You would need a minimum of $238,920 to open a medium-scale beauty supply store in any city in the United States of America.

Beauty supply stores sell a wide range of beauty products, from makeup to sunscreen. Skin care, cosmetics and hair care products are the most retailed products in this industry.

Starting a beauty store is not difficult and it is not so capital intensive especially if you choose to start on a small scale within your neighborhood.

Getting the right brands that people want to buy and good record keeping are the secrets of running a beauty store. If you are contemplating starting your own beauty store in the United States, you should ensure that you carry out a thorough market survey and feasibility studies.

If you get some key factors wrong before starting your any business, then you are likely going to struggle to stay afloat. But over and above, beauty store business is a thriving and profitable especially if you are creative and ready to take on the available market within the location where your business is located.

Estimated Cost Breakdown to Open a Beauty Supply Store

When it comes to starting a standard beauty supply store business, one is expected to spend the bulk of the startup capital on renting and furnishing a store facility.

Aside from that, you are expected to purchase a wide range of beauty products, secure the required license and permits, pay of your employees and utility bills. In view of that, here are the key areas where you are expected to spend your startup capital;

1. The total fee for registering the business in the United States of America – $750.
2. Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
3. Marketing promotion expenses for the grand opening of the beauty supply store 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.
4. The cost for hiring business consultant including writing a business plan – $2,500.
5. Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
6. The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $46,000.
7. The cost for shop remodeling (construction of security tight safes, racks and shelves) – $5,000.
8. Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500) – $3,000
9. Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
10. The cost for start-up inventory (stocking with a wide range of cosmetics, perfumes, toiletries, personal grooming products et al and packaging materials) – $50,000
11. The cost for counter area equipment – $9,500
12. The cost for store equipment (cash register, security, ventilation, signage) – $3,750
13. The cost of purchase and installation of CCTVs – $2,500
14. The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $4,000.
15. The cost of launching a Website – $600
16. The cost for our opening party – $3,000
17. Miscellaneous – $5,000

From the rough estimate as listed above, you would need a minimum of two hundred and thirty – eight thousand, nine hundred and twenty USD ($238,920) to establish a medium – scale but standard beauty supply store business in any city in the United States of America.

Note that this is a rough estimate and we usually advise our readers who are interested in opening a beauty supply store to directly contact suppliers of the items (the types of beauty supply products et al) they would need to get the real time prices of these items.

The truth is that, if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.

3-Year Sales Forecast and Breakeven Analysis

Revenue Streams:

• Hair Products: Shampoos, conditioners, hair extensions, etc.
• Skincare Products: Lotions, serums, creams, etc.
• Cosmetics: Makeup and accessories.

Average Pricing and Sales Volume:

• Hair Products: Assume an average price of $15 per unit and monthly sales of 1,200 units.
• Skincare Products: Assume an average price of $20 per unit and monthly sales of 800 units.
• Cosmetics: Assume an average price of $25 per unit and monthly sales of 700 units.

Growth Rate: A 10% annual growth rate is expected due to increased customer base and successful marketing.

Operational Costs:

• Fixed Cost: Rent, utilities, insurance, salaries, etc., totaling $100,000 annually.
• Variable Cost: Cost of goods sold and sales commissions, estimated at 60% of annual revenue.

Year 1:

Revenue:

• Hair Products: 1,200 units × $15 × 12 months = $216,000
• Skincare Products: 800 units × $20 × 12 months = $192,000
• Cosmetics: 700 units × $25 × 12 months = $210,000

Total Revenue: $216,000 + $192,000 + $210,000 = $618,000

• Variable Cost: 60% of $618,000 = $370,800
• Total Cost: $370,800 (variable) + $100,000 (fixed) = $470,800
• Profit: $618,000 – $470,800 = $147,200

Year 2:

• Revenue: $618,000 + 10% = $679,800
• Variable Cost: 60% of $679,800 = $407,880
• Total Cost: $407,880 (variable) + $100,000 (fixed) = $507,880
• Profit: $679,800 – $507,880 = $171,920

Year 3:

• Revenue: $679,800 + 10% = $747,780
• Variable Cost: 60% of $747,780 = $448,668
• Total Cost: $448,668 (variable) + $100,000 (fixed) = $548,668
• Profit: $747,780 – $548,668 = $199,112

Break-Even Point

Contribution Margin per Dollar of Revenue = 1 – Variable Cost Ratio

: 1 – 0.60 = 0.40 (40%).

Fixed Cost: $100,000 per year.

Break-Even Revenue = Fixed Cost ÷ Contribution Margin

: 100,000 ÷ 0.40

Break-Even Revenue ​ =$250,000

From the figures above, your beauty supply store needs to generate $250,000 in annual sales to breakeven. With projected sales reaching over $600,000 in the first year, your beauty supply store will comfortably exceed the break-even point.

