Table of Content

    Do you want to start cosmetics manufacturing business plan?

    Are you interested in starting a cosmetics business? Well, if you have a mind that can think of ways to manufacture cosmetics to enhance the beauty without altering functioning and structure of human skin, and the knowledge required to implement your ideas, you have probably chosen the right job.

    Professional business planning is the basis of a business, so you have to mention in your cosmetics business plan manufacturing techniques you will be applying, the products that you will provide and a thorough marketing and financial plan. For your help, we are providing a sample business plan of a cosmetic business startup, named, ‘Elegance’.

    Executive Summary

    2.1 The Business

    Elegance will be a licensed and insured cosmetics manufacturing company owned by Angela Jackson. The business will be based in New Jersey. The business will be providing high quality and natural makeup items, beauty products and other skin care products by using organic material and optimal techniques.

    This sample cosmetics manufacturing business plan will help you in exploring the details of how the Elegance will be started. If you have decided to make just one cosmetic item in the beginning, such as if you are only looking for a lipstick business plan, you can still take help from here.

    2.2 Management

    Management is an important part of natural skin care business plan, it basically comprises of the scheme you will follow to run your business. To ensure that you are using natural and organic materials to help others in restoring their beauty you must have an excellent management system, in which you will be taking care of every detail. To regulate all the operations from buying the ingredients, to operate the machinery and selling the products, Angela will be hiring a team, of course, with an efficient manager to help her in supervising the operations.

    This sample cosmetics business plan contains the analysis and management on a wider scale and can be used accordingly if you are starting your business at a smaller scale.

    2.3 Customers

    Our major customers will be the female community, as it is mostly them who are conscious about enhancing and maintaining their beauty. But, instead of just individual buyers, we will have our potential buyers in the form of beauty salons and professional makeup artists.

    2.4 Business Target

    Our target is to get familiar to our target customers within a month or a two of our launch through the sales of our natural and quality products. To be the best and trusted cosmetic brand in New Jersey and to earn a profit margin of $10k per month by the end of the first month of our launch.

    Our business targets to be achieved within the next three years are as follows:

    3 Years Profit Forecast - cosmetics business plan

    Company Summary

    3.1 Company Owner

    Angela Jackson, the owner of the Elegance is a certified cosmetic chemist with an MS degree in Cosmetic Chemistry from the University of Cincinnati. Angela is a skillful woman; she has one-year experience of working in a cosmetics manufacturing company. The unique ideas Angela will present and implement through her company are elaborated in this cosmetics business plan.

    3.2 Why the Business is being started

    Cosmetics and makeup are not just a product for Angela, it is her passion. Her mother was a professional makeup artist which created a sense of makeup items in her since her childhood. She acquired her degree and experience in this domain, so now when she knows all about how to start a cosmetic manufacturing company, she has decided to opt for it.

    3.3 How the Business will be started

    A brief sample of the startup plan of the Elegance as written in their business plan for beauty products is given here free of cost, for anyone who needs guidance in making his/her makeup business plan.

    A facility will be hired in New Jersey which previously was an area for a small pharmaceutical company. Due to the fact that it was an area to test medicines, we’ll not have much to do for converting it to our required laboratory structure. Required machinery and equipment will be bought and the employees will be hired to start the work and manufacture some products to display in the inaugural ceremony of the company.

    The financial experts have forecasted following costs for expenses, assets, and investment, for the start-up.

    cosmetics business plan - startup cost

    The detailed start-up requirements, start-up funding, start-up expenses, total assets, total funding required, total liabilities, total planned investment, total capital and liabilities as forecasted by experts, is given below:

    Start-up Expenses  
    Legal $55,300
    Consultants $0
    Insurance $32,750
    Rent $32,500
    Research and Development $32,750
    Expensed Equipment $32,750
    Signs $1,250
    TOTAL START-UP EXPENSES $187,300
    Start-up Assets $0
    Cash Required $332,500
    Start-up Inventory $32,625
    Other Current Assets $232,500
    Long-term Assets $235,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING $0
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $11,875
    Start-up Assets to Fund $15,000
    TOTAL FUNDING REQUIRED $0
    Assets $23,125
    Non-cash Assets from Start-up $18,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $18,750
    Cash Balance on Starting Date $21,875
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $332,500
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $695,000
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $251,875
    TOTAL CAPITAL AND LIABILITIES $251,875
    Total Funding $255,000

    Products

    The Elegance will be a makeup manufacturing brand, consisting of the manufacturing laboratories as well as a large store to sell its products. So, the business plan for cosmetics company, which we are providing here can be used as a guide for cosmetic store business plan as well as to write your handmade cosmetics business plan.

