The Cost to Build a Beauty Brand | SMH Branding
One of my favorite things to do in my downtime is listen to and read stories about how businesses got their start and grew to notable success. How I Built This with Guy Raz is in heavy rotation in my car as I do my day to day activities. When you start thinking about becoming a beauty entrepreneur, one of the first questions you’ll try to figure out is: how much does it cost to start a beauty business?
The beauty market is great to get into as nearly everyone on the planet uses some kind of personal care product. There is a ton of competition of course, but consumers are always looking to try something new and with the right dedication you can create a following of loyal consumers who will be the basis of your business for years to come.
Once you head into Google or social media groups, you’ll receive lots of conflicting advice which will just confuse you further – a brand might tell you that you can start with just $100, a coach might tell you that you need $250,000 to launch, whereas a beauty industry exec might tell you that you need a minimum of $1m to get started. Julie Fredrickson, co-founder and CEO at Stowaway Cosmetics, told Vogue Business that it costs at least $1.5 million to fund the first 12 to 18 months of a beauty brand.
It’s not always about how much money you have; it’s about how you leverage it. Of the $1.5M Stowaway Cosmetics raised for their launch, $850k was spent on salaries and operational costs….Yikes!
The funds required would heavily depend on the type of company you are building and the products you are launching. You have to be a jack-of-all-trades in some form. Many founders/CEOs take on roles that would normally not be in their job description. As the founder/CEO, you have a vision for almost every minute detail, which means finding proper execution has both a high fail rate and high cost. For my brand Curly Temple many things are produced in-house by me and my team.
So to help you answer the question “how much does it cost to start a beauty business?”, I’ve compiled three questions that I recommend you ask yourself before you start an indie beauty brand.
1. Do you want a side hustle or do you want a brand?
Do you intend to keep your beauty brand as a side hustle, do you want it to grow into a small enterprise that can support you (and perhaps your family) or do you intend for it to be a brand that has global recognition?
What is a side hustle? A side hustle is something you enjoy doing on the side that generates income inconsistently and sometimes you may work for free. It is considered to be an irregular activity that is done for pure enjoyment, typically during your leisure time and it is not done professionally.
Brands are much more dynamic. They can play a different role depending on who they interact with and when. Some people connect with certain aspects of a brand, while others connect meaningfully with another. And oftentimes, a brand can create trust, loyalty, meaning, and engagement with their customers.
If you want to go global as quickly as possible, then you’ll need a large upfront cash injection. However, if you intend to stay in your day job and have your beauty brand as a side hustle, then you can most likely afford to start small and use part of the income from your day job to start your beauty brand and keep it afloat. You might then choose to grow your beauty brand organically and put any earnings straight back into the business.
Whatever you decide, we recommend that you determine your overall business model and think about your definition of success before you get started.
3. Are there any task or jobs that you don't want to do?
I often tell the story of the first time I tried to do my own landscaping. My husband and I bought our very first home and our previous owner had a huge garden. It took us ten hours to dig up a 10x10 garden bed.
After that day, I swore I would never ever do yard work again and we decided to hired a professional to do our landscaping. Even when money was tight, we made the decision that it would save me so much time and stress that it was worth every single cent to get someone else to do it.
You will have similar tasks in your business that you don’t like doing. Make a list of those tasks and get an idea of how much it will cost you to outsource them from day one.
If you don’t outsource anything, then your main investment will be your time and that will save you money. Using your own time will not burn a whole in your pocket. The startup years are your time to really grind. Get your hands dirty…break a nail or two. Sure you’re the founder, but you have to earn the title of CEO. Not all founders make the cut. Your job is to do all you can to ensure that you do… including making wise choices about how the budget is spent and taking your time while spending it.
This approach will, however, take you longer to launch your beauty brand and you’ll have to learn a lot of new skills very quickly – and be honest with yourself: you might not be great at everything.
3. How fast you want you brand to launch?
Many of the indie beauty entrepreneurs I meet want to launch quickly. They feel immense pressure about starting a business in a crowded marketplace and think that getting their brand out quicker will help them beat the competition.
Launching quickly will require you to have all the elements in your beauty business finalized faster than you might be able to achieve working alone, which means that you’ll need to get a lot of outside help – which costs money.
When you can’t buy attention you have to earn it but that takes time. Social media has made it incredibly easy to build an audience and establish your influence. But you have to be willing to do the consistent work. Emphasis on consistent. Building an audience is like nurturing a newborn baby. You gotta feed it often if you want it to grow healthy and strong. The sooner you can get 10k followers on Instagram the better.
The reality is that it is better to go slowly, because going fast won’t necessarily make your brand any better.
Remember: slow and steady wins the race.
Although Stowaway Cosmetics has experienced undeniable success, I don’t recommend spending your budget the way they did. I also don’t want you to think you need a million dollar budget to succeed in the beauty industry.
An ideal budget for your launch year is $25,000 to $75,000. A budget of this size would allow you to launch 1-3 new products over the course of the year (not all at once) and put enough marketing muscle behind each launch to be profitable.
Don't have that much capital? I understand! Here at SMH Branding we want to help you build the beauty brand of your dreams. That means you need to know where to get the cash you need to make your dreams come true. No one has to build the beauty brand alone. Are you ready to build your own skin care, hair care or make-up line today? Learn more about how to get the money you need to build your brand in our Masterclass: How To Build A Beauty Brand.- Click Here to find out more.