MADE
FOR
MEN
Every Man’s Hygiene and Grooming Store
BUSINESS PLAN
Prepared By Jordan McCool-Morin
April 9, 2015
Table of Contents
Executive Summary....................................................................................................................................... 4
1.0 Introduction ............................................................................................................................................ 4
1.1 Industry Overview ............................................................................................................................... 4
1.2 Mission Statement .............................................................................................................................. 5
1.3 Business Goals..................................................................................................................................... 5
2.0 Operations Plan....................................................................................................................................... 6
2.1 Location ............................................................................................................................................... 6
2.2 Inventory ............................................................................................................................................. 6
2.3 Floor Plan ............................................................................................................................................ 7
2.4 Work Plan ............................................................................................................................................ 8
2.4.1 Daily Work Plan………………………………………………………………………………………………………………….8
2.4.2 Weekly Work Plan……………………………………………………………………………………………………………..8
2.4.3 Monthly Work Plan…………………………………………………………………………………………………………… 8
2.4.3 Yearly Work Plan………………………………………………………………………………………………………………. 8
2.5 Supply Analysis .................................................................................................................................... 9
2.6 Capital Budget ..................................................................................................................................... 9
2.6.1 Leasehold Improvements…………………………………………………………………………………………………..9
2.6.2 Furniture, Fixtures and Equipment…………………………………………………………………………………….9
2.6.3 Net Working Capital…………………………………………………………………………………………………………..9
2.7 Operating Expenses .......................................................................................................................... 11
2.8 Margins and Cash Conversion Cycle ................................................................................................. 11
3.0 Human Resources Plan ......................................................................................................................... 11
3.1 Required Labour................................................................................................................................ 11
3.2 Manager HR Duties ........................................................................................................................... 12
3.3 Employee Retention Program ........................................................................................................... 12
4.0 Marketing Plan ...................................................................................................................................... 12
4.1 Value Proposition .............................................................................................................................. 13
4.2 Target Markets .................................................................................................................................. 13
4.3 Segmentation and Market Size ......................................................................................................... 13
4.4 Positioning Statement....................................................................................................................... 14
4.5 Branding ............................................................................................................................................ 14
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4.6 Marketing Personas .......................................................................................................................... 14
4.6.1 Brett the Young Business Man………………………………………………………………………………………… 14
4.6.2 Mike the Family Man………………………………………………………………………………………………………. 14
4.7 The Marketing Mix ............................................................................................................................ 14
4.7.1 Products and Services………………………………………………………………………………………………………14
4.7.2 Price…………………………………………………………………………………………………………………………………15
4.7.3 Place…………………………………………………………………………………………………………………………………16
4.7.4 Promotion………………………………………………………………………………………………………………………..16
4.8 Marketing Expenses .......................................................................................................................... 18
4.9 Competitor Analysis .......................................................................................................................... 18
4.10 Customer’s per Day ......................................................................................................................... 19
5.0 Financial Plan ........................................................................................................................................ 19
5.1 Financial Budget ................................................................................................................................ 19
5.2 Profitability and Cashflow ................................................................................................................. 19
5.3 Summary of Income Statement ........................................................................................................ 20
5.4 Summary of Balance Sheet ............................................................................................................... 20
5.5 Dividend Policy .................................................................................................................................. 21
5.6 Breakeven Analysis ........................................................................................................................... 21
5.7 Sensitivity Analysis ............................................................................................................................ 22
5.8 Investment Analysis .......................................................................................................................... 22
5.9 Risk Analysis ...................................................................................................................................... 23
5.9.1 Critical Variables……………………………………………………………………………………………………………… 23
5.9.2 Contingency Plans…………………………………………………………………………………………………………… 23
6.0 Conclusion ............................................................................................................................................. 24
Appendix A: Product and Price Comparative Analysis ................................................................................ 25
Appendix B: Financial Projections ............................................................................................................... 26
References…………………………………………………………………………………………………………………………………………… 27
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Figures
Figure 1: Company Logo of “The Art of Shaving” .................................................... ....................... 5
Figure 2: Site Plan Map of Midtown Plaza (main level) ................................................................... 6
Figure 3: Floor Plan of Made For Men Midtown Plaza Location ..................................................... 7
Figure 4: Organizational Chart ....................................................................................................... 11
Figure 5: Projected Target Market Size.......................................................................................... 13
Figure 6: Positioning Map .............................................................................................................. 16
Figure 7: Made For Men Business Card ......................................................................................... 17
Figure 8: Diagram of Financial Budget ........................................................................................... 19
Figure 9: Projected Annual Net Income and Growth..................................................................... 20
Figure 10: Net Income Breakeven Analysis.................................................................................... 21
Tables
Table 1: Hours of Operation............................................................................................................. 8
Table 2: List of Suppliers and Location ............................................................................................ 9
Table 3: Estimated Cost of Capital ................................................................................................. 10
Table 4: Operating Expenses.......................................................................................................... 11
Table 5: Tentative Weekly Staff Schedule ..................................................................................... 12
Table 6: Year One Marketing Expenses ......................................................................................... 18
Table 7: Competitor Analysis ......................................................................................................... 18
Table 8: Estimation of Customers per Day and Revenue Outcome............................................... 19
Table 9: Yearly Net Profit Margin................................................................................................... 20
Table 10: Summary of Income Statement ..................................................................................... 20
Table 11: Summary of Balance Sheet ............................................................................................ 21
Table 12: Sensitivity Analysis ......................................................................................................... 22
Table 13: Owners Compensation ................................................................................................... 22
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Executive Summary
The beauty and personal care industry overall has experienced only slight growth in the past few years2.
