Do you want to start a beauty supply store? If YES, here is a complete guide to starting a beauty supply store business with NO money and no experience.
Okay, so we have provided you an in-depth sample beauty supply store business plan template. We also took it further by analyzing and drafting a sample beauty supply store marketing plan backed up by actionable guerrilla marketing ideas for beauty supply stores. In this article, we will be considering all the requirements for starting a beauty supply store business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Beauty Supply Store Business?
Take a look around you and you will see the beauty that lies in human nature. If you are like some people who have a penchant for beauty, and would do anything to make sure that people look and stay beautiful, then you should consider owning a beauty related business. There are avalanches of beauty products that can be seen on the shelves in stores. These products have various uses and they meet the needs of people in different ways.
It is important to state that the beauty supply store business is one the businesses that can’t go out of fashion because of the role it plays in the society. Depending on the scale you want to start, the startup capital for this type of business can be considered as moderate. As a matter of fact, you can start your own beauty supply store and then grow it big within a short period of time by re-investing your profits back to the business.
Before launching this type of business, it will pay you carry out market research, economic and cost analysis and of course feasibility studies. If you get things right before launching your beauty supply store business, it will not take you long before you break even and start smiling to the bank.
Lastly, before launching your beauty supply store, ensure that you read this article and you will be well equipped. You can start your beauty supply store from a small town in the United States and if you are consistent and creative, it won’t be too long before your brand becomes a nationally recognized brand.
Starting a Beauty Supply Store Business – A Complete Guide
- Industry Overview
Beauty supply stores sell a wide range of beauty products, from makeup to skin care. Skin care, cosmetics and hair care products are the most retailed products in this industry. The Beauty, Cosmetics and Fragrance Stores Industry comprises of stores that predominantly retail cosmetics, perfumes, toiletries and personal grooming products et al.
Starting a beauty, cosmetics and fragrance 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 stock keeping records are the secrets of running a beauty, cosmetics and fragrance store.
The Beauty, Cosmetics and Fragrance Stores Industry is indeed a large industry and pretty much active in countries like United States of America, United Kingdom, France, Italy, Holland, Switzerland, Japan, China, Germany, and Canada et al.
Statistics has it that in the United States of America alone, there are about 91,236 registered beauty, cosmetics and fragrance stores responsible for employing about 230,527 and the industry rakes in a whooping sum of $21 billion annually.
The industry is projected to enjoy a 4.7 percent annual growth. The establishments in this industry that have a dominant market share in the United States of America are; L Brands, Sally Beauty Holdings, Inc., Sephora and Ulta Salon, Cosmetics & Fragrance Inc.
A close study of industry activities shows that skin care, which includes lotions and face creams, accounts for the largest share of revenue in the industry at an estimated 27.0 percent. Most of these items are considered less discretionary than cosmetics and fragrances, which has allowed this market segment to grow even during times of weak consumer spending, as was the case during the recession period.
As a matter of fact, innovative skin care products specifically designed to combat aging has increased earnings for this industry. So also, over the last five years, expansive product selections and skilled staff have driven revenue for the Beauty, Cosmetics and Fragrance Stores industry. Studies show that an increase in youth – targeted cosmetics, the expansion of male – specific products and the reformulation of anti – aging staples have given specialty beauty stores a new array of items to offer customers.
The beauty supply store business will continue to blossom because people will always make use of any of the products retailed by beauty supply stores. Despite the fact that the industry seems over-saturated, there is still room big enough to accommodate aspiring entrepreneurs who intend opening their own beauty supply stores in the United States of America.
If you are contemplating starting your own beauty, cosmetics and fragrance store business 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 business, then you are likely going to struggle to stay afloat.
But over and above, the beauty, cosmetics and fragrance stores business is a thriving and profitable business especially if you are creative and ready to take on the available market within the location where your business is located.
