How to start a makeup business

The beauty industry is always evolving, with new makeup trends coming and going. This ever-changing landscape constantly creates new opportunities for entrepreneurs. Whether you want to launch a digital storefront or sell your stuff in a store, there are many ways to succeed in the beauty space.

This guide will show you how to start a makeup business by covering the following:

  • How to set up the business
  • How to create your makeup products
  • How to find customers for your makeup brand
  • How to charge customers for your products
  • How Countingup helps with your finances

How to start a makeup business from scratch

This section will go over important steps you need to take when setting up your business to help you hit the ground running.

Choose a business name and structure

First, you need to choose your business structure. Will you be a sole trader, a limited company or set up a partnership? 

Sole trader businesses are simpler to set up and just start. But, a limited company looks more professional and also gives you limited liability for any debt associated with running the business. That said, running a limited company involves more accounting and tax responsibilities than sole trader businesses do.

Once you’ve chosen a structure, you need to choose a name for your business. You can trade under your own name, but if your plans are to expand your business and hire a team eventually, you may want to choose a separate company name. Just remember to check the Companies House register to ensure no one else is using the name already.

Once you’ve chosen your structure, if you are a limited company, you can register your business with Companies House for £12 –– this registration is called incorporation. An accountant or registration service can support you with this, but it will cost you more.

Register for tax

As a self-employed person, you need to notify HMRC that you will be managing your own tax and National Insurance contributions and submit a Self Assessment tax return yearly (if you make over £1,000 from your business income).

Limited companies also need to register with HMRC for Corporation Tax. Additionally, if your business is predicted to turn over £85,000 or more yearly, you must also register for VAT.

Protect yourself with insurance

It’s important to protect yourself in case something goes awry while you’re trading. You may need a few different policies, but here are a few to consider:

  • Public liability insurance: this covers you if someone is injured or their property is damaged in their dealing with your business. This can also cover injury from the makeup you’ve supplied too, like if someone gets an allergic reaction.
  • Professional indemnity insurance: this will pay for any claims if you make a mistake, breach confidentiality or are accused of professional negligence.
  • Personal accident and sickness insurance: covers your income if you can’t work for a period of time due to illness or injury. You’ll also be covered if you are unable to go back to work at all.

You might need a license or permits to start selling your makeup. The government has a licence checker tool you can use to see if you need to apply for anything before starting the business.

Open a business current account

Limited companies legally have to open a separate business current account to separate your business finances from your own. 

Sole traders and partnerships are not legally required to open a separate business account, but it’s still a good idea for the following reasons:

  • Easier to monitor cash flow (money moving in and out of your business)
  • Makes tax returns easier to prepare since your business and personal transactions are separate
  • Looks more professional

A business account like Countingup has built-in accounting software so that you can save time and stress on bookkeeping tasks.

How to create your makeup products 

Now we’ll look into what you need to do to successfully create makeup products that sell. 

Define your speciality

There’s a lot of competition in the beauty industry, so the best way to attract customers to your brand is to choose a speciality. Research your competitors to see what they’re doing and if there are any gaps in the market your business can fill. 

At the very least, you’ll want to pick a speciality that you enjoy and can do well to increase your chances of creating quality products. Choosing a niche will also prevent you from overwhelming yourself by trying to do everything at once. Additionally, it’ll make it easier to target your ideal customers. 

You can also try to break into the market by focusing on different segments, such as:

  • Benefits – Target a specific need or desire of a specific group.  For instance, selling moisturising lipsticks for people with sensitive skin.
  • Demographics – Select a group of individuals with similar income, jobs, age or ethnicities, like high-end makeup with SPF for elderly white women.
  • Occasions – Create products for special occasions, for example, by offering an exclusive birthday or wedding package.
  • Lifestyle – Make products for people with a certain lifestyle.  This could be selling eco-friendly makeup to consumers who want to protect the planet

Choose a manufacturing process

Starting a makeup business can be as simple as reselling or making basic lip balms from your kitchen to complex manufacturing processes to develop unique formulations. How you decide to produce and sell your products will depend on your experience, skill level, available time and budget. 

The options you have are:

  • Making them yourself – some makeup products like tinted lip balms can be simple enough to make yourself from your own home. If you decide to make your products yourself, carefully test and document your process so you can maintain a consistent formula. You also need to make sure you follow local regulations
  • White or private labelling – White label (or private label) is generically manufactured products that are packaged and sold under your own branding. You use the same formulation and manufacturer as other brands, but with some variations and different packaging. White label is great for moving quickly from idea to finished product since there’s no need to test new formulations over time. 
  • Manufacturing – this is the most complex process, where you create and develop formulations from scratch in a manufacturing facility. Many manufacturers produce products for multiple brands in the same space, making it a more accessible (but expensive) option for young brands.
  • Curating and re-selling – You can also skip the manufacturing altogether and buy wholesale products from multiple brands. Re-selling products allows you to bring a curated shopping experience to your customers. You could sell local-only brands, natural or organic products, makeup for specific skin types, and so on.

