Indie beauty is booming with more and more founder-entrepreneurs starting their beauty businesses at home each week. Our online gallery of graduate brands has now swelled to well over 300 as our alumni take their innovative, natural and organic formulations from kitchen table to retail-ready beauty products.
You too may hold a dream of one day starting a beauty business at home. Perhaps you wish to change your career in the long term or run a small side hustle. Learning to formulate and running your own beauty business is life changing and empowering and allows you a career on your own terms. Wherever you are thinking of taking your beauty business, you will need to take steps to achieving your dream, and that means first and foremost working on a tight budget until you can start to sell your formulations.
Our graduate indie beauty founders didn’t achieve success overnight, although we are amazed at the speed with which some have launched their brands, and gone on to win industry awards. Our courses train them to plan with purpose and execute with precision, rather than rush headlong into launching brands; a move which can be costly. From experience of having mentored our graduates, we know that new indie beauty founders inevitably change ideas about formulations, their launch product line, and especially about branding.
In this post, we take you through some practical, budget-friendly tips on how to start your beauty business at home. If there is one single takeout from our tips, it is the need to plan.
1. Research and Plan your beauty business ideas
We all know the saying “there are riches in niches”, and this certainly holds true for indie beauty. The first thing to understand is your unique selling proposition (USP). Clarity is your starting point and will be your guide as you make decision on ingredients, formulations, branding, packaging and more. Clarity at the start helps you avoid costly mistakes later.
But, you may feel that with so many new indie beauty brands on the market, there is no room for another – a myth we dispel in our article 8 reasons to make your own skincare even if there’s plenty to buy.
Advantages of a founder-led brand
One of key advantages indie beauty entrepreneurs have is their own voice and their own unique backstory about why they started their brand. As a founder-led business, you have the chance to differentiate your beauty brand and stand out. Just take a look at our list of 10 ideas to inspire your cosmetic formulations and you will see that there is plenty to explore and add your own spin to.
We have plenty of examples of our graduates seeking out unique niches and occupying them with fresh, new ideas. For inspiration, read about Latinx founder Sandra Velasquez whose Mexican-heritage brand Nopalera has gone from kitchen table to venture capitalist-funded business in two years. Read about Sandra’s story and those of some of our other graduate founders on these podcast and article links:
Episode 91: The brand mission of indie founder Sandra Velasquez.
Episode 157: From bootstrapping to award-winning beauty brand: interview with founder Roshanne Dorsett of The Glowcery.
Episode 107: Naughty Alchemist: graduate brand story.
Your niche is your selling point
While the graduates in our case studies above are from different countries and very different backgrounds, they all have one thing in common: brands that are distinct in their markets. Nopalera is a Mexican-heritage brand loud and proud, elevating Latinx products and entrepreneurs; The Glowcery is based on natural superfood ingredients and inspired by the fruit and vegetables in our groceries; and Naughty Alchemist highlights the value of ingredient transparency as its founder formulates “open-kichen” style in view of her beauty salon customers. Each has found a niche and infused it with their own personal passion. And, they all started their beauty business at home.
Research your market
It may take you time to arrive at your own niche, mission and formulating ethos, but do not rush these important first steps. Sandra took over a year in devising her brand and mission before she made her first products for sale. Once you have honed your ideas, you will need to research the market for your proposed brand and identify a demand for your products.
You do not need to purchase expensive market reports. Use free online resources like the ones we list as our top beauty business resources, and do some informal research yourself among a panel of users. Graduate Naz Bashir of Solo Skin London only realised she has a product ready for retail when friends kept asking her for her eye cream. You can read about her journey from side hustle to thriving business here:
Episode 127: From indie beauty idea to selling 500 eye creams.
2. Setting up a cosmetics’ lab on a budget
One misconception that deters people from starting a beauty business at home is the cost of equipment. We imagine vast cosmetic production lines – the kind that beauty conglomerates employ – and think that we need expensive, glossy equipment that can turn out thousands of units of product.
Equipment to start with
But, while you will need to move from that kitchen table where you trialed your early formulations, you can easily set up a cost-efficient home lab for cosmetic production. We have examples of students converting spare bedrooms or garage space. Watch these videos which show some of their home lab spaces and also our tutors’ advice on what you need to get started:
Behind the scenes in our students’ labs.
Beginner’s guide to setting up a home lab.
There is no need to invest in expensive homogenisers until you need to upscale. Sandra, for instance, made just 100 units of her cosmetics when she created her first batch for sale.
When you start learning to formulate, all you need are a basic set of tools, all of which are cheap and most of which are readily sourced at home or from leading online stores. The next step, once you are formulating with a view to selling your cosmetics, is to invest in some more professional lab equipment such as larger capacity digital scales and a blender (you can manage well with a stick blender with smaller batches and purchase that counter-top homogeniser later on).
Good manufacturing practice – a must
Wherever you decide to create a production space, remember that you will need to manufacture your cosmetics in accordance with good manufacturing practice (GMP). This is a set of guidelines covering safety, hygiene and procedures that you need to follow in order to adhere to the standards required for cosmetic manufacture. They are common sense and won’t burden you with expenses as most simply require you to be organised and methodical.
