How to start a beauty business

Starting a beauty business can help entrepreneurs combine their passion for cosmetics with financial independence.

As of 2022, there were over 48,000 beauty businesses in the UK, with more than 2,000 new companies having opened over the past 12 months.

According to research by McKinsey, the global beauty industry generated $430 billion in revenue last year, with some companies turning over in excess of £100,000.

The most common form of beauty business is skincare, but the industry encompasses a broad range of specialities, from event makeup and skincare to haircare and styling.

Some businesses focus on one area, while others branch out into multiple segments, such as retailing a range of cosmetic products through online stores.

The beauty industry can be flexible and scalable, with relatively little initial investment required to get started.

Discover the steps you could take to help build a successful beauty business.

Step 1. Find a niche that matches your skills and interests

If you’re going to start a successful business, it can be a good idea to focus on something that you’re passionate about and qualified to do.

You’ll be doing it every day, so consider whether that’s something you’ll have an appetite to do over the long term.

To find your beauty niche, consider different beauty specialities – or a group of specialities – that interest you, such as lash and eyebrow styling, bridal makeup, men’s grooming, or natural skincare.

Having the skills and passion for your niche may help make your start-up journey more rewarding and help keep you focused on growing your start-up.

Step 2. Consider your customers

For a start-up to succeed, it can pay to identify the need in the market – what do people want?

By defining a market opportunity, you can understand your client base and get an idea of potential revenue.

You can also be sure that you’re differentiating yourself from competitors by offering something that they don’t.

One way to do this is by researching your potential customers and whether any existing beauty businesses offer similar services.

If they do, is there anything that you could do differently that would persuade people to choose your business?

For example, you might be able to charge less for similar services, offer slightly different or more comprehensive services, or capitalise on trends such as consumer interest in natural beauty products and treatments.

Step 3. Decide on a business model

To give your start-up the best chance to succeed, it can be a good idea to evaluate different business models – basically, how your beauty business will make money.

The two most common models for beauty businesses are a product business model and a service business model.

A product business model is buying and selling beauty products for a profit, while a service business model includes activities such as hair styling and beauty services.

Another business model to consider is a subscription model, such as sending regular beauty products through the post to subscribing customers.

Other beauty-centric business models include mobile, retail, dropshipping, and product development.

Mobile business model

A mobile business can offer customers flexibility regarding their beauty treatments, with you and your staff travelling to clients to provide your services.

This can be a popular concept for beauty treatments such as spray tanning, manicures, facials, and hair styling, as some customers might prefer to have these services in the comfort of their own homes.

For some customers – such as those with accessibility and mobility challenges – mobile beauty services can be attractive.

Mobile services can be an ideal concept for start-ups that don’t have the resources to open a retail space, and a good way to stand out against the competition.

However, it will require you to have all the necessary equipment and ensure that it is portable and can be safely transported between appointments.

You will also need to make sure you have all the correct insurance arranged.

It’s a good idea to provide training on lone worker safety, and ensure you have a robust system of checking staff locations and providing safety awareness training and equipment.

Retail store business model

A retail store is what most people think of when they think of a business that provides goods and services.

The organisation provides physical premises that customers visit, typically on the high street or an otherwise easily accessible location.

Retailing requires careful planning, as your location will play a key role in your success.

It can be a good idea to find somewhere that is affordable and comes with the necessary amenities, while a visible location with plenty of footfall is essential for generating new business.

Dropshipping business model

A drop-shipping business is a retailer that uses a third party to handle inventory and distribution.

Your business doesn’t keep the products that it offers, and instead works with a wholesaler to manage sales.

You tell the wholesaler which products you’ve sold and where to send them, and it completes the transaction in exchange for a fee.

Dropshipping is ideal for start-ups that don’t want to purchase and store stock.

This might be for financial reasons (it will require an upfront cost to acquire items), or practical ones (you might not have space to store the goods or the ability to ship them to your customers).

Read our guide on how drop-shipping can help launch a low-cost business.

Brand and product development

Unlike the other business models outlined above, brand and product development doesn’t involve the sale of products and services.

Instead, the business creates, develops, and sells a line of beauty products, such as nail polish, haircare, cosmetics, or skincare.

This option is ideal for entrepreneurs that are interested in the science and engineering behind beauty products.

But it also requires you to be a strong marketeer, as you will have to advertise your goods to suppliers.

It can be a challenging industry to break into, but if you have a unique idea that you’re confident in, there is plenty of upside.

Step 4. Create a business plan

To keep your start-up journey on the path to success, developing a business plan can be a smart idea.

This comprehensive document outlines your business goals, strategies, financial projections, and operational details.

Your business plan could detail the fees you intend to charge for your products and services, how you’ll handle cash flow and what your business costs are.

You might also wish to include a financial forecast, which provides an estimate of your earnings based on market research.

Step 5. Secure funding

No matter what business model you choose and the niche you specialise in, you may discover that the costs of starting a business can quickly add up.

But with the right financial help, it can be possible to gain the support you need to get your start-up off the ground.

There are several ways you can secure funds.

You might be able to finance the project or generate support from friend and family loans.

A safer option may be to secure a small business loan.

You’ll receive the necessary capital from a trusted third party, and you can pay the money back as your business grows.

Start Up Loans provides lending of up to £25,000 for start-up businesses, along with 12 months of free business mentoring support to help get your business idea off the ground.

As with any financial decision, it’s important to seek out independent, specialist advice to advise you what financial product best suits your business circumstances.

Discover if a business or personal loan is best for your business

Step 6. Next steps

You will need to consider your business structure – such as if you will operate as a sole trader, create a partnership with one or more other people, or create a limited company.

You can learn more about these structures and find the right one for you with our handy guide.

Once you have done this, you can register and license your business.

You might also need to obtain insurance, as well as a salon or special treatment license from your local authority, depending on your business type.