Funding Sources for Your Beauty Business

As a skincare entrepreneur, having the right products is just the start of your journey. In order to get your company off the ground, you need access to capital. Today, we’ll be talking about three financing ideas that will help your business take off. Let’s get started!

Self Financing 

For most business owners, the first round of capital comes from their own pockets. Funding your own venture is an excellent idea if you’re starting small in the skincare business and if you’ll be going through the private labeling route.

While funding your own business may have its risks, it’s still a feasible option. You have total control over your business since it’s your own money to begin with. Furthermore, you can attract investors more easily down the line if you finance your own business from the get-go because it signals that you believe in your company’s vision.

Friends and Family Financing

Did you know that 5% of US adults have invested in a company started by someone they know? Asking for capital from your friends and family is a viable option that rests on the amicable relationships you have.

When choosing family and friends to ask capital from, you need to make sure that they have faith in your potential to succeed, they understand your plans and the direction your business will take, and that they know the risks the investing in your business entails.

Be realistic about how much money you need and make sure to agree on what form the funding will take. This could be a loan or equity in your company.

Get Help from Venture Capitalists

Venture capitalists are investors who typically go for more mature businesses. They also want a say in the daily operations of a business. They often require scalable cash-flow and positive companies with proven products and business.

To get their attention, you need to have a great pitch which includes:

• Explaining what’s changed. Detail the innovation, industry shift, or problem that presents a substantial opportunity for your company.
• Explaining what you do. In one sentence, show how your company can capitalize on this opportunity.
• Explaining the facts. Get to your company’s story and financials quickly. Layout the opportunity with numbers. Discuss the team and their abilities and experience.

Logo Design Tips for Your Skin Care Business

Logos are important for branding your skincare business. Here are some awesome tips that can take your logo design to the next level.

Explore conceptual icons

In logo design, an icon is a simplified visual that captures the spirit of your brand. A common misconception is that your icon should literally be an image showing what your product or service is. While this may benefit some, it doesn’t have to be the case for all businesses. You can explore more conceptual (or even abstract) icons to emphasize what it is your company does.

Or consider Nike, for example. The iconic “swoosh” icon evokes the feeling of movement and speed. Very fitting for a sportswear brand. Think of your icon as a symbol rather than a picture. It needs to be highly visual and easily recognizable. The advantage of a more graphic icon is that it can often carry more visual weight. Ideally, your icon should be simple enough that clients can recall it even after one quick glance.

Use the space you have

For most businesses, an icon is simply not enough to fully express their brand identity. Also known as a slogan, taglines are dramatic phrases that sum up the tone and premise of a brand. Now, not every company has a tagline. And that’s okay, but that doesn’t mean you should let this valuable space go to waste. If your name allows it, you can break it up into two lines while keeping the same font and size for both lines.

Play around with caps or lowercase

Sometimes, it’s the small details that make all the difference. Something as simple as playing around with caps and lowercase could bring your trademark to a whole new level. Traditionally, uppercase logos give off a strong sense of authority, while the use of lowercase exudes a more approachable, casual vibe. That’s not to say you can’t utilize uppercase text while softening the appearance with your choice of colors. It’s all a matter of balance.

Understand handwritten fonts

Handwritten offer a quirky and authentic feel that is sure to delight any customer. They are especially effective when used as the font of your tagline. If you’ve opted for one of these font styles, then this tip is for you. Often the use of caps for handwritten fonts make them seem less authentic, so take that into account.

Balance your tagline

Let’s talk about your tagline. A simple rule to follow to ensure that your logo makes sense is to always make your tagline shorter than your name. This is why we suggest going for no more than 25 to 30 characters. For the same reason, if you’re using a thicker font for your name, it’s best to use a thinner (or more basic) one for your tagline.

Adjust your name and tagline

Remember the golden rule of design? That’s right, it’s all about visual balance. This is why, although smaller in dimension, your tagline should always be perfectly aligned with your name. This will give your viewers and potential clients a natural sense of harmony.

In the situation where either your name or tagline is considerably longer, you can easily solve that by adjusting the font or size of either elements.

Let your logo breathe

Just like the Mona Lisa, some logos look best when surrounded by a beautiful frame. If you decide to go in this direction, be sure to leave enough space between your chosen frame and logo. In essence, allow your logo some breathing room. If things are looking a little cramped, simply enlarge the frame or decrease the font size.

Ensure readability

Your masterpiece will be popping up in all kinds of places, from the header of your website to your business cards. Regardless of where it appears, your text should always be readable. To ensure this, take note of the text size and font that you use, and check the final result on various platforms (Facebook, Twitter, etc.), and from different devices (desktop, smartphone, tablet, etc.). If your logo is too difficult to read, what was the point of designing it in the first place? In order for your logo to serve its entire purpose, make sure it’s readable in any situation, for any potential customer.

Give your background contrast

Following the theme of visibility, another way to ensure your logo is always ‘seen’ is by selecting a background color that gives enough contrast with your text. If the color of your text is white go for a darker background color such as black. So small, yet so effective.

Align all your elements

Once all of your elements (name, tagline and icon) are present, it’s imperative that they are well balanced as a whole. While there are no set in stone rules, in order to be on the safe side, we suggest that you align all your elements in the same direction: left, center, or right. Remember, your design and content should be one (small happy family).

Pricing Strategies for Private Label Skincare

One of the biggest challenges for new skincare business owners is what to charge for their products. When you take the private labeling route, determining the right price point is critical.

The truth is you can’t just drive down the price of your products in the hopes of beating your competitors. Remember that the price of your product determines the market you’ll be interacting with. Furthermore, it affects the perceived value of your brand.

To help you out, here are some strategies that can help you determine the right price point for your private label brand. Let’s get started.

Start with Your Landing Costs

Landing cost refers to the cost of creating your product plus all the other expenses you incur to get it to your customer. In other words, this is your manufacturing cost, shipping from the manufacturer to your warehouse, and shipping to your customer. You should also factor in distribution costs if you’re selling in retail stores and if there are fees associated with selling on certain platforms.

One way to lower your landing cost is to purchase materials in bulk and to manufacture products in bogger quantities. However, many skincare products have a set shelf life. This means you need to be able to sell your inventory, otherwise, you’ll run the risk of wasting capital and losing profits.

Indirect Cost

Apart from landing costs, your skincare business can also incur indirect costs or fixed overhead costs. This includes all of the expenses needed to set up your business including insurance, website maintenance, electricity, renting office space, and salary for your staff.

This should also be factored in computing for your product prices.

Suggested Retail Price and Profit Margin

A general rule when pricing private label skincare is that your profit margin should be at least 33 percent. However, the cost of raw materials can fluctuate from time to time which raises your landing cost.

To prevent you from having to change your pricing constantly, you need to set your selling price with a good profit margin. A lot of skincare products on the market are actually priced between five and six times its landing cost giving a profit margin of at least 80 percent. 

This means if your landing cost is $10, then your sale price should be at $50 to have a profit of margin of 80 percent. This gives you a $40 profit per unit.

Final Words

Setting  a reasonable profit margin for your business is important if you want your business to succeed. Otherwise, your brand will just end up burning through your cash.

However, with the right strategies, you can sell your products at the right price not just to cover your landing costs but to also give you enough profit every time.