make up company business plan

Cosmetic Business Plan Template

Written by Dave Lavinsky

Cosmetic Business Plan

You’ve come to the right place to create your cosmetic business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their cosmetic companies.

Below is a a sample cosmetic business plan to help you create your own cosmetic company business plan.

Executive Summary

Business overview.

Guilt-Free Glow is a cosmetics shop located in Spokane, Washington. The company’s mission is to provide customers with high-quality, cruelty-free cosmetics. We want our customers to look and feel their best without feeling guilty about the harm cosmetics do to the environment and animals. Therefore, the shop will sell a wide variety of vegan and cruelty-free cosmetics for people all over the world to enjoy. Some of these products include makeup, moisturizers, and hair care products.

The company is founded by Kiera Smith, who has been a vegan beauty vlogger for five years. During that time, she has amassed 500,000 followers through her beauty vlogs. She has always been committed to finding products that are vegan and cruelty-free. Now that she has gained popularity on Youtube, she is eager to start her own cosmetics line. She will offer an online shop for her followers around the world but also start a shop in downtown Spokane for local residents.

Products Served

The following are some of the vegan, cruelty-free products sold by Guilt-Free Glow:

• Makeup tools and brushes
• Shampoo and conditioner
• Moisturizers

Customer Focus

Guilt-Free Glow will target both online customers and customers located in the Spokane area that are interested in vegan and cruelty-free cosmetics. Since the founder has a large following on Youtube and social media, we expect most of our customers will come from her fanbase. When marketing to local residents, we will focus our efforts on women ages 15 to 65, as this is traditionally the largest customer segment for the cosmetics industry.

Management Team

Guilt-Free Glow is led by Kiera Smith, who has been a successful beauty vlogger for five years. She creates tutorials on makeup techniques and offers other beauty tips. She has always been passionate about using vegan and cruelty-free products in her videos and encouraged her followers to do the same. Since there aren’t many cosmetics companies that dedicate their whole line to these values, Kiera Smith was inspired to create her own line of cosmetics and beauty care products.

Kiera Smith will be the owner of the company and will conduct much of the marketing efforts through her own social media channels. She will hire other staff to help her with the other aspects of the business, including running the retail shop.

Success Factors

Guilt-Free Flow will be able to achieve success by offering the following competitive advantages:

• The founder, Kiera Smith, is a popular beauty guru, and her brand and popularity will help sales and minimize marketing costs.
• Guilt-Free Glow offers great pricing in the vegan cosmetics industry. Vegan and cruelty-free products are often expensive and unaffordable to the average consumer. Guilt-Free Glow will sell all its products at a moderate price so that everyone can buy cosmetics without feeling guilty.
• Guilt-Free Glow will hire friendly, knowledgeable, and highly-qualified staff to help both our online and in-store customers.

Financial Highlights

Guilt-Free Glow is seeking $300,000 in debt financing to launch its cosmetics business. The funding will be dedicated to securing a retail space, manufacturing the products, and purchasing the necessary supplies and equipment for the store. Funding will also be dedicated toward three months of overhead costs, including payroll, rent, and marketing costs. The breakout of the funding is below:

• Retail space build-out: $50,000
• Equipment, supplies, and materials: $25,000
• Three months of overhead expenses (payroll, rent, utilities): $125,000
• Marketing costs: $50,000
• Working capital: $50,000

The following graph below outlines the pro forma financial projections for Guilt-Free Glow.

Company Overview

Who is Guilt-Free Glow?

Guilt-Free Glow’s History

In 2017, Kiera Smith started her Youtube channel, which focuses on beauty tutorials and product reviews. Kiera commits to promoting and working with vegan and cruelty-free brands and educates her audience on the importance of these values for the cosmetics industry. Over the years, Kiera has found that very few cosmetics brands commit to any pledge to be vegan or cruelty-free. Therefore, she decided to start her own cosmetics line that is committed to these values.

Since its incorporation, Guilt-Free Glow has achieved the following milestones:

• Developed the company’s branding image, social media, and website.
• Found a retail location and signed a Letter of Intent to lease it.
• Found manufacturers to create the cosmetic products.
• Obtained a sales and use tax permit for use in Spokane, Washington.

Guilt-Free Glow Products

The following are some of the vegan and cruelty-free products sold by Guilt-Free Glow:

Industry Analysis

According to Fortune Business Insights, the cosmetics industry is currently valued at $287.94 billion and is expected to grow to $415.29 billion over the next few years.

This growth is due to the increasing demand for high-quality cosmetics. The target market for cosmetics has expanded substantially over the past decade, with people of all ages and genders opting to pay good money for high-quality makeup, hair care, and other beauty products. This trend is expected to continue, and the cosmetics industry will only continue to grow rapidly.

Another important trend is the increasing popularity of environmentally friendly, vegan, and cruelty-free products. Guilt-Free Glow is taking advantage of this demand and selling exclusively vegan and cruelty-free cosmetics.

By capitalizing on these trends and our founder’s increasing popularity online, Guilt-Free Glow is expected to thrive in the cosmetics industry.

Customer Analysis

Demographic profile of target market.

Guilt-Free Glow will primarily target Kiera’s current fanbase on Youtube and social media. This fanbase includes 500,000 followers, with the majority being females and under the age of 40.

The company will also target residents of Spokane who may be interested in purchasing vegan cosmetics. Traditionally, the customer segment most interested in this industry is women ages 15 to 65.

The precise demographics for Spokane, Washington are:

Customer Segmentation

Guilt-Free Glow will primarily target the following customer profiles:

• Women ages 15-65
• Kiera’s fanbase
• Beauty professionals and influencers
• Spokane residents looking for vegan, cruelty-free cosmetics

Competitive Analysis

Direct and indirect competitors.

Guilt-Free Glow will face competition from other companies with similar business profiles. A description of each competitor company is below.

Ulta Beauty

Ulta Beauty is a major retailer in the cosmetics industry, being the ultimate provider of all beauty products for millions of people across the globe. The company aims to be the most loved beauty destination of its guests and has ultimately succeeded in that mission. At Ulta, you can find any beauty brand you are looking for, such as Dior, Chanel, and Lancome. Whatever item or brand you need, you are bound to find it at Ulta.

Since 1988, Sephora has been a giant in the cosmetics and beauty industries. It’s one of the top locations to shop for all your high-quality beauty and cosmetics needs and has dominated the cosmetics industry with its global presence. With 2,700 stores in 35 countries worldwide, there are very few locations around the world where you can’t find a Sephora store to visit.

At Sephora, you can find some of the hottest and most exclusive brands, such as Rare Beauty by Selena Gomez and FENTY BEAUTY by Rihanna. Furthermore, Sephora has been recognized by Forbes as one of America’s Best Employers four years in a row and scored 100% on the Human Rights Campaign’s Corporate Quality Index three years in a row. When customers are looking to buy cosmetics conveniently and ethically, they often head to Sephora first.

The Cosmetics Company Store

The Cosmetics Company Store is an online cosmetics company that sells high-quality cosmetics brands to customers all around the world. They carry thousands of products for anyone in need of beauty products, including hair care products, makeup, and moisturizers. Customers can purchase from a wide variety of brands they love and are familiar with, including Estee Lauder, Clinique, and Aveda. In addition to having a large online store, The Cosmetics Company Store has a few retail locations in select areas.

Competitive Advantage

Guilt-Free Glow will be able to offer the following advantages over the competition:

• Guilt-Free Glow offers great pricing in the vegan cosmetics industry. Vegan and cruelty-free products are often expensive and unaffordable to the average consumer. Guilt-Free Glow will sell all its products at a moderate price.

Marketing Plan

Brand & value proposition.

Guilt-Free Glow will offer a unique value proposition to its clientele:

• Wide selection of cosmetics.
• A focus on vegan and cruelty-free products.
• Competitive prices that are more affordable than the competition.

Promotions Strategy

The promotions strategy for Guilt-Free Glow is as follows:

Guilt-Free Glow will be located in a very convenient, highly-trafficked area of Spokane that is frequented by men and women of all ages and backgrounds. The store will be in the same neighborhood as stores, restaurants, and salons. The area of Spokane is frequented by shoppers who live in the area and have disposable income to be able to spend frequently on cosmetics.

Social Media

Guilt-Free Glow will have Instagram, Twitter, and Facebook business profiles where Kiera will post frequently new arrivals to the store, featured clients who are using the products, and upcoming sales and events. The posts will be appealing with professional photographs and will engage customers with discount opportunities if they tag friends in the comments in order to grow their social media following. Kiera will also use her personal social media accounts to promote the company and its products.

Website & SEO Marketing

Kiera will reach out to a website designer to develop a website for Guilt-Free Glow. The website will be easy to navigate and include an option to purchase items online and schedule a pickup time in the store, contact information, and location. The SEO will also be managed to ensure that anyone searching “cosmetics store near me” or “Spokane cosmetics” will see Guilt-Free Glow listed at the top of the Bing or Google search engine.

Partnerships With Beauty Influencers

Kiera will partner with other beauty influencers to spread the word about her company. She will offer discount codes to the influencers’ audiences to entice them to shop for her products.

The pricing of Guilt-Free Glow will be moderate so customers feel they receive value when purchasing their products.

Operations Plan

The following will be the operations plan for Guilt-Free Glow.

Operation Functions:

• Kiera Smith will be the Owner and President of the company. She will oversee the major operations of both the retail and online stores.
• Kiera will hire a General Manager for the store. They will be in charge of day-to-day administrative functions, product inventory, supply orders, hiring, and training.
• Kiera will hire an Assistant Manager to assist with product inventory, supply orders, and managing the store when Kiera and the General Manager are unable to be there.
• The store will have 6 – 8 part-time and full-time employees to assist with stocking merchandise and customer service.
• As the store grows and business picks up, more employees will be added to the team to keep up with customer demand.
• Kiera will hire a Marketing Specialist and Web Designer to develop the store’s branding, logo, and social media accounts. The marketing specialist will also develop the website and manage the SEO.
• She will also hire an Administrative Assistant to help her with the other operations tasks needed to run the company.

Milestones:

Guilt-Free Glow will have the following milestones completed in the next six months.

6/1/202X – Finalize lease agreement for 10,000 square foot retail storefront location.

6/15/202X – Begin build out of leased space.

6/30/202X – Finalize agreements with cosmetics distributors to schedule their upcoming product deliveries to the store.

7/1/202X – Kiera will meet with the web designer so they can get started developing guiltfreeglow.com

8/1/202X – Final walk-through and approval of the built-out beauty retail store.

8/2/202X – Begin social media marketing campaign of Guilt-Free Glow.

8/15/202X – The first shipment of store inventory arrives.

8/16/202X – Hire employees and begin training.

8/18/202X – Stocking and display of product inventory in anticipation of the Grand Opening.

9/1/202X – Grand Opening of Guilt-Free Glow.

Financial Plan

Key revenue & costs.

The revenue drivers for Guilt-Free Glow will come from the sales of cosmetics through the retail location and online store.

The cost drivers will be the cost of the cosmetics inventory, labor expenses, marketing expenses, rent, utilities, and overhead costs.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Initial Customers Per Month: 1000
• Average Item Cost: $20
• Annual Lease: $100,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Cosmetics Business Plan FAQs

What is a cosmetics business plan.

A cosmetics business plan is a plan to start and/or grow your cosmetics business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your cosmetics business plan using our cosmetics Business Plan Template here .

What are the Main Types of Cosmetics Businesses?

There are a number of different kinds of cosmetics businesses , some examples include: Niche market cosmetics, high-end cosmetics, kids cosmetics, beauty blogger/influencer, or make-up artist.

How Do You Get Funding for Your Cosmetics Business Plan?

Cosmetics Businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

This is true for a cosmetics business, a plan for a makeup company or a personal care products business plan.

What are the Steps To Start a Cosmetics Business?

Starting a cosmetics business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Cosmetics Business Plan - The first step in starting a business is to create a detailed cosmetics business plan PDF or doc that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your cosmetics business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your cosmetics business is in compliance with local laws.

3. Register Your Cosmetics Business - Once you have chosen a legal structure, the next step is to register your cosmetics business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your cosmetics business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Cosmetics Equipment & Supplies - In order to start your cosmetics business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your cosmetics business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful cosmetics business:

• How to Start a Cosmetics Business

Other Helpful Business Plan Templates

Ecommerce Business Plan Template Beauty Supply Store Business Plan Template Retail Business Plan Template

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Makeup Business

Back to All Business Ideas

13 Steps to Start a Profitable Makeup Business

Written by: Howard Tillerman

Howard Tillerman is the Chief Marketing Officer for Step By Step Business and an award-winning marketing professional.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on September 24, 2021

Investment range

$10,000 - $28,000

Revenue potential

$60,000 - $600,000 p.a.

Time to build

Profit potential

$45,000 - $200,000 p.a.

Industry trend

When starting your makeup business, keep these essential aspects in mind:

• Niche —  Decide what makeup you plan to make and sell. Examples of niches include vegan and cruelty-free makeup, products for sensitive skin, or bold, artistic makeup for creative expression.
• Formulation — Develop unique and high-quality makeup formulas. Consider factors such as color range, skin types, longevity, and ingredients. You can work with a cosmetic chemist or a private label manufacturer.
• Ingredients — Choose high-quality, safe, and possibly natural or organic ingredients. Ensure that your products are free from harmful chemicals and allergens. Establish relationships with suppliers for ingredients, packaging materials, and other necessary components.
• Licenses and permits — Ensure your makeup products comply with cosmetic regulations in your region. In the U.S., this includes FDA regulations for cosmetics . Check for specific requirements related to ingredients, labeling, and manufacturing practices.
• Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
• Legal business aspects — Register for taxes, open a business bank account, and get an EIN .
• Testing — Conduct thorough testing to ensure your makeup products are safe, effective, and meet customer expectations. Consider testing for skin reactions, stability, and performance.
• Sales channels — Set up an online store to sell your makeup products directly to consumers. Ensure your website offers a seamless shopping experience with easy navigation, secure payment options, and efficient shipping.
• Influencer collaboration — Partner with beauty influencers and bloggers to promote your makeup products. Influencers can help you reach a wider audience and build credibility.

Interactive Checklist at your fingertips—begin your makeup business today!

You May Also Wonder:

How do I start my own makeup brand?

The first step to starting a makeup business is learning and understanding the FDA regulations. Also, learn how to manufacture the products you want to sell. You will then want to determine your target customers and lay down your marketing strategies.

Is starting a makeup business profitable?

Yes, it is. In fact, the makeup business has one of the highest markups of any industry. With margins of up to 80 percent, you can generate a net profit of 30 to 65 percent based on the size of your business.

How do you price makeup products?

You can use the cost-plus method to price your makeup product. The strategy involves estimating the cost of production and adding a markup that can take care of your expenses and leave you with a reasonable profit. It would be best to consider what your competitors are charging to ensure that you’re within the industry standards when pricing your products.

How do I start a makeup line with no money?

It is not entirely possible to start a makeup business with no money. The best approach would be to start small. With $5,000 to $10,000, you can get your business up and running. Look for startup capital from angel investors, family, and friends or crowdfunding platforms such as  Wefunder .

Can I start a makeup business from home?

Starting a makeup business from home is possible with careful consideration of local regulations and licensing requirements. Building a strong professional presence is crucial.

How do I sell myself as a makeup artist?

Develop a portfolio showcasing your best work and create a dedicated website or social media profiles to showcase your skills. Offering makeup trials or demonstrations can allow potential clients to experience your services firsthand. Seek testimonials and reviews from satisfied clients to build trust and credibility.

How do I get clients for my makeup?

Collaborate with other beauty industry professionals to expand your network and gain referrals. Attend industry events and bridal shows to showcase your skills and make valuable connections. Building a referral network, offering special promotions, and collaborating with influencers can help attract clients. Leveraging social media and networking with wedding vendors can also yield positive results in gaining clients for your makeup business.

Step 1: Decide if the Business Is Right for You

Not everyone is cut out to be a beauty entrepreneur. So, the first step is to understand the makeup industry dynamics inside out. Start by evaluating the following factors:

Pros and cons 

Launching a makeup business has its upside and downsides. By assessing each side of the coin, you can decide if pursuing the idea is worth your time and effort.

Below is a rundown of some pros and cons of this business:

• Grow into a major beauty brand
• Ingredients are readily available
• Great potential to diversify products
• Establishing a beauty brand takes time
• High startup costs

Makeup industry trends 

Cosmetics is the 3rd largest segment in the US beauty industry, with nearly 15% market share, and the global beauty market is worth half a trillion dollars.(( https://www.ibisworld.com/industry-statistics/employment/cosmetic-beauty-products-manufacturing-united-states/ ))

As of early 2022, makeup trends include lip contouring, fluffy eyebrows, more gentle skin creams, all-natural products, and more colorful, high-impact eye makeup.  

Industry size and growth 

• Industry size and past growth – Makeup products represent 16% of the global cosmetics market value, which was estimated at $81 billion.(( https://www.statista.com/topics/3137/cosmetics-industry/ )) The US cosmetics industry is valued at $18 billion, after a strong 22% growth in 2021 and an average annual growth of 3% since 2017.(( https://www.statista.com/outlook/cmo/beauty-personal-care/cosmetics/united-states )) 
• Growth forecast – The US cosmetics industry is expected to grow 5% annually through 2026.
• Number of businesses – There are more than 4,000 cosmetics and beauty products manufacturing businesses in the US.(( https://www.ibisworld.com/industry-statistics/number-of-businesses/cosmetic-beauty-products-manufacturing-united-states/ )) 
• Number of people employed – The industry employs around 56,000 people.

Trends and challenges

Trends shaping the makeup industry include:

• Ingredient transparency
• Use of all-natural and sustainable ingredients
• Consumer preference for handy and easy-to-use makeup

Challenges in the makeup industry include:

• Maintaining product quality
• Supply chain issues

How much does it cost to start a makeup business?

You’ll need at least $10,000 to start a makeup business, and could spend as much as $28,000. Your big expenses will be inventory, building a website, and marketing. You should also expect to spend good money on research and producing the first batch of products. 

How much can you earn from a makeup business?

The cosmetic industry is comfortable with markups as high as 400% on retail sales, one of the highest in any industry. Products that cost $1.50 to make will sell to customers for $6, giving you a profit margin of 75%.  

A small, home-based makeup business can expect to sell 10,000 units per year. These sales will generate $60,000 in revenue and a profit of about $45,000. As your business grows and production capacity increases, you can expect to sell 100,000 units per year and generate $600,000 in revenue. But you’d need to hire staff and open a production facility, cutting your margin down to just over 30%. You’d still make a tidy profit of $200,000.

What barriers to entry are there?

Barriers to entry in the cosmetic industry include strict regulation from the Food and Drug Administration (FDA) and the Food and Cosmetics Act. Your products will need to meet the safety requirements of these two regulatory authorities, and at the start, you may have a hard time clearing their hurdles in terms of ingredients and testing.  

The second barrier to entry is cutthroat competition. The market is awash with makeup products, making it hard to make inroads and establish a new beauty brand.

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Step 2: hone your idea.

You now have an overview of the makeup industry. The next step is to refine your vision in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Even on a budget, you can launch a makeup business, manufacture at home and sell online. Joanna and Leslie are perfect examples of entrepreneurs who started small and turned Vive Cosmetics into a multi-million dollar company.

Research other makeup companies to examine their products, price points, and customer reviews, and to see what sells best. You’re looking for a market gap to fill. For instance, maybe there’s no company out there focusing only on eye makeup or all-natural skin creams. 

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as lipstick or eyelashes.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your makeup products

One of the essential phases of starting any business is deciding what you will sell. Ideally, you want to offer unique products and services. That way, you can stand out from your competition and attract the right customers.

For a makeup business, some products you can sell include:

• Face powder
• Highlighter
• Rouge or blush
• Contour powder/ cream
• Lip liner pencil
• Eyebrow pencil/powder
• Setting spray 

How much should you charge for makeup products?

Your prices will vary depending on production costs, product type, and your target profit margin. Most makeup items cost from $6 to $10, and it’s important to be competitive. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your markup and final price point. Remember, the price you use at launch should be subject to change if warranted by the market.

Who? Identify your target market 

Your target market will be determined by your level of luxury. If you offer more affordable makeup products, you should target younger women, who might be found on TikTok and Instagram. If you go for more of a high-end look, your target market will be established professional women you could find on Facebook and LinkedIn. 

Where? Choose your business premises 

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll want to rent out a shop and production facility. Find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Makeup and Beauty Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “beauty” or “cosmetics”, boosts SEO
• Name should allow for expansion, for ex: “Flawless Beauty Co.” over “Bridal Beauty Co.”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Cosmetic Business Plan

Here are the key components of a business plan:

• Executive Summary: A brief summary of your business plan, highlighting the key points and objectives of your business.
• Business Overview: An introduction to your business, including its mission, vision, and a brief history or background information.
• Product and Services: Detailed descriptions of the products or services your business will offer, including their features and benefits.
• Market Analysis: An examination of the market you’ll operate in, including the size, trends, and potential customers.
• Competitive Analysis: An evaluation of your competitors, their strengths and weaknesses, and how your business will differentiate itself.
• Sales and Marketing: Your strategy for reaching and attracting customers, including sales tactics, advertising, and promotional plans.
• Management Team: Information about the key individuals in your business, their roles, and their relevant experience.
• Operations Plan: Details about how your business will run day-to-day, including location, facilities, equipment, and processes.
• Financial Plan: Projections for your business’s financial performance, including income statements, balance sheets, and cash flow forecasts.
• Appendix: Supplementary information that supports and complements the rest of the business plan, such as resumes, legal documents, or additional data.

If you’ve never created a business plan, it can be an intimidating task. You might consider finding and hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to makeup. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your makeup business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.

Form Your LLC

Choose Your State

We recommend ZenBusiness as the Best LLC Service for 2024

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding a makeup business. You might also try crowdfunding if you have an innovative concept.  

Step 8: Apply for Business Licenses and Permits

Starting a makeup business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as, health license and permit from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

For a makeup business, you will need the following licenses and permits:

• A cosmetology license if you plan to apply makeup to your customers 
• Manufacturer license if you intend to develop your own makeup line 
• Esthetician license if you want to offer skin care services

You can read this FDA fact sheet for more insights on cosmetic industry regulations.

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your makeup business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance 

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch 

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.

You may want to use industry-specific software like Cosmetic Product Manager , BatchMaster , or ProcessPro to manage formulation, R&D, compliance, manufacturing, inventory, and sales. 

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

The marketing strategy for your makeup business should focus on showcasing the quality, variety, and uniqueness of your products. Here are some powerful marketing strategies for your future business:

• Professional Branding — Develop a branding strategy that emphasizes beauty, inclusivity, and quality through an attractive logo, well-designed packaging, and a polished website.
• Website and SEO — Launch an e-commerce website with high-quality images and detailed descriptions of your makeup products, optimized for SEO to attract relevant traffic.
• Social Media Engagement — Utilize visual platforms like Instagram and TikTok to share tutorials, product launches, and customer reviews, while engaging actively with your audience.
• Content Marketing — Maintain a beauty blog with posts on makeup tips and trends, email newsletters to update subscribers on new products and offers, and create video content that includes tutorials and testimonials.
• Experiential Marketing — Host pop-up shops and participate in beauty events to demonstrate your products live and directly engage with customers.
• Salon and Spa Collaborations — Partner with local beauty salons and spas to feature your products, providing customers with firsthand experiences.
• Influencer Collaborations — Work with beauty influencers for product promotions or co-create lines, leveraging their audiences to expand your reach.
• Community Engagement — Organize makeup workshops or classes to interact directly with customers and promote your products.
• Customer Loyalty Programs — Implement a loyalty program that rewards repeat customers with discounts or exclusive product access, and offer incentives for customer referrals.
• Targeted Online Advertising — Conduct targeted advertising campaigns on platforms like Facebook, Instagram, and YouTube to reach specific demographics.
• Seasonal Promotions — Design marketing campaigns that coincide with seasons, holidays, or major events like fashion weeks to maximize relevance and engagement.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your makeup meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your makeup business could be:  

• The most colors you’ve ever seen
• All-natural makeup for all-natural you 
• Luxury makeup at discount prices 

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a makeup business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in makeup for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in makeup. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a makeup business would include:

• Sales Lead — Selling your products to retail outlets, customers 
• Marketing Lead — SEO strategies, social media, etc.
• Safety and Compliance Manager — Ensuring compliance with federal standards 
• General Manager — Hiring and firing, inventory and maintenance  

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Makeup Business – Start Making Money!

Congratulations. You’re now ready to begin your entrepreneurial journey into cosmetics and beauty!

Now’s as good a time as any to make an investment and take some risks because the makeup industry is growing. Even in this age of virtual meetings and webinars, people still apply eyeliner, swipe blush on their cheeks, and put on lipstick before attending virtual events. As more people return to the office with the lifting of pandemic restrictions, makeup sales are expected to increase further. So, what are you waiting for? Take that first step now and start making money! 

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm a Makeup and Beauty Business Name
• Create a Cosmetic Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Business Licenses and Permits
• Open a Business Bank Account
• Get Business Insurance 
• Prepare to Launch 
• Build Your Team
• Run a Makeup Business - Start Making Money!

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How to Start a Makeup Business in 14 Steps (In-Depth Guide)

Updated:   March 8, 2024

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The makeup industry is booming, with a market size expected to reach over $430 billion globally by 2026 . With more people becoming interested in cosmetics and looking their best, there’s no better time to start your own makeup business.

Whether you want to sell beauty products online, open a makeup studio, or provide mobile services, a makeup business can help you tap into this growing industry while pursuing your passion.

This comprehensive guide covers how to start a makeup business. From writing a business plan to obtaining licenses and insurance, you’ll learn insider tips on sourcing quality makeup products, marketing your services, and retaining happy clients.

1. Conduct Makeup Market Research

Market research is essential to developing a successful makeup line. As you start your own makeup line you’ll need to know about your target market, top beauty brands in the industry, and other elements of the cosmetics industry.

Some things you’ll learn through primary and secondary market research for your beauty business include:

Target market: The rise of social media and beauty influencers has sparked major interest in cosmetics, especially among millennials and Gen Z.

• Useful tools: Makeup tutorials and product reviews on YouTube, Instagram, and TikTok are inspiring consumers to experiment with new looks.
• Beauty brand trends: The natural and organic beauty boom has introduced consumers to cleaner ingredients and ethical production methods.
• Market value: The natural makeup sector alone could be worth up to $54 billion by 2027, showing the shift in consumer values.
• Niche markets: The rise of men using cosmetics has also expanded the market. Male consumers are now a prime target.
• Best region to develop a beauty brand: Geographically, the Asia Pacific region provides massive potential, due to its high population density and growing middle class.

For entrepreneurs starting a makeup business, the possibilities are endless. Those creating new makeup brands can tap into social media for inexpensive marketing. Although major players like L’Oreal and Estée Lauder dominate, small businesses can find niches to develop a strong brand.

2. Analyze the Competition

Carefully analyzing your competition is crucial when starting a makeup business. This gives you an accurate lay of the land so you can differentiate yourself.

Some ways to learn about competitors in the beauty industry include:

• Identify salons and studios in your geographic area.
• Visit their shops, and take notes on pricing, services offered, ambiance, and customer demographics.
• Research their web presence for reviews, offerings, and branding.
• Investigating online competition is equally important.
• Search for makeup brands selling through the same channels you intend to use – marketplaces like Amazon, their e-commerce stores, and social platforms.
• Analyze the top brands’ product selection, pricing, special offers, marketing messaging, reviews, and followers.
• Research competitors outside your niche too, like top mass-market brands.
• Online tools like Semrush , Buzzsumo , and SimilarWeb provide additional data on competitors’ digital footprint and strategy.
• Analyzing competitors in such depth equips you to spot gaps or consumer needs not being met.

Staying up-to-date on competitors also helps you respond to their new product launches, campaigns, and more. With rigorous competitive analysis, you will carve out your niche in the makeup industry.

3. Costs to Start a Makeup Business

Beginning a makeup business requires careful financial planning and cost analysis before launching. Between start-up expenses and ongoing operational costs, entrepreneurs need to budget realistically.

Start-up Costs

When first starting, administrative costs must be accounted for. Some common startup costs for a makeup brand, storefront, or online store include:

• Registering your business as an LLC costs roughly $100, depending on your state.
• Other legal and permit fees can range from $50-$500 for things like a state sales tax permit or business license.
• Basic business insurance will be around $500 annually.
• For brick-and-mortar spaces like salons or retail stores, a lease deposit typically costs 1-2 months’ rent upfront.
• Lease rates vary hugely based on location and size but expect at least $2,000 per month for a modest space.
• Any renovations or build-outs can easily exceed $10,000-$30,000.
• A professional makeup chair is around $300, quality lighting is between $150-$600, and a vanity/station for products is about $200.
• Stocking a high-quality makeup inventory including skincare, tools, perfumes , and cosmetics ( lip gloss , powder, nail polish, etc.) requires an upfront product purchase of $3,000, more if you plan on offering permanent makeup services to customers.
• Ongoing inventory costs will be about $500 per month.
• Website design and hosting will be roughly $100 per month.
• Custom packaging and labeling for makeup products can be $2-$5 per item.
• Initial digital advertising and marketing budgets should be $300 per month minimum.
• Good makeup artists charge at least $50 per hour, so their wages, commissions, and benefits add up.
• For your salary as owner, plan on paying yourself around $40,000-$60,000 initially.

All said total start-up costs for a lean operation can be as low as $15,000. Realistically, have $25,000-$75,000 ready to launch a makeup business right? Secure this through personal savings, loans from family and friends, small business grants, and loans.

Ongoing Costs

Ongoing costs include a lot of the upkeep and replenishment fees for your startups, along with some additional expenses, including:

• Rent and utilities: $2,000
• Staff wages: $4,000
• Insurance: $200
• Accounting services: $300
• Product restocking: $500
• Software subscriptions: $100
• Advertising: $500
• Credit card processing fees: 2-4% of revenue
• Income taxes – at least 20% of profits
• Equipment upkeep and replacements: $2,000
• Professional development and training: $1,000
• Legal and professional fees: $1,000

Careful financial planning and cost analysis are vital when embarking on a new makeup business. Set realistic budgets for one-time startup costs and ongoing overhead based on your specific concept. Leave room for unforeseen and emergency expenses that inevitably crop up.

4. Form a Legal Business Entity

When establishing your makeup business, one key decision is choosing the right legal structure. The four main options each have advantages and drawbacks to weigh.

Sole Proprietorship

A sole proprietorship is the simplest, with you fully owning and operating the business as an individual. You can get up and running quickly, with minimal paperwork and legal fees of around $100-$200. However, you’re personally liable for all financial and legal obligations. Any lawsuit or debt impacts your assets.

Partnership

Partnerships allow two or more co-owners to share control and liabilities. You can combine different skills and investment amounts, ideal for a makeup artist pairing with a retail operator. However disagreements can arise, and each partner is responsible for shared debts.

Corporation

A corporation offers the most formal structure, registering as a separate legal entity. Owners buy shares of stock, elect directors, and follow stricter processes. Corporations limit financial liability but have complex tax and paperwork burdens costing over $1,000 to set up.

Limited Liability Corporation (LLC)

For most makeup businesses, forming an LLC provides the best protections without overcomplicating operations. As of 2022, LLC filings exceeded corporations for the first time.

LLCs limit personal liability and allow flexible management options. Taxes are passed through to members so you avoid “double taxation” on corporate income. Startup costs range from $100-$800 depending on your state.

5. Register Your Business For Taxes

Once you’ve structured your makeup business, a crucial next step is obtaining an Employer Identification Number, or EIN. This unique identifier is essential for federal tax purposes.

An EIN acts like a social security number for your business. It allows you to open a bank account, apply for licenses and permits, hire employees, and file taxes properly. Without an EIN, you can’t operate legally or take key steps to grow your company.

Applying for an EIN is free and fast directly through the IRS website .

Here’s an overview of the online application process:

• First, gather your business information including legal name, address, structure, and ownership details.
• Next, go to the EIN online application. You’ll need to create an IRS account if you don’t already have one.
• You’ll be asked why you need an EIN. For makeup businesses, choose “Started a new business” as the reason.
• Enter your business details like name, address, and responsible party. Double-check that all information is accurate.
• Review your application information. Once submitted, your EIN will be provided immediately.
• The entire application takes less than 15 minutes. You’ll receive your EIN confirmation via email and IRS mail.
• With your new EIN, you must register for state taxes to legally make sales. Expect fees of $10-$100 depending on your state.

Filing as a sole proprietor ? You can use your Social Security number instead of an EIN. However, an EIN adds credibility with vendors and lenders.

Overall the EIN application process is quick, easy, and free. Don’t delay this essential step in legitimizing your makeup business. With your EIN, you can move forward confidently and legally operate your company.

6. Setup Your Accounting

Proper accounting is crucial for any makeup business to succeed. Meticulous record-keeping and financial management will save you headaches and heartaches down the road.

Accounting Software

Using small business accounting software like QuickBooks can automate tracking of all your financial data. Connect your business bank accounts and credit cards so transactions automatically sync. Run reports on sales, profits, taxes owed, and more with ease.

Hire an Accountant

While software does the heavy lifting, having an accountant’s expertise gives peace of mind. A bookkeeper can reconcile accounts, ensure your records are audit-ready, and provide guidance on finances. Expect to invest around $100-$150 per month for basic bookkeeping.

Come tax season, your accountant can handle completing tax forms, optimizing deductions, and advising on tax payments. This may cost $500-$1,500 annually. If you get audited, your meticulous records will prove invaluable.

Open a Business Bank account

Keeping business and personal finances 100% separate is also non-negotiable. Get a dedicated business checking account and credit card solely for company transactions. Never co-mingle funds or pay yourself from the business account. This strict separation protects your assets if sued or debts arise.

Apply for a Business Credit Card

Applying for a small business credit card gives flexibility to make large purchases. Credit limits are lower than personal cards, often $1000-$5000 initially. Boost your chances of approval by providing your EIN, business address, and financial statements.

7. Obtain Licenses and Permits

Before officially opening your makeup business, it is crucial to have the proper licenses and permits in place. Federal license requirements can be found through the U.S. Small Business Administration. The SBA also offers a local search tool to find state and city requirements.

• A general business license is often required to legally operate within a certain city or county. Fees are typically $50-$100 annually. This allows you to conduct business activities in that jurisdiction.
• For brick-and-mortar shops, a building permit ensures your commercial space meets occupational safety codes.
• Selling cosmetics requires special licensing. States regulate makeup as a “health and beauty” category with specific regulations.
• Mobile makeup artists must also comply with health and sanitation rules. States like Florida require a Mobile Cosmetology Salon License to operate outside a fixed location. Expect fees around $25-$100.
• If employing others, you must register with your state labor department for permission to pay wages and worker’s compensation.
• Selling cosmetics with CBD or hemp also necessitates special licensing. States are increasingly regulating topical CBD products separately from consumables.

Check with your city, county, and state commerce departments to identify all required registrations, certificates, and clearances. Obtaining the proper permits avoids disruption to your business and shows you operate legitimately. Display all your licenses prominently.

8. Get Business Insurance

Insuring your makeup business is a vital protective step. Without coverage, a single incident could destroy everything you’ve built.

Business insurance shields you from financial ruin if sued, burglarized, or disaster strikes. It covers legal liabilities, lost income, and repairs.

Some scenarios where a lack of insurance could cripple a makeup biz:

• A customer has an allergic reaction to products and is sued for medical damages. Without liability coverage, you’d pay from your pocket.
• Your salon floods after a storm. No commercial property insurance means you shoulder the costs of ruined makeup and renovations.
• You get robbed of $10,000 of cosmetics. Without coverage, that huge loss comes straight out of your bottom line.

Securing the right policies safeguards your company’s assets and future. Here’s how to get started:

• Assess your risks and needed coverage types. Common policies include general liability, commercial property, workers’ comp, etc.
• Work with an insurance broker specializing in your industry. They can compare quotes and customize policies.
• Provide details on your business operations, location, payroll, assets, and risks. This determines premiums.
• Review options carefully. Look for additions like business interruption insurance or flood/earthquake riders.
• Pay premiums annually or monthly. Costs vary based on your revenue, locale, and coverage limits. Expect $500-$5,000 annually.
• Display proof of insurance prominently on the premises and your website. This shows clients your legitimacy.

Don’t wait until it’s too late to insure your makeup enterprise. The peace of mind is invaluable knowing you’ve safeguarded the business from catastrophic losses. Consult an insurance professional to craft a customized and cost-effective protection plan.

9. Create an Office Space

Having a professional office space lends credibility and efficiency to your makeup business. It provides a centralized hub for administrative tasks, storing supplies, and meeting clients.

Home Office

A home office is the most affordable option starting. Expect costs of $100-$500 for a basic desk, computer, phone and supplies. The convenience factor is ideal for solo entrepreneurs, allowing you to deduct mortgage/rent and utility costs. Downsides include a lack of professionalism and distractions.

Retail Office

Retail space is essential if operating a beauty store, salon, or studio. Prime real estate averages $20-$40 per square foot. A 500 sq ft shop would cost $10,000-$20,000 per month. While pricey, foot traffic and decor elevate your brand power. Onsite product displays and makeup lessons require a spacious setup.

Coworking Office

For collaborative opportunities and networking, coworking spaces like WeWork provide flexible, affordable office rentals. Hot desk rates start at around $300 monthly. Private offices get more costly at $500-$800 but allow client consultations. Community events and shared amenities are bonuses.

Commercial Office

If rapid growth is expected, consider renting traditional office space. Commercial buildings offer custom build-outs but require long-term leases at $25 per square foot. For major makeup brands, the corporate environment reflects success.

10. Source Your Equipment

A makeup business requires quality cosmetics, tools, and equipment to deliver exceptional service. Stocking your arsenal with professional-grade products conveys expertise. Here are the top sources for outfitting your operation:

When buying new, specialty retailers like Nigel Beauty Emporium and Makeup Mania carry pro-level cosmetics and tools. Expect to invest $500 for basic staples like a quality makeup chair, vanity, brushes, lighting, and inventory.

Buying quality used equipment also saves substantially. Search Facebook Marketplace and Craigslist for listings near you. Join Facebook groups like “Makeup Addict Garage Sale” to find deals. eBay and other buy-and-sell apps are also options. Ensure used electrical items work safely.

