Cosmetic Business Plan Template
If you want to start a Cosmetic business or expand your current Cosmetic business, you need a business plan.
The following Cosmetic business plan template gives you the key elements to include in a winning Cosmetic business plan.
Cosmetic Business Plan Example
I. Executive Summary
Business Overview
[Company Name], located in [insert location here], is a cosmetics manufacturing company focused on providing high-quality, all-natural makeup, beauty products, and other skincare products. The company will distribute its products nationwide to all major beauty supply stores and select department stores. The Company’s products will also be available directly to consumers via their website.
Products Served
The Company will manufacture and sell the following products:
- Cosmetics, including face powders, eye shadows, lipsticks, and mascaras
- Haircare products
- Face and body creams and lotions
- Sunscreen
- Bath salts
- Deodorant
- Nail care preparations and nail polishes
Customer Focus
[Company Name] will primarily offer its products retail locations and e-commerce buyers. The demographics of the customers are as given below:
- Individual Buyers: 32%
- Beauty Salons: 48%
- Retail Locations: 20%
Management Team
[Company Name] is led by [Founder’s name], who has been in the cosmetics manufacturing business for [x] years. While [Founder] has never run a cosmetics company himself, he has extensive experience and in-depth knowledge of managing a certified cosmetic company, including the operations side, such as running day-to-day operations as well as handling the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is qualified to succeed due to the following reasons:
- There is currently a high demand for cosmetic and beauty products in the U.S. In addition, the company surveyed the population and received highly positive feedback pointing towards an explicit demand for the services, supporting the business after launch.
- The major strength of being a cosmetics manufacturing company is the vast experience of the management team. It has people on board who understand how to grow business from scratch to become a national phenomenon.
- The Company will use high-quality and exceptional packaging materials which are environmentally friendly.
- The cosmetics business has proven to be a successful industry in the United States.
Financial Highlights
[Company Name] needs an estimate of $400,000 to set up the cosmetic production plant successfully.
Specifically, these funds will be used as follows:
- Manufacturing equipment and plant setup: $300,000
- Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $1,080,000 | $2,472,768 | $2,830,825 | $3,240,728 | $3,709,986 |
| Total Expenses | $962,000 | $1,539,107 | $1,719,742 | $1,901,321 | $2,112,641 |
| EBITDA | $118,000 | $933,661 | $1,111,082 | $1,339,407 | $1,597,344 |
| Depreciation | $25,600 | $25,600 | $25,600 | $25,600 | $25,600 |
| EBIT | $92,400 | $908,061 | $1,085,482 | $1,313,807 | $1,571,744 |
| Interest | $29,946 | $26,202 | $22,459 | $18,716 | $14,973 |
| Pre Tax Income | $62,455 | $881,858 | $1,063,023 | $1,295,091 | $1,556,772 |
| Income Tax Expense | $21,859 | $308,650 | $372,058 | $453,282 | $544,870 |
| Net Income | $40,595 | $573,208 | $690,965 | $841,809 | $1,011,902 |
II. Company Overview
Who is [Company Name]?
[Company Name] is a licensed cosmetics manufacturing company owned by [Founder’s Name]. The business will be based in [insert location here]. The Company will provide high-quality, all-natural makeup items, beauty products, and other skincare products using organic ingredients and optimal techniques.
The company will distribute its products nationwide to all major beauty supply stores and select department stores. The Company’s products will also be available directly to consumers via their website.
[Company Name]’s History
Cosmetics are [Founder’s] passion. His mother was a professional makeup artist who created a sense of makeup items in him since his childhood. Following his passion, he went to cosmetology school and shortly after began working in the field. He then decided to go out on his own and start [Company Name].
[Company Name] has been able to secure a long–term lease for a manufacturing facility in a strategic location. The facility also has the health department’s approval.