Starting a Beauty Supply Store Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who patronize beauty supply stores cut across all genders above 18 years with the financial means; hence the demographic composition of the beauty supply store business is all encompassing. In essence, your target market can’t be restricted to just a group of people, but to all adults who reside in your target location and who have the purchasing power.
So, if you are thinking of opening your own beauty supply store business, then you should make your target demographics all encompassing. It should include corporate executives, students, migrants, entrepreneurs, business people, celebrities, public figures, military men and women, sports men and women, tourists, cyclists, and every adult in the neighborhood where your beauty supply store will be located.
List of Niche ideas Within the Beauty Supply Store Business That You Can Specialize in
It is important to state that there is no known niche area when it comes to the beauty supply store business. Every player in this line of business usually sells a wide range hair care and shower products, cosmetics, skin care products, fragrances, nail care products, deodorant and shaving products, sun care, baby care and other products from top manufacturing brands in the United States and other countries of the world.
On the other hand, it is important to state that some beauty supply stores may decide to build a strong online presence/online store and serve the online community.
The Level of Competition in the Beauty, Cosmetics & Fragrance Stores Industry
The competitions that exist in the Beauty, Cosmetics and Fragrance Stores industry goes beyond competition with beauty supply stores; you will be expected to compete with outlets such as supermarkets and pharmaceutical stores that are into retailing hair care and shower products, cosmetics, skin care products, fragrances, nail care products, deodorant and shaving products, sun care, baby care and other products. So, it will be right to say that competition in the Beauty, Cosmetics and Fragrance Stores industry is tough.
The truth is that no matter the level of competition in an industry, if you brand and promote your products or business properly, you will always make headway in the industry. Just ensure you stock your store with a wide range of products from different manufacturing companies and you know how to attract and reach out to your target market.
But over and above, there are several beauty supply stores scattered all around the United States. So, if you choose to start your own beauty supply store business in the United States, you will definitely meet stiff competitions amongst beauty supply stores and any other outlet such as supermarkets and pharmaceutical stores that is into retailing hair care and shower products, cosmetics, skin care products, fragrances, nail care products, deodorant and shaving products, sun care, baby care and other products. Besides, there are larger beauty supply stores that determine the trends in the industry and you should be ready to compete with them for customers.
List of Well – Known Brands in the Beauty Supply Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.
These are some of the leading beauty supply stores in the United States of America and in the globe;
- L Brands
- Sally Beauty Holdings, Inc.
- Ulta Salon Cosmetics & Fragrance Inc.
- Beauty Supply USA
- Beauty Plus Salon
- USA Nail & Beauty Supply
- Oerigo Beauty (Dover, DE USA)
- Sigma Beauty Flagship Store – Mall of America
- Shen Beauty
- Hair USA Beauty Supply
- YO Beauty USA
- Beauty Empire USA
- Sami Beauty Supply
- USA Beauty Care Inc.
- Cosmetheque USA Inc.
- Beauty Kingdom USA Corporation
- Sally Beauty Supply
- Atomy USA Health and Beauty
- Alcantara Cosmetica USA
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Beauty supply store business is not a green business; as a matter of fact, you will come across several beauty supply stores when you go shopping for beauty supply products and cosmetics. So, if you are mapping out your economic analysis, you should carry out thorough market survey of what is required to rent a store and the amount needed to stock your store with a wide range of products from different manufacturing brands that are in demand in your location and also the cost to successfully run the business.
Over and above, if you are considering starting a beauty supply store business, then your concern should not be limited to the cost of renting a store and stocking your store with a wide range of products from different manufacturing brands, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
Starting Your Beauty Supply Store Business from Scratch vs Buying a Franchise
If you are looking towards starting a beauty supply store business, you have the option of either starting from the scratch or buying the franchise of an existing beauty supply brand.
Starting a beauty supply store business from the scratch is less stressful when compared to other small – scale businesses. With a beauty supply store business, you should just try as much as possible to secure a shop that is close to a major road and then leverage on every marketing tool within your disposal especially the internet to market your products.
