One of my favorite things to do in my downtime is listen to and read stories about how businesses got their start and grew to notable success. How I Built This with Guy Raz is in heavy rotation in my car as I transport my kids back and forth to school, sports’ practices/games, and social activities. Not only are business success stories extremely motivating and inspirational to me, but I’ve also found them to be an effective way to learn new strategies and gain new perspectives on my own work. Every strategy isn’t for every business, but whenever I learn something that has practical application in my business or that of my clients’ I put it to good use.
In some of my reading, I came across an article on Vogue Business entitled “How to Launch a Beauty Brand for $1.5M” A title like that would lead you to believe that $1.5M was a modest budget… Like it would require a good deal of resourcefulness to make it happen. From my experience, $1.5M is plenty of money to get a good start so I was curious to read more about how this budget was spent. You can read the full article at the following link https://www.voguebusiness.com/how-to-launch-a-beauty-brand-stowaway-cosmetics
Without fail, every conversation I have with a potential client about the brand they want to build will lead to them asking “How much is this going to cost me?” or me asking “Do you have a budget for this project?”
Most people have no idea how much it costs to start a beauty brand bare bones, let alone how much it costs to grow fast. I’ve done a few Google searches of my own to find out what kind of info is out there detailing the cost to start a beauty brand. What I’ve found is a really broad range of costs and options to get a brand started, experiments by bloggers/journalists, and brand stories as told by startups with bootstrap budgets all the way up to big investment capital budgets. None of which is really helpful when it’s your turn to get started on your journey.
The goal of this post is to help you assess whether or not you can achieve your startup goals with the money you already have access to or if you need to consider seeking investment capital.
For starters, you have to ask yourself…
How much do I have to spend?
How fast do I want to grow?
How much am I capable of on my own?
What do I need to seek help for?
What do my barriers to entry look like?
Can more money solve more problems?
How quickly do I need/want to be profitable?
Remember, it’s not always about how much money you have; it’s about how you leverage it. Of the $1.5M Stowaway Cosmetics raised for their launch, $850k was spent on salaries and operational costs….Yikes!
Investment capital is much better spent with a focus on growth and achieving profitability as soon as possible. While Julie Fredrickson says don’t expect to break even for 2 – 5 years even if you’re growing fast. I say forget break even! Make it your goal to be PROFITABLE in your first year. You can do that if you use your capital to purchase the optimal amount of inventory and implement solid marketing strategies that will sell it. Inventory should MOVE. If you need an office space and/or warehouse and a large team (more than 2 people) before you have turned a profit, you’re not doing it right.
Here are a few things to note about starting a beauty brand with investment capital (larger budget).
That money ain’t free! Investors expect to make a profit on their investment, which means you have to make good on that amazing pitch you gave that secured the capital. That comes with a lot of pressure.
It’s really easy to rely on round after round of fundraising disguised as “growth” just to keep your brand afloat. Don’t fall into that trap. Fundraising should only be used to fuel your startup or to initiate exponential growth of an already successful business. You shouldn’t need to raise more funds every time you want to increase your inventory or operations. Think about the best way to spend your seed dollars so that you can maximize growth and stand on your own two feet until it is time for you to take a major leap to the next level.
When you hear about brands being acquired for hundreds of millions of dollars remember that those numbers are all relative. A brand that sells for $600 Million dollars, but has raised $400M+ in capital is not walking away with $600M. Investment money is just debt until your brand is profitable. Raise and spend wisely.
Start lean, build lean, and reap the exponential benefits later. Just because you have the capital to pay salaries and deck out your brand new corporate office doesn’t mean that you should. Focus on quantifiable growth. Profit FIRST.
Don’t let the money burn a whole in your pocket. The startup years are your time to really grind. Get your hands dirty…break a nail or two. Sure you’re the founder, but you have to earn the title of CEO. Not all founders make the cut. Your job is to do all you can to ensure that you do… including making wise choices about how the budget is spent and taking your time while spending it.