However, the recent trend towards increasing use of hygiene and grooming products by men and the
increased popularity of the straight razor shaving technique has caused significant growth in the Men’s
Grooming subcategory of the market. More and more men are using hygiene and grooming products
and are seeking out grooming services. Manufacturers are also responding to this trend and are
beginning to create product lines designed only for men. This presents an opportunity to form the
connection between manufacturers and the general consumer by creating a retail business that brings
these men-specific products together to provide such demanded products and services to men.
Made For Men is a high quality retailer of men’s hygiene and grooming products located in Midtown
Plaza. Our goal is to revolutionize the morning routine; to turn the chore of shaving into more of an art
form, and to provide men with the products and knowledge that they need to start each day looking
their best, feeling confident and being ready for whatever lies ahead. We provide a wide array of
hygiene and grooming products as well as a one of a kind grooming service to men within the city of
Saskatoon and within a 100km radius surrounding area. It is a one-stop-shop targeted to men between
the ages of 18 and 65. Our customers want to look their best and develop a feeling of confidence that
radiates throughout all aspects of daily life. They may also desire the Made for Men in-store grooming
service to learn proper techniques, feel refreshed and walk out of our store as a whole new man.
This business plan includes the Operations, Human Resources, Marketing, and Financial components of
the proposed business. As the business plan illustrates, this business has potential to be profitable and
generate net profits of over $80,000 by year 5 with potential for growth and expansion for the future.
1.0 Introduction
1.1 Industry Overview
The global market for men’s cosmetics is booming4. Men’s hygiene products are quickly moving from a
niche market into a fully established and successful market. According to NPD Group, Men’s grooming
tools are among the largest dollar growth drivers in the overall personal care industry, and product
categories like men’s facial skincare continue to grow at a fast pace. In 2013, retail sales of men’s
grooming products reached $718 million and it was found that every nine in ten men use some sort of
grooming products today4. In addition, sales of men’s cosmetics and toiletries in the U.S. are expected to
hit $3.2 billion by 20163.
As men in Canada, continue to explore beauty and personal care beyond just shaving (especially the
younger generation and the much talked about millennials), manufacturers of branded and private label
products continue to develop and market products designed for men – from formulations to packaging –
to support interest and encourage purchases. Made For Men plans to capitalize on these types of
products and the uprising opportunities.
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Figure 1: Company Logo of “The Art of Shaving”
A U.S. based company known as “The Art of
Shaving” is a very successful company that is similar
to Made For Men. The Art of Shaving has averaged 30
percent annual sales growth throughout its decade-long
existence and today reaches sales of 15 million dollars1. The
huge success of “The Art of Shaving” in the USA proves that
there is a strong market for this type of business in Canada
and proves that men do in fact desire these types of products
and services. Since Canada is not much different than the
states in terms of demographics and trends, this is good reason to believe that this business will be
successful here as well.
Made For Men fits into this industry as a retail business that provides high quality men’s hygiene and
grooming products along with expert advice and demonstrations for customers to acquire the
knowledge for proper grooming and a revolutionized morning routine. Our high quality products and
grooming service will have men walking out of our store feeling confident and refreshed.
1.2 Mission Statement
Made For Men is committed to revolutionizing each and every Man’s hygiene and grooming routine by
providing top quality hygiene and grooming products along with expert advice and demonstrations from
our friendly and knowledgeable staff. We strive to be a one-stop-shop for everything a man needs to
look his best, feel confident and feel prepared for whatever lies ahead.
1.3 Business Goals
Short-Term Goals:




Establish business in Midtown Plaza and Begin Operations
Reach an average customer flow of one customer per hour after the first month of business
Ensure customer satisfaction and consider customer recommendations through a monthly
review of customer feedback forms
Achieve our sales target of $300,000 in our first fiscal year
Medium-Term Goals:



Become published in SHARP Magazine by the end of year two (Canada’s Magazine for Men)
Realize a net income of $40,000 or above by the end of year two
Begin to contribute portion of sales to prostate and testicular cancer research
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Long-Term Goals:


Begin to expand and establish Made For Men stores in Calgary, AB and Winnipeg, MB by the end
of year 5.
Begin planning for expansion into B.C. and Ontario after Year 7
2.0 Operations Plan
2.1 Location
An ideal location would be in a mall such as Midtown Plaza that is marketed as more of a fashion mall.
The business would be conveniently located on the main level, close to the mall entrance for easy
access, but also along the main hallway to capture the attention of individuals from such a high traffic
area. Since some of our products such as cologne and deodorant can be purchased from stores such as
The Bay and Sears, we would strategically distance ourselves from them. The highlighted space on the
map in Figure 2 below is the current location of Pandora Jewelry Store. This area would have 950 square
feet of space, great exposure and would be an ideal location for Made For Men. The estimated cost of
leasing this space is $30 per square foot, which leads to $28,500 per year.
Figure 2: Site Plan Map of Midtown Plaza (main level).