Please note that most of the big and successful beauty supply stores around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
Possible Threats and Challenges You Will Face When Starting a Beauty Supply Store Business
If you decide to start your own beauty supply store business today, one of the major challenges you are likely going to face is the presence of well – established beauty supply stores and other outlets within your business location that are also into selling hair care and shower products, cosmetics, skin care products, fragrances, nail care products, deodorant and shaving products, sun care, baby care and other products. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face is economic downturn; if the economy is in bad shape, history has it those businesses such as beauty supply stores and the likes usually struggle to maintain their old customers or even welcome new customers. So also, unfavorable government policies can hamper the growth of your beauty supply store. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
Starting a Beauty Supply Store Business – Legal Matters
- Best legal entity to use for this type of business
You have the option of either choosing a general partnership, limited liability Company, or a sole proprietorship for a business such as beauty supply store. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale beauty supply store especially if you are just starting out with a moderate startup capital in a small neighborhood.
But if your intention is to grow the business and have chains of beauty supply stores across the United States of America and other countries of the world via franchising and opening an online store, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your beauty supply store business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your beauty supply store business with the ability to sell franchise and open chains of beauty supply stores all across the United States of America, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or a ‘S’ corporations especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your beauty supply store business so as to compete with major players in the industry.
Catchy Business Name ideas Suitable for a Beauty Supply Store Business
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own beauty supply store business, here are some catchy names that you can choose from;
- Maria De La Rosa® Beauty Supply Store, Inc.
- Stacy McRib ™ Beauty Supply Store, LLC
- Bridget Decoster™ Beauty Supply Store, Inc.
- Broadway Beauty Supply Store, LLC
- Mark Fernand Beauty Supply Store, Inc.
- Jacinta Borrow® Beauty Supply Store, Inc.
- Eyes of Beholder© Beauty Supply Stores, Inc.
- Georgina Paulson™ Beauty Supply Store, LLC
- Jill Noel™ Beauty Supply Stores, Inc.
- Madonna Whyte® Beauty Supply Store, Inc.
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 are required by the industry you want to operate from. So, it is important 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.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own beauty supply store business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
Intellectual Property Protection/Trademark
If you are considering starting your own beauty supply store business, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
Is Professional Certification Needed to Run a Beauty Supply Store Business?
When it comes to the beauty supply store business, you do not need to have any formal training or special certification before you can be allowed to start a beauty supply store business. All you need is informal training that will expose you to the in and out of beauty supplies buying and selling business.
On the other hand, if you come across any form of certification that can aid you conduct your beauty supply store business profitably, then by all means try and pursue such certification.
List of Legal Documents You Need to Run a Beauty Store Business
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own beauty supply store business in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID/Tax Identification Number
- Business Plan
- Non – disclosure Agreement
- Copy of license for the service support facility and/or a recent inspection report
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
Financing Your Beauty Supply Store Business
Starting a beauty supply store business can be cost effective especially if you choose to start on a small scale by running a beauty supply store in a street corner. Securing a standard and well-positioned store facility and stocking your store with a wide range of hair care and shower products, cosmetics, skin care products, fragrances, nail care products, deodorant and shaving products, sun care, baby care and other products from different manufacturing brands are part of what will consume a large chunk of your startup capital, but if you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard large scale beauty supply store business.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your beauty supply store business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
Choosing a Suitable Location for a Beauty Supply Store Business
When it comes to choosing a location for your beauty supply store, the rule of thumb is that you should be guided by the demand for such products and easy access to wholesale purchasing of a wide range of products from different manufacturing brands. Of course, if you are able to secure a central location for your beauty supply store, it will give people easy access to your store.
It cannot be overemphasized that the location you chose to open your beauty supply store business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and organizations/businesses with the required purchasing power and lifestyle.
Most importantly, before choosing a location for your beauty supply store, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out. This is the reason why it is very important to gather as much facts and figures before choosing a location to set up your own beauty supply store.
