More women are transitioning back to natural hair, and while this might be a feat to applaud, caring for the natural hair is quite different and tough. If you have natural hair and have tried several products that have worked on your hair, and you know these products will be of immense help to others, then it is time to think of starting your own natural hair care product line business.
You will need to ensure that you have the required start-up capital because this will be necessary to help you procure the raw materials and ingredients for your natural hair care products as well as the packaging. You will also need to know if you want to use normal ingredients or go organic.
Steps to Starting a Making Natural Hair Care Line
1. Understand the Industry
According to a research by Mintel, more blacks in the united states of America are gravitating towards natural hair care products and this has seen an increase in the sale of hair styling products, which jumped to 26.8 percent between 2013 and 2015, reaching a value of $946 million which represents more than 16 percent of the overall hair industry. The move to naturals has also seen a drop in the sale of relaxers.
According to IBISWorld, industry revenue for natural hair care products is projected to reach $212 million by 2017 growing by 2.8 percent between the periods of 2011 and 2016. Even though the economy is slowly recovering, spending power amongst the blacks according to The Nielson Co has increased tremendously within a decade and is still expected to grow some more within the next decade.
The increase in production of organic and natural hair care products has been fueled by the approval given by the U.S Department of Agriculture (USDA) and the FDA. What has fueled demand in this industry is the change in the lifestyle of consumers as they now demand chemical-free hair products.
More than 51 percent of blacks in the United States have resorted to natural hair care products and yet demand shows no signs of slowing down as sales have been projected to reach $1.4 billion in the year 2022.
According to a research by Mintel, 35 percent of blacks with natural hair also like to change hairstyles at least once in a month, with favorite styles including coloring of the hair. 19 percent of black women have continually changed their hair care products because they can’t find what is right for them.
Even though more customers have shifted to natural hair products, it hasn’t stopped the high demand for hair extensions, wigs and weave as 44 percent of black women with natural hair claimed to have a wig, while 38 percent planned to get one within the year.
Even though there are new entrants into the natural hair care product line of business, the industry is not expected to grow tremendously according to IBISWorld and this is due to the fact that the larger companies will continue to acquire the smaller ones. Also, because of stiff competition in this industry, it is hard for new entrants to come in much less break through.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require natural hair care products are not only individuals that have natural hair but those who are also transitioning to natural hair and even those who don’t have natural hair but use the products anyway.
So, this is basically for women in different adult age groups with even a few men as well. Also, it has been said that Caucasian women are more likely to be customers of hair care product lines that women of other races use. This does not mean that the demographics is limited to just these ones.
3. Decide What Niche to Concentrate On
Starting a natural hair care product line business is an all-encompassing business as your products would need to be tested before they can be sold to others. However to generate more revenue for your business and boost your bottom line, you can go into several niches in order to cater to a wide variety of your market.
While it is usually easier for large scale companies to specialize in several niches, thereby offering more to their customers; small scale businesses usually stick to just one or two unique niches and use that to stand out in the industry. Some of the niche areas that you may decide to get into after starting your natural hair care product line business are;
- Natural hair care product line
- Organic natural hair care product line
- Hair kits and accessories
- Sale of other hair care products
The Level of Competition in the Industry
While you might have tried on your hair products and think that your target market should automatically fall in love with it, you will need to contend with running the business and making it a success. First, the amount you intend to use in starting your natural hair care product line business will go a long way in determining what scale you intend to start on and how effective this would likely be against your competitors.
If you intend to compete favourably against your competitors, you would need to focus first on those that are offering the same services as you, so that you can manipulate any gap and use this to offer better products to your customers. What most clients are looking for when they purchase hair care products is one that would meet their expectations.
4. Know the Major Competitors in the Industry
Every industry has brands that stand out and the natural hair care product line industry is no different. The brands that stand out are those that are well recognized by the target market.
These brands either stand out due to the effectiveness of their products, their marketing strategies or they must have been in the industry for a long time. Therefore some of the leading natural hair care product line brands in the United States of America are;
- Yelani all-natural hair care products
- Alikay Naturals
- Amazing Botanicals
- Camille Rose
- Design Essentials
- Kinky Curly
- Koils By Nature
- The Mane Choice
- Tropic Isle Living
- Sunny Isle JBCO
- Uncle Funky’s Daughter
- Lawrence Ray Concepts
- The Detangle Brush
- TGIN (Thank God I’m Natural)
- Jane Carter Solution
The natural hair care product line industry is a huge one and according to analysis, revenue in this industry is likely to increase by 5 percent each year. However, most of the natural hair care products that are being produced in the industry are by major brands, while the other few are being shared by independent natural hair care product businesses.
However, if you are a new entrant that has found the right niche, you will have no problem at all standing out. If you intend to build your own natural hair care product line empire, you might need to decide if you want to concentrate on women, men or both; adults, kids or both.
You will need to identify the ethnic distribution that is dominant in your target area and know what their hair care needs are, what they expect from a natural hair care product and what they also expect from you as the producer of a natural hair care product line.
Another decision that you would need to look into is your geographic location. The location of your natural hair care business is very important because it would be useless to produce natural hair care products for African American women in Utah as opposed to doing so in Georgia.
