Have you been wanting to start a natural skincare line from home, but assumed that it would be too hard?

Well in this 8 step quick-start guide, I’m going to break down everything you need to know about launching a skincare brand in 2021.

Including all the details on startup costs, potential revenue, and even average profit margins.

I'm Ippei, a master of all things online business, passive income, and local lead generation...

And I’ve spent hours researching the cosmetic industry, and gathering together all the information you could need for how to start a skincare line.

Plus, if curious on my personal secret to passively funding your business ideas…

Stick around to the end. 

But for now, let’s get started with those numbers!

How to Start a Skincare Line in 2021

4.5/5

Thinking About Launching Your Own T-Shirt Line? Here's What You Should Know:

Starting an online t-shirt business can be a profitable side hustle and even a source of passive income. But to get started, you will need to write a business plan, get your business legal, create your designs, perfect your marketing, and choose between print on demand and DIY.

Start Up Costs

While this list is not a comprehensive compilation of every you need to start a skincare line, it provides a snapshot of what you need to add into your business plan.

  • Business License: $500
  • Website: $2,000
  • Product Development: $5,000 
  • Product Testing: $5,000
  • Start Up Inventory: $2,500 (approx. $2 per unit)
  • Operating Expenses: $500
  • Professional Product Photography: $250
  • Marketing (Ads, Homeshows, etc): $1,000
  • Product Liability Insurance: $1,200
  • Misc Professional Fees: $1,500
  • Product Label Printing: $200 (approx. $0.50 per unit)
  • Packaging: $1,000 (approx. $1 per unit)
  • Shipping: $3,000 (approx. $2 per unit)
  • Logo/Graphic Design: $500

Annual Revenue of Established Skincare Line

According to one example on Starter Story, her annual revenue was $90,000.

Profit Margins of Established Skincare Line

According to the same story above, her profit margin was approximately 53% at $4,000 per month.

Quick Start Checklist: 

1. Research to Spot Market Gaps

If there is one thing I cannot stress enough to you about starting your own skin care line…

It would be the research phase.

Maybe you’ve spent 2020 quarantining in your house and refining your DIY skincare regimen…

Sandalwood essential oil, organic rose water tonics, homemade activated charcoal soap, and hyaluronic acid are your new BFF’s…

And now you want to share your newly discovered formulas with the world.

Which is great!

But just because something works well for your skin, doesn't mean that it will for everyone else.

Especially if you lack any sort of background in the dermatology, beauty, skin care realms.

The good and bad thing about the beauty and skin care industry is that federal regulations are actually quite lenient.

But just because the rules are loose, doesn’t mean you should take advantage of that and skimp on your quality or research. 

Doing your research before you create a skin care product and market it to the world is absolutely vital.

It’s vital for the success of your business, and also for the safety of your customers and quality of your products.

Even something as simple as the sourcing of your ingredients is an essential step that needs to be given adequate research and time.

Immerse yourself in the research phase of creating your skin care line.

Make it your mission to know absolutely everything there is to know about the industry you’re entering, the product you’re creating, and the ingredients you’re using. 

Before you release your line, you should absolutely be a master of your craft.

2. Business Plan

 When you’ve thoroughly completed your product research phase, it’s time to dig deep into your business brain and start crafting your business plan.

Your business plan can either become the bane of your existence, or an incredible tool for growth that is at your disposal. 

It all depends on how you approach it, and the intent behind its creation.

If you go into writing your business plan with the mentality that it is simply a necessary evil, but that you probably won’t get much use out of it..

Or worse, if you see it as being completely useless and a waste of your precious time as a small business startup…

Then you’re probably going to find yourself in the camp of people who find writing a business plan similar to pulling out their own hair.

But it really doesn’t have to be this way!

The best way to approach writing your first business plan is to view it as a tool and the cornerstone of your new skin care business brand.

Basic Things to Include in a Business Plan:
  • Executive Summary - The highlights 
  • Company Description - Who are you? What problem are you solving?
  • Market Analysis - Who are you solving problems for, and what is the overall outlook of how well you could succeed at solving that problem?
  • Organization & Management - LLC, Corporate, and who's in charge of what? 
  • Marketing & Sales - How are you going to get the attention of your potential customers in order to generate a profit? 
  • Financial Projections - Numbers, Numbers, Numbers 

A well written and strategic business plan will help you to stay on track as your business starts to grow, and it will help you spot potential roadblocks and problems before they arise.

