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- How To Start a Beauty Supply Store
- How To Open a Beauty Supply Store FAQs
- Helpful Videos & Images
- Additional Resources in the Beauty Supply Industry
How To Start a Beauty Supply Store
Starting a beauty supply store can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn how to open a beauty supply store successfully.
Importantly, a critical step in starting a beauty supply store is to complete your business plan. To help you out, you should download Growthink’s Ultimate Beauty Supply Store Business Plan Template here.
15 Steps To Start a Beauty Supply Store
- Choose the Name for Your Beauty Supply Store
- Develop Your Beauty Supply Store Business Plan
- Choose the Legal Structure for Your Beauty Supply Store
- Secure Startup Funding for Your Beauty Supply Store (If Needed)
- Secure a Location for Your Business
- Register Your Beauty Supply Store With the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Beauty Supply Store
- Buy Beauty Supply Store Equipment & Inventory
- Develop Your Beauty Supply Store Marketing Materials
- Purchase and Setup the Software Needed to Run Your Beauty Supply Store
- Hire Staff
- Open for Business
1. Choose the Name for Your Beauty Supply Store
The first step to starting your own beauty supply store is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your beauty supply store:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your beauty supply store.
2. Develop Your Beauty Supply Store Business Plan
One of the most important steps in starting a beauty supply store is to develop a detailed business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your beauty supply store.
- Company Overview – this section tells the reader about the history of your beauty supply store and what type of beauty supply store you operate. For example, does your beauty supply store cater to professionals or the general public? Will you offer online sales with an eCommerce store or only sell goods at a physical store?
- Industry Analysis – here you will document key information about the beauty supply industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, what is their profession? Are they in a certain income bracket? What do they look for when buying beauty products?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your beauty supply store? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your beauty supply store make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Beauty Supply Store
Next you need to choose a legal structure for your beauty supply store and register it and your business name with the Secretary of State in each state where you operate your beauty supply store.
Below are the five most common legal structures:
1) Sole Proprietorship
A sole proprietorship is a business entity in which the owner of the beauty supply store and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a beauty supply store together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a beauty supply store include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a beauty supply store is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your beauty supply store, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Beauty Supply Store (If Needed)
In developing your beauty supply store plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a beauty supply store to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a beauty supply store that they believe has high potential for growth.
5. Secure a Location for Your Business
Location is key for a new business. You’ll want to find a spot that is visible and accessible, especially if you’re starting out with a small budget. A good location will also have a lot of foot traffic, so consider your target market when choosing a spot.
To find the right space, consider:
- Driving around to find the right areas while looking for “for lease” signs
- Contacting a commercial real estate agent
- Doing commercial real estate searches online
- Telling others about your needs and seeing if someone in your network has a connection that can help you find the right space
6. Register Your Beauty Supply Store With the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your beauty supply store’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your beauty supply store to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
Every state, county and city has different business license and permit requirements.
Nearly all states, counties and/or cities have license requirements including:
- General Business License – You will need to obtain a general business license in order to operate your beauty supply store. This license will allow you to conduct business in your state or locality.
- Seller’s Permit – You will need a seller’s permit in order to sell products in your store. This permit allows you to purchase products wholesale and resell them retail.
- Zoning Permit – A zoning permit is required in order to operate a business in a specific location. This permit ensures that your business complies with local zoning regulations.
Depending on where you launch your beauty supply store, you will have to obtain the necessary state, county and/or city licenses.
10. Get Business Insurance for Your Beauty Supply Store
Business insurance policies that you should consider for your beauty supply store include:
- General Liability Insurance – This type of insurance protects your business from third-party claims of bodily injury, property damage, and personal injury.
- Product Liability Insurance – Product liability insurance protects your business from claims that a product you sold caused someone bodily injury or property damage.
