Blog #5

The revenue model strategy for our business includes pricing for customers on the web. Our bottles of shampoo or conditioner will have the same size. As a startup company we agreed on keeping the size of the bottle steady, and later on we will offer a variety of sizes to the customers. Our pricing tactics is as follow:

  • Bottle of shampoo or conditioner:  22 Fl.oz./650 mL⇒ $ 23
  • A set of shampoo and conditioner ⇒ $ 40
  • Gift cards purchase  ⇒ $25- $500
  • Holiday gift sets $ 30

Our 2 year revenue plan is as follows:

  • Assuming we sell our products to 500 customers/month (17customers/day)
  • 425 customers decide to spend money on a set of shampoo and conditioner ⇒ $40×425 = $17,000
  • 75 customers decide buy either a bottle of shampoo, or conditioner ⇒ $23×75=$1725
  • Monthly sales = $18725
  • 2 year gross annual sales = $224,700

Our 5 year revenue plan is as follows:

  • Assuming that our website attracts about 100 customers and we sell our products to 70 customers on a daily basis:
  • 60 customers decide to spend money on a set of shampoo and conditioner ⇒ $40×60 = $2,400
  • 10 customers decide buy either a bottle of shampoo, or conditioner ⇒ $23×10=230
  • Estimated daily sales( with 3 gift cards purchase with a minimum of $25)= $ 2,705
  • Assuming that the daily sales and number of customers will stay constant :weekly sales = $ 18,935
  • Monthly sales = $75,740
  • 5 year gross annual sales = $908,880

⇒During the holidays seasons we will be expecting a peak in our daily sales so we can roughly estimate our annual sales to be $913,880 ( $908880 + $5000= $913,880)

Metrics that matter for our business model include customer satisfaction, productivity, net income, and cash flow.

Here’s a table of our various costs

Of course this is an optimistic business model, but we believe that by marketing on Facebook and black beauty blogs, offering worldwide shipping, and pivoting as we go, we will reach our five year goal.

Here is our latest Business Model Canvas

Blog #0: Who we are and what we’re going to do

We are Benson Inc, an eco-friendly company that offers an all-natural, organic solution to hair care and styling. Our company offers two lines of hair products  are:

  • Hair wax for straight and wavy hair
  • Shampoo,  conditioner, leave-in conditioner, and hair serum  for girls/women with  African-lineage hair type

Despite the extra cost of providing all natural ingredients, Benson Inc believes that protecting the Earth is first priority. Moreover, using organic products made with unrefined ingredients on your hair provides great benefits.Why not have great hair too?

We believe men will be interested in the hair wax, and African-American women will be interested in the shampoo,  conditioner, leave-in conditioner, and hair serum . In order to test this hypothesis, we will ask everyone within our target market what they currently use, and if they would be interested in Benson Inc products.We  will  offer free samples  to anyone who shows interest in our products, so we can get feedback on the quality of the products.  We will also create a survey and join online chat rooms, network with members of natural hair movement platform. Naturalistas use youtube a lot for tutorials. We will offer free tutorials with our products so people can have a better idea on how to use it. From their comments on each tutorial, we will be able to pinpoint who is interested or not.  If people seem content with the products they already have, and show little interest in Benson Inc, we will consider that a failure and pivot.

Our value proposition relies on the fact that our products is organically made with unrefined/ unprocessed  natural ingredients and the packaging, and it is basically suitable for all hair types.  We will create a mockup of our packaging and ingredient list, comparing it to similar brands on the market to create a distinct product. This experiment is closely tied to the target market test, as we will show those within our target market our mock up. We will also show trusted friends, including graphic designers,hair stylists,  and health-minded individuals, to get their input on what value this adds and how we can do better. If the value proposition doesn’t spur any interest in our target market, and/or if our trusted friends believe we aren’t being stylish or health conscious enough, we will consider that a failure.

In order to see how saturated the market is, we will study various channels such as Etsy, Pinterest, Ebay, Facebook ,and Amazon. On Etsy, we’ll direct message the sellers to get their view on sales of such a product online. If the market is entirely saturated, we will find another place to sell our product, such as smaller community stores, or local drugstores.

We will attempt to sell both online and by setting up a table at MSU. If we haven’t sold anything in the first week, we will definitely pivot. If by two weeks, we’ve only sold between 1-5  product units, we will also pivot. Each week we will assess our sales, compare it to our business model and determine where to go from there.

Here is the link to our Business Model Canvas.