Business Idea and Location
The proposed business idea is a company named Eleven Candles aimed at retail and distribution of aromatherapy specialty candles and incense. The wide offerings is aimed to provide different sensual and spiritual experiences for consumers with various needs. However, the primary mission of the company is to advance aromatherapy as a strategy for improvement of mental health and emotional state of individuals. The business will be located in Albany, New York, known for its rich commercial and cultural background and a combination of urban areas with extensive suburban areas.
Structure and Management
The business will maintain a home-office structure. A home office structure is when a space of an individual’s residence is designated and used for official business purposes. Home offices have become popular for self-employed and small businesses as it significantly reduces costs that would otherwise be paid towards rent of space, utilities, and warehousing; instead utilizing the space of a residence for such uses and simply paying a few extra costs for additional equipment or utilities (Kenton, 2020). A home office structure is both effective and offers benefit, such as there are available IRS home office deductions for small businesses (IRS, 2021a).
There will be a small storefront retail location, but the majority of sales for this type of product and in the context of the current economy are expected to be online, also emphasizing the effectiveness of using a home office structure. The company will have an online webstore, with direct-to-consumer shipping. The company is expected to have 3 employees at the start: the owner, a store clerk, and inventory management specialist that will also oversee shipping. Aromatherapy products will be ordered based on market demand, popular trends, and customer-specific orders wholesale and then shipped or sold directly to consumer at a price.
Due to the small size of the business, it will most likely maintain a sole proprietorship business entity legal structure. It is the simplest business entity, with one person being the owner and operator of the business. It is easy to start without a need for a business license, has no corporate formalities, and the tax structure is beneficial as it is easy to complete, and most business losses can be deducted on the owner’s personal tax return (IRS, 2021b). The owner receives all the profits, but also carries the sole risk and responsibility for legalities and debt of the business, but since this is a low-risk enterprise, it is appropriate. Therefore, as a small business, the owner who will be full-time invested in the business will manage both day-to-day affairs as well as strategic decisions.
For funding, as a sole proprietorship, the business has access to small administration business loans, which are sometimes sponsored by state and federal governments as well as business grants that may be given to small businesses and entrepreneurs. Also, as a sole proprietor, one can obtain either a business line of credit through a bank or apply for a personal loan, since the business and the owner are essentially one entity in this type of structure. Angel investors from venture firms or friends and family are a possibility as well with a strong business plan and evidence of market demand, but shares cannot be given away under a sole proprietorship structure.
Marketing
An effective means of marketing the business would be an emphasis of benefits of aromatherapy products with mental health which is the mission of the business. Commonly such products are associated with spirituality or meditation, and the business will embrace this as well. However, the distinguishing feature would be a strong emphasis on the mental health aspect, using the latest evidence. Aromatherapy has been actively promoted as part of medically safe and sanctioned CAM (complementary and alternative medicine) interventions.
Aromatherapy is used globally in the management of pain and psychiatric or stress-related disorders such as anxiety and insomnia (Perry & Perry, 2006). Meanwhile, there has been a proven positive effect of aromatherapy in the treatment of depression (Sánchez-Vidaña et al., 2017). The business will advertise aromatherapy and its specialty selected products are a beneficial completement to traditional medical approaches and helpful alternative treatment for depression and anxiety.
The target market can be widespread but will be primarily targeted towards young adults and middle-aged adults aged 18-45 years old that are accepting and embracing of CAM interventions. It is accepted that the majority of the market for these types of products would be females. Aromatherapy can be beneficial for everyone, but targeted consumers can include those that suffer from anxiety, depression, and other non-severe mental health disorders to which the product lines can be most appealing.
As a small business that primarily sells online, the best method of advertising will be online and social media. It is the most cost-effective and efficient way of advertising direct-to-consumer which also allows to track market demand and consumer demographics. Social media and online marketing offer access to a wide audience while allowing for low-cost advertising that can be highly targeted by demographic, interest groups, geographic location, and keywords. It is a false assumption that social media advertising is only for large enterprises, small businesses with a strong strategy can multiply their exposure and sales by getting on the screens of consumers and increasing traffic to site or the business media pages (Fountain, 2021).
4P’s of Marketing
- Product – products sold will be physical goods including but not limited to scented candles, flameless candles, incense, oil diffusers, scented oval, room spray, wax warmers, nebulizers and other similar scented and aroma products (Lund, 2020).
- Price – price is expected to be affordable but not necessarily low-priced. There is expected to be variation in price of products, ranging from regular items to more specialty or luxurious offerings. The business will position itself as accessible with an emphasis on quality which will modestly reflect on the price. As popular for online shipping businesses, a subscription service of various tiers may be viable.
- Place – the product and business will be promoted largely online through search engines and social media advertising as well as both online and in print on specialized platforms for the thematic of the products.
- Promotion – the online business will be promoted using multiple social media and online advertising strategies ranging from local listings and search engine increase. An online blog will be started along with traditional active social media postings which detail the products and new releases. Another strategy is maintaining an effective e-commerce presence via the company’s own website as well as other major platforms such as Amazon. The combination of methods is best to reach the widest audience that can lead to potential conversions and sales.
References
Fountain, T. M. (2021). Why small businesses and startups should invest in social media marketing. Forbes. Web.
IRS. (2021a). Home office deduction. Web.
IRS. (2021b). Sole proprietorships. Web.
Kenton, W. (2020). Home office. Investopedia. Web.
Lund, N. (2020). 6 candle alternatives that don’t feel like a downgrade from the real thing. Web.
Perry, N., & Perry, E. (2006). Aromatherapy in the management of psychiatric disorders. CNS Drugs, 20(4), 257–280. Web.
Sánchez-Vidaña, D. I., Ngai, S. P., He, W., Chow, J. K., Lau, B. W., & Tsang, H. W. (2017). The effectiveness of aromatherapy for depressive symptoms: A systematic review. Evidence-based complementary and alternative medicine: eCAM, 2017, 5869315. Web.