Plus, diving into the market analysis portion of your business plan will be a game changer for the success of the product you create. 

It will also give you a much needed business structure.

I say much needed because most small business owners get started because they are passionate…

And not because they are organized and experienced business owners already.

For you, your passion is obviously skin care!

But preparing yourself for running a business will take some work.

Your business plan will be there to help you along the way, and keep you focused on your five and ten year business projections.

3. Register / Insurance

Before you can even think about marketing and selling your skincare products to the public, you have to do your due diligence and get your business legal.

To start with, you will need to make a decision regarding your business’s legal structure.

The four main business structures are:

  • Sole Proprietorship
  • LLC (Limited Liability Company)
  • General Partnership
  • Corporation

If you haven’t officially registered your business as anything yet, then you will automatically be categorized as a Sole Proprietorship.

For very small businesses a Sole Proprietorship is often more than sufficient, but I highly recommend that you take a step up and register your business as an LLC.

I say this because a Sole Proprietorship offers very little legal protection for you as the business owner.

Whereas an LLC separates you as the business owner from the debts and liabilities of your business.

Unless you are working with a partner, or you are an extremely large business with complex legal needs…

A General Partnership or Corporation will likely not apply to you.

Next, you will need to register your business.

The steps to registering your business will vary depending on the type of business you are starting, and your location. 

But for most small businesses this will be as simple as registering your business name with your state and local government. 

In addition to this, you will also want to apply for your EIN number.

This step is extremely simple, and can be accomplished for free online with the IRS. 

Finally, don’t skip the step of getting business insurance!

Especially in the healthy, skin care, and beauty space…

Lawsuits aren’t uncommon. 

Having comprehensive product liability insurance is absolutely essential. 

Think about it…

If someone buys your new fancy facial toner and they break out in full body hives after using it…

They might just be coming after you and your business because of it. 

That’s not the moment you want to realize that you never bothered to get liability insurance for your skin care line.   

4. Branding & Website

Branding your skin care line is one of the most enjoyable and important steps in the entire process of starting your skin care business.

This step is where your ideas begin to come to life, and you start to create something more than just a line of products.

Your business will start to gain personality and marketability in the branding phase as you identify your target audience, and craft a brand identity that will speak to them.

A brand is more than just a logo and some color swatches.

Although these elements are a part of creating a brand, they are just the starting point.

Your brand represents the feelings, beliefs, and ideas that you want your customers to associate with your products. 

So if you are passionate about creating a line of skin care products that are ethically sourced, sustainably packaged, and cruelty free…

Then your ideal customer will hold these similar values, and when they think of your brand, they will automatically associate it with “green”, vegan, and eco conscious ideals.

Your products will represent and appeal to a certain lifestyle as much as they will to solving a potential skin care problem.

It might even be helpful to choose a set of 5 words that you want your brand to represent to your customers.

Some examples would be:

  • Minimalist
  • Ethical
  • Sustainable
  • Luxurious
  • Artisan
  • Organic
  • Vegan
  • Glamorous
  • Bohemian
  • Simple
  • Natural
  • Gentle
  • Hypoallergenic

Think about these things as you build your branding imagery, and apply it to your logo and website creation, as well as your product’s packaging.

When building your website, focus on function just as much as form.

Unless you are planning to only stock your products in other stores or boutiques and operate solely as a wholesale distributor…

Your website won’t just be a representation of your business and brand, but also your online store.

For this reason, when choosing a website builder, look for platforms that are focused on offering a seamless storefront experience.

Some great choice would be:

  • Shopify
  • Wix
  • Squarespace
  • Weebly
  • WordPress

All of these DIY website builders offer eCommerce options that will help you to create a beautiful and user friendly online storefront for your skincare product line.

5. Formulation Journal

If you choose to go the route of personally creating your product formulas, then there is one thing that you absolutely cannot live without. 

