Starting a makeup business is a rewarding venture that combines your passion for beauty and artistry with smart business sense. The beauty industry is a multi-billion dollar market, with steady demand for makeup for everything from daily wear and special events to professional photoshoots.
This guide will walk you through the practical steps, from validating your concept and securing licenses to acquiring inventory and building supplier relationships, to help you launch a successful makeup business in the U.S.
Step 1: Plan your business and validate your idea
Start by researching your target market. Use Google Trends to check interest in specific product types, like "vegan lipstick" or "clean foundation." You can also browse beauty subreddits and Facebook groups to understand what real customers want and what problems they face with current products.
Next, analyze your competition. Look at the product assortments, price points, and social media strategies of at least three direct competitors. Databases like Mintel offer in-depth market reports, which can give you a broader view of industry trends and consumer behavior.
Estimate your startup costs
Initial costs can range from $5,000 to over $20,000. A basic breakdown includes initial inventory ($3,000-$10,000), business licenses and insurance ($500-$1,500), and website development with marketing ($1,000-$5,000). Your professional kit will be a separate expense.
A frequent misstep is to purchase too much inventory at once. You might want to consider launching with a smaller, curated collection of products. This lets you test the market and see what sells before you commit to a larger investment.
Here are 3 immediate steps to take:
- Survey 20-30 potential customers about their makeup preferences.
- Analyze three direct competitors’ product offerings and pricing.
- Create a preliminary budget that lists expected costs for inventory and licensing.
Step 2: Establish your legal structure and secure licenses
First, choose a business structure. Most new makeup businesses form a Limited Liability Company (LLC). This structure protects your personal assets, like your home, if the business faces a lawsuit. You can file for an LLC through your state's Secretary of State website for about $50-$500.
With your legal structure in place, you can get your tax ID. You will need a free Employer Identification Number (EIN) from the IRS website. This number works like a Social Security number for your business and is required for taxes and opening a business bank account.
Understand cosmetic regulations
The Food and Drug Administration (FDA) regulates cosmetics under the Federal Food, Drug, and Cosmetic Act. While the FDA does not pre-approve makeup, your products must be safe for consumers and labeled correctly. A frequent mistake is to make medical claims, like saying a foundation "cures acne."
Secure your permits
You will need a seller's permit from your state's department of revenue to collect sales tax. These are often free but can cost up to $100. Also, check with your city or county clerk for a general business license, which typically costs between $50 and $400.
Here are 4 immediate steps to take:
- File for an LLC with your state's Secretary of State.
- Apply for a free EIN on the IRS website.
- Review the FDA's cosmetic labeling guide.
- Contact your city clerk to ask about a local business license.
Step 3: Secure your business insurance
Protect your new venture with the right insurance. You will need a few specific policies to cover the unique risks of a makeup business, from client allergic reactions to property damage. This is an expense to plan for in your budget.
Key insurance policies and costs
General liability insurance is your foundation. It covers third-party claims like slips and falls. Expect to pay $400-$700 annually for a $1 million policy. If you sell products, you also need product liability insurance to cover claims from reactions or defects. This can add $500-$2,000 per year.
Many new owners overlook professional liability insurance. This policy protects you if a client claims your professional advice or service caused them financial harm. You might want to look at providers like Hiscox, NEXT Insurance, or the Professional Beauty Association for quotes.
Here are 3 immediate steps to take:
- Request quotes for general and product liability from three different insurers.
- Ask each provider if their policy specifically covers allergic reactions to cosmetics.
- Review your budget to account for annual premiums, which can total $900-$2,700 or more.
Step 4: Set up your location and get equipment
If you plan a retail studio, look for a 400-800 square foot space zoned for commercial use. For a home-based business, you will need to check your city’s rules for a home occupation permit. This ensures you operate legally from your residence.
When you negotiate a lease, you might ask for a tenant improvement allowance to help pay for mirrors and lighting. A shorter 1-2 year lease provides more flexibility than a 5-year term, which is a big commitment when you are just starting out.
Acquire your inventory and supplies
You can source products from wholesalers like Qosmedix or create a unique line with private label manufacturers like MANA Products. A frequent misstep is ordering too much variety initially, which ties up cash in slow-moving stock. Start with a focused collection.
Private label companies often require minimum order quantities (MOQs) of 500-1,000 units per product. Your separate professional makeup artist kit, with a quality brush set and foundation range, will likely cost between $2,000 and $5,000.
Here are 4 immediate steps to take:
- Check your city’s zoning laws for commercial or home occupation permits.
- Price out a professional makeup kit from two different beauty suppliers.
- Contact a private label manufacturer to request their catalog and MOQ information.
- Draft a list of 5-10 core products for your initial launch collection.
Step 5: Set up payment processing
You will need a reliable way to accept payments. For services like bridal makeup, it is standard to require a 25-50% non-refundable deposit via contract to secure the date. For product sales, customers expect to pay with credit, debit, or digital wallets.
