Starting a hair product line can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful hair product line.
Importantly, a critical step in starting a hair product line is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Hair Product Line:
- Choose the Name for Your Hair Product Line
- Develop Your Hair Product Line Business Plan
- Choose the Legal Structure for Your Hair Product Line
- Secure Startup Funding for Your Hair Product Line (If Needed)
- Secure a Location for Your Business
- Register Your Hair Product Line 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 Hair Product Line
- Buy or Lease the Right Hair Product Line Equipment
- Develop Your Hair Product Line Marketing Materials
- Purchase and Setup the Software Needed to Run Your Hair Product Line
- Open for Business
1. Choose the Name for Your Hair Product Line
The first step to starting a hair product line 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 hair product line:
- 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 hair product line.
2. Develop Your Hair Product Line Business Plan
One of the most important steps in starting a hair product line is to develop your 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 hair product line.
- Company Overview – this section tells the reader about the history of your hair product line and what type of hair product line you operate. For example, are you a hair styling product, shampoo, conditioner, hair color, or a hair treatment product?
- Industry Analysis – here you will document key information about the hair product 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, how old are they? Where do they live? What do they find important when purchasing products like the ones you will offer?
- 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 hair product line? 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 hair product line 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 Hair Product Line
Next you need to choose a legal structure for your hair product line and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the hair product line 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.
2) Partnerships
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 hair product line 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 hair product line 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 hair product line 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 hair product line, 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 Hair Product Line (If Needed)
In developing your hair product line business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a hair product line 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 hair product line that they believe has high potential for growth.
5. Secure a Location for Your Business
When looking for a location for your hair product line, it’s important to consider all of your requirements. You’ll need to find a space that is large enough to house your manufacturing and storage facilities, as well as an office for you and your team. It’s also important to find a space that is accessible and has good transportation links.
Another important factor to consider is the cost of renting or leasing the space. Make sure you have a realistic budget in mind and be prepared to negotiate with potential landlords.
6. Register Your Hair Product Line 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 hair product line’ 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 hair product line 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
The requirements can vary depending on your state, but typically you will need a business license, a manufacturing license and/or a distributor’s license. You may also need to obtain permits for the production of your products, as well as for the storage and sale of those products. Contact your state’s department of revenue or department of licensing and regulations for more information on the specific licenses and permits you will need to start your hair product line.
10. Get Business Insurance for Your Hair Product Line
The type of insurance you need to operate a hair product line may vary depending on the scope of your operations.
Some business insurance policies you should consider for your hair product line include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Hair Product Line Equipment
To start your hair product line, you will need some essential equipment. This includes a scale to weigh your ingredients, a mixer to blend them, and containers to store your finished products. You may also want to invest in labeling equipment to create professional-looking labels for your products.
12. Develop Your Hair Product Line Marketing Materials
Marketing materials will be required to attract and retain customers to your hair product line.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your hair product line. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional hair product line 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.
- 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 hair product line.
13. Purchase and Setup the Software Needed to Run Your Hair Product Line
To start a hair product line, you will need to purchase some software. Hair product lines typically require software that can help with inventory tracking, order management, and customer relationship management (CRM). There are a number of different software options available, so be sure to do your research to find the one that is best suited for your needs.
14. Open for Business
You are now ready to open your hair product line. 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 Start a Hair Product Line FAQs
Is it hard to start a hair product line?
No, it's not hard to start a hair product line. All you need is a good idea for a product and the willingness to put in the work to make your vision a reality. It can be quite successful if you have a good product and a well-thought-out marketing plan.
How can I start a hair product line with no experience?
There are a few different ways to go about starting a hair product line with no experience. You can start by reading books about the topic. There are also several online courses available that can teach you the basics of starting a hair product line. You can also reach out to professionals in the industry for advice and mentorship. Additionally, you can attend industry events and trade shows to learn more about the market.
What type of hair product line is most profitable?
The most profitable hair product line is a professional hair care line. These products are typically sold in salons and other professional hair care outlets. They are more expensive than over-the-counter products, but they are in demand because they offer users a wider range of options for taking care of their hair. Professional hair care lines often include shampoos, conditioners, styling products, and hair treatments. Many also come with instructional guides that help users get the most out of the products.
How much does it cost to start a hair product line?
To start a hair product line, it will cost you between $10,000 and $50,000. This includes the cost of product development, manufacturing, marketing, and distribution.
What are the ongoing expenses for a hair product line?
The ongoing expenses for a hair product line can include the cost of goods, shipping, labor, and marketing. The cost of goods can include the ingredients in the products, packaging, and shipping costs. Labor costs can include the wages of those who design, manufacture, and package the products. Marketing expenses can include advertising, promotional materials, and website design and maintenance.
How does a hair product line make money?
There are a few ways a hair product line can make money. The most common is to sell the products directly to consumers. The company can also make money by selling the products to retailers. Another way that the company can make money is by licensing the products to other companies.
Is owning a hair product line profitable?
Yes, owning a hair product line can be profitable. The hair care industry is a multibillion-dollar market. It is projected to grow even more in the years to come. This is because many people are becoming interested in finding new or better products for taking care of their hair.
Why do hair product lines fail?
One of the main reasons hair product lines fail is that they do not keep up with changing trends. Suppose a company does not update its products to reflect the latest trends. In that case, its line will quickly become outdated and lose market share. Another reason hair product lines fail is that they do not target the right market. If a line aims for an older demographic, for example, it may fail to capture the interest of younger consumers. Finally, hair product lines often fail because they do not have a diverse marketing campaign. Suppose a line only uses traditional advertising methods, such as TV commercials and magazine ads. In that case, it will not reach as many consumers as it could if it uses social media and online ads.
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