducted
- Storage and retention of all original recruitment and selection documentation for 12 months in
accordance with relevant records management guidelines.

Step-by-Step Recruitment Guide (2009). Guide to the recruitment, selection & appointment process. Retrieved on
March 12, 2010, from:
http://www.hr.ecu.edu.au/rec/html/step-by-step_recruitment_guide_1.cfm

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ELLA EMPLOYEE BENEFITS
Reward Philosophy
To attract, engage and retain great people, Ella Perfume is committed to providing a multi-dimensional rewards
program including a competitive base pay, a comprehensive benefits plan, incentives, professional development
opportunities, and a great work environment for part-time and full time employees.
Compensation
Competitive Base Salary
Ella Perfume conducts market analysis and participates in annual SMEs business salary surveys to ensure our
competitiveness in the market.
Incentive Programs
At Ella perfumes we believe that our employees contribute to the success of the company and that everyone
should share in this success. This is why we want our employees to have the opportunity to earn additional
financial rewards through one of our many incentive programs.
Service Awards
We take great pride in commending our employees loyalty and commitment to Ella Perfume. We recognize our
employees who meet key milestones in their career and with our company on an annual basis.
Health Benefits
Ella perfumes offers its employees a comprehensive benefits package with services ranging from vision care, and
professional services, to dental care and life insurance. We consider Wellness an integral part of our rewards
philosophy.
Discount Programs
Wellness Programs
Health and Dental benefits
Learning and Development
Our employees are our greatest asset. We believe strongly in developing our employees on a professional and
personal level. Therefore, we offer a variety of opportunities for Learning and Development through internal
training programs:
Performance Management
Leadership skills development
Annual Training Calendar and Courses
Career Development
Work Environment
At Ella Perfumes, we believe in a work environment that cares about the employee as well as their contributions.
We offer opportunities to get involved with and/or participate in:
Company-wide Communications Meetings
Company Sponsored events such as Annual Staff Celebrations, Family Picnics, Golf Tournaments, and
BBQ's.
SMEs business networking conventions
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4.12 RISK ANALYSIS

These are our three greatest risks:
o Lack of sales
A lack of sales will mean that we will have to do more research in order to explore new
markets that will bring in revenue

o Economic downturn
An economic downturn is likely. In this case we will focus our positioning on making Ella
Perfume look like an affordable alternative to expensive designer perfume. Our
marketing message will include you deserve it to boost impulse sales.

o Liability
Perfume can cause irritations due to allergies. Currently, Canadian law does not force
perfume makers to disclose the ingredients in their perfume. We however will disclose
this information so that our customers can make informed decisions about whether or
not they will be allergic to our products.

4.13 IMPLEMENTATION PLAN & SCHEDULING

What When

Research January 2010

Marketing Plan February 2010

Operations Plan March 2010

Financial Plan March 2010

Finalize Business Plan April 2010

Register Copyright & Trademark April 2010
Build Website May July 2010
Launch Website August 2010

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5.0 FINANCIAL PLAN

5.1 ASSUMPTION SHEET
This business will be run as a part-time operation for the first year
We are aiming to sell 1000 units in the first year
Our product costs $5 to make and $5 to ship
Rent will cost $1,100 / month
Best case cash flow = a 15% increase in sales compared to our realistic cash flow
Worst case scenario = a 15% decrease in sales compared to our realistic cash flow
All our sales will be made in cash

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5.2 SOURCES AND APPLICATION OF FUNDS
This is a bit of blocking text. There is really nothing to see here other than that it is filling space. Isnt it nice to just
spread out and relax? It will be very important to delete this text. But for now, just let this text fill your document
with joy and happiness.

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5.3 OPENING BALANCE SHEET

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5.4 PRO FORMA CASH FLOW STATEMENT

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5.4.1 YEAR ONE, MONTHLY CASH FLOW (BEST, WORST, AND REALISTIC SCENARIOS)
with joy and happiness
.