For major investments like dermaplaning machines or microblading tools, consider renting first. Rental companies like Stage and Screen Beauty let you test products before buying. Rates range from $50-$500 monthly for specialty devices. This avoids major upfront costs when starting.

Salon and spa liquidators sell new surplus supplies at huge discounts. Check Liquid Asset Partners for deals on cosmetics, furniture, tools, and more, often up to 70% off retail.

Leasing lets you acquire essentials with low monthly payments. Equipment financing companies like Marlin Leasing specialize in salon amenities. Build business credit to earn higher lease limits.

By mixing new, used, rented, and leased equipment, startup costs stay reasonable. Seek student discounts from brands like MAC Cosmetics . Scout sales and promos when stocking up on staples. With smart sourcing, your makeup toolkit stays budget-friendly and functional.

11. Establish Your Brand Assets

Creating a strong brand identity is crucial for makeup businesses to stand out and be recognizable. Investing in professional assets conveys polish and builds credibility.

Get a Business Phone Line

Acquiring a dedicated business phone line establishes legitimacy. Customers can call one consistent number rather than their cell. Cloud-based services like RingCentral make it easy to set up a custom greeting, voicemail, call routing, and more for around $30/month. This professionalism wins trust.

Design a Logo

A logo and visual identity should align with your brand vision. For makeup, consider creative logos evoking glamour, artistry, and transformation. Services like Looka help you explore logotypes like abstracts, monograms, letter marks, and more. Expect around $50-$150 for custom design. Use consistent fonts, colors, and imagery across all assets.

Print Business Cards

Business cards are still essential for in-person networking and appointments. They quickly convey your brand story. Vistaprint offers affordable, quality printing with frequent promotions. Order at least 500 to start. Custom signage also adds legitimacy to brick-and-mortar.

Hand these cards out when meeting potential partners and influencers. Give them to happy clients to refer others. They enable quick follow-up so new leads don’t get lost.

Buy a Domain Name

Purchasing a personalized domain cements your web presence. Align it closely with your name for consistency. Namecheap offers domains starting at around $9 annually. Opt for .com over alternatives and make it short/catchy.

Design a Website

Having a website is expected today to engage prospects. Using a site builder like Wix , you can launch one yourself for $10-$20 monthly. Pick a template fitting your aesthetic. Or hire a web developer on Fiverr starting around $500. They handle technical aspects while you provide content.

12. Join Associations and Groups

Joining relevant organizations and networks boosts your knowledge, connections, and visibility when starting a makeup venture. Surrounding yourself with like-minded professionals provides insider tips and expanded opportunities.

Local Associations

Seeking out local makeup artist associations should be a priority. Major ones like the Professional Beauty Association have regional chapters perfect for meeting area businesses. Joining provides access to events, continuing education, and promotion. Annual dues average $100-$300.

Local Meetups

Attending trade shows like Cosmoprof links you to established brands. Here vendors demonstrate new products, techniques, and services on the market. Bring plenty of business cards and mingle after demonstrations.

Use sites like Meetup to find regular local networking meetups in your metro area. These casual gatherings help you organically connect with like-minded professionals. The face-time builds local relationships leading to referrals.

Facebook Groups

Search for makeup groups on Facebook to tap into massive communities. Examples like Makeup Addiction and Makeup Artists have over 100,000 international members. Ask for advice, share work examples, and find collaborators.

13. How to Market a Makeup Business

Implementing an effective marketing strategy is essential for any new makeup business to gain visibility and attract clients. With the right promotion, you can establish your brand locally while expanding your reach online.

Tap Into Your Network

Leverage your network first when launching. Reach out to friends, family, and existing contacts who may become customers or refer others. Offer them a special discount to try your services and incentivize sharing your business if they’re satisfied. Word-of-mouth referrals from happy customers remain incredibly powerful marketing.

Digital Marketing

Digital campaigns allow scalable promotion as you grow:

• Run Google/Facebook paid ads targeting local demographics and makeup interests. Geo-fencing around related businesses like salons also works.
• Start a YouTube channel showcasing makeup tutorials, product reviews, and business vlogs. Optimizing videos for search helps discovery.
• Write blog content focused on makeup tips, trends, and techniques. Promote posts on social media and link back to your site.
• Be active on platforms like Instagram and TikTok to showcase work and engage followers. Use relevant hashtags.
• Email subscribers with promotions, offers, and value-added content. Collect emails onsite and through lead gen ads.
• Partner with influencers in your city to co-create content and run sponsored posts about your business.

Traditional Marketing

Traditional options like print advertising can also help exposure:

• Run local newspaper and radio ads focused on a strong call to action. Track conversions.
• Design eye-catching flyers and mailers to distribute around your area. Offer discounts to incentivize visits.
• Seek out local event partnerships like bridal shows to set up booths and network directly.
• For brick-and-mortar, use sidewalk signs and posters in windows to attract foot traffic.

A healthy marketing mix keeps your makeup business top of mind through multiple channels. Dedicate time consistently to promotion and reassess performance monthly, adjusting budgets to highest-ROI initiatives. The more creative you get with marketing, the faster your brand presence will grow locally and beyond.

14. Focus on the Customer

Providing an exceptional customer experience is pivotal for any makeup business. How you treat clients before, during, and after appointments determines your success.

Some ways to increase customer focus include:

• Truly listening to their needs, masterfully accentuate their features, and share tips for touch-ups, so they feel cared for.
• Taking time to get the look just right and answering all questions shows you prioritize their satisfaction.
• Following up after their appointment with thanks and an incentive for future bookings increases retention too.
• Sending a handwritten thank you note or complimentary product sample as a surprise gesture.
• The extra effort to provide five-star service gives your brand power no advertising can replicate.

With exceptional service baked into every client interaction, your makeup business can build a reputation for the ultimate experience. Word travels fast when you go above and beyond. Online reviews sing your praises, leading new leads your way.

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Discover the Best Tools for Business Plans

Learn from the business planning experts, resources to help you get ahead, how to write a cosmetic or skincare company business plan, your key to success, the ultimate guide to planning your beauty company.

This article will take you through the essentials of creating a business plan tailored to the cosmetic and skincare industry.

Read on to discover the secrets to crafting a winning business plan for your cosmetic or skincare company!

Who is this for?

Cosmetic Brand, Skincare Brand, Makeup Artist, Beauty Salon, Spa, Esthetician, Cosmetic Dentistry, Dermatologist, Plastic Surgeon, Beauty Supply Store, Online Beauty Retailer, Subscription Box Service, Cosmetic Manufacturing, Private Label Cosmetics, Cosmetic Packaging, Cosmetic Testing Laboratory, Beauty Product Distributor, Cosmetic Wholesaler, Beauty Product Marketing Agency, Beauty Product Photography, Beauty Blog, Cosmetic Ingredient Supplier, Cosmetic Product Trainer, Beauty School, Cosmetic Formulation Chemist, Cosmetic Regulatory Consultant, Cosmetic Product Development, Organic Skincare Brand, Natural Skincare Brand, Clean Beauty Brand.

Why You Should Read This Article

If you’re reading this, chances are you’ve got a brilliant idea for a cosmetic or skincare company that’s ready to take the industry by storm. But before you start mixing up formulas or designing packaging, there’s one crucial step you can’t afford to skip: writing a business plan.

What is a Business Plan?

A business plan is essentially a roadmap for your company’s future. It’s a comprehensive document that outlines your business model and concept, market analysis, operational strategy, financial projections, and more. Think of it as your company’s resume – it’s your chance to showcase your vision, your expertise, and your potential to investors, partners, and even yourself.

Why Do I Need a Business Plan?

Now, you might be thinking, “I’m a creative visionary, not a business person. Why do I need to bother with a boring old business plan?” Well, my friend, let me tell you – a solid business plan is absolutely essential for any entrepreneur looking to succeed in the competitive world of cosmetics and skincare.

Here’s why:

• Clarity and Focus: Writing a business plan forces you to think critically about every aspect of your business, from your target market to your production process to your financial projections. It helps you clarify your vision, set concrete goals, and develop a clear strategy for achieving them.
• Attract Funding: If you’re planning to seek funding from investors or loans from banks, a well-crafted business plan is non-negotiable. Investors in the beauty and personal care industry want to see that you’ve done your homework, that you understand your market, and that you have a realistic plan for turning a profit.
• Competitive Edge: The beauty and personal care industry is fiercely competitive, with new brands popping up every day. A strong business plan can help you stand out from the crowd by showcasing your unique value proposition and demonstrating your industry expertise.
• Decision-Making Tool: As you grow your business, your business plan will serve as a valuable decision-making tool. It provides a framework for evaluating new opportunities, measuring progress, and making strategic course corrections along the way.

But writing a compelling business plan for a cosmetic or skincare company isn’t just about filling in a generic template. To create a plan that truly sets you up for success, you need to dive deep into the unique challenges and opportunities of the beauty industry.

That’s where this guide comes in. We’ve pulled together insights from industry experts, successful entrepreneurs, and our own decades of experience to walk you through the key considerations and best practices for writing a winning business plan for your cosmetic or skincare company.

Whether you’re a skincare aficionado with dreams of launching your own clean beauty line or a makeup artist ready to turn your signature looks into a global brand, this guide will give you the tools and knowledge you need to put your best face forward (pun totally intended).

So grab a notepad, get ready to dive into some market research, and let’s start building the business plan that will bring your company to life!

The 6 Things You Must Consider Before Writing Your Cosmetics or Skincare Business Plan

In the glittering, Instagram-worthy world of cosmetics and skincare, a well-crafted business plan is your roadmap to success. But don’t be fooled by the industry’s pretty face – behind the scenes, it’s a massive, highly organized, efficient, and fiercely competitive arena where every detail matters. According to Statista, the revenue in the U.S. cosmetics segment is forecast to grow by 19.04 percent between 2023 and 2028, reaching a staggering $23.12 billion. Meanwhile, the U.S. skincare market is projected to generate $24.35 billion in revenue in 2024 alone, with a yearly growth rate of 2.94% through 2028.

If you want to carve off a chunk of this lucrative market for yourself, you better be prepared. Before you even think about writing your business plan, there’s a crucial pre-planning phase known as the “gestation” period that can make or break your startup. The Harvard Business Review’s analysis of the University of Michigan’s Panel Study of Entrepreneurship found that “the most successful entrepreneurs were those that wrote their business plan between six and 12 months after deciding to start a business.”

At Businessplan.com, we know that our Pre-Planning Process provides a solid framework for entrepreneurs across industries. But those in the cosmetics and skincare sector face unique challenges and opportunities. Here are six essential considerations to guide your pre-planning journey, ensuring your startup isn’t just another flash in the pan, but a brand built for lasting success in this demanding industry.

1. Syncing With Current and Emerging Industry Trends

Why it matters.

Aligning your business idea with current and future trends isn’t just a nice-to-have; it’s a must-have. Cara Eaton, Sustainability Director at Croda , points out that innovation across various sectors offers exciting opportunities for impact . But here’s the thing: you need to understand these trends inside and out. Only then can you identify where your business can fill gaps, meet unmet needs, and anticipate what your customers will be clamoring for next. 

Connecting with “Know Your Customer”

So, how do you make sure your business idea is on point with industry trends? It all starts with getting up close and personal with your target customers. And no, we’re not talking about some half-hearted survey or focus group. To truly understand your customers’ functional, emotional, and social jobs-to-be-done , you need to conduct Pre-Vision Interviews with your competitors’ customers as part of the Know Your Customer step in the Pre-Planning Process.

These interviews are your golden ticket to uncovering what makes your customers tick, what makes them switch, and what they’re secretly wishing for. By diving deep into your competitors’ customers, you can spot opportunities for innovation and make sure your product or service is the answer to your customers’ prayers. This is how you validate, refine, or pivot your business idea early on, so you don’t end up pouring your blood, sweat, and tears into something that’s DOA.

2. Embracing a Consumer-Centric Approach to Product Development

Consumers are no longer satisfied with just a pretty package or a clever marketing campaign. They want products that deliver real results, align with their values , and elevate their skincare experience. The rise of products offering clinical benefits alongside sensory experiences is a testament to this shift. To stay relevant, you need to put your consumers at the heart of your product development process. This means digging deep into their needs, preferences, and pain points, and using these insights to guide every decision you make.

From Interviews to Insights

Remember those Pre-Vision Interviews we talked about in the Know Your Customer step? They’re not just a box to check off your pre-planning to-do list. These interviews are a goldmine of valuable insights that can shape your product development strategy. But here’s the catch: you need to know how to conduct these interviews effectively and, more importantly, how to analyze the data you collect.

This is where many aspiring entrepreneurs stumble. They go through the motions of conducting interviews but fail to extract the key insights that can make or break their product ideas. To avoid this pitfall, you need to approach the interview process with a clear framework and a set of targeted questions that get to the heart of your customers’ needs and desires. And once you have that raw data, you need to roll up your sleeves and dive into the analysis phase.

Refining Your Product Ideas

Analyzing your interview data is all about identifying patterns, themes, and opportunities. It’s about reading between the lines and uncovering the unmet needs and unexpressed wishes of your target market. And most importantly, it’s about being willing to use this information to objectively refine your product ideas.

This is where the rubber meets the road. You might have a vision for a groundbreaking new skincare product, but if your customer insights point in a different direction, you need to be willing to pivot. Embracing a consumer-centric approach means letting go of your ego and preconceived notions and letting your customers guide the way.

By integrating your customer insights into every stage of the product development process – from ideation to formulation to packaging – you’ll be able to create products that not only meet but exceed your customers’ expectations. And when you do that, you’ll earn more than just their business; you’ll earn their trust, loyalty, and advocacy.

3. Incorporating Diversity, Equity, and Inclusion (DEI) From the Start

In today’s beauty industry, DEI isn’t just a trendy acronym; it’s central to product-market fit. Consumers are demanding brands that not only talk the talk but also walk the walk when it comes to representing and celebrating diversity . By weaving DEI into the very fabric of your business from day one, you’ll be better positioned to connect with a broader consumer base and foster a more inclusive community around your brand.

Diversity in Customer Interviews

But here’s the thing: incorporating DEI isn’t just about the end product. It starts with the very first step of the Pre-Planning Process: Know Your Customer . When conducting competitor customer interviews, it’s critical to ensure that you’re gathering insights from a diverse range of backgrounds and perspectives.

Why? Because customers from different demographics, cultures, and life experiences will have vastly different needs, preferences, and pain points when it comes to cosmetics and skincare. By seeking out and listening to these diverse voices, you’ll be able to create products that resonate with a wider audience and avoid the pitfalls of a one-size-fits-all approach.

Building an Inclusive Brand

Incorporating DEI from the start isn’t just about doing the right thing; it’s also about building a brand that is relevant and resonant in today’s market. By prioritizing diversity in your product development, marketing, and corporate culture, you’ll be better equipped to meet the needs and expectations of an increasingly diverse consumer base.

Moreover, by fostering a workplace culture that values and thrives on diverse perspectives, you’ll unlock new sources of innovation and empathy in your business practices. And in an industry where understanding and connecting with your customers is everything, that’s a powerful competitive advantage.

4. Navigating Regulatory Compliance and Industry Standards

If you think regulatory compliance is just some boring paperwork, think again. In the high-stakes world of cosmetics and skincare, one misstep can spell disaster for your brand. And if you’re not factoring in the costs of compliance from day one, you’re setting yourself up for a nasty surprise down the line.

Don’t Get Blindsided

When you’re knee-deep in your Core Cost Analysis (CCA), it’s easy to focus on the obvious expenses like materials and direct labor. But if you’re not accounting for the myriad costs of meeting industry standards and regulations, you’re in for a rude awakening.

We’re talking safety testing, clinical trials, ingredient sourcing, labeling requirements – the list goes on. And if you think you can skimp on these costs and still come out on top, good luck with that.

Compliance as a Secret Weapon

But here’s the kicker: navigating compliance isn’t just about avoiding legal hot water. It’s also about building a brand that customers can trust. In a market where consumers are more savvy and skeptical than ever, and popular review sites like MakeupAlley and Beautypedia are just a click away,  a brand that prioritizes transparency and safety is going to stand out like a unicorn in a field of donkeys.

So when you’re crunching the numbers in your CCA, don’t just focus on the bare minimum. Factor in the costs of going above and beyond on compliance, and watch as it becomes your secret weapon in the battle for customer loyalty.

5. The Value of Finding Your Voice

Before you can craft a compelling brand voice, you need to know what you stand for. And that starts with your value propositions – the unique benefits and experiences you promise to deliver to your customers. As Dr. Brent Ridge , Co-Founder of Beekman 1802 , emphasizes, an authentically empathetic brand mission can forge deep, emotional connections with customers. But you can’t communicate that mission effectively without first defining your value propositions.

The Heart of Your Business Model

Your value propositions aren’t just a part of the Business Model Development step in the pre-planning stage– they’re the heart of it. When you’re developing your Business Model Canvas , your value propositions should be at the center, informing every other aspect of your business. From your customer segments to your channels to your revenue streams, every component of your business model should be designed to deliver on your value propositions.

Aligning Voice with Value

Once you’ve clearly defined your value propositions, you can start to develop a brand voice that authentically reflects them. Your brand voice is the personality and emotion you infuse into every interaction with your customers, from social media posts to packaging. It’s how you communicate your values, your mission, and your unique selling points in a way that resonates with your target audience.

By crafting your brand voice around your value propositions, you ensure that every touchpoint with your customers is aligned and working together to deliver on your brand promise. Your voice becomes an extension of your values, creating a consistent and cohesive brand experience that builds trust and loyalty with your customers.

6. Committing to Sustainability and Transparency from the Ground Up

Sustainability and transparency aren’t just buzzwords. Consumers are demanding that brands not only talk the talk but also walk the walk when it comes to ethical and sustainable practices. As Pamela Gill-Alabaster , Global Head of ESG & Sustainability at Kenvue , points out, companies need to be disclosing their ESG impacts with the same rigor and transparency as their financial reporting.

The crucial thing to understand: committing to sustainability and transparency isn’t just about checking boxes or appeasing consumers. It’s about building a brand that can stand the test of time. By integrating sustainable practices and transparency into your operations from the ground up, you’re not just aligning with consumer values – you’re future-proofing your business.

Operationalizing Sustainability

So how do you actually operationalize sustainability and transparency? It starts with the Operations in Detail phase of the Pre-Planning Process. This is where you take the key activities, resources, and partners outlined in your Business Model Canvas and turn them into actionable operations plans.

It’s about ensuring that sustainability and transparency are woven into every aspect of your operations. This means:

• Selecting suppliers and partners who share your commitment to sustainability and transparency
• Investing in sustainable technologies and practices throughout your supply chain
• Implementing robust tracking and reporting systems to ensure transparency and accountability
• Developing a company culture that prioritizes sustainability and transparency at every level

By taking a rigorous, detailed approach to operational planning, you can ensure that your commitment to sustainability and transparency is more than just lip service – it’s embedded in the very fabric of your business.

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From Pre-Planning to Writing Your Business Plan

You’ve just explored the six key considerations every cosmetics and skincare entrepreneur should tackle before writing their business plan. And if you’re feeling a bit overwhelmed, that’s entirely normal. The truth is, the hard work of writing a business plan is actually in the pre-planning stage.

Now, this doesn’t mean there isn’t work left to do once you’ve laid the groundwork. But it does mean that the actual writing of your business plan needs to be based on the solid foundation you’ve built in the pre-planning phase.

As mentioned earlier, most successful new businesses spend six to 12 months in the pre-planning stage. That might seem like a long time, but trust me – it’s time well spent. So, if you haven’t already, bookmark this page and start setting yourself some pre-planning objectives. Go on, I’ll wait.

Oh, you’re back? Fantastic. So, you’ve done the entire Pre-Planning Process? How are you feeling? Still ready to write that business plan? Good, because here’s where the magic happens.

Want to increase your chances of success by 12%, especially knowing that half of businesses fail within five years of launch? Of course you do! Well, you might be surprised to know that the time you put into developing your business plan has a major impact.

Our friends over at Harvard Business Review have some eye-opening statistics on this. They found that the optimal time to spend on a business plan is three months. That’s right – three months of focused, strategic plan writing can increase your chances of creating a viable venture by 12%.

But here’s the kicker: spending any longer than three months on your plan is futile, mostly because the information used to inform the plan loses its currency. And spending just a month or two on the plan? That’s just as bad. 

Are you catching on to the theme here? Time. Planning a business properly is all about the time and effort you put in. 

So, are you ready to roll up your sleeves and do this right? Fantastic. The first thing you need to do is Understand Your Audience – and we’ll dive into that next.

Writing a Business Plan Tailored to Your Specific Audience

Alright, let’s get one thing straight: when it comes to writing your business plan, it’s not just about you. I mean, sure, you’re writing it for yourself (and that’s crucial), but you’ve also got to keep your audience in mind. And trust me, different audiences are looking for different things.

So, before you start scribbling away, take a moment to think about who you’re trying to impress. Are you pitching to investors? Applying for a bank loan? Trying to convince a landlord that your cosmetics startup won’t turn their property into a glittery disaster zone?

If you’re pitching to investors who specialize in early-stage cosmetics and skincare companies, you better believe they know their stuff. They’re not just looking for a pretty face (or product); they want to see that you’ve got the brains and the brand to back it up.

Take Shiseido , for example. When they launched their LIFT Ventures fund, they weren’t just throwing money at any old startup with a catchy name. They were looking for companies like Phyla and Patricks , who had a unique approach, a focus on science and wellness, and commercial traction to boot. Savvy investors are keeping a close eye on the latest trends and consumer preferences in the beauty industry, adapting their strategies to capitalize on the sector’s potential for growth, as highlighted in our article 9 Signs the Beauty Sector’s Investment Glow-Up Is on the Horizon , following a challenging year in 2023.

So, when you’re writing your plan for investors who happen to be beauty buffs, make sure you’re highlighting what sets you apart. Show them how your innovative technology or unique approach to the market is going to disrupt the industry and make them some serious cash.

On the other hand, if you’re applying for a bank loan or an SBA loan , you better be ready to get down to the nitty-gritty. These folks want to see detailed planning, comprehensive research, and a realistic assessment of your startup costs. They’re not interested in your cool logo or your influencer marketing strategy; they want to know that you’ve got a solid plan to pay them back.

So, when you’re writing your plan for the banks, make sure you’re dotting your i’s and crossing your t’s. Show them that you’ve done your homework, that you know your numbers inside and out, and that you’ve got a realistic plan to turn a profit.

The Bottom Line

At the end of the day, the success of your business plan hinges on its ability to meet the unique needs of its audience. Whether you’re going through the comprehensive Pre-Planning Process or using Model-Based Planning® to save time, the goal is the same: to create a well-thought-out document that not only serves as your own strategic roadmap but also convinces your audience that you’ve got what it takes to succeed in the competitive world of cosmetics and skincare.

So, before you start writing, take a moment to put yourself in your audience’s shoes. Do some research. What do they care about? What are they looking for? And how can you tailor your plan to show them that you’re the beauty brand they’ve been waiting for?

The Must-Haves When Writing Your Cosmetic and Skincare Company Business Plan

• Executive Summary: Your elevator pitch on steroids. Develop your narrative and give financiers the CliffsNotes version of your cosmetic and skincare company’s vision, unique value proposition, and why you’re the one to watch in this space.
• Market Analysis: Dive into the nitty-gritty research and analysis it takes to understand the current the beauty industry. Who’s your target audience? Who are your competitors, and how are you going to outmaneuver them? Show that you’ve done your homework and have a pulse on the market.
• Products & Specialization: What sets your cosmetic and skincare company apart? Are you the go-to for clean, vegan, and cruelty-free products? Spell it out, and don’t be afraid to toot your own horn.
• Operational Strategy: Give financiers a peek under the hood of your cosmetic and skincare company’s operations. From your supply chain management to your product development process, prove that you’ve got the chops to run a tight ship.
• Marketing & Sales: How are you going to get the word out and keep customers coming back for more? Lay out your strategy and implementation game plan, including your social media strategy, influencer partnerships, and any retail or e-commerce partnerships you’ve got up your sleeve.
• Management Team: Introduce the organizational structure and who’ll be leading your cosmetic and skincare company to glory. Highlight their track record, industry connections, and why they’re the dream team you need to succeed.
• Financial Projections: Don’t be shy about the numbers. Present your financial projections , including startup costs, revenue targets, and profitability timeline. Prove that your cosmetic and skincare company is a money-making machine waiting to happen.
• Appendices: Include any extra goodies that’ll give your business plan an edge, such as market research, customer testimonials, or letters of intent from potential retail partners.

To wrap up, remember that writing a business plan for your cosmetic or skincare company is not just a one-and-done exercise. As your business grows and evolves, so should your plan. Make a habit of revisiting and updating your plan regularly – at least once a year – to ensure that it stays relevant and actionable.

And most importantly, don’t let the process of writing a business plan intimidate you. Yes, it takes time, effort, and research, but it’s also an incredibly valuable opportunity to deepen your understanding of your industry, your customers, and your own business. By following the steps and best practices outlined in this guide, you’ll be well on your way to creating a business plan that sets your cosmetic or skincare company up for long-term success.

So what are you waiting for? It’s time to put pen to paper (or fingers to keyboard) and start turning your beauty business dreams into a reality. Your future customers (and investors) are waiting!

Unlock Your Beauty Brand's Potential

Expert business planning for cosmetic and skincare entrepreneurs.

Introducing the Expert Business Planning Bundle – your comprehensive toolkit for building a thriving cosmetic or skincare business. Curated specifically for beauty entrepreneurs, this bundle includes the Model-Based Planning® Worksheet, a cosmetic and skincare-specific business plan template, a powerful financial projection Excel model, and expert guides on leveraging these tools and AI to develop a winning plan. Invest in your beauty brand’s future and bring your vision to life.

Beauty Business Planning Essentials

Insider secrets for standout success.

Developed by the top business planning team in the U.S., our Expert Business Planning Bundle gives you the insider secrets and expert resources to create a standout business plan for your cosmetic or skincare venture. Leveraging these industry-specific tools and strategies will set you apart from the competition and position your beauty brand for success.

With this bundle, you will:

• Access insider knowledge and proven strategies used by the top business planning company in the U.S.
• Gain a competitive edge by leveraging expert resources tailored specifically to the cosmetic and skincare industry
• Harness the power of a cosmetic and skincare-specific template filled with targeted pro tips, insights, and instructions
• Streamline your planning process using the Model-Based Planning® Worksheet for Cosmetic and Skincare Companies
• Create professional financial projections with the included Excel model designed for beauty businesses
• Structure and organize your plan effectively using the curated cosmetic and skincare-focused business plan template
• Learn how to leverage these tools and AI to develop a compelling and comprehensive business plan
• Increase your chances of securing loans, investments, or approvals needed to bring your cosmetic and skincare vision to life

Use this bundle as your primary toolkit for crafting a cosmetic or skincare company business plan that unlocks the funding and support you need.

Don’t rely on generic templates when creating your cosmetic or skincare business plan. Instead, invest in a toolkit carefully curated by industry experts who have spent their careers helping beauty businesses succeed. The Expert Business Planning Bundle is the best investment you can make, as no other resource can match its depth, breadth, and practical wisdom tailored specifically to the cosmetic and skincare industry.

Our team has distilled their thousands of hours of experience working with successful beauty businesses into a comprehensive toolkit that saves you time, money, and prevents costly mistakes. This targeted, practical knowledge enables you to write a business plan that surpasses what even the best consultants could produce, customized to your unique needs and goals.

Whether you’re seeking funding, approvals, or simply want to set your cosmetic and skincare business up for long-term success, the Expert Business Planning Bundle is the ultimate resource to help you achieve your vision. With this toolkit, you’ll have the confidence and expertise to create a compelling business plan that unlocks the doors to the funding and support your beauty brand deserves.

Frequently Asked Questions

• How can I tailor my cosmetic and skincare business plan to attract potential investors?

To appeal to investors, highlight aspects that demonstrate profitability, scalability, and your competitive edge in the market. Emphasize your management team’s experience and expertise in the cosmetic and skincare industry, and showcase how your unique offerings and business model position you for success. Include financial projections that illustrate your growth potential and the return on investment that investors can expect.

• What information should I include in the business description section of my cosmetic and skincare business plan?

In the business description section, provide a comprehensive overview of your cosmetic and skincare company. This should include your business concept, target market, product or service offerings, unique selling points, location, brand design, market fit, differentiators, and your vision for impact on the industry. Be sure to clearly articulate how your company stands out from competitors and meets the needs of your target customers.

• How much personal information should I share about the management team in my cosmetic and skincare business plan?

When discussing your management team, include succinct biographies of key members, focusing on their relevant experience, skills, and contributions to the success of your cosmetic and skincare company. Highlight their expertise in areas such as product development, marketing, sales, or operations, and how their backgrounds align with the needs of your business. Avoid excessive personal detail and keep the information professional and relevant to your company’s goals.

• Should I highlight past success stories in my cosmetic and skincare business plan?

Yes, including past success stories can enhance your credibility and appeal to banks, investors, or other stakeholders. If you or your team members have previous experience in the cosmetic and skincare industry, showcase how these experiences have equipped you with valuable skills, insights, and networks that will contribute to the success of your current venture. This can help build confidence in your ability to execute your business plan and achieve your goals.

• What are the key elements of a company overview in a cosmetic and skincare business plan?

The company overview should provide a concise summary of the essence of your cosmetic and skincare business. This includes your company name, location, product or service offerings, and the experience you aim to provide for your customers. Additionally, outline your mission statement, core values, and long-term objectives, highlighting how these elements align with your target market and industry trends. This section should give readers a clear understanding of what your company represents and its goals for growth and success in the cosmetic and skincare market.

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How to Start a Makeup Business

Main Sections In This Post Steps To Starting A Makeup Business Points to Consider Knowledge Is Power Featured Video

In this post, you’ll find a step-by-step guide to starting a makeup business.

In addition, we will give you an overview of what you can expect from operating a makeup business and help you make better decisions and gain clarity.

You can access the latest resources in our “Knowledge Is Power” section, which can be used during the startup phase and once your makeup business is fully operational.

There is an abundance of information available to explore. If you like this post, consider sharing it with others and bookmarking it for future reference.

Let’s get started with the steps.

The Steps to Start Your Makeup Business

Below are the steps to starting a makeup business.

Each step is linked to a specific section, allowing you to jump to your desired section or scroll to follow the steps in order.

• An Overview of What You’re Getting Into
• Makeup Business Overview
• Researching Your Makeup Business
• Looking Startup and Operating Costs
• Creating Your Mission Statement
• Creating A Unique Selling Proposition (USP)
• Choose a Makeup Business Name
• Register Your Company
• Create Your Corporate Identity
• Writing a Business Plan
• Banking Considerations
• Getting the Funds for Your Operation
• Software Setup
• Business Insurance Considerations
• Supplier and Service Provider Considerations
• Setting Your Prices
• Physical Setup
• Creating a Website
• Hiring Employees
• Getting Customers Through the Door

1. An Overview of What You’re Getting Into

It is essential to have a strong understanding of what you’re getting into. The more you know what to expect, the better your decisions will be and the fewer surprises you’ll encounter.

Before starting your makeup business, there are many points to consider, the pros and cons of owning and operating your business, how passionate you are about your business, getting the right advice, and more.

When you consider these crucial points, you’ll better understand what you are getting into and can avoid many problems you could encounter if you bypass these issues.

Take the time to look at these considerations from the following link before starting your business, and you will gain the information to help you make the right decisions.

See our page on Critical Points to Consider before starting your business.

2. Gaining an Overview of Owning a Makeup Business

Next, let’s discuss the issues that will give you an overview of what to expect from owning and running a makeup business.

In this step, we will be looking at the following sections:

a.) A Quick Overview of Owning a Makeup Business b.) Makeup Business Models c.) Challenges You Could Face When Starting and Operating a Makeup Business

a.) A Quick Overview of Owning a Makeup Business

A makeup business involves the provision of cosmetic products and services designed to enhance or alter the appearance of individuals.

This industry encompasses various aspects, including retail sales of makeup products, professional makeup application services for events such as weddings and photo shoots, and makeup education and training programs.

Day-to-Day Tasks in Running a Makeup Business

Client Consultations and Appointments:

• Schedule and conduct consultations with clients to understand their preferences and requirements.
• Book appointments for makeup application services, trials, and consultations.

Makeup Application:

• Perform makeup application services for clients, adhering to their desired look and ensuring high-quality results.
• Stay updated on the latest makeup trends, techniques, and product innovations.

Product Management:

• Manage inventory of makeup products, ensuring adequate stock levels and replenishing supplies as needed.
• Source new products, considering quality, trends, and customer preferences.

Marketing and Promotion:

• Develop marketing strategies to promote the makeup business and attract new clients.
• Utilize social media platforms, websites, and other marketing channels to showcase services and engage with the target audience.

Administrative Tasks:

• Handle administrative duties such as bookkeeping, invoicing, and managing expenses.
• Respond to client inquiries, emails, and phone calls in a timely and professional manner.

Client Relationship Management:

• Build and maintain relationships with clients, ensuring their satisfaction with services and addressing any concerns or feedback.
• Encourage client loyalty through special promotions, discounts, or loyalty programs .

Professional Development:

• Participate in workshops, training sessions, and industry events to enhance skills, knowledge, and expertise in makeup artistry.
• Seek certifications or accreditations to validate expertise and credibility in the field.

Sanitization and Hygiene Practices:

• Follow strict sanitization and hygiene protocols to maintain cleanliness and prevent the spread of infections.
• Regularly clean and sanitize makeup tools, equipment, and work areas.

In conclusion, running and managing a makeup business involves a combination of artistic skill, business acumen, and customer service.

By efficiently handling day-to-day tasks, makeup entrepreneurs can create a thriving business and establish a strong reputation in the industry.

b.) Makeup Business Models

Types of Setups and Business Models for a Makeup Business

Freelance Makeup Artist:

• Operates independently, providing makeup services on a per-client basis.
• Typically works on location for events such as weddings, photo shoots, and special occasions.

Makeup Studio or Salon:

• Establishes a physical location where clients can receive makeup services.
• Offers a range of services including makeup application, consultations, and possibly retail sales of makeup products.

Online Retailer:

• Sells makeup products through an e-commerce website or online marketplace.
• May specialize in niche products, offer tutorials, and provide personalized recommendations.

Makeup Education and Training Center:

• Focuses on providing makeup education and training programs for aspiring makeup artists.
• Offers courses, workshops, and certifications in various aspects of makeup artistry.

Makeup Product Line:

• Develops and sells own line of makeup products, which can include cosmetics, skincare, and accessories.
• May sell products online, through retailers, or in their own physical stores.

Choosing a suitable business model from the beginning is crucial, as switching your model later is more challenging.

Focusing on a niche allows you to adapt your products and services to a specific group of customers.

Consider becoming a specialist instead of trying to be a business that offers everything to everyone. Identifying a business model that feels right to you is essential and can give you a better chance of succeeding.

c.) Challenges You Could Face When Starting and Operating a Makeup Business

Challenges in the Startup Phase of a Makeup Business

Initial Investment:

• Securing adequate funds for startup costs such as equipment, inventory, and marketing can be challenging, especially for those with limited financial resources.

Brand Establishment:

• Building brand recognition and establishing credibility in a competitive market requires strategic branding efforts and consistent messaging.

Finding Suppliers:

• Sourcing reliable suppliers for quality makeup products at affordable prices can be difficult, especially when starting with limited industry contacts.

Regulatory Compliance:

• Navigating regulations and obtaining necessary permits and licenses for operating a makeup business can be time-consuming and complex.
• Creating effective marketing strategies to reach and attract target customers amidst established competitors poses a significant challenge, particularly for new entrants.

Talent Acquisition:

• Hiring skilled makeup artists or staff members with industry expertise may be challenging, especially when competing with established businesses for top talent.

Challenges in Operating a Makeup Business

Client Retention:

• Maintaining a loyal customer base and encouraging repeat business requires consistent quality of service and effective customer relationship management.

Inventory Management:

• Balancing inventory levels to meet customer demand while minimizing excess stock or shortages can be challenging, particularly with seasonal trends and product expiration dates to consider.

Competition:

• Staying ahead of competitors and differentiating the business in a saturated market requires continuous innovation, exceptional customer service, and strategic marketing efforts.

Staff Training and Development:

• Providing ongoing training and development opportunities for staff members to stay updated on the latest makeup techniques, trends, and product knowledge is essential for maintaining quality standards.

Adaptation to Trends:

• Remaining relevant and meeting evolving customer preferences and industry trends necessitates flexibility and the ability to quickly adapt product offerings and services.

Financial Management:

• Managing cash flow, budgeting, and controlling expenses to ensure profitability and sustainability is an ongoing challenge for business owners.

Successfully navigating these challenges requires resilience, strategic planning, and a proactive approach to problem-solving .

3. Research

Quality information plays a significant role in achieving success.

Continuous research is vital. The more you know, the easier it is to operate your business.

a.) Demand, the Competition and Your Location b.) Target Audience

a.) Demand, the Competition and Your Location

Makeup Business Supply, Demand, Competition, and Location

Determining the demand for your products and services before starting your makeup business is essential. Offering high quality and reasonable prices is not enough.

There must be enough demand for what you plan to offer, or opening your business doesn’t make sense.

A lack of demand will lead to closing before you see any success, and you could have a mountain of debt that’s challenging to repay.

Market Saturation:

In addition to market demand, you need to consider if the market is saturated with what you plan to offer. With a saturated market, gaining market share won’t be easy unless you offer something your competitors don’t.

You also need to consider if the competition could easily copy your idea. If so, competitors are already established, so they could take most of the market share for your idea.

When looking at the competition, focus on what you are up against. Understand your competition, what they provide and their strengths and weaknesses.

You may be able to bring something new to the marketplace instead of just going head-to-head with the competition. Understanding what you are up against is crucial when starting a new business.

Choosing Your Location:

Ideally, you should focus on a location that balances sufficient demand with a manageable level of competition. Moreover, affordability is another crucial consideration.

While a highly populated area might provide greater exposure, you must ensure that the increased expenses won’t outweigh your profits.

Opting for cheaper rent may seem tempting, but you must ensure the location has enough customers to provide enough revenue for your makeup business to be profitable and survive.

In conclusion, choosing the right location with balanced supply and demand is crucial for your business’s success. Take the time to thoroughly research and analyze potential locations to make an informed decision.

