business plan sample for makeup

Makeup Business Plan Template

Written by Dave Lavinsky

Writing a Successful Business Plan For Your Makeup Business + Template

If you’re looking to start or grow a makeup business, you need a business plan. Your plan will outline your business goals and strategies, and how you plan on achieving them. It will also detail the amount of funding you need, and if needed, present a case to investors and lenders regarding why they should invest in your business.

In this article, we’ll explain why you should invest the time and energy into creating a makeup business plan, and provide you with a makeup business plan template and  business plan sample  that includes an overview of what should be included in each section.

Download the Ultimate Makeup Business Plan Template here >

Why Write a Business Plan For a Makeup Business?

There are many reasons to write a business plan for a makeup company, even if you’re not looking for funding. A business plan can help you see potential pitfalls in your business strategy, as well as identify opportunities you may not have considered. It can also help you track your progress and adjust your plans as needed.

That said, if you are looking for funding, a business plan is essential. Investors and lenders want to see that you have a solid understanding of your industry, your customers, and your competition. They also want to know that you have a realistic view of your financial situation and how much money you’ll need to get started.

How To Write a Business Plan For a Makeup Business

While every business plan is different, there are 10 essential components that all makeup business plans should include:

Executive Summary

Company description, industry analysis, customer analysis, competitor analysis, marketing plan, operations plan, management team, financial plan.

Keep in mind that you’ll need to tailor this information to your specific type of makeup business, but these 10 components should be included in every plan.

The executive summary is the first section of your business plan, but it’s often written last. This is because it provides an overview of the entire document.

In the executive summary, briefly explain what your business does, your business goals, and how you plan on achieving them. You should also include a brief overview of your financial situation, including how much money you’ll need to get started.

The next section of your makeup business plan is the company description, where you’ll provide an overview of your business.

Include information about your:

• Company Overview
• Success Factors & Accomplishments To Date
• How & When Incorporated

With regards to the company overview, here you will document the type of makeup company you operate. For example, a makeup company description might look something like this:

At GlamGlow Makeup Studio, our offerings encompass a wide range of cosmetic essentials designed to cater to every beauty need. Our product lineup includes high-grade foundation, volumizing mascara, vibrant lipstick shades, precise eyeliners, and natural-looking blush. Each product has been meticulously selected to ensure our clients have access to the best makeup options on the market. Our commitment extends beyond just selling makeup; we aim to empower our customers with the tools and knowledge to enhance their natural beauty.

Strategically located in Binghamton, NY, GlamGlow Makeup Studio is poised to serve the beauty enthusiasts of Binghamton and its surrounding areas. Our studio’s welcoming atmosphere and accessible location make it the perfect spot for anyone looking to elevate their makeup experience.

What sets GlamGlow Makeup Studio apart is not just our exceptional range of products but also our foundation of expertise and commitment to excellence. Our founder brings a wealth of experience from successfully running a previous makeup business, ensuring that we understand the nuances of what makes a beauty brand thrive. Moreover, our competitive edge lies in our superior makeup quality and the extensive variety we offer, setting us apart from any competition in the region.

This is just an example, but your company description should give potential investors a clear idea of who you are, what you do, and why you’re the best at what you do.

The next section of your business plan is the industry analysis. In this section, you’ll need to provide an overview of the industry you’re in, as well as any trends or changes that might impact your business.

Questions you will want to answer include:

• What is the overall size of the makeup industry?
• How is the industry growing or changing?
• What are the major trends affecting the makeup industry?

For example, your industry analysis might look something like this:

One of the key trends in the Makeup industry is the growing popularity of natural and organic beauty products. Consumers are becoming more conscious of the ingredients used in their makeup products, leading to a shift towards environmentally-friendly and cruelty-free options. This trend bodes well for GlamGlow Makeup Studio, as the brand prides itself on offering high-quality, all-natural makeup products that are both safe and effective. By tapping into this growing market segment, GlamGlow has the opportunity to attract a loyal customer base in Binghamton, NY.

