Whether you’re a cosmetologist, skin or nail technician, make up artist or trying to start selling make up, you will need a plan to start up. A good plan should have about seven parts and should ideally be around 20-40 pages, maybe more. First, you need to determine what products or services you are planning on selling so you can create the business plan around the items you’re wanting to offer.
When starting up a cosmetics/beauty business, you will need to figure out what you’re selling, do market research, research products, find a building, find a name, create a business plan, get a business license and open your business.
Determine Your Products or Services
The first step is to figure out what you’re selling. If you just want to start a business but you have no idea what you’re going to sell, the business plan will be potentially all over the place and you will have no idea what direction you are going to take it. A messy business plan will not likely get you the funding you will be needing to start, so making sure you line all your ducks up prior to starting the business plan will ensure you that you can give your plan the best start.
Do you want to sell services? Are you a cosmetologist, aesthetician, nail tech or barber? Do you have a creative flare for make up application or have you taken a make up artistry course? If you’re trained in any beauty or massage related field, you may be looking to open a salon or spa. If you are, there are certain things to look for in potential buildings. If you’re just wanting to open a retail business without services, you will have a wider selection of potential buildings.
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Do Market Research
A business will not succeed without customers. You will also have major competition if there are stores like Ulta or Sephora in the area, so you will need to find out a few things.
You will need to know if there is a market for what you are wanting to sell. Go to the businesses that you will be competing with directly and see what they sell and how much they stock. Check out if they are lacking what you sell.
Find a website like SurveyMonkey and work on coming up with questions to ask to see how others would feel about your business, see what they find lacking and see if they have suggestions for services or products that they just cannot find locally. Once you get that information, use it and find ways to incorporate the ideas into your business.
You can do a typical paper survey and go to public shopping places that allow surveys (or get permission) and stop people on the street, or you can do it through email and social media. Both options can give you a wider reach, depending on where you go and what you do- you may want to stick with social media and boost the post to a target local audience. Even if you do it online, you may not find the number of responses you are hoping to get.
Research Products and Services
The next step is to visit your direct competition itself to do some research. You will want to know what are best sellers, where people are doing most of their shopping (higher end vs drug store brands) and you will want to know what people are buying. You do not need to interview staff, that may not be the best route.
Look at the shelves to see what spots are empty. Look to see what kind of selection they have and try to get in at a popular shopping time so you can see what areas are most busy. Try to go on a Saturday in the early afternoon, if you go when a lot of people are out shopping, you will get a better feel for what people are looking for.
If you go to a particular store a lot and there is always a few spots that are empty, take note. Those will be more
Find a Building
One major thing to keep in mind- location, location, location. You want to pick a popular shopping center or street where you can get a lot of foot traffic. If there is a thriving mall in your area, you may want to look into renting a space inside the mall. Foot traffic and window shoppers are important to keep in mind. Even if window shoppers do not buy today, they can easily come back and buy later.
Now, malls seem to be dying all around the country, so you may not want to open in a mall. You could also find that you have to pay higher rent and rent is another factor you want.
Determine if you want to start off with a small storefront and expand when you get bigger or if you want to start off big. Starting big could be a risk. A bigger storefront could end up with higher overhead and could end up costing more of your starting profits than you want. Remember, you can start small and always expand when your store gets popular enough.
You also don’t want to rent a space too close to a lot of competition but if you pick an unserved area, make sure the people locally would use your products or services. If you open a high end store in a high poverty area, you likely won’t get a lot of local business. If you offer a wide variety of products at all price ranges, you may be able to pull off serving a lower income area but don’t expect everyone to gravitate to the more expensive products.
Find a Name
You will need to find a name for your business. You want it to be memorable, easy to spell and easy to put on a small business card or a flyer. You want to make sure it’s something people will be able to look up, remember and recommend to friends.
You can put a play on something (like a play on your own name or a word that will stick with people’s minds) or you can come up with something else that is easy to remember. A name is a very important part of marketing your business so make sure it’s memorable.