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5.5 PROJECTED FIRST YEAR INCOME STATEMENT

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5.6 CLOSING BALANCE SHEET

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5.7 BREAK-EVEN ANALYSIS
Our projected revenue and expenses balance out for the year. Our projected cash flow shows that we will be
making what we spend every month. If we get off course, we will know exactly where we are spending too much,
and will have to change our operations to match the current environment.

5.8 RATIO ANALYSIS
CURRENT RATIO - CURRENT ASSETS / CURRENT LIABILITIES
$12,700.00 / $0.00 = Thumbs up
Mathematically nothing is divisible by zero, but the fact that the company has $12,700 in current assets, and no
liability is very good for a business starting off.
WORKING CAPITAL - CURRENT ASSETS CURRENT LIABILITIES
$12,700.00 - $0.00 = $12,700.00
To start off, Ella Perfume will have $12,700.00 to play with. $10,000 of it will be in cash. The reason for this is so
that we can pay any unexpected expenses, and then roll those added expenses into our future cash flow
statements.
QUICK RATIO - MOST LIQUID ASSETS / CURRENT LIABILITIES
$10,000.00 / $0.00 = Thumbs up.
Again, no number can be divided by zero. This ratio is simply telling us that we will have $10,000 of liquid asset in
the business when we start.
PROPRIETORSHIP RATIO - OWNERS INVESTMENT / TOTAL ASSETS
$30,000 / $30,000 = 1
This ratio is telling us that the owners of the business own it completely with no outside equity invested in the
business.
DEBT TO EQUITY RATIO - TOTAL LIABILITIES / OWNERS EQUITY
$0.00 / $30,000 = 0
Ideally, a business wants this ratio to be less than 1 because it shows financial institutions how much of the
owners own money is in the business. Because we are financing Ella Perfume entirely ourselves, that means that
there is no outside liability, and we own the business outright.
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GROSS PROFIT RATIO GROSS PROFIT / (SALES/INCOME)
$39,990.00 / ($39,990.00 / $39,990.00) = 39,990
It is because we aiming to break even that this ratio seems awkward. All of our income statement ratios will look
odd, but that is because we are aiming to break even.
NET PROFIT MARGIN - NET PROFIT / (SALES/INCOME)
$0.00 / ($39,990.00/$39,990.00) = 1
Again, we are aiming to break even.
RETURN ON INVESTMENTS NET PROFIT / TOTAL ASSETS
$0.00 / $30,000 = $0.00
This makes our venture look like it is not worth it, but we believe that the lessons learned in the first year will help
us gain a leg over future competition because we will understand the industry of retailing custom perfume online
better than they will.
RETURN ON OWNER S EQUITY NET PROFIT / OWNERS EQUITY
$0.00 / $30,000 = $0.00
Again, it seems like there is nothing in it for the owners. We are working on this job part-time for the opportunity
to see where it will lead us. I believe we will make thousands of dollars in experience in our first year.
RETURN ON ASSETS (NET INCOME + INTEREST EXPENSE) / TOTAL ASSETS
$0.00 + ($0.00/$30,000) = $0.00
This formula shows that we will not be generating return on assets. This is very good for Ellas because the ROA
low rate means that we will not have to be paying off liabilities
RETURN ON EQUITY (NET INCOME / SHAREHOLDERS EQUITY
$0.00/$30,000 = $0.00

We do not expect to generate any shareholders profit within the first 12 months of operation. This ties in with our
no liabilities approach.

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APPENDICES
1.0 RESUMES

Kevin Andrews
2167 Halifax Drive
Ottawa, ON K1G 2W3
(613)262-6510
kev.andrews@hotmail.com