This is just an example, but your industry analysis should give potential investors a clear idea of the overall industry, and how your company fits into that industry.

The next section of your makeup business plan is the customer analysis. In this section, you’ll need to provide an overview of who your target customers are and what their needs are.

• Who are your target customers?
• What are their needs?
• How do they interact with your industry?
• How do they make purchasing decisions?

You want a thorough understanding of your target customers to provide them with the best possible products and/or services. Oftentimes, you will want to include the specific demographics of your target market, such as age, gender, income, etc., but you’ll also want to highlight the psychographics, such as their interests, lifestyles, and values.

This information will help you better understand your target market and how to reach them.

For example, your customer analysis might look something like this:

We will also cater to bridal parties and those planning significant life events, providing specialized packages that include trial sessions and day-of-event services. Our studio will target beauty enthusiasts who follow makeup trends and seek to experiment with new looks and products. By offering workshops and makeup classes, we will appeal to individuals looking to improve their makeup skills and techniques.

In summary, your customer analysis should give potential investors a clear idea of who your target market is and how you reach them.

The next section of your business plan is the competitor analysis. In this section, you’ll need to provide an overview of who your major competitors are and their strengths and weaknesses.

• Who are your major competitors?
• What are their strengths and weaknesses?
• How do they compare to you?

You want to make sure that you have a clear understanding of your competition so that you can position yourself in the market. Creating a SWOT Analysis (strengths, weaknesses, opportunities, threats) for each of your major competitors helps you do this. 

For example, your competitor analysis might look something like this:

S & S Beauty Supply Store

S & S Beauty Supply Store offers a wide range of beauty products, including makeup, skincare, haircare, and beauty tools. Their price points are generally affordable, catering to budget-conscious customers. Annual revenue is estimated to be moderate, given their focus on affordability and accessibility. They have a single location in Binghamton, NY, which serves the local community. Their customer segment largely consists of local residents, including students, working professionals, and beauty enthusiasts. A key strength is their extensive product range and affordability. However, a potential weakness is the limited brand variety compared to larger retailers.

Ulta Beauty

Ulta Beauty offers a comprehensive selection of beauty products, including makeup, skincare, haircare, and fragrance. Their price points vary widely, ranging from drugstore brands to high-end luxury products. Ulta Beauty generates significant revenue, benefiting from a large customer base and a diverse product portfolio. They have multiple locations nationwide, including one in Vestal, NY, near Binghamton. Their customer segments include women of all ages, beauty enthusiasts, and professionals. A key strength is their vast product selection and in-store salon services. A potential weakness is the higher price point for luxury brands, which may not appeal to all customers.

Benefit Cosmetics BrowBar

Your competitor analysis should give potential lenders and investors a clear idea of who your major competitors are and how you compare to them.

The next section of your business plan is the marketing plan. In this section, you’ll need to provide an overview of your marketing strategy and how you plan on executing it.

Specifically, you will document your “4 Ps” as follows:

• Products/Services : Here is where you’ll document your product/service offerings.
• Price : Detail your pricing strategy here.
• Place : Document where customers will find you and whether you will use distribution channels (e.g., partnerships) to reach them.
• Promotion : Here you will document how you will reach your target customers. For instance, makeup businesses often reach new customers via promotional tactics including advertising and online marketing.

For example, your marketing plan might look something like this:

GlamGlow Makeup Studio offers a range of high-quality beauty products and services tailored to meet diverse customer needs. The foundation available in the studio can cater to various skin types and tones, offering excellent coverage and a flawless finish. Customers can expect to pay around $40 for a bottle of premium foundation.

Mascara is another essential product in the studio’s lineup. Designed to provide volume, length, and definition, the mascara comes in various formulations, including waterproof options. The average selling price for mascara is approximately $25.

The lipstick collection features a wide array of colors and finishes, from matte to glossy. These lipsticks are formulated to provide long-lasting color and comfort. On average, a tube of lipstick is priced at $20.