For more, see the Demand for Your Products and Services and Choosing The Best Location for Your Business.

b.) Target Audience

Benefits of Understanding Your Target Audience

Understanding your target audience is essential for the success of your makeup business. Here’s why:

• Adaptability : The more you know about your customers, the better you can adapt your products, services, and offers to meet their needs and preferences.
• Focused Offerings : With a thorough understanding of your target audience, you can focus on providing the products and services your customers are interested in rather than trying to supply a broad range of products and services.
• Effective Marketing : Knowing your target audience allows you to create targeted marketing campaigns that resonate with your customers, leading to higher engagement and conversion rates.
• Customer Retention : By understanding your customers’ preferences and providing personalized experiences, you can enhance customer satisfaction and loyalty, leading to repeat business and positive word-of-mouth referrals.
• Competitive Advantage : Understanding your target audience enables you to differentiate your makeup business from competitors by offering unique value propositions tailored to your customers’ needs and desires.

Target Market Ideas:

• Individuals seeking professional makeup services for special events such as weddings, proms, and parties.
• Beauty enthusiasts interested in high-quality makeup products and tutorials.
• Makeup artists looking for reliable suppliers of professional-grade cosmetics.
• Salons and spas seeking to expand their service offerings with makeup services.
• Photographers and videographers in need of makeup artists for photo shoots and film productions.
• Fashion designers and stylists requiring makeup artists for fashion shows and editorial shoots.
• Actors, models, and performers seeking makeup services for on-screen appearances and live performances.

4. Looking Startup and Operating Cost:

Understanding the financial aspect of your business and making good decisions based on the facts are crucial factors in succeeding.

You will struggle to manage a successful operation without investing the time and effort necessary to understand the financials of your makeup business.

This section has a lot to cover, and these are critical steps in starting and operating your business.

The section is broken up into the following:

a.) Start-up Cost:

In this step, we will look at the importance of getting accurate estimates and a simple list to help you understand your needs.

b.) Monthly Expenses:

Expenses must be monitored, or the operation could be jeopardized. A sample list of monthly expenses is provided, which can be used to generate ideas for your setup.

c.) Best  Practices

Well take a look at what you can do to ensure you are always on top of the financial well being of your operation.

Let’s get started!

a.) Start-Up Costs:

Startup Cost:

Accurately estimating startup costs is crucial for a smooth process from planning to opening.

Underestimating can lead to financial shortages, delaying your opening, while overestimating can deter potential investors due to perceived high risk. Costs depend on factors like business model, size, location, hiring, and equipment.

To estimate, list all needs and research prices, adjusting as unforeseen issues arise. Sample estimates are informative but cannot provide exact costs due to varying setups.

Research and accurate estimates are essential for determining if starting a makeup business is viable.

Sample List: Startup Costs for a Makeup Business

The purpose of the list below is to focus on the items more than the numbers because these are general samples, and your figures will be different.

Sample List of Estimated Startup Costs for a Mid-sized Makeup Business in the USA:

• Incorporation fees: $500 – $1,000
• Legal consultation: $500 – $2,000
• Total: $1,000 – $3,000
• Lease deposit: $2,000 – $5,000
• Renovation and remodeling: $5,000 – $15,000
• Signage: $500 – $2,000
• Total: $7,500 – $22,000
• Makeup stations and mirrors: $2,000 – $5,000
• Makeup products and tools inventory: $5,000 – $10,000
• Lighting equipment: $1,000 – $3,000
• POS system: $1,500 – $3,000
• Total: $9,500 – $21,000
• Website development: $1,000 – $3,000
• Printed materials (business cards, brochures): $500 – $1,500
• Social media advertising: $500 – $2,000
• Total: $2,000 – $6,500
• Makeup artist certification: $500 – $2,000
• Workshops and training programs: $1,000 – $3,000
• Total: $1,500 – $5,000
• Liability insurance: $500 – $1,500 (annual premium)
• Property insurance: $1,000 – $3,000 (annual premium)
• Total: $1,500 – $4,500
• Utilities setup fees: $200 – $500
• Office supplies: $300 – $1,000
• Contingency fund: $2,000 – $5,000
• Total: $2,500 – $6,500

Grand Total (estimated): $25,000 – $68,500

For more, refer to our article on Estimating Startup Costs.

b.) Monthly Operating Costs:

Monthly Expenses for a Makeup Business

Your monthly expenses will vary depending on several factors discussed during the estimation of startup costs.

Variables to Consider:

Whether you plan to run your makeup business independently or with a fully staffed team significantly affects monthly expenses.

Location plays a crucial role; a high-traffic area costs more than opening in a less prime location.

Monthly expenses may include high loan payments, expensive marketing campaigns, and repairs and maintenance.

Typical Monthly Expenses:

Utilities such as electricity, water, and internet. Payroll for employees, including makeup artists and administrative staff.

Operating costs such as rent, insurance premiums, and equipment maintenance.

Marketing expenses for advertising, promotions, and social media campaigns. Inventory replenishment to maintain stock levels of makeup products and supplies.

To ensure optimal business operations and manage revenue fluctuations, it’s crucial to keep expenses as low as possible without compromising quality, customer service, or productivity.

This balance ensures sustainable growth and profitability for your makeup business in the long term.

Sample List of Monthly Expenses for a Mid-Sized Makeup Business

Again, the purpose of the list below is to focus on the items in the list more than the numbers. The numbers are a general idea, and your numbers will differ.

• Monthly loan installment: $500 – $1,500
• Makeup artists: $2,000 – $5,000
• Administrative staff: $1,000 – $2,500
• Total Payroll: $3,000 – $7,500
• Electricity: $200 – $500
• Water: $100 – $300
• Internet: $50 – $150
• Total Utilities: $350 – $950
• Rent for the business location: $2,000 – $5,000
• Property insurance: $200 – $500
• Total Rent and Insurance: $2,200 – $5,500
• Repairs and maintenance for makeup stations and tools: $100 – $300
• Social media advertising: $300 – $1,000
• Printed materials (business cards, flyers ): $100 – $300
• Total Marketing and Advertising: $400 – $1,300
• Restocking makeup products and supplies: $1,000 – $3,000
• Office supplies: $50 – $200
• Contingency fund: $500 – $1,000

Grand Total (estimated): $7,100 – $20,550

Effective financial management is crucial for your business. By doing so, you will clearly understand its performance.

With this information and understanding you will have the ability to to manage your business with more control.

For more, see, Critical Points About Small Business Finances

5. Create Your Mission Statement

Importance of a Mission Statement for a Makeup Business

A mission statement serves as a guiding principle for your makeup business, helping to identify its purpose and core values.

It provides clarity on the main benefit your business aims to provide to customers and the community.

With a well-defined mission statement, you can stay focused and aligned with your goals, ensuring consistency in decision-making and operations.

It serves as a reminder of your business’s overarching purpose, helping to differentiate it from competitors and resonate with target audiences.

Examples of Mission Statements for a Makeup Business:

• “Our mission is to empower individuals to express their unique beauty through high-quality makeup products and personalized services that enhance confidence and self-expression.”
• “At [Business Name], our mission is to inspire creativity and self-confidence by offering innovative makeup solutions and expert guidance tailored to individual preferences and lifestyles.”
• “We are committed to promoting inclusivity and diversity in beauty by providing a diverse range of makeup products and services that celebrate and embrace the uniqueness of every individual.”
• “Our mission is to simplify beauty routines and enhance natural features with our versatile and easy-to-use makeup products, catering to the needs of busy individuals seeking effortless elegance.”
• “At [Business Name], our mission is to foster a supportive and inclusive community where individuals of all backgrounds can explore and experiment with makeup to discover their own definition of beauty.”

For more, see How To Create a Mission Statement.

6. Creating A Unique Selling Proposition (USP)

The Importance of a Unique Selling Proposition (USP) for a Makeup Business

A Unique Selling Proposition (USP) is a critical component of your makeup business’s identity and differentiation strategy.

It helps identify and create something that sets your business apart from competitors in the market.

By defining what makes your makeup business unique, you can effectively communicate your value proposition to potential customers and stand out in a crowded marketplace.

Creating a Unique Selling Proposition:

• Identifying Unique Qualities: Analyze your makeup business’s strengths, such as unique product offerings, exceptional customer service, or specialized expertise in certain makeup techniques.
• Understanding Customer Needs: Research your target audience to understand their preferences, pain points, and unmet needs. Tailor your USP to address these specific customer demands.
• Highlighting Benefits: Clearly articulate the benefits that customers will receive by choosing your makeup business over competitors. Focus on what makes your products or services superior and how they solve customer problems.
• Consistent Messaging: Ensure that your USP is consistently communicated across all marketing channels, including your website, social media, and advertising materials.

Examples of Unique Selling Propositions for a Makeup Business:

• “Our makeup business offers vegan and cruelty-free cosmetics, providing customers with high-quality products that align with their ethical values.”
• “At [Business Name], we specialize in personalized makeup consultations, helping customers discover the perfect look that enhances their natural beauty and complements their individual style.”
• “Our makeup business stands out for its extensive range of inclusive foundation shades, ensuring that every customer can find their perfect match and feel confident in their skin.”
• “We differentiate ourselves by offering on-site makeup services for special events, providing convenience and professional expertise that sets us apart from traditional beauty salons.”
• “At [Business Name], we pride ourselves on our eco-friendly packaging and sustainable practices, offering environmentally-conscious customers a guilt-free way to indulge in their beauty routines.”

7. Choose a Business Name

Choosing a Name for Your Makeup Business

When selecting a name for your makeup business, it’s essential to choose one that is catchy, appropriate for your industry, and easy to remember. Remember, your business name will likely stay with you for the duration of your company’s existence, so take your time in selecting the right one. Additionally, having a matching domain name for your online presence is crucial in today’s digital age. Ensure that the name you desire is not already registered by another business to avoid potential legal issues.

30 Ideas for Makeup Business Names:

Here Is a List of Sample Makeup Business Names:

• GlamourGlow Beauty
• RadiantRush Cosmetics
• FlawlessFinish Makeup Studio
• EnchantEyes Cosmetics
• AllureAesthetic Beauty
• ChicCheeks Makeup Co.
• SparkleSpectrum Cosmetics
• DreamDazzle Makeup Artistry
• VelvetVanity Beauty Bar
• EliteElegance Cosmetics
• BellaBloom Makeup Studio
• DivineDolce Beauty Boutique
• LuminousLux Makeup Lounge
• PoshPalette Cosmetics
• OpulentOasis Beauty Studio
• GlamourGrace Makeup Artistry
• RadianceRealm Cosmetics
• EnvyEclipse Beauty Bar
• EtherealEssence Makeup Studio
• SilkSiren Cosmetics
• BelleBlush Beauty Boutique
• LuxeLash & Lip Lounge
• VividVisage Makeup Studio
• SheerSplendor Cosmetics
• AuraAesthetics Beauty Bar
• RoyalRose Makeup Artistry
• GlamorizeGlow Cosmetics
• EnchantEssence Beauty Boutique
• DivineDestiny Makeup Studio
• BlissfulBeauty Cosmetics

This list can help spark your creativity and inspire you to come up with an original name that aligns with your brand vision and identity.

For more, see the following articles:

• How To Register a Business Name
• Registering a Domain Name For Your Business

8. Register Your Company

Ensuring Your Makeup Business is Legal

It’s crucial to ensure that your makeup business is legally compliant to operate smoothly and avoid any legal issues down the line.

Consulting with a legal professional can help you set up your business structure in a way that offers tax benefits and liability protection.

Common Types of Registrations for a Makeup Business:

• Sole Proprietorship: A business owned and operated by one individual with no legal distinction between the owner and the business.
• Partnership: A business structure owned and operated by two or more individuals who share responsibilities and profits.
• Limited Liability Company (LLC): A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Permits and Licenses to Consider for a Makeup Business:

• Business License: Required by most jurisdictions to legally operate a business within that area.
• Cosmetology License: Mandatory for makeup artists providing cosmetic services, ensuring they meet professional standards and regulations.
• Health Permit: Necessary for businesses handling cosmetic products to ensure compliance with health and safety regulations.
• Sales Tax Permit: Required for businesses selling makeup products to collect and remit sales tax to the government.
• Zoning Permit: Ensures that your business location complies with local zoning regulations and is suitable for commercial use.
• Environmental Health Permit: Needed if your makeup business offers services like facials or skincare treatments to ensure compliance with sanitation standards.
• Fire Department Permit: Required for businesses operating in commercial spaces to ensure compliance with fire safety regulations.

Ensuring that your makeup business obtains the necessary registrations, permits, and licenses is essential for legal compliance and smooth operation.

Consulting with legal and regulatory professionals can provide valuable guidance tailored to your specific business needs and location.

Registration:

• How to Register Your Business
• How To Register a DBA
• How to Register a Trademark
• How to Get a Business License

Business Structures:

• How to Choose a Business Structure
• Pros & Cons of a Sole Proprietorship
• How To Form an LLC
• How To Register a Business Partnership
• How To Form a Corporation
• How To Choose a Business Registration Service

9. Create Your Corporate Identity

A Corporate Identity (ID) is a visual representation of your business, comprising elements like your logo, business cards, website, signage, stationery, and promotional materials.

Consistency in design across these components is essential for projecting a professional image to both new and existing customers. A cohesive corporate ID reinforces brand recognition and credibility, helping to establish trust and loyalty among your target audience.

It’s crucial to invest in a well-designed corporate ID to make a strong and lasting impression in the competitive makeup industry.

You can see our pages for an overview of your logo , business cards , website , and business sign , or see A Complete Introduction to Corporate Identity Packages.

10. Writing a Business Plan

Importance of a Business Plan

A business plan serves as a crucial document for securing financing, attracting investors, and guiding your makeup business through both the startup phase and ongoing operations.

Vision and Guidance:

Writing a business plan involves creating a vision of what your makeup business will look like when fully operational. It provides a roadmap for achieving your goals and staying on track.

Consideration and Effort:

Crafting a comprehensive business plan requires time, careful consideration, and effort. It’s an opportunity to thoroughly plan and articulate the details of your business.

Understanding and Vision:

Completing a business plan gives you a clear understanding of what you need to start and operate your business successfully. It provides a concrete vision for your business’s future.

Options for Creation:

You have several options for creating your business plan, including writing it from scratch, hiring a professional, using a template, or utilizing business plan software.

Regardless of the approach, active participation is crucial to effectively communicate your business’s nature and management strategy.

Adaptability and Optimization:

Business plans and operations may evolve over time. Reviewing the document periodically and making necessary adjustments based on experience, operational changes, or market shifts is advisable.

This adaptability ensures that your business plan remains relevant and effective in guiding your makeup business toward success.

Business Plan Sample Template for a Makeup Business

Below is a business plan that serves as a template.

You can adapt it to fit your makeup business.

Business Plan Template for a Makeup Business

1. Executive Summary:

• Overview of the makeup business concept.
• Mission statement and business goals.
• Brief summary of key aspects of the business plan.

2. Business Description:

• Detailed description of the makeup business, including products/services offered.
• Target market analysis and customer demographics.
• Unique selling proposition (USP) and competitive advantage.

3. Market Analysis:

• Industry overview and trends in the makeup industry.
• Analysis of target market size, growth potential, and buying behavior.
• Assessment of competitors and market positioning.

4. Organization and Management:

• Business structure (sole proprietorship, partnership, corporation, etc.).
• Management team and their roles/responsibilities.
• Organizational chart and key personnel profiles.

5. Products and Services:

• Detailed description of makeup products/services offered.
• Pricing strategy and rationale.
• Information on suppliers and sourcing of products.

6. Marketing and Sales Strategy:

• Marketing objectives and strategies to reach the target market.
• Promotional tactics, including advertising, social media, and influencer partnerships.
• Sales forecast and distribution channels.

7. Funding Request:

• Financial requirements for startup and ongoing operations.
• Breakdown of funding sources (loans, investors, personal investment, etc.).
• Use of funds and expected return on investment (ROI).

8. Financial Projections:

• Income statement, cash flow projection, and balance sheet for the first three to five years.
• Assumptions used in financial forecasts.
• Break-even analysis and return on investment (ROI) calculations.

9. Appendix:

• Supporting documents such as resumes, licenses, permits, and legal agreements.
• Additional market research data, industry reports, and references.
• Any other relevant information to support the business plan.

See How to Write a Business Plan for information on creating yours.

11. Banking Considerations

Choosing a Bank for Your Makeup Business

When selecting a bank for your makeup business, opt for one nearby, focusing on small businesses, with a solid reputation in the financial sector. Building a professional relationship with your banker is crucial.

They can offer advice during prosperous periods and support you through challenging times. Your banker can also streamline loan applications.

Account Considerations:

• Business Account: Separate business and personal transactions for easier expense tracking, reporting, and tax filing.
• Merchant Account: Facilitate credit and debit card payments from customers, enhancing sales and convenience.

A strategic banking partnership can provide essential support and services crucial for the success and growth of your makeup business.

For more, see How to Open a Business Bank Account. You may also want to look at What Is a Merchant Account and How to Get One.

12. Getting the Funds for Your Operation

Securing Funding for Your Makeup Business

When starting a makeup business and in need of financial assistance, several options are available.

Traditional lenders, private loans, investors, and selling personal assets are potential avenues for funding.

Additionally, exploring government grants can provide valuable support for launching your makeup business.

Considerations When Meeting with a Loan Officer:

• Business Plan: Present a comprehensive business plan detailing your makeup business’s objectives, target market, financial projections, and strategies for growth.
• Financial Statements: Provide accurate financial statements, including income statements, balance sheets, and cash flow projections, to demonstrate the viability of your business and its ability to repay the loan.
• Credit History: Be prepared to discuss your personal and business credit history. A strong credit profile enhances your credibility as a borrower and increases your chances of loan approval.
• Collateral: Determine if collateral is required to secure the loan and be prepared to offer assets, such as property or equipment, as security.
• Loan Terms and Conditions: Understand the terms and conditions of the loan, including interest rates, repayment schedules, and any associated fees or penalties.
• Questions and Clarifications: Ask questions to clarify any uncertainties about the loan process, terms, or requirements. Ensure you fully understand the obligations and responsibilities associated with borrowing funds.

Documents Needed to Apply for a New Makeup Business Loan:

• Business Plan: Detailed plan outlining business objectives, market analysis, financial projections, and strategies for success.
• Financial Statements: Income statements, balance sheets, and cash flow projections demonstrating the financial health and profitability of the business.
• Credit History: Personal and business credit reports to assess creditworthiness and repayment capacity.
• Legal Documents: Business registration documents, licenses, permits, and any legal agreements relevant to the makeup business.
• Collateral Information: Details of assets available as collateral, such as property deeds, vehicle titles, or equipment appraisals.
• Personal Identification: Valid identification documents, such as driver’s license or passport, for all business owners or partners.
• Tax Returns: Personal and business tax returns for the previous few years to verify income and financial stability.
• Bank Statements: Recent bank statements to provide insight into cash flow and financial transactions.

Preparing these documents in advance can streamline the loan application process and improve your chances of securing financing for your makeup business.

For more, see the following:

• Getting a Small Business Loan
• SBA Small Business Grants
• Search: Makeup Business Start-up Loans
• Search: Grants For a Makeup Business

13. Software Setup

Researching Software for Business Management

Researching software thoroughly is crucial to avoid complications later on. Implementing a program from scratch is often easier than switching to a new system after data is already in another program.

Look for a company with a reliable history to ensure ongoing support.

Demos allow you to test functionality before purchasing. Software reviews and forums provide valuable user insights. Check for available training, either from the company or other sources, to maximize software utilization.

Additionally, consider software for expense tracking and tax preparation. Consulting with a bookkeeper or accountant can provide valuable guidance in selecting the right accounting software.

Types of Software for a Makeup Business

• Inventory Management Software: Tracks stock levels, orders, and product availability.
• Appointment Scheduling Software: Manages client appointments and staff schedules.
• Point-of-Sale (POS) Software: Facilitates transactions and tracks sales.
• Customer Relationship Management (CRM) Software: Manages customer interactions and marketing efforts.
• Accounting Software: Handles financial transactions, invoicing, and budgeting.
• Social Media Management Software: Streamlines social media marketing and engagement.
• Project Management Software: Organizes tasks, collaborations, and deadlines for projects.
• Employee Management Software: Tracks employee hours, payroll, and performance evaluations.
• Website and E-commerce Platform: Manages online presence and sales.
• Digital Asset Management (DAM) Software: Organizes and stores digital media assets like photos and videos.

Check out Google’s latest search results for software packages for a makeup business.

14. Get The Right Business Insurance

Business insurance is a vital safeguard for the operations of a makeup business, providing protection against various risks and liabilities.

Comprehensive Coverage

Before engaging in any business activity, it’s imperative to have the right insurance coverage in place. This includes protection for customers, employees, yourself, anyone on the premises, and your property.

Professional Liability Insurance

Professional liability insurance is crucial for makeup businesses. It offers protection against lawsuits arising from alleged negligence, errors, or omissions in the services provided.

This coverage can help mitigate financial losses associated with legal fees and settlements.

Property Insurance

Property insurance safeguards your business premises, equipment, inventory, and other assets against damages or losses caused by fire, theft, vandalism, or other covered perils.

Interruption Insurance

Interruption insurance, also known as business interruption insurance, is a vital consideration. It provides financial support in the event of a business shutdown due to covered incidents such as fire, natural disasters, or other unforeseen circumstances.

This coverage helps mitigate the loss of income and ongoing expenses during the period of interruption, ensuring the continuity of your business operations.

Consulting with an Insurance Broker

It’s advisable to work with a competent insurance broker who specializes in business insurance.

An experienced broker can assess your specific needs and risks, recommend appropriate coverage options, and ensure you have sufficient protection tailored to your business requirements.

They can also help you understand policy terms and conditions, navigate the claims process efficiently, and make adjustments to your coverage as needed.

In conclusion, investing in comprehensive business insurance, including professional liability, property, and interruption coverage, is essential for mitigating risks and protecting the financial stability of your makeup business.

Consulting with a knowledgeable insurance broker is crucial to ensure you have adequate coverage to safeguard your business interests.

For more, see What to Know About Business Insurance . You can also browse the latest Google search results for makeup business insurance .

15. Suppliers and Service Providers

The Importance of Strong Relationships with Suppliers and Service Providers

Building and maintaining strong relationships with suppliers and service providers is essential for the success of any business.

Reliability and Trustworthiness

Having a reliable and trustworthy supplier is paramount. It ensures consistent access to quality products or services, which directly impacts your business’s reputation and customer satisfaction.

Competitive Pricing and Profit Margins

Suppliers offering competitive prices enable businesses to remain competitive in the market. Lower costs from suppliers allow for better pricing strategies, increasing profit margins and potentially attracting more customers.

Consistent Supply

A dependable supplier ensures a steady flow of necessary supplies, preventing disruptions to business operations and meeting customer demands efficiently.

Mutual Benefit

Treating suppliers and service providers respectfully and ensuring they benefit financially fosters a positive working relationship.

This mutual benefit encourages loyalty and cooperation, enhancing overall business efficiency and success.

Items and Services a Makeup Business Might Need

• Cosmetic Products: Foundation, eyeshadow, lipstick, etc.
• Packaging Materials: Bottles, jars, labels, etc.
• Ingredients and Raw Materials: Pigments, oils, fragrances, etc.
• Manufacturing Equipment: Mixing machines, filling machines, etc.
• Transportation Services: Shipping and logistics for product distribution.
• Marketing and Advertising Services: Graphic design, photography, etc.
• IT and Software Solutions: Point-of-sale systems, inventory management software, etc.

Establishing strong partnerships with these suppliers and service providers is critical for the seamless operation and success of a makeup business.

For more information, see How To Choose a Supplier.

16. Setting Prices

Researching Pricing:

Thorough pricing research is essential for a makeup business to maintain competitiveness and profitability.

Avoiding Overpricing:

Setting excessively high prices can deter customers, leading to lost sales and reduced market share.

Preventing Underpricing:

While low prices may attract customers initially, they can jeopardize profitability, hindering the ability to cover expenses and sustain operations.

Striking the Right Balance:

Finding the optimal price point involves aligning with market standards while highlighting the value proposition to justify costs. Balancing affordability with profitability ensures sustainable growth and customer satisfaction.

See the following for more:

• Setting the Price of Your Products and Services
• Search Results for Pricing Strategies for a Makeup Business.

17. Physical Setup

When purchasing inventory, prioritize products your customers demand, aligning with their needs for repeat business.

Balancing inventory levels is crucial—excess ties up funds, while insufficient stock leads to lost sales.

Optimize product displays through testing for maximum sales.

Expiry Dates:

Avoid carrying products nearing expiry to prevent wastage. Maintain a balance between sufficient stock and avoiding expiry dates, ensuring products sell before expiration.

Makeup Business Layout:

Consider layout for efficiency and safety. Optimize flow to prevent congestion, ensure easy access to products, and create a welcoming atmosphere for customers.

Business Signs:

Install prominent signage for visibility and professionalism. Include directional signs for exits and key areas, enhancing customer experience and brand perception.

Your Office Setup:

An organized office fosters productivity. Equip your workspace with necessary tools for efficient business management, optimizing time and resources.

• Considerations for the Setup of Your Office
• Considerations for Your Company Sign.

18. Creating a Website

A website is essential for your makeup business as it serves as the primary point of contact for customers. Unlike social media platforms, you have full control over your website when you host and register a domain name.

It allows you to showcase your products, services, and promotions effectively.

Additionally, utilizing your website for blogging can establish you as an industry expert, providing valuable insights and tips tailored to your customers, thereby building trust and credibility.

For more, see How to Build a Website for Your Business .

19. Hiring Employees

Running a Makeup Business:

Starting a makeup business solo can help control expenses initially, but as the business grows, managing alone may become overwhelming.

Hiring qualified personnel is crucial for efficient operations and maintaining service quality.

Job Positions or Outsourced Services to Consider:

• Makeup Artists: Additional makeup artists can handle increasing client demand and appointments.
• Receptionist: Hiring a receptionist can manage bookings, inquiries, and customer service tasks.
• Marketing Specialist: Employing a marketing specialist can enhance advertising efforts and brand promotion.
• Accountant/Bookkeeper: Outsourcing accounting services or hiring an accountant/bookkeeper ensures accurate financial records and tax compliance.
• Administrative Assistant: An administrative assistant can assist with administrative tasks, scheduling, and paperwork.
• Cleaners: Outsourcing cleaning services ensures a clean and hygienic workspace for clients and staff.
• Website Developer: Hiring a website developer ensures a professional online presence and smooth website functionality.
• Social Media Manager: Employing a social media manager can handle content creation, engagement, and growth strategies on social platforms.
• Inventory Manager: Hiring an inventory manager ensures proper stock management, ordering, and organization of makeup products.
• Training Specialist: Employing a training specialist can provide ongoing training and skill development for makeup artists and staff.

Considering these job positions or outsourced services can streamline operations and support the growth of a makeup business.

For more, see How and When to Hire a New Employee.

20. Getting Customers Through the Door

When you have reached this step, your business is set up and ready to go, with one more final step, which is important: getting customers through the door.

There are numerous ways to do this, like advertising, having a grand opening , word of mouth, etc.

The following sections will give you a few ideas to spark your creativity and draw attention to your new makeup business.

In this step, we’ll cover the following sections:

a.) Marketing Considerations b.) The Market Can Guide You c.) Sample Ad Ideas d.) Joint Venture Ideas

Let’s dig a little deeper into the following sections.

a.) Marketing Considerations

Attracting Customers:

Establishing a customer base is crucial for the success of your makeup business. Initially, it’s challenging as awareness is low.

However, with time and a good reputation, it becomes easier. Marketing is an ongoing effort that requires investment in effective techniques to boost revenue.

While you may not always need professional help, considering it can be beneficial.

Simple Marketing Methods:

• Social Media Presence: Utilize platforms like Instagram, Facebook, and X to showcase your work, engage with potential customers, and build a community.
• Word of Mouth: Encourage satisfied customers to spread the word about your business to friends and family. Positive reviews and referrals can significantly impact your reputation.
• Local Events and Collaborations: Participate in local events, fairs, or collaborate with other businesses to increase visibility and reach a broader audience.
• Offer Promotions or Discounts: Attract new customers by offering introductory promotions or discounts on services. This can incentivize people to try your business.
• Online Advertising: Explore online advertising options such as Google Ads or social media ads to target specific demographics and increase brand awareness.

Implementing these simple methods can help you effectively spread the word about your makeup business and attract potential customers.

See How To Get Customers Through the Door and our marketing section for ideas on promoting your business.

b.) The Market Can Guide You

Market Awareness:

Staying attuned to customer preferences is crucial for the success of your makeup business.

While you may have a specific product or service in mind, it’s essential to recognize market demand for variations. Ignoring these signs could result in missed opportunities for business growth.

Adaptability:

While it’s important to stay focused on your business plan, remaining adaptable to market trends is key.

If repeated indications of customer preferences emerge, consider revisiting your strategy. Being open to adjusting your offerings can lead to a more resilient and thriving business in the long run.

c.) Sample Ad Ideas

• Headline: “Glow Up Your Look with Our Makeup Magic!” Unveil your beauty potential with our professional makeup services. From glamorous evenings to everyday elegance, let our expert makeup artists transform your look and enhance your natural radiance. Book your appointment today and step into a world of flawless beauty!
• Headline: “Get Picture-Perfect with Our Makeup Artistry!” Make every moment picture-perfect with our exquisite makeup services. Whether it’s a special occasion or a casual outing, our skilled makeup artists will create a stunning look tailored to your unique style. Elevate your beauty game and leave a lasting impression wherever you go.
• Headline: “Discover Your Signature Look with Our Makeup Mastery!” Unleash your inner diva and embrace your individuality with our personalized makeup sessions. From bold and daring to subtle and sophisticated, our talented makeup artists will help you discover your signature style. Let your beauty shine with confidence!
• Headline: “Elevate Your Beauty Routine with Our Makeup Expertise!” Elevate your everyday beauty routine with our professional makeup services. Whether you’re seeking a natural glow or a glamorous makeover, our experienced makeup artists will exceed your expectations. Experience the difference and indulge in luxury beauty today!
• Headline: “Be the Center of Attention with Our Makeup Marvels!” Stand out from the crowd and steal the spotlight with our captivating makeup creations. From mesmerizing eyes to luscious lips, our skilled makeup artists will accentuate your best features and leave you feeling fabulous. Transform your beauty dreams into reality with us!

d.) Joint Venture Ideas

Joint ventures can be lucrative opportunities for businesses to collaborate and expand their reach.

Here are some key considerations and potential partners for a makeup business owner to explore:

• Salons and Spas : Partnering with salons or spas can offer mutual benefits, as they often provide complementary services like hair styling, facials, or massages. A joint venture could involve cross-promotion of services, package deals, or hosting beauty events together.
• Photographers and Videographers : Collaborating with professionals in the photography and videography industry can lead to joint projects such as bridal makeup packages, editorial shoots, or makeup tutorials for social media platforms.
• Fashion Boutiques : Teaming up with fashion boutiques allows for cross-promotion of makeup products alongside clothing and accessories. Joint ventures could involve hosting fashion shows, makeup workshops, or offering discounts for customers who purchase from both businesses.
• Event Planners : Event planners often require makeup services for weddings, corporate events, or photoshoots. Establishing a partnership with event planning companies can lead to referrals and exclusive deals for clients who book makeup services through both businesses.
• Fitness Centers : Fitness enthusiasts may be interested in makeup products suitable for active lifestyles or post-workout touch-ups. Collaborating with fitness centers could involve sponsoring fitness events, offering makeup services at wellness retreats, or creating workout-friendly makeup kits.
• Influencers : Partnering with influencers or makeup artists with a large online following can increase brand exposure and credibility. Joint ventures may include sponsored content, product collaborations, or hosting makeup masterclasses.
• Wedding Planners : Wedding planners often assist brides with their entire wedding look, including makeup. By partnering with wedding planners, makeup businesses can offer comprehensive bridal packages and gain access to a steady stream of clients during wedding season.
• Cosmetic Brands : Collaborating with other cosmetic brands can lead to product bundling, co-branded collections, or joint marketing campaigns targeting a shared audience.

Approaching these businesses with a well-thought-out joint venture proposal that outlines the benefits for both parties is essential for building successful partnerships in the makeup industry.

Also see How To Create A Joint Venture

Points To Consider

Next, for your makeup business, let’s review essential points to consider

We will cover sections, including tips to improve the setup of your makeup business, equipment, alternatives to starting from scratch, and more.

After that, you’ll reach the “Knowledge Is Power” segment, where you can access resources containing valuable information.

Key Points to Succeed in a Makeup Business

Critical Points to Succeed in the Setup Phase of a Makeup Business:

• Market Research: Conduct thorough market research to identify target demographics, competitor analysis, and market trends to inform business strategies.
• Business Plan: Develop a comprehensive business plan outlining goals, target market, services offered, pricing strategy, and marketing tactics.
• Legal Considerations: Register the business, obtain necessary permits or licenses, and ensure compliance with local regulations and health standards.
• Financial Planning: Create a budget, secure funding or investment if required, and establish pricing structures to ensure profitability.
• Branding and Marketing: Develop a strong brand identity, including a memorable logo, website, and social media presence to attract customers and build brand awareness.
• Product and Supplier Selection: Source high-quality makeup products and reliable suppliers to ensure consistency and customer satisfaction.
• Professional Development: Invest in training and certification to enhance skills and credibility in the industry.
• Location and Setup: Choose a suitable location with high foot traffic or visibility, and design an inviting and functional workspace that reflects the brand aesthetic.
• Technology and Systems: Implement essential technology such as appointment scheduling software, inventory management systems, and POS systems to streamline operations.
• Networking: Establish connections with industry professionals, influencers, and potential collaborators to expand the business network and opportunities for growth.

Critical Points to Succeed When Your Makeup Business Is in the Operation Phase:

• Customer Experience: Prioritize excellent customer service to build loyalty and positive word-of-mouth referrals.
• Quality of Service: Maintain high standards in makeup application techniques, product quality, and hygiene practices to ensure customer satisfaction.
• Staffing: Recruit skilled and reliable makeup artists who align with the brand ethos and provide ongoing training and support to enhance their performance.
• Employee Turnover : Implement strategies to reduce turnover, such as offering competitive wages, providing opportunities for professional development, and fostering a positive work environment.
• Inventory Management: Monitor inventory levels, track product usage, and replenish stock efficiently to avoid shortages or excess inventory.
• Marketing and Promotion: Continue to invest in marketing efforts to attract new customers and retain existing ones through targeted campaigns, promotions, and loyalty programs.
• Financial Management: Monitor financial performance regularly, track expenses, and adjust pricing or cost-saving measures as needed to maintain profitability.
• Adaptability: Stay informed about industry trends, customer preferences, and market changes, and adapt business strategies accordingly to remain competitive.
• Feedback and Improvement: Solicit feedback from customers and employees to identify areas for improvement and implement changes to enhance the business operations.
• Long-Term Planning: Develop long-term growth strategies, set achievable goals, and regularly evaluate progress to ensure the continued success and sustainability of the makeup business.

Making Your Makeup Business Stand Out

• Specialized Services: Offer unique makeup services tailored to specific occasions or themes, such as bridal makeup, special effects makeup, or theatrical makeup. This specialization can attract customers seeking expertise in particular areas.
• Personalized Consultations: Provide personalized consultations to understand each client’s preferences, skin type, and desired look. Offering customized makeup solutions can enhance customer satisfaction and loyalty.
• High-Quality Products: Use premium-quality makeup products known for their effectiveness and safety. Investing in reputable brands and cruelty-free products can build trust with customers and differentiate your business from competitors.
• Professionalism and Hygiene: Maintain high standards of professionalism and hygiene to ensure client safety and satisfaction. Emphasize cleanliness, proper sanitation practices, and adherence to industry regulations to instill confidence in your services.
• Exceptional Customer Service: Prioritize exceptional customer service by providing a welcoming atmosphere, attentive staff, and prompt responses to inquiries or concerns. Building positive relationships with clients can foster loyalty and positive word-of-mouth referrals.
• Unique Branding and Marketing: Develop a unique brand identity and marketing strategy to differentiate your business in the market. Utilize social media platforms, creative advertising campaigns, and collaborations with influencers or local businesses to enhance brand visibility and attract customers.
• Continuous Education and Trends: Stay updated on the latest makeup trends, techniques, and industry innovations through ongoing education and training. Offering cutting-edge services and staying ahead of trends can position your business as a leader in the industry.

Ideas for Add-ons for a Makeup Business:

• Skincare Consultations: Offer skincare consultations alongside makeup services to assess clients’ skin concerns and recommend appropriate skincare products or treatments. Providing comprehensive skincare solutions can enhance the overall makeup experience and address clients’ individual needs.
• Makeup Workshops and Classes: Organize makeup workshops or classes for individuals interested in learning makeup techniques or enhancing their skills. Offering educational opportunities can attract aspiring makeup artists and enthusiasts while generating additional revenue for your business.
• Mobile Makeup Services: Extend your services beyond the salon by offering mobile makeup services for weddings, events, or photo shoots. Providing on-location makeup services can accommodate clients’ convenience and expand your customer base.
• Makeup Subscription Boxes: Create makeup subscription boxes featuring curated products, tutorials, and beauty tips delivered to subscribers’ doorsteps monthly or quarterly. Offering subscription services can generate recurring revenue and provide customers with a convenient way to discover new products.
• Bridal Packages: Develop bridal makeup packages tailored to brides and bridal parties, including pre-wedding consultations, trial sessions, and on-site wedding day services. Providing comprehensive bridal packages can attract clients seeking professional makeup services for their special day.
• Special Events and Promotions: Host special events, promotions, or themed makeup parties to attract customers and generate excitement around your business. Offering limited-time discounts, loyalty programs, or exclusive makeup collections can incentivize repeat business and increase customer engagement.
• Collaborations and Partnerships: Collaborate with other beauty professionals, photographers, or wedding vendors to offer integrated services or promotional packages. Partnering with complementary businesses can expand your reach, attract new customers, and create mutually beneficial opportunities for growth.

Hours of Operation:

The hours of operation for a makeup business can vary based on factors like target clientele, location, and services offered.

However, typical hours may include weekdays from 9 AM to 6 PM and weekends from 10 AM to 4 PM.