Objective
My goal is to own and direct an online business.
Sales and Marketing Skills
Competed in the Ontario Colleges Marketing Competition (OCMC)
Composed an outstanding marketing plan for Warner Music Canada
Generated more than $100,000 in sales last year for my previous employer
Communication Skills
Cultivated impressive presentation skills through OCMC as well as presentation
assignments both in a team and individually
Directed many team projects during college
Technical Skills
Developed great proficiency with Microsoft Office, PowerPoint, Excel, and Access
Acquired the ability to create websites
Polished research skills using online databases, and other sources
Improved typing ability to 80 WPM
Organizational Skills
Coordinated many team projects through college including finance, advertising,
marketing, and the creation of a full-fledged business plan
Employed extensive time management skills to keep myself and my team members on
top of our projects
Creative Skills
Founded the Idea Bank; a networking club for students of the SME program at
Algonquin College
Created logo designs for many companies, such as Andrews Robichaud, Fairlawn
Gardens, and Pilates Patio
Work History
2006-Present, Waiter, Zaks Diner, Ottawa, ON
2005-2006, Waiter, Moes Caf, Ottawa, ON
Education
2008-Present, Algonquin College, Ottawa, ON
Area of academic study: small to medium sized business management
Diploma expected June 2010
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Adam MacLeod

1800 Laxton Cres. , Ottawa, ON, K2C 2N3
613-723-6551
macleodak@gmail.com
EMPLOYABILITY SKILLS PROFILE
Communications, Thinking, and Problem Solving
Positive Attitude, Initiative and Responsibility
Flexibility, Organization, and Participation

DISTINCTIVE SKILLS
In spring 2009, I worked with a team to develop a marketing plan for a local musician, Becky Abbot. We were
awarded first place in the Small Medium Enterprise Marketing competition, for the most effective plan.
EDUCATION

o Small and Medium Enterprise Management (Spring 2010)
o Returning for Business Marketing in Fall 2011

o Ontario Secondary School Diploma with honours (Spring 2006)
o Principals Commendation Award for Outstanding Contribution to Woodroffe High School

LIFE EXPERIENCE
-2006)
Trinity United Church (2003-2006)
-Conductor at Trinity United Church (2006) for 10 to 15 children

WORK EXPERIENCE
- Present)
o Oversee onsite donations and perform necessary operational duties.
o Awarded Team Member of the Quarter (Fall 2008)
o Coordinator, Halloween Merchandise (Fall 2009)

- August 2008)
o Stock Supervisor, for up to 5 employees, responsible for receiving and inventory
o Periodically oversaw daily operations of the store
o Responsible for opening and closing procedures of the store

ADDITIONAL DEMONSTRATED ABILITIES

Performed as a guitarist, bassist, and singer at numerous social functions

REFERENCES AVAILABLE UPON REQUEST

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C-STEP ANALYSIS (ENVIRONMENTAL SCAN)
DIRECT AND INDIRECT COMPETITION
DIRECT
Scent Crafters
http://www.scentcrafters.com/home.html
$39 for 3.4 oz
Esens
http://esens.com/
$100 0.3oz (9-12 months)
Raffy Perfumes
http://www.parfumsraffy.com/customblends.htmlIndirect
$39 for 1.7oz
INDIRECT
Most perfume companies are selling an image not a scent.
Some examples of stores:
o The Body Shop
o The Bay
o Boutique stores
Horizontal marketing
o Industries selling deodorants, essential oils, soaps, and similar products

SOCIAL AND ENVIRONMENTAL
Perfume is classified as many different types including but not limited to, eau de toilet, cologne, and
musk.
The actual odours of perfume are derived from naturally occurring scents and synthetic creations.
Naturally occurring scents are a great deal more expensive and more difficult to achieve, however, deliver
the most softer and complicated scents; whereas, synthetic scents are cheap but lacking in substance due
to the fact that they are pure and made up of a single compound.
Our society on the whole believes in the appropriate treatment of animals and therefore do not approve
of animal testing. A product will be seen as more humane and many consumers do not mind spending
more on a product if they can assure no animals were tested on before being put to market
Being Green is a major trend many consumers are now demanding from the products they purchase;
therefore, we have a responsibility to the environment and our customers to meet green objectives in
manufacturing of the perfume, the delivery of the perfume, and even the containers the perfume is
stored in. Being sustainable CAN make money.
Another example of sustainability is naturally occurring substances like sandalwood are becoming extinct
because of their use in many perfumes. Extracting scents from animals is where many perfumes began
and we must look at other natural alternatives.
Many individuals cannot wear or even be around manufactured perfumes for many different reasons
including skin allergies, asthmatic reactions, and other respiratory conditions. We should be considerate
of these people and try to find substances and scents that are friendlier to the needs of other people.