- Business Property Insurance – This insurance protects your business premises and contents in the event of damage or theft.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy Beauty Supply Store Equipment & Inventory
The next step to opening a beauty supply store is to purchase the necessary equipment and inventory. This includes items such as shelving, displays, cash registers, and product.
You will also need to stock your shelves with a variety of beauty products, ranging from makeup and hair care products to skincare and fragrance. While you can buy some of these items online, it is often best to purchase them from a beauty supply wholesaler. This will ensure that you get high-quality products at a fraction of the retail price.
12. Develop Your Beauty Supply Store Marketing Materials
Marketing materials will be required to attract and retain customers to your beauty supply store.
The key marketing materials you will need are as follows:
- Logo – Spend some time developing a good logo for your beauty supply store. Your logo might be displayed on your storefront, printed on your receipts and shopping bags, and used across your online promotions. The right logo can increase customer trust and awareness of your brand.
- Website – Likewise, a professional beauty supply store website provides potential customers with information about the products you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you. You will also need to set up your beauty supply store online if you plan to sell your products over the internet in addition to a physical location.
- Social Media Accounts – Establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your beauty supply store. You might also consider partnering with beauty brands for cross-promotion on social media.
13. Purchase and Setup the Software Needed to Run Your Beauty Supply Store
A beauty supply store needs inventory software to keep track of what products they have in stock and how much of each product they have. They also need a point-of-sale system to process transactions.
Some popular point-of-sale systems for beauty supply stores include Square and Shopify. For inventory management, you might consider options such as Brightpearl and Vend.
Research the software that best suits your needs, purchase it, and set it up.
14. Hire Staff
When it comes to finding and hiring staff, it’s important to do your research. You’ll want to make sure you hire people who are knowledgeable about the beauty industry and who have a passion for helping others look and feel their best.
When interviewing potential employees, ask them questions about their experience in the beauty industry, as well as their goals for the future. It’s also important to get a sense of their personality and whether they would be a good fit for your team.
Once you’ve hired your staff, it’s important to provide them with training so that they are familiar with the products and services you offer. This will help ensure that your customers receive the best possible service.
15. Open for Business
You are now ready to open your beauty supply store. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How To Open a Beauty Supply Store FAQs
What Is a Beauty Supply Store?
A beauty supply store is a retail business that sells cosmetics, skincare, and other products used by hairstylists as well as general consumers. It can be in the form of an online or offline business. The goal of these stores is to provide customers with all their needs for makeup, hair care, nail care, skincare, and more. They also offer how-to advice on how to use their products correctly so they will get the most out of them.
These stores typically stock items such as shampoos, cosmetics, hair extensions, and tools such as curling irons and flat irons. The products they carry can vary significantly depending on the size of their inventory and the area where they are located. They may only sell one type of shampoo or a wide variety of product lines depending on what customers in their locality prefer to buy.
Beauty supply stores often have staff members who are knowledgeable about each product's ingredients and how it works best for different people with various skin tones and hair types, etc.
Is It Hard To Start a Beauty Supply Store?
No, not at all. In fact, opening your own beauty supply store is a relatively easy process that can be completed in just a few steps. Finding a location for your store and securing the funding to hire staff, buy inventory, and pay for other startup costs will likely be your biggest challenges. Following the steps outlined above will help you get started.
How Can I Start a Beauty Supply Store With No Experience?
If you're interested in starting a business in the beauty industry, but don't have any experience, opening a beauty supply store could be a great option. Beauty supply stores are relatively easy to set up and run, and can be very profitable. Here's what you need to know to get started. Researching the industry is a great place to start. You might also consider making connections with experienced individuals in the beauty supply industry who can mentor you.
What Type of Beauty Supply Store Is Most Profitable?
There are many different types of beauty supply stores. Some are very small, only carrying a few select items. Others are large and carry a wide variety of products.
So, which type of store is most profitable? The answer may surprise you. It turns out that the size of the store doesn't necessarily matter. What matters most is the location of the store. The most successful beauty supply stores are located in high-traffic areas. This could be a busy street, a mall, or even a grocery store. The key is to have a lot of people walking by your store. This way, you're sure to get a lot of foot traffic and potential customers.
