If your interests lie in beauty and cosmetics, you might be thinking about starting your own makeup business. Whether you’re thinking of launching an online store or you’d prefer to sell your products through distributors, a physical store or independent consultants, this guide explains all you need to know about how to start a makeup business.
Launching your own makeup business means you’ll be able to start your own brand. It also gives you the freedom and flexibility to set your own prices and sell products in-store or online. Plus, it could enable you to follow your dream and work in a business you’re really passionate about, while also having the benefit of being your own boss and working the hours that suit you.
There are lot of options to explore when it comes to starting your own cosmetics business. It’s important to choose a suitable niche to focus on as this will help you build a brand, find your target market, and stand out from the competition.
When weighing up your options, you want to think about whether your brand will fill a product gap in the market, or whether it’s going to be a new version of a popular classic. Make sure you carry out some market research first to assess whether there will be sufficient demand.
Some of the areas to think about include:
Your first step to launching your makeup business is to choose the products you want to sell. You want to choose something that you’re interested in but also something that’s likely to sell well. As part of this, you need to factor in how much it will cost to produce the products. That way you can set realistic margins and make sure you earn a decent profit.
It’s generally better to start small and only launch a couple of products before expanding your range once you’ve got the right processes in place.
Every business needs a business plan. This should outline what your business is, what it will sell and who your target market is. Having a business plan will provide you with a roadmap to help you stay on track, but it will also be necessary if you later apply for funding or investment.
As well as describing the services your business will offer, your business plan should include:
You’ll also need to think about how much inventory you’re planning to hold and, if you sell products online, how the ordering and shipping process will work.
If you have enough money in your savings account, you could use this cash to get your business up and running. Alternatively, you might be able to borrow money from friends and family – but your relationship can rapidly go downhill if your business fails and you can’t repay the money.
You could also look into whether you can apply for a startup loan. The startup loans programme is a UK-wide government-backed scheme that offers funding of up to £25,000 to those with a viable business idea but no access to funding. To qualify, you’ll need to be a UK resident and at least 18 years old, and be able to show you couldn’t obtain funding from alternative sources. You must also not have been trading for more than 36 months. You will usually need to show your business plan, trading history, projected earnings and turnover.
Other options to think about include crowdfunding and business angels. Crowdfunding enables you to collect money from a pool of investors via online platforms such as Seedrs, Crowdfunder and Crowdcube. In return for their investment, these people might get a share in the company or a reward.
Business angels, on the other hand, are private individuals who tend to invest in startups and early-stage businesses in exchange for a share of the company’s equity. In addition to money, they bring their own skills, expertise and contacts to the table.
In some cases, you might also qualify for a business grant. Unlike a loan, a business grant does not need to be repaid. However, many are aimed at specific industries, community groups or types of business so qualifying criteria can be tough.
When setting up your business you will need to choose a legal structure. The easiest option is to set up as a sole trader, which means you’ll need to pay income tax on your earnings through your self-assessment tax return each year.
Alternatively, you could consider setting up a limited company. Rather than paying income tax, limited companies pay corporation tax on their profits which could work out cheaper if you’re a higher rate taxpayer.
Once you’ve decided, you’ll need to register with HMRC. If you’re a limited company, you will also need to register with Companies House.
Additionally, it’s a good idea to open a business bank account to help keep your business and personal finances separate, and consider hiring an accountant to help you with your taxes.
Then there’s business insurance to consider. If you have a physical store, public liability insurance will protect you against costs resulting from third party injury or damage to property. If you hire staff, you’ll also need employer’s liability insurance which will pay out if an employee becomes ill or injured as a result of the work they do for you.
Finally, you’ll need to make sure the products you want to sell comply with the UK Regulation for cosmetics. As part of this, you’ll need to:
A strong brand will help you stand out from the competition. It’s what your company stands for and should be designed to connect with your target audience. When building your brand, you’ll need to think about the right colour palette, brand logo and tone of voice – this needs to flow through to all the copy on your website, social media and packaging.
Once you’ve got your ideas lined up, you need to start developing your products. Think about the sizing, colours and textures, as well as the packaging. Your chosen packaging needs to align with your brand’s values. So if you’re focusing on sustainability, make sure your packaging is made from sustainable materials, not plastic.
This step is crucial, so don’t skip it. You need to be sure the products meet the correct quality, size, colour and texture requirements. You might want to check features such as how waterproof a mascara is or how long lasting a foundation is. It’s not uncommon to go through several rounds of testing before finalising the product.
Even if you plan to sell your products in a physical store, it’s still important to have an online presence. That means you need to spend some time designing your website so that potential customers can find out more about your business and the products you sell.
Your website should include a home page, an about page, a contact page and shop pages. Make sure customers can search, sort and filter products to help them find what they want. You can use website builders such as Wix and Squarespace that will guide you through the process, or you can hire a professional web developer to do it for you. Consider adding payment features such a PayPal to make it easier for your customers to buy your products.
Now you need to think about your marketing strategy. If you’re planning to sell your products online, you’ll want to think about how to attract traffic to your site.
One way to do this is through social media networks like Twitter, Facebook, YouTube and Instagram. This will enable you to build up a community of followers who might become regular customers. You could also hire people with large social media followings to talk about using your products and encourage their followers to buy their own. Plus, you could pay for adverts to appear in target customers’ feeds.
In addition, you need to make sure your website copy is optimised for SEO (Search Engine Optimisation) as this will help your copy rank higher on Google and reach more customers. You can use pay-per-click (PPC) marketing too, so that a link to your website appears towards the top of a search engine’s results page. You then pay a fee each time a user clicks on that link.
Once you’ve completed the above steps, you’re ready to launch. Make sure you build up to the launch on your social media profiles, and consider launching with a promotion or competition to gain people’s interest.
Creating brand awareness takes time so even when your business is up and running, you need to keep promoting it to increase sales. Attending beauty-related events can enable you to network and meet other people in the industry. It can be a great way to educate consumers about your products but also potentially partner with local wedding planners, photographers or artists.
On top of this, you need to stay active on your social media channels. You could choose to run regular competitions or giveaways, as well as share links to new products and blog posts. Also think about referral discounts and special offers or free products on birthdays, for example.
You might want to hire a PR professional to help increase media coverage for your new business. This could involve sending out boxes of new products for consumers to try so that they become more excited about your offerings.
Additionally, think about setting aside a portion of your monthly budget to advertise in relevant magazines and websites. It’s also worth sending out surveys to existing customers from time to time to ask how they find the quality of the products and whether there are any areas you could improve in.
If you’re looking for funding for your new makeup business but you don’t know where to start, the team at Swoop would be happy to help. We can talk through your funding requirements and help match you with the most suitable choice for your business. Get in touch today.
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