    Our company will manufacture and sell the following products:

    1. Cleansing Products: This will include the products to remove dirt, oil, and makeup from the skin and will include cleansing oils, cleansing milk, toners, moisturizers, facial masks, shampoo, and face wash.
    2. Decorative Cosmetics: This will include the decorative beauty products that are used to change the appearance by applying some color and will include lipsticks, lip gloss, foundation, face powder, blusher, eyeliner, eyeshades, mascara, eyelashes, nail polishes, and nail enamel remover.
    3. Care Cosmetics: These are the products which are made to cure acne or fairness problems. We’ll manufacture sunscreens, acne wash, and acne creams by using organic compounds and vitamins.
    4. Makeup Brushes: This will comprise of different makeup brushes used for applying foundation, eyeshade, bronzer, blush, and special lip brush. Although we’ll not be manufacturing brushes in the initial stages of our startup, however, Angela thought it should be included in the cosmetics business plan products shop for completeness.

    All our products will be made under highly supervised conditions, we’ll ensure the best quality and natural effects by using organic compounds, minerals, and vitamins in our products. None of our product will contain any type of chemical or ingredient that may harm the skin.

    Marketing Analysis of cosmetics manufacturing business

    After have decided your services and enlisting them in your makeup line business plan, the next step is to do marketing analysis. Market analysis must be done accurately in ones cosmetic retail business plan, with a focus on market trends and segments.

    If you are looking for a cosmetics business plan or if you are just interested in hair product business plan, you can take help from here. You can also look for mac cosmetics business plan available on the web to get an idea about what you should write. Even if you think that you can do this work by researching on your own, you should not rely totally on your knowledge, this important task must be done by or at least get revised by an expert.

    5.1 Market Trends

    The cosmetic industry is one of those businesses which are not affected by economic downfalls or unpredictable incomes as every woman and some men use some type of cosmetic to maintain a healthy and fresh look. The demand for this business in the market can be seen by its annual growth rate which according to IBISWorld is 3.2%. There are currently more than 4000 cosmetic manufacturing businesses in the United States. Collectively the revenue generated by these businesses in 2018, is $52 billion. The business still has a lot be potential and can prove immensely profitable if you run it successfully.

    5.2 Marketing Segmentation

    Our experts have identified the following type of target audience which can become our future consumers:

    Marketing Segmentation - cosmetics business plan

    5.2.1 Individual Buyers: Our first target group will comprise of the individual buyers especially women, who will surely test the quality of our products. And after trying once, we are sure that they will use our products for the rest of their lives. To introduce our products to this group, we’ll use different advertisement techniques discussed later.

    5.2.2 Beauty Salons: Our second target group comprises of the salons which are open, place to place in New Jersey. As beauty salons require cosmetics in bulk almost every week. So, we have decided to offer discounts to them for them to be our potential consumer.

    5.2.3 Professional Makeup Artists: The third group comprises of the artists who perform makeup services in film industries and other places.

    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Individual Buyers 32% 11,433 13,344 16,553 18,745 20,545 13.43%
    Beauty Salons 48% 22,334 32,344 43,665 52,544 66,432 10.00%
    Professional Makeup Artists 20% 12,867 14,433 15,999 17,565 19,131 15.32%
    Total 100% 46,634 60,121 76,217 88,854 106,108 9.54%

    5.3 Business Target

    We aim at becoming renown and the most trusted cosmetic manufacturer in whole New Jersey. Our other business targets are:

    • To achieve the net profit margin of $10k per month by the end of the first year
    • To expand our business and supply to other cities

    5.4 Product Pricing

    We have priced our items in relatively lower ranges to attract our target customers and generate more sales.

    Strategy

    There are several well established and famous cosmetic brands in the whole United States, so in order to introduce yourself to your target market, you must have an effective skin care marketing plan. In your beauty product marketing plan, you have to demonstrate why people should choose you over your competitors.

    6.1 Competitive Analysis

    Our biggest competitive advantage lies in the quality of our products and our expert and experienced team. We’ll be having biochemists in our laboratories to ensure that the products we are manufacturing are suitable for every type of skin. Secondly, we will be having low prices in the initial stages of our startup so that people can know about our services. Our eye-catching display and attracting store in the middle of the commercial zone will also be an advantage for us. Lastly, our effective advertisement strategy will also be helping us to promote our products.