Create a Business Plan
This may be the most important part, besides applying for your business license. The business plan will detail all your plans and research so you can get funding. You will want to make sure to include every part of the plan and you will want to put as much detail into it as you can, remember the business plan is what you present when you’re looking to get funding. The SBA recommends around 30 pages and you need to include:
Executive Summery
The first part is the executive summery. It’s summarizing the business, your mission statement and your mission in starting the business. This is the shortest part of the plan and should be short and sweet.
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Business Description
This is a more detailed description of what your business will be. You will put the products and/or services you’re planning on offering as well as brands and all other details. You will also state if you’re opening an LLC, partnership, sole proprietorship or corporation. This description should be around one or two pages and should fully cover what your business will be about.
Market analysis and strategy
This will be a much longer part. You need to detail how you are planning on marketing and summarize who you’re looking to serve. This should be one or two pages. Don’t just say you’re targeting women. Break your target down to show that you have put a lot of thought into who you’re targeting. Describe your ideal client down to how she dresses or what income range she lives in. Make sure to get very specific. Just because she is your target doesn’t mean others won’t shop there, you won’t turn a different woman or man away just because they don’t fit into your target.
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Marketing Plan
Similar to a marketing strategy, this shows the plan you have for your marketing from short term to long term. You will want to list the ways you plan to get the word out about your business. Do a lot of research because you’ll also need to write out the budget so you can count that in the amount you want to borrow at first. Look at where your target audience typically spends time- a billboard in the country wouldn’t work if you’re targeting urban women and an ad campaign on Instagram wouldn’t work if your target isn’t doing Instagram.
Look at all forms of advertising because TV ads can still work and so can radio- depending on how people in your target are consuming entertainment.
Competitive Analysis
This is another important part. You need to know what makes your business competitive with the other salons or cosmetic businesses locally. You need to write up a detailed and well-researched page on what makes you stand out and what your competition is lacking. Make sure this is at lease 1-3 pages.
Management and organization description
What kind of management system are you going to have? You need a clear view of how many people you will need to run the company. If you’re opening a corporation immediately, that needs established as well.
Products and services description
You need to use this section to go into extreme detail and give every detail of the products and services you’re going to use. You need to make sure they know how much of each item and factor in costs as well- to help show what the cost will be of running the business.
Operating Plan
You need to establish how you’re going to run the business and how many people you will work during each day. Will you pay salary or hourly? Think of every part of operating a business and make this as detailed as humanly possible.
Financial Projection and Needs
This is possibly the most important part of your plan. You need hard facts- how much will it cost to operate in a certain amount of time and how much do you need to borrow? Look at forecast (try to forecast) and see how long you think it will take before you’ll start seeing real profit and go from there.
This is the part of the plan where you lay out exactly how much you feel you need to borrow to start up and run the store until you get your feet on the ground and start to make an actual profit.
Exhibits and appendices
The final part of your plan is everything that is left over. If you have any special licenses or certifications, you need to add those here and after the next step, put a copy of your business license in as well. This is where you put all papers, certifications, spreadsheets or anything else to show what you’re planning.
Once you get your business plan written, it’s time to go to the tax division for your state and get your business license. You will have to fill out a form and once it gets approved, you will get the certification.
The final thing left to do is finalize everything and get started on opening your business. Now that you have all the paperwork and plans finalized, you can open your shop and put your marketing plan in action.
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Frequently Asked Questions
What are some ideas for a cosmetic business?
Some things you will need to stock are cosmetics of all price ranges. You need to make sure you have higher ticket items as well as lower ticket that way you can offer your services and products to a wide range of people as well as your target market.
How do I determine my target market?
You need to sit down and list all the qualities of the people that you feel would be interested in what you’re selling. Do some surveys and ask other people and put questions they can answer if they want to provide income, race, class and other options to help you narrow down to see exactly who your products appeal to most.
To learn more on how to plan your own cosmetic business click here!
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About the author. A lifetime of Entrepreneurship.
Hi! My name is Shawn and I am a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop (link here http://archives.starbulletin.com/2003/05/18/business/index.html) to an import and export business to an online review business plus a few more and now I create online resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet new business owner, I see myself. I know how hard the struggle is to obtain and retain clients, finding good employees and making sure everything works together all while trying to stay competitive.