Factors That Influence the Cost of Starting a Beauty Supply Store

1. The Type of Beauty Supply Store

We have strictly brick and mortar stores where beauty care products are retailed over the counter and some of this beauty supply stores have mini salons or beauty parlor in their facility.

We also have online stores or those that combine both online and offline method of retailing. The two come with different cost implications when starting the business.

2. The Choice of Location

In business, location is key part of what determines the success of a business. As a matter of fact, there are business consultants cum realtors who are specialized in helping people choose an ideal location for their type of business; a location that will guarantee them to profitability in the shortest time frame.

Please note that in the United States of America, zoning violations and citations can be very costly for a business. It is always preferable to make sure you comply with all the zoning and land use laws before you choose a location for your business.

3. The Required Licenses and Permits

In the United States of America, you cannot open a beauty supply store without first applying for the mandatory licenses and permits.

You would need Retail Seller Permit, Business Operation License, Doing Business as (DBA) License, building license, zonal permits, and signage permits amongst others that may be unique to different cities and states.

In order to get the overall cost of licensing and permits associated with opening a new beauty supply store in the United States, we will advise that you reach out to your city government to find out what you need for your beauty supply store. You also need to consider state and federal requirements.

4. The Type of Facility

As regards the facility, you have the options of renting, leasing or designing and constructing a facility from the scratch.

With renting and leasing, you have to spend a bit to modify the facility to fit into what you have in mind, but there is a limit to how far you can go and it will be dependent on what the landlord of the facility wants. Let us assume that you want to construct your beauty supply store from the scratch.

It means that you will buy the land or a property, construct and equip the beauty supply facility to fit into what you have in mind. With that, you will agree that you are going to spend way more when compared to people that rent or lease a facility.

5. Additional Services Offerings

The fact that there are different types of beauty supply stores means that these stores are designed to offer different services. For example, a beauty supply store that operates online would offer shipping services while a strictly brick and mortar may not.

A brick-and-mortar beauty supply store may decide to operate a beauty parlor while an online beauty supply store may not. In essence, some of the additional services you are going to be offering will cost you more hence you must increase your budget for opening a beauty supply store.

6. The Cost of Hiring and Paying a Business Consultant and Attorney

If you want to get your business to start on the right foundation, it will be a wise decision to hire the services of a competent business consultant and perhaps an attorney.

A business consultant will help with drafting a workable business plan document, a marketing plan and strategy, comprehensive SWOT analysis, and other advisory services.

An attorney on the other hand will help you with registering the business, drafting contract documents and offer you all the legal expertise that will help you start the business on the right foundation.

7. The Cost of Branding, Promotion and Marketing 

Trust me, if you need massive results as it relates to competing and winning a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion and marketing of your new beauty supply store.

As a matter of fact, it is not cheap to come by an expert in branding, promotion and marketing that will help you compete with brands that are already determining the market direction of the industry in your city.

8. The Cost for Furnishing and Equipping the Beauty Supply Store

Before you can open a beauty supply store, you should budget and buy safes, flat screen TVs, sound system, DVD players, Satellite dish and decoder, office furniture (table, stools and sofas),

Drawers and cabinets, telephones, filing cabinets, office equipment (cash register, security and fire alarm and protection gadgets, CCTV, ventilation, signage), amongst others.

9. The Cost for Insurance

In the United States, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.

Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your beauty supply store business.

10. The Cost for Registering the Business

The cost for registering the beauty supply store business is yet another cost that will influence the overall cost of opening a beauty store in the United States of America. Although, the cost of registering a business quite is affordable, but it will no doubt add to your overall bottom line.

11. Supplies and Ongoing Expenses

Another major factor that will determine the cost of opening a beauty supply store in the United States of America is your supplies such as:

Hair care and shower products, cosmetics, skin care products, fragrances, nail care products, deodorant and shaving products, sun care, baby care and other products.

If you have direct access to manufacturers of the products that you would need, it will sure cut down the cost of running the beauty store as against buying from third party suppliers. So also, if you have an in-house beautician, it will increase your profitability of running the beauty supply store.

12. Cost of Recruiting and Training Your Staff

The fact that you are opening your beauty supply store as a new business means that you are expected to recruit and train your staff.

The training will help you sell the corporate culture of your organization to the new employees. As expected, it will cost you money to hire expert trainers that will help you train your new hires and that will add to the overall cost of opening a beauty supply store.

13. The Cost of Purchase and Customizing of Uniforms

As expected, your staff are expected to all have different uniforms and they are expected to put on these uniforms when they are on duty. All these uniforms will cost you money which is why it must be part of your budget.

14. The Cost of Grand Opening of the Beauty Supply Store

In recent times, no beauty supply store opens its door for business without first organizing an opening party to officially launch the business.

This means that the cost of grand opening of the beauty store is part of the factors that will determine the overall cost of opening the business. You can choose to do a soft opening if you operating on a low budget or you can choose to go all grand.