For defining the eyes, the studio offers high-quality eyeliners that glide on smoothly and provide lasting wear. Available in both pencil and liquid forms, the eyeliners are priced around $18 each.

Blush is an essential part of the makeup routine for adding a natural flush of color to the cheeks. GlamGlow Makeup Studio provides blushes in various shades and finishes, ensuring a perfect match for every skin tone. The average price for a blush compact is $22.

Promotions Plan

We will employ a comprehensive range of promotional methods and tactics to attract customers to GlamGlow Makeup Studio. One of the primary strategies we will utilize is online marketing. This includes maintaining an engaging and visually appealing website, which will showcase our services, portfolio, and customer testimonials. Additionally, we will leverage social media platforms such as Instagram, Facebook, and TikTok to reach a broader audience. Through regular posts, stories, and live sessions, we will highlight our makeup services, share beauty tips, and engage with our followers.

We will also invest in search engine optimization (SEO) to ensure our website ranks highly in search engine results, making it easier for potential clients to find us. Complementing our SEO efforts, we will run targeted pay-per-click (PPC) advertising campaigns to drive traffic to our website and convert leads into appointments.

Email marketing will be another key component of our promotional strategy. We will build a mailing list to send out newsletters, special offers, and updates about new services or events. This personalized approach will help us maintain a strong relationship with our clients and keep them informed about what’s happening at GlamGlow Makeup Studio.

In addition to our online efforts, we will actively participate in local community events and collaborate with other businesses in Binghamton, NY. By offering makeup services at these events or partnering with local photographers, bridal shops, and fashion stores, we will increase our visibility and credibility within the community.

We will also implement a referral program that rewards existing clients for referring new customers to us. Word-of-mouth remains a powerful tool, and incentivizing referrals will encourage satisfied clients to spread the word about our services.

To further enhance our promotional efforts, we will offer special promotions and discounts during holidays, back-to-school seasons, and other significant occasions. These limited-time offers will attract new clients and encourage repeat business from our existing clientele.

Lastly, we will ensure our studio’s interior and exterior signage is eye-catching and professionally designed to attract walk-in customers. Our location in Binghamton, NY, will benefit from high visibility, and well-designed signage will draw the attention of passersby.

As you can see, your marketing plan should give potential investors a clear idea of your marketing objectives, strategies, and tactics.

The next section of your business plan is the operations plan. In this section, you’ll need to provide an overview of your company’s day-to-day operations and how they will be structured.

• What are your company’s daily operations?
• How are your company’s operations structured?

Your operations plan should be detailed and concise. You want to make sure that potential investors have a clear understanding of your company’s day-to-day operations and how they are structured.

You will also include information regarding your long-term goals for your operations and how you plan on achieving them.

For example, your operations plan might look something like this:

To ensure the success of GlamGlow Makeup Studio, there are several key day-to-day operational processes that we will perform:

• Customer Appointments Management: Schedule and confirm client appointments, ensuring optimal booking to maximize studio capacity.
• Inventory Management: Monitor and manage makeup and skincare product inventory to ensure adequate stock levels and avoid shortages.
• Staff Coordination: Assign tasks and coordinate schedules for makeup artists and support staff to ensure smooth operations.
• Sanitation and Cleanliness: Maintain high standards of cleanliness and sanitation in all areas of the studio to comply with health regulations and enhance customer experience.
• Customer Service: Greet clients upon arrival, provide consultations, and ensure a positive and welcoming environment.
• Financial Transactions: Handle payments, manage cash flow, and maintain accurate financial records using point-of-sale systems.
• Marketing and Promotions: Execute daily marketing activities, including social media updates, special promotions, and email campaigns to attract new customers and retain existing ones.
• Training and Development: Conduct regular training sessions for staff to keep them updated on the latest makeup trends and techniques.
• Customer Feedback: Collect and analyze customer feedback to continuously improve services and address any concerns promptly.
• Supplier Relations: Communicate with suppliers to order products, negotiate terms, and manage deliveries.

