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The Ultimate Guide on How to Start a Beauty Business

Starting a beauty business is a lot like building the perfect skincare routine. They both take time, dedication, and a lot of trial and error. Not to mention — there are a few steps you just can’t skip (moisturizer, anyone?). That’s why we’ve put together the perfect formula for starting your beauty business with the help of some entrepreneurial pros who’ve done it, that’ll take your business from looking like a one to a solid ten out of ten.

Pick your beauty business niche

It’s no secret that the beauty industry is booming. Valued at an estimated $532 billion and counting, it’s a market that any savvy entrepreneur would want to dip their toes in. As this industry evolves and grows, the competition grows with it. If you want your small business to stand out to consumers and remain profitable, you need to find your niche.

Your niche is your focus — your area of expertise. When starting a beauty business, you want to choose something you are passionate about and have some experience in. Choosing too large a niche will make it difficult to compete against larger corporations. Whether you’re developing products, marketing a service, or even vlogging, it’s best to choose one thing that you can specialize in.

If you’re a lover of all things beauty and having trouble deciding which to narrow in on, here are a few important tips to keep in mind:

  • Think of the problems that your target audience is facing. Acne, jet lag, dark circles — and position your product or service as a solution
  • Consider your connection to what you do and why you do it. The beauty industry is saturated, authentic stories sell.
  • Do some research and gauge if there is true demand for your product or service
  • If you’ve found a niche that you’re interested in, check out the competition. If you have no competitors, and demand seems high, your business has great potential. If there are competitors, figure out what they lack and apply it to your business instead.

If you’re still struggling to find a niche, that’s okay! It doesn’t hurt to keep brainstorming. For some beauty business ideas/inspiration, click here.

beauty business pinterest board

Hire a lawyer

A lawyer can help make sure your product or service meets the selling requirements of your country. If you’re based in the United States, for example, you’ll want to become familiar with FDA regulations. This will ensure that your product is compliant.

For cosmetics, the FDA has many rules and regulations around the manufacturing and labeling of these types of products. There may even be some prohibited and restricted ingredients that you may not know about. This is where a lawyer really comes in handy.

The EU, Canada, and most everywhere else will have strict regulations you must follow before selling beauty products — so make sure to check with a lawyer before starting your beauty business.

Get your finances in order

Time to think about those dollah-bills! Opening a bank account for your business helps you file taxes accurately, organize accounting records, and avoid overspending. It also helps you keep personal spending and business spending separate to avoid future confusion.

If you’ve never opened a business bank account before, here are some tips:

  • Don’t just choose the first bank you meet with. Shop around and find a bank that caters to entrepreneurs, offers great insurance plans and has a great point or rebate system.
  • Get your papers in order. All businesses need a taxpayer identification number to open a business bank account.
    • TIN (USA)
    • BN (Canada)
    • VAT (Europe)
  • Make sure everything went through successfully. That means that your business name is written correctly, and your deposits go through properly.

“I’d recommend writing down everything you have to do before you start spending anything. It helps you see the future, and also helps you determine what you can go without.” —A’oleon Ka’Wazay, Virgin Beauty

Create a logo

One of the most critical parts of any beauty brand is the logo. More often than not, it’s the first thing people see when they come in contact with your brand. So, you want to make sure your first impression with potential customers is a lasting one!

If you haven’t created a logo for your beauty business, don’t sweat it! The process can seem intimidating, especially if you’re not a designer. A good place to start is coming up with a catchy business name. From there you can hop on our logo maker and brainstorm some logo concepts for free!

Click here to for some beauty logo inspiration.

Make your products

Now that you’ve established your niche, learned the rules and regulations of the industry, sorted out your finances, and have a face for your brand — it’s time to create!

One of the hottest topics in the beauty industry right now is the clean beauty movement. Consumers want complete transparency from a brand and are looking for clean, non-toxic ingredients that are cruelty-free. Bonus points if they’re vegan! Depending on your niche, this is something you’ll want to incorporate into your product.

Our recommendation is to lay the foundation for scaling your business by investigating suppliers early. Suppliers can provide specialty raw ingredients at wholesale prices, reducing your cost as you scale up the production of your products. A few supplier examples are:

Test your offering

As you test your product or service, work with suppliers who can create small batches rather than ordering huge quantities. This will save you time and money, and help get an understanding of what people like and don’t like.

If you’re opening a service-based beauty business, you can test by offering your services for a very reduced rate, or free, to friends and family in exchange for some honest feedback and potential marketing. Ask them to give you a shoutout on social media, or write a great review about you online!

“Testing is hard. We had the luck to launch from an established cosmetic institute —schleswigquelledeslebens.de, and we tested the products in a professional context on clients with various conditions and needs.” —QDL cosmetics

Figure out your packaging

Some people don’t believe in love at first sight — those people don’t know the power of good branding. Nailing your custom packaging can provoke a person to purchase without hesitation. Good packaging creates that “I HAVE to have it” feeling. That’s why it’s important to create a brand identity.

