There’s no better time to start a cosmetics business — or for that matter, any business – than now. “How can you say that?” you ask. Glad you asked.
Yes, there’s a global pandemic raging across the world. Look at the positives, though.
People are shopping more online than ever before. This phenomenon empowers even startup businesses to compete on an equal footing with larger ones.
Zoom meetings have become the default way to conduct business during shutdowns. That’s a boon to companies that focus on cosmetics, whose customers want to accentuate their good points under the camera’s harsh gaze.
And, in general, most people have more time on their hands. Those who spend their time planning, rather than daydreaming or binge-watching TV programs, can make a go of their business ideas, provided they start small and don’t go deeply in debt to fund their business.
Finally, a potent vaccine has already been approved by the FDA for emergency use. By springtime, the vaccine should be available to all Americans.
If that prediction becomes reality, it will provide even more opportunities for fledgling cosmetic businesses. After all that time spent in lockdown, they will be even more excited about getting dressed up and going out on the town – and they’re likely to want a fabulous face to go along with their finery.
And, according to Formula Botanica, the organic and natural cosmetics market looks to be on the verge of a boom, predicted to reach $23.6 billion by year’s end in 2025. Beauty brands whose focus is on natural ingredients can capitalize on this trend by getting started right now.
So, if starting a cosmetic business is a lifelong dream, get to work now to make it happen. Here’s a roadmap to cosmetics sales success.
Begin by Starting a Small Cosmetics Business
Before taking out a loan or a huge chunk of change out of your bank, do some background research. Not only should beauty entrepreneurs learn about how to formulate cosmetics from ingredients, but they also need to learn about the basics of running a business.
- Identify a niche: One of the best ways for a startup to get off on the right foot is to start small. Identify a niche where there’s plenty of demand but little competition. Whether it’s vegan ingredients or cosmetics that contain no alcohol to market to Muslims, there’s likely a space in which your business can gain a foothold. Learn how to create a unique selling proposition for the business in order to stand out.
- Create a distinctive brand image: Think about the cosmetics’ target customer. What kind of brand story will appeal to this consumer? What images will catch the eye of these people? Then, work with a designer to create logos, labels, and other brand assets that will give the brand a seamless look across all the brand’s marketing materials. Once the business is up and running, a label manufacturer will usually have a designer on staff to turn those ideas into attractive images.
- Draw up a business model and the products’ manufacturing process: Look at the least expensive way to create the cosmetics and then do the research to develop a repeatable, consistent manufacturing process. Next, decide what raw materials and labor are needed to produce those products at the desired scale. Then, sketch out a trial budget, including any marketing costs. Add those numbers up, and that will be the amount of money needed to set the business in motion. Study the laws that govern cosmetic production and marketing. Make sure that the business model takes these requirements into consideration before finalizing the plan.
- Create a realistic financial plan: Always go conservative when it comes to financing. If the money is available to cashflow the business, that’s always the best way to go. Learn what you need to sell the products to make a profit. Research target customers to see if they would be willing to pay that for the cosmetics. Those numbers will indicate whether the business has an excellent likelihood of succeeding. They’re also the numbers startup companies need to take to the bank should they apply for a business loan.
- Decide the best way to market and sell the products: Whether it’s a company website, a stall at the local farmer’s market, or a spot on a local store’s shelf, a new cosmetic business needs to ensure that there is a way to sell their products. Secondly, look for low-cost, high-impact ways to get the word out about the products. Never focus on the product in the marketing strategy. Focus on what the product will do for the customer. Make digital marketing a major part of that strategy. Even Amish businesses have recognized that potential customers search online to find the products they sell.
- Finalize a business plan: Before heading off to the bank to borrow money, realize that the banker will require you to show them a viable business plan. It should include the brand’s vision for its current operations and its future, the products it plans to sell, its target customer demographics, its competitors, marketing strategy, financial forecast, and funding the brand has already secured.
After Starting a Cosmetics Business, Expand Your Line
Although it’s best to offer only a few items when starting out, there will come a time when you’ll want to expand the business. The time to expand is when the brand begins to gain some traction in its niche, attracts devoted customers, and begins to turn a profit.
Listen to customers’ feedback closely. If several of them suggest that the brand should sell X, look into the nuts and bolts of manufacturing, marketing, and selling that product at scale. Remember, it’s not about the brand – it’s all about the customer.
As the brand gains more customers, look at ways to scale the business. Research efficient ways to create more of the customers’ favorite products. Whether it’s hiring more people, buying additional machinery, or automating processes, be sure to determine the costs of expansion versus the estimated returns on your investment.
With careful planning, quality products, and solid financials, your cosmetics brand will likely thrive in tomorrow’s demand-driven market. To discover how quality labels can make your cosmetic products stand out on the shelf or online, get in touch with the Nova Custom Label Printing team today.