Here are a few things to note about self-funding your beauty brand (smaller budget):
You’re not at a disadvantage because you didn’t raise a million dollars in startup capital. When you’re self made you don’t have a bunch of hands in the cookie jar. Nor do you have a bunch of voices telling you what to do. You’ll be profitable sooner which means you can pay yourself sooner (and a lot more). You also don’t have the pressure to grow faster than your brand can sustain on its own. Fast growth can come at a cost. Enjoy your slow(er) journey.
Keep it simple. The best way to maximize your budget is focus on winning with ONE amazing product. Don’t spread your budget thin by trying to launch with a full product line that you can’t guarantee will have reliable support. Your first product should be something that delivers undeniable results so that you can build your brand credibility while you are building your customer base.
Your profit margin is your best fundraiser. Cosmetics is one of the few industries that can support 10x + markups. A product that only costs you $3 all in to produce can easily be sold for $30 – $65 with the right brand positioning. The success of your first product is really all you need to sustain consistent brand growth.
When you can’t buy attention you have to earn it. Social media has made it incredibly easy to build an audience and establish your influence. But you have to be willing to do the consistent work. Emphasis on consistent. Building an audience is like nurturing a newborn baby. You gotta feed it often if you want it to grow healthy and strong. The sooner you can get 10k followers on Instagram the better. Start NOW. You’ll need the momentum.
Word of mouth is your most effective marketing tool. Empower your customers to be your greatest marketing asset. What will it take for you to secure your first 100 customers? How can you leverage your first 100 customers to secure your next 10,000 customers?
What’s the sweet spot?
Although Stowaway Cosmetics has experienced undeniable success, I don’t recommend spending your budget the way they did. I also don’t want you to think you need a million dollar budget to succeed in the beauty industry.
An ideal budget for your launch year is $75,000 to $250,000. A budget of this size would allow you to launch 5-7 new products over the course of the year (not all at once) and put enough marketing muscle behind each launch to be profitable.
On December 3, 2018, I received an email confirming a VIP Day was just booked on my calendar by someone I recently chatted with during a Hash It Out session. She was super nervous about trusting me with her vision because she didn’t know me and I wouldn’t share any information about my client roster. I know that can be scary, but I have my reasons and I never miss out on the right clients.
But that’s not the point of this post…
We met for her private VIP Day on December 8 at 10a EST, and it was painfully obvious that she still wasn’t sure if she made the right decision in booking with me, but she was ready to stick it out. I assured her that I had her best interest at heart and I would make sure we laid the foundation for a product and brand she could be proud to put her name on.
By the end of our VIP Day, she was much more comfortable with me and confident that I knew what I was doing 😉 Like so many of my other clients, she said “I’m not sure why, but I really feel like you are the person I’m supposed to work with on this.”
On April 6, 2018, we signed the agreement to begin her formulation project.
On July 7, 2018, we put the finishing touches on her product formula and wrapped up the project.
Over the next 3-4 months she finalized her packaging and website design, sent her first batch of inventory to production and gathered testimonials/reviews for her product so she would have social proof to show before she launched.
She also spent that time really building her audience and priming them for a future product launch (without them even knowing)… She did an amazing job of creating content that positioned her as an influencer in her market segment and teased the product without giving it away too early.
On December 2, 2019 I got word that she would be launching her very first product in less than a week and I couldn’t have been more proud! I knew she had an amazing product and I knew she was going to make a ton of sales on her launch day because she took the time to lay the foundation for her brand from the start.
She did even better than we predicted.
On Friday, December 6, 2019 she launched her new brand with 88 orders – many of which included 2-3 units of her debut product.
By Sunday, December 8, 2019 she had sold well over 100 units of her product. And by the end of the first week she had completely sold out of her inventory.