TECHNOLOGICAL
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Remember natural versus synthetic scents as discussed earlier.
Perfume has been around for many years and many people prefer certain scents that they have known for
a long time which still use traditional means of creating perfumes. We should seek out newer
technologies as well as keeping to traditional means to determine what are the most effective and
innovative ways to create perfume
What we are trying to create is a very personal experience for each shopper and to do that we need the
technology to meet the needs of customers in an online environment. By instituting well structured and
fully integrated customer resource management (CRM) technologies, we will be able to know what
customers want and how to improve on our product in all aspects of the business.
Well generated digital storefront technology is required to make the shopping experience easy and
comfortable for the customer and fully integrated with the business itself. Design is key.

ECONOMICAL
The current economic crisis has hurt business both locally and internationally. The downside is many
people are spending less on personal luxury items like perfume; however, many people have looked to
the internet for the best prices on items and present an opportunity to customers who still want quality
products at more reasonable prices.
Competitive pricing will be important to reach potential customers. Designer perfumes can cost upwards
of $100; however, in many cases they are backed by strong ad campaigns and celebrity promoters. The
goal will be not to compete with these companies, but create a more specialized product and shopping
experience to customers.

POLITICAL AND LEGAL
Health Canada
o Health concerns with perfume and campaigns banning its use in schools and other facilities
o Important to know the effects of perfumes on surrounding individuals
Taxation Laws (GST and customs)
Import/Export
o Larger market for customers outside of Canada
o Free shipping options
o Ability to ship perfume
o Canada Business: Services for Entrepreneurs; Exporting Goods Regulations.
http://www.canadabusiness.ca/eng/guide/1312/.

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SECONDARY RESEARCH

Perfume is made up of alcohol, water & perfume (fragrance) oil. Perfume is a word that comes from Latin per
fumum, which means "through smoke" (per means through, fumum means smoke).

There are 3 major types: oriental, floral & chypre (means "very sincere" in French). There are also many sub-
variations such as woody, musky, aquatic, spicy & fruity.

Source: http://www.jurgita.com/articles-id147.html

TOP KEY FINDINGS FROM THE PREMIUM MARKET REPORT 2008

CONTINUAL FRAGRANCE LAUNCHES
2008 was another bumper year for new fragrances and there are now more mens and womens fragrance
launches than in any other beauty category, according to the fragrance foundation

Retailers are put under considerable pressure to stock new fragrance lines and have become ruthless in weeding
out underperforming brands.

The effect has been to speed up the rate at which the fragrance houses launch new brands which is often at the
expense of creativity.

According to both UK and international surveys, classic perfume fragrances are still a reliable and safe gift choice
during the holiday season. While beauty retailing on the high street is feeling the economic pressures, many online
retailers are continuing to post good growth.

Source: http://www.fragrancefoundation.org.uk/market-research.htm

WHY USERS SWITCH PERFUMES
According to Research into the women's fragrance market, USA, in partnership with Cosmopolitan and CosmoGirl
magazines, here are some reasons why users switch different perfumes:

Change of mood (71%)
Special occasion (54%0
Change of season (28%)
On average, women wear a favourite fragrance for three years

Surveys from fragrance foundation show that 53% would tend to try a new brand while the other 47% would buy
their favourite brand instead of trying something new.

Some of the characteristics and buying habits of UK market also show that women are looking for long lasting
scents, want to feel attractive (esp. under-25s), want others to comment on them (esp. under-25s), want to feel
sexy (esp. 25-49s), and changes or enhances my mood.