And that is your formulator’s journal.

Think of this like a botanist’s field guide, but for skin care recipes.

It will be your own working handbook that will shift, change and grow as you do.

Ultimately, the more you write down…

The better.

Creating the perfect formulas for your skin care product lines will take a lot of trial and error.

The last thing you want is to create a series of different batches, and not be able to remember your recipes and formulas for each one!

This is why your formulation journal is so key.

It will include every note, recipe tweak, measurement, time, and temperature necessary to create the same product over and over again with consistency and excellence.

If you’ve never done this before, then a formulation journal can sound intimidating.

But if you are unsure of what you should be writing down, here is a basic list of what to include in your formulator journal:

  • Production Date
  • Formula including percentages
  • Batch size formula in grams
  • Your manufacturing procedures
  • pH measurements and adjustments for water containing products
  • Timing schedule for whipped products (whip, cool down, whip, etc)
  • Detailed notes on your finished product: visual appearance, color, texture, scent (woodsy, sweet, floral, acidic, etc.), skin feel (immediately after several hours, after a few days/weeks), changes you notice over a period of time, etc.
  • Improvement ideas for the next batch

The other exciting part of keeping a formulation journal is that you will be able to look back on it over time.

It’s almost like a diary or a scrapbook of your journey to starting your skin care line.

As well as being a sentimental piece of business history, it will also serve as a great source of inspiration for new products in the future.

Sometimes looking back at old ideas with fresh eyes will help spark your imagination for the creation of a new product!

6. Regulations, Testing, and Manufacturing

While the FDA doesn’t actually require you to have your cosmetic and skincare products approved, they are still the authority on regulations.

Which means that you don’t actually have to take your product to the FDA for approval before you put it on the market…

But you need to follow all FDA regulations when creating you products.

Surprisingly, there isn’t even a law that prohibits you from manufacturing cosmetic products at home.

So if you were planning to create your skincare line in your personal home lab, you are more than free to do so.

The biggest thing is ensuring that you lab space is completely sterile.

Your disinfectant regimen should be relentless and thorough.

You will need to sanitize literally everything.

Preferably with 97% alcohol and a steam cleaner to follow up afterwards on all surfaces, supplies, and equipment.

On top of ensuring that your products are created in a germ free environment, you will also need to pay for product testing.

There are a variety of different safety and quality assurance tests that you can have performed on your products, but here are a few basics:

  • Microbiological/challenge testing also referred to as PET (preservative efficacy testing)

  • Stability testing
  • Cosmetic Product Safety Report
  • Patch testing/clinical testing (This enables you to say your product is “dermatologically tested” or “dermatologist approved”)
  • Claims testing and user trials (also know as performance testing, or efficacy testing)

Each type of test serves a different purpose, but they will all be performed in a lab setting, and you will need to research which cosmetic testing lab is local to your region of the world.

Then you can send your products to them for testing. 

If the regulations for skin care products and cosmetics are confusing or overwhelming to you, here is a great article that breaks down questions regarding the FDA regulations for homemade cosmetics.

Should you choose to forgo creating your skin care products at home, you can work alongside a private label manufacturing company to help produce your skin care line.

Working with a private label manufacturing gives you slightly less control over your products, but it can help to ensure quality and cleanliness.

Just make sure that you thoroughly vette your third party manufacturer beforehand.

Even though you won’t be creating the products yourself, you will still have ownership over them and it will still be made with your branding under your business name. 

7. Labeling and Packaging

Although I’m sure you’ve given a lot of thought to your product branding and appearance, now it’s time to actually start labeling and packaging your products!

This is one of the final steps in bringing your product idea to life.

If you are creating your products from a home lab, be careful to maintain the same sterilization standards for packaging and labeling as you would when mixing and creating your products.

It is still possible to allow germs and bacteria into your product during the bottling and labeling stage.

But if you are working with a third party, private labeling manufacturer, you will just need to make sure that you have your branding and labeling ready to go for them to use.

When making decisions about how to package your products, keep in mind the needs and preferences of your customers.

There are so many different options, but ultimately you want to choose the packaging that will be the best and easiest for your customer’s use.