2.2 Inventory
In terms of inventory, Made For Men would provide the equipment and products needed for every
man’s morning routine. The business would provide products such as straight razors, safety razors,
cartridge razors, shaving cream and oil, aftershave, hair products, beard cream, men’s fragrances,
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deodorant, bath and shower gel, face wash, lotion, and more. Refer to Appendix A for a complete list of
products offered. These products would be ordered from various suppliers such as Jack Black, MenU,
CRW Distribution, and Molton Brown to name a few. At an estimated 4 turns per year, our starting
required inventory to stock our shelves is $31,941. As sales increase, inventory will be turned quicker
and orders may have to be placed on a weekly basis.
2.3 Floor Plan
The space would be utilized as depicted in the floor plan below. The front desk would have two point of
sale systems for optimal customer convenience and reduced waiting lines. The razors would be safely
secured in the cabinet behind the front desk and there would be plenty of shelving for our wide range of
inventory. The demonstration area would consist of a barber chair and mirror for our grooming expert
to give customers the complete grooming experience, to give demonstrations, and to educate men on
proper grooming. There would also be a sample table where customers would be able to get hands-on
with our products and try them out before purchasing. Other highlights include our flat screen monitor
(which can be used to promote products), our storage area for inventory, first aid, and other supplies, a
staff bathroom, as well as the office space.
Figure 3: Floor Plan of Made For Men Midtown Plaza Location.
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2.4 Work Plan
2.4.1 Daily Work Plan
Table 1: Hours of Operation
The operating hours would match the Midtown Plaza
mall hours, which are listed in Table 1. I would be
11:00am - 5:30pm SUNDAY
the manager and owner of the business and would
9:30am - 5:30pm MONDAY
be responsible for opening the business each
9:30am - 5:30pm TUESDAY
morning and closing it most evenings. I would have
9:30am - 9:00pm WEDNESDAY
one full-time Sales Associate and one Grooming
9:30am - 9:00pm THURSDAY
Expert to work with me throughout the day. We
would be selling products, but also providing expert
9:30am - 9:00pm FRIDAY
advice to customers, and booking individuals for a
9:30am - 5:30pm SATURDAY
grooming treatment to teach them how to use
different razors and products properly. During slow hours, I would be responsible for organizing time
sheets, taking inventory, payroll, bank deposits, and placing orders which would be submitted to
suppliers every two weeks initially. At the end of the day, I would take any cash received and lock it in
the drawer of my office desk.
2.4.2 Weekly Work Plan
In addition to placing required orders with suppliers, at the end of each week I would review and update
the financial statements and input any required accounting. Every two weeks, we would have a short
staff meeting to keep everyone updated and discuss any necessary topics or issues.
2.4.3 Monthly Work Plan
At the end of the month I would print out a brief information package that would include the income
statement, a product performance analysis and any significant events or customer feedback received
throughout the month. This information would be used to make any necessary changes to our product
line, to track business performance, and to determine where we excelled and where we might need
improvement. Some of these topics would be discussed at our bi-monthly meetings that would be held
with staff to keep everyone informed.
2.4.4 Yearly Work Plan
At the end of the year, I would construct our financial statements and have an annual meeting to be
transparent and present the highlights of the year to staff. This would also be a great time to evaluate
our accomplishments and set new goals for the upcoming year, both personal goals and businessdirected goals.
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2.5 Supply Analysis
The wide range of inventory that is provided at Made For Men
requires plenty of suppliers as indicated in Table 2. As the table
illustrates, to bring in the types of inventory I would want to
stock means that the majority of suppliers would be based out
of the U.S.A. This could result in higher shipping expenses and
adds a level of risk since our expenses would be related to the
exchange rate and the shape of the Canadian dollar. There is
also a chance of inventory being stuck at the border and not
arriving on time, generating further risk for the business.
Table 2: List of Suppliers and Location
For most suppliers, Made For Men would have to apply to be an
official retailer of their products. Upon completion and
acceptance of the application, a contract will then be
negotiated indicating shipping times, quantity, price, and days
payable. Terms could be included in the contract to guarantee
that goods are received within a specified time of ordering to
mitigate some of the risk.
2.6 Capital Budget
Supplier
Location
Jack Black
USA
CRW Distribution
USA
Molton Brown
USA/UK
L'Occitane
Canada
Kiehl's
Canada
Anthony
USA
Woody's Grooming
USA
Groommate
USA
MenU
USA
2.6.1 Leasehold Improvements
The space to be leased would require some renovations to design the store in a way that will attract
men and create a welcoming environment. Since the potential lease space is in good physical condition,
the leasehold improvements are minimal, as shown in Table 3 below. $3,200 would be put towards
construction of walls and interior design, $3,800 would be
required for flooring, and $800 for paint. This leads to an
estimated cost of $7,800 for leasehold improvements.
2.6.2 Furniture, Fixtures and Equipment
The furniture, fixtures and equipment required consist of
shelving, a flat screen monitor, point of sale systems, an office
desk, an office computer, barber chair and station, front desk,
light fixtures, store sign, and other supplies. These requirements
come to a total of $13,384 as illustrated in Table 3 below.
2.6.3 Net Working Capital
In terms of working capital, the business would have approximately $5,000 in initial cash available. It is
estimated that the business can average 4 turns per year on inventory, with an opening inventory of
$31,941. There would be no accounts receivable since customers will pay on site with cash, debit or
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credit card. Accounts payable would be $5,324 based on an average days payable of 15 days. Therefore,
our Net Working Capital is estimated at $31,617 as shown in Table 3. This leads to a total capital
requirement of $52,801. A line of credit may also be opened as a back-up if more cash is needed.