    6.2 Sales Strategy

    No matter what quality you provide, the people can never know about you if your marketing plan cosmetic product is not appealing and attractive for them.

    The Elegance has got this important part of marketing plan cosmetics done by a marketing expert, given here as well for your help.

    • We will ensure a strong social media presence and an effective website to display our process.
    • We will advertise our cosmetic business in relevant business magazines, newspapers, TV stations, and social media.
    • We will offer a 10% discount on our products for the first month of our launch.
    • We will gift one item from a list of displayed items as selected by our customers on the inauguration day.
    • We will be offering a 20% discount to salons when they buy our products in massive amount.

    6.3 Sales Forecast

    Our expected sales forecast is as follows:

    Unit Sales - cosmetics business plan

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Cleansing Products 1,887,030 2,680,320 2,588,240
    Decorative Cosmetics 802,370 815,430 823,540
    Care Cosmetics 539,320 770230 1,002,310
    Makeup Brushes 265,450 322,390 393,320
    TOTAL UNIT SALES 3,494,170 4,588,370 4,807,410
    Unit Prices Year 1 Year 2 Year 3
    Cleansing Products $140.00 $150.00 $160.00
    Decorative Cosmetics $600.00 $800.00 $1,000.00
    Care Cosmetics $700.00 $800.00 $900.00
    Makeup Brushes $650.00 $750.00 $850.00
    Sales
    Cleansing Products $2,149,800 $2,784,000 $3,383,200
    Decorative Cosmetics $120,050 $194,500 $268,500
    Care Cosmetics $50,110 $71,600 $93,000
    Makeup Brushes $139,350 $194,600 $249,850
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Cleansing Products $0.70 $0.80 $0.90
    Decorative Cosmetics $0.40 $0.45 $0.50
    Care Cosmetics $0.30 $0.35 $0.40
    Makeup Brushes $3.00 $3.50 $4.00
    Direct Cost of Sales
    Cleansing Products $989,300 $1,839,000 $2,679,700
    Decorative Cosmetics $66,600 $119,900 $173,200
    Care Cosmetics $17,900 $35,000 $52,100
    Makeup Brushes $19,400 $67,600 $115,800
    Subtotal Direct Cost of Sales $1,294,100 $1,699,400 $2,104,700

    6.4 Sales Monthly

    Sales Monthly - cosmetics business plan

    6.5 Sales Yearly

    Sales Yearly - cosmetics business plan

    Personnel plan

    To run your business in a way you actually have decided in your cosmetics business plan, you need a team which is dedicated and committed to their work responsibilities.

    That’s why it is very important to list the requirements of the staff for your company in your skin care business plan  so that you will be clear about the skills you will be looking into the people while hiring them.

    7.1 Company Staff

    Angela will supervise the manufacturing section by herself, sidewise she’ll hire the following staff:

    • 1 General Manager for managing overall operations of the company
    • 1 Accountant for maintaining financial records
    • 8 Production Workers for blending compounds and manufacturing cosmetics
    • 1 Biochemist for checking and testing the products
    • 2 General Workers for assisting in packaging the products
    • 2 Salesmen for operating the company’s store
    • 1 Technical Assistant for managing the company’s social sites and website
    • 3 Cleaners for cleaning the facility
    • 2 Sales Executives for marketing the company
    • 1 Driver for transporting goods

    7.2 Average Salary of Employees

     Personnel Plan      
    Year 1 Year 2 Year 3
    General Manager $85,000 $95,000 $105,000
    Accountants $45,000 $52,000 $59,000
    Biochemist $85,000 $92,000 $109,000
    Production Workers $410,000 $440,000 $480,000
    General Workers $66,000 $73,000 $80,000
    Salesmen $35,000 $42,000 $59,000
    Technical Assistant $60,000 $63,300 $70,000
    Cleaners $63,300 $70,000 $76,700
    Sales Executives $85,000 $92,000 $109,000
    Driver $40,000 $45,000 $52,000
    Total Salaries $784,300 $855,600 $963,700

    Financial Plan

    A financial plan is a very important part of a business plan for cosmetic shop, as it covers all the expenses needed for your startup. In your beauty product business plan, you have to craft a map of the cost of equipment and machinery you will be buying for your business and the amount you will be spending on advertisement strategy. As financial plan envisage that how you will be able to balance the startup costs by profits earned thus it must be written carefully in your cosmetics business plan.

