Calantha Naturals will be a manufacturer and e-retailer of natural, ethically handmade, and vegetarian personal care products. The company will initially start selling sustainably made soaps at both a physical location in Park City, Utah, and online, while our actual factory will at first be located at our Salt Lake City home. But we still need to show consumers how our love for Calantha Naturals translates to wholesome products they will want. So what is a newborn company to do?
Simply put, this natural/organics industry is a HUGE one and we’re VERY excited.
Consider this:
• Retail sales of natural and organic hair care products grew by 70% during 2004-2008, from $982 million to almost $1.7 billion.
• Natural and organic color cosmetics had retail sales of $386 million in 2008.
• The skincare category was still dominant in 2008, accounting for 69% of retail dollars within the industry.
• Global retail sales of natural personal care products will continue their bullish run to nearly $40 billion in 2014.
But how do facts about your industry’s growth (like those above) come in handy when requesting funds to launch or expand your venture?
You have to let investors know that YOU know about both your potential AND your competitive arena. We know and love our competitors; without them, we’d be nowhere. But you also have to specify your company’s outlook and how it’ll impact your organization. Yes, this industry may earn $40B in the next four years, but any single co. clearly won’t be the ONLY one making all that, right? No, it’ll make only a portion of that (hopefully a sizable one!).
This is why you should not only know your potential and your competitors, but also your “ideal consumer” or target segment, who will lead you to your desired projected income. We know who our target market is (no, we won’t tell ya), but do you?
Let’s say you’d like to make and sell manly baby carriers for stay-at-home dads. So you do your research and learn the industry is expected to grow by $10B e/year (!) and you want some of that money. Now what? Well, be more specific. True, there may not be that many “manly” baby carriers out there, but they still exist.
So what now? Well, what will you have that all those other makers of manly baby carriers don’t? And be specific! See, investors want to see how you’ll take advantage of your industry’s projected growth in order to pay them back. Want to make carriers that feature a TON of pockets b/c you don’t want these men to have to take a whole diaper bag when just running a quick errand? Sounds good! And do they have these manly baby carriers in your hometown? No? Well, there’s a nice niche! So crank up that sewing machine and make a couple (or more!) to let a few potential customers try your product. (If no one tries it before you expand your co., you’ll expand a co. that makes stuff that people won’t know anything about. And if your product wasn’t that great to begin with, you wouldn’t have known b/c you didn’t let others try it and give you feedback! Know that NO amount of marketing can fix a crappy product.)
Wow, your local “quasi”-customers LOVE the added convenience these manly baby carriers gives them; they’re literally raving about them! And you hear they’re even trying to convince their ladies to start making more babies JUST to keep using them. BINGO! Don’t hesitate in telling THAT (though in more moderate terms) to investors.
So to summarize, show investors your product’s expected growth (even that in your area) and tell them specific attributes about your customers in order to make it so that your venture becomes one they WILL want to buy right then.
As always, thanks for your time. Have any Questions? Comments? You know the drill (i.e. simply leave a comment).
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