How Much Does It Cost To Start a Beauty Supply Store?
If you plan to start a beauty supply store, how much it costs to start this type of business will depend on what you want to offer customers. Start-up costs can range from hundreds of dollars up to millions for full-service stores, but the following is a general breakdown:
- Business Licenses / Permits - In most cases, these are annual or biennial expenses that must be acquired before starting your beauty supply store. These include federal tax ID numbers and local business licenses. Depending on how much detail your city requires in your application for a business license they could cost anywhere from $25 – $500 dollars. You will also have initial fees for permits or zoning requirements. These can be anywhere from $25 to several hundred dollars.
- Inventory, Store Fixtures, and Display Cases - Depending on how much you want to offer customers, how many display cases are necessary, how much inventory you need to order, how much cosmetic products are available to the public will determine how much it costs to start a beauty supply store. The average startup cost for inventory can range anywhere from $15,000 – $100,000 if you have the capital to invest in the products upfront. Also, keep in mind that you’ll need professional-grade fixtures and counters for your displays as well as cases that allow customers privacy while browsing through your merchandise. These could run anywhere between $2,500 – $15,000 depending on how much detail you want.
- Advertising, Marketing, and Promotional Supplies - Anyone who has run a business knows how crucial advertising is in bringing in customers through the door of your beauty supply store. With so many new businesses starting up all over the country every day, how can they expect anyone to know about them?
- Grand Opening Supplies - You’ll also have to allocate funds for your grand opening marketing campaign which could cost anywhere from $1,000 to $10,000 depending on how big you go. The more word-of-mouth promotion you receive at first, the better chance your store will survive early on; however, how can you get people talking about your business if they don’t know it exists? This is why every small business owner must invest in a reliable marketing and promotional campaign, and how much to spend will depend on how much you want to invest. This can start as low as $100 for signage if you make it yourself, or up to thousands of dollars for banner stands, print advertising, billboards, etc.
- Personal Costs - You’ll also have personal costs associated with starting your beauty supply store such as your time. You might work 10 hours each day in the beginning until things are organized properly at your business. This can be free labor but if you’re hiring employees this will mean additional payroll expenses every month on top of what you’re already putting into startup costs.
Learning how to start a beauty supply store doesn’t need to be intimidating when there are guides like this one that can walk you through how to create a business plan, how much it might cost to start your beauty supply store, how many hours you’ll need to put into it until things are running smoothly, and how much money you can expect to bring in each month. This will set realistic expectations so there are no surprises along the way.
No matter how big or how small your budget is for startup costs if you have a passion for this type of industry then starting a beauty supply store is not only an excellent business venture but also one of the most rewarding.
What Are The Ongoing Expenses for a Beauty Supply Store?
There are a few key ongoing expenses that are important to keep in mind when budgeting for your beauty supply store. These include beauty supply products, rent or mortgage, utilities, and insurance.
Inventory will be your biggest ongoing expense, as you'll need to constantly restock your shelves with the latest products. Keep a detailed beauty supply store inventory list to ensure you are keeping great selling products in stock and not reordering products that don't sell. You'll also need to factor in the cost of shipping and handling when ordering from suppliers.
Rent or mortgage payments will be another significant ongoing expense. If you're leasing space for your store, be sure to factor in the cost of any necessary renovations or build-outs. Utilities, such as electricity, gas, and water, will also need to be factored into your budget.
Finally, you'll need to purchase insurance for your business. This will protect you in the event of a natural disaster, theft, or another unforeseen incident.
How Does a Beauty Supply Store Make Money?
A beauty supply store makes money by selling products that are used in the beauty industry. These products can include hair care products, makeup, and skincare items. The store may also offer services such as manicures and pedicures as part of its business model. The average markup for a product in a beauty supply store is 50%. This means that for every $1.00 that a product costs, the store will charge $1.50.
