Opening a retail cosmetics store is no easy feat. However, it could be a profitable one. These days, beauty is a booming billion-dollar industry, predicted to grow to $750 billion by 2024. Still, however promising the numbers may look, there is a lot of careful planning and number crunching involved with opening any retail business. If you are looking to open a retail cosmetics store, there are a few things you need to check off your list first.
The term “business plan” sounds intimidating, but creating one is necessary for the success of your retail cosmetics store. A good business plan is a blueprint for your company’s success. It lays out your strategy and shows investors that your company is worth investing in. Once you’ve done the fun stuff like naming your business, you need to break down the nitty-gritty details.
First, you should do some market research of cosmetics retailers in your area and determine where your business fits in. This is important to include in your plan because it shows the need you are filling. Next, your business plan should illustrate your operational, management, employment and marketing strategies. Finally, be sure to cover the financials. This includes startup costs, expected operational costs and your store’s break-even point (the point at which you break even on your initial investment). Your financials should also cover how you plan to afford to run the business until you become profitable and able to pay yourself.
To start a retail cosmetics store, you need to decide what type of business to set up. There are several options, a few of which include a sole proprietorship, partnership, corporation and limited liability corporation (LLC). To figure out the best way to set up your retail cosmetics store, talk with your accountant and lawyer.
Another important consideration is making sure you have all the necessary permits, registrations and licenses to operate your company. Check with your state’s laws to learn more about what is required where you live.
Choose a Location
A great location is imperative for any successful retail business. During the development of your business plan, you should identify a few potential locations for your business based on where your target demographic lives and shops. A high-traffic strip mall in an upper-income area might be ideal for a luxury retail cosmetics store. Meanwhile, a storefront in a busy lower-income area could work well as a discount retailer. 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.
Deciding what to sell in your store is another important step to starting a retail cosmetics business. Choose the products you sell carefully to serve your target demographic. It’s important to understand that some popular cosmetics brands have exclusive deals with specific retailers, so you may not be able to carry every brand in your store. Further, some high-end brands require large minimum purchase orders that could make ordering them untenable for a small shop. Research different cosmetics vendors and learn about their offerings and any rules on minimum orders. Establish relationships with chosen vendors and set up an inventory plan.
Set Up Systems
It’s a good idea to think about how you want to set up your systems for inventory, sales, marketing and more. You will also need store policies, including those covering employee conduct and customer returns. This requires a solid plan and choosing the business tools you want to work with. This can be a lot to think about it, but it’s important to get these operational details down so you can properly train employees and keep things running smoothly.
Before opening a retail cosmetics store, you need to hire employees. 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.
Your business plan should include your marketing strategy, 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 polished web presence featuring colorful, high-resolution photographs of your cosmetics products and makeup application videos will also be an invaluable sales tool that offers 24/7 shopping capability.
- BUDGET - be sure you know what it will cost you and if you are willing to spend it in terms of cost and time
- It is not easy...if you have a family or time consuming tasks this may not be for you.
Chelsea Levinson earned her B.S. in Business from Fordham University and her J.D. from Cardozo. She is a small business owner who has created content for Bank of America, H&R Block, CNBC, AOL and many more.