Bear in mind that not all countries permit cosmetics manufacture at home with the purpose of creating retail products. You will need to research this before taking on expenses. Read this post to guide you:
3. Budget-friendly formulating
Manufacturing cosmetics means buying ingredients in larger volumes than you are used to when you are learning to formulate. Ensure that any formulation you plan to take forward as part of your cosmetics’ line has been costed out, and that you can afford the ingredients in the minimum order quantities (MOQs) your suppliers require you to purchase.
Calculate the thresholds for various batch sizes and work out your minimum viable first production volumes. You are likely to have been buying smaller retail volumes when making your formulation trials, but by buying larger quantities and at wholesale prices, you can bring your unit costs down.
You will need to do the maths and cost out every single aspect of a formulation, including its packaging, and the time it takes you, or someone you hire, to make it.
To afford the MOQs, you may need short-term finance to cover the purchase of your raw materials. Some of our graduates share how they overcame this hurdle and found ways to finance their start-up.
There are online, software packages around that help small craft and cosmetics’ businesses map out the all-important cost of goods sold (COGS). You need to be meticulous in doing your costings in order to know if you have a viable product and can make money. Typically, COGS calculations do not factor in other expenses such as any marketing support you need to give your retailers, or your own marketing, advertising and promotional expenses.
Ideal formulations to start a beauty business at home
Many of our graduates start their beauty brands with just a few products – or even a single hero cosmetic – and very often those are simple anhydrous products like balms, salves and face and body oils. The advantage of these is that they can require fewer ingredients, take less time to make and need simple equipment to formulate. They can be packaged using easily-sourced options that can be purchased in small quantities and branded with labels. Avoid screen printing large quantities of packaging until you have tested your products on the market.
The beauty of these is also that they are practical cosmetics that have a place in almost all target customers’ beauty routines. They are easier to sell at events like farmers’ and artisan markets and can be easier to ship too. They also allow for personalisation to match your brands’ niche and ethos and can include botanical oils, butters and essential oils that are local or regional to your home base.
For some ideas about starter formulations that won’t break the bank, see:
10 best beauty products to make at home.
6 easy cosmetic formulations for beginners.
How to make your own skincare products.
4. Cost-effective branding
Cost-effective branding may mean doing the brand concept and design yourself. We have seen graduates, like Roshanne of The Glowcery, competently create their own brand from scratch themselves – at least the first iterations of logos, colours and design – so they can launch without spending a fortune on external branding agencies or designers. However, you need to ask yourself where your skills lie and if you have time to teach yourself design packages in order to create professional-looking labels, logos, packaging and more.
If there is one aspect of your indie beauty business that you need to invest in – whether your time or in buying-in external help – it is branding and packaging design. A professional, external resource can guide you and ask you questions that will help not just them, but also you understand your brand mission, vision and ethos. We have all heard the saying “your brand is more than your logo”, and nowhere is this truer than with beauty brands.
You need your branding to work exceptionally hard for you so your products stand out in a busy market and do justice to the mission you have for your business. Sandra Velasquez, as we mentioned, spent a year in working behind the scenes on her brand mission and vision, as well as the visual design of Nopalera long before she even devised her formulations. Branding can in fact be the first step in your plan of action and is likely to be ongoing while you are still finalising formulations.
Again, take your time in planning and feeling comfortable about your brand. Your first customers will be a test of how your brand is received and it is likely you will make changes, so try to avoid huge upfront costs until you have proof of concept in the market. There is no need to buy in sevices of a large agency when you can hire a graphic designer. But, whichever route you take, ensure you think through your branding carefully before you pay for packaging.
We have plenty of resources to help you think through this all-important aspect of starting a beauty business.
Episode 15: Top 10 tips on branding indie beauty businesses.
Episode 16: Beginner’s guide to branding a beauty business.
Episode 17: Working with a designer in branding your beauty business.
5. Low-cost options for packaging
In the past year or so, packaging costs have soared for reasons including rising fuel costs and depleted paper sources. When it comes to packaging, even the small, indie beauty brand will discover that events across the world impact your choices.
Formulate for your packaging options
To be cost-effective, you should aim to reduce your packaging requirements. However, your formulations will determine what kind of packaging is required as well as desireable. Your customer needs to dispense your products easily, safely and hygienically and in accordance with the type of product, as well as the needs of any specific ingredients you use. For instance, even an anhydrous product that in theory doesn’t require a preservative may still need one if it comes into contact with humidity or wet fingers. Issues like this may impact your choice of packaging.
Glass, aluminium, plastics in their many forms, or card tubes? These are the basic materials to choose from when thinking through the ideal container for your formulations. But, will glass be safe in a bathroom, and will that plastic you chose be returned to you for refilling? Do you have the facilities to clean and refill returned containers? Can you educate your customers about how to kerb-side recycle or return the packaging?
This indie brand demonstrates an innovative refill-and-return scheme to think about:
Episode 109: A beauty refill business where bigger is better. See also:
Episode 118: Plastic is not the enemy, we are.