Is Owning a Beauty Supply Store Profitable?
Yes, owning a beauty supply store can be very profitable. How much do beauty supply stores make varies. To improve the profitability of your own beauty supply store, you should reduce unnecessary expenses to improve net profit. For example, you can use social media advertising to attract large groups of new customers to your store. Another way is to promote specific products that are likely to generate high sales, such as beauty supplies or accessories related to popular culture. You could also introduce discounts and offers so you can compete with other stores in the city.
It is important to keep track of your profits and losses so that you can see how profitable your business is becoming. Being able to anticipate trends can also lead you to sell more products and drive up profits for your store.
Why Do Beauty Supply Stores Fail?
Beauty supply stores often fail when sales cannot meet expenses. Rent is one of the highest monthly expenses for a business. If you're not in a high-traffic area, your beauty supply store might not generate enough foot traffic to sustain itself.
Additionally, inventory can be expensive, and if you don't have enough customers, you might not be able to sell all of your products before they go bad.
How Big Is the Beauty Supply Industry?
The beauty supply industry is estimated to be about an 18.9 billion U.S. dollars industry as the latest report and continues to grow at a healthy rate, increasing by 2.8% each year. This growth can be attributed to how diverse the beauty supply business is and the ample opportunities that exist for ownership.
What Are the Key Segments of the Beauty Supply Industry?
The beauty supply industry is diverse, meaning there are many different opportunities for how to run a beauty store. This diversity can be how big your store is, how expensive your products are, and how far you expect customers to drive to your store.
The key segments of the beauty industry include:
- Haircare products
- Skincare products
- Cosmetic products
- Other products
What External Factors Affect the Beauty Supply Industry?
There are many external factors that affect how the beauty supply industry is done, including how much people are using social media, how strong the dollar is compared to other countries’ currency, how much people are willing to spend on beauty products, and how many influencers are promoting these products.
Technology has also transformed the beauty industry by allowing consumers to interact with their products virtually before buying. Check out the infographic below for more information.
Who Are the Key Competitors in the Beauty Supply Industry?
ULTA Beauty and Sally Beauty Supply are two of the most popular beauty supply brands nationwide. There may be other beauty stores in your local area, so be sure to research your area and find out where your target market tends to shop for these products.
The beauty supply is a booming industry with plenty of room for new business owners. There are many different ways to open a beauty store, but they each have their own pros and cons. One of the most popular types is the convenience store.
Convenience stores sell beauty products alongside everyday items like groceries, snacks, gifts, and more. This type of store allows people to conveniently pick up essentials for themselves or their family members.
With the growing trend of consumers purchasing products online, you may consider creating an online beauty supply store instead of having a brick-and-mortar location.
What Are the Key Customer Segments in the Beauty Supply Industry?
There are four different customer segments that you should consider when launching a professional beauty store. These segments are the following:
- Salon professionals
- Beauty schools and students
- Estheticians and beauty salon technicians
- Home hair care enthusiasts
Each customer segment has its own needs, so you’ll need to identify how your business satisfies the different segment needs depending on your primary target market.
For example, salon professionals need product lines that will meet the demands of their particular clientele. A beauty school, on the other hand, would want to teach how to use certain products and how they work on different skin types. This helps prepare them for what they’ll experience in an actual salon environment.
What Are Some Successful Marketing Strategies for a Beauty Store?
- Run a Contest - Offering a contest can be a great way to get people excited and engaged with your business. There are various ways how you could set up the contest and how you could pick the winner. For example, you could have a photo contest where people submit their favorite hairstyles or have a video contest where people have to create a how-to video on how to do an updo. You could also add in some prizes such as coupons to use in your store for the person who wins the contest.
- Get Social - Ignoring social media platforms such as Facebook and Twitter is no longer an option when running a business today. It is essential that you have a presence on these sites, build brand awareness, and know how to engage your customers with fun contests or even how people can share their experiences with your products.