Table 3: Estimated Cost of Capital
Description
Estimated Cost
Source
Lease Hold Improvements:
Wall Design (Brick)
Flooring
Paint
3,200
3,800
800
$8.00/ Sq.ft. Rona
$4.00/Sq.ft. Rona
$2.00/Sq.ft. Rona
Total
7,800
*Note that not all walls will be painted, some will
contain brick design
Furniture, Fixtures, Equipment:
Shelving
Flat Screen Monitor
Point of Sale Systems
Office Desk
Office Computer
Barber Chair and Station
Front Desk
Light Fixtures
Store Sign
Other Supplies
Total
2,184
500
1,800
800
600
1,300
4,000
500
1,200
500
13,384
Net Working Capital:
Cash
Inventory
Accounts Recievable
Accounts Payable
Total
5,000
31,941
(5,324)
31,617
TOTAL CAPITAL REQUIRED
52,801
Eddies Hangup Display Ltd.
Future Shop
Barcodes Inc.
officefurniture.com
Future Shop
Jeffco
custommade.com
Pegasus Lighting
Dream Image Signs
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2.7 Operating Expenses
The Made For Men operating expenses consist mainly of fixed
costs. The fixed costs that would be incurred each year include
an occupancy cost of $10/square foot, lease expense of
$30/square foot, advertising expenses, incorporation fees,
insurance, phone and internet expense, repair and
maintenance, general supplies, CCA, debt interest,
wages/salaries, uniforms, and employee benefits. The only
variable cost that is anticipated is the miscellaneous variable
cost. The estimated total operating expense each year would
be $174,817. The breakdown of costs are shown in Table 4.
2.8 Margins and Cash Conversion Cycle
On the retail side, average industry gross profit margin is 52%,
which would mean a 108% mark up on inventory. In terms the
grooming service that we provide, the gross profit margin is
97% since very little product is used. With grooming service
making up 20% of revenues and retail making up 80% of
revenues, the average overall gross profit margin would be
61%.
Table 4: Operating Expenses
Fixed Costs:
Occupancy Costs
Lease
Advertising Expenses
Incorporation Fees
Insurance
Phone/Internet
Repair and Maintenance
General Supplies
CCA
Debt Interest
Wages
Uniforms
Employee Benefits
Variable Costs:
Misc. Variable Costs
TOTAL
9,500
28,500
15,950
600
800
1,200
1,500
1,000
1,494
2,450
99,235
800
10,968
819
174,817
3.0 Human Resources Plan
3.1 Required Labour
Figure 4: Organizational Chart
Figure 4 illustrates the simple organizational chart for
the labour required by Made For Men. I would be the
manager of the business, and would hire one full time
Sales Associate and one Grooming Expert to work with
me. A manager salary of $50,000 would be paid out
each year. The Sales Associate would be paid an hourly
wage of $10.50 and the Grooming Expert would be paid
an hourly wage of $14.62. Casual Sales Associates can
also be hired if needed. The estimated yearly salary and
wage expense would be $99,235. According to the
financial template in Appendix B and compared to industry standards, we would be overstaffed.
However, this is a necessity since the grooming expert would be busy with customer appointments and
another person would have to manage the till and help customers. Since we are open seven days a
week, two staff would be required to stagger scheduling as well and allow for days off. We would likely
not have to hire until sometime in year six, and being overstaffed will allow us to provide excellent
customer service. Table 5 provides a tentative staff schedule that would be put in place.
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Table 5: Tentative Weekly Staff Schedule
3.2 Manager HR Duties
I would conduct the recruitment and selection duties and would personally select all employees. I would
hire individuals with customer service experience, who are responsible, professional, respectful, and
who are able to work as part of a team. I would instruct employees to shake hands with individuals who
enter the store, introduce themselves and ask if they need any help finding anything. Small gestures
matter in business and can make a lasting impact on customers.
As manager, I would be responsible to deal with any staff issues. Meetings would be scheduled as
necessary to provide discipline, direction or criticism to staff.
3.3 Employee Retention Program
I would want to create a work environment that is very engaging and that allows for personal
development of employees. Since there are only three or four people required, it would be a very close
knit workplace and hopefully employees would feel comfortable and welcomed. As mentioned in the
operations plan, I would plan to keep employees involved in business decisions and keep them aware of
the condition the business is in through our bi-weekly meetings. I would also plan one-on-one
performance appraisals to be able to assess their progress in their position and help them set goals for
improvement. Since all staff would be expected to wear formal and professional clothing to work,
uniforms would be provided for every hired individual. Lastly, I would also plan quarterly events where
the group can get together outside of the workplace and participate in activities to develop teamwork
and cohesiveness. Examples might include rowing, local conferences, relays, etc.
4.0 Marketing Plan
The marketing plan is essential in order to attract enough customers per day. Since this is one of our
most critical variables, great focus and about 3-5% of sales will be put towards marketing. We want to
capitalize on the increasing trend toward men-specific hygiene and grooming by gathering these types
of products and services into one convenient location. As described above, the market is experiencing
growth that is expected to continue into the future and more men are using hygiene and grooming
products and services more than ever before.
