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How Much Does It Cost to Start a Hair Care Line?

You would need a minimum of $664,525 to establish a medium scale but standard hair care line in any city in the United States of America.

It is a known fact that hair care products are used in all parts of the world and those that are in the business of producing these products are known to generate sales year in year out if the business is properly managed. Economic downturn hardly affects the usage of hair care products because it is a commodity that plays a major role in the beauty world.

This is no wonder the production of hair care products has continued to soar high. If you are however thinking of starting your own hair care line, then you must be ready to learn the ropes.

One of the major factors that encourage aspiring entrepreneurs to venture into the hair care product business is the fact that there are readily available markets for hair care products. Despite the stiff competition, if you are able to carve a niche for yourself, it won’t be too difficult for people to accept your products. In this article, we will help you with the estimated cost of opening a hair care line in your city.

Estimated Cost of Starting a Hair Care Line

When it comes to starting a standard hair care line, one is expected to spend the bulk of the start-up capital on leasing a facility in an ideal location and of course purchasing and installing equipment and machines. Please note that the exact cost of opening a hair care line depends on the size of the business and where it will be located.

Aside from that, you are expected to purchase ingredients, packaging materials, and of course pay your employees and utility bills. These 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 launching of the hair care line 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 (it includes writing business plans) – $4,500.
  5. Insurance (general liability, workers’ compensation, and property-casualty and other related insurance policy) coverage at a total premium – $12,400.
  6. The cost for payment of rent for a facility for 12 months at $1.76 per square foot in the total amount of – 75,600.
  7. The cost of remodeling the facility and constructing a standard hair care line factory (including installing the needed machines and gadgets) – $150,000.
  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, fueling and maintenance of the distribution trucks, and payments of bills et al) – $150,000
  10. The cost for start-up inventory (raw materials and Chemicals such as Color pigments, oils, Castor oil, waxes (beeswax, candelilla wax, or camauba, red fluorescent dye, solvent, antioxidant, and emollients) and labeling and packaging materials. et al) – $40,000
  11. The cost for storage hardware (bins, rack, shelves, creates) – $20,720
  12. The cost for equipment and machines such as blending, mixing and compounding machine, molding machine (tubes), and packaging, labeling, and sealing machines) – $150,000
  13. The cost for store equipment (cash register, security, ventilation, signage) – $750
  14. The cost of purchase of distribution trucks – $35,000
  15. The cost of launching a website – $600
  16. The cost for our opening party – $5,500
  17. Miscellaneous – $5,000

From the rough estimate above, you would need a minimum of six hundred and sixty four thousand five hundred and twenty five USD ($664,525) to establish a medium scale but standard hair care line in any city in the United States of America. Please note that this amount includes the salaries of all staff for the first three months of operation.

Please note that this is a rough estimate and we usually advise our readers who are interested in starting opening a hair care line to directly contact wholesalers and suppliers of the type of equipment and raw materials they need in order 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 . Having said that, here are some of the factors that will influence the cost of opening a hair care line business in the United States of America;

Factors That Influence The Cost Of Opening A Hair Care Line

  1. The Type and Size of the Hair Care Line 

A major factor that will determine the overall cost of opening a hair care line in the United States of America is the type and size of the business. A standard hair care line is supposed to go into the production of shampoo, conditioner, hair oils and serums, dry shampoo, hair wax / pomade, hair mousse, heat protectant spray, sea salt spray and hair dye et al.

For example, it will cost more to open a hair care line that is into the production of these various types of hair care products when compared to the cost of opening a hair care line business that is only into repacking and retailing hair care products.

  1. The Choice of Location

Another major factor that will determine the cost of opening a hair care line in the United States of America is the location you want to locate the business. In business, location is a key part of what determines the success of the business.

In fact, there are business consultants and realtors who specialize in helping people choose an ideal location for their business; a location that will guarantee them profitability and to break even within the shortest time frame.

So, you will now agree that location can influence the cost of starting a business not just in the United States of America but anywhere in the world. For example, renting or leasing a store or production facility in a location that is off the city center or off a major road will be less expensive when compared to renting or leasing a store facility in a highbrow area.

  1. The Required Licenses and Permits

In the United States of America, you cannot open a hair care line business without first applying for the mandatory license and permits. You would need an operational license, building license, zonal permits, signage permits, and chemical handlers license amongst others.

As expected, these license and permits cost money and it will influence the overall cost of opening a hair care line business in the United States of America. Please note that you have to pass through several inspections before you can be issued your licenses and permits.

In order to get the overall cost of licensing and permits associated with opening a new hair care line in the United States, we will advise that you reach out to your city government. You also need to consider state and federal requirements too.