FRAGRANCE TYPES AND PROPENSITIES
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Trend towards fresh, clean, flowery, fruity, citrus
Tend away from marine, herbal, musky, spicy, woody
Under-18s prefer citrus notes
35-45s and over like musky notes

PURCHASE DECISION MAKING AND BEHAVIOUR
25-49s know what they want but also tend to buy on impulse
Under-25s tend to explore different scents and brands
Three out of five women were more likely to buy a fragrance samples in a magazine (foil pouch samples
preferred)
Three out of four women say that when they find a fragrance they really like, they tell their friends about
it
Women claimed to spend more on fragrance for themselves than on fragrance as a gift
Under-25s like the shopping experience to include great music, chic surroundings and good-looking
consultants

MARKET GROWTH
According to a Womens Fragrance, UK Market Intelligence Report in August 2007, the market value and growth of
perfume is quite profound. Over 200 new launches each year, of which only 5% are still on the market after two
years and only 3% after three years.

The top five flavour and fragrance Industry companies command 62% of market value. Based on 2008 estimated
sales volume in millions, the top five industry leaders:

1. Givaudan
2. Firmenrich
3. IFF
4. Symrise; and
5. Takasago

GIFTING PERFUME
The gifting trend is still a major purchase driver in the perfume fragrance industry. 2009 surveys suggest that 75%
of all annual fragrance sales are made in November & December. 51% of women claiming to have bought
fragrance as a gift for their partner and one in two women receive fragrances as gifts. Interesting enough, 34% of
men usually get fragrance as a gift

Source: http://www.fragrancefoundation.org.uk/market-research.htm

FEMALE USAGE
According to Quantcast (a web site based on viewing the statistics of other web sites), the demographics of the
highly popular North American website perfume.com, 68% of online customers are Caucasian females. The middle
of November to the end of January is the peak of seasonal visits.

Source: http://www.quantcast.com/perfume.com

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An online perfume website, esens.com also support dominate female usage. The interesting thing is that 60% of
the 74% female users are in college vs. perfume.com who did not have a majority sector of users.

http://www.quantcast.com/esens.com

TRENDS IN ONLINE SHOPPING
The Nielsen Global Online Survey is the largest half-yearly survey of its kind, aimed at gauging current confidence
levels, spending habits/intentions and current major concerns of consumers across the globe. The latest survey,
conducted from October to November 2007, polled 26,312 Internet users in 48 markets from Europe, Asia Pacific,
North America, Africa and the Middle East. The survey is representative of all Internet users aged 15+.

The Internet is no longer a niche technology it is mass media and an utterly integral part of modern life. As our
lives become more fractured and cluttered, it isnt surprising that consumers turn to the unrivalled convenience of
the Internet when it comes to researching and buying products.
Jonathan Carson, President, International, Nielsen Online

Books are still the most popular purchases online, followed by Clothing/Accessories/Shoes, Videos / DVDs /
Games, Airline Tickets and Electronic Equipment.

Other significant growth categories were cosmetics/nutrition supplies and groceries, which jumped nine and eight
percentage points respectively.

The number of Internet consumers buying books over the Internet has increased seven percent in the past two
years, but the fashionistas are on the advance the Clothing / Accessories / Shoes category has experienced the
highest increase by far in the two-year period from 20 percent to 36 percent.

Credit cards are by far the most common method of payment for online purchases 60 percent of global online
consumers used their credit card for a recent online purchase, while one in four online consumers chose PayPal. Of
those paying with a credit card, more than half (53%) used Visa.

Consumers tend to stick to what they know when it comes to online shopping, according to Nielsen. 60 percent of
online shoppers say they buy mostly from the same site, proving that online shoppers are uniquely loyal. This
shows the importance of capturing the tens of millions of new online shoppers as they make their first purchases
on the Internet. If shopping sites can capture them early, and create a positive shopping experience, they will likely
capture their loyalty and their money, said Carson.

Recommendations from fellow consumers whether they are people they know or fellow online shoppers play
an enormous role in the decision-making process. The explosion in Consumer Generated Media over the last year
means that this reliance on word of mouth, over other forms of referral, looks set to increase, said Carson.