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4.1 Value Proposition
We support men by providing superior hygiene and grooming products and services to men who are
looking to enhance their morning routine, look their best, and extrude confidence throughout each and
every day. At Made For Men, in addition to offering all of the products, equipment, and services, we
offer knowledgeable staff to educate men on straight shaving and proper product use.
4.2 Target Markets
There are two major target markets that we would be pursuing:
1. A Primary target market of Men living in
Saskatoon or within a 100km radius of the
city who are between the ages of 18 – 65.
One example could be the business man who
knows that self-presentation is important,
and that looking and feeling confident is a
must in order to get that upcoming
promotion. Another example could be men
who are looking to impress that special
someone, or build their confidence to talk to women.
2. The secondary target market would be women who are looking for the next greatest gift idea
for their boyfriends, husbands, brothers, or other men in their lives.
4.3 Segmentation and Market Size
Figure 5: Projected Target Market Size
As described in the target market section above, the market will be
segmented geographically and demographically to include men within
the city of Saskatoon and within a 100 km radius of Saskatoon since
many people from surrounding rural communities will often come to
Saskatoon for their shopping. We would also segment the market by
sex and would most often target the male population, ages 18-65.
According to Statistics Canada, this primary target market would
consist of approximately 91,018 individuals as illustrated in Figure 5.
Saskatoon +Surroundings
Males in Area
Ages 18-65
Since Made for Men is more of a luxury type of product and service, we could potentially segment the
market further and target higher income levels as well since they would have more money to spend on
such luxuries. Fashion savvy individuals may also be targeted through means of magazines such as
SHARP magazine (Canada’s Magazine for Men).
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4.4 Positioning Statement
To fashionable gentlemen looking to revolutionize your morning routine, Made for Men provides high
quality hygiene and grooming products and a one of a kind grooming service to build confidence by
helping you look and feel your best each and every day.
4.5 Branding
Branding is the image that we want the business to portray in the minds of consumers when they think
about Made For Men. When someone thinks of Made For Men, they should feel confidence, and picture
a clean-cut and professional gentleman in his late 20s or early thirties being able to excel in all areas of
life, be it family, work, school, etc. This would be communicated to customers through our promotions
described below and the way we operate our business.
4.6 Marketing Personas
4.6.1 Brett the Young Businessman
Brett is 27 years old and is from Saskatoon. Brett is a corporate sales person. He was just recently
married and is working really hard to be promoted. Brett is also very conscious about his looks and very
particular with his style and fashion. He appreciates health and wellbeing, and understands the
importance of self-image and self-respect. Brett always takes a quick glance in the mirror before leaving
the house. His friends consider him a confident person, and he wants to maintain this confidence and he
has no problem spending money on hygiene and grooming products or services.
4.6.2 Mike the Family Man
Mike is a middle aged man with an established, stable career, a wife and two kids. He has a very busy
lifestyle and tries to balance work with family life. He goes to work, picks up the kids from school, helps
make supper, and drives them to hockey practice before calling it a day. The morning hygiene and
grooming routine is his time of relaxation and peace, some “me time” where he can focus on himself
and prepare for the day ahead. Made For Men can make that morning more enjoyable by transforming
the everyday shave into an invigorating experience to start the day off right.
4.7 The Marketing Mix
4.7.1 Products and Services
Made for Men retails high quality men’s hygiene and grooming
products and offers an in-store grooming service to customers.
We offer every single product that men need for their morning
routine. Everything from shaving cream, different types of razors,
aftershave cream and oils, lotions, beard cream, men’s
fragrances, deodorant, hair paste and styling gel, shampoo,
conditioner, body wash, face wash, and other products designed
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for men. Refer to Appendix A for a more detailed description of products offered at Made For Men
along with competitor prices. Note that none of the expected competitors stock all of the products that
are available at Made For Men.
Our grooming service is by appointment and consists of a one-on-one grooming experience with our
grooming expert. The customer will relax in a barber chair with hot towels applied, followed by a
protective layer of pre-shave oil. Hot shaving cream is then
applied and lathered before a traditional straight razor
shave with the grain. After a re-lather, a second shave
against the grain ensures closeness and a smooth shave. A
second, lemongrass infused towel is then applied, followed
by an aftershave moisturizer. Lastly, a hydrating toner is
applied along with an aftershave balm to keep skin smooth.
Our unique grooming experience will also provide
opportunity for other store visitors to learn more about
shaving and our products.
What separates us apart from competition is that we offer convenience, confidence and quality. Our
customers have the convenience of buying every shaving, grooming and hygiene product they need
from one central location. It is a one-stop-shop for everything a man needs for his morning routine.
What we truly offer is the feeling of confidence. The products and services we provide empower men
with the confidence that they desire by helping them to start their day off feeling energized, refreshed
and looking their best. This is achieved by offering a variety of high quality hygiene and grooming
products and a top notch grooming service that is unmatched and will have men walking out of our
store with their head held just a little bit higher. Our products and services would be of the highest
quality because every man deserves the best.
4.7.2 Price
We would use a competitive pricing strategy to match the more generic products such as face wash,
lotions, soaps, shampoos etc. to the prices available at the Bay and Sears. Even though our products
would still be different and as high quality as we can purchase, there are many substitutes and
customers might not value the slight differences in these types of products and opt for a cheaper price.
For our more unique or specialty products such as razors, razor brushes and grooming equipment, we
would charge more since these items are not available in the mall, and are difficult to locate in
Saskatoon. Our grooming service would offer a low price to attract customers and get people into our
store. We would charge $35 for a hot shave which includes an oil treatment, a hot lather shave, cool
scented towels, and a post-shave cooling lotion as described above. Average purchase price for products
was estimated at $35 as well.
