A beauty supply store is a store that retails a wide range of beauty products. Skincare, cosmetics, hair care products, perfumes, toiletries, personal grooming products et al are the most retailed products in beauty supply stores. Sally Beauty Supply, Bath & Body Works, ULTA Beauty, Sephora, and Merle Norman Cosmetics are the most retailed brands in the beauty industry in the United States.
The global beauty industry market is valued at $511 billion in 2022. The beauty and personal care market is estimated to hit a jaw-dropping market size of $716.6 billion by 2025. The US cosmetic market is worth a staggering $62.46 billion.
Skincare is one of the most profitable product categories, as its revenue is projected to generate roughly 177 billion U.S. dollars in 2025. As of 2020, Asia Pacific was the industry leader, accounting for approximately 43 percent of the global market. In February, West Virginia was the state with the highest foot traffic per capita of beauty supply stores. On average, Friday is the busiest day of the week for beauty supply stores.
Steps on How to Start a Beauty Supply Store
Table of Content
Conduct Market Research
The first step in the market research process for your beauty supply store is to develop market-based research questions in line with your overall business goal and objective. In this regard, you should source for information that will help you maximize your business, information that will tell you what your potential market is looking for from a beauty supply store, the product, and brands that people spend a premium on, and also help you operate your beauty store with less stress.
a. Who is the Target Market for a Beauty Supply Store?
If you are thinking of opening a beauty supply store, then you should make your target demographics all-encompassing. It should include beauty salons, beauticians, and every adult in the neighborhood where your beauty supply store will be located.
b. Is Beauty Supply Store a Profitable Business?
Yes, the beauty supply store business is profitable, and statistics show that the market size, measured by the revenue of the industry, came to $18.9 billion in 2022. According to the study, the average woman spends about $313 per month on her appearance. This adds up to $3756 per year or $225,360 throughout a lifetime.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to beauty supply stores, and here are some of them;
- Brick and mortar beauty supply stores
- Online beauty supply stores
d. Who are the Major Competitors?
- Atomy USA Health and Beauty
- Alcantara Cosmetica USA
- L Brands
- Sally Beauty Holdings, Inc.
- Ulta Salon Cosmetics & Fragrance Inc
- Beauty Supply USA
- Beauty Plus Salon
- USA Nail & Beauty Supply
- Oerigo Beauty (Dover, DE USA)
- Sigma Beauty Flagship Store – Mall of America
- Shen Beauty
- Hair USA Beauty Supply
- YO Beauty USA
- Beauty Empire USA
- Sami Beauty Supply
- USA Beauty Care Inc
- Cosmetheque USA Inc
- Beauty Kingdom USA Corporation
e. Are There County or State Regulations or Zoning Laws for Beauty Supply Store Business?
Yes, there are county or state regulations and zoning laws for the beauty supply business. It is important to state that in the United States, government agencies and departments routinely grant variances to rules and regulations. Often, you only have to fill out a short form. In other cases, your request may have to be publicly heard before your city council, zoning board, or other body. Please check with your zoning or planning department to find out what options are available to you.
f. Is There a Franchise for Beauty Supply Store Business?
Yes, there are franchise opportunities for beauty supply stores. They include;
- Sally Beauty Holdings, Inc.
- Beauty Supply Outlet
- Armstrong McCall.
- Sigma Beauty Flagship Store – Mall of America
- Beauty Supply USA
g. What Do You Need to Start a Beauty Supply Store Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- A Good Shop Facility
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- Suppliers of Beauty and Cosmetic Products
- Startup and Working Capital
Memorable Business Name ideas for Beauty Supply Store Business
- Loveth® Beauty Supply Store, Inc.
- Tine and Tyler® Beauty Supply Store, Inc.
- Beauty Nation® Beauty Supply Store, Inc.
- Ted Capstone™ Electric Cars Dealership, Inc.
- Esther Lane® Beauty Supply Store, Inc.
- Al Baroness® Beauty Supply Store, Inc.
- Lady Annie® Online Beauty Supply Store Company
- Macron Martins® Beauty supply Store, LLC
- High End® Beauty Supply Store, Inc.
- Nelly B® Beauty Supply Store, Inc.
- Maria De La Rosa® Beauty Supply Store, Inc.
- Stacy McRib ™ Beauty Supply Store, LLC
- Bridget Decoster™ Beauty Supply Store, Inc.
- Broadway Beauty Supply Store, LLC
- Mark Fernand Beauty Supply Store, Inc.
- Jacinta Borrow® Beauty Supply Store, Inc.
- Eyes of Beholder© Beauty Supply Stores, Inc.
- Georgina Paulson™ Beauty Supply Store, LLC
- Jill Noel™ Beauty Supply Stores, Inc.
