Products Included in the Makeup Industry
According to the Federal Drug Administration (FDA), a cosmetic includes products that have been crafted for application to a human body. Makeup makes up one segment of the cosmetic industry. It is defined as a product that enhances your appearance that is specifically designed for your face. A partial list of makeup products (aka color cosmetics) include –
- Blush.
- Mascara.
- False Eyelashes.
- Eyeliner/Eye Shadow.
- Foundation.
- Lipstick/Lip gloss, among other products.
Makeup Industry Statistics
In 2016, a market study by Allied Market Research revealed that the global makeup market (also known as the color cosmetics market) was valued at an impressive $5,875,000,000. Additionally, this same study forecasted that the global makeup market will reach a value of $9,555,000,000 by 2023. The good news is, with a market value nearing $10 billion, there is more than enough space for another makeup line to join the colossal-sized industry. To begin, decide how you would answer the following questions –
- How will your makeup line be different from makeup company behemoths?
- Niche market?
- Organic?
- Sun protection?
- Anti-aging?
- Special effects, to name a few.
- What is your motivation to start a makeup line?
- Do you have the necessary entrepreneurial spirit?
- How much will it cost to start a makeup line?
- How will you begin to create your business plan?
- Do you know where to find professional help as you open your makeup business?
The reality is, many entrepreneurs have successfully launched makeup (and makeup-related) businesses in the recent past. Some entrepreneurs possess business objectives to compete with the well-established makeup business behemoths. Still, others recognize that it is very possible to generate enough profits by remaining a one-person operation, using small-scale economics as a guide. Remember though, either way, the choice is yours! This choice, however, will likely impact the answer to how much does it cost to start a makeup line?
How to Start a Makeup Line
Starting a makeup line, from a business perspective, is remarkably similar to any other type of business. An entrepreneur starting a new makeup line should spend ample time determining which segment of the target market would have an interest in your niche makeup line.
- Take advantage of industry reports from companies like IBISWorld. The industry reports typically charge a nominal fee.
- Check out the free statistical insight obtained through the U.S. Census Bureau American FactFinder Tool.
- Establish the appropriate legal entity of the makeup line business (sole prop, LLC, LP, corporation, etc).
- Develop a well-designed business plan.
- Speak with industry colleagues as well as any other business experts.
Start your company today for $0 with IncFile.com.
How Much Does It Cost to Start a Makeup Line?
In addition to the serious amounts of legwork and research that is required to successfully launch a makeup line, there are also cash outlays required before you can start selling your makeup brand. The anticipated expenses for a small-scale makeup business include –
| An official brand website. | $750 |
| Legal fees for establishing a business entity & consultations. | $1,000 |
| Licenses, Permits and & upfront insurance premiums. | $5,000 |
| General upfront business expenses that include signage, business cards, advertising, and other marketing materials. | $2,800 |
| Rental of an appropriate office/lab facility. | $5,000 — $50,000 |
| Materials to prepare products. | $2,000 |
| Miscellaneous. | $1,000 |
| Total | $17,550 – $62,550 |
For those interested in starting a medium-sized makeup line, the initial investment is likely to surpass $150,000. A large-scale makeup operation’s initial investment will exceed several million dollars.
Tips for Financing Your Makeup Line
A small-scale makeup line is often funded personally; however, there are many financing options available that provide capital to entrepreneurs who have little experience or an acceptable business credit history. Consider these financing options with lenient underwriting guidelines. The loosened underwriting standards offered by these financial products are a great option should you run short on cash as you open your makeup line.
- A Stated income Business Line of Credit.
- A No Income Verification Business Line of Credit.
- A No Documentation Business Line of Credit.
And for those with less than perfect credit, consider a microloan. Makeup line entrepreneurs with plentiful retirement funds have the option to take advantage of a ROBS Transaction.
|
Get up to $50,000 in Microloans or Grants Get Microloans & Grants |
Get up to $250,000 in Business Credit Lines Get Business Funding |
Writing a Business Plan & Consulting with Experts
Many small-scale entrepreneurs take shortcuts when trying to open a business, despite the very real risk this decision creates. This often includes forgoing the creation of a business plan. But, be forewarned, if you need financing at any time, you may need to submit a professional, well-thought-out business plan as a part of the application package. This also holds true if you plan on leasing commercial space for your business. Landlords almost always require potential tenants to submit a business plan before they will consider leasing space to you.
If a business plan seems beyond your wheelhouse, don’t go at it alone. Reach out to business professionals trained to create a dynamic, accurate business plan, and access a multitude of business support services. Makeup entrepreneurs in need of assistance are advised to use the SmallBiz (Powered by LegalShield and GoSmallBiz) service for further assistance with starting a new business. LegalShield combined with GoSmallBiz offers the following services to individuals who have begun the process of starting a makeup line. They include –
- Business Plan Software.
- Website Creation and Maintenance.
- Unlimited Business Consultations with professional consultants in the areas of risk, human resources, and marketing, among others.
- Email Marketing Campaigns that can be customized.
- A Customizable Marketing Dashboard.
- Online Business Education and Training Modules.
Makeup Industry Regulation
The FDA oversees the cosmetic industry (in which makeup is included) through the enforcement of regulations set forth by the Federal Food, Drug & Cosmetic Act (FD&C Act). Essentially, this legislation requires that makeup/cosmetics avoid mislabeling or mis-branding the product to the consumer public. Additionally, if a makeup product is a retail-marketed offering, the manufacturer must also comply with labeling rules set forth by the Fair Packaging and Labeling Act (FPL). The FDA offers guidance as follows–
Multi-Purpose Makeup Products — A Cautionary Warning
Often, there are makeup products that offer dual purposes. For example, a sun-protection makeup foundation is not only a makeup item but actually a drug as well. Because…
- The foundation enhances one’s appearance which deems it a makeup item.
- The foundation prevents harmful UV rays which defines it as a drug — subject to additional regulation.
If the FDA deems a product as a ‘combo’ product (meaning it is both a drug & makeup), the regulations regarding the manufacture and sales of that product will change dramatically. Entrepreneurs looking to determine how much it cost to start a makeup line should direct their questions to the Center for Drug Evaluation & Research (CDER).
IncFile makes entrepreneurship easy. Get started with $0 LLC today!