The sales didn’t stop rolling in. Imagine thinking you’ll be lucky to sell 50 units of product in your first month because you’re the new kid on the block, but instead you sell a whopping 1,000 units. That’s what I call success!
When we hear about Kylie Jenner or Rihanna selling out their inventory we think “Of course she did. She’s a celebrity.” And that is exactly why I chose to share this client story. Achieving a sold out beauty launch is not just reserved for celebrities and mega-influencers. It’s awarded to those that are willing to seek expert guidance in the areas they lack and put in the work required to achieve the results they’re after.
Success is in the execution and I’ve mastered the process.
I dedicated 3 years (2017, 2018, 2019) to applying, testing, tweaking and fine-tuning my knowledge and experience into a proven process so that my clients could consistently experience these results. Your brand could be next 😉
It’s been awhile since we’ve had a really exciting beauty launch, so when Tracee Ellis Ross – Curly Queen of Hollywood – announced she was stepping her stiletto in the hair care ring the naturals went wild. Myself included! If I’m being honest, I was definitely wishing I was the chemist on the job.
I digress…
Tracee’s launch strategy for Pattern Beauty was executed to perfection and the results speak for themselves. The brand completely sold out of 9 skus the day of their website launch. Independent beauty brands dream of success like this! Here are 3 lessons from the Pattern Beauty launch that you can apply to your own beauty brand.
Get clear about the problem(s) you want to solve
*image captured from the @patternbeauty instagram page
Tracee knew the market was missing a natural hair care brand that felt like it was created by someone within the natural hair community. While there are quite a few naturalista built brands, few have addressed the most common natural hair woes. With Pattern we got:
A huge tube of conditioner because no curly girl uses just a dime size.
3 different conditioners to address the level of moisture and TLC your curls need – a made-for-you experience with mass market logistics.
Oils to seal the cuticle… because curly girls know the importance of locking in moisture on thirsty strands.
Wash day accessories – we love our tools and there are some that are very specific to the natural community. Detangling brush, microfiber towel, hair clips… a Youtuber’s dream.
Pattern beauty really considered every problem the natural community faces. You have to have an intimate understanding of your customer to meet their needs this well.
Build First, Sell later
*image captured from the @patternbeauty instagram page
The roll out for Pattern Beauty was so seamless and stealthy. It definitely paralleled a Beyonce drop for the natural hair community. There’s really only one way to pull off such a successful launch on short notice… Build a platform.
Sure Tracee’s platform is built on her celebrity, but social media has made it incredibly simple and easy to make a name for yourself without fame. It wasn’t fame alone that made this successful. If Tracee wasn’t already known for unapologetically embracing her curls, this launch would have flopped for sure. Popularity means nothing if you haven’t truly established your lane. You have to decide what you want to be known for and start taking action behind making it happen.
If skin care is your thing start showing your skin care routine and discussing how you select the products you use.
If hair is your thing, start showing how you care for your hair and how you style it. What ingredients does your hair love?
Maybe you’re the girl that spends just as much time and attention on your body care as others spend on their skin and hair. Tell us all about how you do that. How often do you dry brush? What do you use to exfoliate? How do you prevent alligator skin in the winter?
Establish yourself as an authority on what you love… do it with your unique personality… consistently… and you’ll be well on your way to building a platform that is ripe for selling out whatever you release on launch day.
.
Shhhhh….Keep your business to yourself and don’t rush the process
*image captured from the @patternbeauty instagram page
Whatever you do, don’t say a word about your product before you are ready to launch. Tracee made no mention of Pattern Beauty until it was time for the launch countdown (1 week out). It wasn’t until the launch promo began that she revealed more about the journey and the team behind it. So instead of telling your audience what you’re working on, use your platform to make your potential customers tell you to get to work.
A store attendant at a local beauty supply told Tracee his customers often come into the store with a picture of her in hand hoping to achieve her look. Long before there was Pattern Beauty, there were people using Tracee as their hairspiration. That’s the kind of influence you want to have before you launch.
