The Beauty in Business: Starting Ain't Easy
The beauty business isn't for the faint at heart. New, independent brands are launching in record numbers, creating a comfortable space for aspiring entrepreneurs. This emergence of new brand owners can lead one to believe that getting in this business is a simple task. However, if you plan to do real business, you’ll learn quickly that owning and managing a brand takes much more than posting a few Instagram photos and setting up a PayPal account. I had to learn this lesson the hard way but the pain wasn’t in vain. Hopefully, the knowledge I gained from my experience will help others take a less painful route.
Unlike many of today’s brand owners, when I started, I didn’t have a huge social media following, big bank account, industry access, or tons of entrepreneurial experience. I had to take the “learn as I go” approach and it’s a miracle that I still have my sanity! Each phase presented different, more difficult challenges that could’ve easily discouraged me from moving forward. Fortunately, I made it across the first finish line and vowed to share my learning experience with new and aspiring brand owners in hopes of saving them time, money and, more importantly, their sanity.
No two entrepreneurs are the same but insight from someone who can provide first-hand knowledge about this journey can be helpful to just about anyone in this business. Presuming you have a general sense of what you want your product line to include, here are a few important areas that are equally (if not more) critical to the successful launch of your brand. I’ll cover other topics in future posts but in the meantime, let’s touch on a few things that will be relevant during the earlier stages of your journey:
- It’s your baby, name it with love. Put as much thought and consideration into choosing your business' name as you would if you were choosing a name for your firstborn. It’s going to be what introduces your brand to the world so make sure you can live with it and that it accurately represents your brand. Also, make sure it’s original. You want to avoid unintentionally duplicating another company’s name. It’s important that you don’t make this mistake because it has financial and legal implications. Please choose wisely.
- Handle your business’ business. Whether you’re planning to structure your business as a partnership, corporation, or limited liability company (LLC), structure it accordingly. You may be starting small but consider where you envision your business in the future. You can always modify the structure later but keep in mind that changes can be time-consuming and costly so it’s easier to determine your structure in the beginning (if possible) rather than later. You also want to avoid any drama with the IRS so make sure you choose the right structure early on and don’t hesitate to seek professional guidance if you get stumped. In addition to federal requirements, your state also has its own set of stipulations. Obtaining the required licenses, in addition to your Federal Tax Identification Number (EIN/FEIN), is necessary to conduct business in many states. The type of license you’ll need depends on how you’re selling your products (i.e., online, a physical location, etc.), what products you’re selling, and where you intend to sell them. So basically, if you’re selling anything, you’ll need a license. Be sure to contact your state agency for additional details regarding licensure requirements.
- Get the tea on the industry. Educate yourself as much as possible. Gaining insider knowledge and staying abreast of industry trends will help you keep up with the times and get ahead of current fads. Your personal interest in beauty alone may not be enough to sustain your company. You want to be able to offer your customers expert-level knowledge when necessary so take classes, attend conferences, and read industry-specific books every chance you get. Never stop investing in your professional development because there’s always something new to learn. Besides, the more you know, the more confidence your customers will have in your brand.
- You have to spend money to make money. There’s absolutely no way you can start a successful cosmetics business without money. Launching a brand can easily cost you tens of thousands of dollars so, while it’s important to be conservative in your spending, you don’t want to cut costs in areas that will jeopardize the integrity of your brand. In other words, have enough funds to consistently produce quality products, maintain your inventory, invest in effective marketing tools, hire reputable professionals when needed, and for unexpected expenses. These are just a few line items that you can expect to monopolize your budget however, this list has endless growth potential.
- Hindsight is the best vision. In hindsight, I would’ve invested less in the start-up inventory. Although most of the products sold out in a relatively short period, some products were favored more than others. I would suggest expanding your product options and limiting the quantity. The objective is to test your products’ appeal before you officially launch. Hosting a pre-launch event with a select group (invite a few beauty professionals) is a great way to get an idea of which products will likely be your bestsellers. Depending on your lab or manufacturer, you may be required to meet production minimums so ordering in small quantities may be very costly or not an option at all but there are creative approaches you can take to avoid the additional expense. After you officially launch and become more familiar with your customers’ buying patterns, adjust your supply accordingly. Having too much inventory can be just as counterproductive as not having enough so give yourself some time to learn your audience before you go on an inventory spending spree. Don’t overdo it in the beginning.
In spite of the many challenges, I’m grateful for this experience. I've learned so much thus far and as I continue my journey, I'll continue to share what I learn along the way. I hope this information was helpful and if you have any questions, you can always e-mail me at firstname.lastname@example.org. I’m here to help :-).