Your operations plan should give readers a clear idea of your company’s day-to-day operations, how they are structured, and your long-term goals for the company.

The next section of your business plan is the management team. In this section, you’ll need to provide an overview of your management team and their experience.

• Who is on your management team?
• What are their qualifications?
• What is their experience?

Your management team ideally includes individuals who are experts in their respective fields. You want to make sure that lenders and investors have a clear understanding of your management team’s qualifications and experience, and feel they can execute on your plan.

For example, your management team might look something like this:

Chloe Carter, President

Your management team should give potential lenders and investors a clear idea of who is on your team and how their qualifications and experience will help your company succeed.

The final core section of your business plan is the financial plan. In this section, you’ll need to provide an overview of your company’s financials.

• What are your company’s projected revenues?
• What are your company’s projected expenses?
• What is your company’s projected growth rate?
• How much funding do you need and for what purposes? 

Your financial plan should give potential investors a clear understanding of your company’s financials. While you may include a summary of this information in this section, you will include full financial statements in the appendix of your business plan.

For example, your financial plan might look something like this:

Below is a summary of your financial projections. If/when you change the Revenue Assumptions, Cost Assumptions, and/or Other Assumptions, the results below will change.

This is just an example, but your financial plan should give potential investors a clear idea of your company’s financial projections.

The final section of your business plan is the appendix. In this section, you’ll need to provide any additional information that was not included in the previous sections.

This may include items such as:

• Full financial statements
• Resumes of key management team members
• Letters of reference
• Articles or press releases
• Marketing materials
• Product information
• Any other relevant information

By including this information in the appendix, you are allowing potential investors and lenders to learn more about your company.

In summary, writing a makeup business plan is a vital step in the process of starting and/or growing your own business.

A business plan will give you a roadmap to follow. It can also help you attract investors and partners.

By following the tips outlined in this article, you can be sure that your business plan will be effective and help you achieve your goals.  

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Cosmetic Business Plan Template

If you want to start a Cosmetic business or expand your current Cosmetic business, you need a business plan.

The following Cosmetic business plan template gives you the key elements to include in a winning Cosmetic business plan.

You can download our business plan template (including a full, customizable financial model) to your computer here.

Cosmetic Business Plan Example

I. executive summary, business overview.

[Company Name], located in [insert location here], is a cosmetics manufacturing company focused on providing high-quality, all-natural makeup, beauty products, and other skincare products. The company will distribute its products nationwide to all major beauty supply stores and select department stores. The Company’s products will also be available directly to consumers via their website.

Products Served

The Company will manufacture and sell the following products:

• Cosmetics, including face powders, eye shadows, lipsticks, and mascaras
• Haircare products
• Face and body creams and lotions
• Nail care preparations and nail polishes

Customer Focus

[Company Name] will primarily offer its products retail locations and e-commerce buyers. The demographics of the customers are as given below:

• Individual Buyers: 32%
• Beauty Salons: 48%
• Retail Locations: 20%

Management Team

[Company Name] is led by [Founder’s name], who has been in the cosmetics manufacturing business for [x] years. While [Founder] has never run a cosmetics company himself, he has extensive experience and in-depth knowledge of managing a certified cosmetic company, including the operations side, such as running day-to-day operations as well as handling the business management side (e.g., staffing, marketing, etc.).

Success Factors

[Company Name] is qualified to succeed due to the following reasons:

• There is currently a high demand for cosmetic and beauty products in the U.S. In addition, the company surveyed the population and received highly positive feedback pointing towards an explicit demand for the services, supporting the business after launch.
• The major strength of being a cosmetics manufacturing company is the vast experience of the management team. It has people on board who understand how to grow business from scratch to become a national phenomenon.
• The Company will use high-quality and exceptional packaging materials which are environmentally friendly.
• The cosmetics business has proven to be a successful industry in the United States.