Source: http://th.nielsen.com/site/documents/GlobalOnlineShoppingReportFeb08.pdf

Page 70 of 73

MARKET RESEARCH SUMMARY CONCLUSION

An unprecedented number of perfume lines are being introduced into the market place than ever before;
however, classic perfumes have remained a safe constant for distributors that have sold the same lines for
decades, for example Chanel No5; in fact, we discovered that 62% of the total market share is controlled by the
top 5 companies. Traditionally, customers buy the image, not the scent, at least for the most part. The United
States market place believes in the ideology of perfume more than other countries in the world and therefore will
represent the greatest opposition in global sales.

Since 2008 we have noticed a significant drop in how much people will spend on perfume products. Perfume has
one of the largest profit margins in consumable products and distributors must be careful how they price their
products. An expensive perfume is much more difficult to sell, whereas a cheap perfume can be equally difficult to
sell to a market that expects a certain price to pay for beauty products. We noticed that many customers still
prefer in-store as opposed to online shopping during the most important season for perfume- Christmas (where
75% of annual sales are reportedly made). Research therefore shows that we must either attempt to compete with
other manufacturers during the holiday season, or address the needs of our customers throughout the year.
Online shopping should not have to be an alternative either, using a bricks and clicks approach addresses the
needs of all potential customers. We should be practical, reliable, and fun for customers to purchase from.

According to the Fragrance Foundation of the United Kingdom, most women claim to own and use at least seven
different fragrances therefore making it imperative that any perfume distributor, similar to other beauty products,
have a solid and attractive advertising campaign. We discovered that the numbers are disconcerting for new
fragrance companies; with over 200 releases each year, 5% remain after two years in business and 3% after three.
The current economic situation will make entering any business difficult; however, promise some exciting new
possibilities for companies and products willing to take the first step.

-Team Element(s)

Page 71 of 73

SURVEY MONKEY RESULTS

Page 72 of 73

FOCUS GROUP PLAN

Objective:
To discover what would compel consumers to (1) buy Ella brand perfume, (2) in an online shop.

Questions:
Demographics; Identifying Focus Group Make-Up
Sex, Age, Profession, Marital status, Hobbies, etc. Target Markets?
Product Design
Scent preferences? Price? Packaging? Shipping costs? Personality quizzes? Product name?
Website design/features ideas? Advertising?
Online Buying Habits
Do you shop online? Why?/Why not? What do you buy? How often? Where from? Methods of
payment?
Perfume Buying Habits
How much bought/gifted? Price? Chosen brands/favourites?

What would make you buy this product?
What changes to the current product and selling concept would you make?

Page 73 of 73

LIST OF FIXED AND VARIABLE COSTS
Fixed Costs Low Medium High
Rent
Warehouse $725.00 $1,150.00 $1,575.00
total $725.00 $1,150.00 $1,575.00
Salary
current wage $9.50 $9.50 $9.50
hours per week $8.00 $8.00 $8.00
days $30.00 $30.00 $30.00
employees 2 3 4
total $4,560.00 $6,840.00 $9,120.00
Accountancy Costs
Size of business $56.00 $75.00 $94.00
Marketing
Google Adwords $175.00 $200.00 $400.00
Yahoo $175.00 $175.00 $175.00
Prints $50.00 $100.00 $150.00
Facebook $50.00 $75.00 $100.00
Other $50.00 $100.00 $150.00
total $500.00 $650.00 $975.00
Utility Costs
Utility bills $75.00 $90.00 $105.00
Other (parking, etc) $0.00 $20.00 $40.00
total $75.00 $110.00 $145.00
total $5,860.00 $8,750.00 $11,815.00
Variable Costs
Materials $0.75 $1.75 $2.75
Delivery $6.75 $13.50 $19.75
Other $0.00 $2.75 $2.50
total $7.50 $18.00 $25.00
Unit Break Even
Fixed Costs $5,860.00 $8,750.00 $11,815.00
Unit Selling Price $39.99 $39.99 $39.99
Unit Variable Costs $7.50 $18.00 $25.00
Total: 180 398 788
Sales Break Even
# Units to Break Even 180 398 788
Selling Price $39.99 $39.99 $39.99
Total: $7,212.72 $15,912.35 $31,519.80

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ELLA PERFUME BUSINESS PLAN

PREPARED BY TEAM ELLA

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