Depending on demand, special events, or appointments, flexible scheduling options like early mornings, late evenings, or weekend extensions may be necessary to accommodate clients.

Equipment and Supplies

A List of Equipment and Supplies to Consider for a Makeup Business:

• Makeup Brushes : Various types and sizes for different makeup applications.
• Makeup Palettes : Including eyeshadows, blushes, contouring, and highlighting palettes.
• Foundations and Concealers : Different shades and formulas to match diverse skin tones.
• Setting Powders and Sprays : To set makeup and increase its longevity.
• Eyelash Curler and False Eyelashes : For enhancing eye makeup looks.
• Makeup Sponges and Blenders : For seamless makeup application and blending.
• Makeup Mirrors : With adequate lighting for precise makeup application.
• Makeup Removers : Including wipes, liquids, and balms for removing makeup.
• Sanitization Tools : Such as brush cleaners, alcohol sprays, and sanitizing wipes.
• Storage Containers : For organizing and storing makeup products and tools.
• Disposable Applicators and Brushes : For hygienic makeup application on clients.
• Makeup Cases and Bags : For convenient transportation of makeup supplies.
• Beauty Blotters and Cotton Pads : For makeup touch-ups and removal.
• Face Masks and Gloves : For maintaining cleanliness and hygiene during makeup application.
• Makeup Chair and Table : Comfortable seating and workspace for clients during makeup sessions.
• Ring Light or Studio Lighting : For well-lit makeup application areas.
• Makeup Organizers and Display Stands : For showcasing products and enhancing accessibility.
• Skin Preparation Products : Such as primers, moisturizers, and makeup bases.
• Lipsticks, Lip Liners, and Lip Glosses : In various shades and finishes for lip makeup.
• Makeup Setting Tools : Such as makeup setting fans or blow dryers for quick setting of makeup.
• Hair Accessories : Such as hair clips, hair bands, and hairpins for hairstyling during makeup sessions.
• Makeup Trolley or Cart : For easy mobility and storage of makeup supplies in a salon or studio setting.
• Face Masks and Shields : For protecting clients and makeup artists during makeup application, especially in times of health concerns.

Researching makeup products provides insights into product trends, features, and customer preferences.

By analyzing various products, you can identify gaps in the market, understand consumer needs, and tailor your offerings accordingly to meet demand and enhance customer satisfaction.

See the latest search results for makeup products.

Buyer Guides

Buyer guides offer insights from a customer’s viewpoint, providing valuable information and potentially uncovering aspects previously overlooked.

These guides aid in understanding consumer preferences and market trends, facilitating informed business decisions for better customer satisfaction and success.

See the latest search results for makeup buyer guides.

Assessing your skill set is crucial before starting a makeup business. It ensures you have the necessary capabilities to manage various aspects of the business effectively.

Identifying any skill gaps allows you to take proactive steps to address them, either through self-education or by hiring individuals with the required expertise.

Essential Skills for a Makeup Business Owner:

• Makeup Application Techniques: Proficiency in applying makeup to achieve desired looks.
• Product Knowledge: Understanding cosmetic products, their ingredients, and their application.
• Customer Service: Ability to provide exceptional service, address customer needs, and handle inquiries or complaints.
• Sales and Marketing: Skills to promote products and services, attract customers, and increase sales.
• Business Management: Competence in managing daily operations, finances, and administrative tasks.
• Financial Management: Knowledge of budgeting, accounting principles, and financial planning.
• Time Management: Ability to prioritize tasks, meet deadlines, and optimize productivity.
• Creativity and Innovation: Capacity to develop unique makeup designs and adapt to changing trends.
• Communication Skills: Effective verbal and written communication with clients, suppliers, and team members.
• Networking and Relationship Building: Establishing and nurturing connections within the industry to expand clientele and opportunities.

For more, see The Essential Skills To Run a Business

Considering a Makeup Business For Sale

Benefits of Buying an Established Makeup Business:

• Immediate Revenue Generation : Start earning income from the day you acquire the business, bypassing the lengthy startup phase.
• Reduced Risk : Determine the viability of the business before investing, as you have access to financial records and performance metrics.
• Existing Customer Base : Acquire an established customer base, saving time and resources on customer acquisition efforts.
• Established Reputation : Benefit from the business’s existing brand reputation and goodwill within the community or industry.
• Known Financials : Have clarity on revenue, profit, and expenses, providing insight into the business’s financial health from the outset.

Disadvantages of Buying an Established Makeup Business:

• Higher Acquisition Cost : Typically, purchasing an established business involves paying a premium for its goodwill and existing customer base.
• Resistance to Change : Implementing changes to the business model or operations may alienate existing customers, posing challenges to growth.
• Inherited Reputation : Assume responsibility for the business’s reputation, whether positive or negative, which can impact customer perceptions and trust.

Considering an existing makeup business for sale allows entrepreneurs to enter the market with less uncertainty and faster revenue generation.

However, thorough due diligence is essential to ensure the business aligns with your goals and objectives.

The latest search results for a makeup business for sale and others in the same category.

See our article on performing due diligence for buying a business if you find something promising.

Franchise Opportunities Related to a Makeup Business

Pros of Owning a Franchise:

• Proven Business Model : Follow a predetermined plan created by the corporate office, reducing the risk of failure.
• Established Reputation : Benefit from the brand’s existing reputation and marketing efforts, which can attract customers.
• Comprehensive Training : Receive training and support from the franchisor, ensuring you understand all aspects of the business.
• Corporate Support : Access ongoing support from the corporate office, including guidance on operations, marketing, and troubleshooting.

Cons of Owning a Franchise:

• High Initial Investment : Franchise fees and startup costs can be significant, requiring substantial upfront capital.
• Limited Autonomy : Must adhere to the franchise agreement, limiting your ability to make independent business decisions.
• Restricted Product/Service Offerings : Limited to offering only approved products or services, reducing flexibility and innovation.
• Ongoing Fees : Pay regular franchise fees, royalties, and other ongoing expenses to the franchisor.
• Limited Flexibility : Bound by corporate guidelines and policies, restricting your ability to customize operations to local preferences.

Exploring franchise opportunities can provide valuable insights and resources for starting a makeup business. While there may not be direct matches, examining related industries or businesses can offer inspiration and ideas.

Researching franchise options allows you to assess the feasibility of joining an established brand versus starting from scratch.

See the latest search results for franchise opportunities related to this industry.

Knowledge Is Power if You Use It!

There are many sources of information that you may not have considered to increase your knowledge for starting and running a makeup business.

The good news is that the sections below cover a lot of material, and I have made it easy for you by providing links to search results.

You don’t have to focus on what to look for; instead, click the links that interest you and explore the search results.

You can explore now or bookmark this page to return another time.

Terminology

Being familiar with the terminology in your industry is a must. You can pick it up as you gain more experience.

For now, you can see the list below to get you started.

• Foundation : A cosmetic product applied to the face to create an even, uniform skin tone.
• Concealer : A makeup product used to cover imperfections such as blemishes, dark circles, and discoloration.
• Primer : A product applied before makeup to prepare the skin, minimize pores, and help makeup last longer.
• Setting Spray : A product sprayed onto the face after makeup application to set and prolong its wear.
• Eyeshadow : Colored cosmetic applied to the eyelids and under the eyebrows to enhance the eyes.
• Eyeliner : Cosmetic product used to define the eyes by outlining the eyes’ contours.
• Mascara : Makeup product applied to the eyelashes to darken, lengthen, and define them.
• Blush : Cosmetic product applied to the cheeks to add color and definition.
• Highlighter : A product applied to the high points of the face to create a luminous, glowing effect.
• Contour : Using makeup products to create shadows and define facial features such as cheekbones and jawline.
• Lipstick : Cosmetic product applied to the lips to add color and sometimes texture.
• Lip Liner : Pencil used to outline the lips and prevent lipstick from feathering or bleeding.
• Setting Powder : Translucent or colored powder applied over foundation to set makeup and control shine.
• Brow Pencil/Powder : Cosmetic product used to fill in and define eyebrows.
• Makeup Brushes : Tools with bristles used to apply makeup products to the face and eyes.
• Sponge/Beauty Blender : Makeup applicator used to blend and apply foundation, concealer, and other products.
• Tinted Moisturizer : Lightweight moisturizer with a hint of color for a natural, dewy finish.
• BB Cream/CC Cream : All-in-one cosmetic product that combines skincare benefits with coverage and sun protection.
• Makeup Remover : Product used to dissolve and remove makeup from the skin.
• Setting Gel : Clear or tinted gel used to set and shape eyebrows or tame stray hairs.
• Fixative Spray : Spray used to set makeup and provide long-lasting wear, often used for special occasions or stage makeup.

Trends and Statistics

Analyzing industry trends and statistics for a makeup business provides insights into consumer preferences, market demand, and emerging opportunities.

It helps businesses stay competitive by adapting to changing trends, identifying growth areas, and making informed decisions to optimize product offerings and marketing strategies.

See the latest search results for trends and statistics related to the makeup industry.

Associations

Trade associations provide valuable benefits such as keeping members updated on industry news, facilitating networking opportunities, and offering resources for professional development and advocacy within the industry.

See the search results for associations for a makeup business and the benefits of Joining the Chamber of Commerce.

The Top Makeup Companies

Analyzing an established makeup business can inspire innovative ideas, identify gaps in the market for competitive advantage, and reveal overlooked offerings by competitors.

This strategic examination provides valuable insights for enhancing your own makeup business.

See the latest search results for the top makeup companies.

Customer Expectations

Reviewing search results for customer expectations regarding makeup use provides valuable insights into their perspectives. It allows businesses to align their offerings with customer desires, potentially exceeding expectations.

Additionally, this process helps identify any overlooked issues, ensuring comprehensive coverage of all aspects related to customer satisfaction.

See the search results related to customer expectations for makeup use.

Tips For Makeup Sales

Reviewing tips and insights for running a makeup business can spark new ideas and offer valuable advice to avoid potential issues.

It’s a valuable way to enhance your knowledge and stay ahead in the industry.

See the latest search results about insights into running a makeup business.

What To Avoid When Running a Makeup Business

Learn from others’ mistakes to avoid pitfalls in your makeup business. Explore the provided link for valuable insights into what to avoid.

See the latest search results about mistakes to avoid in your makeup business.

Interviews With Makeup Business Owners

Interviews with experienced makeup business owners provide valuable insights, offering dos and don’ts that expand industry knowledge.

See the latest search results for interviews with makeup business owners.

Explore publications for valuable makeup tips and insights to refine your skills and business strategies.

See the search results for makeup books.

Discussion Forums

Engage in makeup forums to connect with industry peers and gain insights to enhance your business.

See the latest search results related to makeup discussion forums.

Online or local courses enhance skills for operating your makeup business.

See the latest courses that could benefit a makeup business owner . Also, see our management articles for tips and insights for managing your business.

Subscribing to leading makeup blogs provides industry insights and fresh ideas. Subscribe to those of value; weed out outdated or irrelevant ones for a curated source of information.

Look at the latest search results for top makeup blogs to follow.

Retail Based Business Tips

Analyzing retail sector data aids in makeup business management, fostering continual enhancement for long-term success.

Look at the latest search results for retail tips and insights to follow.

Keeping up with makeup-related news through media outlets offers insights into industry trends, product launches, and influencer collaborations.

Stay informed by following relevant news channels, websites, and magazines to enhance your knowledge of the makeup industry.

See the latest results for makeup news.

YouTube provides a wealth of makeup-related content, catering to visual learners with daily updates and a vast array of related videos.

It’s a valuable resource for exploring makeup techniques, trends, and product reviews.

YouTube videos related to makeup sales.

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Resources for Your Growing Business

How to start a makeup business in 10 steps.

Why Start a Makeup Business?

Types of businesses in the cosmetic industry, what is the growth potential for a makeup business, 10 steps for how to start a makeup line, bonus tips for success, start your makeup business.

The beauty industry is constantly growing and evolving. New trends are always emerging, which creates opportunities for entrepreneurs in the beauty space.

Whether you want to create a product to sell in a store or launch your own digital storefront, there are many ways to achieve success as a beauty guru. 

In this 10-step guide, you’ll discover what it takes to start a makeup business, market your own line and scale your company to success. 

There are many reasons to start a cosmetic business. Here are a few of the most popular inspirations for entrepreneurs to get started in the beauty space:

• The ability to start your own brand
• Fulfill the high demand for cosmetics
• Pursue your passion for beauty
• Set your own prices and scale your income
• Sell products in-store or online (remote income)

There is no right or wrong answer when it comes to your “Why” for starting a cosmetic business. Considering your motivations will help you get focused on your end-goal and see your business through to success. 

If you want to start a makeup business, there are dozens of ways to go. Choosing a focus is helpful when you’re starting to build your brand . Your niche could be one specific type of product or a line of products that is meant for a very specific type of consumer.

Choosing a niche will make it easier to hone in on your target market, brand your business effectively and stand out in a sea of other beauty brands.

Traditional Makeup Products

Blushes, lipsticks, eyeliners, mascaras, foundation and eyeshadows are all very common makeup products. However, new businesses that get into makeup production create their own lines of these products all the time.

Each of these products comes with a wide range of variations. For example, when it comes to lipsticks, you have glosses, crayons, mattes, metallics and more. This is on top of all of the color options.

When you decide to create any of these products, you will likely need to put your own personal twist on them and create a themed collection. 

Please note that creating products like these may take several rounds of testing formulas and measuring qualitative aspects since anything you release must be safe for the skin.

Over the past few years, eyelashes have been a major trend. False lashes are a relatively easy product to sell since they don’t require as much product development as other makeup products.

For the most part, developing a lash product involves ordering the lash styles you like from a supplier and packaging them with your branding. You can sell your lashes in your own store, either online or in a physical storefront. 

Alternatively, you can sell your lashes at other makeup retailers like Sephora, Ulta or even drugstores.

Aside from the lashes themselves, it is very important to consider what type of lash glue you are selling with your lashes. Since the adhesive goes so close to the user’s eye, you need to ensure that it’s not harmful if it comes in contact with the eye.

Body Makeup

Body makeup works very similarly to concealer, foundation and other makeup you’d use on your face. The purpose of body makeup is to help cover up blemishes, even out your skin tone and get the perfect amount of glow.

Since it is similar in nature to many traditional makeup products, product development and the retail process are very similar.

All-Natural Makeup

People are becoming more aware of the ingredients they are putting in and on their bodies. This has created a demand for clean ingredient makeup products. 

Consider creating products that are plant-based—nixing chemicals can do wonders for your business. These products are a bit more expensive to manufacture, but there are people who are willing to pay a premium for natural products.

Luxury Makeup

There are people who are willing to invest hundreds of dollars in their makeup even if it’s not made from all plant-based materials. These are typically people who are skilled in the makeup realm—such as makeup artists—and know that high-quality products come at a high price point.

Create a product with the highest quality ingredients available if your goal is to target this market.

The beauty industry is growing quickly as trends evolve and multiply rapidly. As of 2019, the cosmetics industry is worth $532 billion and it is slated to exceed a market value of $805 billion by 2023 . Cosmetic products and skincare alone contribute to nearly 40% of that value. 

Additionally, the profit margins for makeup businesses are at an average of 40% and can be up to 80%. As a small makeup business, you’ll likely fall right around the average profit margin.

It is important to note that the cosmetics sector has a few main players that run the show. Not all brands will grow at this rate.

This bit of information should not dissuade you from starting a cosmetic business, but should help you to shape your expectations accordingly.

Starting your own business is exciting, but it can also be confusing if you need help knowing where to start. While there are many paths to success, we’ve outlined the 10 steps you need to help you get started on the right track. With this guide, you’ll have an established beauty brand in no time. 

1. Choose a Product

Choose a product that you can create with a unique touch that sets it apart from the competition. You should choose a product that interests you, but you should also ensure there is a demand for what you want to produce.

It’s also wise to consider what it will cost you to produce an item. This will help you set realistic margins and earn a handsome profit on every sale. 

We recommend starting with only one or two cosmetic products before growing your business. By choosing one or two beauty products, you can perfect the process and start to build your customer base without a ton of pressure.

2. Create a Business Plan

Before you start developing your product, you should make a business plan. This outlines what you want to sell, who you want to sell it to and how you plan to sell it.

This business plan will be used primarily for your own reference, but it will also help if you are pitching for partnerships, loans, grants or investors.

Your business plan should include:

• A company overview
• Market research analysis
• The legal structure and general organization of your business
• A breakdown of your beauty products
• An overview of your marketing and sales strategy
• A detailed financial outlook
• Any and all files related to your business (contracts, legal documentation, tax information, etc.) 

In this step, you work out the logistics of your business. Consider things like how much inventory you plan to hold and what the ordering and shipping process looks like. You can also outline how you will send invoices for your makeup business .

Really dive deep into your target audience. See how potential competitors are serving this audience and figure out how you can do it better, making your brand stand out from the competition.

3. Get Funding

Starting a business requires capital and there are several ways to come up with this capital. 

You could fund your business with your own savings. However, if you don’t have the money of your own, you have the option of either borrowing the money or seeking investors.

To take out a business loan, you can start by reaching out to your bank. We encourage you to shop around with other banks to find the best interest rates. Also, check out what the Small Business Administration has to offer.

If you decide to go with an investor, determine if you want a partner who is hands on or if you’d prefer a silent investor. Investors could be family members, friends or business associates. Ideally, you’d want somebody who is trustworthy and has the amount of money that you need.

Additionally, some local organizations have grants available for new business owners. This money is often free, meaning you don’t have to pay it back. Google “business grants in [your location]” to find local programs.

Startup costs for a cosmetic business will vary based on the product you decide to sell and how large of an operation you are looking to run, but there are some basic costs that are pretty much standard across the board.

Here are some investments you may to make when starting your cosmetic business: 

• Limited liability company (LLC): $125
• Branding and website: $2,000+
• Product photography or camera equipment: Will vary
• Product development: $5,000+
• Warehouse: Varies by size and location
• Marketing and ads: Will vary
• Packaging: Will vary

There are cheaper alternatives to some of these investments, however pinching pennies may reduce the quality of your product and branding. Your initial goal may be to start small and then scale up once you have revenue coming in.

4. Take Care of the Legalities

When you start a makeup business, you will need to register your business. An LLC should suffice, but a “doing business as” (DBA) or corporation may work better. How you classify your business will depend on local legal requirements.

It’s important that your business is its own legal entity. In the event that an accident occurs due to one of your cosmetic products, you’ll want to make sure you’re protected as an individual.

You will also need to seek a tax identification number for your business entity so that you can pay taxes. This is called an employer identification number (EIN).

Some cosmetic and beauty products require approval by the Food and Drug Administration (FDA). We encourage you to check out the cosmetics page of their website for specific guidelines on developing and labeling your product.

Additionally, you should seek legal assistance if you plan on patterning any element of your brand.

5. Build Your Brand

A brand is essentially the personality you build for your business. It should be designed to connect with your target audience. 

You breathe life into your brand by creating an aesthetic that includes a color palette, logo and the like. Additionally, you’ll develop a voice for your brand that shines through in any copy on your website, social media and packaging.

6.  Develop Your Product

You have your ideas and plan all laid out. You also have your business model established and the funding ready to go. It is time to develop your product. Everything about your product should be highly representative of your brand.

Hammer out the specifics, including sizes, colors to textures. At this point, you’ll also want to work out packaging. Be very intentional with your packaging because it makes a world of difference. 

Pay close attention to the materials and ingredients you use when you manufacture cosmetics. For example, if sustainability is one of your brand’s values, plastic packaging is not on-brand. 

Finally, make sure your product is worth what you plan to charge for it. Overcharging customers will not bring them back.

7. Test Your Products

Order samples of your products so that you can test them. Make sure they are the quality you expected in terms of size, color and texture. You should check other qualitative measures such as how waterproof the product is, or how long it lasts.

You may have to go through several rounds of testing before getting it just right.

8. Design a Digital Storefront

Many makeup businesses excel in the world of e-commerce. Even if you plan to sell your products in physical stores, you’ll likely opt for an online storefront as well (and factor it into your business model). 

Your website should include a home page, an ‘about’ page, a contact page and shop pages. The shop pages should be easily searched, sorted and filtered so that your customers can find what they are looking for with ease.

Ensure that you use a secure paywall so your customers’ sensitive information is never compromised. Adding payment features like PayPal or plan options also enrich the user experience.

You have two options when it comes to building your online storefront. You can either create it yourself with a drag-and-drop site like Squarespace or you can hire a professional to build it for you.

We recommend hiring a professional so that your site meshes perfectly with your brand and offers a seamless user experience for your customers.

9. Create a Marketing Strategy

It is time to develop a marketing strategy. If you are sticking to e-commerce for your makeup business, both advertisements and content marketing are good options.

Here are a few approaches you can take when creating your marketing strategy:

• Paid ads : Run targeted ads on Facebook, Twitter and Instagram
• Social media marketing : Create engaging content to build a community of followers who could be potential customers
• Search engine optimization : Use SEO to target keywords that your potential customers would be searching
• Influencer marketing : Hire people with large social media followings to talk about using your products and encouraging their followers to purchase their own

Your marketing strategy should depend greatly on your target audience. Design your marketing strategy so that it speaks with your target audience. This goes for both messaging and the delivery of the message. Speak to them in a language that resonates with them, and make sure you’re delivering the message on a platform that they spend time on. For more tips and guidance on promoting your business, you can follow our post on How to Advertise Your Business .

10. Launch Your Products

Once you have everything ready to go, it is time to launch. Get your followers and supporters excited for the big day and start generating sales. If you’ve followed the steps in this guide, hopefully you’ll have a line of customers waiting at your physical or virtual storefront!

Every entrepreneurial journey is unique, especially in the cosmetics industry where there are so many ways to go when starting a cosmetics business. However, there are some business practices that are universal. Here are a few tips to get customers and grow your makeup business.

Master Social Media

If you are already known and trusted in the online world of makeup—let’s say you’re a respected makeup artist—you will find it much easier to sell your beauty products.

Think about the people who climbed to the top of the cosmetics industry on YouTube.  They built personal brands that exemplified their makeup artistry and later went on to create makeup collections of their own.

This process will likely look different for you. But studying their journeys from makeup artists and influencers to creators of makeup collections will give you ideas for your own brand strategy.

Prioritize Customer Appreciation 

Let your customers know you appreciate them in a few ways. Use referral systems and giveaways to send free or discounted products to loyal customers.

These small things show your customers how grateful you are for their loyalty to your cosmetics business.

Send Public Relations Boxes

Investing in influencer marketing and sending our public relations (PR) boxes whenever you launch a new collection is a strategy that many successful makeup businesses use. 

Seeing all of your new products laid out in an on-brand PR box will really get people excited about your collection. And people will be more likely to buy your products when an influencer they know and trust talks about them.

Prioritize Inclusivity

Many beauty brands create products that are centered around white consumers. They fail to create shades of their products that work for people with darker shades of skin, and their branding often fails to embrace diversity.

Think about how you can include all makeup fans when you design and market your products.

Now that you’re familiar with the basics of the makeup industry, the manufacturing of cosmetics and the 10 steps for building a successful business, you are ready to bring your idea to life.

There are so many possibilities for people who dream of creating a makeup collection of their own. We are confident that you’ll have success in the industry once you set up a solid strategy and get to work.

So what do you say? Are you ready to start your cosmetics business?

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How to Start a Makeup Business in the US: A Step-By-Step Guide

Natalia Gonzalez

minutes read

Starting a makeup business in the US can be a rewarding and fulfilling journey, but it also requires careful planning and strategic decision-making. At Booksy, we believe in providing entrepreneurs with the tools and resources they need to succeed. In this guide, we'll provide an overview of the key steps in launching a makeup business , from creating a business plan to building your brand and reaching your target audience. Whether you're an experienced makeup artist or a beauty industry newcomer, this guide will provide valuable insights and practical tips to help you achieve your goals. So, let's dive into the world of beauty entrepreneurship and discover how to make your makeup business a success!

Grasping the Makeup Industry Landscape

The makeup industry is a dynamic and multifaceted world, and understanding its complexities is crucial for building a successful business. From the latest trends to changing consumer preferences, staying informed and agile is essential. 

Keeping Up with Makeup Trends and Consumer Behavior

Understanding trends and consumer behavior nowadays is key for entrepreneurs looking to succeed in the beauty industry. By understanding what consumers want and what's popular in the market, you can make informed decisions about your product offerings, marketing strategies, and overall business direction. Here are some reasons why it's important to stay up-to-date on makeup trends: 

Stay Relevant and Competitive

The beauty industry is highly competitive, and trends change rapidly. By keeping up with the latest developments, you can ensure your products or services remain relevant and attractive to your target audience. This can help you stand out in a crowded market and gain a competitive edge.

Identify New Opportunities

Keeping up with trends can help you identify new growth opportunities. Whether it's an emerging trend in clean beauty, sustainable packaging, or innovative product formulations, staying informed can inspire new ideas and directions for your business and tackle that niche of clients who are looking for businesses that offer you the first on the list.

Understand Consumer Behavior

Tracking makeup trends can provide valuable insights into consumer behavior and preferences, allowing entrepreneurs to adjust their marketing strategies and product offerings to better meet the needs and desires of their target audience. In today's digital age, social media has become a powerful tool for monitoring trends and engaging with consumers. Platforms like TikTok , with its massive Gen Z user base , have become go-to destinations for discovering new makeup looks , reviewing products , and sharing tutorials .  By actively participating in these online communities and leveraging social media to share content related to your makeup products or services, you can attract new customers and build a loyal following. For example, you could create short videos showcasing your products in action, share tips and tricks for achieving popular makeup looks, or collaborate with influencers and content creators to reach new audiences. By staying active and engaged on social media , you can not only keep up with the latest trends but also become a trusted and influential voice in the beauty community. This can help differentiate your brand, build a strong reputation, and drive long-term success in the competitive makeup industry.

Look for gaps in the current market offerings and consider how you could fill those gaps with new products or services . Are there any emerging trends that are not yet well-represented in the market? Are there any unmet needs or desires among consumers that you could address?

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Identifying Your Makeup Business Niche

In a crowded makeup market, specialization can be a powerful way to differentiate your brand , connect with a dedicated customer base, and build a strong reputation. Whether you're interested in natural and organic products, specialize in bridal makeup, or offer special effects services, identifying your niche is crucial for standing out and building a successful business. Here are some reasons why specialization is important in the makeup industry:

1. Differentiate Your Brand

By specializing in a particular area of the makeup industry, you can create a unique brand identity and stand out in a crowded market. Whether you focus on a specific type of product, a particular demographic, or a unique style or technique, specialization can help you build a distinct and memorable brand.

2. Build Expertise

Specialization allows you to build deep expertise in a particular area of the makeup industry, which can enhance your credibility and reputation. Whether you become known for your exceptional skills in bridal makeup, your expertise in natural and organic products, or your innovative special effects techniques, specialization can help you establish yourself as a leader in your field.

3. Connect with a Target Audience

By focusing on a specific niche, you can build strong connections with a dedicated customer base that shares your interests and values. A niche is a specific group of customers that a business focuses on. It's like a special area that the business is good at, and that makes it different from other businesses.

This can lead to repeat business, word-of-mouth referrals, and a loyal community of supporters who champion your brand.

4. Streamline Your Operations

Specialization can also simplify your operations by allowing you to focus on a specific area of expertise, streamlining your product offerings, and optimizing your marketing and sales strategies. This can help you work more efficiently, reduce costs, and increase profitability.

An online booking software like Booksy can be valuable tools for streamlining your operations and optimizing your scheduling, booking, and customer management processes. By leveraging technology and automation, you can save time, reduce errors, and provide a seamless customer experience, ultimately supporting your niche specialization strategy and enhancing your overall success

Essential Requirements to Start a Makeup Artist Business

• Essential Skills and Training: Ensure you have the necessary makeup artistry skills and consider obtaining professional training or certification from a reputable institution to enhance your credibility and expertise.
• High-Quality Tools : Invest in a comprehensive professional makeup kit with a wide range of high-quality products to cater to different skin tones, types, and preferences. Include essential tools, brushes, and sanitation supplies to ensure a safe and hygienic experience for your clients.
• Comprehensive Business Plan : Develop a detailed business plan that outlines your services, target market, pricing strategy, and financial projections. This roadmap can also assist in securing funding or support if needed, so be sure to research and comply with legal and regulatory requirements for operating a makeup business in your area.
• Strong Branding and Marketing Strategy : Establish a strong brand identity, including a memorable business name, logo, and visual aesthetic. Develop a comprehensive marketing strategy that utilizes both online and offline channels to reach your target audience and effectively promote your services.
• Legal Compliance : Register your business, choose a suitable structure (like LLC), and obtain any required licenses or permits. Also, get liability insurance to protect against potential claims.
• Portfolio Development : Build a portfolio showcasing your makeup work. This could include before-and-after photos, testimonials, and diverse styles. An online portfolio or social media profiles dedicated to your work can be very effective.
• Networking and Relationship Building: Connect with local photographers, event planners, and bridal shops to build a referral network. Establishing good relationships within the beauty industry can lead to client referrals and collaborations.
• Continuous Education : The makeup industry is continually evolving. Keep up with the latest trends, techniques, and products through workshops, online courses, and industry events. Workspace: Decide if you'll work from a home studio, travel to clients' locations, or rent a space. Your workspace needs will depend on your business model and target clientele.
• Workspace: Decide if you'll work from a home studio, travel to clients' locations, or rent a space. Your workspace needs will depend on your business model and target clientele.
• Customer Service Skills : Excellent customer service is vital. Be professional, punctual, and attentive to client needs to build a loyal customer base and positive reputation.

Launching a successful makeup artist business demands a unique blend of artistic talent, business know-how, and strategic planning. 

Developing a Makeup Business Plan  

As you embark on your makeup business journey,  taking the time to carefully consider each aspect of your plan, you'll increase your chances of success and gain a deeper understanding of the market, your target audience, and your competition. Your business plan should include key elements such as a 

• Mission statement
• Market analysis 
• Marketing strategy
•  Operational plan
• Financial projections

As you develop your plan, be sure to seek feedback and advice from experts or mentors in the industry to ensure that you're on the right track.

Service-Oriented Business Plan

Whenever you're starting a business it's essential to have a clear plan in place that outlines your service offerings, target audience, pricing strategy, and operational plan. Your plan should also include strategies for building a strong client base through effective marketing and networking. As you develop your plan, consider potential challenges and opportunities associated with running a service-based business, such as managing client expectations, scheduling appointments, and maintaining a high level of customer satisfaction. Seek feedback and advice from industry experts or mentors to ensure that your plan is comprehensive and realistic. With a well-crafted business plan in hand, you'll be well-positioned to launch your makeup services business and achieve success. 

Financial Planning and Budgeting

As you begin the process of launching a makeup business, financial planning and budgeting are critical steps . This plan should account for startup costs, such as makeup supplies, marketing expenses, and any necessary licenses or permits. Additionally, carefully consider your pricing strategy and develop realistic revenue projections based on market research and a thorough understanding of your target audience. A well-crafted financial plan will not only serve as a compass for your business but will also be essential in securing any necessary funding or investments. As you navigate the financial aspects of your makeup business, remember to stay true to your vision while keeping a watchful eye on the horizon of financial stability.

Here are some important things to keep in mind while crafting your financial planning and budgeting: 

• Accurately estimating startup costs, including supplies, equipment, and any necessary licenses or permits
• Researching and understanding the competitive landscape and pricing strategies of other makeup businesses in the market
• Setting realistic revenue projections based on the target audience, market demand, and pricing strategies
• Developing a budget that allocates funds for ongoing expenses, such as marketing, advertising, and operational costs

Legalities and Compliance in the Makeup Business

No matter the industry you’re in, it's important to ensure that your business is operating in compliance with legal requirements. This helps to protect both you and your clients, and can also give you peace of mind as you focus on growing your business. Research the laws and regulations that apply to your business, such as health and safety standards, product labeling requirements, and any licensing or certification requirements.

Asking Google it’s a great idea for quick answers, but it’s not tailored for everyone and might come with side risks when completely relying on it. Consult with a legal professional if necessary to ensure that you are fully compliant. Remember, taking the time to understand and comply with legal requirements can save you time, money, and headaches in the long run, and allow you to focus on what you do best - creating stunning makeup looks!

Choosing a Location for Your Makeup Business

Selecting the right location for your makeup business can be a critical factor in its success. Whether you're considering a retail space, a studio, or a combination of the two, carefully weigh your options to ensure that the location is both practical and aesthetically pleasing. Consider factors such as visibility, accessibility, parking availability, and proximity to your target audience. Think about your client's needs and preferences, and strive to choose a location that will be convenient and inviting for them. Also, take into account your personal preferences and vision for your business. Whether you prefer a chic studio in the heart of a bustling city or a quaint storefront in a charming neighborhood, make sure the location aligns with your overall goals and values. Remember, the right location can be a powerful catalyst for success in your makeup business!

Designing an Appealing Makeup Space or Website

Your makeup space or website can have a significant impact on the customer experience. Whether you're designing a physical space or a digital one, strive to create a welcoming and inviting atmosphere that reflects your brand's personality and values. Pay attention to details such as lighting, color scheme, decor, and layout, all of which can influence customer perception and engagement. Consider incorporating elements that enhance the customer experience, such as comfortable seating, soothing music, or engaging visuals. For your website, prioritize user-friendliness and ensure that it is visually appealing, easy to navigate, and optimized for search engines. Remember, creating a memorable and inviting makeup space or website can be a powerful way to differentiate your brand, attract new customers, and foster repeat business.

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Creating a Memorable Customer Experience

Your customers are the heart of your business, and providing them with a memorable and positive experience is essential to building a loyal clientele. Focus on building genuine connections with your customers, taking the time to understand their needs and preferences, and exceeding their expectations at every turn. Prioritize excellent customer service, offering prompt and friendly assistance, and addressing any concerns or issues professionally and effectively.

Consider offering added value such as personalized recommendations, exclusive offers, or loyalty programs to foster long-term relationships with your customers. Additionally, seek feedback and actively incorporate it into your business practices to continuously improve and exceed your customers' expectations. By prioritizing a customer-centric approach, you can build a loyal following and establish a reputation for excellence in the makeup industry.

Building Your Makeup Brand  

Crafting a strong brand identity.

Your brand should be unique, authentic, and consistent across all touchpoints, from your logo and packaging to your website and social media presence. Consider your brand's values, personality, and target audience as you craft a distinctive visual identity, voice, and messaging. Incorporate these elements into your marketing and communication strategies to create a cohesive and memorable brand experience. 

• Establish your brand's values : For example, if you prioritize sustainability, use eco-friendly packaging materials and donate a portion of your profits to environmental causes.
• Define your brand's personality : For instance, if you want to be known for fun, quirky makeup looks, create social media content that showcases your playful and creative side.
• Consistently use your brand's visual identity: Use your logo and color scheme consistently across all marketing materials, from business cards to your website.

By investing in a strong and distinctive brand identity, you can build credibility, foster trust, and drive business growth in the long term.

Marketing and Promoting Your Makeup Business

As a makeup business owner, you know that marketing is the fuel that powers growth and attracts customers. With an abundance of channels and tools available, it's important to develop a comprehensive marketing strategy that aligns with your brand and resonates with your target audience. From establishing an online presence to partnering with influencers, there are countless ways to promote your business and generate buzz.

Establishing an Online Presence and Utilizing Social Media

One key element of your marketing strategy should be establishing a strong online presence. This means creating a professional and user-friendly website, optimizing it for search engines, and engaging with customers through social media platforms such as Instagram and TikTok. Additionally, utilizing tools like scheduling and booking software can help streamline your business operations, improve customer experience, and enhance your overall marketing strategy. 

By leveraging technologies, you can effectively manage appointments, reduce no-shows, and build a loyal clientele, which can contribute to the growth and success of your makeup business.  

Launching Your Makeup Business

As you prepare to take your makeup business to new heights, crafting a memorable launch is paramount. Whether you opt for a grand in-person event or a sleek virtual affair, think big and think bold. Grab the spotlight with live makeup demonstrations, invite influencers to add some star power, and entice customers with exclusive deals and promotions. To build momentum, consider offering introductory specials or loyalty programs to attract new clients and keep them coming back. Word-of-mouth promotion can be a powerful tool, so incentivize your satisfied customers to spread the word by offering referral discounts. With a little creativity and strategic planning, you can create a buzz around your launch and kickstart your makeup business with a bang!

Cost Considerations in Starting a Makeup Business

Understanding the financial requirements is crucial for a successful makeup business launch. The cost to start a makeup business varies based on several factors, including the scale of the business, location, and business model. Initial expenses typically include product inventory, legal fees for business registration, insurance, marketing, and website development for online presence.  So here’s a small summary of things to keep in consideration when starting a makeup business

• Product inventory : Investing in high-quality makeup products is crucial to providing your clients with a top-notch experience.
• Legal fees : There may be legal costs associated with registering your business, obtaining licenses or permits, and consulting with a lawyer to ensure compliance with local laws and regulations.
• Insurance: Consider purchasing insurance to protect your business against potential risks and liabilities.
• Marketing : Investing in marketing efforts such as social media advertising, influencer partnerships, or local events can help build brand awareness and attract new customers.
• Website development: Having a professional website can help establish your online presence and make it easy for customers to find and book your services.

Starting a makeup business in the US can be a thrilling journey filled with creativity, strategy, and a deep understanding of the multifaceted beauty industry. By following this comprehensive guide, you've equipped yourself with the tools to build a brand that stands out, serves your client's needs, and establishes a solid presence in the competitive makeup marketplace. 

Remember, success in this industry requires a persistent drive to learn , adapt , and innovate , as well as a commitment to providing exceptional customer experiences that keep clients coming back. With passion, dedication, and the insights gained from this guide, you can turn your dreams of a thriving makeup business into a reality!

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How to Start a Profitable Makeup Business [11 Steps]

By Nick Cotter Updated Feb 02, 2024

Business Steps:

1. perform market analysis., 2. draft a makeup business plan., 3. develop a makeup brand., 4. formalize your business registration., 5. acquire necessary licenses and permits for makeup., 6. open a business bank account and secure funding as needed., 7. set pricing for makeup services., 8. acquire makeup equipment and supplies., 9. obtain business insurance for makeup, if required., 10. begin marketing your makeup services., 11. expand your makeup business..