    An effective business plan for hair care products and skin care products include the strategy to provide high quality at low prices in the early stages of business. Now, when you know the importance of getting introduced to people in the high competition, you will surely understand how important it is to keep prices low. So in your financial plan, you must also include the analysis of the gap between your investment and the money earned in the beginning. It is advised to get this task done by a financial expert, but a rough idea can be got by reading sample plans on the web like this one.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

    8.2 Brake-even Analysis

    Breke-even Analysis - cosmetics business plan

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159,740
    Assumptions:
    Average Per-Unit Revenue $260.87
    Average Per-Unit Variable Cost $0.89
    Estimated Monthly Fixed Cost $196,410

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $309,069 $385,934 $462,799
    Direct Cost of Sales $15,100 $19,153 $23,206
    Other $0 $0 $0
    TOTAL COST OF SALES $15,100 $19,153 $23,206
    Gross Margin $293,969 $366,781 $439,593
    Gross Margin % 94.98% 94.72% 94.46%
    Expenses
    Payroll $138,036 $162,898 $187,760
    Sales and Marketing and Other Expenses $1,850 $2,000 $2,150
    Depreciation $2,070 $2,070 $2,070
    Leased Equipment $0 $0 $0
    Utilities $4,000 $4,250 $4,500
    Insurance $1,800 $1,800 $1,800
    Rent $6,500 $7,000 $7,500
    Payroll Taxes $34,510 $40,726 $46,942
    Other $0 $0 $0
    Total Operating Expenses $188,766 $220,744 $252,722
    Profit Before Interest and Taxes $105,205 $146,040 $186,875
    EBITDA $107,275 $148,110 $188,945
    Interest Expense $0 $0 $0
    Taxes Incurred $26,838 $37,315 $47,792
    Net Profit $78,367 $108,725 $139,083
    Net Profit/Sales 30.00% 39.32% 48.64%

    8.3.1 Profit Monthly

    Profit Monthly - cosmetics business plan

    8.3.2 Profit Yearly

    Profit Yearly - cosmetics business plan

    8.3.3 Gross Margin Monthly

    Gross Margin Monthly - cosmetics business plan

    8.3.4 Gross Margin Yearly

    Gross Margin Yerly - cosmetics business plan

    8.4 Projected Cash Flow

    Projected Cash Flow - cosmetics business plan

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $40,124 $45,046 $50,068
    Cash from Receivables $7,023 $8,610 $9,297
    SUBTOTAL CASH FROM OPERATIONS $47,143 $53,651 $59,359
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $47,143 $53,651 $55,359
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $21,647 $24,204 $26,951
    Bill Payments $13,539 $15,385 $170,631
    SUBTOTAL SPENT ON OPERATIONS $35,296 $39,549 $43,582
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35,296 $35,489 $43,882
    Net Cash Flow $11,551 $13,167 $15,683
    Cash Balance $21,823 $22,381 $28,239

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $184,666 $218,525 $252,384
    Accounts Receivable $12,613 $14,493 $16,373
    Inventory $2,980 $3,450 $3,920
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $201,259 $237,468 $273,677
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $12,420 $14,490 $16,560
    TOTAL LONG-TERM ASSETS $980 $610 $240
    TOTAL ASSETS $198,839 $232,978 $267,117
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $9,482 $10,792 $12,102
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $9,482 $10,792 $12,102
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $9,482 $10,792 $12,102
    Paid-in Capital $30,000 $30,000 $30,000
    Retained Earnings $48,651 $72,636 $96,621
    Earnings $100,709 $119,555 $138,401
    TOTAL CAPITAL $189,360 $222,190 $255,020
    TOTAL LIABILITIES AND CAPITAL $198,839 $232,978 $267,117
    Net Worth $182,060 $226,240 $270,420

    8.6 Business Ratios

     Ratio Analysis        
    Year 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets 4.35% 4.71% 5.80%  9.80%
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    Total Debt to Total Assets 2.68% 1.04% 0.76% 67.10%
    Pre-tax Return on Net Worth 66.83% 71.26% 75.69% 4.40%
    Pre-tax Return on Assets 64.88% 69.75% 74.62% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19.20% 21.16% 23.12% N.A.
    Return on Equity 47.79% 50.53% 53.27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

    Download Cosmetics Manufacturing Business Plan Sample in pdf

    OGScapital staff also specialize in compiling such as woodworking business plan, production business plan, candle making business plan, soap manufacturing business plan, soap making business plan, spray tan business plan and many other business plans.