Even if you are located far off your target market, you must determine the cost of ensuring that the products get to the target market by engaging in massive publicity and also getting the big stores to put your natural hair care products on their shelves.
5. Decide Whether to Buy a Franchise or Start from Scratch
Starting from scratch gives you the opportunity to be in control of your business and draft the strategies that would help make your business become a force to be reckoned with. Starting from scratch however involves you having to deal with enough paperwork and making certain decisions that could either grow or destroy your business.
Buying a franchise on the other hand allows you to worry less about the minute details of the business such as where to source for products, getting the right equipment or even marketing strategies that would aid your business grow to the level you want.
It should however be noted that the natural hair care product line isn’t one that involves buying a franchise, as manufacturers of these products usually prefer to have their names on the product instead.
6. Know the Possible Threats and Challenges You Will Face
Every business in existence, either new or old, is usually faced with threats and challenges that might make the business fail, which is why you must be prepared as an entrepreneur to face any challenges that you may encounter by drafting strategies to help you deal with them.
Some of the threats and challenges that you may likely face will come from stringent and unfavorable government policies, the arrival of a competitor offering same or better services, inability – either financially or via human capital – to meet with the growing demand of customers, and the downturn of the economy which will affect the purchasing power of our target market.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Having a legal entity is very important for your natural hair care business, otherwise you will not be taken seriously by major retailers and stores when trying to get your business out to your target market. Also, if you do not have a legal entity, there is no way that you can seriously compete with other brands or even employ anyone to work for you.
choosing a legal entity means that you have plans to grow your business and become a force to be reckoned with in your industry. It should be noted that any business structure you pick comes with tax and legal implications. There are four basic types of legal entities in the United States of America and they are;
Sole proprietorship is the most basic and simplest form of legal entity to set up. As an entrepreneur using this business structure, you own all the profits as well as all the debts incurred by the business. Partnership form of legal entity involves two or more people as partners.
A corporation is usually more complex and is for larger companies that have more than your average number of employees. A Limited Liability Company (LLC) is a more preferred form of legal entity because of the advantages it has.
Choosing a legal entity is serious business and you would need to seek the advice or engage the services of a law attorney to help you choose the legal structure that is best for your natural hair care product line business.
8. Choose a Catchy Business Name from the ideas Below
Choosing the right name for your business is very important because your company name precedes your products. So it is absolutely necessary that you choose a business name that is not only unique, creative or memorable but one that allows your target market know that this is the industry that you are in.
Therefore, if you are thinking of starting your own natural hair care product line business, below are some business names to consider;
- Sharon Rose Kinky Hair Products
- Afro Eau Natural Hair Products
- Missy Curls Hair Products
- Boonty Organic Hair Products
- Vixen natural Hair Care Products
- Yo’girl natural Hair Care Products
9. Discuss With an Agent to Know the Best Insurance Policies for You
Regardless of the size of your business and what legal entity you intend to use for your business, having insurance for your natural hair care product line business is very necessary.
The reason why you need an insurance policy is that as much as you are sure that your natural hair care products are good, you can still get sued by a customer who didn’t get the result they were expecting, and for this you would need to insure your business so as to be personally protected from any liability.
If you are confused about the kind of insurance to get for your business, it is best you approach an insurance agent or broker for advise on which would best suit your business. However, some of the basic insurance policies that you might need to think of purchasing if you intend to start your natural hair care product line in the United States of America are;
- General insurance
- Professional Liability Insurance
- Health insurance
- Workers’ Compensation Insurance
- Business Property Insurance
- Commercial Auto Insurance
- Business Owner’s Policy (BOP)
- Hazard Insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
The natural hair care product line is one that involves the production of hair care products by mixing several ingredients together. Some of the ingredients are usually sourced from places that will give the hair products some form of distinctiveness.
This distinctive nature is usually what an entrepreneur in this kind of business seeks to protect by intellectually filing to protect his hair care products.
If you are out to protect the uniqueness of your natural hair care products, the logo of your company, your business name and any other vital piece that you would not want your competitors copying, then you would do well to file for intellectual property protection for your natural hair care product line business.
11. Get the Necessary Professional Certification
Even though formal training isn’t needed before you start producing your own natural hair care products in the United States of America, you would be required to have a license that permits you to run your natural hair care product line business.
It is however necessary to find out from your state what exactly would be required from you in order to start your own natural hair care product line so that you do not break any laws.
12. Get the Necessary Legal Documents You Need to Operate
It is very essential that you have the required documentation in place before launching your natural hair care product line business in the United States of America. Not to have any proper documentation is to get in trouble with the law which could in the end affect your ability to conduct your business.
Therefore, some of the legal documents that you would be required to have in order to successfully run your natural hair care business in the United States of America are;
- Certificate of Incorporation or Doing Business As (DBA)
- Business Plan
- Business License
- Seller’s Permit ID
- Operating Agreement
- Material Data Safety Sheets
- Non-disclosure Agreement
- Employment Agreement
- Insurance Policy
- Contract Document
13. Raise the Needed Startup Capital
You will need money for several things if you are starting your natural hair care product line business, such as sourcing and producing the ingredients and marketing the produced products to your target market.