Your skin should be #goals. Your hair should be #goals. Your body care should be #goals. Building that buzz around your personal brand is far more impactful than prematurely spilling the beans on your product development.
While you’re actively working on getting your product ready for the market, don’t rush it. Tracee said Pattern Beauty was 2 years in the making with over 75 rounds of samples. Don’t get me wrong… it doesn’t have to take you 2 years or tons of samples to get your product right. You just never want to rush to the market before you know you have a winner. I know the saying is all press is good press, but the last thing you need as a new brand is a less than stellar product creating static for your reputation before you really take off.
Take your time, get the product right, let a few people try it out, get noticeable results of your own and THEN prepare to launch. It doesn’t matter how long it takes as long as you are doing your part and working toward a win.
My name is Desiree, but my clients call me Desi. I develop high end beauty products and I build ICONIC beauty brands. I am The Glam Scientist. Applications are now being accepted for Idea to Icon – my new 12 month incubator program where I work with you step by step to achieve your goal of launching your beauty brand in 2020. Open enrollment ends February, 2020. Click here to apply today!
Creating a beauty brand is a PROCESS that you shouldn’t try to rush, but it also shouldn’t take you 2+ years to turn your idea into a viable business. There are a lot of moving parts on the path to building an iconic beauty brand. Before you run full speed ahead with your ideas, you need to conduct the proper research and develop a solid plan of action. Starting with a private VIP Day or Workshop is so important because it gives you the opportunity to hammer out the details all at once. This is the time to fully develop your product idea, gain an intimate understanding of your target customer, get clear about your brand’s persona and positioning and carefully plan your overall marketing strategy. Starting with this step is the best way to minimize stress and confusion in your journey from idea to launch.
Once you are clear on the direction of your brand, you can begin preparing for product development. The fastest way to waste your time and money is to go into the lab without a formulation plan. So the second month of your journey is dedicated to exploring delivery systems, sourcing ingredients and putting a few potential formulas on paper before we hit the lab. During this phase of the process I work very closely with my clients to finalize their product claims, select key ingredients to back up those claims, and ensure the product will be formulated for optimal functionality and results.
The first sample run is the most critical in the development process because it directs every iteration of the formula to follow. At this step you have the opportunity to test variations of your potential formula to see what ingredient combination best matches your vision. The foundation of your iconic product is built at this step. This part of the process can literally make or break your product. If you are not completely honest with your feedback of this sample set, you run the very real risk of getting to the finish line with a product that doesn’t meet your standard and/or vision. Always, Always, Always be HONEST. THOROUGH. and DECISIVE when you are evaluating samples. Your brand depends on it.
At the midway point of your development project, you sample a revised version of your formula based on the feedback you provided during the first sample run. This version of your product should be pretty close to perfect, but a few minor tweaks may still be necessary. At this step in the process we’re making sure your conditioner or body cream is not too thick or too thin… Your shampoo or body wash has enough lather and cushion… Your hair or body oil is not too heavy and absorbs at a good rate… Your facial serum or mask glides perfectly on your skin… and above all we’re making sure your product actually works like we say it will.
At this stage of the development process we put the finishing touches on the formulation and submit it for stability, safety and efficacy testing. This is also the perfect time to run a private focus group to gather feedback from your target market. I can’t stress enough how important it is to get feedback from your ideal customer BEFORE you finalize your product and put it on the market. Social proof sells beauty! It’s much harder to sell a product if your customer can’t see that people have already used it with great results. Use your focus group to gather feedback that will help you put the finishing touches on your product and to be your brand’s first set of ambassadors.
The biggest mistake new brands make is building an amazing product and launching it with lackluster branding and marketing. It’s super important to have a brand presence and marketing strategy that attracts your ideal customer. The first step of the Creative Direction process is to devise a comprehensive plan for your brand presence and marketing. While you may have an amazingly effective product, it will be a hard sell if your customer can’t connect to how it looks or what you have to say about it. Branding is more than a cute logo and pretty colors. Marketing is deeper than posting a picture and a “buy now” caption. Magnetic branding and intuitive marketing is the name of the game.
