Cosmetic business covers a whole range of products such
as lipsticks, lip gloss, eyeliners and powder. Others are nail polish remover,
false lashes and lotions.
The business has
may sub sectors in the fashion and beauty industry. Billions of dollars worth of
cosmetic products are sold world wide yearly making the industry highly
competitive and lucrative.
There are large and small business owners carving a niche
in the cosmetic landscape. The business is ever changing and an entrepreneur
interesting in launching a cosmetic line should be informed on new trends.
To succeed industrialist needs to focus on a niche
market, develop high quality products and apply effective marketing framework. Target
marketing by making custom made products is just a few business strategies.
You can hire an expert, copy a template or research
similar plans. Starting a homemade enterprise is challenging, fun and exciting.
Here are a few ideas on how to write a homemade cosmetic business plan.
Homemade
Cosmetic Manufacturing Business Plan
Company
Summary
Incorporate the company into a limited liability entity. Focus
on quality products, branding and effective market penetration.
Specialize in a niche market or offer a wide range of
products. The company should have a chief executive office, procurement, marketing
and strategic planning department. If you want to run a sole proprietorship home
based format you perform most functions mentioned above.
Mission
Statement
To effectively compete with established brand you need
market research. The company should focus on quality control and product development.
Offer a multiple range of products including competitive pricing.
Regulations
and Permits
Your product needs to pass a simple standardization test.
It also needs a national food and drug administration certification.
The packaging should have a precise description of
ingredients that constitute the product. You need a federal tax business identification
number and insurance cover.
The Product
The competitive advantages for small homemade products
are adaptability, product testing and development. The cosmetic could be
manufacturer by a third party through outsourcing contract.
The production company would handle mass production,
packaging and shipment. The number of products manufactured depends on the
business template.
A complete
cosmetic line includes cleansers, makeup, eye shadow, and body lotion. Others are
creams, masks, facial scrubs, nail polish and nail polish remover.
The products should undergo extensive research, surveys,
product testing and development. Develop many formulas using natural
ingredients available in your local market.
Focus on quality, effect of substance on skin, color, fragrance
and visual appeal. Stay abreast of fast changing trends, top brands and
customer preferences.
You need a large sustainable source of raw materials. Common
ingredients found in cosmetics include fruit extracts, herbs, and natural oils.
The Market
Market penetration depends on the popularity of the
branded product. Offer high quality products with unique designs and attracted
packaging.
Focus on an age group, demography and consumer market. To
reach a wider customer base open sales outlets and offer private label deals.
Make your product appealing to young career women and middle-aged
women. Marketing outlets for your cosmetic products include boutiques, wholesalers
and retailers.
Others are
supermarkets, departmental stores and fashion fairs. You need an effective marketing
campaign focused on natural, health related quality of your brand.
Create
a Work Space
Since you intend operating a home based business you need
to create an office. You need a sterile laboratory to develop the products.
Carry out lots of product testing, free samples to gather
important data. The office needs furniture and electronic gadgets such as
computer, modem, fax and dedicated telephone line.
You can hire a professional packaging company to design
the packaging and product. Opening an outlet store for your products is a very
good idea.
There is nothing wrong operating an online store to receive
orders for your product. If your manufacturing partner provides drop shipment
then your job is easier.
Use online market places to promote and sell your
products. Print descriptive labels and follow trade guidelines on full
disclosure ethics. Install basic laboratory equipment needed to develop your
product.
Key Elements
for Success
The key elements for success include creating high
quality products and effective marketing. Others are manpower development, quality
control mechanism, e-commerce and retail outlet.
Build
a Website
Create an interactive easy to navigate website. Populate
it with content and images of your product. Add products description, benefits
of using the product including price. Offer drop shipment services and accept
online payments.
Marketing
Trends
The blurred line between cosmetic categories provides an
easy platform for merchandising. Mainstream cosmetics and herbal products fight
for dominance in departmental stores.
Common trends include body bath products, fragrances and
aromatherapy products. Others are skin care lotions, makeup, perfumes and colognes.
Marketing
the Cosmetic Product
Advertise your product in local newspapers and magazines.
Use handbills, complementary cards, banners and poser to reach customers.
Make sure your outlet looks appealing and elegant and
offer good service. Create sample sized products for distribution at
supermarkets, malls and shopping centers.
Market your products to salons, boutiques and fashion
house. Use online resources and campaigns to drive traffic to your website and possibly
sales.
Marketing
Distribution Channels
Distribution channels are many in the cosmetic industry. Here
are a few places to sell your products
Salons
Spas
Specialty stores
Cosmetic discounters
Clubs
Departmental stores
Drug stores
Health clubs
Lifestyle retailers
Boutiques
Financial
Plan
Don’t forget to include a financial plan in your business
plan. The plan should cover expected growth, tax, interest rates and current
liabilities.
Your key financial
indicators should focus on breaking even and projected profit-loss. Add to your
budget, cost of web commerce, promotions and marketing. How to start your Cosmetic Business
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