I don’t need to tell you that owing your own beauty brand is a dream for many people. I also don’t need to mention that the beauty business is a competitive and saturated industry full of the ghosts of failed brands. Using my experience of starting and running our own haircare brand, Darshana, for the past eight years, I hope to help you avoid some of the most common planning mistakes.
Here are a few questions you should know the answer to before you spend your time and money bringing your beauty products to market:
- Who is going to buy my product? – As obvious as this sounds, this is often overlooked in the initial excitement of planning your beauty business. We entrepreneurs can become so focused on creating an amazing product that we overlook this super important question. Forgetting this step can be a fatal mistake from the start. First, make sure you deeply understand the demographics, along with the physical and emotional characteristics of your future customers. Second, understand their challenges and what motivates them to purchase beauty products. The more detailed the better.
TIP: Ask yourself, “What problem does my product solve for my ideal customers?”
- Who are my direct competitors? – I know sometimes ignorance is bliss. I can’t tell you how many times I thought I had an amazing, original idea for a product only to find I was one of many similar products. This is another area where a little bit of time and research will save you a lot of heartache and money in the future.
Think about what is your competitive advantage over the other products. Many small beauty businesses won’t be able to compete with larger manufacturers on price. You should think about other potential advantages you might have. For example, focus on aspects that make your products unique like ingredients, quality, small batch, personalization, or customer service.
TIP: Ask yourself, “Why would someone buy my product instead of all the other similar products already on the market?”
- How am I going to tell people about my new product? – Knowing who your competitors are will also start to help you develop your own brand messaging and marketing channels. Understanding how you are going to get your message out will also help you develop your branding strategy. Social media is pretty much a given these days but it’s becoming harder and harder to stand out and gain a loyal, engaged audience. You will have to decide on your brand imaging, paid vs. free influencer partnerships, Facebook/Instagram ads, live streaming, produced videos, affiliated links, etc. You will have to decide on if you need to budget for things like internet ads, trade shows, professional videos, samples, radio/tv, and sales reps.
TIP: Look at how other similar-sized brands get their message out. Learn from how they use their social media pages, specifically, their images, videos, promotions, influencers, ads, and promotions. Pick a brand that has been doing it only a few years longer than you. You, mostly likely, do not have the budget for, and are not competing with, L’Oreal or Maybelline.
- Where am I going to sell my new product? – You might be saying to yourself “I’m going to sell my products anywhere I can!” That might seem like the obvious answer but it’s going make you less focused and potentially cost you in the long run. Unless you have an unlimited budget, you will have to know the answer to this before you begin production of your products. It will also have a big influence on your packaging, your sizes, and even your ingredients.
Are you going to sell in retail stores or only online? If online only, will you put your products on Amazon? If you are going to go into retail, will you use a distributor? Do those retailers like the product in a box? Will your product have enough margin for wholesale pricing or a distributor? Will you sell in salons or spas? If so, you might need backbar sizes (larger sizes not sold in retail so they can use them on their clients) Are you going to sell only to a US audience or are you eventually planning on selling internationally. International ingredient and label standards in Europe and Asia can be quite different. Are you open to drop shipping your product? All of these answers, and others, will influence your product and packaging.
TIP: Ask yourself, “Where do I purchase beauty products?”
- How am I going to pay for it? – Not just initial startup funds but how will you support the growth of your company over the first couple of years. You should also plan for the funding of future orders, marketing, and developing new products for your line. The most common funding sources are your own money, friends, family, banks, and crowdfunding.
TIP: I recommend you avoid traditional bank loans at first. You can always use banks to fund your purchase orders as the business grows, if needed. Think about starting slow with one or two products online and investing money from the profits as the business grows. That way if you need to can change anything, like your ingredients, label, or packaging, you can do it more easily. Or, worst case scenario, if you end up going out of business you won’t be burdened by a lot of debt.
TIP: Ask yourself, “Am I going to continue to work when I start my company?”
- What are my strengths? – Be honest with yourself. Go ahead. No one’s listening. This isn’t a job interview so you can be honest. It’s important to understand this because it can help guide you on which tasks you should focus on and which ones you should outsource. When you begin you will be both the CEO and the warehouse worker but it will get you planning for, eventually, what will be the most profitable use of your time and what you should pay others do to for you.
Maybe your great at telling everyone why they should buy your product but you don’t know anything about websites. Then getting having someone design your website or using a plug-and-play WordPress theme might be for you. Maybe social media isn’t your thing but you are really good at writing. Then maybe you bring a friend or intern in for the Instagram posts but you handle the e-mail marketing. As an entrepreneur you will have to wear many hats, especially in the beginning, but the more you know yourself the better you will be at budgeting your time and knowing when to get help.
TIP: Ask yourself, “Am I good at sales?” This is the one thing that every beauty brand owner is going to have to do. Heck, any business owner in general for that matter. No one is going to believe in your product more than you. Don’t think you are just going to hire a sales rep and your products will fly off the shelves. You are going to be the #1 cheerleader for your brand.
- Do I love the beauty industry? Last, but not least. I know this question might sound “touchy feely” for starting a business but the answer is so important. It will help determine,
not only your success, but to your quality of life. You are going to be living and breathing this business for, hopefully, a long time. If you don’t love the beauty industry your business might become a daily grind and eventually something you regret starting. People will pick up on your passion if you are doing something you love.
TIP: Ask yourself, “Do I spend my time learning about the newest beauty products or talking about the latest beauty trends with friends?” or “Would I do this for free?”
I hope these questions have helped you gain some valuable insight into starting your own beauty brand. If you have any questions, feel free to comment below or e-mail me at [email protected].