What’s a plan without execution? This step of the process is all about preparing your brand for a well executed launch – call up the graphic designer, photographer, videographer and copywriter, etc and put them to work! It’s ok to steal like an artist! Keep a file of inspiration that you can share with the creative professionals you hire for your project. Take note of websites that have the look and user experience you strive for to guide your graphic designer. Create a saved collection on Instagram for photo and video marketing inspiration. If you come across a post or brand that has the kind of voice you hope to project send it to your copywriter. Be inspired but make your brand your own.
The second biggest mistake new brands make is building an entire brand without gathering an audience to launch to. If you build it, they WILL come – but you have to let them know you’re here otherwise you’re just launching in the dark. While your formulation is in production, find your people, get to know them, and give them clues about what they can expect from your pending brand. Marketing is a marathon that requires tremendous foresight to be timely and effective. If you’re new to beauty you’ll first want to establish your stake in the industry. Let people know what you love and why you love it. Share your journey of discovery and newly gained insight. Allow people to follow your story as it unfolds. Find out what your people expect/hope to see from you. Share tidbits of the development process in real time and as your launch date approaches give them more hints of what to expect and when.
It’s time to birth this baby! A high quality product, magnetic branding, iron clad marketing plan, and a captivated audience is the perfect setup for a sold out launch. With the right numbers and logistics, you’ll be prepared to pitch your brand to retailers to expand your reach in no time.
You just went from Idea to Icon in 9 steps and it all started with a VIP Day / Workshop!
Want a deeper look into my process? Complete the form below to receive my FREE webinar.
I recently did a Periscope broadcast covering the topic of overcoming a saturated market. Press play to find out my best advice for shining and thriving in an industry that is full of products and brands.
If you haven’t already noticed, skin is in. For the past two runway seasons we’ve seen designers and their appointed makeup artists take a minimalist approach to the makeup looks for their shows. Ask any professional makeup artist the key to achieving a flawless makeup look and they will tell you a clean, well hydrated canvas.
The Neutrogena Hydro Boost Water Gel is a product that is getting rave reviews from beauty editors, bloggers and product junkies alike. After hearing about this product one too many times I just had to take a look at the ingredients list to find out why it had claimed so much fame. So what’s the secret? Hyaluronic Acid.
No surprise here! Hyaluronic Acid is found naturally in the body and plays a big role in the appearance of healthy, firm, well moisturized skin. It supports cell and tissue health and helps reduce inflammation. The older we get the less hyaluronic acid our bodies produce resulting in less than youthful looking skin. Sun exposure also decreases our bodies’ ability to produce HA. Hyaluronic Acid can hold 1000 times its weight in water which makes it the ultimate skin moisturizer.
Using Hyaluronic Acid in skin care products allows us to reintroduce this major moisturizing skin component back into our bodies. HA has the natural ability to penetrate the skin’s surface to temporarily reside in the places it needs to be. When this key ingredient is incorporated into the proper delivery system it becomes even more active beneath the skin’s surface.
The Neutrogena Hydro Boost Water Gel is mainly comprised of silicones to deliver moisture. The product obviously works well as is, but I specialize in natural and organic formulations so while silicones have their place, I prefer to find more luxe alternatives. There are natural oils that help skin care actives penetrate the surface layer of the skin more effectively. There are also natural oils that provide a similar skin feel to silicones. Pairing Hyaluronic Acid with plant based actives and novel oils would take this product from great to superb and from mass to prestige.
In the age of the selfie more and more women are looking for products that will give them flawless skin without the use of tons of makeup.
So which of you Glam Stars is going to take advantage of this Glam Biz Insider information? I’m waiting on you ; )
