How to Start a Cosmetic Business (Cost to Start)

Introduction on how to start a cosmetic business

Cosmetics are a part of life for many women. These days, the paradigm of the beauty industry is rising as people are ready to spend a significant amount of time to look their best. Due to the influence of social media and the availability of different varieties, the demand for new cosmetic products is increasing. Cosmetics industry includes a vast array of businesses such as anti-aging clinics, aromatherapy, beauty salon, beauty spa, cosmetic store, hair salon, and even makeup artists are part of it.

A step-by-step guide to starting a cosmetic store business

There are many profitable business ideas to start your cosmetic business. Before you move ahead, you need to know the basics of cosmetic business. If you would like to open a cosmetics store and need information on the kinds of legal issues you should consider, this article provides legal considerations to think carefully about before starting a business.

If a change of career into the natural beauty sector excites you, we’re here to help get you started on your journey in the beauty and cosmetics industry. Here are the steps to start a cosmetic business and let’s get started!

Step 1: Research to start a cosmetic business

The first step is to do research; you must find out where you can buy the products at a wholesale rate. The products should be of high quality so that it makes your store popular. Developing relationships with a wide variety of distributors will provide you the opportunity to buy them at a cheap rate and in bulk.

This will enable you to sell your products to the customers at a marked-up price. Another important part of the research is to know about the kind of competition existing in the market. To differentiate your products from the rest of the market, it becomes imperative to gain knowledge about your contenders and the brands they are selling and which of them are popular.

Step 2: Business plan to start a cosmetic business

Business plan to start a cosmetic business.
Business plan to start a cosmetic business.

A business plan is very important for the growth and success of a company. These plans provide a business with a vision for the future and a clear strategy for how to expand. It is the written description of your business’s future.

Your business plan for a cosmetic store should include:

  • Executive summary
  • Company description
  • Market analysis
  • Competitive analysis
  • Description of management and organization
  • Breakdown of your products and services
  • Marketing plan
  • Sales strategy

Step 3: Choose a niche market

You need to settle on a specific area. There are loads of areas if we are talking about the beauty industry such as anti-aging clinics, aromatherapy, beauty salons, private label cosmetics, beauty spa, cosmetic store, hair salons, and even makeup artists.

Starting, choose your area of specialty in which you intend to focus your business. Focus on an area that you are familiar with, or where you see the greatest opportunity for you to add value with your products. In the beginning, it’s advisable not to try selling or manufacturing multiple items at the same time, stay lean, and build authority within your niche first. Do not try to put your feet in two boats and sell too many types of products at once.

You need to specialize in one or two sectors so that you can put your full focus and concentration on it. This will help your business grow rapidly. This will also help you to get the best out of your products by focusing on just one target group.

Step 4: Decide the best location to start a cosmetic business

During the planning stages, you should decide whether you want to rent or buy a store. Which option is right for you will depend on many factors, including your location and the startup funds you have available. You will always need to find the right location for your store. Opening your cosmetics store where you will gain no foot traffic can be harmful to your business. You will also have to be tired of opening and closing hours if you intend on opening a cosmetics store in a shopping center.

Primarily, you can start a cosmetic store from your home or do only online business in your initial days. After making a good amount of profit, you can think about putting up or renting a store. Find a location that will be considerably cheap. You can also lease a premise. Leasing a premise could be hard and expensive for someone with a small business, so keep that in mind.

Step 5: Equipment & furniture list you need

It’s not a place where people are going to come and sit for hours.  They will come, purchase items they needed and they will leave the shop. Below are some of the major things and equipment needed for setting up a cosmetic shop.

  • There must be a lot of space in the shop, for customers to move around freely and try the products
  • Product shelves, where all the products will be arranged in a simplistic manner
  • You can also keep a showcase, to present the most expensive products in your shop
  • A billing desk where you can keep your billing machine, and computer
  • A good paint job is a must. Select sober colors. It creates a peaceful ambiance

Customers identify a brand or company by seeing their logo, so, logos play a crucial part in a business. You can design a simple logo on your own or get an expert to design a memorable logo that will stay encrypted in people’s minds.

The logo needs to be unique and extraordinary in its concept so that it attracts potential customers and retains them. A logo plays a very important role for a company; if it is designed well, then the customers get a good first impression of the company.

To start a cosmetics business, you need to decide what type of business you want to set up. There are several options, a few of which include a sole proprietorship, partnership, corporation, and limited liability corporation (LLC).

Another important consideration is making sure you have all the necessary permits, registrations, and licenses to operate your cosmetic store. You’ll need to work with state and local regulators to determine which licenses and permits your business will need. If you plan to sell products directly to consumers, you may also need to apply for a sales tax collection account from your state’s department of revenue.