Develop your products

Next, it’s time to develop your product line, making everything about it highly symbolic of your brand. This step involves hammering out the details of product sizes, colours, textures, and prices. 

You’ll also want to work out how you want your packaging to look. Packaging is crucial because it’ll be the first thing your customer sees when the product arrives in their home. You could work with a graphic designer to create cute branded packaging that represents your company.

Pay attention to the materials and ingredients you use for your cosmetics. For example, plastic packaging is probably not a great choice if you promote your brand as eco-friendly. 

How to find customers for your makeup business

Once your products are ready to sell, it’s time to find people who will buy them.

Design a digital storefront

Whether you want to sell your products in physical stores or online, creating a digital storefront is still a good idea so customers can browse (and hopefully buy!) your range.

Make sure your website has an About page, a contact page, and, of course, show pages. Make your site on-brand and easy to navigate.

You have two options when it comes to building your online storefront. You can either create it yourself with a site like WordPress, Wix, or Squarespace or hire a professional to build it for you. 

Use social media

Social media is an excellent way to look for jobs, join groups, connect with potential customers, and share pictures of your makeup to promote your products. You can also share makeup tutorial videos and snippets of how you make your products to spark peoples’ interest.

Join an online marketplace

Another option is selling your makeup online through marketplaces like Amazon, Shopify or Etsy. Marketplaces are increasing in popularity, so most platforms try to make it as easy as possible to buy and sell products. Most marketplaces also allow you to pay to market your products on their platforms to get in front of more consumers. 

How to create invoices for your business

While marketplaces and digital storefronts often come with payment portals you can use to charge consumers for your products. Still, if your product range is made to order, you’ll need to create invoices to get paid for your work. It doesn’t have to be complicated if you follow these steps:

  1. Define payment terms

Discuss payment terms before you begin working on anything. Let your customer know what your preferred payment methods are straight away. Bank transfer and card payments are common, but many makeup brands, large and small, also accept other methods like PayPal, Venmo and Klarna. 

  1. Make it professional

Make your invoices look professional by designing them with your brand colours and logo. You’ll also want to add the word “Invoice” to the top corner of your document to make it clear that’s what it is.

Finally, ensure your invoices meet UK Government guidelines by including this accounting data and information:

  • Your business details: Your personal name or business name and your company’s contact information, including address, phone number, email address and website.
  • Your client’s business details: Your client’s name or business name and their business contact information, including address, phone number, email address and website.
  • A unique payment reference: Assign a number to each invoice to make it easier for you and the customer to track them.
  • Main work-related dates: The date of the invoice, when the client needs the products and your payment deadline.
  • An itemised breakdown: The individual services you’re charging your customer for.
  • VAT: If applicable, list the amount of VAT included in the service fee. 
  • Payment information: Ways to pay you — bank details or a payment portal, for instance.

If you decide to include a note at the end, make it short and sweet: ‘Thank you for your business!’ or ‘Hope to work with you again soon!’. A friendly note can help you build a good relationship from the start.

You can create professional invoices quickly and easily with an app like Countingup. Every invoice you generate will automatically receive a unique reference number, and you’ll receive a notification once you’ve been paid. Countingup also matches incoming payments with invoices so that you don’t have to. 

3) Send the invoice to your client

Send the invoice as soon as possible after the purchase, preferably as soon as the customer makes the order. If you’re a Countingup user, you can use the app to create invoices on the go and send them via email, so you don’t waste a minute.

If you need to follow up on an unpaid invoice, always be polite and understanding. Late payments are called ‘credit notes’, and we’ve written this useful guide to help you chase them up. 

Get off to the right start when it comes to your business finances 

When you’re starting your own business, it’s important to keep your personal and business finances separate, as well as keeping organised records for bookkeeping purposes. Starting a business takes a lot of time, focus, and hard work. The last thing you need is to waste hours dealing with a bunch of financial admin. 

That’s why thousands of business owners use the Countingup app to save time on their financial management and focus on growing their business. Countingup is the business current account and accounting software in one app. It automates time-consuming bookkeeping admin for self-employed people across the UK.

With automatic expense categorisation, receipt capture tools and cash flow insights, you can confidently keep on top of your business finances and save yourself hours of accounting admin, so you can focus on starting growing your makeup business. Find out more here.