- Madonna Whyte® Beauty Supply Store, Inc.
Register Your Business
a. What Type of Business Structure is Best for Beauty Supply Store?
Even though there are several options when it comes to the business structure of a beauty supply store, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.
Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Beauty Supply Store?
- General Business License
- Seller’s Permit
- Fire and Safety Permit (Fire certificates)
- Federal Export Licenses
- Zonal Permits
- Signage Permit
- State Occupational Licenses
- Operational State Facility Inspections (Building Permits)
d. What Type of Certification is Needed to Open a Beauty Supply Store?
You don’t need any certifications to open a beauty supply store.
e. What Documents are Needed to Open a Beauty Supply Store?
These are some of the basic legal documents you are expected to have if you want to legally run a beauty supply store in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- Dealer License and Surety Bonds
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a beauty supply store, usually you may not need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Beauty Supply Store?
When it comes to starting a beauty supply business, the startup costs vary and it could range from $10,000 to over $500,000. This is because the startup inventory is on the high side.
b. What are the Costs Involved in Starting a Beauty Supply Store
- The Total Fee for Registering the Business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the beauty supply store for $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- Cost for hiring Business Consultant – $2,500.
- Insurance coverage at a total premium – $2,400.
- Cost for payment of rent for 12 months at $1.76 per square foot in the total amount of $53,300.
- Cost for Shop remodeling (construction of racks and shelves) – $5,000.
- Other start-up expenses including phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost of start-up inventory – $25,000
- Cost for store equipment (cash register, security, ventilation, signage) – $3,750
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
- The cost of Launching a website: $600
- The cost for our opening party: $3,000
- Miscellaneous: $5,000
c. What Factors Determine the Cost of Opening a Beauty Supply Store?
- The size of beauty supply store
- The choice of location
- The required licenses and permits
- The type of beauty supply business (online or bricks and mortar)
- The types and brands of beauty products to be retailed in the store
- The cost of hiring and paying a business consultant and attorney
- The cost for branding, promotion, and marketing of the business
- The cost for furnishing and equipping the facility
- The cost for insurance policy covers
- The cost for registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost for the grand opening of the beauty supply store.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
It is not compulsory to build a new facility for your beauty supply store, but if you have the required finance, it will pay you to build your facility. The truth is that building or reconstructing a facility will allow you to come up with a facility that will perfectly fit into your overall business goals and vision.
e. What are the Ongoing Expenses of a Beauty Supply Store?
- Rent and lease
- Supplies and inventory
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Salaries of employees
f. What is the Average Salary of your Staff?
- Chief Executive Officer (Owner) – $40,000 Per Year
- Shop Manager – $30,000 Per Year
- Merchandise Manager – $29,630,000 Per Year
- Accountant (Cashier) – $28,500 Per Year
- Sales Boys and Sales Girls – $26,100 Per Year
- Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Beauty Supply Store
- Raise money from personal savings and sale of personal stocks and properties
- Raise money from investors and business partners
- Sell shares to interested investors
- Apply for a loan from your bank/banks
- Source for soft loans from your family members and your friends.
Write a Business Plan
a. Executive Summary
Stacy McRib ™ Beauty Supply Store, LLC is a registered beauty, cosmetics & fragrance store that will be based in Los Angeles – California, USA. We have been able to secure a corner piece location where we intend to launch our store before venturing out to open chains of beauty stores all across major cities in the United States of America.
b. Products and Service
- Haircare and shower products
- Skincare products
- Nail care products
- Deodorant and shaving products
- Suncare, baby care, and other products
c. Mission Statement
Our mission is to build a highly successful business venture that will grow from one store to different locations all around key cities in the United States of America. We want to become a one-stop beauty, cosmetics & fragrance shop.
Our vision as a community-based beauty, cosmetics & fragrance store is to become the number one choice in the whole of Los Angeles – California, and also to be amongst the top 2 leading beauty stores in the State of California before our 10th anniversary.
d. Goals and Objectives
The goals and objectives of our beauty supply store are to provide retail outlets where people can buy a wide range of cosmetics, perfumes, toiletries, and personal grooming products from different manufacturers both from the United States of America and from other countries.
e. Organizational Structure
- Chief Executive Officer (Owner)
- Shop Manager
- Merchandise Manager
- Accountant (Cashier)
- Sales Boys and Girls
- Security Guard
a. SWOT Analysis
The location of our store, the vast experience, and qualification of our management team, the business model we will be operating on, varieties of payment options, a wide range of cosmetics, perfumes, toiletries, personal grooming products et al and our excellent customer service will count as a strong strength for Stacy McRib ™ Beauty Supply Store, LLC.