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Figure 6: Positioning Map
Made for Men is high quality, high price on a positioning map with competition such as Sears, The Bay,
The Body Shop, Walmart, and The Art of Shaving. The art of shaving is the most similar business to Made
For Men. We would match the art of shaving in terms of quality and would keep our prices similar to
theirs or slightly lower. We would definitely be viewed to be more specialized and higher quality than
the bay or sears and especially Walmart. See Appendix A for a complete list of product prices.
4.7.3 Place
As mentioned above, our products and services would be directly available to customers at our location
in Midtown Plaza. Ideally we would be located on the main floor of the mall, in the current location of
Pandora Jewelry store. In order to attract our target market, the store would be designed to welcome
Men. We would have darker colors, stylish brick finishing on some walls, and glass shelving. Lighting
would be dim and music would be playing in the background. We would avoid the stereotypical
feminine colours and would have an elegant yet masculine store sign as shown in the business plan title.
4.7.4 Promotion
Marketing efforts in the first year of business is essential for the success of Made For Men. We would
therefore allocate approximately 5% of our expected sales revenue towards promotions.
We would host a Grand Opening event with c95 or Rock 102FM live on location, announcing the event
and the business on air. During our Grand Opening, we would offer a free product sample with any
P a g e | 16
purchase for the first fifty customers. The goal of this event would be to spread awareness and establish
a customer base.
At Made For Men, we support men and would promote recent
movements such as Movember and Decembeard, that raise
money for support and research on many men’s health
problems such as testicular cancer, prostate cancer, and colon
cancer. Once established, we would make efforts to donate a
portion of sales to prostate or testicular cancer research. We
would make sufficient use of our web page, Facebook and
Twitter pages for advertising purposes and promotions as well.
As a start-up business, we would attempt to pitch our business at the Pitch Party put on by the Wilson
Centre for Entrepreneurial Excellence. We would register to have a booth set up after the program
during the networking event to spread awareness and gain
exposure. In addition, the business card in Figure 7 would be
created and would be distributed at this event and at other
events throughout the year.
Lastly, we would like to promote on campus through Captive Audience indoor advertising in order to
advertise in the arts tunnel and washrooms around the University of Saskatchewan.
Figure 7: Made For Men Business Card
P a g e | 17
4.8 Marketing Expenses
Marketing Expenses for the first year of business
would sum to $15,950. See Table 6 for a detailed
breakdown of marketing expenses. Marketing
expenses would be similar year to year and may
decrease slightly since less marketing would be
needed as our brand awareness increases. There are
also certain expenses, such as our grand opening
event, that would not be included in subsequent
years.
4.9 Competitor Analysis
Table 6: Year One Marketing Expenses
Business Cards
$
500
Screenprint Signage
$
500
Web Page
$
2,500
Facebook Campaigns
$
4,500
Grand Opening
$
1,000
Captive Audience
$
6,700
Pitch Party Entry Fee
$
250
In Saskatoon, there are currently no direct
Total
$
15,950
competitors who are selling all of the same products
and services available at Made For Men. However, indirect competition does exist and still
requires consideration. On the retail side, businesses such as Walmart, The Bay, Sears, The Body
Shop and the Art of Shaving are examples of competition. Barber shops such as Tommy Gun’s
would be an example of service competition in Saskatoon. Refer to the competitor analysis
below for more information.
Table 7: Competitor Analysis
Name
Description/Image
The Art of
Shaving
Tommy Gun's
The Bay
Sears
The Body Shop
Walmart
Classic barber feel. Focus
is on straight razors and
shaving.
Retro barber made
modern. Barber shop only.
Location
Quality
U.S.A.
Very High
51st Street or
Stonebridge
High
Higher quality department
store.
Department store.
Skin products. Female
focus.
Midtown Plaza
Midtown Plaza, Centre
Mall, Primrose Drive
Discount department
store.
Preston Crossing,
Stonebridge, Belts Ave.
Midtown Plaza
Above
Average
Average
Average
Low
The Art of Shaving would be our closest competitor, with a similar focus and quality. However, they are
only located in U.S.A. which means that customers would have to pay large shipping fees to order from
them. Tommy Gun’s is a direct competitor when considering the grooming service we offer. We will not
P a g e | 18
count on the grooming aspect of the business to be a revenue generator, but more of a loss leader and
an opportunity to demonstrate and teach our customers how to properly use our products.
4.10 Customer’s per Day
Based on the marketing efforts described, we
estimate that we will be able to attract an
average of 26 customers per day in the first
year. This works out to about 3 customers per
hour. A detailed breakdown of how this
number was obtained is illustrated in Table 8.
Table 8: Estimation of Customers per Day and
Revenue Outcome
Variable
Customers per Day
26
Customers per Week
182
Weekly Operating Hours
65
In order to assess the feasibility of the
Customers per Hour
3
customers per day estimate, market research
Average Purchase Price
$
35
revealed that The Body Shop had 24
$
6,370
individuals enter their store in one hour, 11 of Weekly Retail Revenue
which made a purchase. This works out to
Approximate Yearly Retail Revenue
$
331,240
approximately 90 customers per day.