- Build Strong Relationships - Even if there are other beauty stores located in the same area as yours, it doesn't mean that they won't work together to find ways how they can benefit from each other's success. There are many ways how competing beauty supply businesses could partner up to help one another out such as offering each others' products at both locations, cross-advertising on social media networks, etc.
How Do You Maintain Quality and Customer Service in Your Own Store?
If you want to open a beauty supply store, it's crucial to maintain quality and customer service in order to attract and retain your customers.
To maintain quality in your own store, you should:
- Make sure that all of the products you sell are clean and in pristine condition so that they don't become contaminated and unsafe for your retail store.
- Offer a variety of hair care services such as hair styling, relaxers, weaves, or even extensions at competitive prices.
- Keep up with trends by stocking new products when necessary such as different hair colors or styles.
- Take out expired products from inventory so that they don't become stale and less effective.
To maintain customer service in your own beauty supply store, you should:
- Greet clients soon as they walk through the door
- Ask how you can help them
- Encourage customers to browse around the store
- Offer suggestions on how they could achieve their desired look
- Anticipate and address your customers' needs.
- Thank each customer after a purchase.
- Ensure that all of your employees are knowledgeable about how to use different hair products and services on different types of hair.
What Are the Different Products to Sell in Your Beauty Supply Store?
A beauty supply store can sell many different types of cosmetic products, not just hair care products. For example, the store could sell makeup, nail polish, and other beauty products. They can also offer other services such as haircuts. Customers can also learn how to do their own hair at home through training courses.
Offer value-added services such as free consultations with stylists or even free samples of new items before they go on sale so that people have the chance to try them out first before committing to purchasing one.
Some beauty stores choose to only offer haircuts. They may specialize in certain types of haircuts such as African American haircuts, men's haircuts, and even weave installation services. These types of stores typically focus more on male or female clientele who visit the store every month to get their haircut. This strategy will then generate more income for the business because clients must come back frequently for haircuts compared to other types of beauty supplies that customers might buy once and never need again unless they run out.
Beauty stores are typically located in a shopping center or mall along with other beauty-related businesses including beauty salons, nail salons, tanning salons, and barbershops. Since beauty stores stock a large amount of inventory, they should be located in busy areas such as around schools or other places that draw in foot traffic.
Beauty products are typically displayed on shelves for customers to find what they need quickly without needing to ask anyone working there. However, larger items such as hair weaves may not physically fit onto the shelves so these larger items can be kept out of sight and stored where customers will be able to see them when an employee retrieves them from storage.
Most beauty supply stores provide a wide range of beauty products for women and men to look better so that they will buy more in order to further improve how they look. Buying these types of beauty supplies can be expensive, so some men or women may not be able to afford to spend much money on such items on a regular basis to maintain their appearance.
What Are Some Tips For Hiring Staff for Your Beauty Supply Store?
- Hire a general manager to handle the finances, marketing, and inventory management.
- Hire a receptionist or sales associate who can help customers find what they need and give them information about the products being sold.
- Hire employees to work in the back of the store stocking shelves with items or assisting customers who want their hair braided, cut, or styled. Make sure that employees have a good work ethic and a positive attitude.
- You should also hire a few people to work at the front of the store who are friendly and talk to customers while they shop. These people will then have direct contact with how much revenue you make from the sales you do each day.
Helpful Videos & Images
How To Start a Beauty Supply Business Online 2022 [Complete Guide] | #BeautySupply
Technology Is Transforming the Beauty Industry – Learn How
Additional Resources in the Beauty Supply Industry
- Black Owned Beauty Supply Association: www.bobsa.org
- Jinny Beauty Supply Vendorwww.jinny.com
How to Finish Your Beauty Supply Store Business Plan in 1 Day!
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Click here to finish your beauty supply store business plan today.
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