Embarking on a makeup business venture requires a thorough understanding of the market landscape. A comprehensive market analysis will enable you to identify industry trends, understand your competition, and pinpoint your target customer base. Here are some key actions to take:

• Research industry trends: Look into current and future trends in the makeup industry such as sustainable and clean beauty products, technology integration, and personalized customer experiences.
• Analyze competitors: Identify direct and indirect competitors, evaluate their product range, pricing, marketing strategies, and market position. This will help you find gaps in the market that you can capitalize on.
• Understand your audience: Define your target demographic by considering factors like age, gender, income level, and buying habits. Use surveys, focus groups, and social media analytics to gain insights into their preferences and needs.
• Assess market size and potential: Estimate the size of your target market and forecast potential growth. This involves looking at industry reports, market research data, and economic indicators relevant to the makeup industry.
• Regulatory considerations: Ensure you are aware of the local and international regulations pertaining to cosmetics, including ingredient usage, labeling, and safety standards.

Are Makeup businesses profitable?

Yes, makeup businesses can be very profitable depending on the type of business, location, and customers. Many makeup businesses specialize in providing professional makeup services to customers, such as bridal makeup, special event makeup, and makeup lessons. Additionally, selling makeup products, such as cosmetics and skin care items, can also be a highly profitable venture. Many makeup businesses also offer online sales of their products, which can also increase their profitability.

Embarking on the journey of starting a makeup business requires a solid foundation, and drafting a thoughtful business plan is a critical step in that process. A well-crafted business plan will not only guide your strategy and operations but also attract potential investors. Here are key points to consider when drafting your makeup business plan:

• Define your brand identity, including the name, logo, and the values that set your makeup line apart from competitors.
• Conduct market research to understand your target demographic, their preferences, and the current makeup trends they follow.
• Outline your product range, including details about the types of makeup you will offer, the ingredients, and any unique selling points.
• Develop a marketing and sales strategy, detailing how you will promote your products and which channels you will use to reach your customers.
• Establish a pricing strategy that covers costs, competitor pricing, and perceived customer value.
• Detail your operational plan, including suppliers, manufacturing processes, and logistics for distribution.
• Create financial projections with an estimated budget, forecasting sales, and planning for contingencies.
• Identify your management team and any advisors, detailing their roles, experiences, and how they will contribute to the business's success.

How does a Makeup business make money?

A makeup business can make money by selling products, offering makeup services, such as makeup application or makeup lessons, or by offering makeup classes. Additionally, they may offer other services such as facials, waxing, hair styling, or even cosmetic consultations. They can also make money by selling makeup products online or through retail stores, as well as through advertising and marketing.

Developing a makeup brand is a creative and strategic process that involves defining your brand's identity and product line. It's crucial to differentiate your brand in the competitive beauty market by focusing on unique value propositions and high-quality products. Consider the following steps to help guide your brand development:

• Identify Your Niche: Determine the segment of the market you want to appeal to, whether it's organic products, luxury items, or affordable everyday wear.
• Define Your Brand Identity: Craft a compelling brand story, mission statement, and visual elements like your logo and packaging that resonate with your target audience.
• Select a Product Line: Decide on the initial range of products you want to offer, focusing on those that align with your brand's niche and identity.
• Formulate Your Products: Work with manufacturers or in-house experts to create formulations that meet quality standards and regulatory requirements.
• Test Your Products: Conduct thorough testing for safety, efficacy, and consumer satisfaction before launching.
• Plan Your Marketing: Develop a marketing strategy that leverages social media, influencers, and traditional advertising to build brand awareness.

How to come up with a name for your Makeup business?

When coming up with a name for your makeup business, think of something that reflects your brand identity. Consider words that evoke the feeling you want your customers to have when they use your products. Brainstorm several ideas and narrow them down to your favorite one. Finally, make sure you check that the name is available for you to use by looking it up on the internet to ensure it is not taken by another business.

To ensure your makeup business operates legally and professionally, formalizing your business registration is a critical step. This process will vary depending on your location and the structure of your business. Below are general guidelines to help you through this phase:

• Choose a Business Structure: Decide whether you want to operate as a sole proprietorship, partnership, limited liability company (LLC), or corporation. Each has different legal and tax implications.
• Register Your Business Name: If your business name is different from your own name, you'll need to register it with the appropriate government authority, often called 'Doing Business As' (DBA) registration.
• Obtain Necessary Licenses and Permits: Check with your local and state authorities to find out what is required for a makeup business, which may include a general business license, a cosmetology license, or a seller's permit.
• Apply for an Employer Identification Number (EIN): If you plan to hire employees or operate as a corporation or partnership, you'll need to get an EIN from the IRS for tax purposes.
• Register for State Taxes: Depending on your location, you may need to register for state taxes like sales tax or payroll taxes.
• Understand Zoning Laws: Ensure that your business location complies with local zoning laws, which may affect where you can legally operate your business.

Resources to help get you started:

Explore pivotal resources designed for makeup entrepreneurs to gain insights on market trends, operational strategies, and growth advice:

• Beauty Business Journal: Subscription-based insights on market trends, strategic advice, and business case studies in the beauty industry. https://www.beautybusinessjournal.com
• Cosmetics Business: Offers comprehensive news, reports, and analysis on global cosmetic developments and strategies. https://www.cosmeticsbusiness.com
• Mintel Beauty & Personal Care: Provides market research reports and analysis on beauty and personal care trends and innovations. https://www.mintel.com/beauty-personal-care
• CEW Beauty News: Delivers the latest in beauty industry news, trends, and executive moves directly to your inbox. https://www.cew.org/beauty-news
• The Business of Fashion: Offers analytical articles and reports on the beauty sector's overlapping with fashion, including strategic business advice. https://www.businessoffashion.com

Before launching your makeup business, it's critical to ensure you're fully compliant with local laws and regulations. Acquiring the necessary licenses and permits is a crucial step to legally sell your products and services. Below is a guide to help you identify and obtain the required documentation:

• Business License: Check with your city or county government to apply for a general business license, a basic requirement for operating a business legally.
• Cosmetic Manufacturing License: If you're producing makeup, you might need this license from the Food and Drug Administration (FDA) or its local equivalent.
• Seller's Permit: This permit allows you to sell products and is usually required for businesses that have a physical presence or sell goods to the public.
• Health Department Permit: If your business involves on-site makeup application, you may need to comply with local health department regulations.
• Professional Licenses: Depending on your location, a cosmetology or esthetician license may be required to apply makeup on clients.
• Trademark Registration: Consider registering your brand name and logo as a trademark to protect your brand identity.
• Home Occupation Permit: If operating from home, this permit ensures your business complies with local zoning laws.

What licenses and permits are needed to run a makeup business?

Depending on location, the licenses and permits needed to run a makeup business can vary. Generally, a business license and/or any other local business permits and/or approvals may be required, as well as any specific licensing and certifications necessary based on rules and regulations of your particular state. You may also need a tax identification number (TIN). Additionally, you may need to obtain liability insurance for your business.

Getting your makeup business's finances in order is crucial for managing cash flow, taxes, and potential funding. A dedicated business bank account helps separate personal and business finances, while securing funding ensures you have the resources to grow. Here's how you can accomplish these key steps:

• Research banks: Look for banks offering low fees, good customer service, and business-friendly services. Consider both traditional banks and online banking options tailored for small businesses.
• Gather required documents: Typically, you'll need your business registration documents, EIN (Employer Identification Number), and personal identification to open an account.
• Choose the right account type: Decide between checking, savings, or a merchant services account based on your business needs.
• Understand your funding needs: Assess how much capital you'll need to start and maintain your business, including inventory, marketing, and other operational expenses.
• Explore funding options: Consider small business loans, lines of credit, investors, or crowdfunding platforms. Ensure you understand the terms and conditions of any funding you pursue.
• Prepare a strong business plan: A well-crafted business plan can improve your chances of securing loans or investments by demonstrating the viability of your makeup business.

Setting the right prices for your makeup services is crucial, as it affects your profitability and market positioning. Consider the value you provide, your experience, and the competitive landscape. Follow these guidelines to establish an effective pricing strategy:

• Analyze your costs: Account for products, travel, time, and overhead expenses to ensure each service is profitable.
• Research market rates: Look at what competitors charge for similar services to gauge what customers are willing to pay.
• Offer tiered pricing: Create service packages ranging from basic to premium to cater to different client budgets and needs.
• Factor in your expertise: If you have specialized skills or certifications, price your services accordingly to reflect your expertise.
• Consider time-based pricing: For longer sessions, set higher rates to compensate for the extended time commitment.
• Introduce loyalty discounts: Encourage repeat business by offering discounted rates for regular clients.
• Adjust prices over time: Regularly review and adjust your pricing to reflect changes in costs, demand, and experience level.

What does it cost to start a Makeup business?

Initiating a makeup business can involve substantial financial commitment, the scale of which is significantly influenced by factors such as geographical location, market dynamics, and operational expenses, among others. Nonetheless, our extensive research and hands-on experience have revealed an estimated starting cost of approximately $14000 for launching such an business. Please note, not all of these costs may be necessary to start up your makeup business.

To start a makeup business, having the right equipment and supplies is essential for providing professional service. From brushes to palettes, each tool plays a crucial role in the application and final look. Here's a guide to help you acquire the necessary makeup equipment and supplies:

• Brush Set: Invest in a high-quality set of brushes for different applications, including foundation, eyeshadow, blush, and contouring.
• Foundation Range: Stock a wide range of foundation shades to cater to various skin tones.
• Eye Makeup: Include a selection of eyeshadows, eyeliners, mascaras, and brow products.
• Lip Products: Offer a variety of lipsticks, glosses, liners, and balms in different colors and finishes.
• Palettes: Have a range of blush, contour, and highlight palettes suitable for different skin tones.
• Sanitation Supplies: Ensure cleanliness with brush cleaners, alcohol sprays, and disposable applicators.
• Makeup Cases: Use professional makeup cases for organization and easy transportation of your products.
• Lighting and Chairs: Portable and adjustable lighting and comfortable chairs are important for a professional setup.
• Skincare: Maintain a selection of skincare products to prep clients' skin before makeup application.

List of Software, Tools and Supplies Needed to Start a Makeup Business:

• Computer and Printer
• Accounting Software
• Marketing Software
• Makeup Products (foundation, eyeshadow, blush, etc.)
• Brushes and Applicators
• Makeup Palettes and Color Wheels
• Makeup Mirrors
• Makeup Storage and Organization Solutions
• Advertising Materials
• Business Cards
• Website and Social Media Accounts

Securing the right business insurance is a critical step in safeguarding your makeup business. It can protect you from financial losses due to unforeseen events such as accidents, theft, or lawsuits. Here's a guide to help you obtain the necessary insurance:

• Identify the types of insurance your makeup business might need, such as general liability insurance, professional liability insurance, and product liability insurance.
• Consult with a seasoned insurance agent who specializes in small businesses or the beauty industry to understand the specific risks and the coverage that can mitigate them.
• Shop around to compare quotes from different insurance providers to find a policy that matches your budget and coverage requirements.
• Consider the value of your inventory and equipment when determining the amount of coverage you need to avoid being underinsured.
• Keep in mind that some venues or events may require proof of insurance before allowing you to operate on their premises.
• Regularly review and update your insurance policy to reflect changes in your business, such as the introduction of new products or services.

Now that you've honed your makeup skills and are ready to attract clients, it's time to focus on marketing your makeup services. Effective marketing will help you reach potential clients, build your brand, and establish your presence in the beauty industry. Here are some strategic steps to get your makeup business noticed:

• Develop a Brand Identity: Create a memorable logo, choose a color scheme, and develop a voice that reflects your makeup style and philosophy. This helps in making your brand recognizable and attractive to clients.
• Launch a Professional Website: Your website should showcase your portfolio, list your services and prices, provide a booking system, and include customer testimonials to build trust.
• Utilize Social Media: Regularly post before-and-after photos, makeup tutorials, and client reviews on platforms like Instagram, Facebook, and TikTok to engage with your audience and showcase your work.
• Offer Promotions and Discounts: Attract new clients with introductory offers, discounts for referrals, or bundled service packages.
• Network with Other Professionals: Collaborate with local photographers, event planners, and hair stylists who can refer clients to you.
• Engage in Local Events: Participate in bridal expos, fashion shows, and beauty conventions to increase visibility and network with potential clients.
• Invest in Paid Advertising: Consider using targeted ads on social media or Google to reach a specific audience interested in makeup services.
• Encourage Word-of-Mouth: Provide exceptional service that inspires your clients to recommend you to others.

Once your makeup business is up and running, expanding your reach and services can help you to attract a broader customer base and increase your revenue. Here are some strategies to consider when looking to grow your business:

• Introduce New Products or Services: Keep your offerings fresh by researching trends and adding new products or services that align with customer demands.
• Collaborate with Influencers: Partner with beauty influencers and bloggers to reach a wider audience and gain credibility in the makeup industry.
• Offer Makeup Classes or Workshops: Educate others by providing classes or workshops, positioning yourself as an expert in the field and adding another revenue stream.
• Expand Online Presence: Invest in a strong online marketing strategy, including SEO, to increase your visibility on search engines and attract more customers.
• Explore Retail Opportunities: Consider selling your products in local boutiques or collaborating with larger retailers to get your brand in front of more people.
• Attend Trade Shows: Participate in beauty expos and trade shows to network with industry professionals and showcase your products to a larger audience.

• Diploma in Organic Skincare Formulation
• The International Organic Skincare Entrepreneur Program
• Diploma in Organic Haircare Formulation
• Diploma in Beauty Brand Business Management
• The Lab at Formula Botanica
• Advanced Diploma in Organic Cosmetic Science
• Certificate in Organic Anti-Ageing Skincare
• Certificate in Natural Cosmetic Preservation
• Certificate in Cosmetic Stability Testing
• Free Training
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How to Write your Beauty Products Business Plan

Embarking on the journey to create your own beauty brand is an exciting yet challenging adventure. As an indie brand founder, you need more than just passion and creativity; you need a clear vision and a robust business plan. This plan serves as your roadmap, guiding you through the complexities of launching a cosmetics company. But where do you begin, and what should your business plan include?

In this blog post, we’ll break down the ten essential steps every aspiring beauty entrepreneur must take to craft a successful business plan. Whether you’re dreaming of launching a beauty empire from your home or taking the first steps in your entrepreneurial journey, this guide is for you.

          View this post on Instagram                       A post shared by Formula Botanica (@formulabotanica)

Our step-by-step video guide below is based on the business planning exercises we provide as part of our Diploma in Beauty Brand Business Management . The diploma is an extensive, six-module course that teaches you how to start a cosmetic business at home and build a beauty brand from scratch. Pre-enrol to find out more about this diploma and our other award-winning courses.

Step 1: Why your beauty business needs a plan

Writing a business plan isn’t just a checkbox task; it’s your roadmap to success. Before diving in, ask yourself why you’re crafting this plan. It’s more than a document—it’s your guide to launching and growing a thriving beauty business.

Although writing a business plan might seem daunting, it’s crucial to focus your energy, time, and resources on achieving your goals. Your plan is not just for investors; it’s a strategic tool for decision-making and ensuring smooth day-to-day operations.

Take the time to build your business plan, as it involves essential groundwork: discovering your vision, defining your brand, identifying your market, understanding competitors, and mapping out a financial plan. Each step prepares you for success and ensures you’re ready for what’s ahead.

Step 2: Defining your brand mission and vision

Before you dive into designing your beauty brand’s logo or packaging, take a step back and consider why you’re in business in the first place. Your vision and mission are the guiding lights of your brand, and they should come first.

Your vision statement is about your bigger dreams and how you want to make a difference in the world. It’s not just about selling organic products; it’s about the impact you want to have. For instance, at Formula Botanica, our vision is to make natural formulation as commonplace as cookery.

Your mission statement is how you plan to achieve that vision. It should be practical, active, and specific. For us at Formula Botanica, our mission is to “teach the world to formulate,” which we accomplish through our online courses.

Crafting your vision and mission isn’t a quick task or a generic exercise. These statements are the heart of your beauty business, defining why your brand exists and how it serves your customers. Take the time needed to get them right before moving on to the next steps. Total clarity here is crucial, as these statements will guide everything else you do.

Step 3: Defining your niche and customers

Having a clear vision and mission is great, but without knowing your niche or target market, your beauty business might not get off the ground. Understanding exactly who you’re selling to is crucial. You need to know who they are, how they live, and how they shop. This might seem tedious, but this is a crucial step.

Once you identify your target customer, everything becomes easier. You’ll know which marketing messages resonate, what they’re looking for, and how to effectively reach them. Your niche can’t just be ‘organic’ or ‘natural’—those markets are saturated. Instead, explore untapped niches like skincare for women over 50, athletes, or teenage boys. 

While you don’t need to follow every trend, thorough market research is essential. Identify your niche and position your brand strategically within the market. Find out about the latest market trends below:

Beauty news: your exclusive guide to the top 10 ingredients for 2024

Step 4: Detailing your beauty products

Your business plan must clearly outline your initial products, their unique selling propositions, and how they meet your target customers’ needs. This might sound straightforward, but many beauty entrepreneurs face costly challenges when they change direction after launching. Often, introducing new products can distract from the essential tasks of marketing and sales.

When you’re formulating natural skincare or haircare, it’s easy to get carried away with a wide array of products. But remember, as a business, you need a cohesive lineup that resonates with your audience and offers a compelling sales proposition. Your products should work together seamlessly as part of a beauty routine that solves your customers’ problems.

You don’t need a massive product range to make a splash in the market. In fact, launching with a single, standout ‘hero’ product can be incredibly effective. Focus on how your products complement each other, and consider the growing trend of sustainable consumption—think about creating a versatile product that delivers multiple benefits.

Step 5: Researching your competitors

Your competitors should have a prominent place in your skincare business plan. While your unique perspective and experiences as a founder give your brand a distinctive edge, keeping an eye on the key players in your niche is essential—especially at your product range’s price point. Understanding your competitors not only keeps you sharp but also provides crucial insights any potential investor will want to know early on.

Researching competitors can be challenging, especially when their websites are filled with PR jargon that doesn’t reveal much. But don’t let that deter you. Dive deeper by looking for interviews with their founders and following them on social media. Competitor research can reveal opportunities for your brand to thrive and uncover strategies to boost customer loyalty and growth. By understanding what works for them and what doesn’t, you can identify their strengths and weaknesses, which helps you position your brand more effectively.

However, don’t become obsessed with your competitors. Instead, check in on their activities every few months. Your goal isn’t to mimic them but to shape your own brand narrative. If you have clarity on your mission, vision, niche, and target customer, you’re already on solid ground. Keeping tabs on the market is simply smart business practice and can guide you to make informed decisions that enhance your brand’s position.

Step 6: Determining your manufacturing strategy

Your manufacturing strategy is a key part of your business plan. Decide whether to produce your beauty products in your own lab , partner with a contract manufacturer, or use private-label products. Each option has its pros and cons and should align with your brand’s mission and vision. Consider whether you plan to stick with your initial choice or switch models as you grow. We cover all this in detail in our Diploma in Beauty Brand Business Management.

Each manufacturing model affects crucial aspects like distribution, logistics, financing, and retailer contracts. How many units do you plan to produce annually? Which model aligns with your ambitions and lifestyle? Your manufacturing strategy directly impacts your overall business model and operational strategy.

There’s no one-size-fits-all answer, but understand the implications of your choice. While making products at home in small batches might seem ideal, many entrepreneurs face rapid growth and need to quickly transition to outsourced manufacturing to meet demand. Consider your vision, time, staffing, and financial situation carefully, as this decision is critical to your success.

Step 7: Determining your retail strategy

We’ve seen many indie beauty entrepreneurs think they can sell direct to consumers from their website alone. But to do this successfully, you need to be a skilled digital marketer—or hire one. While selling directly from your site allows you to keep all the profits, getting your products stocked in stores and online retailers can significantly boost your brand’s visibility. Retailers have established customer bases, while you’ll need to build brand awareness from scratch.

Your work in defining your niche, target customers, and product range should guide you in choosing the right retail partners. Consider where your brand fits: mass, “masstige,” premium, or luxury categories. Which retailers do you want to stock your products, and what are their profit margins? How will these margins affect your manufacturing model and financial forecasts? Should you work with distributors, especially overseas, and how do their margins impact your bottom line?

Address these questions in your business plan. You don’t want to be stuck figuring out how to sell your products once they’re sitting in boxes in your living room or warehouse!

Step 8: Outlining funding options

We might have left finances to last, but securing funding is a thread that runs through your entire business plan. Every decision you make has financial implications, and a firm grasp of your finances is essential for a successful beauty brand.

Your business plan should outline the various funding options available to you, from “love money” from friends and family to bank loans and crowdfunding. Consider both short-term and long-term funding strategies, and be prepared to answer potential investors’ questions. Show them why you and your business are worth investing in. We cover finances in the following posts:

How to start a cosmetics business from home How much does it cost to start a beauty business? How to start a beauty brand on a small budget Budget-friendly strategies to start a beauty business

Step 9: Learning about financial forecasting

If you’re reading this, you are likely thinking of starting an indie beauty business. Writing a business plan in your first year is crucial, especially if you’re pre-revenue or pitching to investors. Even without sales, you can highlight key market data and your brand’s potential.

Begin your financial forecast with a timeline showcasing milestones such as launch date, key achievements, brand development, current stage, and investments raised. If you’re already selling, include details of investments, sales, and financial projections.

Don’t forget to factor in hidden expenses like retailer promotions. Stores often expect you to contribute to product promotions, and cash flow is vital. Waiting for retailer payments can lead to cash shortages, halting operations if funds are tied up in stock and you can’t buy materials or fund promotions.

Financial forecasting is integral to your daily business operations, making it essential to regularly update your business plan. Keep a close eye on profit and loss, and track trends monthly. Learn about financial forecasting, and consider hiring an accountant to prepare for day-to-day operations and investor discussions.

Step 10: Using your business plan

Congratulations on completing the first draft of your business plan! Now comes the most crucial step: using your plan effectively rather than letting it gather dust in a filing cabinet. Your business plan is a living document, a roadmap to revisit and adjust as you measure your business’s health and performance. It’s not just for impressing banks and investors at the start. So, how should you use it and how often? Here’s a quick guide: 

• Weekly: Keep an eye on your competitors and market trends. Have things changed that might impact your product range, pricing, or development? While you need time to establish your market position, use your plan to monitor shifts and avoid knee-jerk reactions.
• Monthly:   Review your financial forecast. Compare your budget against actual sales and expenses to see if you’re on track. Whether you’re ahead or behind, this gives you a clear benchmark for your business’s health and guides your next steps.
• Annually: Reassess your mission, vision, and niche. Was your initial research accurate? Has your brand and product range proved its concept? A mastermind group or mentor can help you evaluate necessary changes to your core statements. Base these decisions on sound financials, too.

Formulate your future 

We hope these insights have provided you with a solid foundation for starting your beauty business. If you dream of creating a brand that’s bigger than yourself—whether it’s a skincare line, haircare range, or makeup collection that transforms lives—we’re here to help you turn that vision into reality. Learn to formulate your own products and bring your brand to market with confidence.

Pre-enrol now in our Diploma in Beauty Brand Business Management – the ultimate online training programme for launching or growing your indie beauty brand. Think of it as a Beauty Brand MBA, combining award-winning teaching materials with insights from a web summit featuring 30+ influential speakers from the beauty and business world.

Or why not pre-enrol in one of our formulation courses in skincare or haircare and change your life through natural formulation? All our courses are easy, fun, empowering and life-changing.

Start-up costs for a beauty business can vary greatly based on your goals and circumstances.  If you choose to outsource, be prepared for higher initial costs, as most contract manufacturers require large minimum order quantities. Branding and packaging can also add up, especially if you’re targeting the luxury market.

How much does it cost to start a beauty business?

Writing a business plan can help you navigate these expenses and plan your finances as your business grows. You can start on a smaller budget by making products at home to sell at local markets. Identify your personal goals and lifestyle needs to estimate your start-up costs effectively. 

Indie beauty is booming, and more skincare entrepreneurs are finding their niche in the market. However, simply being “natural,” “green,” or “organic” isn’t enough to differentiate your brand. To stand out, focus on how your products address specific consumer needs and solve real problems. Avoid trying to be everything to everyone. Writing a beauty brand business plan will help you refine your ideas, define a viable product offering, identify your target customer base, and determine your route to market.

Join us at Formula Botanica, where tens of thousands of students and followers take our free and paid online courses to learn how to formulate organic skincare and haircare for themselves or to sell and also how to set up a beauty brand and business.

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How to become an organic skincare formulator, free training, how to become an organic skincare entrepreneur, leave us a comment.

Liz was Formula Botanica’s Content Coordinator between August 2020-2024. Liz worked as a professional blogger, journalist and site developer for many years and was also part of the Formula Botanica student community. Read more about the Formula Botanica Team .

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How To Write a Makeup Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for makeup businesses that want to improve their strategy and/or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every makeup business owner should include in their business plan.

Download the Ultimate Business Plan Template

What is a Makeup Business Plan?

A makeup business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Makeup Business Plan?

A makeup business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Makeup Business Plan

The following are the key components of a successful makeup business plan:

Executive Summary

The executive summary of a makeup business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your makeup company
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your makeup business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your makeup firm, mention this.

You will also include information about your chosen makeup business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a makeup business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the makeup industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, the customers of a makeup business may include:

• Special occasion customers: those who need makeup for weddings, proms, etc.
• Fashion models: people who need a professional look on a daily basis
• Professionals: makeup artists and other professionals in the industry

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or makeup services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your makeup business may have:

• Quality of products
• Range of products
• Customization services
• Competitive prices
• Expertise of staff

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or, you may promote your makeup business via word-of-mouth.

Operations Plan

This part of your makeup business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a makeup business include reaching $X in sales. Other examples include adding new products or services, expanding to new markets, or launching a new marketing campaign.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific makeup industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue : how much revenue you generate.
• Cost of Goods Sold : These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss) : Once expenses and revenue are totaled and deducted from each other, this is the net income or loss.

Sample Income Statement for a Startup Makeup Business

Balance Sheet

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Makeup Business

Cash Flow Statement

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup makeup business.

Sample Cash Flow Statement for a Startup Makeup Business

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your makeup company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

The goal in creating your business plan is to articulate a clear and concise message that will serve as your roadmap to success. A well-written business plan will also help you secure funding from investors, lenders, or other sources.   

Finish Your Makeup Business Plan in 1 Day!

Other helpful articles.

How To Write a Beauty Business Plan + Template

How To Write a Beauty Bar Business Plan + Template

How To Write a Beauty Supply Business Plan + Template

How To Write a Bridal Makeup Business Plan + Template

How To Write a Makeup Artist Business Plan + Template

How To Write a Permanent Makeup Business Plan + Template

How to Start a Cosmetic Business

Starting a cosmetic business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful cosmetic business.

Importantly, a critical step in starting a cosmetic business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

15 Steps To Start a Cosmetic Business:

• Choose the Name for Your Cosmetic Business
• Determine the Type of Cosmetic Business You Will Launch
• Develop Your Cosmetic Business Plan
• Choose the Legal Structure for Your Cosmetic Business
• Secure Startup Funding for Your Cosmetic Business (If Needed)
• Secure a Location for Your Business
• Register Your Cosmetic Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Cosmetic Business
• Buy or Lease the Right Cosmetic Business Equipment
• Develop Your Cosmetic Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Cosmetic Business
• Open for Business

1. Choose the Name for Your Cosmetic Business

The first step to starting a cosmetic business is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your cosmetic business:

• Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing . Come up with a name that reflects the desired brand and/or focus of your cosmetic business.

2. Determine the Type of Cosmetic Business You Will Launch

The next step is to determine the type of cosmetic business you will launch. The three main types of cosmetic businesses are:

• Retail Cosmetics Business : This is a business that sells cosmetics directly to consumers through retail stores.
• Wholesale Cosmetics Business : This type of cosmetic business supplies other retailers with cosmetic products.
• Manufacturing Cosmetics Business: This type of business manufactures cosmetic products and then sells their products wholesale or retails. 

3. Develop Your Cosmetic Business Plan

One of the most important steps in starting a cosmetic business is to develop your cosmetic business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your cosmetic business.
• Company Overview – this section tells the reader about the history of your cosmetic business and what type of cosmetic business you operate. For example, are you a manufacturer, retailer or wholesalerr? 
• Industry Analysis – here you will document key information about the cosmetic industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your cosmetic business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your cosmetic business make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

4. choose the legal structure for your cosmetic business.

Next you need to choose a legal structure for your cosmetic business and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the cosmetic business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a cosmetic business together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a cosmetic business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a cosmetic business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your cosmetic business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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5. Secure Startup Funding for Your Cosmetic Business (If Needed)

In developing your cosmetic business plan, you might have determined that you need to raise funding to launch your business. 

If so, the main sources of funding for a cosmetic business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a cosmetic business that they believe has high potential for growth.

6. Secure a Location for Your Business

Having the right space can be important for your cosmetic business, particularly if you’d like to meet clients there.

To find the right space, consider:

• Driving around to find the right areas while looking for “for lease” signs
• Contacting a commercial real estate agent
• Doing commercial real estate searches online
• Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space

7. Register Your Cosmetic Business with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

8. Open a Business Bank Account

It is important to establish a bank account in your cosmetic business’ name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

9. Get a Business Credit Card

You should get a business credit card for your cosmetic business to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

10. Get the Required Business Licenses and Permits

There are a few licenses and permits you’ll need to operate a cosmetic business. The most common ones are:

Business License – A business license is generally required in order to start a business. The requirements for obtaining a business license vary by state, so be sure to check with your local government office for more information.

Tax ID Number – Also known as an Employer Identification Number (EIN), a tax ID number is needed to pay federal and state taxes on behalf of your business.

Sales Tax Permit – If you’ll be selling products or services in your state, you’ll need to apply for a sales tax permit from your state’s department of revenue.

Health Department Permit – If you’ll be manufacturing or selling any type of cosmetic product, you’ll likely need to obtain a health department permit from your state’s health department.

Nearly all states, counties and/or cities have license requirements including:

• Zoning Approval : typically at the city or county level, this provides authorization for construction or use of a building or land for a particular purpose
• Fire Department Approval : a process by which the local fire department reviews and approves the installation of a fire alarm system.

Depending on the type of cosmetic business you launch, you will have to obtain the necessary state, county and/or city licenses.

11. Get Business Insurance for Your Cosmetic Business

When starting a cosmetic business, it’s important to protect your business with the right insurance. Here are some of the most common types of insurance businesses should consider:

General Liability Insurance – This type of insurance protects your business from any legal claims made against it. For example, if someone trips and falls in your store, general liability insurance would help cover the costs of any legal proceedings.

Product Liability Insurance – This type of insurance protects your business from any legal claims made against it for products that cause injury or property damage. For example, if a customer is injured by one of your products, product liability insurance would help cover the costs of any legal proceedings.

Commercial Property Insurance – This type of insurance protects your business from any damage or loss to your property. For example, if a fire destroys your office building, commercial property insurance would help cover the costs of repairing or rebuilding the building.

Business Income Insurance – This type of insurance protects your business from any loss of income due to a disaster or accident. For example, if your business is unable to operate for a period of time after a fire, business income insurance would help cover the lost income.

Workers’ compensation insurance : If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs. 

12. Buy or Lease the Right Cosmetic Business Equipment

Before you can start your cosmetic business, you need to buy or lease the right equipment. Here are some of the most common pieces of equipment you will need:

• Countertops and Display Cases – You will need a countertop to display your products and a case to store them in.
• Storage Cabinets and Shelving – You will need cabinets and shelving to store your products and supplies.
• Labels and Printers – You will need labels to identify your products and a printer to print those labels.
• Scale – You will need a scale to weigh your products.
• Cash Register – You will need a cash register to process payments.
• Computers – You will need computers to manage your business operations.

There are many other pieces of equipment that you may need depending on the type of cosmetic business you launch. For example, if you plan to manufacture cosmetics, you will need additional equipment such as mixers, blenders, and ovens. Talk to other cosmetic business owners in your area or consult with an equipment supplier to get a complete list of the equipment you need for your specific business.

13. Develop Your Cosmetic Business Marketing Materials

Marketing materials will be required to attract and retain customers to your cosmetic business.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your cosmetic business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional cosmetic business website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your cosmetic business.

14. Purchase and Setup the Software Needed to Run Your Cosmetic Business

When starting a cosmetic business, there are a few key pieces of software that you will need. The first is accounting software. This will help you manage your finances, including tracking expenses and income. The second is a customer relationship management (CRM) system. This will help you keep track of customer information, such as contact details, purchase history and preferences. Finally, you will also need a web hosting service to host your website.

Research the software that best suits your needs, purchase it, and set it up.

15. Open for Business

You are now ready to open your cosmetic business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

How to Finish Your Cosmetic Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

How to Start a Cosmetic Business FAQs

Is it hard to start a cosmetic business.

There is no one-size-fits-all answer to this question, as the ease or difficulty of starting a cosmetic business will vary depending on your skills, experience, and resources. 

However, if you follow the steps above, you should be able to start your cosmetic business without too much difficulty.

How can I start a cosmetic business with no experience?

If you don't have any experience in the cosmetic industry, it might be a good idea to consult with an experienced business professional. There are many resources available to help you get started, such as online tutorials, books, and even business courses.

Another option is to start a smaller cosmetic business. This will allow you to gain experience and learn the ropes before expanding into a larger business.

Finally, remember that starting a cosmetic business takes time and hard work. Don't give up if things don't go as planned in the beginning - just keep working hard and you'll be successful in no time!

What type of cosmetic business is most profitable?

The profitability of a cosmetic business will vary depending on the products and services offered.

However, some of the most profitable cosmetic businesses are those that offer high-end products and services. This is because customers are willing to pay more for premium products and services.

Another factor that affects profitability is location. A cosmetic business that is located in a high-traffic area, such as a city centre or shopping district, will likely be more profitable than one that is located in a rural area.

Finally, the type of cosmetic business you start will also affect profitability. For example, a hair salon is likely to be more profitable than a nail salon.

How much does it cost to start a cosmetic business?

Like most businesses, the cost to start a cosmetic business can vary depending on the size and scope of the operation. The average startup range is between $10,000 and $30,000.

This cost can include everything from equipment and supplies to marketing and advertising costs.

One of the biggest expenses is likely to be the cost of setting up a storefront or office. This could include things like rent, utilities, and marketing materials.

Another major expense is likely to be inventory. You'll need to purchase products to sell, and this can be costly, especially if you are offering a wide range of products.

Finally, you'll need to factor in costs like accounting and legal services, as well as employee salaries.

What are the ongoing expenses for a cosmetic business?

The ongoing expenses for a cosmetic business can vary depending on the size and scope of the operation. The average ongoing expenses range between $1,500 and $5,000 per month. This could include things like rent, utilities, inventory costs, advertising costs, and employee salaries.

However, some of the most common expenses include:

• Rent or mortgage payments
• Utilities, such as electricity and water
• Employee salaries
• Marketing and advertising costs
• Product inventory
• Accounting and legal fees

How does a cosmetic business make money?

A cosmetic business can make money in a number of ways, including through product sales, services, and advertising.

One of the most common ways to make money from a cosmetic business is through product sales. This could include selling products to consumers directly, or through retailers.

Another way to make money from a cosmetic business is by providing services. This could include things like beauty treatments, such as facials or massages, or hair and makeup services.

Finally, businesses can make money through advertising. This could involve placing ads in local newspapers or magazines, or on websites or television channels.

Is owning a cosmetic business profitable?

Owning a cosmetic business can be profitable. The average annual income for a cosmetic business owner is around $60,000, but this number can vary depending on the type of services offered and the location of the business.

Some of the biggest benefits of owning a cosmetic business include:

• Flexible hours
• Low overhead costs
• Ability to work from home

Some of the key things you can do to make your cosmetic business more profitable include:

• Offering a variety of services : This will help you appeal to a larger audience, and it can also help you attract new clients.
• Pricing your services competitively : You don't want to charge too much or too little, but rather find a price that is reasonable and fair.
• Investing in marketing and advertising : This is essential for any business, but it is especially important for a cosmetic business, as you need to generate awareness about your services.
• Creating a strong brand identity : A strong brand identity can help your business stand out from the competition.
• Offering customer incentives : This could include things like discounts, loyalty programs, or free products/services.  

Why do cosmetic businesses fail?

A cosmetic business can fail for a number of reasons, such as a lack of marketing, an ineffective sales strategy, no competitive edge, and poor customer service.

Many businesses also fail because they don't research their target market sufficiently and instead try to appeal to everyone, which can be a costly mistake. It's important to understand what your target market wants and how you can best serve their needs.

Another common reason for business failure is a lack of investment in training and education, which can keep businesses from adapting to industry changes and keep them from being able to offer the latest services and products.

Finally, many businesses fail because they're not run efficiently and end up wasting valuable resources. This can be avoided by using cloud-based software, outsourcing tasks, and investing in good organizational systems.

Who are key players in the cosmetic market?

The cosmetic market is made up of a variety of different players, including small businesses, large enterprises, and even individuals.

Some of the key players in the market include:

• Estee Lauder
• Procter & Gamble

However, there are many other players in your specific target market, and it is important to research the market to identify the key players that may have the most direct influence on the success of your business.

How much should I charge for my cosmetic services?

Cosmetic fees can vary depending on the type of cosmetic services being offered, as well as the size and scope of the project.

However, some common cosmetic fees include:

• Makeup application - $50-$100 
• Eyebrow shaping - $20 to $50
• Lip injections- $350 to $1,000
• Chemical peels - $75 to $200
• Botox - $150 to $400
• Microblading - $450 to $1,000

The best way to determine the right fee for your cosmetic services is to research the rates of similar businesses in your industry, and to also consider the value that you will be providing to the client.

Other Helpful Business Plan Articles & Templates

How to Start a Makeup Business

A makeup business sells beauty products, catering to customers' individual beauty needs. Products are sold to distributors, in a standalone store, or through independent consultants.

