If you would like to start this business one day, then you’ll have to face this eventually. So let’s find out today and clear your confusion on How Much Does It Cost To Start A Beauty Business?
Don’t worry as it is not necessary that you should be a millionaire to start this business. Well, you’re lucky if you’re one because things are comparatively going to be easy.
We’re not here to judge. So be a millionaire or not, we’re going to guide you.
Let’s also make it very clear that there are people who have started this business from scratch or from a few bucks.
Tell me that you’ve heard about Sara Blakely. The founder and inventor of Spanx. We admire her greatly because she started her business with only $5,000 of her own money.
It was a side hustle in her apartment while she worked a corporate job. Now, it’s a billion-dollar company and she owns 100% of it!
Great isn’t it? So considering her hustle and her being an inspiration, let’s quickly discuss two things in this article.
- How to start from scratch? / Are you unwilling to invest a lot?
- What are the Financial / Hidden costs?
How much it Cost To Start A Beauty Business
if you’re not willing to invest a lot of money.
1. Network with people like you’re the boss!
Start networking with people who have similar ideas or who have already established a beauty brand. You can simply ping them, DM them, shoutout or follow up on a regular basis to get their attention.
All you need is a few minutes to know how they have started it all. Otherwise, get hold of people who have started their journey but are struggling.
Know their struggles! Because that’s important too. You can also start cold calling them and schedule a call for yourself. You’re anyway not selling them anything. To be honest, you’re buying their time.
2. Are you not willing to go through this alone? Find a partner!
Does your best friend share the same ideas as you? Is he/she passionate about the same thing? Do you know someone who can share the same struggle and pain?
Find a partner! Share each other’s knowledge.
Probably you have a background in formulating and your partner has a background in sales? This partnership works out too!
3. Assign few tasks to your friends within their expertise
You can take out very little from your pocket and hire your friends because they might do this for free anyway if they are very close to you.
But to motivate them a little bit and to make sure that they are accomplishing the tasks within a deadline, pay them a little to impress them and eventually your task will be done in no time.
4. Side hustles are the best!
Why go full-fledged when you know you can go slow while working full-time somewhere else.
This could be an advantage financially as you can invest half your salary every month in the beauty business and give less time to your side hustle. Will that not work?
5. Sell shameless and go crazy!
Go full-fledged when it comes to sales. DM everyone you know, friends and family, neighbors, colleagues, random people you were flirting online with. You never know who is going to be helpful and who has a great network.
This is why sell shameless and go crazy!
Now let’s talk about,
Financial investment or hidden costs
1. Regulations on the basis of the country you belong to
Which country are you from? What are the cosmetic regulations? Please research! In the USA, the cosmetic industry is regulated by the Food & Drug Administration (FDA).
Before you even get started, it would be a good idea to check out the information published by the FDA specifically for startups and home-based cosmetic businesses.
This will help you when you get started and are figuring out your costs.
The Food and Drug Administration is responsible for protecting public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, and medical devices.
by ensuring the safety of our nation’s food supply, cosmetics, and products that emit radiation.
2. Key start-up costs
To start any cosmetic business, or really any business, your key start-up costs will be in three primary areas including:
- Product Development – around $3500 for a single product
- Business & Miscellaneous Expenses – varies but at least $1500
- Sales & Marketing – starting at $300 and up
Please note that the above cost is a ballpark and it might vary in different situations and in different countries. We’re going to assume that you are going to start small so the best way to do that is to start online.
Of course, costs can vary widely depending on the formulations you are making, but here is a general ballpark for what you can expect.
3. Launch fast or launch slow?
Many of us prefer to launch quickly as we feel immense pressure about starting a business in a competitive marketplace and think that getting the brand out quicker will help us beat the competition.
But what we don’t know is that launching quickly will require having all the elements in the beauty business finalized faster which might get difficult to achieve working alone, which means that we’ll need to get a lot of outside help – which costs money.
So what you prefer is totally up to you. It is also fine to go slow as you would like to make sure that you’re investing in the right places and with the right people.
You do not want to spend a lump sum amount of money and then realize that it was a mistake. Spending little money and then realizing that it was a mistake would make more sense.
Be mentally prepared that you are a human and you tend to make mistakes. So make mistakes on low investments rather than huge ones.
4. How far do you want to go with product testing and certifications?
We prioritize the fact that the formulations that you use are safe for the consumers and we also recommend you research the rest of the product testing and certifications.
For example, in the New Product Development (NPD) life cycle, you first need to create a product that you’re really happy with, ensuring all components have been tested and positive feedback received from your target audience using a focus group
Then and only then, you need to get it officially tested and certified. You need to ensure your products can be legally sold and by following Good Manufacturing Practice (GMP) and making sure you adhere to the cosmetic and labelling regulations in your country, your product should pass the testing procedure and get certified.
This however is a cost most people aren’t aware of when they first start.
5. Order filling, marketing & sales costs
Filling orders will be your next significant cost and the final area that we’ll cover is your marketing costs.
You need to have money available for boxes for shipping, people to actually fill the orders and shipping costs. When you are coming up with the price of your product don’t forget to include shipping as part of your costs.
This can often be as much or more than the cost of the product. For example, if it costs you $10 to make your product, shipping costs will easily be around $5 so you need to charge $15 per unit just to break even.
If you begin an online business which is what we would recommend then the initial costs can be fairly low. Running a website can be done around $300 – $500 a year depending on the quality of the content on your website and the web developing companies you’re approaching.
This is why we earlier suggested approaching freelancers and friends whose expertise would be in line.
Online promotion via social media or email can be done for next to nothing and requires mostly an investment of your time.
The activities that you should spend your time on will depend a lot on who your customers are but things like writing blog posts about your topic, publishing videos, participating in social networking sites like Facebook or Instagram, commenting on other people’s sites, and conducting online auctions are all things that can boost sales of your cosmetic product.
Our only question to you is, are you willing to give it all away? Well, we aren’t referring to your money but your time and efforts. Do remember, you either spend more money or less! If you’re spending less then get ready to proportionate the balance through your efforts and your time. Don’t you agree? Feel free to reach out to us or to know more about us, please visit our website.
We’re always available to help you so that you can grow exponentially and achieve your dreams.