As you can see, you won’t be deciding on the packaging on the basis of cost alone. There are so many variables and options to factor in, as well as the kind of packaging your brand look and feel requires.
As a natural or organic indie beauty brand, you are likely to be striving to start your beauty business at home on sustainable lines, and to reduce your footprint on the planet. However, many innovative, more sustainable packaging options are still quite costly. Mushroom and seaweed packaging might sound optimal, but can you afford the minimum order quantities these may require?
We have a comprehensive guide to sustainable packaging which includes a checklist of things to consider:
Budget-friendly packaging solutions
Having alerted you to the issues of packaging and some things to consider, let’s look at some budget-friendly options. First, think about buying small quantities from online stores like Amazon or Etsy. While prices might be more per unit, you have the flexibility to buy less and test packaging out before commiting to getting customised packaging at a later stage. There are also some online printers offering to custom print cartons in small quantities – from as a low as a single box (buy one or two to see the design, correct errors, ensure your products fits and so on, before buying more).
Print finishes like gloss, spot UV colour, foiling and embossing all add to costs, so ask yourself if they are necessary for your brand. Start simply and revamp your labels later on once you have made sales.
Design and print your own labels, or use one of the many online print services. Buying your own label printer is a good investment too. Just ensure the model you choose can take the size and type of paper stock you wish to print.
If you sell online, try to use plain Kraft card outer mailing boxes, and avoid custom printing them. Labels will suffice. Plain mailer boxes can be good value. Perhaps print a postcard to pop inside the delivery box so you can handwrite a note of thanks to personalise the customer experience.
For more ideas of simple, effective and cheap ways to package your cosmetics and delight your customers, see:
6. Financing your beauty start-up
You need to set a budget for your start-up, and also a timeframe. Starting a beauty business at home may seem an informal, entry-level approach to the cosmetics’ industry, but it will nevertheless bring expenses that need budgeting and planning for. The best way to determine the big-picture issues relating to starting a business is to write a business plan. This can cost nothing more than your time, and is likely to save you cash both immediately and in the longer term.
If you know where you are going, you can plan, take action, assess and measure the effectiveness of your decisions. We know that a business plan sounds daunting, but it need not be a huge document that you take a year on and then put in a drawer and forget about. It is really an outline and checklist as well as some ballpark costings of the most important aspects of your business.
If you do need to source finance, it will be your most useful tool in raising money and persuading others to invest in you and your business. We have made things simple for you with this roadmap of what goes into a business plan:
For ideas about how to raise finance and the costs of starting a beauty business at home, take a look at these articles which include graduate brand case studies:
How much does it cost to start a beauty business?
How to start a beauty brand on a small budget.
7. Cost-effective marketing and sales
Mention the word marketing, and you may think of a black hole swallowing up vast sums of your start-up budget. But, there are plenty of highly-effective and cost-efficient ways to market and promote your new indie beauty brand on a limited budget.
It is increasingly hard to get noticed in the noise and drive sales from social media channels without advertising and that can get through cash fast unless you know what you are doing.
So, where can you start marketing without feeling overwhelm or get cash-strapped fast?
Your best asset, and one that comes free apart from an investment in time, is yourself. As long as you have some know-how with mobile tech, you can film yourself talking about your back story, what your brand stands for, and of course, what skincare or haircare issues your products are directed at. This is where social media can be your best friend as video rules supreme on social platforms today.
The aim is not to talk one-way in broadcast mode, but to engage with your potential customers, and grow a community by offering them value. This value can come in the form of advising on their skincare issues, listening to what they need, and providing resources, research and solutions.
There is no need to push your products the whole time. This would be a hard sales’ tactic. Rather, you should aim to foster a like-minded community, and to show up regularly with the intention of providing a service. It may not come naturally to you to be in front of the camera or be visible online. But, rest assured that once you have tried it a few times, you will relax, take it in your stride and be more confident.
People like to buy from people, so remember this as you learn to be visible on social media.
For more ideas, see our dedicated articles on marketing your beauty products:
6 Ways to promote your indie beauty products.
Beauty business marketing – a video series, including tips on generating website traffic and using social media.
7 Tips on using Instragram for your beauty business.
Conclusion: cost-effective ways to start a beauty business at home
In most countries it is perfectly possible and legal to start a beauty business at home. This means you have the chance to start small, with budget-friendly equipment and need only invest more when you come to manufacture larger volumes. Small, incremental steps need not cost the earth.
We have seen Formula Botanica graduates start with under $3K to cover everything from branding to ingredients and equipment, and bootstrap their businesses to award-winning brands within a year or so.
Everything is possible, if you believe in your mission, your self worth and that of your brand, and can take others on your journey of starting your beauty business at home – as our graduate Sandra Velasquez did with Nopalera. Let her and our other graduate stories inspire your steps to starting a beauty brand of your dreams.
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Liz is Formula Botanica’s Content Coordinator and joined our team in August 2020. Liz worked as a professional blogger, journalist and site developer for many years and was also part of the Formula Botanica student community. Read more about the Formula Botanica Team.