Financial Highlights

[Company Name] needs an estimate of $400,000 to set up the cosmetic production plant successfully. Specifically, these funds will be used as follows:

• Manufacturing equipment and plant setup: $300,000
• Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Top line projections over the next five years are as follows:

II. Company Overview

Who is [company name].

[Company Name] is a licensed cosmetics manufacturing company owned by [Founder’s Name]. The business will be based in [insert location here]. The Company will provide high-quality, all- natural makeup items, beauty products, and other skincare products using organic ingredients and optimal techniques.

The company will distribute its products nationwide to all major beauty supply stores and select department stores. The Company’s products will also be available directly to consumers via their website.

[Company Name]’s History

Cosmetics are [Founder’s] passion. His mother was a professional makeup artist who created a sense of makeup items in him since his childhood. Following his passion, he went to cosmetology school and shortly after began working in the field. He then decided to go out on his own and start [Company Name].

[Company Name] has been able to secure a long–term lease for a manufacturing facility in a strategic location. The facility also has the health departments’s approval.

Since incorporation, the company has achieved the following milestones:

• Found office space and signed Letter of Intent to lease it
• Developed the company’s name, logo, and website
• Created the list of products
• Determined equipment and inventory requirements
• Began recruiting key employees with experience

[Company Name]’s Products/Services

Iii. industry analysis.

The cosmetic industry is historically not affected by economic downfalls. Every woman and some men use some type of cosmetic product to maintain a healthy and fresh look, thus the market potential is vast. According to a market research firm, the global cosmetics market size is expected to gain momentum by reaching $415.29 billion over the next five years.

Another trend in this industry is the exploration of safer raw materials for the production of cosmetic and beauty care products. The truth is that people all over the world are looking for cosmetics and beauty care products that contain fewer chemicals, thus increasing the demand for cosmetics and beauty care products produced from natural materials.

The cosmetic and beauty products manufacturing industry has also started to adopt eco–friendly packaging. As a matter of fact, this adoption will likely persuade environmentally conscious consumers to buy its products while increasing operators’ efficiency.

IV. Customer Analysis

Demographic profile of target market.

[Company Name] will serve retail businesses and individuals throughout the U.S.

The precise demographics are as follows:

Customer Segmentation

The Company will primarily target the following three customer segments:

• Individual Buyers: Individual consumers, especially women will be key targets for the company’s e-commerce business.
• Beauty Salons: The second target group comprises beauty salons, as beauty salons require cosmetics to treat their customers and also sell beauty products. The company will offer their products, at wholesale to this segment.
• Retail Locations: The third group comprises the retail locations who will sell their products in their brick and mortar stores.

V. Competitive Analysis

Direct & indirect competitors.

Beauty Supplies Inc. Beauty Supplies Inc. is one of the popular cosmetic manufacturing companies and has been in business for xx years. Beauty Supplies Inc. offers a wide array of products that one would expect in cosmetics and self-care. Besides this, Beauty Supplies Inc. also manufactures makeup supplies and tools. The belief that customer satisfaction is as important as their products has helped Beauty Supplies Inc. garner a vast base of customers, which continues to grow day by day.

Beauty Supplies Inc. generally has low and medium-priced options for each type of product. However, they do not provide eco-friendly products that [Company Name] plans to carry.

Total Beauty Total Beauty provides its customers with hundreds of beauty products that they can browse from the comfort of their homes. Customers are able to browse through their vast database from one central location. Total Beauty categorizes skincare, haircare, and beauty products, to make it easy to find what its customers are looking for.

Cosmetic Palace Cosmetic Palace was established in [xx]. It has a strong reputation for providing the best products to its clients. Cosmetic Palace’s current location is in [location], which is filled with salons and retail stores. Cosmetic Palace caters to a high-end clientele looking to buy premium cosmetics.

Competitive Advantage

[Company Name]’s biggest competitive advantage lies in the quality of the products and the expert team.