Ready to turn your business idea into a reality? We recommend forming an LLC as it is the most affordable way to protect your personal assets. You can do this yourself or with our trusted partner for a small fee. Northwest ($29 + State Fees) DIY: How to Start an LLC

Start a makeup business by following these 10 steps:

• Plan your Makeup Business
• Form your Makeup Business into a Legal Entity
• Register your Makeup Business for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Makeup Business
• Get the Necessary Permits & Licenses for your Makeup Business
• Get Makeup Business Insurance
• Define your Makeup Business Brand
• Create your Makeup Business Website
• Set up your Business Phone System

We have put together this simple guide to starting your makeup business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Makeup Business Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Find a Domain Now

Powered by godaddy.com, what are the costs involved in opening a makeup business.

If your business plan includes starting a makeup line from scratch, you will need to invest a great deal of time and money, before ever opening your doors to customers. Industry leaders suggest planning for nine to eighteen months, just to develop your makeup line.

In addition, you’ll need to budget for the following:

• Storefront and/or factory locations - malls, kiosks, and high-end plazas are an affordable option
• Lighting for your establishment
• Makeup accessories - mirrors, sponges, and brushes
• Display cases
• POS and business management system/software
• Logo and trademark design
• Advertising and marketing material

If you have a vision for a makeup product,  Sephora  offers entrepreneurs a unique opportunity to turn their vision into reality. Grants and funding through this program could help offset some of these initial costs.

Experienced makeup professionals report an initial budget of anywhere from $75,000 to $200,000, depending upon the specifics of your business plan.

What are the ongoing expenses for a makeup business?

The average makeup business’ largest operating expenses are payroll and costs associated with leased space.

Additional expenses include:

• Stocking inventory
• Manufacturing of inventory (if applicable)
• Marketing strategy and related advertising investments
• Education, travel, and market research

Annual expenses vary, depending upon location and size of product line.

Who is the target market?

Marketing efforts should target specific demographics. Learn who would benefit most from your products, their specific needs, and work to define what sets you apart from the competition.

A few demographics to consider:

• Actors and actresses
• Local broadcasters
• Cheerleaders and gymnasts
• Men and women of various ages - men represent a growing market that is largely untapped at the moment
• Makeup artists and consultants

How does a makeup business make money?

A makeup business generates revenue from either the individual sale or wholesale distribution of their products.

Beauty products are typically sold by the unit and vary in price. Low-end cosmetic lines have products starting at $5, while high-end items sell for upwards of $150.

How much profit can a makeup business make?

Profit margins for this industry average 40%, with some running as high as 80%. An average small beauty line can realize a profit of $35,000 to $70,000 annually, while larger companies are reporting profits in the multi-millions.

How can you make your business more profitable?

Makeup entrepreneurs have reported success implementing the following strategies:

• Host a makeup or skincare clinic, specifically geared towards your target audience(s).
• Offer makeup artist services.
• Get involved in photo shoots with local and national magazines.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

One crucial aspect that cannot be overlooked when starting your makeup business is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they're a far less stable and advantageous option than LLCs.

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business's debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business's liabilities.

In practice, this means that if your makeup business were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

More than 84% of our readers opt to collaborate with a professional LLC formation service to kickstart their venture. We've negotiated a tailored discount for our readers, bringing the total down to just $29.

Form Your LLC Now

Note: If you're interested in more information before getting started, we recommend having a look at our state-specific How to Start an LLC guide (DIY) or our in-depth Best LLC Services review (for those opting for a professional service).

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

Federal Business Licensing Requirements

The U.S. Food & Drug Administration has set regulated standards for the production and sale of cosmetics. This FDA website outlines the federal cosmetics regulations . Review and understand these regulations to ensure that your makeup business is in line with all federal regulations. 

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a makeup business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Makeup Business needs and how much it will cost you by reading our guide Business Insurance for Makeup Business.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a makeup business

Creating brand awareness takes time, creativity, and dedication. Carefully consider your logo and ensure it properly represents your product line. Many makeup lines have found success attending beauty-related events, such as industry organized seminars and expos. This is a wonderful way to network, conduct research, and educate consumers on your makeup line. Partner with local wedding planners, hair stylists, makeup artists, theatre groups, and photographers. They are often in the market for new products that meet their evolving demands.

Set aside a portion of your monthly budget to advertise in relevant magazines and websites. Additionally, online tools, such as business directories, social media platforms, and Google AdWords, will assist in identifying the needs of your target audience.

How to keep customers coming back

Recent studies indicate that the biggest reasons customers shop for a new makeup line is directly related to a drop in product quality and poor customer service. To ensure customer retention, follow up with clients and ask for their input. Provide special offers or free products on birthdays or significant life events. This affords you the opportunity to test out new products on customers and helps build a loyal customer base.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

The business savvy entrepreneur who is passionate about experimenting with cosmetics will find success in this industry. As the owner of a makeup business, your role is to help others turn their visions into a reality and feel more positive about their appearance.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a makeup business?

This is largely dependent upon how you decide to structure your business. Whether you open a brick and mortar or ship products to others for distribution/sale, some day-to-day activities will remain the same:

• Test new products and collect feedback from current and prospective customers
• Fill makeup orders and ship to destination
• Advise customers on personal makeup and skincare needs, helping them achieve their desired look
• Network within community/industry and market your business
• Contact suppliers
• Conduct market research and keep up with the latest trends
• Regular sales team meetings to discuss current business trends and ongoing needs
• Administrative duties

If a makeup store is part of your vision, there are a few additional activities to consider:

• You and your staff will take a more hands-on approach with customers.
• Shelves must be fully stocked and reorders should be placed regularly.
• Facility must be maintained and kept clean.

What are some skills and experiences that will help you build a successful makeup business?

Real world experience is critical to the success of your business. Before establishing your company, consider working at a beauty store. Study each department, the customers' needs, the distribution chain, marketing, and staffing. There is a lot of work that goes into running a company like this. Learn from the successes and failures of your future competitors. Your education, however, shouldn’t stop there. Get to know the various products and lines on the market. Experiment with the merchandise and get creative.

To lead a makeup business to success, one should possess many of the qualities that make a great leader. Strong communication and organizational skills are critical. Attention to detail and the ability to delegate will also prove beneficial. The  Professional Beauty Association  offers membership resources to assist start-ups in realizing long-term success.

What is the growth potential for a makeup business?

Growing 6% in 2016, the beauty industry consistently realizes significant growth, year after year. The makeup class was the largest contributor, contributing 82% of the industry’s overall growth. While brick and mortar establishments offer the highest earning potential, online beauty sales have grown at a rate of 20% annually. This industry shows no signs of slowing down and offers ample opportunities for the dedicated and innovative entrepreneur.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a makeup business?

Industry leaders offer the following advice to those considering starting a makeup business:

• Success in this industry requires careful planning, hard work, and personal time. Do not expect to be an overnight success.
• Target your marketing efforts.
• Pay attention to the details.
• Research continuously to remain on top of the latest trends.
• Network, network, network.

How and when to build a team

Education and training are of the utmost importance in this field. With payroll representing one of your largest expenses, overstaffing stands to eat into your profit margins, slowing down the success of your company. When constructing your business plan, consider short and long-term goals. This will help you determine the size of your workforce and the timeline of when new members should be added to your team.

Useful Links

Industry opportunities.

• Professional Beauty Association
• FACES Cosmetics Franchise Opportunity
• Natural Products Association

Real World Examples

• Melt Cosmetics
• Violet Voss
• Urban Decay

Further Reading

• How to Start a Makeup Line at Home
• Additional Tips Starting Your Own Cosmetic Business

Have a Question? Leave a Comment!

Makeup Business Plan Template

Written by Dave Lavinsky

Writing a Successful Business Plan For Your Makeup Business + Template

If you’re looking to start or grow a makeup business, you need a business plan. Your plan will outline your business goals and strategies, and how you plan on achieving them. It will also detail the amount of funding you need, and if needed, present a case to investors and lenders regarding why they should invest in your business.

In this article, we’ll explain why you should invest the time and energy into creating a makeup business plan, and provide you with a makeup business plan template and  business plan sample  that includes an overview of what should be included in each section.

Download the Ultimate Makeup Business Plan Template here >

Why Write a Business Plan For a Makeup Business?

There are many reasons to write a business plan for a makeup company, even if you’re not looking for funding. A business plan can help you see potential pitfalls in your business strategy, as well as identify opportunities you may not have considered. It can also help you track your progress and adjust your plans as needed.

That said, if you are looking for funding, a business plan is essential. Investors and lenders want to see that you have a solid understanding of your industry, your customers, and your competition. They also want to know that you have a realistic view of your financial situation and how much money you’ll need to get started.

How To Write a Business Plan For a Makeup Business

While every business plan is different, there are 10 essential components that all makeup business plans should include:

Executive Summary

Company description, industry analysis, customer analysis, competitor analysis, marketing plan, operations plan, management team, financial plan.

Keep in mind that you’ll need to tailor this information to your specific type of makeup business, but these 10 components should be included in every plan.

The executive summary is the first section of your business plan, but it’s often written last. This is because it provides an overview of the entire document.

In the executive summary, briefly explain what your business does, your business goals, and how you plan on achieving them. You should also include a brief overview of your financial situation, including how much money you’ll need to get started.

The next section of your makeup business plan is the company description, where you’ll provide an overview of your business.

Include information about your:

• Company Overview
• Success Factors & Accomplishments To Date
• How & When Incorporated

With regards to the company overview, here you will document the type of makeup company you operate. For example, a makeup company description might look something like this:

At GlamGlow Makeup Studio, our offerings encompass a wide range of cosmetic essentials designed to cater to every beauty need. Our product lineup includes high-grade foundation, volumizing mascara, vibrant lipstick shades, precise eyeliners, and natural-looking blush. Each product has been meticulously selected to ensure our clients have access to the best makeup options on the market. Our commitment extends beyond just selling makeup; we aim to empower our customers with the tools and knowledge to enhance their natural beauty.

Strategically located in Binghamton, NY, GlamGlow Makeup Studio is poised to serve the beauty enthusiasts of Binghamton and its surrounding areas. Our studio’s welcoming atmosphere and accessible location make it the perfect spot for anyone looking to elevate their makeup experience.

What sets GlamGlow Makeup Studio apart is not just our exceptional range of products but also our foundation of expertise and commitment to excellence. Our founder brings a wealth of experience from successfully running a previous makeup business, ensuring that we understand the nuances of what makes a beauty brand thrive. Moreover, our competitive edge lies in our superior makeup quality and the extensive variety we offer, setting us apart from any competition in the region.

This is just an example, but your company description should give potential investors a clear idea of who you are, what you do, and why you’re the best at what you do.

The next section of your business plan is the industry analysis. In this section, you’ll need to provide an overview of the industry you’re in, as well as any trends or changes that might impact your business.

Questions you will want to answer include:

• What is the overall size of the makeup industry?
• How is the industry growing or changing?
• What are the major trends affecting the makeup industry?

For example, your industry analysis might look something like this:

One of the key trends in the Makeup industry is the growing popularity of natural and organic beauty products. Consumers are becoming more conscious of the ingredients used in their makeup products, leading to a shift towards environmentally-friendly and cruelty-free options. This trend bodes well for GlamGlow Makeup Studio, as the brand prides itself on offering high-quality, all-natural makeup products that are both safe and effective. By tapping into this growing market segment, GlamGlow has the opportunity to attract a loyal customer base in Binghamton, NY.

This is just an example, but your industry analysis should give potential investors a clear idea of the overall industry, and how your company fits into that industry.

The next section of your makeup business plan is the customer analysis. In this section, you’ll need to provide an overview of who your target customers are and what their needs are.

• Who are your target customers?
• What are their needs?
• How do they interact with your industry?
• How do they make purchasing decisions?

You want a thorough understanding of your target customers to provide them with the best possible products and/or services. Oftentimes, you will want to include the specific demographics of your target market, such as age, gender, income, etc., but you’ll also want to highlight the psychographics, such as their interests, lifestyles, and values.

This information will help you better understand your target market and how to reach them.

For example, your customer analysis might look something like this:

We will also cater to bridal parties and those planning significant life events, providing specialized packages that include trial sessions and day-of-event services. Our studio will target beauty enthusiasts who follow makeup trends and seek to experiment with new looks and products. By offering workshops and makeup classes, we will appeal to individuals looking to improve their makeup skills and techniques.

In summary, your customer analysis should give potential investors a clear idea of who your target market is and how you reach them.

The next section of your business plan is the competitor analysis. In this section, you’ll need to provide an overview of who your major competitors are and their strengths and weaknesses.

• Who are your major competitors?
• What are their strengths and weaknesses?
• How do they compare to you?

You want to make sure that you have a clear understanding of your competition so that you can position yourself in the market. Creating a SWOT Analysis (strengths, weaknesses, opportunities, threats) for each of your major competitors helps you do this. 

For example, your competitor analysis might look something like this:

S & S Beauty Supply Store

S & S Beauty Supply Store offers a wide range of beauty products, including makeup, skincare, haircare, and beauty tools. Their price points are generally affordable, catering to budget-conscious customers. Annual revenue is estimated to be moderate, given their focus on affordability and accessibility. They have a single location in Binghamton, NY, which serves the local community. Their customer segment largely consists of local residents, including students, working professionals, and beauty enthusiasts. A key strength is their extensive product range and affordability. However, a potential weakness is the limited brand variety compared to larger retailers.

Ulta Beauty

Ulta Beauty offers a comprehensive selection of beauty products, including makeup, skincare, haircare, and fragrance. Their price points vary widely, ranging from drugstore brands to high-end luxury products. Ulta Beauty generates significant revenue, benefiting from a large customer base and a diverse product portfolio. They have multiple locations nationwide, including one in Vestal, NY, near Binghamton. Their customer segments include women of all ages, beauty enthusiasts, and professionals. A key strength is their vast product selection and in-store salon services. A potential weakness is the higher price point for luxury brands, which may not appeal to all customers.

Benefit Cosmetics BrowBar

Your competitor analysis should give potential lenders and investors a clear idea of who your major competitors are and how you compare to them.

The next section of your business plan is the marketing plan. In this section, you’ll need to provide an overview of your marketing strategy and how you plan on executing it.

Specifically, you will document your “4 Ps” as follows:

• Products/Services : Here is where you’ll document your product/service offerings.
• Price : Detail your pricing strategy here.
• Place : Document where customers will find you and whether you will use distribution channels (e.g., partnerships) to reach them.
• Promotion : Here you will document how you will reach your target customers. For instance, makeup businesses often reach new customers via promotional tactics including advertising and online marketing.

For example, your marketing plan might look something like this:

GlamGlow Makeup Studio offers a range of high-quality beauty products and services tailored to meet diverse customer needs. The foundation available in the studio can cater to various skin types and tones, offering excellent coverage and a flawless finish. Customers can expect to pay around $40 for a bottle of premium foundation.

Mascara is another essential product in the studio’s lineup. Designed to provide volume, length, and definition, the mascara comes in various formulations, including waterproof options. The average selling price for mascara is approximately $25.

The lipstick collection features a wide array of colors and finishes, from matte to glossy. These lipsticks are formulated to provide long-lasting color and comfort. On average, a tube of lipstick is priced at $20.

For defining the eyes, the studio offers high-quality eyeliners that glide on smoothly and provide lasting wear. Available in both pencil and liquid forms, the eyeliners are priced around $18 each.

Blush is an essential part of the makeup routine for adding a natural flush of color to the cheeks. GlamGlow Makeup Studio provides blushes in various shades and finishes, ensuring a perfect match for every skin tone. The average price for a blush compact is $22.

Promotions Plan

We will employ a comprehensive range of promotional methods and tactics to attract customers to GlamGlow Makeup Studio. One of the primary strategies we will utilize is online marketing. This includes maintaining an engaging and visually appealing website, which will showcase our services, portfolio, and customer testimonials. Additionally, we will leverage social media platforms such as Instagram, Facebook, and TikTok to reach a broader audience. Through regular posts, stories, and live sessions, we will highlight our makeup services, share beauty tips, and engage with our followers.

We will also invest in search engine optimization (SEO) to ensure our website ranks highly in search engine results, making it easier for potential clients to find us. Complementing our SEO efforts, we will run targeted pay-per-click (PPC) advertising campaigns to drive traffic to our website and convert leads into appointments.

Email marketing will be another key component of our promotional strategy. We will build a mailing list to send out newsletters, special offers, and updates about new services or events. This personalized approach will help us maintain a strong relationship with our clients and keep them informed about what’s happening at GlamGlow Makeup Studio.

In addition to our online efforts, we will actively participate in local community events and collaborate with other businesses in Binghamton, NY. By offering makeup services at these events or partnering with local photographers, bridal shops, and fashion stores, we will increase our visibility and credibility within the community.

We will also implement a referral program that rewards existing clients for referring new customers to us. Word-of-mouth remains a powerful tool, and incentivizing referrals will encourage satisfied clients to spread the word about our services.

To further enhance our promotional efforts, we will offer special promotions and discounts during holidays, back-to-school seasons, and other significant occasions. These limited-time offers will attract new clients and encourage repeat business from our existing clientele.

Lastly, we will ensure our studio’s interior and exterior signage is eye-catching and professionally designed to attract walk-in customers. Our location in Binghamton, NY, will benefit from high visibility, and well-designed signage will draw the attention of passersby.

As you can see, your marketing plan should give potential investors a clear idea of your marketing objectives, strategies, and tactics.

The next section of your business plan is the operations plan. In this section, you’ll need to provide an overview of your company’s day-to-day operations and how they will be structured.

• What are your company’s daily operations?
• How are your company’s operations structured?

Your operations plan should be detailed and concise. You want to make sure that potential investors have a clear understanding of your company’s day-to-day operations and how they are structured.

You will also include information regarding your long-term goals for your operations and how you plan on achieving them.

For example, your operations plan might look something like this:

To ensure the success of GlamGlow Makeup Studio, there are several key day-to-day operational processes that we will perform:

• Customer Appointments Management: Schedule and confirm client appointments, ensuring optimal booking to maximize studio capacity.
• Inventory Management: Monitor and manage makeup and skincare product inventory to ensure adequate stock levels and avoid shortages.
• Staff Coordination: Assign tasks and coordinate schedules for makeup artists and support staff to ensure smooth operations.
• Sanitation and Cleanliness: Maintain high standards of cleanliness and sanitation in all areas of the studio to comply with health regulations and enhance customer experience.
• Customer Service: Greet clients upon arrival, provide consultations, and ensure a positive and welcoming environment.
• Financial Transactions: Handle payments, manage cash flow, and maintain accurate financial records using point-of-sale systems.
• Marketing and Promotions: Execute daily marketing activities, including social media updates, special promotions, and email campaigns to attract new customers and retain existing ones.
• Training and Development: Conduct regular training sessions for staff to keep them updated on the latest makeup trends and techniques.
• Customer Feedback: Collect and analyze customer feedback to continuously improve services and address any concerns promptly.
• Supplier Relations: Communicate with suppliers to order products, negotiate terms, and manage deliveries.

Your operations plan should give readers a clear idea of your company’s day-to-day operations, how they are structured, and your long-term goals for the company.

The next section of your business plan is the management team. In this section, you’ll need to provide an overview of your management team and their experience.

• Who is on your management team?
• What are their qualifications?
• What is their experience?

Your management team ideally includes individuals who are experts in their respective fields. You want to make sure that lenders and investors have a clear understanding of your management team’s qualifications and experience, and feel they can execute on your plan.

For example, your management team might look something like this:

Chloe Carter, President

Your management team should give potential lenders and investors a clear idea of who is on your team and how their qualifications and experience will help your company succeed.

The final core section of your business plan is the financial plan. In this section, you’ll need to provide an overview of your company’s financials.

• What are your company’s projected revenues?
• What are your company’s projected expenses?
• What is your company’s projected growth rate?
• How much funding do you need and for what purposes? 

Your financial plan should give potential investors a clear understanding of your company’s financials. While you may include a summary of this information in this section, you will include full financial statements in the appendix of your business plan.

For example, your financial plan might look something like this:

Below is a summary of your financial projections. If/when you change the Revenue Assumptions, Cost Assumptions, and/or Other Assumptions, the results below will change.

This is just an example, but your financial plan should give potential investors a clear idea of your company’s financial projections.

The final section of your business plan is the appendix. In this section, you’ll need to provide any additional information that was not included in the previous sections.

This may include items such as:

• Full financial statements
• Resumes of key management team members
• Letters of reference
• Articles or press releases
• Marketing materials
• Product information
• Any other relevant information

By including this information in the appendix, you are allowing potential investors and lenders to learn more about your company.

In summary, writing a makeup business plan is a vital step in the process of starting and/or growing your own business.

A business plan will give you a roadmap to follow. It can also help you attract investors and partners.

By following the tips outlined in this article, you can be sure that your business plan will be effective and help you achieve your goals.  

Finish Your Business Plan in 1 Day!

Wish there was a faster, easier way to finish your business plan?

With our Ultimate Makeup Business Plan Template you can finish your plan in just 8 hours or less!

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Makeup Line Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Beauty Care Industry » Makeup Line

Are you about starting a makeup production company ? If YES, here is a complete sample makeup line business plan template & feasibility report you can use for FREE .

If you are conversant with the cosmetic and beauty products line of business, you will realize that there is room for any investor or entrepreneur to start his or her own cosmetic or makeup line and still get a fair share of the market as long as his or her product is of standard and it meets the existing requirements.

No doubt it requires loads of research, experience and huge capital base to be able to establish a makeup line of business that can be globally accepted. But if you want to start small, then you might not have to break the bank to get started, but you must still do a thorough research and if possible acquire a degree or diploma in cosmetology.

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It is important to state that your motivation of going into makeup business should not be because you are looking for just any business to go into; your motivation should be based on the fact that you love beauty and you have entrepreneurial mindset.

If you go into this kind of business and many other businesses with the wrong motivation, you stand the chance of struggling with the business or even closing down the business if confronted with challenges.

If you are sure that this type of business is what you truly want to do after you must have conducted your market research and feasibility studies, then the next step to follow is to write a good business plan. Below is a sample makeup line production company business plan that will help you successfully launch your own business;

A Sample Makeup Line Business Plan Template

1. industry overview.

Cosmetic and beauty products manufacturers basically prepare, blend, compound and package beauty products and cosmetics for their clients. Cosmetic and beauty products included in this industry are perfumes, makeup items, hair preparations, face creams, lotions and other toiletries.

Inconsistent incomes do not really affect cosmetics and beauty products, but essential goods, such as makeups, experience steadier demand.

The revenue generated in this industry has increased steadily in recent years, as some of the industry’s largest export partners began to experience post – recessionary growth. Going forward, the industry’s diverse product lines and commitment to research and development will keep revenue growth stable.

The Cosmetic & Beauty Products Manufacturing Industry is a thriving sector of the economy of the united states of America and they generate a whopping sum of well over billion annually from more than 3,361 registered and licensed cosmetics & beauty product manufacturing companies scattered all around the United States of America.

The industry is responsible for the employment of well over 51,263 people. Experts project the industry to grow at a -1.8 percent annual rate from 2011 to 2016. Estee Lauder, Mary Kay and L’Oreal USA, Inc. have the lion market share in the Cosmetic & Beauty Products manufacturing industry in the United States of America and in some other countries.

Research conducted by IBISWORLD shows that the Cosmetic and Beauty Products manufacturing industry is in the growth phase of its life cycle, though it is likely to enter the mature phase in the near future. Industry value added, a measure of the industry’s contribution to the overall economy, is forecast to grow at an average annual rate of 0.7 percent in the 10 years to 2022.

This rate is significantly slower than GDP growth, which is anticipated to increase at an average annual rate of 2.2 percent during the same period.

While IVA growth slower than GDP growth is typically indicative of an industry in the mature or declining stage of its life cycle, the Cosmetic and Beauty Products Manufacturing industry is still growing as it is still experiencing high rates of industry entrants and product development.

With this kind of business, if you want to start on a small scale, you can choose to start servicing your city and state. All you would need is contacts, packaging, networking and good marketing and customer service skills. However, if you intend starting it on a large scale, then you should consider spreading beyond your city to state level and even national level.

Over and above, the Cosmetic and Beauty Products Manufacturing industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business and still compete for the available market and make profits.

2. Executive Summary

Clarisse Brown® Makeup Line, LLC is a licensed and standard makeup manufacturing company that will be located in an industrial area in Jackson Mississippi. We have been able to secure a long-term lease agreement for a facility in a strategic location with an option of a long-term renewal on an agreed terms and conditions that is favorable to us.

The facility has government approval for the kind of business we want to run and it is easily accessible and we are deliberate about that to facilitate easy movement of raw materials (chemicals and packaging containers) and finished products (makeup products).

We are in the cosmetic & beauty care manufacturing industry to engage in the production of makeups and powders et al. We are also in business to make profits at the same to give our customers value for their money; we want to give people and businesses who patronize our makeup products the opportunity to be part of the success story.

We are aware that there are several big scale and small scale makeup lines and even cosmetic and beauty care product manufacturing companies scattered all around the United States and Canada whose products can be found in every nooks and crannies of The United States and Canada.

Which is why we spent time and resources to conduct our feasibility studies and market survey so as to enable us locate the business in an area that will support the growth of the business and also for us to be able offer much more than our competitors will be offering.

We ensured that our facility is easy to locate and we have mapped out plans to develop a wide distribution network for wholesalers all around Jackson – Mississippi and the United States of America.

Much more than producing quality and safe makeup products, our customer care is going to be second to none. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they visit purchase any of our bottled water and also to become our loyal customers and ambassadors.

Clarisse Brown® Makeup Line, LLC will ensure that all our customers (wholesale distributors) are given first class treatment whenever they visit our factory. We have a CRM software that will enable us manage a one on one relationship with our customers (wholesale distributors) no matter how large the numbers of our customer base may grow to.

We will ensure that we get our customers involved when making some business decisions that will directly or indirectly affect them.

Clarisse Brown® Makeup Line, LLC is family business that will be owned by Clarisse Brown and her immediate family members. Mrs. Clarisse Brown who is the Chief Executive Officer of the Company is Graduate of Cosmetology and she holds a Master’s Degree in Business Management (MBA).

She has well over 12 years of experience working in related industry as a senior manager prior to starting Clarisse Brown® Makeup Line, LLC. She will be working with a team of professionals to build the business and grow it to enviably height.

3. Our Products and Services

Clarisse Brown® Makeup Line, LLC is going to run a standard and licensed makeup manufacturing company whose products will not only be sold in Jackson – Mississippi but also throughout the United States of America and Canada. We are in the cosmetic & beauty care product manufacturing industry to make profits and also to give our customers value for their money.

We will ensure that we do all that is permitted by the law in the United States of America to accomplish our business goal and objective. These are some of the products that we will be offering;

• Manufacturing makeups, including face powders, face cleanser, eye shadows, lipsticks and mascaras
• Manufacturing shaving cream, shaving preparations and aftershave products
• Manufacturing sunscreen products
• Manufacturing bath salts and talcum powders

4. Our Mission and Vision Statement

• Our vision is to establish standard makeup product manufacturing Company whose products will be not only be sold in Jackson – Mississippi, but also throughout the United States of America and Canada.
• Our mission is to establish a standard and world class makeup product manufacturing Company that in our own capacity will favorably compete with leaders in the industry. We want to build a business that will be listed amongst the top 10 makeup brands in the United States of America and Canada

Our Business Structure

Clarisse Brown® Makeup Line, LLC is a business that is established with the aim of competing favorably with other leading makeup product brands in the industry. This is why we will ensure that we put the right structure in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)

Plant Manager

• Human Resources and Admin Manager

Merchandize Manager

Sales and Marketing Manager

• Machine Operators
• Accountants / Cashiers

Distribution Truck Drivers

5. Job Roles and Responsibilities

Chief Executive Officer – CEO (Owner):

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization.
• Responsible for overseeing the smooth running of the makeup product manufacturing plant
• Part of the team that determines the quantity of makeup products that are to be produced
• Maps out strategy that will lead to efficiency amongst workers in the plant
• Responsible for training, evaluation and assessment of plant workers
• Ensures that the steady flow of both raw materials to the plant and easy flow of finished products through wholesale distributors to the market
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Ensures that the plant meets the expected safety and health standard at all times.

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Defining job positions for recruitment and managing interviewing process
• Carrying out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities.
• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Responsible for the purchase of raw materials and packaging materials
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Ensures that the organization operates within stipulated budget.
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding increase sales
• Document all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company

Accountant / Cashier

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensuring compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the manager in an effective and timely manner
• Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
• Receives parcels / documents for the company
• Distributes mails in the organization
• Handles any other duties as assigned by the line manager

Production Workers / Machine Operators:

• Responsible for preparing, blending, compounding and packaging makeup products
• Handles labeling of cosmetics and beauty care products
• Operate machines used in the manufacturing makeups such as face powders, eye shadows, lipsticks and mascaras
• Operates machines used in the manufacturing bath salts and talcum powders
• Assists in packaging and loading cosmetic and beauty care products into distribution trucks
• Assists in loading and unloading makeup products
• Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
• Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment
• Assists the transport and logistics manager in planning their route according to a delivery schedule.
• Local-delivery drivers may be required to sell products or services to stores and businesses on their route, obtain signatures from recipients and collect cash.
• Transport finished goods and raw materials over land to and from manufacturing plants or retail and distribution centers
• Inspects vehicles for mechanical items and safety issues and perform preventative maintenance
• Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
• Collects and verifies delivery instructions
• Reports defects, accidents or violations

6. SWOT Analysis

We are quite aware that there are several makeup product manufacturing companies both large and small in the United States of America and Canada which is why we are following the due process of establishing a business so as to compete favorable with them.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Clarisse Brown® Makeup Line, LLC employed the services of an expert HR and Business Analyst with bias in start – up business to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Clarisse Brown® Makeup Line, LLC;

Part of what is going to count as positives for Clarisse Brown® Makeup Line, LLC is the vast experience of our management team, we have people on board who are highly experienced and understands how to grow business from the scratch to becoming a national phenomenon.

So also, the wide varieties of makeup products that we produce, our large national distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.

A major weakness that may count against us is the fact that we are a new makeup production company and we don’t have the financial capacity to engage in the kind of publicity that we intend giving the business especially when big names like Estee Lauder, Mary Kay and L’Oreal USA, Inc. et al are already determining the direction of the market both in the United States and in the global market.

• Opportunities:

The opportunities available for makeup products manufacturing companies with a wide range of products are enormous. This is due to the fact that almost all Americans and people from all over the world make use of cosmetics and beauty care products regularly.

As a result of that, we were able to conduct a thorough market survey and feasibility studies so as to position our business to take advantage of the existing market for cosmetics and beauty care products and also to create our own new market. We know that it is going to requires hard work, and we are determined to achieve it.

We are quite aware that just like any other business, one of the major threats that we are likely going to face is economic downturn and unfavorable government policies . It is a fact that economic downturn affects purchasing power.

Another threat that may likely confront us is the arrival of a new makeup production company or cosmetics and beauty care product manufacturing company in same location where ours is located.

7. MARKET ANALYSIS

• Market Trends

If you are conversant with the existing trend in the cosmetic & beauty care products manufacturing industry, you will quite agree that despite the fact that there are competitions in different stages of the industry.

That is competitions amongst bigger corporations such as Estee Lauder, Mary Kay and L’Oreal USA, Inc. and also competitions amongst smaller and medium scale makeup / cosmetic and beauty care product manufacturing companies.

Most makeup products manufacturing company are leveraging on creativity in terms of packaging and marketing to continue to stay afloat in the industry.

Another trend in this industry is the exploration of safer raw materials for the production of makeup products. The truth is that people all over the world are looking for makeup products that contain less chemical hence the increase in demand for makeup products that are produced from herbal raw materials.

Lastly, the cosmetic and beauty care products manufacturing industry is the adoption of eco – friendly approach towards the production and packaging of its products. As a matter of fact, the industry’s adoption of eco-friendly practices will likely persuade environmentally conscious consumers to buy its products, while increasing operators’ efficiency.

8. Our Target Market

When it comes to selling makeups / cosmetics and beauty care products, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people, but all those who resides in our target market locations.

In view of that, we have conducted our market research and we have ideas of what our target market would be expecting from us. We are in business to engage in manufacturing and wholesale distribution of makeup products to the following groups of people;

• Cosmetic and beauty care retailers
• Beauty salons and spas
• Makeup artists
• All the female in our target market location

Our competitive advantage

A close study of the cosmetic and beauty care products manufacturing industry cum makeup line reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the stiffer competition and we are well prepared to compete favorably with other makeup line / cosmetic and beauty care product manufacturing companies in Jackson – Mississippi and throughout the United States and Canada.

Clarisse Brown® Makeup Line, LLC is launching a standard makeup product brand that will indeed become the preferred choice of residence of Jackson – Mississippi and every city where our makeup product will be retailed.

Part of what is going to count as competitive advantage for Clarisse Brown® Makeup Line, LLC is the vast experience of our management team, we have people on board who are highly experienced and understands how to grow business from the scratch to becoming a national phenomenon.

So also, the wide varieties of makeup products that we produce our large national distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups makeup / cosmetic and beauty care products manufacturing companies) in the bottled water industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Clarisse Brown® Makeup Line, LLC is established with the aim of maximizing profits in the cosmetic and beauty care product manufacturing industry in both the United States of America and Canada and we are going to go all the way to ensure that we do all it takes to sell a wide range of makeup products to a wide range of customers.

Clarisse Brown® Makeup Line, LLC will generate income by selling the following products;

• Face powders, face cleanser, eye shadows, lipsticks and mascaras
• Shaving cream, shaving preparations and aftershave products
• Sunscreen products
• Bath salts and talcum powders

10. Sales Forecast

One thing is certain when it comes to makeup product manufacturing business, if your products are well – packaged and branded and if your production plant is centrally positioned and easily accessible, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Jackson – Mississippi and every city where our makeup products care will be sold and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base.

We have been able to critically examine the makeup / cosmetic and beauty care products manufacturing industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in Jackson – Mississippi.

Below is the sales projection for Clarisse Brown® Makeup Line, LLC, it is based on the location of our business and other factors as it relates to small scale and medium scale makeup products manufacturing company start – ups in the United States;

• First Fiscal Year-: $250,000
• Second Fiscal Year-: $550,000
• Third Fiscal Year-: $950,000

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Clarisse Brown® Makeup Line, LLC and also the kind of makeup products we produce, we conduct a thorough market survey and feasibility studies in order for us to be able to be able to penetrate the available market in our target market locations.

We have detailed information and data that we were able to utilize to structure our business to attract the numbers of customers we want to attract per time and also for our products to favorable compete with other leading brands in the United States of America and Canada.

We hired experts who have good understanding of the cosmetic and beauty care product manufacturing industry to help us develop

In other to continue to be in business and grow, we must continue to sell our products to the available market which is why we will go all out to empower or sales and marketing team to deliver our corporate sales goals. In summary, Clarisse Brown® Makeup Line, LLC will adopt the following sales and marketing approach to sell our distilled alcoholic drinks;

• Introduce our makeup products brand by sending introductory letters to residence, merchants, retailers, makeup artists, beauty salons and spas and other stakeholders in Jackson – Mississippi and other cities both in the United States of America and Canada
• Open our makeup production company with a party so as to capture the attention of residence who are our first targets
• Engage in road show in targeted communities from time to time to sell our products
• Advertise our products in community based newspapers, local TV and radio stations
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our cosmetic and beauty care product brands
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Despite the fact that our makeup production plant is a standard one with a wide range of makeup products that can favorably compete with other leading brands in the cosmetics and beauty care production industry, we will still go ahead to intensify publicity for all our products and brand. We are going to explore all available means to promote Clarisse Brown® Makeup Line, LLC.

Clarisse Brown® Makeup Line, LLC has a long – term plan of distributing our makeup products in various locations all around the United States of America and Canada which is why we will deliberately build our brand to be well accepted in Jackson – Mississippi before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for selling our products but to also effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Clarisse Brown® Makeup Line, LLC;

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms
• Sponsor relevant community programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, et al to promote our makeup product brand
• Install our Bill Boards on strategic locations all around major cities in the United States of America and Canada
• Engage in road show from time to time in targeted communities
• Distribute our fliers and handbills in target areas
• Position our Flexi Banners at strategic positions in the location where we intend getting customers to start patronizing our products.
• Ensure that our products are well branded and that all our staff members wear our customized clothes, and all our official cars and distribution vans are customized and well branded.

12. Our Pricing Strategy

When it comes to pricing for products such as makeup / cosmetics and beauty care product, there are two sides to the coin. We are aware of the pricing trend in the makeup / cosmetic and beauty care products manufacturing industry which is why we have decided to produce various sizes of cosmetics and beauty care products.

In view of that, our prices will conform to what is obtainable in the cosmetics and beauty care production industry but will ensure that within the first 6 to 12 months our products are sold a little bit below the average prices of various makeup / cosmetic and beauty care product brands in the United States of America.

We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our makeup product brands.

• Payment Options

The payment policy adopted by Clarisse Brown® Makeup Line, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Clarisse Brown® Makeup Line, LLC will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards / Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for the purchase of our makeups without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our products.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business.

The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a makeup line production company; it might differ in other countries due to the value of their money.

When it comes to starting, a makeup line production company the major areas that you look towards spending the bulk of your cash is in the purchase of standard chemical mixing machines, distribution trucks and of course renting or leasing a well-located facility large enough fit into the design you have in mind.

Aside from that, you are not expected to spend much except for paying of your employees, purchase of raw materials, maintaining your trucks and fueling. These are the key areas where we will spend our start – up capital;

• The total fee for registering the business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
• Marketing promotion expenses for the grand opening of Clarisse Brown® Makeup Line, LLC in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
• Cost for hiring Business Consultant – $2,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• Cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
• Cost for construction of a standard makeup production plant – $100,000.
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
• The cost for Start-up inventory (raw materials, and packaging materials et al) – $80,000
• Cost for store equipment (cash register, security, ventilation, signage) – $13,750
• Cost of purchase of distribution vans – $60,000
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, Fax Machines, tables and chairs et al) – $4,000.
• The cost of launching a website – $600
• The cost for our opening party – $10,000
• Miscellaneous – $10,000

We would need an estimate of $500,000 to successfully set up our makeup products production plant in Jackson – Mississippi. Please note that this amount includes the salaries of all the staff for the first 3 month of operation.

Generating Funds / Startup Capital for Clarisse Brown® Makeup Line, LLC

Clarisse Brown® Makeup Line, LLC is a family business that is owned and financed by Clarisse Brown and her immediate family members. We do not intend to welcome any external business partner which is why we have decided to restrict the sourcing of the start – up capital to 3 major sources.