Packaging Options:

  • Materials: Glass, plastic, compostable, recyclable, etc.

  • Package Type: Jar, tube, dropper bottle, bottle, spray bottle, tins, etc. 

And here are the basic requirements for labeling your skin care product line:

Label Requirements for Skincare Products:
  • Company Branding
  • Product Identification
  • Industry Compliance
  • Verifiable Certifications (cruelty free, vegan, organic, hypoallergenic, etc.)
  • Ingredients
  • Warnings/Disclaimers
  • Instructions
  • Content Measurements
  • Place of Business

8. Marketing

Lastly, to successfully launch a skin care brand…

Marketing is everything.

From day one, you should be working on establishing a strong social media presence for your new skin care line…

Specifically in Instagram.

Building an awareness of your skincare brand on Instagram is one of the best ways to gain a potential customer base before you’ve even launched your line.

Like Tribe Skincare out of Australia, who has almost 60k followers and claims to be making $100k/mo in sales!

But throwing up a couple photos from your iPhone isn’t going to cut it.

To emphasize the quality and caliber of your product, you should hire a professional photographer to take quality product photos for your skincare brand.

This might not seem like a huge deal…

But trust me, having a cohesive set of branding photos for your product line will be crucial.

It tells the world that you’re a professional…

Not just someone mixing up concoctions in their house and throwing them online. 

Another great way to gain traction on Instagram is to reach out to social media “influencers” that fit the style of your brand.

If you can secure brand deals with them to promote your skin care line before it’s launch…

You better have your stock ready to go.

Because you better believe that their followers will be swarming to get their hands on your product if their favorite influencer is obsessed with your new facial serum!

But a strong marketing strategy requires more than good branding, social media, and influencer brand deals.

Ultimately, you will have to be prepared with a lead generation strategy that will attract new customers to your business on a consistent basis.

Fortunately we can teach how to do exactly that through our local lead generation coaching program and online course.

Pros and Cons

of starting a skincare line

Pros

Be Your Own Boss

For many aspiring entrepreneurs, one of the greatest draws to launching a business is the freedom to set your own schedule. There’s no boss to dictate your day, or look over your shoulder… You are in control of your time. This can be both freeing, and stressful. But for most small business owners, it is one of the most gratifying aspects of being self employed.

Create Products That Better People’s Lives

Skincare products are a big deal. Whether it’s an acne healing serum, all natural lotion, or eczema salve, the products you create will better people’s lives. Which is why the focus on quality and safety standards are so important.

High Profit Margins

The good news about skincare products is that the standard markup is relatively high. Which means that your profit margins will also be high! People will pay a lot of money to take care of their skin. Especially if the products are high quality and all natural.

Cons

Complex Testing Process

Getting your skincare products out into the world isn’t going to be an easy or short process. The reality is that for every product you create, you will have to follow and comply with a complex testing process. This rigorous training cannot be skipped, and no shortcuts can be taken, as this is what ensures that your customers can safely use the products you create.

Time Intensive

If this isn’t already obvious from the above point, creating skin care products is a time consuming process. Not only will you need to work through multiple formulations before you begin final testing, but you will also have to design the packaging, and market your products once the testing is done.

Extensive Research

Oh, and before I forget, before you even start those initial formulations… You will need to do extensive research. The research phase will prepare you for the formulations, which will prepare you for the testing. Get the picture? It’s hard work!

High Startup Costs

Needless to say, all of these steps are not just time consuming… They are also expensive. The startup costs for a skin care line will be extensive.

Skin Care Line: Now or Later?

Creating a product from scratch is one of the hardest business ventures that you can start.

And starting your own skin care line is no different.

By far the most important part of any business is getting customers. 

You have to have enough money these days to get your product to Market and the market effectively to your target audience.

In fact, because of the industry regulations and testing, it is actually harder to launch in many ways than the average product.

If you don't have the capital to get started, it's best either to save up for it and start well or start up a more efficient business such as digital real estate which will give you the working capital to start your other businesses.

That's how I started my dropshipping business as well as my affiliate marketing business by using the consistent monthly revenue that my local lead generation company made.

Local Lead Generation Online Property

Learn more about creating online assets here.

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