• High-Quality Ingredients: [Company Name] uses all-natural, organix ingredients and continuously strives to improve its products offerings. The cosmetic products do not contain any harmful chemicals. Instead, the company uses advanced organic and natural preservatives that cause no harm to the skin.
• Management: The Company’s management team has years of business and marketing experience that allows them to market and serve customers in an improved and sophisticated manner than the competitors.
• Relationships: Having lived in the community for xx years, [Founder’s Name] knows all local leaders, newspapers, and other influencers, including the local leaders who fought the [Competitor] opening two years ago. It will be relatively easy for the company to build branding and awareness of the store and establish several product lines.
• Sustainability: [Company Name] will be a zero-waste company with its plastic-negative packaging. It will maintain its eco-friendly status while scaling up to meet demand.

VI. Marketing Plan

You can download our Business Plan Template (including a full, customizable financial model) to your computer here.

The [Company Name] Brand

[Company name] seeks to position itself as a respectable, upper-middle-market competitor in the cosmetics industry. The [Company Name] brand will focus on the company’s unique value proposition:

• Offering a wide portfolio of cosmetic products manufactured for men and women
• Convenient location
• Comfortable, customer-focused environment
• Moderate price point
• Providing excellent customer service

Promotions Strategy

[Company Name] expects its target market to be businesses and individuals throughout the U.S. The Company’s promotions strategy to reach the audience includes:

Pre-Opening Events Before opening the cosmetic manufacturing business, [Company Name] will organize pre-opening events designed for prospective customers, local merchants, and press contacts. These events will create buzz and awareness for [Company Name] in the area.

Advertisement Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The Company will advertise its products in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.

Social Media Marketing Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.

Word of Mouth Marketing [Company name] will encourage word-of-mouth marketing from loyal and satisfied clients. The Company will use recommendations and word-of-mouth marketing to grow the customer base through the network of its existing customers. The Company will be incentivizing its existing customer base and companies to encourage their friends to make a purchase for the first time.

Special Offers Offers and incentives are an excellent approach to assisting businesses in replenishing the churn in their customer base that they lose each year. The Company will introduce special offers to attract new consumers and encourage repeat purchases, which will be quite advantageous in the long run.

Pricing Strategy

Pricing strategy is one of the most important functions that any business can plan for attracting customers. Prices are a foundational element of a company’s revenues—if managed carefully, they can generate high profits.

[Company Name]’s pricing will be moderate, so customers feel they receive great value when availing of the products they are paying for. The customer can expect to receive high-quality cosmetic products for a more affordable price than what they pay at an ultra-premium cosmetic shop.

VII. Operations Plan

Functional roles.

[Company name] will have an excellent management system to ensure that natural and organic materials are being used to help others restore their beauty. It will take care of every detail. To regulate all the operations from buying the ingredients, operating the machinery, and selling the products, the founder will be hiring an experienced team to help him supervise the operations.

To execute on [Company Name]’s business model, the company needs to perform several functions, including the following:

Administrative Functions

• Chief Executive Officer (Owner)
• Plant Manager
• Human Resources and Admin Manager
• Sales and Marketing Manager
• Machine Operators
• Distribution Truck Drivers

[Company Name] expects to achieve the following milestones in the following [] months:

VIII. Management Team

Management team members.

[Company Name] is led by [Founder’s Name], who has vast experience and understands how to grow a business from scratch and make it a national phenomenon. The owner of the company is a certified cosmetic chemist with an MS degree in Cosmetic Chemistry from a renowned university. He is a skillful man; he has xx years of experience working in a cosmetics manufacturing company. The unique ideas will be presented and implemented by him to elaborate the company.

[Founder] has personal relationships with salespeople at a variety of high-end skincare suppliers.