These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings and sell of stocks
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $200,000 ( Personal savings $150,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Clarisse Brown® Makeup Line, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to retail our makeup products a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Clarisse Brown® Makeup Line, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and construction of standard cosmetic and beauty care plant: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members and friends: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed chemical mixing machines, furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party / launching party planning: In Progress
• Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress

Table of Contents

How to make a business plan

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

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How to Write a Business Plan in 9 Steps (+ Template and Examples)

Every successful business has one thing in common, a good and well-executed business plan. A business plan is more than a document, it is a complete guide that outlines the goals your business wants to achieve, including its financial goals . It helps you analyze results, make strategic decisions, show your business operations and growth.

If you want to start a business or already have one and need to pitch it to investors for funding, writing a good business plan improves your chances of attracting financiers. As a startup, if you want to secure loans from financial institutions, part of the requirements involve submitting your business plan.

Writing a business plan does not have to be a complicated or time-consuming process. In this article, you will learn the step-by-step process for writing a successful business plan.

You will also learn what you need a business plan for, tips and strategies for writing a convincing business plan, business plan examples and templates that will save you tons of time, and the alternatives to the traditional business plan.

Let’s get started.

What Do You Need A Business Plan For?

Businesses create business plans for different purposes such as to secure funds, monitor business growth, measure your marketing strategies, and measure your business success.

1. Secure Funds

One of the primary reasons for writing a business plan is to secure funds, either from financial institutions/agencies or investors.

For you to effectively acquire funds, your business plan must contain the key elements of your business plan . For example, your business plan should include your growth plans, goals you want to achieve, and milestones you have recorded.

A business plan can also attract new business partners that are willing to contribute financially and intellectually. If you are writing a business plan to a bank, your project must show your traction , that is, the proof that you can pay back any loan borrowed.

Also, if you are writing to an investor, your plan must contain evidence that you can effectively utilize the funds you want them to invest in your business. Here, you are using your business plan to persuade a group or an individual that your business is a source of a good investment.

2. Monitor Business Growth

A business plan can help you track cash flows in your business. It steers your business to greater heights. A business plan capable of tracking business growth should contain:

• The business goals
• Methods to achieve the goals
• Time-frame for attaining those goals

A good business plan should guide you through every step in achieving your goals. It can also track the allocation of assets to every aspect of the business. You can tell when you are spending more than you should on a project.

You can compare a business plan to a written GPS. It helps you manage your business and hints at the right time to expand your business.

3. Measure Business Success

A business plan can help you measure your business success rate. Some small-scale businesses are thriving better than more prominent companies because of their track record of success.

Right from the onset of your business operation, set goals and work towards them. Write a plan to guide you through your procedures. Use your plan to measure how much you have achieved and how much is left to attain.

You can also weigh your success by monitoring the position of your brand relative to competitors. On the other hand, a business plan can also show you why you have not achieved a goal. It can tell if you have elapsed the time frame you set to attain a goal.

4. Document Your Marketing Strategies

You can use a business plan to document your marketing plans. Every business should have an effective marketing plan.

Competition mandates every business owner to go the extraordinary mile to remain relevant in the market. Your business plan should contain your marketing strategies that work. You can measure the success rate of your marketing plans.

In your business plan, your marketing strategy must answer the questions:

• How do you want to reach your target audience?
• How do you plan to retain your customers?
• What is/are your pricing plans?
• What is your budget for marketing?

How to Write a Business Plan Step-by-Step

1. create your executive summary.

The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans . Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.

Generally, there are nine sections in a business plan, the executive summary should condense essential ideas from the other eight sections.

A good executive summary should do the following:

• A Snapshot of Growth Potential. Briefly inform the reader about your company and why it will be successful)
• Contain your Mission Statement which explains what the main objective or focus of your business is.
• Product Description and Differentiation. Brief description of your products or services and why it is different from other solutions in the market.
• The Team. Basic information about your company’s leadership team and employees
• Business Concept. A solid description of what your business does.
• Target Market. The customers you plan to sell to.
• Marketing Strategy. Your plans on reaching and selling to your customers
• Current Financial State. Brief information about what revenue your business currently generates.
• Projected Financial State. Brief information about what you foresee your business revenue to be in the future.

The executive summary is the make-or-break section of your business plan. If your summary cannot in less than two pages cannot clearly describe how your business will solve a particular problem of your target audience and make a profit, your business plan is set on a faulty foundation.

Avoid using the executive summary to hype your business, instead, focus on helping the reader understand the what and how of your plan.

View the executive summary as an opportunity to introduce your vision for your company. You know your executive summary is powerful when it can answer these key questions:

• Who is your target audience?
• What sector or industry are you in?
• What are your products and services?
• What is the future of your industry?
• Is your company scaleable?
• Who are the owners and leaders of your company? What are their backgrounds and experience levels?
• What is the motivation for starting your company?
• What are the next steps?

Writing the executive summary last although it is the most important section of your business plan is an excellent idea. The reason why is because it is a high-level overview of your business plan. It is the section that determines whether potential investors and lenders will read further or not.

The executive summary can be a stand-alone document that covers everything in your business plan. It is not uncommon for investors to request only the executive summary when evaluating your business. If the information in the executive summary impresses them, they will ask for the complete business plan.

If you are writing your business plan for your planning purposes, you do not need to write the executive summary.

2. Add Your Company Overview

The company overview or description is the next section in your business plan after the executive summary. It describes what your business does.

Adding your company overview can be tricky especially when your business is still in the planning stages. Existing businesses can easily summarize their current operations but may encounter difficulties trying to explain what they plan to become.

Your company overview should contain the following:

• What products and services you will provide
• Geographical markets and locations your company have a presence
• What you need to run your business
• Who your target audience or customers are
• Who will service your customers
• Your company’s purpose, mission, and vision
• Information about your company’s founders
• Who the founders are
• Notable achievements of your company so far

When creating a company overview, you have to focus on three basics: identifying your industry, identifying your customer, and explaining the problem you solve.

If you are stuck when creating your company overview, try to answer some of these questions that pertain to you.

• Who are you targeting? (The answer is not everyone)
• What pain point does your product or service solve for your customers that they will be willing to spend money on resolving?
• How does your product or service overcome that pain point?
• Where is the location of your business?
• What products, equipment, and services do you need to run your business?
• How is your company’s product or service different from your competition in the eyes of your customers?
• How many employees do you need and what skills do you require them to have?

After answering some or all of these questions, you will get more than enough information you need to write your company overview or description section. When writing this section, describe what your company does for your customers.

The company description or overview section contains three elements: mission statement, history, and objectives.

• Mission Statement

The mission statement refers to the reason why your business or company is existing. It goes beyond what you do or sell, it is about the ‘why’. A good mission statement should be emotional and inspirational.

Your mission statement should follow the KISS rule (Keep It Simple, Stupid). For example, Shopify’s mission statement is “Make commerce better for everyone.”

When describing your company’s history, make it simple and avoid the temptation of tying it to a defensive narrative. Write it in the manner you would a profile. Your company’s history should include the following information:

• Founding Date
• Major Milestones
• Location(s)
• Flagship Products or Services
• Number of Employees
• Executive Leadership Roles

When you fill in this information, you use it to write one or two paragraphs about your company’s history.

Business Objectives

Your business objective must be SMART (specific, measurable, achievable, realistic, and time-bound.) Failure to clearly identify your business objectives does not inspire confidence and makes it hard for your team members to work towards a common purpose.

3. Perform Market and Competitive Analyses to Proof a Big Enough Business Opportunity

The third step in writing a business plan is the market and competitive analysis section. Every business, no matter the size, needs to perform comprehensive market and competitive analyses before it enters into a market.

Performing market and competitive analyses are critical for the success of your business. It helps you avoid entering the right market with the wrong product, or vice versa. Anyone reading your business plans, especially financiers and financial institutions will want to see proof that there is a big enough business opportunity you are targeting.

This section is where you describe the market and industry you want to operate in and show the big opportunities in the market that your business can leverage to make a profit. If you noticed any unique trends when doing your research, show them in this section.

Market analysis alone is not enough, you have to add competitive analysis to strengthen this section. There are already businesses in the industry or market, how do you plan to take a share of the market from them?

You have to clearly illustrate the competitive landscape in your business plan. Are there areas your competitors are doing well? Are there areas where they are not doing so well? Show it.

Make it clear in this section why you are moving into the industry and what weaknesses are present there that you plan to explain. How are your competitors going to react to your market entry? How do you plan to get customers? Do you plan on taking your competitors' competitors, tap into other sources for customers, or both?

Illustrate the competitive landscape as well. What are your competitors doing well and not so well?

Answering these questions and thoughts will aid your market and competitive analysis of the opportunities in your space. Depending on how sophisticated your industry is, or the expectations of your financiers, you may need to carry out a more comprehensive market and competitive analysis to prove that big business opportunity.

Instead of looking at the market and competitive analyses as one entity, separating them will make the research even more comprehensive.

Market Analysis

Market analysis, boarding speaking, refers to research a business carried out on its industry, market, and competitors. It helps businesses gain a good understanding of their target market and the outlook of their industry. Before starting a company, it is vital to carry out market research to find out if the market is viable.

The market analysis section is a key part of the business plan. It is the section where you identify who your best clients or customers are. You cannot omit this section, without it your business plan is incomplete.

A good market analysis will tell your readers how you fit into the existing market and what makes you stand out. This section requires in-depth research, it will probably be the most time-consuming part of the business plan to write.

• Market Research

To create a compelling market analysis that will win over investors and financial institutions, you have to carry out thorough market research . Your market research should be targeted at your primary target market for your products or services. Here is what you want to find out about your target market.

• Your target market’s needs or pain points
• The existing solutions for their pain points
• Geographic Location
• Demographics

The purpose of carrying out a marketing analysis is to get all the information you need to show that you have a solid and thorough understanding of your target audience.

Only after you have fully understood the people you plan to sell your products or services to, can you evaluate correctly if your target market will be interested in your products or services.

You can easily convince interested parties to invest in your business if you can show them you thoroughly understand the market and show them that there is a market for your products or services.

How to Quantify Your Target Market

One of the goals of your marketing research is to understand who your ideal customers are and their purchasing power. To quantify your target market, you have to determine the following:

• Your Potential Customers: They are the people you plan to target. For example, if you sell accounting software for small businesses , then anyone who runs an enterprise or large business is unlikely to be your customers. Also, individuals who do not have a business will most likely not be interested in your product.
• Total Households: If you are selling household products such as heating and air conditioning systems, determining the number of total households is more important than finding out the total population in the area you want to sell to. The logic is simple, people buy the product but it is the household that uses it.
• Median Income: You need to know the median income of your target market. If you target a market that cannot afford to buy your products and services, your business will not last long.
• Income by Demographics: If your potential customers belong to a certain age group or gender, determining income levels by demographics is necessary. For example, if you sell men's clothes, your target audience is men.

What Does a Good Market Analysis Entail?

Your business does not exist on its own, it can only flourish within an industry and alongside competitors. Market analysis takes into consideration your industry, target market, and competitors. Understanding these three entities will drastically improve your company’s chances of success.

You can view your market analysis as an examination of the market you want to break into and an education on the emerging trends and themes in that market. Good market analyses include the following:

• Industry Description. You find out about the history of your industry, the current and future market size, and who the largest players/companies are in your industry.
• Overview of Target Market. You research your target market and its characteristics. Who are you targeting? Note, it cannot be everyone, it has to be a specific group. You also have to find out all information possible about your customers that can help you understand how and why they make buying decisions.
• Size of Target Market: You need to know the size of your target market, how frequently they buy, and the expected quantity they buy so you do not risk overproducing and having lots of bad inventory. Researching the size of your target market will help you determine if it is big enough for sustained business or not.
• Growth Potential: Before picking a target market, you want to be sure there are lots of potential for future growth. You want to avoid going for an industry that is declining slowly or rapidly with almost zero growth potential.
• Market Share Potential: Does your business stand a good chance of taking a good share of the market?
• Market Pricing and Promotional Strategies: Your market analysis should give you an idea of the price point you can expect to charge for your products and services. Researching your target market will also give you ideas of pricing strategies you can implement to break into the market or to enjoy maximum profits.
• Potential Barriers to Entry: One of the biggest benefits of conducting market analysis is that it shows you every potential barrier to entry your business will likely encounter. It is a good idea to discuss potential barriers to entry such as changing technology. It informs readers of your business plan that you understand the market.
• Research on Competitors: You need to know the strengths and weaknesses of your competitors and how you can exploit them for the benefit of your business. Find patterns and trends among your competitors that make them successful, discover what works and what doesn’t, and see what you can do better.

The market analysis section is not just for talking about your target market, industry, and competitors. You also have to explain how your company can fill the hole you have identified in the market.

Here are some questions you can answer that can help you position your product or service in a positive light to your readers.

• Is your product or service of superior quality?
• What additional features do you offer that your competitors do not offer?
• Are you targeting a ‘new’ market?

Basically, your market analysis should include an analysis of what already exists in the market and an explanation of how your company fits into the market.

Competitive Analysis

In the competitive analysis section, y ou have to understand who your direct and indirect competitions are, and how successful they are in the marketplace. It is the section where you assess the strengths and weaknesses of your competitors, the advantage(s) they possess in the market and show the unique features or qualities that make you different from your competitors.

Many businesses do market analysis and competitive analysis together. However, to fully understand what the competitive analysis entails, it is essential to separate it from the market analysis.

Competitive analysis for your business can also include analysis on how to overcome barriers to entry in your target market.

The primary goal of conducting a competitive analysis is to distinguish your business from your competitors. A strong competitive analysis is essential if you want to convince potential funding sources to invest in your business. You have to show potential investors and lenders that your business has what it takes to compete in the marketplace successfully.

Competitive analysis will s how you what the strengths of your competition are and what they are doing to maintain that advantage.

When doing your competitive research, you first have to identify your competitor and then get all the information you can about them. The idea of spending time to identify your competitor and learn everything about them may seem daunting but it is well worth it.

Find answers to the following questions after you have identified who your competitors are.

• What are your successful competitors doing?
• Why is what they are doing working?
• Can your business do it better?
• What are the weaknesses of your successful competitors?
• What are they not doing well?
• Can your business turn its weaknesses into strengths?
• How good is your competitors’ customer service?
• Where do your competitors invest in advertising?
• What sales and pricing strategies are they using?
• What marketing strategies are they using?
• What kind of press coverage do they get?
• What are their customers saying about your competitors (both the positive and negative)?

If your competitors have a website, it is a good idea to visit their websites for more competitors’ research. Check their “About Us” page for more information.

If you are presenting your business plan to investors, you need to clearly distinguish yourself from your competitors. Investors can easily tell when you have not properly researched your competitors.

Take time to think about what unique qualities or features set you apart from your competitors. If you do not have any direct competition offering your product to the market, it does not mean you leave out the competitor analysis section blank. Instead research on other companies that are providing a similar product, or whose product is solving the problem your product solves.

The next step is to create a table listing the top competitors you want to include in your business plan. Ensure you list your business as the last and on the right. What you just created is known as the competitor analysis table.

Direct vs Indirect Competition

You cannot know if your product or service will be a fit for your target market if you have not understood your business and the competitive landscape.

There is no market you want to target where you will not encounter competition, even if your product is innovative. Including competitive analysis in your business plan is essential.

If you are entering an established market, you need to explain how you plan to differentiate your products from the available options in the market. Also, include a list of few companies that you view as your direct competitors The competition you face in an established market is your direct competition.

In situations where you are entering a market with no direct competition, it does not mean there is no competition there. Consider your indirect competition that offers substitutes for the products or services you offer.

For example, if you sell an innovative SaaS product, let us say a project management software , a company offering time management software is your indirect competition.

There is an easy way to find out who your indirect competitors are in the absence of no direct competitors. You simply have to research how your potential customers are solving the problems that your product or service seeks to solve. That is your direct competition.

Factors that Differentiate Your Business from the Competition

There are three main factors that any business can use to differentiate itself from its competition. They are cost leadership, product differentiation, and market segmentation.

1. Cost Leadership

A strategy you can impose to maximize your profits and gain an edge over your competitors. It involves offering lower prices than what the majority of your competitors are offering.

A common practice among businesses looking to enter into a market where there are dominant players is to use free trials or pricing to attract as many customers as possible to their offer.

2. Product Differentiation

Your product or service should have a unique selling proposition (USP) that your competitors do not have or do not stress in their marketing.

Part of the marketing strategy should involve making your products unique and different from your competitors. It does not have to be different from your competitors, it can be the addition to a feature or benefit that your competitors do not currently have.

3. Market Segmentation

As a new business seeking to break into an industry, you will gain more success from focusing on a specific niche or target market, and not the whole industry.

If your competitors are focused on a general need or target market, you can differentiate yourself from them by having a small and hyper-targeted audience. For example, if your competitors are selling men’s clothes in their online stores , you can sell hoodies for men.

4. Define Your Business and Management Structure

The next step in your business plan is your business and management structure. It is the section where you describe the legal structure of your business and the team running it.

Your business is only as good as the management team that runs it, while the management team can only strive when there is a proper business and management structure in place.

If your company is a sole proprietor or a limited liability company (LLC), a general or limited partnership, or a C or an S corporation, state it clearly in this section.

Use an organizational chart to show the management structure in your business. Clearly show who is in charge of what area in your company. It is where you show how each key manager or team leader’s unique experience can contribute immensely to the success of your company. You can also opt to add the resumes and CVs of the key players in your company.

The business and management structure section should show who the owner is, and other owners of the businesses (if the business has other owners). For businesses or companies with multiple owners, include the percent ownership of the various owners and clearly show the extent of each others’ involvement in the company.

Investors want to know who is behind the company and the team running it to determine if it has the right management to achieve its set goals.

Management Team

The management team section is where you show that you have the right team in place to successfully execute the business operations and ideas. Take time to create the management structure for your business. Think about all the important roles and responsibilities that you need managers for to grow your business.

Include brief bios of each key team member and ensure you highlight only the relevant information that is needed. If your team members have background industry experience or have held top positions for other companies and achieved success while filling that role, highlight it in this section.

A common mistake that many startups make is assigning C-level titles such as (CMO and CEO) to everyone on their team. It is unrealistic for a small business to have those titles. While it may look good on paper for the ego of your team members, it can prevent investors from investing in your business.

Instead of building an unrealistic management structure that does not fit your business reality, it is best to allow business titles to grow as the business grows. Starting everyone at the top leaves no room for future change or growth, which is bad for productivity.

Your management team does not have to be complete before you start writing your business plan. You can have a complete business plan even when there are managerial positions that are empty and need filling.

If you have management gaps in your team, simply show the gaps and indicate you are searching for the right candidates for the role(s). Investors do not expect you to have a full management team when you are just starting your business.

Key Questions to Answer When Structuring Your Management Team

• Who are the key leaders?
• What experiences, skills, and educational backgrounds do you expect your key leaders to have?
• Do your key leaders have industry experience?
• What positions will they fill and what duties will they perform in those positions?
• What level of authority do the key leaders have and what are their responsibilities?
• What is the salary for the various management positions that will attract the ideal candidates?

Additional Tips for Writing the Management Structure Section

1. Avoid Adding ‘Ghost’ Names to Your Management Team

There is always that temptation to include a ‘ghost’ name to your management team to attract and influence investors to invest in your business. Although the presence of these celebrity management team members may attract the attention of investors, it can cause your business to lose any credibility if you get found out.

Seasoned investors will investigate further the members of your management team before committing fully to your business If they find out that the celebrity name used does not play any actual role in your business, they will not invest and may write you off as dishonest.

2. Focus on Credentials But Pay Extra Attention to the Roles

Investors want to know the experience that your key team members have to determine if they can successfully reach the company’s growth and financial goals.

While it is an excellent boost for your key management team to have the right credentials, you also want to pay extra attention to the roles they will play in your company.

Organizational Chart

Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.

If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.

An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.

You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.

5. Describe Your Product and Service Offering

In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.

Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.

The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.

If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”

Your product and service section in your business plan should include the following:

• A detailed explanation that clearly shows how your product or service works.
• The pricing model for your product or service.
• Your business’ sales and distribution strategy.
• The ideal customers that want your product or service.
• The benefits of your products and services.
• Reason(s) why your product or service is a better alternative to what your competitors are currently offering in the market.
• Plans for filling the orders you receive
• If you have current or pending patents, copyrights, and trademarks for your product or service, you can also discuss them in this section.

What to Focus On When Describing the Benefits, Lifecycle, and Production Process of Your Products or Services

In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.

When describing the benefits of your products or services, here are some key factors to focus on.

• Unique features
• Translating the unique features into benefits
• The emotional, psychological, and practical payoffs to attract customers
• Intellectual property rights or any patents

When describing the product life cycle of your products or services, here are some key factors to focus on.

• Upsells, cross-sells, and down-sells
• Time between purchases
• Plans for research and development.

When describing the production process for your products or services, you need to think about the following:

• The creation of new or existing products and services.
• The sources for the raw materials or components you need for production.
• Assembling the products
• Maintaining quality control
• Supply-chain logistics (receiving the raw materials and delivering the finished products)
• The day-to-day management of the production processes, bookkeeping, and inventory.

Tips for Writing the Products or Services Section of Your Business Plan

1. Avoid Technical Descriptions and Industry Buzzwords

The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.

A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.

2. Describe How Your Products or Services Differ from Your Competitors

When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.

If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.

For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.

3. Long or Short Products or Services Section

Should your products or services section be short? Does the long products or services section attract more investors?

There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.

If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.

Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.

The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.

If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.

A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.

4. Describe Your Relationships with Vendors or Suppliers

Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.

Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.

5. Your Primary Goal Is to Convince Your Readers

The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.

When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.

While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.

Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.

Key Questions to Answer When Writing your Products and Services Section

Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.

• Are your products existing on the market or are they still in the development stage?
• What is your timeline for adding new products and services to the market?
• What are the positives that make your products and services different from your competitors?
• Do your products and services have any competitive advantage that your competitors’ products and services do not currently have?
• Do your products or services have any competitive disadvantages that you need to overcome to compete with your competitors? If your answer is yes, state how you plan to overcome them,
• How much does it cost to produce your products or services? How much do you plan to sell it for?
• What is the price for your products and services compared to your competitors? Is pricing an issue?
• What are your operating costs and will it be low enough for you to compete with your competitors and still take home a reasonable profit margin?
• What is your plan for acquiring your products? Are you involved in the production of your products or services?
• Are you the manufacturer and produce all the components you need to create your products? Do you assemble your products by using components supplied by other manufacturers? Do you purchase your products directly from suppliers or wholesalers?
• Do you have a steady supply of products that you need to start your business? (If your business is yet to kick-off)
• How do you plan to distribute your products or services to the market?

You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.

6. Show and Explain Your Marketing and Sales Plan

Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.

The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.

There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.

In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.

Outline Your Business’ Unique Selling Proposition (USP)

The sales and marketing section is where you outline your business’s unique selling proposition (USP). When you are developing your unique selling proposition, think about the strongest reasons why people should buy from you over your competition. That reason(s) is most likely a good fit to serve as your unique selling proposition (USP).

Target Market and Target Audience

Plans on how to get your products or services to your target market and how to get your target audience to buy them go into this section. You also highlight the strengths of your business here, particularly what sets them apart from your competition.

Before you start writing your marketing and sales plan, you need to have properly defined your target audience and fleshed out your buyer persona. If you do not first understand the individual you are marketing to, your marketing and sales plan will lack any substance and easily fall.

Creating a Smart Marketing and Sales Plan

Marketing your products and services is an investment that requires you to spend money. Like any other investment, you have to generate a good return on investment (ROI) to justify using that marketing and sales plan. Good marketing and sales plans bring in high sales and profits to your company.

Avoid spending money on unproductive marketing channels. Do your research and find out the best marketing and sales plan that works best for your company.

Your marketing and sales plan can be broken into different parts: your positioning statement, pricing, promotion, packaging, advertising, public relations, content marketing, social media, and strategic alliances.

Your Positioning Statement

Your positioning statement is the first part of your marketing and sales plan. It refers to the way you present your company to your customers.

Are you the premium solution, the low-price solution, or are you the intermediary between the two extremes in the market? What do you offer that your competitors do not that can give you leverage in the market?

Before you start writing your positioning statement, you need to spend some time evaluating the current market conditions. Here are some questions that can help you to evaluate the market

• What are the unique features or benefits that you offer that your competitors lack?
• What are your customers’ primary needs and wants?
• Why should a customer choose you over your competition? How do you plan to differentiate yourself from the competition?
• How does your company’s solution compare with other solutions in the market?

After answering these questions, then you can start writing your positioning statement. Your positioning statement does not have to be in-depth or too long.

All you need to explain with your positioning statement are two focus areas. The first is the position of your company within the competitive landscape. The other focus area is the core value proposition that sets your company apart from other alternatives that your ideal customer might consider.

Here is a simple template you can use to develop a positioning statement.

For [description of target market] who [need of target market], [product or service] [how it meets the need]. Unlike [top competition], it [most essential distinguishing feature].

For example, let’s create the positioning statement for fictional accounting software and QuickBooks alternative , TBooks.

“For small business owners who need accounting services, TBooks is an accounting software that helps small businesses handle their small business bookkeeping basics quickly and easily. Unlike Wave, TBooks gives small businesses access to live sessions with top accountants.”

You can edit this positioning statement sample and fill it with your business details.

After writing your positioning statement, the next step is the pricing of your offerings. The overall positioning strategy you set in your positioning statement will often determine how you price your products or services.

Pricing is a powerful tool that sends a strong message to your customers. Failure to get your pricing strategy right can make or mar your business. If you are targeting a low-income audience, setting a premium price can result in low sales.

You can use pricing to communicate your positioning to your customers. For example, if you are offering a product at a premium price, you are sending a message to your customers that the product belongs to the premium category.

Basic Rules to Follow When Pricing Your Offering

Setting a price for your offering involves more than just putting a price tag on it. Deciding on the right pricing for your offering requires following some basic rules. They include covering your costs, primary and secondary profit center pricing, and matching the market rate.

• Covering Your Costs: The price you set for your products or service should be more than it costs you to produce and deliver them. Every business has the same goal, to make a profit. Depending on the strategy you want to use, there are exceptions to this rule. However, the vast majority of businesses follow this rule.
• Primary and Secondary Profit Center Pricing: When a company sets its price above the cost of production, it is making that product its primary profit center. A company can also decide not to make its initial price its primary profit center by selling below or at even with its production cost. It rather depends on the support product or even maintenance that is associated with the initial purchase to make its profit. The initial price thus became its secondary profit center.
• Matching the Market Rate: A good rule to follow when pricing your products or services is to match your pricing with consumer demand and expectations. If you price your products or services beyond the price your customer perceives as the ideal price range, you may end up with no customers. Pricing your products too low below what your customer perceives as the ideal price range may lead to them undervaluing your offering.

Pricing Strategy

Your pricing strategy influences the price of your offering. There are several pricing strategies available for you to choose from when examining the right pricing strategy for your business. They include cost-plus pricing, market-based pricing, value pricing, and more.

• Cost-plus Pricing: This strategy is one of the simplest and oldest pricing strategies. Here you consider the cost of producing a unit of your product and then add a profit to it to arrive at your market price. It is an effective pricing strategy for manufacturers because it helps them cover their initial costs. Another name for the cost-plus pricing strategy is the markup pricing strategy.
• Market-based Pricing: This pricing strategy analyses the market including competitors’ pricing and then sets a price based on what the market is expecting. With this pricing strategy, you can either set your price at the low-end or high-end of the market.
• Value Pricing: This pricing strategy involves setting a price based on the value you are providing to your customer. When adopting a value-based pricing strategy, you have to set a price that your customers are willing to pay. Service-based businesses such as small business insurance providers , luxury goods sellers, and the fashion industry use this pricing strategy.

After carefully sorting out your positioning statement and pricing, the next item to look at is your promotional strategy. Your promotional strategy explains how you plan on communicating with your customers and prospects.

As a business, you must measure all your costs, including the cost of your promotions. You also want to measure how much sales your promotions bring for your business to determine its usefulness. Promotional strategies or programs that do not lead to profit need to be removed.

There are different types of promotional strategies you can adopt for your business, they include advertising, public relations, and content marketing.

Advertising

Your business plan should include your advertising plan which can be found in the marketing and sales plan section. You need to include an overview of your advertising plans such as the areas you plan to spend money on to advertise your business and offers.

Ensure that you make it clear in this section if your business will be advertising online or using the more traditional offline media, or the combination of both online and offline media. You can also include the advertising medium you want to use to raise awareness about your business and offers.

Some common online advertising mediums you can use include social media ads, landing pages, sales pages, SEO, Pay-Per-Click, emails, Google Ads, and others. Some common traditional and offline advertising mediums include word of mouth, radios, direct mail, televisions, flyers, billboards, posters, and others.

A key component of your advertising strategy is how you plan to measure the effectiveness and success of your advertising campaign. There is no point in sticking with an advertising plan or medium that does not produce results for your business in the long run.

Public Relations

A great way to reach your customers is to get the media to cover your business or product. Publicity, especially good ones, should be a part of your marketing and sales plan. In this section, show your plans for getting prominent reviews of your product from reputable publications and sources.

Your business needs that exposure to grow. If public relations is a crucial part of your promotional strategy, provide details about your public relations plan here.

Content Marketing

Content marketing is a popular promotional strategy used by businesses to inform and attract their customers. It is about teaching and educating your prospects on various topics of interest in your niche, it does not just involve informing them about the benefits and features of the products and services you have,

Businesses publish content usually for free where they provide useful information, tips, and advice so that their target market can be made aware of the importance of their products and services. Content marketing strategies seek to nurture prospects into buyers over time by simply providing value.

Your company can create a blog where it will be publishing content for its target market. You will need to use the best website builder such as Wix and Squarespace and the best web hosting services such as Bluehost, Hostinger, and other Bluehost alternatives to create a functional blog or website.

If content marketing is a crucial part of your promotional strategy (as it should be), detail your plans under promotions.

Including high-quality images of the packaging of your product in your business plan is a lovely idea. You can add the images of the packaging of that product in the marketing and sales plan section. If you are not selling a product, then you do not need to include any worry about the physical packaging of your product.

When organizing the packaging section of your business plan, you can answer the following questions to make maximum use of this section.

• Is your choice of packaging consistent with your positioning strategy?
• What key value proposition does your packaging communicate? (It should reflect the key value proposition of your business)
• How does your packaging compare to that of your competitors?

Social Media

Your 21st-century business needs to have a good social media presence. Not having one is leaving out opportunities for growth and reaching out to your prospect.

You do not have to join the thousands of social media platforms out there. What you need to do is join the ones that your customers are active on and be active there.

Businesses use social media to provide information about their products such as promotions, discounts, the benefits of their products, and content on their blogs.

Social media is also a platform for engaging with your customers and getting feedback about your products or services. Make no mistake, more and more of your prospects are using social media channels to find more information about companies.

You need to consider the social media channels you want to prioritize your business (prioritize the ones your customers are active in) and your branding plans in this section.

Strategic Alliances

If your company plans to work closely with other companies as part of your sales and marketing plan, include it in this section. Prove details about those partnerships in your business plan if you have already established them.

Strategic alliances can be beneficial for all parties involved including your company. Working closely with another company in the form of a partnership can provide access to a different target market segment for your company.

The company you are partnering with may also gain access to your target market or simply offer a new product or service (that of your company) to its customers.

Mutually beneficial partnerships can cover the weaknesses of one company with the strength of another. You should consider strategic alliances with companies that sell complimentary products to yours. For example, if you provide printers, you can partner with a company that produces ink since the customers that buy printers from you will also need inks for printing.

Steps Involved in Creating a Marketing and Sales Plan

1. Focus on Your Target Market

Identify who your customers are, the market you want to target. Then determine the best ways to get your products or services to your potential customers.

2. Evaluate Your Competition

One of the goals of having a marketing plan is to distinguish yourself from your competition. You cannot stand out from them without first knowing them in and out.

You can know your competitors by gathering information about their products, pricing, service, and advertising campaigns.

These questions can help you know your competition.

• What makes your competition successful?
• What are their weaknesses?
• What are customers saying about your competition?

3. Consider Your Brand

Customers' perception of your brand has a strong impact on your sales. Your marketing and sales plan should seek to bolster the image of your brand. Before you start marketing your business, think about the message you want to pass across about your business and your products and services.

4. Focus on Benefits

The majority of your customers do not view your product in terms of features, what they want to know is the benefits and solutions your product offers. Think about the problems your product solves and the benefits it delivers, and use it to create the right sales and marketing message.

Your marketing plan should focus on what you want your customer to get instead of what you provide. Identify those benefits in your marketing and sales plan.

5. Focus on Differentiation

Your marketing and sales plan should look for a unique angle they can take that differentiates your business from the competition, even if the products offered are similar. Some good areas of differentiation you can use are your benefits, pricing, and features.

Key Questions to Answer When Writing Your Marketing and Sales Plan

• What is your company’s budget for sales and marketing campaigns?
• What key metrics will you use to determine if your marketing plans are successful?
• What are your alternatives if your initial marketing efforts do not succeed?
• Who are the sales representatives you need to promote your products or services?
• What are the marketing and sales channels you plan to use? How do you plan to get your products in front of your ideal customers?
• Where will you sell your products?

You may want to include samples of marketing materials you plan to use such as print ads, website descriptions, and social media ads. While it is not compulsory to include these samples, it can help you better communicate your marketing and sales plan and objectives.

The purpose of the marketing and sales section is to answer this question “How will you reach your customers?” If you cannot convincingly provide an answer to this question, you need to rework your marketing and sales section.

7. Clearly Show Your Funding Request

If you are writing your business plan to ask for funding from investors or financial institutions, the funding request section is where you will outline your funding requirements. The funding request section should answer the question ‘How much money will your business need in the near future (3 to 5 years)?’

A good funding request section will clearly outline and explain the amount of funding your business needs over the next five years. You need to know the amount of money your business needs to make an accurate funding request.

Also, when writing your funding request, provide details of how the funds will be used over the period. Specify if you want to use the funds to buy raw materials or machinery, pay salaries, pay for advertisements, and cover specific bills such as rent and electricity.

In addition to explaining what you want to use the funds requested for, you need to clearly state the projected return on investment (ROI) . Investors and creditors want to know if your business can generate profit for them if they put funds into it.

Ensure you do not inflate the figures and stay as realistic as possible. Investors and financial institutions you are seeking funds from will do their research before investing money in your business.

If you are not sure of an exact number to request from, you can use some range of numbers as rough estimates. Add a best-case scenario and a work-case scenario to your funding request. Also, include a description of your strategic future financial plans such as selling your business or paying off debts.

Funding Request: Debt or Equity?

When making your funding request, specify the type of funding you want. Do you want debt or equity? Draw out the terms that will be applicable for the funding, and the length of time the funding request will cover.

Case for Equity

If your new business has not yet started generating profits, you are most likely preparing to sell equity in your business to raise capital at the early stage. Equity here refers to ownership. In this case, you are selling a portion of your company to raise capital.

Although this method of raising capital for your business does not put your business in debt, keep in mind that an equity owner may expect to play a key role in company decisions even if he does not hold a major stake in the company.

Most equity sales for startups are usually private transactions . If you are making a funding request by offering equity in exchange for funding, let the investor know that they will be paid a dividend (a share of the company’s profit). Also, let the investor know the process for selling their equity in your business.

Case for Debt

You may decide not to offer equity in exchange for funds, instead, you make a funding request with the promise to pay back the money borrowed at the agreed time frame.

When making a funding request with an agreement to pay back, note that you will have to repay your creditors both the principal amount borrowed and the interest on it. Financial institutions offer this type of funding for businesses.

Large companies combine both equity and debt in their capital structure. When drafting your business plan, decide if you want to offer both or one over the other.

Before you sell equity in exchange for funding in your business, consider if you are willing to accept not being in total control of your business. Also, before you seek loans in your funding request section, ensure that the terms of repayment are favorable.

You should set a clear timeline in your funding request so that potential investors and creditors can know what you are expecting. Some investors and creditors may agree to your funding request and then delay payment for longer than 30 days, meanwhile, your business needs an immediate cash injection to operate efficiently.

Additional Tips for Writing the Funding Request Section of your Business Plan

The funding request section is not necessary for every business, it is only needed by businesses who plan to use their business plan to secure funding.

If you are adding the funding request section to your business plan, provide an itemized summary of how you plan to use the funds requested. Hiring a lawyer, accountant, or other professionals may be necessary for the proper development of this section.

You should also gather and use financial statements that add credibility and support to your funding requests. Ensure that the financial statements you use should include your projected financial data such as projected cash flows, forecast statements, and expenditure budgets.

If you are an existing business, include all historical financial statements such as cash flow statements, balance sheets and income statements .

Provide monthly and quarterly financial statements for a year. If your business has records that date back beyond the one-year mark, add the yearly statements of those years. These documents are for the appendix section of your business plan.

8. Detail Your Financial Plan, Metrics, and Projections

If you used the funding request section in your business plan, supplement it with a financial plan, metrics, and projections. This section paints a picture of the past performance of your business and then goes ahead to make an informed projection about its future.

The goal of this section is to convince readers that your business is going to be a financial success. It outlines your business plan to generate enough profit to repay the loan (with interest if applicable) and to generate a decent return on investment for investors.

If you have an existing business already in operation, use this section to demonstrate stability through finance. This section should include your cash flow statements, balance sheets, and income statements covering the last three to five years. If your business has some acceptable collateral that you can use to acquire loans, list it in the financial plan, metrics, and projection section.

Apart from current financial statements, this section should also contain a prospective financial outlook that spans the next five years. Include forecasted income statements, cash flow statements, balance sheets, and capital expenditure budget.

If your business is new and is not yet generating profit, use clear and realistic projections to show the potentials of your business.

When drafting this section, research industry norms and the performance of comparable businesses. Your financial projections should cover at least five years. State the logic behind your financial projections. Remember you can always make adjustments to this section as the variables change.

The financial plan, metrics, and projection section create a baseline which your business can either exceed or fail to reach. If your business fails to reach your projections in this section, you need to understand why it failed.

Investors and loan managers spend a lot of time going through the financial plan, metrics, and projection section compared to other parts of the business plan. Ensure you spend time creating credible financial analyses for your business in this section.