Raising money to start a business isn’t an easy affair which is why it is usually advised that you have a business plan in place as this would help convince your bank, investors and friends of the seriousness of your business to enable them give you the funds that you would need.
Some of the options available to you to raise money for your natural hair care product line business are;
- Generating start-up capital from personal savings and sale of properties
- Approaching venture capitalists
- Sourcing for soft loan from friends and family members
- Approaching the bank for a loan
14. Choose a Suitable Location for your Business
Choosing a suitable location for your business is very important. However, choosing a location might depend on the scale with which you might be starting your business. If you intend to start your business on a very small scale and want to deal with just the target area in your locality, then you can start this business from home and produce just as much as you can keep up with.
The issue of location for this kind of business is important because even though you will most times have to take your products to the big stores and salons, it doesn’t mean that locating your business in a remote area is okay for you as you will have to commute longer distances.
Also, if you locate your business in an area that is too far, you will need to spend more in creating more publicity so as to increase awareness for your natural hair care products.
15. Hire Employees for your Technical and Manpower Needs
In order to get your products out on the shelf, there are certain things you would need to do such as creating your first product sample, which will involve you sourcing for raw materials and working with a cosmetologist to ensure that you get only the best for your natural hair care products line.
Once you have gotten the sample you need and have perfected it, you can then go into mass production; you will then need to purchase your packaging materials and products in large quantities.
You will need to get bottles, jars and cups to store your products as well as a beautiful label to make your packaging attractive. Other basic equipment you will need are; measuring utensils, pots, metal funnels, heat-safe bowls and spoons and a precision kitchen scale.
The number of employees that you would require in building a solid business structure would vary depending on what scale of business you would be running.
Basically though, you would need a Chief Executive Officer, an admin and human resources manager, marketing and sales executives, business development officer, hair analyzer, production specialist, accountant, front desk officer, cleaner and a driver.
Therefore you would need at least 12 people to be able to run a successful natural hair care product line business and grow it to the level you want.
The Service Delivery Process of the Business
The production process when starting a natural hair care product line business starts from developing products that would meet the specific idea you have in mind. The right ingredients must be used to match the characteristics or performance of the products to be produced.
Most entrepreneurs in the hair care line usually make use of product development and manufacturing laboratories to ensure that the product they intend to formulate is in line with the guiding regulations and requirements of the natural hair care product line industry.
After coming upon the right formula, samples are usually tested for room temperature stability as well as preservative effectiveness in order to determine how long the product is likely to last for, although the industry regulations always put a timeline for products produced.
After the right formula has been found, raw materials are then ordered for in bulk and tested by the lab to check its quality. Once this is done, the products can then be produced. Another thing that is important is the packaging of the product. The different cups, jars or bottles are used for the product.
16. Write a Marketing Plan Packed With ideas & Strategies
Knowing what kind of natural hair care products you intend to roll out to your target market and also knowing who your target market is, will help you draft proper marketing strategies that would help generate revenue for your business.
This is why it is important to conduct a proper market research that will allow you know what your competitors are up to and the best way to penetrate and get a fair share of the market so as to stand out in the industry.
Also, while crafting your marketing strategies, you have to be careful to ensure that they fit right into your marketing budget. Creating strategies that would not fit into your marketing budget might spell doom for your business financially.
Therefore, below are some of the marketing strategies and ideas that you would need to adopt for your natural hair care products line business;
- Introduce your natural hair care products to salons, spas, supermarkets and other stakeholders in the industry
- Ensure that your business is listed in yellow pages and in online directories
- Place adverts in local newspapers and magazines as well as on radio and television stations
- Distribute handbills, fliers and business cards in various strategic locations
- Engage in direct marketing and sales
- Use official website and social media platforms to market our natural hair care products
17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Every brand needs a boost in order to create the necessary awareness that would get the intended target market to become interested in its products or activities. Engaging in activities that would boost the brand of a business is however not peculiar to only new businesses as already existing businesses engage in it as well.
It can sometimes be overwhelming to create a product and constantly engage in activities that would boost the awareness of the product, which is why some entrepreneurs usually engage the services of a brand consultant to help them draft strategies that would effectively promote the brand of the business.
The natural hair care product line industry is one that is stiff with competition especially as most people are now resorting to DIY methods in their homes in order to care for their natural hair, which is why boosting the awareness of your brand is important.
There are several means – both conventional and unconventional – by which one can use in conveniently reaching out to the intended target market. Therefore, the several platforms that can be leveraged on to boost the awareness of your brand as well as create a corporate identity are;
- Use the testimony from people who have used your products and are satisfied with the results to boost awareness for your brand
- Use social media platforms such as Facebook, Twitter, Instagram, Linkedin and Google Plus to vigorously promote your brand
- Ensure that you distribute handbills and fliers in various strategic locations
- Install billboards in various strategic locations to increase awareness about our brands
- Place advertisements in local newspapers, hair and beauty magazines as well as on radio and television stations
- Throw contests via our website and social media platforms in order to stimulate awareness about our brand