However, keeping in mind that The Body Shop has been in Canada for almost 20 years, an estimate of 24
individuals per day is more reasonable for Made For Men.
5.0 Financial Plan
5.1 Financial Budget
As mentioned in section 2.6, the total capital requirement in order to start this business is $52,801. This
money would be financed through a $20,000 investment of personal savings and love money as
Shareholders Equity, and $35,000 would be obtained through debt financing as illustrated in Figure 8. To
obtain financing through a bank, interest would be approximately 7%, and my father would be a
guarantor. This would result in a yearly payment of $3843 over a timeframe of 15 years (~$1500
principle reduction each year).
5.2 Profitability and Cashflow
Figure 8: Diagram of Financial Budget
Based on the financial template in Appendix B, the business is expected to
realize a net income of $21,767 in the first year. As figure 9 shows, net
profit is estimated to grow 97% in year two followed by an increase of
39%, 22% and 19% in following years to a year 5 net income of
$86,738. Overall, Made For Men is expected to generate an average
five year net income of $56,692. The corresponding net profit margin
each year is shown in Table 9.
EQUITY
20,000
(36%)
DEBT
35,000
(64%)
P a g e | 19
Figure 9: Projected Annual Net Income and Growth
As shown in the balance sheet
(Appendix B), cash balance is
expected to be about $30,000 in
year one and increase to $54,660 in
year two, $71,515 in year three,
$84,895 in year 4, and $98,799 by
year five. The net cash flow starts at
$29,067 in year one and decreases
to 25,593 in year two, $16,855 in
year three, $13,380 in year 4 and
$13,904 in year 5. The decrease in
net cash flow is mainly due to the
increase in dividends paid out as the
business becomes more profitable.
Table 9: Yearly Net Profit Margin
2015 2016 2017 2018 2019
Net Profit
Margin
7%
12%
15%
17%
18%
5.3 Summary of Income Statement
The projected revenue, net income and retained earnings show positive growth for the future. For a
more detailed income statement, refer to Appendix B.
Table 10: Summary of Income Statement
2015
Revenue
2016
2017
2018
2019
327,600
369,369
406,998
438,032
471,432
Net Income
21,767
42,829
59,538
72,590
86,738
Retained Earnings
21,767
47,529
64,406
77,481
91,325
5.4 Summary of Balance Sheet
The projected total assets, total liabilities and total shareholder’s equity are shown below. Note the
growth in shareholder’s equity as retained earnings grow. For a more detailed balance sheet, refer to
Appendix B.
P a g e | 20
Table 11: Summary of Balance Sheet
2015
2016
2017
2018
2019
Total Assets
80,697
105,648
121,542
133,415
145,976
Total Liabilities
38,931
38,119
37,136
35,934
34,651
Total Shareholder's Equity
41,767
67,529
84,406
97,481
111,325
5.5 Dividend Policy
Dividends will not be paid out in the first year of business. If the business has a cash balance greater
than $12,000 in the previous year, the difference will then be paid out in dividends. See Appendix B for
dividend values paid out each year.
5.6 Breakeven Analysis
Since the amount of customers per day is the most critical variable in this business, a breakeven analysis
based on customers per day was considered as shown in figure 10. In order to breakeven with a net
income of zero, Made For Men would have to have 22 customers per day on average. In year one, we
estimate 26 customers per day, giving a 13% cushion. It is expected that the amount of customers per
day will grow by 10% in year two, 7.5% in year three, and will begin to stabilize with 5% growth in years
four and five. The percent cushion thus increases to 35% by year 5. A breakeven analysis based on price
was also constructed and can be viewed in Appendix B.
Figure 10: Net Income Breakeven Analysis
Number of Customers per day
Net Income Breakeven
40
35
30
31
32
34
29
26
25
20
23
22
22
22
15
10
5
22
Base Case
Average 5 year Net Income = $56,692
Yr 5 Owner Compensation = $128,086
Breakeven
0
1
2
3
Year
4
5
P a g e | 21
5.7 Sensitivity Analysis
In order to further investigate the response to the critical variable of customers per day, the sensitivity
analysis shown in Table 12 was constructed. Note that a change from 26 to 20 customers per day would
likely result in bankruptcy. As you can see, the business is quite sensitive to changes in customers per
day. However 20 customers per hour works out to 2 customers per hour, which seems feasible with a
detailed marketing plan to attract customers.
Table 12: Sensitivity Analysis. This table illustrates the effect of the number of customers per day on the
net income, year 5 owners compensation, and year 5 owner hourly wage
Customers/day
20
22
24
26 (Base Case)
28
30
Average 5
year Profit
7,578
23,949
40,321
56,692
72,735
88,463
Year 5 Owner
Compensation
65,825
92,440
110,263
128,086
145,909
162,235
Year 5 Owner
Hourly Wage
25.32
35.55
42.14
49.26
56.12
62.40
5.8 Investment Analysis
For an initial investment of $20,000 with $35,000 of debt financing, the potential returns by year five are
quite promising. In order to gauge the value and feasibility of the business, owner’s compensation was
calculated and illustrated in Table 13.
Table 13: Owners Compensation. Note the Calculated Hourly Wage based on the estimated amount of
hours required by the manager/owner.
2015
Total Owner Compensation
Manager Hours
Calculated Hourly Wage
2016
2017
2018
2019
50,000
68,317
95,191
113,359
128,086
2,600
2,600
2,600
2,600
2,600
19.23
26.28
36.61
43.60
49.26
As mentioned previously, the net income by year 5 is estimated at $86,783 and as Table 13 shows, the
base case projects a Calculated Hourly Wage of 49.26 per hour for the manager.
