The skincare industry is booming, with an ever-growing demand for products that cater to a variety of skin types and concerns. As you consider entering this lucrative market, it's essential to grasp the current trends and carve out a niche for your brand. Here's what you need to know when starting a business focused on skincare.
How to start a skincare business
01. Do your research and choose your skincare niche
The beauty sector is rapidly evolving, driven by both increased consumer awareness and new tech. Trends such as organic ingredients, personalized skincare and eco-friendly packaging are shaping the industry. Staying abreast of these trends can help you spot opportunities and anticipate customer needs when it comes to your own skincare business.
To stand out in a crowded skincare market — in 2024 the skincare market in the US was expected to generate revenue of an estimated US$24.35 billion), focusing on a specific niche can be advantageous. Whether it's men's skincare, products for sensitive skin or homemade remedies, identifying your target audience will guide your product development and marketing efforts.
Conducting thorough market research is crucial. You'll want to understand who your competitors are, what they offer, and what gaps exist in the market. Look into growth drivers such as an aging population or increased health consciousness that could propel your business forward.
While opportunities abound, so do challenges. Regulatory hurdles, fierce competition and changing consumer preferences can impact your business. By recognizing these challenges early on, you can strategize to overcome them effectively.
02. Create a business plan
A well-thought-out business plan is your roadmap to success in the skincare industry. It outlines your business goals, strategies and how you plan to achieve them. Here's what to include in your skincare business plan:
Your business plan should detail your company's mission statement, product offerings, market analysis, organizational structure and financial projections. It also needs to address how you'll handle operations, human resources and any legal considerations.
Understanding the financial aspects of starting a business is critical. You'll need to estimate startup costs, forecast sales and profits and manage cash flow. This section should also cover pricing strategies and break-even analysis.
03 Estimate your startup costs and secure funding
Before diving into the skincare market, it's important to calculate how much capital you'll need to start this type of a business. Consider related expenses such as:
Product development and testing
Manufacturing or production costs
Packaging and branding materials
Marketing and advertising expenses
Rent for physical space if needed
Licenses, permits and insurance
Learn more: The best ways to raise money for a business
Some popular ways to raise money for a small business include:
Bank loans: Traditional term loans or lines of credit from banks
SBA loans: Government-backed loans with favorable terms
Crowdfunding: Raising small amounts from many people, often online
Angel investors: Wealthy individuals who invest in early-stage businesses
Venture capital: Professional firms investing in high-growth potential startups
Personal savings or bootstrapping: Using your own money to fund the business
04. Develop your skincare product line
Choosing the right path for your skincare product line is an important decision. Whether you opt for manufacturing or creating homemade products, each option has its own set of pros and cons. Here's how to go about approaching this crucial step in starting a skincare business:
Manufacturing vs. homemade: Deciding between these two paths depends on various factors such as your budget, control over the production process and scalability. Manufacturing allows for larger quantities but requires significant investment, while homemade products offer personalization but might limit your ability to scale quickly.
Finding a manufacturer or supplier: If you choose to manufacture, you'll need to find a reliable skin care line manufacturer or supplier. Look for partners who can provide quality ingredients and materials, and who adhere to industry regulations.
Then you'll want to think about your product formulation — ingredients, scent, effect on the skin. You'll also want to plan the packaging and branding of your skincare products.
If you plan to make homemade skincare products you'll need to do a lot of research around which ingredients to use, including their different properties and benefits for the skin. Don't neglect safety and make sure everything you use is safe to use via thorough testing. It's best to start with simple recipes, that require minimal ingredients and equipment.
05. Register and license your skincare business
Registering your business is a critical step in establishing your skincare business. Compliance with laws and regulations ensures your business operates without costly interruptions. Here's what you need to consider:
Permits and licenses: Depending on your location and the nature of your skincare business, you may need specific permits and licenses to operate legally. Research the requirements in your area or consult with a legal expert to ensure you have all necessary documentation.