A major weakness that may count against us is the fact that we are a new beauty, cosmetics & fragrance store and we don’t have the financial capacity to compete with multi-million dollar beauty stores like L Brands, Sally Beauty Holdings, Inc., Sephora, and Ulta Salon, Cosmetics & Fragrance Inc. and co when it comes to retailing products at rock bottom prices.
The fact that we are going to be operating our beauty, cosmetics & fragrance store in one of the busiest streets in Los Angeles – California provides us with unlimited opportunities to sell our products to a large number of people. We have been able to conduct thorough feasibility studies and market surveys and we know what our potential clients will be looking for when they visit our store; we are well-positioned to take on the opportunities that come our way.
Just like any other business, one of the major threats that we are likely going to face is an economic downturn. It is a fact that an economic downturn affects purchasing or spending power. Another threat that may likely confront us is the arrival of new beauty, cosmetics & fragrance stores, or even a supermarket, in the same location where ours is located.
b. How Do Beauty Supply Stores Make Money?
Beauty supply stores make money by selling a wide range of cosmetics, perfumes, toiletries, personal grooming products et al from different manufacturers both from the United States of America and from other countries of the world.
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Sales & Advertising Strategies
- Place adverts on both print (newspapers, beauty care, and cosmetics magazines) and electronic media platforms
- Sponsor relevant community-based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your products
- Install your Bill Boards in strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- Contact every adult in the neighborhood where your beauty supply store will be located informing them about your business and the products you retail
- List your beauty supply store in local directories / yellow pages
- Advertise your beauty supply store on your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions where your beauty supply store is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo.
a. How Much Should You Charge for your Product/Service?
Generally, the price of beauty care products depends on the type, size, and brand of the product.
b. How Much Profit Do Beauty Supply Store Owners Make a Year?
It depends, but available reports show that at a minimum, online or in-store, a beauty supply store owner should net from $35,000 to $70,000 annually. The amount you make in a physical location can be tied to where you are – in a big city location you can make from $100,000 to $300,000 annually. You can make as much as a beauty supply store with online sales.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the beauty supply store
- The types and brands of products retailed in the shop
- The location the beauty supply store is covering (online or strictly brick and mortar)
- The management style of the beauty supply store
- The business approach of the beauty supply store
- The advertising and marketing strategies adopted by the store.
- The number of years the beauty supply store is in business
d. What is the Profit Margin of a Beauty Supply Store?
The profit margin of a beauty supply store is not fixed. Typically, beauty and cosmetics stores gain a handful of profits on all products. Margins usually range from 20% to around 60-70%. So, the revenue you would be making will be based on sales made by you monthly and the expenses that you incur while running the business.
e. What is the Sales Forecast?
Below is the sales forecast of a beauty supply store. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $240,000
- Second Fiscal Year: $350,000
- Third Fiscal Year: $480,000
Set Up your Shop
a. How Do You Choose a Perfect Location for Beauty Supply Store?
- The demography of the location especially as it relates to the ratio of men to women
- The demand for beauty care products and cosmetics in the location
- The purchasing power of residents of the location
- Accessibility of the location
- The number of beauty supply stores and other outlets that retail beauty care products in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Beauty Supply Store?
- Las Vegas, Nevada
- Los Angeles, California
- Chicago, Illinois
- Boston, Massachusetts
- Silver Spring, Maryland
- Rowland Heights, California
- Portland, Oregon
- New York City, New York
- Atlanta, Georgia
- Dallas, Texas
c. What Equipment is Needed to Operate a Beauty Supply Store?
You should be prepared to purchase receipt issuing machines, POS, and related software apps. You will also need computers or laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others, and all these can be gotten as fairly used.
When it comes to hiring employees for a standard beauty supply store, you should make plans to hire a competent chief executive officer (owner) shop manager, merchandise manager, accountant (cashier), sales boys and girls, and security guard.
Launch the Business Proper
No beauty supply store opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can choose to go for a grand opening party. The bottom line is that with a proper launching of the beauty supply store, you will be able to officially inform people in your city that your beauty supply store is open for business.
a. What Makes a Beauty Supply Store Business Successful?
- Choose a good location and shop facility to launch the business
- Make sure your shop is well stocked with different brands and types of beauty care products
- Throw a grand party before officially opening the beauty supply store
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your beauty supply store business
- Leverage on all available online and offline platforms to promote your beauty supply store
b. What Happens During a Typical Day at a Beauty Supply Store?
- The shop is open for the day’s work
- The shop and products are cleaned and well-arranged
- Walk-in customers are attended to
- Deliveries of orders are made
- Stocks are taken and reports are written and submitted to superior officers
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Beauty Supply Store?
- Customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining and bidding skill
- Work experience in a beauty supply store or any retail environment
- Experience in managing people
- Experience in business administration.