These are some of the key factors that you should consider before choosing a location for your beauty supply store;
- The demography of the location
- The demand for beauty supplies in the location
- The number of adults and the purchasing power of residents of the location
- Accessibility of the location
- The number of other outlets that are into retailing hair care and shower products, cosmetics, skin care products, fragrances, nail care products, deodorant and shaving products, sun care, baby care and other products in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
Starting a Beauty Supply Store Business – Technical and Manpower Details
On the average, there is no special technology or equipment needed to run this type of business except for Point of Sales (POS) Machines, shelves, and software applications. You will also need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of a store facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard beauty supply store business, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Merchandize Manager, Store Manager, Sales and Marketing Officer/Sales Girls and Boys, Accounting Clerk and Cleaners. On the average, you will need a minimum of 3 to 6 key staff members to run a small scale but standard beauty supply store business.
The Services Process Involved in the Beauty Supply Store Business
When it comes to buying and selling stuffs, there is no hard and fast rule about it. Basically, it is the duty of the merchandize manager to help the store stock goods (a wide range of hair care and shower products, cosmetics, skin care products, fragrances, nail care products, deodorant and shaving products, sun care, baby care and other products from different manufacturing brands).
They go out there to source for good purchasing deals and they also ensure that they do not only purchase at the right prices that will guarantee them good profits, but also ensure that they purchase beauty supplies that are in demand in their business location.
Once the beauty supplies are bought, they are properly arranged in the store for customers to see and purchase. On the other hand, they are also expected to deliver orders made by clients if such services are available in their store. So also, stocks are taken after the close of business every day and accounts are balanced. This will enable them place demand for more products from the warehouse.
It is important to state that a beauty supply store may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated beauty supply store business process is not cast on stone.
Starting a Beauty Supply Store Business – The Marketing Plan
- Marketing ideas and strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a beauty store business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the Beauty, Cosmetics and Fragrance Stores industry.
People and organizations will patronize beauty supplies from your store if they know that they are going to get the best and of course value for their money.
As a matter of fact, your marketing strategy should center on quality, pricing and above all excellent customer service. You should ensure that whenever your customers visit your beauty supply store, they will get quality products and excellent service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services or products. In other words, a larger percentage of your marketing effort should be directed to internet users.
These are some of the marketing ideas and strategies that you can adopt for your beauty supply store business;
- Introduce your beauty supply store by sending introductory letters alongside your brochure to corporate executives, students, migrants, entrepreneurs, business people, celebrities, public figures, military men and women, sports men and women, tourists and every adult in the neighborhood where your beauty supply store will be located
- Advertise on blogs and forums and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business so as to give your business an online presence
- Directly market your products
- Engage in road show in targeted communities from time to time to sell your products
- Join local beauty supply store associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word of mouth marketing (referrals)
Factors That Will Help You Get the Right Product Pricing
One key factor that will help you sell your beauty care supply products at rock bottom prices is to purchase your items directly from manufacturers in pretty large quantities. The truth is that the higher the quantity of items that you purchase directly from the manufacturers, the cheaper you tend to get them.
Another strategy that will help you retail your beauty care supplies at the right price is to ensure that you cut operational cost to the barest minimum, and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost of paying sales and marketing executives.
Strategies to Boost Your Beauty Supply Store Brand Awareness and Create Your Corporate Identity
If you are in business and you are not conscious about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
If your intention of starting a beauty supply store business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of beauty supply stores and franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your beauty supply store;
- Place adverts on both print (newspapers and beauty care and cosmetics magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your products
- Install your billboards at strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your beauty supply store
- Distribute your fliers and handbills in target areas
- Contact corporate executives, students, migrants, entrepreneurs, business people, celebrities, public figures, military men and women, sports men and women, tourists and every adult in the neighborhood where your beauty supply store will be located informing them about your business and the products you retail
- List your beauty supply store in local directories
- Advertise your beauty supply store in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where your beauty supply store is located
- Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.