Essentials Of A Cosmetics Business Plan
Beauty and beauty products have always found a favorable audience and continue to be popular and sought after products, thus making beauty and cosmetic products a serious business opportunity that is witnessing a steady and consistent growth. This growth and demand for cosmetic products is seen more so now especially in the times of social media platforms, video blogs and Instagram, when every new cosmetic product is tried, tested, promoted and advertised via several influencers and celebrities.
Starting a fashion business is a good opportunity to consider for aspiring entrepreneurs. Cosmetics business is evergreen & popular sector that has several new products being introduced routinely and is something that most individuals require routinely.
Cosmetics refers to products and solutions used for skincare, nails, haircare, complexion, which take care of them and help enhance the skin, hair, nails, complexion, thus further resulting in an overall enhancement of one’s appearance.
Aspiring entrepreneurs who are wondering how to start with cosmetic shop should first research the types of cosmetic businesses.
Various types of cosmetic businesses-
Under this business model, entrepreneurs manufacture their own cosmetic products, whether it is makeup products such as lipsticks or highlighters or nail paints or even skincare products such as oils (for hair or body oils) or shampoos etc. Manufacturing is a great business idea but it requires knowledge regarding the manufacturing techniques of cosmetic products and also a sizeable investment for purchasing equipment required for manufacturing. Additionally, manufacturing requires special licences and permits from FDA too. However, manufacturing of cosmetic products is a highly rewarding business idea.
Retail Store Of Specific Brand
Retail is the recommended business model that a number of entrepreneurs opt for, where they sell cosmetic products via a shop. A standalone flagship store will sell the cosmetic products of a particular brand only, for example all products of the brand Lakme or Chambor. Since cosmetic brands advertise about themselves in a large way and most brands are well known, this type of business model retailing in products of a particular brand can help create a loyal and fixed customer base and help create an identity for the business too. However, what this business lacks is the option of choices that customers might want to look at.
Cosmetics business that is the most popular is a shop that deals in cosmetic products of all the different renowned brands and of all different varieties and types, available under a single roof. A multi-brand retail store caters to a very large audience and to the needs of all kinds of customers. In a multi-brand shop customers can benefit from the wide variety of choices and options available. However, the only drawback is that business owners need to stock up on a large number of cosmetic products.
Another way of operating a cosmetic business is by starting an online store. Online selling of products is now a very successful medium of doing business and has the advantage of reaching out to a wide audience, across the country and even internationally. Online stores can even stream videos and tutorials relating to the launch of new products and on how to use some of the products and even make up tutorials. However online stores lack a personal touch and customers might hesitate making a purchase without physically checking and testing the products.
Also businesses such as anti-aging clinics, aromatherapy, beauty salons, beauty spa, hair salon and even makeup artists are part of the cosmetic business along with the cosmetic store and can be considered as business avenues too
Each business model for cosmetic products has its own share of advantages and disadvantages but despite the model chosen to carry out the business, the cosmetic industry and cosmetic business is a popular venture that is profitable and is growing by leaps and bounds too.
The vital factor to consider, irrespective of the type of cosmetic business is that in order to run any business, online or offline, certain basic essential details need to be considered to ensure a successful start and profitable running and growth of the business. The most basic and essential of these is to have a cosmetic shop business plan in place.
Business Planning is essential for the business because-
- A business plan helps streamline vague and ambitious business ideas into concrete, structured plans on paper .
- Business planning helps provide a focus towards the actual business since the business plan highlights the vision of the business as well as the business goals.
- The business objectives become clear when jotted down in a business plan.
- The business plan ensures that the entrepreneurs are on track towards attaining the desired business goal and are staying true to the strategy and the business model, instead of getting waylaid after starting the business.
- A business plan helps to highlight the tasks and prioritise the work. Additionally, the plan also helps to delegate the tasks easily.
- A business plan also helps maintain accountability and the cash flow of the business.
These are just some of the benefits of having a business plan in place for the business.
Essentials Of Cosmetic Business Plan
A cosmetic business plan is a must for starting the business and the plan must include certain essential information which can be known via a business planning checklist. The cosmetic business plan is also used for procuring bank loans required for the business and must thus be prepared thoroughly, ensuring that all the points are covered. The basic details that need to be included in a cosmetic business plan are-
Details Of The Business
The cosmetic business plan must include the business idea in detail, such as how will the business be conducted, the structure of the business, whether selling only selected brands or selling cosmetics of all brands, the business entity such as either a proprietorship or a partnership or a one person company or a limited liability partnership, the location of the shop and also the goal and vision of the business, such as projected sales while starting the business and expected growth in the future and other objectives of the business that need to be fulfilled in the long run. In short the entire description of the business must be included in the cosmetic shop business plan.
Management And Equipment Required
The cosmetic business plan must also include information regarding the delegation of responsibilities and how the business will be managed, the number of staff needed for the shop. Along with management details, information regarding the equipment needed for the cosmetic shop, such as display counters, shelves, mirrors, and stocking facilities must also be included in the business plan.
Capital Requirement And Funding Procurement
Starting the cosmetic shop requires capital investment in terms of purchasing the space for the shop or renting it along with maintaining a certain amount of stock of the various cosmetic products. Furnishing the shop and making the display counters and shop look attractive also requires expenditures. Along with these there are certain maintenance costs as well as salaries of the staff, electricity bills and other miscellaneous expenses, all of which need to be considered and mentioned in the business plan.
Along with the expenses and capital required the proposed plan of procuring the funds for the said expenses must also be mentioned in the document. The business plan can include information regarding application for bank loans or obtaining funding from non banking financial institutions. If the funding is going to come from borrowings from friends and family or from the entrepreneur’s savings then those details must also be mentioned in the business plan.
Market Research And Analysis
The cosmetic business is a popular venture, thus having quite a few vendors dealing in the same business. Therefore it is necessary to conduct a market research and analysis and mention it in the business plan. The competition needs to be studied, and observations need to be made such as what factors are working for the competition, what is their marketing strategy, how are they attracting the customers, how are the products priced, what are the needs and demands of the customers, are there any shortcomings in the demand and supply that the entrepreneur can fill in through their business, etc. A detailed analysis of the cosmetic business needs to be made before starting the business. Additionally the proposed marketing strategies also need to be planned and mentioned in the business plan. Most cosmetic companies and brands carry out advertising and marketing on a large scale, thus their products are already known to the consumers, therefore helping the entrepreneur focus on attracting customers to the shop by offering discounts and attractive schemes and promotions. A basic description of the marketing strategy must be included in the business plan.
A business plan also includes an executive summary of the cosmetic business. The business plan is a crucial first step towards setting up the cosmetic shop and must be prepared meticulously. deAsra can help with planning a detailed and thorough business plan, thus helping lay a solid foundation for the future of the business.