Hiring Plan

[Founder] will supervise the manufacturing section by himself, sidewise will hire the following staff:

• General Manager for managing overall operations of the company
• Accountant for maintaining financial records
• Production workers for blending compounds and manufacturing cosmetics
• Biochemist for checking and testing the products
• General workers for assisting in packaging the products
• Salespeople for operating the company’s store
• Technical Assistant for managing the company’s social sites and website
• Sales Executives for marketing the company
• Driver for transporting goods

IX. Financial Plan

Revenue and cost drivers.

[Company Name]’s revenues will come from its ecommerce sales, direct to consumer, as well as its wholesale accounts. The major costs for the company will be salaries of the staff, which are paid through a combination of salaries and commission. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.

Capital Requirements and Use of Funds

Key assumptions.

The following table reflects the key revenue and cost assumptions made in the financial model:

  5 Year Annual Income Statement

  5 Year Annual Balance Sheet

  5 Year Annual Cash Flow Statement

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Cosmetic Business Plan Template

Written by Dave Lavinsky

Cosmetic Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their cosmetic companies.

If you’re unfamiliar with creating a cosmetic business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a cosmetic business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Cosmetic Business Plan?

A business plan provides a snapshot of your cosmetic business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Cosmetic Company

If you’re looking to start a cosmetic business or grow your existing cosmetic company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your cosmetic business to improve your chances of success. Your cosmetic business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Cosmetic Businesses

With regards to funding, the main sources of funding for a cosmetic business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for cosmetic companies.

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How to Write a Business Plan for a Cosmetic Business

If you want to start a cosmetic business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your cosmetic business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of cosmetic business you are running and the status. For example, are you a startup, do you have a cosmetic business that you would like to grow, or are you operating a chain of cosmetic businesses?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the cosmetic industry.
• Discuss the type of cosmetic business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of cosmetic business you are operating.

For example, you might specialize in one of the following types of cosmetic businesses:

• Niche market cosmetics: This type of cosmetic business specializes in one particular segment of cosmetics. For instance, a niche cosmetic business could sell only fragrance-free products, all vegan products, or gluten free products.
• High-end cosmetics: This type of cosmetic business develops and sells premium make-up and skin care products.
• Kids cosmetics: This type of cosmetic business specializes in producing inexpensive play-makeup products for children.
• Beauty blogger/influencer: This type of cosmetic business involves trying out products from different types of cosmetic brands and providing tutorials, reviews, and other helpful information for people who may be interested in the products. Usually, beauty companies will pay the blogger/influencer to sample or endorse their products.
• Make-up Artist: This type of cosmetic business involves providing make-up services for special occasions like weddings or graduation ceremonies.

In addition to explaining the type of cosmetic business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, the number of products sold, and reaching $X amount in revenue, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the cosmetic industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the cosmetic industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your cosmetic business plan:

• How big is the cosmetic industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your cosmetic business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your cosmetic business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of cosmetic business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other cosmetic businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes mass market cosmetic brands and retailers, as well as secondhand cosmetic retailers. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of cosmetic business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you make it easier for customers to acquire your products?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a cosmetic business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of cosmetic company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide premium make-up, skin care products, or esthetician services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your cosmetic company. Document where your company is situated and mention how the site will impact your success. For example, is your cosmetic business located in a busy retail district, a business district, a standalone store, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your cosmetic marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your cosmetic business, including answering calls, stocking shelves, greeting customers, and collecting payments, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to acquire your Xth customer, or when you hope to reach $X in revenue. It could also be when you expect to expand your cosmetic business to a new city.  

Management Team

To demonstrate your cosmetic business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing cosmetic businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a cosmetic business or successfully running a small salon.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you expect to serve 20-30 customers per day, and will each customer purchase 1-5 items on average? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your cosmetic business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a cosmetic business:

• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or photos of happy customers using your products.  

Writing a business plan for your cosmetic business is a worthwhile endeavor. If you follow the template above, you will be able to prepare a winning beauty product business plan, makeup business plan or a business plan for a cosmetic company. You will understand the cosmetic industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful cosmetic business.

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