Since incorporation, the company has achieved the following milestones:
- Found office space and signed Letter of Intent to lease it
- Developed the company’s name, logo, and website
- Created the list of products
- Determined equipment and inventory requirements
- Began recruiting key employees with experience
[Company Name]’s Products/Services
The Company will manufacture and sell the following products:
- Cosmetics, including face powders, eye shadows, lipsticks, and mascaras
- Haircare products
- Face and body creams and lotions
- Sunscreen
- Bath salts
- Deodorant
- Nail care preparations and nail polishes
III. Industry Analysis
The cosmetic industry is historically not affected by economic downfalls. Every woman and some men use some type of cosmetic product to maintain a healthy and fresh look, thus the market potential is vast. According to a market research firm, the global cosmetics market size is expected to gain momentum by reaching $415.29 billion over the next five years.
Another trend in this industry is the exploration of safer raw materials for the production of cosmetic and beauty care products. The truth is that people all over the world are looking for cosmetics and beauty care products that contain fewer chemicals, thus increasing the demand for cosmetics and beauty care products produced from natural materials.
The cosmetic and beauty products manufacturing industry has also started to adopt eco–friendly packaging. As a matter of fact, this adoption will likely persuade environmentally conscious consumers to buy its products while increasing operators’ efficiency.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve retail businesses and individuals throughout the U.S.
The precise demographics are as follows:
| United States | |
|---|---|
| Total Population | 312,796,426 |
| Population Male | 49.00% |
| Population Female | 51.00% |
| Median Age | 37.5 |
| Target Population by Age | |
| Age 18 to 24 | 9.99% |
| Age 25 to 34 | 13.08% |
| Age 35 to 44 | 12.94% |
| Age 45 to 54 | 14.64% |
| Age 55 to 64 | 12.43% |
| Median Household Income | $57,639 |
| Households w/disposable income | |
| Income $50,000 to $74,999 | 18.03% |
| Income $75,000 to $99,999 | 12.97% |
| Income $100,000 to $124,999 | 8.65% |
| Income $125,000 to $149,999 | 5.40% |
| Income $150,000 to $199,999 | 5.12% |
| Income $200,000 and Over | 5.34% |
Customer Segmentation
The Company will primarily target the following three customer segments:
- Individual Buyers: Individual consumers, especially women will be key targets for the company’s e-commerce business.
- Beauty Salons: The second target group comprises beauty salons, as beauty salons require cosmetics to treat their customers and also sell beauty products. The company will offer their products, at wholesale to this segment.
- Retail Locations: The third group comprises the retail locations who will sell their products in their brick and mortar stores.
V. Competitive Analysis
Direct & Indirect Competitors
Beauty Supplies Inc.
Beauty Supplies Inc. is one of the popular cosmetic manufacturing companies and has been in business for xx years. Beauty Supplies Inc. offers a wide array of products that one would expect in cosmetics and self-care. Besides this, Beauty Supplies Inc. also manufactures makeup supplies and tools. The belief that customer satisfaction is as important as their products has helped Beauty Supplies Inc. garner a vast base of customers, which continues to grow day by day.
Beauty Supplies Inc. generally has low and medium-priced options for each type of product. However, they do not provide eco-friendly products that [Company Name] plans to carry.
Total Beauty
Total Beauty provides its customers with hundreds of beauty products that they can browse from the comfort of their homes. Customers are able to browse through their vast database from one central location. Total Beauty categorizes skincare, haircare, and beauty products, to make it easy to find what its customers are looking for.
Cosmetic Palace
Cosmetic Palace was established in [xx]. It has a strong reputation for providing the best products to its clients. Cosmetic Palace’s current location is in [location], which is filled with salons and retail stores. Cosmetic Palace caters to a high-end clientele looking to buy premium cosmetics.
Competitive Advantage
[Company Name]’s biggest competitive advantage lies in the quality of the products and the expert team.
- High-Quality Ingredients: [Company Name] uses all-natural, organix ingredients and continuously strives to improve its products offerings. The cosmetic products do not contain any harmful chemicals. Instead, the company uses advanced organic and natural preservatives that cause no harm to the skin.
- Management: The Company’s management team has years of business and marketing experience that allows them to market and serve customers in an improved and sophisticated manner than the competitors.
- Relationships: Having lived in the community for xx years, [Founder’s Name] knows all local leaders, newspapers, and other influencers, including the local leaders who fought the [Competitor] opening two years ago. It will be relatively easy for the company to build branding and awareness of the store and establish several product lines.