P a g e | 22
5.9 Risk Analysis
5.9.1 Critical Variables
1) As mentioned above, the single most critical variable is achieving the necessary number of
customers per day. Any less than an average of 20 customers per day and the business would be
bankrupt.
2) Although there is not much competition in the market at this point, there are not many barriers
of entry for this type of business, and there is nothing stopping other individuals to start a
similar business.
3) Since our products and services are classified as a luxury, there is the risk of consumers not
spending on such products or not being as concerned about grooming in the face of recession or
hard economic times.
4) Shipping costs for inventory could be an important variable to consider. To get most of the
products we would want to stock in the store, we would have to ship from the states, which
would be more expensive in general and also lead to hidden fees and charges. This also presents
the possibility of inventory orders arriving late.
5) Despite the growth and increasing popularity of men’s hygiene and grooming products, a
potential risk in the market is the fact that men are reluctant to enter outlets that are perceived
as a women's only zone4. Most retailers that supply men’s products sell mainly women’s
products.
5.9.2 Contingency Plans
1) In order to attract enough customers per day, great focus will be placed on the marketing plan.
As mentioned above, various events and promotion material are planned to make a strong
impact in our first year of business. Our marketing budget is estimated at $15,950 (5% of sales)
for our first year to help ensure marketing success.
2) With the first mover’s advantage, we will be able to capture a good portion of the market before
imitators become established.
3) The market did hold strong throughout the last recession, which means there would still be the
chance of survival even in the case of a recession2. To be on the safe side, prices could be
reduced and marketing efforts could be directed to persuade consumers to continue
purchasing.
4) As described in the Supply Analysis, a contract would be negotiated indicating shipping times,
quantity, price, and days payable. Terms could be included in the contract to guarantee that
goods are received within a specified time of ordering to mitigate some of the risk.
5) Made for Men will be designed to attract men and make them feel comfortable shopping in our
store to minimize this risk.
P a g e | 23
6.0 Conclusion
As described in the business plan, Made For Men is the high quality retailer of Men’s hygiene and
grooming products located in Midtown Plaza. With great attention placed on the marketing plan in
order to attract a sufficient number of customers per day, I believe that Made For Men is a feasible
business that shows potential to be successful. Made For Men is projecting to reach a net income of
$86,738 in year 5 by capitalizing on the increasing trend towards men’s grooming and hygiene. With the
first mover advantage, I believe that Made For Men is the answer to consumer demand and may
actually play a role in the further growth of this trend.
“Made for Men… Every Man’s Hygiene and Grooming Store”
P a g e | 24
Appendix A: Product and Price Comparative Analysis
Product
Price
25
25
250
80
150
115
The Art of
Shaving
(USA)
25
25
300
125
185
125
25
300
25
25
25
25
20
20
20
20
185
30
30
100
35
25
320
20
20
N/A
30
28
28
20
20
190
N/A
35
N/A
55
Made For Men
Aftershave
Lotions
Straight Razors
Safety Razors
Cartriage Razors
Shaving Brush
Pre and Post-Shave
Oils
Shaving Sets
Soap and Body Wash
Facial Scrub
Eye Gel
Mustache Comb
Mustache wax
Beard Cream
Nail Clippers
Scissors
Electric Shavers
Deoderant
Hair Products
Men's Fragrence
Grooming Service
*Prices are based on averages
The
Bay
Sears
The Body Shop
Tommy Guns
20
25
N/A
40
50
N/A
20
25
N/A
N/A
50
50
12
15
N/A
N/A
N/A
35
20
N/A
N/A
N/A
N/A
N/A
N/A
50
15
15
20
N/A
N/A
N/A
10
10
80
25
20
80
N/A
N/A
50
10
15
N/A
N/A
N/A
N/A
10
10
80
25
20
80
N/A
15
20
15
15
15
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
40
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20
N/A
45
P a g e | 25
Appendix B: Financial Projections
Please refer to the attached Excel document to review the Made For Men base case Financial
Projections.
P a g e | 26
References
1. CNN Money. 2006. The Art of Shaving’s Strategy: A cut above.
http://money.cnn.com/2006/06/22/magazines/business2/artofshaving.biz2.
Accessed February 6, 2015.
2. Euromonitor International. 2015. Men’s Grooming Marketing Research.
http://www.euromonitor.com/mensgrooming. Accessed February 10, 2015.
3. Kline. 2012. Male Grooming Products: Global Market Brief.
http://www.klinegroup.com/reports/y576.asp. Accessed February 10, 2015.
4. PremiumBeautyNews (PBN). 2012. Male Grooming: Market Grows at Rapid Pace but
Brands Need to Adapt. http://www.premiumbeautynews.com/en/male-groomingmarket-grows-at,4457. Accessed February 10, 2015.
5. Statistics Canada. 2011. Census Metropolitan Area of Saskatoon.
http://www12.statcan.gc.ca/censusrecensement/2011/as-sa/fogs-spg/Facts-cmaeng.cfm?LANG=Eng&GK=CMA&GC=725. Accessed February 7, 2015.
6. NPD Group.2015. https://www.npd.com/wps/portal/npd/us/home/. Accessed February
10, 2015.
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