  1. The Type of Facility

The type of facility you want to operate your hair care business from is also a major factor that will determine the overall cost of opening a hair care line business in the United States of America.  As regards the facility, you have the option of renting, leasing, or designing and constructing your own store or production facility from the scratch.

With renting and leasing a store or production facility, you might just have to spend extra cost to modify the store facility to fit into the picture of what you have in mind, the number of racks and storage room/warehouse that you want to attach to your production facility or store, 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 production and store facility from the scratch. It means that you will buy the land or property, bring up your design and construct and equip the 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 production and store facility in a shopping mall. This indeed will greatly influence the overall cost of opening your hair care line business.

  1. Your Products and Service Offerings

Another key factor that will determine the cost of opening and operating a hair care line business in the United States of America is the product and service offerings of the hair care line. The fact that there are different types of hair care businesses means that these hair care line businesses are designed to operate differently.

The cost for opening a strictly brick and mortar hair care line with a production facility and retail outlet will be far more when compared to the cost of opening a strictly online hair care  business.

  1. The Size of the Hair Care Line Business

Another very important factor that determines the cost of opening a hair care line in the United States of America is the size of the store. Of course, the larger the hair care line store, the large the budget to get it up and running especially as it relates to stocking the store.

Aside from the cost of stocking the store, it will also cost you more to position employees to man different job positions in the store and this will translate to spending more money.

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

If you want to get your business started 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, a comprehensive SWOT analysis, and other advisory services that will help you with opening the business.

So also, an attorney will help you with registering the business, drafting contract documents (especially for your suppliers and creditors), and offering you all the legal expertise that will help you start the business on the right foundation.

These services will cost you money and it will indeed influence the overall cost of opening a hair care line store in the United States of America.

  1. The Cost for Branding, Promotion, and Marketing of the Hair Care Line 

The cost for branding, promoting, and marketing the hair care line is yet another key factor that will determine the overall cost of opening a hair care business in the United States of America.

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 hair care line business.

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. So, if you add the cost of paying a branding and marketing expert, it will surely increase the cost of opening your hair care line.

  1. The Cost for Furnishing and Equipping the Facility

Another factor that will determine the cost of opening a hair care line business is the cost of furnishing and equipping the production facility and/or store. 

Before you can open a hair care store, you should budget for items like storage hardware (bins, rack, shelves, case), shopping baskets and trolleys, counter area equipment, Flat Screen TVs, sound system,

Satellite dish and decoder, furniture (table, and stools), telephones, filing cabinets, store equipment (cash register, POS machines, security, CCTV, ventilation, signage), and security and fire alarms, prevention gadgets amongst others. All these will cost money and it will influence the overall cost of opening a hair care store in the United States of America.

  1. The Cost for Insurance

The cost of paying for insurance policy cover is yet another important factor that will determine the overall cost of opening a hair care line in the United States of America. Interestingly, in the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that is required by the industry you want to operate from.

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

  1. The Cost for Registering the Business

The cost of registering the hair care business is yet another cost that will influence the overall cost of opening a hair care line business in the United States of America. Although, the cost of registering a business is affordable, it will no doubt add to the overall cost of opening a hair care business in the United States of America.

  1. Source of Your Supplies

Another major factor that will determine the cost of opening a hair care line in the United States of America is the source of your supplies.

For example, if you are not into the production of your hair care products and you have to rely on supplies, if you are able to build a robust business relationship with some of the leading hair care production companies, then you would have succeeded in cutting down the cost of your supplies. As a matter of fact, you can even get your supplies on credit.

  1. Cost of Recruiting and Training Your Staff

The fact that you are opening your hair care line as a new business means that you are expected to recruit and train your staff to conform to the kind of hair care business you want to operate. 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 trainers, and that will add to the overall cost of opening a hair care line business.

  1. The Cost for the Purchase and Customizing of Uniforms

Another factor that will determine the overall cost of opening a hair care business in the United States is the cost for the purchase and customizing of uniforms. Your sales people and security personnel need to 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.

  1. The Cost for Grand Opening of the Hair Care Line Business

In recent times, no hair care business opens its doors for business without first organizing an opening party to officially launch the business. This means that the cost of the grand opening is part of the factors that will determine the overall cost of opening a hair care line in the United States of America.

You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party. The bottom line is that it is a cost that must be part of your budget and this cost will influence the overall cost of opening the hair care line business in the United States of America.

In Conclusion,

Please note that there are other factors not listed above that will surely influence the overall cost of opening your hair care line which is why we will advise that you work with a result driven business consultant in your city to give you the needed guide and info as it relates to the unique factor in your location.