startup costs for cosmetic business

What are the startup costs for a cosmetic business today?

What are the startup costs for a cosmetic business today?

This is probably the most common question I get asked. It is also a sign of how many people are thinking about developing their own beauty range. In fact DIY beauty products workshops are very trendy at the moment. These courses are ok in the hobby phase, but if you want to go professional and start your own cosmetic business more strategic thinking and money needs to go into it. Let’s have a look at the startup costs for a cosmetic business:

Cosmetic market research
This is essential to find the gap in the market that has no players in it. The gaps are usually niche, therefore it is all about finding the one that people can benefit from and that you are passionate about.
Cost: lots of time, finding the relevant people and speaking to them, cosmetic market reports
Cosmetic development briefing and costing
Once you found your gap, it is time to give it shape with a cosmetic product brief and some numbers. The briefing and costing are linked, so it may take a few attempts to get the sweet spot between the two or you might have to change your budget or brief. This phase is like the foundation of your house, so the key decisions you take at this stage are the ones you will have to stick with once the house or products are “built”. This phase is also important to estimate the budget required for your cosmetic business startup. Parameters that affect this phase are:

  • type of product: emulsion, oil, body wash and so on…
  • number of products in the range
  • how green do you want your beauty range to be: organic, organic certified, as natural as possible…
  • cosmetic formulation development cost
  • cosmetic products production costs (this is affected by the the number of units per production run as well as the cost of cosmetic raw materials used)
  • packaging
  • marketing material
  • website

Cost: from several thousands of pounds to hundreds of thousand of pounds.

Cosmetic formulation development cost

This cost may vary depending on the complexity of the product, the brief and the number of products. It is difficult to give a cost as there are many variants.

Red tape cost

The regulatory aspects of cosmetic development has increased dramatically in the last few years, making tests and services more time consuming and therefore more expensive. These extra fixed costs have a major impact on the price per unit on small runs. The cost of this phase depends on the type of cosmetic product and countries you intend to sell your cosmetic products to.

Cosmetic business insurance

This price varies, from premises and equipment insurance to product liability insurance.

Sales and Marketing

The sky is the limit…

At the green chemist consultancy we can help you with strategic thinking, costing and feasability, cosmetic formulation development, packaging sourcing, contract manufacturer matching, technical coaching…

One Response to What are the startup costs for a cosmetic business today?

  1. fatu sesay March 24, 2017 at 10:16 pm #

    im trying to start my own lipstick line

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(Organatural is now renamed The Green Chemist Consultancy.)