As of 2017, the cosmetics industry was valued at $532.43 billion and will reach $805.61 billion by 2023. The industry growth potential is a good indicator that the cosmetic industry is in demand and will surge upward even in economic downturns because of cosmetic and skincare product availability. If you want to learn how to start a cosmetic business from home, here is everything you need to know about the beauty industry, business practices and regulations.
Identify Your Niche Market
As with any industry, you will need to develop your Private Label Cosmetics niche because the industry is so diverse. Your niche essentially identifies your market portion and audience base. Defining your market helps you establish business goals, policy and procedure, geospatial market determinants and marketing or advertising characteristics. Instead of marketing to the general public, you identify with the subset to drive sales:
- Identify customer subsets
- Classify product usage practices of subsets
- Categorize market practice characteristics (who uses what and why)
Learn About FDA Regulations
Regulatory compliance will be a vital part of a cosmetic business to which the United States Food and Drug Administration will help you establish your legal, directive policy and adherence procedure. If you fail to develop and maintain company compliance of federal guidelines, you or your investors will incur legal penalties including the possibility of hefty fines. It also hurts your brand.
Hire a Cosmetic Chemist
Now that you know who you will potentially be creating products for, you need to hire a cosmetic chemist for product development. First, you want someone with the right kind of niche experience who will guide consumer research, product invention and problem-solving. If you know your customers are disillusioned by current beauty or skincare regimens, a chemist will suggest innovative ingredients that solve issues.
Secure Business Financing
A significant part of your business plan will be financing. Even with clear policy and procedure, they won’t mean much if you don’t know how to pay for it. If you intend to use investors or bank loan financing, you will need to include a breakdown of your business plan as well as how you intend to use each dollar. Your funding will help cover a home office, licensing, permits, products, employee costs, packaging, distribution and logistics. Once achieved, it will be easy to convert a room in your home into an office.
Build an Exceptional Brand
Your branding is not just about your product line. You need to develop teams to create and oversee the operations of public relations, marketing strategies, customer service, website processes, information technology, graphic design and content development. Everything has to be cohesive before you intend to launch your business in the cosmetic industry. You would much rather spend extra time on branding than have to worry about a reputation management crisis that hurts your brand after a customer discovers a product problem.
Once you have your home office set up, it will be much simpler a process to hire a development company that can oversee many of your operations including products, packaging and labeling.