Step 8: Generating funds

Every business, whether big, medium or small, needs funds to operate. Without adequate finances, no business can accomplish its objectives. It is like the blood of a business. Money is required to buy raw materials to produce your original cosmetics items or to purchase the products for retail selling.

You can make money from your family or friends or the banks. Also, wealthy clients in your area are a good source of funds. You also need to design a business card consisting of your company’s logo. Design the card with details of your name, your business name, your email, and your website address at the very least.

Step 9: Hire a cosmetic chemist

First, you want someone with the right kind of niche experience who will guide consumer research, product invention, and problem-solving. Having reliable, hardworking employees can make a huge difference in the success of your business. Make sure to take the time to hire and train your staff properly before opening. First impressions are important, so you want to make sure employees feel comfortable with your products and systems before letting customers through the door.

Employees are the ambassadors of your brand, the importance of which can’t be overstated for small businesses. These people are the face of your business, who your repeat customers will interact with over and over again. Take the time to hire and train the best staff possible.

Step 10: Create a marketing plan

Your business plan should include your marketing strategy of a cosmetic store, and now is the time to implement it. Once you’re ready to open your doors, you need to let customers know who you are and what you’re offering. You can get the word out through advertisements, promotions, organic and paid social media such as Instagram and more. A business cannot survive without customers. So, it’s important to market your cosmetics business to bring in new and returning customers.

You need to devise an innovative marketing plan to attract your target audience and apply the right technique to retain them. Your marketing plan needs to be calculative, and it needs to include pricing, costs, and lucrative market ideas to sell your cosmetic items.

It depends on how you and your staff sell stuff. As you are setting up a new shop, it’s better to buy less stock so that your loss is minimized in case the business doesn’t run well. Keep good products of all ranges. See how the customers respond.

You may also check this: Mug Printing Business Plan, Profit, and Investment.

Step 11: Add more value to your products

Today, the number of beauty brands out there is almost countless and they are competing with each other to be the most remarkable one. Figuring out what your competitors are doing will help you create better ideas. You can apply concepts that are similar to theirs, but try to add more value to your products.

Step 12: Brand building

Standing out in the market is a hard thing, but if you bring out something that does not exist in the market, you can play monopoly and capture the whole market share. Try building your line around innovative and new products. You can also make homemade original cosmetics.

Do surveys and talk with cosmetologists to find out the need of the market. For instance, there could be colors that are in demand but are missing in the commonly sold eye shadow pallets. You can take that opportunity and play monopoly and run a successful business.

Without following the trends you can’t run a successful cosmetics business. If you want to be one step ahead of your competitors, then try to be more up to date than them. Don’t forget to read a lot of fashion articles, watch makeup-related videos on YouTube, and keep up with beauty trends on social media.

You need to conduct surveys to figure out what kind of beauty products consumers currently need, what they didn’t get from other cosmetics brands, and why they choose to use makeup products from certain brands. This research can help you innovate on your products.

Step 14: Get opinions and improve

Since you are new to the business, you will make many mistakes as part of the learning process. Making mistakes is human but you must learn from them to move forward in a meaningful way. Get opinions from experts in your field and make necessary improvements.

The estimated cost to start a cosmetic store

Here comes the principal factor- money. In typical beauty care and cosmetic business, you need about 1lakh to 2 lakhs to invest initially. We have tried our best to provide you with all the initial expenditures in setting up this business. All the prices are just an estimate. The real prices might vary accordingly. Estimated cost for starting a cosmetic store is:

  • Security deposit for the shop- 50,000rs
  • Rent of the shop- 10,000rs
  • Salary of the staff- 10,000rs
  • Buying products- 80,000rs
  • Furniture and equipment- 40,000rs
  • A decent computer and a printer- 30,000rs
  • Re-furnishing the shop- 20,000rs
  • Electricity bills- 2000rs
  • Starting a website and developing it-5000rs


Starting your own cosmetic business will be one of the greatest journeys in your professional career. The initial period is bound to be hectic, but later on, it will be fine. While the cosmetic industry is extremely saturated and competitive, there is still an extraordinary opportunity for new and exciting brands. You need to keep track of the changing demands of your customers.

If a brand can develop a solution to a problem experienced by consumers, then there will always be the opportunity for a successful, profitable business. Amongst the countless different customer groups, you simply need to uncover one that is not being sufficiently catered for by any other brand. Take advice from everyone before starting your business, and if you follow the above-mentioned steps, there’s a high chance of marking a significant place in the market.

In case if you are interested in Aquaponics Farming Business Plan for Profits.


Please enter your comment!
Please enter your name here