Many entrepreneurs find this section daunting to write. You do not need a business degree to create a solid financial forecast for your business. Business finances, especially for startups, are not as complicated as they seem. There are several online tools and templates that make writing this section so much easier.

Use Graphs and Charts

The financial plan, metrics, and projection section is a great place to use graphs and charts to tell the financial story of your business. Charts and images make it easier to communicate your finances.

Accuracy in this section is key, ensure you carefully analyze your past financial statements properly before making financial projects.

Address the Risk Factors and Show Realistic Financial Projections

Keep your financial plan, metrics, and projection realistic. It is okay to be optimistic in your financial projection, however, you have to justify it.

You should also address the various risk factors associated with your business in this section. Investors want to know the potential risks involved, show them. You should also show your plans for mitigating those risks.

What You Should In The Financial Plan, Metrics, and Projection Section of Your Business Plan

The financial plan, metrics, and projection section of your business plan should have monthly sales and revenue forecasts for the first year. It should also include annual projections that cover 3 to 5 years.

A three-year projection is a basic requirement to have in your business plan. However, some investors may request a five-year forecast.

Your business plan should include the following financial statements: sales forecast, personnel plan, income statement, income statement, cash flow statement, balance sheet, and an exit strategy.

1. Sales Forecast

Sales forecast refers to your projections about the number of sales your business is going to record over the next few years. It is typically broken into several rows, with each row assigned to a core product or service that your business is offering.

One common mistake people make in their business plan is to break down the sales forecast section into long details. A sales forecast should forecast the high-level details.

For example, if you are forecasting sales for a payroll software provider, you could break down your forecast into target market segments or subscription categories.

Your sales forecast section should also have a corresponding row for each sales row to cover the direct cost or Cost of Goods Sold (COGS). The objective of these rows is to show the expenses that your business incurs in making and delivering your product or service.

Note that your Cost of Goods Sold (COGS) should only cover those direct costs incurred when making your products. Other indirect expenses such as insurance, salaries, payroll tax, and rent should not be included.

For example, the Cost of Goods Sold (COGS) for a restaurant is the cost of ingredients while for a consulting company it will be the cost of paper and other presentation materials.

2. Personnel Plan

The personnel plan section is where you provide details about the payment plan for your employees. For a small business, you can easily list every position in your company and how much you plan to pay in the personnel plan.

However, for larger businesses, you have to break the personnel plan into functional groups such as sales and marketing.

The personnel plan will also include the cost of an employee beyond salary, commonly referred to as the employee burden. These costs include insurance, payroll taxes , and other essential costs incurred monthly as a result of having employees on your payroll.

3. Income Statement

The income statement section shows if your business is making a profit or taking a loss. Another name for the income statement is the profit and loss (P&L). It takes data from your sales forecast and personnel plan and adds other ongoing expenses you incur while running your business.

Every business plan should have an income statement. It subtracts your business expenses from its earnings to show if your business is generating profit or incurring losses.

The income statement has the following items: sales, Cost of Goods Sold (COGS), gross margin, operating expenses, total operating expenses, operating income , total expenses, and net profit.

• Sales refer to the revenue your business generates from selling its products or services. Other names for sales are income or revenue.
• Cost of Goods Sold (COGS) refers to the total cost of selling your products. Other names for COGS are direct costs or cost of sales. Manufacturing businesses use the Costs of Goods Manufactured (COGM) .
• Gross Margin is the figure you get when you subtract your COGS from your sales. In your income statement, you can express it as a percentage of total sales (Gross margin / Sales = Gross Margin Percent).
• Operating Expenses refer to all the expenses you incur from running your business. It exempts the COGS because it stands alone as a core part of your income statement. You also have to exclude taxes, depreciation, and amortization. Your operating expenses include salaries, marketing expenses, research and development (R&D) expenses, and other expenses.
• Total Operating Expenses refers to the sum of all your operating expenses including those exemptions named above under operating expenses.
• Operating Income refers to earnings before interest, taxes, depreciation, and amortization. It is simply known as the acronym EBITDA (earnings before interest, taxes, depreciation, and amortization). Calculating your operating income is simple, all you need to do is to subtract your COGS and total operating expenses from your sales.
• Total Expenses refer to the sum of your operating expenses and your business’ interest, taxes, depreciation, and amortization.
• Net profit shows whether your business has made a profit or taken a loss during a given timeframe.

4. Cash Flow Statement

The cash flow statement tracks the money you have in the bank at any given point. It is often confused with the income statement or the profit and loss statement. They are both different types of financial statements. The income statement calculates your profits and losses while the cash flow statement shows you how much you have in the bank.

5. Balance Sheet

The balance sheet is a financial statement that provides an overview of the financial health of your business. It contains information about the assets and liabilities of your company, and owner’s or shareholders’ equity.

You can get the net worth of your company by subtracting your company’s liabilities from its assets.

6. Exit Strategy

The exit strategy refers to a probable plan for selling your business either to the public in an IPO or to another company. It is the last thing you include in the financial plan, metrics, and projection section.

You can choose to omit the exit strategy from your business plan if you plan to maintain full ownership of your business and do not plan on seeking angel investment or virtual capitalist (VC) funding.

Investors may want to know what your exit plan is. They invest in your business to get a good return on investment.

Your exit strategy does not have to include long and boring details. Ensure you identify some interested parties who may be interested in buying the company if it becomes a success.

Key Questions to Answer with Your Financial Plan, Metrics, and Projection

Your financial plan, metrics, and projection section helps investors, creditors, or your internal managers to understand what your expenses are, the amount of cash you need, and what it takes to make your company profitable. It also shows what you will be doing with any funding.

You do not need to show actual financial data if you do not have one. Adding forecasts and projections to your financial statements is added proof that your strategy is feasible and shows investors you have planned properly.

Here are some key questions to answer to help you develop this section.

• What is your sales forecast for the next year?
• When will your company achieve a positive cash flow?
• What are the core expenses you need to operate?
• How much money do you need upfront to operate or grow your company?
• How will you use the loans or investments?

9. Add an Appendix to Your Business Plan

Adding an appendix to your business plan is optional. It is a useful place to put any charts, tables, legal notes, definitions, permits, résumés, and other critical information that do not fit into other sections of your business plan.

The appendix section is where you would want to include details of a patent or patent-pending if you have one. You can always add illustrations or images of your products here. It is the last section of your business plan.

When writing your business plan, there are details you cut short or remove to prevent the entire section from becoming too lengthy. There are also details you want to include in the business plan but are not a good fit for any of the previous sections. You can add that additional information to the appendix section.

Businesses also use the appendix section to include supporting documents or other materials specially requested by investors or lenders.

You can include just about any information that supports the assumptions and statements you made in the business plan under the appendix. It is the one place in the business plan where unrelated data and information can coexist amicably.

If your appendix section is lengthy, try organizing it by adding a table of contents at the beginning of the appendix section. It is also advisable to group similar information to make it easier for the reader to access them.

A well-organized appendix section makes it easier to share your information clearly and concisely. Add footnotes throughout the rest of the business plan or make references in the plan to the documents in the appendix.

The appendix section is usually only necessary if you are seeking funding from investors or lenders, or hoping to attract partners.

People reading business plans do not want to spend time going through a heap of backup information, numbers, and charts. Keep these documents or information in the Appendix section in case the reader wants to dig deeper.

Common Items to Include in the Appendix Section of Your Business Plan

The appendix section includes documents that supplement or support the information or claims given in other sections of the business plans. Common items you can include in the appendix section include:

• Additional data about the process of manufacturing or creation
• Additional description of products or services such as product schematics
• Additional financial documents or projections
• Articles of incorporation and status
• Backup for market research or competitive analysis
• Bank statements
• Business registries
• Client testimonials (if your business is already running)
• Copies of insurances
• Credit histories (personal or/and business)
• Deeds and permits
• Equipment leases
• Examples of marketing and advertising collateral
• Industry associations and memberships
• Images of product
• Intellectual property
• Key customer contracts
• Legal documents and other contracts
• Letters of reference
• Links to references
• Market research data
• Organizational charts
• Photographs of potential facilities
• Professional licenses pertaining to your legal structure or type of business
• Purchase orders
• Resumes of the founder(s) and key managers
• State and federal identification numbers or codes
• Trademarks or patents’ registrations

Avoid using the appendix section as a place to dump any document or information you feel like adding. Only add documents or information that you support or increase the credibility of your business plan.

Tips and Strategies for Writing a Convincing Business Plan

To achieve a perfect business plan, you need to consider some key tips and strategies. These tips will raise the efficiency of your business plan above average.

1. Know Your Audience

When writing a business plan, you need to know your audience . Business owners write business plans for different reasons. Your business plan has to be specific. For example, you can write business plans to potential investors, banks, and even fellow board members of the company.

The audience you are writing to determines the structure of the business plan. As a business owner, you have to know your audience. Not everyone will be your audience. Knowing your audience will help you to narrow the scope of your business plan.

Consider what your audience wants to see in your projects, the likely questions they might ask, and what interests them.

• A business plan used to address a company's board members will center on its employment schemes, internal affairs, projects, stakeholders, etc.
• A business plan for financial institutions will talk about the size of your market and the chances for you to pay back any loans you demand.
• A business plan for investors will show proof that you can return the investment capital within a specific time. In addition, it discusses your financial projections, tractions, and market size.

2. Get Inspiration from People

Writing a business plan from scratch as an entrepreneur can be daunting. That is why you need the right inspiration to push you to write one. You can gain inspiration from the successful business plans of other businesses. Look at their business plans, the style they use, the structure of the project, etc.

To make your business plan easier to create, search companies related to your business to get an exact copy of what you need to create an effective business plan. You can also make references while citing examples in your business plans.

When drafting your business plan, get as much help from others as you possibly can. By getting inspiration from people, you can create something better than what they have.

3. Avoid Being Over Optimistic

Many business owners make use of strong adjectives to qualify their content. One of the big mistakes entrepreneurs make when preparing a business plan is promising too much.

The use of superlatives and over-optimistic claims can prepare the audience for more than you can offer. In the end, you disappoint the confidence they have in you.

In most cases, the best option is to be realistic with your claims and statistics. Most of the investors can sense a bit of incompetency from the overuse of superlatives. As a new entrepreneur, do not be tempted to over-promise to get the interests of investors.

The concept of entrepreneurship centers on risks, nothing is certain when you make future analyses. What separates the best is the ability to do careful research and work towards achieving that, not promising more than you can achieve.

To make an excellent first impression as an entrepreneur, replace superlatives with compelling data-driven content. In this way, you are more specific than someone promising a huge ROI from an investment.

4. Keep it Simple and Short

When writing business plans, ensure you keep them simple throughout. Irrespective of the purpose of the business plan, your goal is to convince the audience.

One way to achieve this goal is to make them understand your proposal. Therefore, it would be best if you avoid the use of complex grammar to express yourself. It would be a huge turn-off if the people you want to convince are not familiar with your use of words.

Another thing to note is the length of your business plan. It would be best if you made it as brief as possible.

You hardly see investors or agencies that read through an extremely long document. In that case, if your first few pages can’t convince them, then you have lost it. The more pages you write, the higher the chances of you derailing from the essential contents.

To ensure your business plan has a high conversion rate, you need to dispose of every unnecessary information. For example, if you have a strategy that you are not sure of, it would be best to leave it out of the plan.

5. Make an Outline and Follow Through

A perfect business plan must have touched every part needed to convince the audience. Business owners get easily tempted to concentrate more on their products than on other sections. Doing this can be detrimental to the efficiency of the business plan.

For example, imagine you talking about a product but omitting or providing very little information about the target audience. You will leave your clients confused.

To ensure that your business plan communicates your full business model to readers, you have to input all the necessary information in it. One of the best ways to achieve this is to design a structure and stick to it.

This structure is what guides you throughout the writing. To make your work easier, you can assign an estimated word count or page limit to every section to avoid making it too bulky for easy reading. As a guide, the necessary things your business plan must contain are:

• Table of contents
• Introduction
• Product or service description
• Target audience
• Market size
• Competition analysis
• Financial projections

Some specific businesses can include some other essential sections, but these are the key sections that must be in every business plan.

6. Ask a Professional to Proofread

When writing a business plan, you must tie all loose ends to get a perfect result. When you are done with writing, call a professional to go through the document for you. You are bound to make mistakes, and the way to correct them is to get external help.

You should get a professional in your field who can relate to every section of your business plan. It would be easier for the professional to notice the inner flaws in the document than an editor with no knowledge of your business.

In addition to getting a professional to proofread, get an editor to proofread and edit your document. The editor will help you identify grammatical errors, spelling mistakes, and inappropriate writing styles.

Writing a business plan can be daunting, but you can surmount that obstacle and get the best out of it with these tips.

Business Plan Examples and Templates That’ll Save You Tons of Time

1. hubspot's one-page business plan.

The one-page business plan template by HubSpot is the perfect guide for businesses of any size, irrespective of their business strategy. Although the template is condensed into a page, your final business plan should not be a page long! The template is designed to ask helpful questions that can help you develop your business plan.

Hubspot’s one-page business plan template is divided into nine fields:

• Business opportunity
• Company description
• Industry analysis
• Target market
• Implementation timeline
• Marketing plan
• Financial summary
• Funding required

2. Bplan’s Free Business Plan Template

Bplans' free business plan template is investor-approved. It is a rich template used by prestigious educational institutions such as Babson College and Princeton University to teach entrepreneurs how to create a business plan.

The template has six sections: the executive summary, opportunity, execution, company, financial plan, and appendix. There is a step-by-step guide for writing every little detail in the business plan. Follow the instructions each step of the way and you will create a business plan that impresses investors or lenders easily.

3. HubSpot's Downloadable Business Plan Template

HubSpot’s downloadable business plan template is a more comprehensive option compared to the one-page business template by HubSpot. This free and downloadable business plan template is designed for entrepreneurs.

The template is a comprehensive guide and checklist for business owners just starting their businesses. It tells you everything you need to fill in each section of the business plan and how to do it.

There are nine sections in this business plan template: an executive summary, company and business description, product and services line, market analysis, marketing plan, sales plan, legal notes, financial considerations, and appendix.

4. Business Plan by My Own Business Institute

My Own Business Institute (MOBI) which is a part of Santa Clara University's Center for Innovation and Entrepreneurship offers a free business plan template. You can either copy the free business template from the link provided above or download it as a Word document.

The comprehensive template consists of a whopping 15 sections.

• The Business Profile
• The Vision and the People
• Home-Based Business and Freelance Business Opportunities
• Organization
• Licenses and Permits
• Business Insurance
• Communication Tools
• Acquisitions
• Location and Leasing
• Accounting and Cash Flow
• Opening and Marketing
• Managing Employees
• Expanding and Handling Problems

There are lots of helpful tips on how to fill each section in the free business plan template by MOBI.

5. Score's Business Plan Template for Startups

Score is an American nonprofit organization that helps entrepreneurs build successful companies. This business plan template for startups by Score is available for free download. The business plan template asks a whooping 150 generic questions that help entrepreneurs from different fields to set up the perfect business plan.

The business plan template for startups contains clear instructions and worksheets, all you have to do is answer the questions and fill the worksheets.

There are nine sections in the business plan template: executive summary, company description, products and services, marketing plan, operational plan, management and organization, startup expenses and capitalization, financial plan, and appendices.

The ‘refining the plan’ resource contains instructions that help you modify your business plan to suit your specific needs, industry, and target audience. After you have completed Score’s business plan template, you can work with a SCORE mentor for expert advice in business planning.

6. Minimalist Architecture Business Plan Template by Venngage

The minimalist architecture business plan template is a simple template by Venngage that you can customize to suit your business needs .

There are five sections in the template: an executive summary, statement of problem, approach and methodology, qualifications, and schedule and benchmark. The business plan template has instructions that guide users on what to fill in each section.

7. Small Business Administration Free Business Plan Template

The Small Business Administration (SBA) offers two free business plan templates, filled with practical real-life examples that you can model to create your business plan. Both free business plan templates are written by fictional business owners: Rebecca who owns a consulting firm, and Andrew who owns a toy company.

There are five sections in the two SBA’s free business plan templates.

• Executive Summary
• Company Description
• Service Line
• Marketing and Sales

8. The $100 Startup's One-Page Business Plan

The one-page business plan by the $100 startup is a simple business plan template for entrepreneurs who do not want to create a long and complicated plan . You can include more details in the appendices for funders who want more information beyond what you can put in the one-page business plan.

There are five sections in the one-page business plan such as overview, ka-ching, hustling, success, and obstacles or challenges or open questions. You can answer all the questions using one or two sentences.

9. PandaDoc’s Free Business Plan Template

The free business plan template by PandaDoc is a comprehensive 15-page document that describes the information you should include in every section.

There are 11 sections in PandaDoc’s free business plan template.

• Executive summary
• Business description
• Products and services
• Operations plan
• Management organization
• Financial plan
• Conclusion / Call to action
• Confidentiality statement

You have to sign up for its 14-day free trial to access the template. You will find different business plan templates on PandaDoc once you sign up (including templates for general businesses and specific businesses such as bakeries, startups, restaurants, salons, hotels, and coffee shops)

PandaDoc allows you to customize its business plan templates to fit the needs of your business. After editing the template, you can send it to interested parties and track opens and views through PandaDoc.

10. Invoiceberry Templates for Word, Open Office, Excel, or PPT

InvoiceBerry is a U.K based online invoicing and tracking platform that offers free business plan templates in .docx, .odt, .xlsx, and .pptx formats for freelancers and small businesses.

Before you can download the free business plan template, it will ask you to give it your email address. After you complete the little task, it will send the download link to your inbox for you to download. It also provides a business plan checklist in .xlsx file format that ensures you add the right information to the business plan.

Alternatives to the Traditional Business Plan

A business plan is very important in mapping out how one expects their business to grow over a set number of years, particularly when they need external investment in their business. However, many investors do not have the time to watch you present your business plan. It is a long and boring read.

Luckily, there are three alternatives to the traditional business plan (the Business Model Canvas, Lean Canvas, and Startup Pitch Deck). These alternatives are less laborious and easier and quicker to present to investors.

Business Model Canvas (BMC)

The business model canvas is a business tool used to present all the important components of setting up a business, such as customers, route to market, value proposition, and finance in a single sheet. It provides a very focused blueprint that defines your business initially which you can later expand on if needed.

The sheet is divided mainly into company, industry, and consumer models that are interconnected in how they find problems and proffer solutions.

Segments of the Business Model Canvas

The business model canvas was developed by founder Alexander Osterwalder to answer important business questions. It contains nine segments.

• Key Partners: Who will be occupying important executive positions in your business? What do they bring to the table? Will there be a third party involved with the company?
• Key Activities: What important activities will production entail? What activities will be carried out to ensure the smooth running of the company?
• The Product’s Value Propositions: What does your product do? How will it be different from other products?
• Customer Segments: What demography of consumers are you targeting? What are the habits of these consumers? Who are the MVPs of your target consumers?
• Customer Relationships: How will the team support and work with its customer base? How do you intend to build and maintain trust with the customer?
• Key Resources: What type of personnel and tools will be needed? What size of the budget will they need access to?
• Channels: How do you plan to create awareness of your products? How do you intend to transport your product to the customer?
• Cost Structure: What is the estimated cost of production? How much will distribution cost?
• Revenue Streams: For what value are customers willing to pay? How do they prefer to pay for the product? Are there any external revenues attached apart from the main source? How do the revenue streams contribute to the overall revenue?

Lean Canvas

The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.

Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:

• Problem: Simple and straightforward number of problems you have identified, ideally three.
• Solution: The solutions to each problem.
• Unfair Advantage: Something you possess that can't be easily bought or replicated.
• Key Metrics: Important numbers that will tell how your business is doing.

Startup Pitch Deck

While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.

Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.

Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.

Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.

Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.

• Cover/Introduction Slide: Here, you should include your company's name and mission statement. Your mission statement should be a very catchy tagline. Also, include personal information and contact details to provide an easy link for potential investors.
• Problem Slide: This slide requires you to create a connection with the audience or the investor that you are pitching. For example in their pitch, Airbnb summarized the most important problems it would solve in three brief points – pricing of hotels, disconnection from city culture, and connection problems for local bookings.
• Solution Slide: This slide includes your core value proposition. List simple and direct solutions to the problems you have mentioned
• Customer Analysis: Here you will provide information on the customers you will be offering your service to. The identity of your customers plays an important part in fundraising as well as the long-run viability of the business.
• Market Validation: Use competitive analysis to show numbers that prove the presence of a market for your product, industry behavior in the present and the long run, as well as the percentage of the market you aim to attract. It shows that you understand your competitors and customers and convinces investors of the opportunities presented in the market.
• Business Model: Your business model is the hook of your presentation. It may vary in complexity but it should generally include a pricing system informed by your market analysis. The goal of the slide is to confirm your business model is easy to implement.
• Marketing Strategy: This slide should summarize a few customer acquisition methods that you plan to use to grow the business.
• Competitive Advantage: What this slide will do is provide information on what will set you apart and make you a more attractive option to customers. It could be the possession of technology that is not widely known in the market.
• Team Slide: Here you will give a brief description of your team. Include your key management personnel here and their specific roles in the company. Include their educational background, job history, and skillsets. Also, talk about their accomplishments in their careers so far to build investors' confidence in members of your team.
• Traction Slide: This validates the company’s business model by showing growth through early sales and support. The slide aims to reduce any lingering fears in potential investors by showing realistic periodic milestones and profit margins. It can include current sales, growth, valuable customers, pre-orders, or data from surveys outlining current consumer interest.
• Funding Slide: This slide is popularly referred to as ‘the ask'. Here you will include important details like how much is needed to get your business off the ground and how the funding will be spent to help the company reach its goals.
• Appendix Slides: Your pitch deck appendix should always be included alongside a standard pitch presentation. It consists of additional slides you could not show in the pitch deck but you need to complement your presentation.

It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.

Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.

Advantages of the Business Model Canvas, Lean Canvas, and Startup Pitch Deck over the Traditional Business Plan

• Time-Saving: Writing a detailed traditional business plan could take weeks or months. On the other hand, all three alternatives can be done in a few days or even one night of brainstorming if you have a comprehensive understanding of your business.
• Easier to Understand: Since the information presented is almost entirely factual, it puts focus on what is most important in running the business. They cut away the excess pages of fillers in a traditional business plan and allow investors to see what is driving the business and what is getting in the way.
• Easy to Update: Businesses typically present their business plans to many potential investors before they secure funding. What this means is that you may regularly have to amend your presentation to update statistics or adjust to audience-specific needs. For a traditional business plan, this could mean rewriting a whole section of your plan. For the three alternatives, updating is much easier because they are not voluminous.
• Guide for a More In-depth Business Plan: All three alternatives have the added benefit of being able to double as a sketch of your business plan if the need to create one arises in the future.

Business Plan FAQ

Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time.  They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.

Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans.  A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.

A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs.  Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.

The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.

A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.

Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.

Exlore Further

• 12 Key Elements of a Business Plan (Top Components Explained)
• 13 Sources of Business Finance For Companies & Sole Traders
• 5 Common Types of Business Structures (+ Pros & Cons)
• How to Buy a Business in 8 Steps (+ Due Diligence Checklist)

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Martin luenendonk.

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.

How to Write a Business Plan for a Small Business

Noah Parsons

24 min. read

Updated September 2, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of writing a business plan

If you’re reading this guide, then you already know why you need a business plan . 

You understand that writing a business plan helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your business plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After writing your business plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

When writing a business plan, the produces and services section is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

When writing a business plan, the operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

The last section of your business plan is your financial plan and forecasts. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI to write a business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of writing a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Writing a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of writing a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan

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How To Start A Makeup Artists Business

Makeup artists are often overlooked – their contribution to special events, photoshoots, films and more tend to be overshadowed by the final outcome. However, this hasn’t stopped the makeup industry from thriving. 

The demand for professional makeup services is on a steady rise – proving that people recognise the true value of skilled artistry. So, if you’ve been thinking of starting your own makeup artists business, you could be on the verge of a profitable business venture. 

However, makeup is a pretty competitive scene. It’s important your business is well set up and prepared for the business environment. That’s where we can help — keep reading to know more. 

How To Start My Own Makeup Artists Business In Australia 

Starting a makeup artist business requires careful planning and thoughtful preparation. To give your business the best chance at success, it’s important to check all the right boxes – this includes ensuring you’re well qualified, setting up your business properly, and protecting it from potential risks.

Get Qualified

A makeup artist can elevate a creative project, positively impact a bride on their wedding day or simply help someone feel their best. Achieving that level of skills requires proper training, knowledge and experience. 

To become a qualified professional makeup artist, enrolling in courses and gaining hands-on experience is essential. Remember, makeup artistry goes beyond mastering a perfect smokey eye. You’ll need to understand various application techniques, colour theory, hygiene practices, and how to adapt to different skin types. The more knowledge you acquire, the more refined your craft will be.

Plan Your Makeup Artist Business 

Mastering makeup is only half the game. If you want to run a successful makeup artists business, then you’ll need to be smart about how you set up your business. The first step to successfully launching your makeup artists business involves a lot of research and planning. 

This may seem like a tedious and boring step however, creating a solid business plan can help you identify any risks you may have overlooked, get clarity on your goals and stay organised.

We’ve written more about writing a business plan in our guide: How To Start Writing A Business Plan.  

Register Your Makeup Artists Business

Every Australian business is required to be legally recognised as a business before it can operate. In order to do this, you will need to register your makeup artists business . To register your business, the first step is to pick out a business structure. The most common business structures are a sole trader, partnership and company.

• Sole Trader: If you register your business as a sole trader, you will be liable for the entire business – there’s no legal separation between your makeup artist business and you as an individual. Therefore, if the business is ever in any trouble, you could be at personal risk. To register as a sole trader, you simply need to apply for an Australian Business Number (ABN) online and register a business name , unless you plan on using your personal name for the business. 
• Partnership: Registering your makeup artist business as a partnership follows a similar process to registering as a sole trader. You’ll need to obtain an ABN (Australian Business Number) for the business and register a business name , unless you’re using the full names of all partners, in which case registration is not required. In a partnership, the business is legally tied to all partners, making each partner jointly liable for the debts and obligations of the entire business.
• Company: A company is registered with the Australian Securities and Investments Commission (ASIC) and is a separate legal entity, making it more regulated than other business structures. Therefore, it’s essential to carefully follow ASIC’s rules and regulations when setting up your company – seeking expert legal advice is highly recommended. While registering a company is a bit more complex, the company structure offers greater legal protection, as it provides limited liability. Since a company exists independently from its owners, your personal assets are generally shielded, meaning you won’t be personally affected if the company faces financial difficulties.

Keep in mind, there are other business structures and options available to you – we’ve just given you a quick rundown of the most frequently registered. It’s a good idea to chat with a legal expert when deciding on how to structure your makeup artists business, as they can give advice that’s specific to your unique business. 

Get Your Legal Agreements Drafted

The next step to getting your makeup artist business started is getting the right legal agreements drafted. Legal agreements help manage the risks that come with running a business and secure your business’s rights. Well drafted legal agreements are integral in having smooth business operations, so it’s important to research what you may need, chat with a legal expert and have them drafted to meet the needs of your makeup artists business. 

Here’s a few legal agreements you may want to consider getting: 

• Service Agreement: This is a contract between you and your clients determining the rights and responsibilities of both parties. It covers matters such as scope of services, payment, liabilities, termination, dispute resolution and more 
• Business Terms And Conditions: Having a T&Cs for your business is a good way to establish the ground rules for anyone interacting with your business
• Employment Contracts: When hiring employees, employment contracts are a necessary way to establish important matters such as breaks, leave, entitlements, pay and  responsibilities 
• Non-Disclosure Agreement (NDA): To protect your business’s private information (such as business ideas) confidentiality agreements such as an NDA are crucial 
• Partnership Agreement: If you’re going into business with partners, having a formal agreement determining how the partnership will operate and jointly run the business is essential to avoid future misunderstandings 
• Shareholders Agreement: When setting up a company, a shareholders agreement is an important document in identifying the company shareholder, their rights, obligations and what happens when one shareholder want to exit the company 
• Privacy Policy: If you’re makeup artist business has a website that collects information from it’s users, then you will likely need to have a privacy policy on the website to be compliant with Australian privacy laws 

How To Start A Makeup Artists Business From Home 

If you’re planning to start your makeup artist business from home, you’ll still need to go through the registration process and have legal agreements in place – this applies to mobile makeup artist businesses as well.

However, starting a home-based makeup artists business comes with additional legal considerations. It’s important to familiarise yourself with your local council regulations, which typically cover zoning laws, signage, waste management, business hours, noise levels, and any permits you may need to obtain before you can legally operate.

How Do I Advertise My Makeup Artist Business?

There are various mediums you can use to advertise your makeup artist business. Whether it’s traditional forms of media, such as print ads, or newer methods like social media marketing, it’s crucial to choose the platforms that best suit your business.

Start by identifying your target audience, determining your marketing budget, and getting any necessary contracts (such as an Influencer Agreement ). Once you have these in place, you can begin promoting your business.

However, it’s important to be aware of the rules and regulations surrounding advertising. Ensure your advertising practices comply with the Australian Association of National Advertisers (AANA) guidelines and Australian Consumer Law (ACL).

Keep in mind that the ACL covers more than just advertising – it also governs consumer rights related to pricing, service quality, refunds, and more. Understanding these obligations is not only crucial for compliant advertising but also for running a legally sound makeup artist business overall.

Do Any Other Laws Apply To My Makeup Artist Business? 

Aside from advertising codes and the ACL, a number of other regulations will impact your business. It’s important to know exactly what these regulations are and ensure your makeup artists business is always functioning in accordance with them. 

A few regulations to keep an eye out for include: 

• Employment Law : When hiring employees, it’s essential to ensure they are treated in accordance with Australian employment regulations and work health and safety (WHS) practices
• Data and Privacy Law : The collection of any personal information or use of surveillance practices must comply with data privacy regulations
• Industry Regulations : Safe business practices, banned materials, chemicals, and other standards are typically covered by industry-specific regulations. It’s important to stay updated and ensure compliance
• Intellectual Property (IP) Law : Your business should not only protect its own intellectual property but also respect the ownership of others’ IP. Legal processes such as trade mark applications or obtaining an IP licence can be useful in safeguarding these rights

Remember, every business is different. Your makeup artist business’s specific legal compliance requirements will differ from another business, so it’s always safer to get expert legal advice and go from there.  

Key Takeaways 

Launching a makeup artist business can be an exciting opportunity, but it requires thorough legal planning and consideration — expert legal help can provide you with the necessary support. To summarise what we’ve discussed: 

• Starting a makeup artist business requires careful planning, including obtaining the necessary qualifications, setting up a solid business plan, and selecting the appropriate business structure (sole trader, partnership, or company)
• Legal agreements, such as service agreements, employment contracts, and privacy policies, are essential for protecting your business and ensuring smooth operations
• Whether operating from home or as a mobile service, you must comply with local council regulations regarding zoning, permits, and business practices
• Advertising your business involves choosing the right platforms (print or social media) and ensuring compliance with the Australian Consumer Law (ACL) and AANA guidelines
• Other key laws that impact your makeup artist business include employment law, data privacy regulations, industry-specific health and safety standards, and intellectual property laws
• Compliance with these laws is crucial for protecting both your business and clients, and seeking expert legal advice can help tailor your approach

If you would like a consultation on starting a makeup artist business, you can reach us at 1800 730 617 or [email protected] for a free, no-obligations chat .

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Breaking news, 23andme independent board resigns in feud over ceo anne wojcicki’s plan to take company private.

All seven of 23andMe’s independent board members resigned in a stinging rebuke to a proposal by CEO Anne Wojcicki’s plans to to take the company private. 

Wojcicki, who has been  trying to take the company private  since April, proposed to acquire all outstanding shares of 23andMe not owned by her or her affiliates  for $0.40 per share , in July.

“I am surprised and disappointed by the decision of the directors to resign,” Wojcicki said in a memo Tuesday to employees obtained by The Post.

Wojcicki added that her plan was the “best opportunity for long term success.”

The genetic testing company’s shares rose 2.6% on Wednesday.

The stock has plummeted 96.6% since 2021, when the company went public through a merger with English billionaire Richard Branson’s blank-check company VG Acquisition.

The company – which at one time was valued at $3.5 billion – has a market capitalization of $180.2 million. 

The independent directors had rejected her plan in July because it didn’t provide a premium to the closing price at the time.

“After months of work, we have yet to receive from you a fully financed, fully diligenced, actionable proposal that is in the best interests of the non-affiliated shareholders,” the independent board members said in a letter addressed to “Anne” on Tuesday . 

“We believe the Special Committee and the Board have provided ample time for you to submit such a proposal. That we have not seen any notable progress over the last 5 months leads us to believe no such proposal is forthcoming.”

Wojcicki co-founded 23andMe – known for its saliva DNA testing and digital ancestry tools – in 2006. 

The board formed a special committee in late March to explore paths forward for the struggling company.

The independent board members – which included doctors, venture capitalists and YouTube CEO Neal Mohan – said it was “clear that we differ on the strategic direction for the Company going forward.”

23andMe and its DNA tests skyrocketed in popularity around 2018, but the company has faltered since.

Its business model does not often invite repeat customers – since one DNA test is all a person needs for their ancestry results.

It also has been rocked by scandal. 

23andMe revealed a data breach – which included customers’ personal information – last year.

The breach took place over a five-month period before the company became aware of the hack. 

The company confirmed the breach in October, but did not disclose the full extent of the hack until December.

More than 30 lawsuits were filed against the company over the breach.

On Monday, 23andMe agreed to pay a $30 million settlement for a class action suit that claimed the company failed to alert Chinese and Ashkenazi Jewish customers that the breach seemed to target their data in particular.

The suit alleged those customers’ data had been compiled into lists that were sold on the dark web .

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The first phase of turning around a restaurant company.

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Kamran Khan, CEO of Arabian Entertainment Co. Ltd.

Is your restaurant or café company struggling? Lately, a lot of F&B companies have either filed for Chapter 11 or are struggling to survive, and the list includes a lot of big names . A restaurant brand never succeeds or fails because of any one reason; multiple factors contribute to any downfall. Within no time, these factors can turn into a domino effect where things keep tumbling one after another.

The good news is that a lot of times, these situations can be reversed. I've "been there, done that" with two companies that operated multiple restaurant brands. In both companies, the situation was extremely difficult to survive; but when we broadly applied the following framework, the results were extremely positive. Today, both companies are delivering consistently positive results. If you are one of the leaders caught in the eye of the storm, I want to offer a roadmap to a successful turnaround.

1. Assess the situation.

The first step is to take a deep dive into the current business, from the business model to the support center capabilities and all the way to the field (Operations). Take time to assess and list the major challenges in each area, with particular focus on departments like Operations, Supply Chain, Finance, People, Marketing, etc.

It's important to avoid knee-jerk reactions to any situation; chances are you will discover several issues, but immediately replacing a bolt in one place could loosen one somewhere else. That is why it's important to take a detailed stock of the overall situation and then plan your set of action steps. Once your actions are lined up, make sure each action has three basic checks: time to complete, expected outcome, and a contingency (if possible).

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Once you have this master sheet ready, proceed to the next step.

2. Calibrate your team.

This step lays down the foundation of success for your entire plan. Having the right team is not enough; you should have the right people in the right seats. Do a thorough review of every team member—their performance, achievements, commitment and attitude. This is the time to make tough calls: look at hidden talent in your team and promote them to the right positions, and replace the ones who do not qualify on merit. Be swift and firm during this phase.

3. Build action plans.

Now that you have the right people in the right seats, it’s time to build a robust action plan for each department. Do not get involved directly at this stage; rather, let the department heads lead the development of an action plan for their division based on the overall situation analysis performed in step one. Each action plan should be very specific, with a clear target, deadlines and expected outcome. I recommend using the SMART model . Every department should have different components based on their specific challenges.

Be laser-focused on operations, supply chain and finance, because in my experience, these three departments are the driving force behind any turnaround situation. There are several key components that should be covered in the action plans of these departments:

• Operations: Guest satisfaction scores; food quality scores; a manpower evaluation (I recommend doing this in collaboration with finance); building upkeep; and GM performance.

• Supply Chain: Supplier assessments; cost evaluations; methods for finding alternative products without compromising on quality; right forecasts and par levels; and steps to reduce dependency on petty cash purchases.

• Finance: Strategies for cash flow management and assessments of receivables, payables and petty cash.

4. Conduct menu engineering.

Consider the menu as your “soft real estate.” Typically, menu engineering not only directly impacts sales but also cost efficiencies. Every aspect of the menu should be evaluated (costs of goods sold, selling price, contribution margin, and product popularity and uniqueness). How you design your menu and which item occupies how much space on your menu and where are all important elements for maximizing menu real estate. This task should be a joint exercise between operations, finance, supply chain and marketing. Make sure menu engineering is done very scientifically based on facts and not assumptions or guesses.

5. Cut back on marketing.

Yes, you read that right. Would you invite a guest to your home if you were not ready? Probably not. Mind you, I am not suggesting that you should have no customers, but don't invest in marketing when your service is not up to standard and food items are missing from the menu. Just maintain a status quo until you fix the core issues, and then go for well-planned marketing initiatives.

6. Look for quick wins.

There are typically a few low-hanging fruits that you should not miss, such as improving the top line or controlling expenses. A few examples for improving top line are to focus on B2B catering and limited-time offers to boost traffic. For your bottom line, optimize utility expenses and assess your manpower (but don’t cut too close to the bone).

7. Close loss-making stores.

It can be a tough call to make, but close any loss-making store. Fear of closure is always high, but I have found that in order to succeed in the restaurant business, you have to stop yourself from being emotionally attached to individual parts, including locations.

8. Consider expansion.

Once you see the winds of change, only then should you consider doing a “cautious expansion." The restaurant owners and board may have the urge to expand quickly from the start, but doing so too early may be shooting yourself in the foot. It's important to get the abovementioned areas fixed before considering this step; otherwise, you could be trying to build a pipeline that has leakage. When you do find yourself in a good position to take this step, look for a strong location that ticks all the important boxes—visibility, rent, traffic, lease period, etc.

To conclude, no restaurant turnaround plan is one-size-fits-all. However, as I mentioned in the beginning, the first phase should always be to assess the situation and then draft your strategies. In my experience, this framework can lead to success for most restaurant turnarounds.

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