Sustainable packaging is a huge concern for consumers these days. The plastic-free movement is growing in popularity, and the need for recyclable or even compostable options is increasing in demand. If this is important to you, consider companies like Noissue.co who develop sustainable packaging.

“I learned the hard way that people want to see the product on or inside the box. Especially when you’re new. Make sure there is an image, or a cut out in the box so they can see and connect with the product. Packaging is everything! Spend money and time here. It makes a huge difference and will help you in marketing.” —Lauren Madeira

Find your partners

As you grow and develop your beauty business, your need to work with outside vendors and partners will grow too. Here are four main partners you should source in the early stages of your business:

A lab

For now, you might be planning to produce your beauty products at home. But as you grow, this will become less and less manageable. It can also be difficult to guarantee and maintain a sterile environment at home, that’s why we recommend finding a lab to create your products.

A fulfillment partner

If your business is run online, you’ll likely need to find an order fulfillment partner sooner than later, lest your home begins to look like a warehouse! These people will be responsible for order intake, packaging products, and shipping them out. There are fulfillment partners all over the world, but we recommend finding one nearby so you can frequently check-in and ensure quality control is meeting your standards.

Ecommerce platform

The way we shop is changing every day. What we do know is Ecommerce is increasing in popularity, and physical retail spaces are declining. Both serve the same purpose; however, Ecommerce opens the doors to a wider audience and serves immediate buyer satisfaction.

Your own website could serve as an Ecommerce tool, or you could use Shopify, Big Cartel, or WooCommerce on a WordPress website.

Stockists

Many people still prefer the in-store shopping experience where they can see and try out products before committing to a purchase. Most major beauty businesses offer both an Ecommerce experience in addition to having a storefront to appeal to both types of shoppers.

The problem is, operating a storefront is costly. That’s why working with stockists is a great solution! Stockists are stores that sell a multitude of products in your industry or related industries: think general stores, department stores, etc. They’re an easy option for your customers to engage with your product in person without having to pay for a storefront.

“I found my bottles, brand style, ingredients and more with Google. I get my bottles from sks-bottle.com. I created my logo with Looka which was so easy to use. We manufacture all our products in a certified kitchen. Our main ingredient is Shea butter and we produce that ourselves in our village in Ghana to help create job opportunities for women there, and it’s shipped to the US via DHL. ” —Malia Dinko, Northshea

Set your pricing

Pricing is a big thing to consider when starting a beauty business.  Some tips for developing your pricing are:

Competitor pricing

While you don’t want to anchor to what your competitors are charging, this will help you understand what people are willing to pay.

Your business costs

Consider the cost of your product ingredients, production, packaging, shipping, labor, etc. and build this into your price.

Timeline to break even

How many months will it be until you make a profit? If the price for your product or service doesn’t cover your costs, you’ll exhaust your financial resources, and your business will pay the price (figuratively).

Quality counts

Remember that people are willing to spend money on good quality products! At the end of the day, it’s all about finding the right price for you and your business.

Better down than up

It’s easier to drop your prices than it is to raise them. Stick to a higher price point at first and gauge how the market responds to sales, discounts, and promotions.

“Our pricing model is 100% supply-driven. I.E. we have applied a reasonable profit margin goal to our costs and found that we stacked up well against perceived competitors. The cosmetic market is very ambiguous — with 99% of products made up of raw chemicals, even for the most expensive brands. So, selling high-quality at the right price is not so hard.” —Aviva Christophe, QDL cosmetics

Design a website

A good website fosters trust amongst your customers as it creates a sense of legitimacy and professionalism. You’ll want to take the time to create a website that’s easy to navigate, nice to look at, and answers all prospective customer questions. Even if you’re selling your product or service from a retail space, creating a website that showcases your offerings and tells your brand story, has a huge impact on the growth of your business.

Once you’ve picked a website building platform, chosen your domain name, and selected a web host, you’ll be on your way to creating your online beauty business! For more helpful tips on creating a website, check out this 10-step website checklist.

Get your game face on!

Phew! We’ve covered a lot. Figuring out how to start a beauty business is no small task, but knowing the positive impact you’re having on people is worth the toil. We hope you’ve found this guide helpful, we’ll leave you with some words of inspiration from entrepreneurs just like you who started their own beauty businesses from scratch:

  • “Take time to do your market research, be conscious about where you source your ingredients, perfect your formulations, stay true to yourself/your brand, and if you feel very good about it all go for it!” —Malia Dinko, Northshea
  • “Follow your heart, embrace your uniqueness, protect your art and craft. Love what you do and understand there will always be challenges but you can do it!” —A’oleon Ka’Wazay, Virgin Beauty
  • “I think that you need to focus on social media, connection and tutorial videos with your products. Sharing and teaching others about your own products will help you know what your brand needs and the next step you need to do.” —Lauren Madeira

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