- Sustainability: [Company Name] will be a zero-waste company with its plastic-negative packaging. It will maintain its eco-friendly status while scaling up to meet demand.
VI. Marketing Plan
The [Company Name] Brand
[Company name] seeks to position itself as a respectable, upper-middle-market competitor in the cosmetics industry. The [Company Name] brand will focus on the company’s unique value proposition:
- Offering a wide portfolio of cosmetic products manufactured for men and women
- Convenient location
- Comfortable, customer-focused environment
- Moderate price point
- Providing excellent customer service
Promotions Strategy
[Company Name] expects its target market to be businesses and individuals throughout the U.S. The Company’s promotions strategy to reach the audience includes:
Pre-Opening Events
Before opening the cosmetic manufacturing business, [Company Name] will organize pre-opening events designed for prospective customers, local merchants, and press contacts. These events will create buzz and awareness for [Company Name] in the area.
Advertisement
Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The Company will advertise its products in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.
Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.
Word of Mouth Marketing
[Company name] will encourage word-of-mouth marketing from loyal and satisfied clients. The Company will use recommendations and word-of-mouth marketing to grow the customer base through the network of its existing customers. The Company will be incentivizing its existing customer base and companies to encourage their friends to make a purchase for the first time.
Special Offers
Offers and incentives are an excellent approach to assisting businesses in replenishing the churn in their customer base that they lose each year. The Company will introduce special offers to attract new consumers and encourage repeat purchases, which will be quite advantageous in the long run.
Pricing Strategy
Pricing strategy is one of the most important functions that any business can plan for attracting customers. Prices are a foundational element of a company’s revenues—if managed carefully, they can generate high profits.
[Company Name]’s pricing will be moderate, so customers feel they receive great value when availing of the products they are paying for. The customer can expect to receive high-quality cosmetic products for a more affordable price than what they pay at an ultra-premium cosmetic shop.
VII. Operations Plan
Functional Roles
[Company name] will have an excellent management system to ensure that natural and organic materials are being used to help others restore their beauty. It will take care of every detail. To regulate all the operations from buying the ingredients, operating the machinery, and selling the products, the founder will be hiring an experienced team to help him supervise the operations.
To execute on [Company Name]’s business model, the company needs to perform several functions, including the following:
Administrative Functions
- Chief Executive Officer (Owner)
- Plant Manager
- Human Resources and Admin Manager
- Sales and Marketing Manager
- Machine Operators
- Distribution Truck Drivers
Milestones
[Company Name] expects to achieve the following milestones in the following [] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name], who has vast experience and understands how to grow a business from scratch and make it a national phenomenon. The owner of the company is a certified cosmetic chemist with an MS degree in Cosmetic Chemistry from a renowned university. He is a skillful man; he has xx years of experience working in a cosmetics manufacturing company. The unique ideas will be presented and implemented by him to elaborate the company.
[Founder] has personal relationships with salespeople at a variety of high-end skincare suppliers.
Hiring Plan
[Founder] will supervise the manufacturing section by himself, sidewise will hire the following staff:
- General Manager for managing overall operations of the company
- Accountant for maintaining financial records
- Production workers for blending compounds and manufacturing cosmetics
- Biochemist for checking and testing the products
- General workers for assisting in packaging the products
- Salespeople for operating the company’s store
- Technical Assistant for managing the company’s social sites and website
- Sales Executives for marketing the company
- Driver for transporting goods
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come from its ecommerce sales, direct to consumer, as well as its wholesale accounts. The major costs for the company will be salaries of the staff, which are paid through a combination of salaries and commission. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] needs an estimate of $400,000 to set up the cosmetic production plant successfully.
Specifically, these funds will be used as follows:
- Manufacturing equipment and plant setup: $300,000
- Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of ecommerce customers per day | |
|---|---|
| Year 1 | 20 |
| Year 2 | 40 |
| Year 3 | 60 |
| Year 4 | 80 |
| Year 5 | 100 |
| Average number of wholesale accounts | 25 |
| Average order price | $32 |
| Annual increase in order price | 6.00% |
| Annual Lease (per location) | $25,000 |
| Yearly Lease Increase % | 2.50% |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