For example, if you plan to start a skincare business in New York you'll need to:
Register your business with NY Department of State
Obtain an Employer Identification Number (EIN)
Acquire necessary licenses and permits
Comply with FDA regulations for cosmetic products
Follow New York State Education Department rules for estheticians
Adhere to labeling requirements for cosmetics
Obtain liability insurance
Comply with New York business tax obligations
Follow workplace safety regulations
Adhere to consumer protection laws
Comply with data privacy regulations if collecting customer information
Product safety and labeling laws: The skincare industry is subject to stringent regulations regarding product safety and labeling. You must ensure that your products meet all safety standards and that labels provide accurate information about ingredients and usage instructions.
Learn more: How to license a business
06. Choose your sales channels and decide on your fulfillment options
Choosing the right sales channels and managing order fulfillment are crucial for getting your skincare products into customers' hands. Here's how to approach these final steps before launching:
Compare sales channels: You have several options for selling your products, including online marketplaces, e-commerce websites or brick-and-mortar stores. Each channel has its advantages and challenges, so consider where your target customers prefer to shop and the resources you have available.
Online vs in-store: Selling online can offer a broader reach and lower overhead costs, while in-store can provide a tactile experience for customers. You might also consider a combination of both to maximize exposure. Learn moire about how to create an online store.
Order fulfillment options: Once you've made a sale, delivering the product is next. You can handle fulfillment in-house, or outsource to third-party logistics providers who can store inventory and ship orders for you.
07. Brand and market your skincare business
Start by developing your marketing plan. It's how you'll attract customers to your brand. It should include your:
Target audience: Define who your customers are and where you can reach them.
Branding: Develop a strong brand identity that resonates with your target audience.
PromotionsStrategies: Decide on the mix of digital marketing, social media campaigns, influencer partnerships or traditional advertising that will best reach your audience.
Sales channels: Identify where you will sell your products—online through an e-commerce platform or in physical retail stores.
Creating a strong brand identity and then implementing effective marketing strategies are essential for the success of your skincare business. Your brand is more than just a logo it's the entire experience you offer to customers. It includes your brand name, visual elements and the message that you communicate. Make sure your branding reflects the values and quality of your skincare line.
Learn more: How to name a business.
Once you've established your brand identity, it's time to market your products. Here are some popular strategies to consider:
Digital marketing: Use social media, email marketing and content marketing to reach a wider audience online.
Influencer partnerships: Collaborate with influencers who align with your brand values to tap into their followers and promote your skincare products.
SEO: Optimize your website and content with relevant keywords to improve visibility in search engine results.
Traditional marketing: Don't overlook traditional marketing methods like print ads, PR and attending industry events to network.
Remember that consistency is key in branding and marketing — every touchpoint with customers should reinforce your brand identity and message. With a well-executed branding and marketing plan, you can build a loyal customer base and grow your skincare business.
08. Launch your skincare business
The launch of your skincare business is a momentous event that sets the stage for your future success. Here are some steps to ensure a smooth transition from planning to operating your business.
Make sure your products are ready for market, with quality and packaging that meet your brand standards. Then check you've established your operational workflow, from production to order fulfillment and that each part of the process is efficient and potentially scalable.
Build a website and establish a presence on social media platforms where your target audience is active. Get started with these skin and beauty website templates:
Learn more about building a website from scratch.
Set up your chosen sales channels, whether it's an online store, marketplace listings or physical retail partnerships.
Implement your marketing plan to create buzz around your launch. Consider special promotions or events to attract initial customers.
Determine your key performance indicators (KPIs) to measure the success of your launch and ongoing operations. This could include sales figures, customer feedback or website traffic.
Skincare business examples built on Wix
Enyo Skincare
Enyo Skincare sells a wide range of products via its website. From lip butters to milk baths and body scrubs, they offer a selection of luxurious products for their customers. Offering high quality skincare products is important to them and they aim to cater for all skin types.
Sweet Holistic Skin
This beauty brand, Sweet Holistic Skin, offers all natural skincare products including body butters and oils. Their products are handmade with love, care and all organic ingredients.
Marie Skin Care Success
Marie Skin Care Success is committed to helping its customers have healthy skin first and foremost. Their products are handmade with all natural ingredients. Choose from soap bars, moisturizers and lotions.
How to start a skincare business FAQ
How much does it cost to start a skincare business?
The cost to start a skincare business can vary widely depending on factors such as product development, manufacturing, branding and marketing. Initial expenses can range from a few thousand dollars for a small homemade line to hundreds of thousands for a large-scale operation with extensive product lines.