Many payment processors charge between 2.5% and 3.5% per transaction, plus monthly fees. A frequent oversight is not accounting for these costs, which can eat into your profits. You will want a solution with clear, low rates and no long-term contracts.
For makeup businesses that accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and you are done.
At just 1.99% per transaction with no hidden costs or extra hardware, it is particularly useful for mobile artists working events. This rate is noticeably lower than what many other providers offer.
Getting started is straightforward:
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available on your JIM card as soon as the sale is done, with no wait for bank transfers.
Here are 3 immediate steps to take:
- Draft a simple contract outlining your deposit and final payment terms.
- Compare the transaction fees of two other payment processors to JIM's 1.99% rate.
- Download the JIM app to see how it works on your phone.
Step 6: Secure funding and manage your finances
An SBA Microloan is a solid option for initial funding. These loans range from $500 to $50,000, with interest rates typically between 8% and 13%. To qualify, you will need a strong business plan and a good personal credit score.
You can also pursue grants, though they are competitive. Look into programs like the Amber Grant for women entrepreneurs or beauty-specific incubators like Sephora Accelerate, which provide funding and mentorship.
Calculate your working capital
Plan for at least six months of working capital. This fund covers ongoing costs like inventory restocks and marketing before your sales become steady. A budget of $5,000 to $15,000 is a realistic target for this period.
Once you secure funds, open a dedicated business bank account. Many new owners make the mistake of mixing personal and business money, which complicates tax season and makes it hard to track your actual profit.
Here are 4 immediate steps to take:
- Research SBA Microloan lenders in your area.
- Open a separate business checking account.
- Draft a six-month budget for your working capital needs.
- Review the eligibility criteria for the Amber Grant.
Step 7: Hire your team and set up operations
As you grow, you may need help. For a retail space, a part-time Beauty Advisor can manage sales and customer questions. For service-based work, you might hire a freelance Makeup Artist. Expect to pay skilled artists between $25 and $50 per hour, depending on their experience.
Understand staffing requirements
Some states require a cosmetology or esthetician license to apply makeup professionally. You should check your state's board of cosmetology website for its specific rules. A frequent misstep is to hire artists as 1099 independent contractors when they function as employees, which can lead to tax penalties.
Once you have a team, you can use scheduling software like GlossGenius or Acuity Scheduling to manage appointments and client information. As a benchmark for retail, many small beauty businesses aim for one full-time employee for every $100,000 to $150,000 in annual revenue.
Here are 4 immediate steps to take:
- Draft a job description for a part-time Beauty Advisor or Makeup Artist.
- Check your state board of cosmetology website for licensing rules.
- Compare the features of two scheduling apps like GlossGenius and Acuity.
- Outline a simple daily checklist for opening and closing procedures.
Step 8: Market your business and find customers
Build your online presence
Focus your efforts on visual platforms like Instagram and TikTok. Post high-quality photos and videos of your work, such as tutorials and before-and-after shots. You might want to collaborate with micro-influencers (10k-50k followers), who often have strong engagement.
Many new business owners spread their marketing budget too thin. Instead of using every platform, master one or two first. Also, start building an email list immediately. Offer a free guide, like a "Skincare Prep Guide," on your website to capture visitor emails.
Leverage local partnerships
Connect with local photographers, bridal shops, and event planners. You can offer them a 10-15% referral fee for each client they send your way. This is a great way to build a steady stream of service-based work without spending on ads.
For online sales, a good e-commerce conversion rate in beauty is 2-3%. Your customer acquisition cost (CAC) from social media ads might be $25-$50 per customer. Track these numbers to ensure your marketing spend is profitable.
Here are 4 immediate steps to take:
- Identify five local micro-influencers to contact for collaboration.
- Draft a referral agreement to propose to a local photographer.
- Create a content calendar with your first four post ideas for Instagram.
- Set up an email capture form on your website.
Step 9: Price your products and services
Set your service rates
For services, you can price per person or create packages. A bridal makeup package, including a trial session, often runs from $350 to $600. A single makeup application for an event might be $125-$200, while bridesmaids are typically priced at $100-$150 each.
Many new artists underprice their services to attract clients. This can make it difficult to raise rates later. Instead, research what established artists in your area charge to set a competitive but fair price from the start. Your rate should reflect your skill and the products you use.
Price your retail products
For products, a common strategy is cost-plus pricing. Calculate your total cost per item, including the product, packaging, and a portion of your marketing spend. Then, apply a markup. A standard retail markup is 100%, known as keystone pricing, which doubles your cost.
For example, if a private label foundation costs you $12 per unit all-in, you would price it at $24. This gives you a 50% gross profit margin. You can adjust this based on brand positioning; luxury brands may use a 200-300% markup.
Here are 4 immediate steps to take:
- Research the service menus of three local makeup artists.
- Calculate the total cost-of-goods for one of your planned retail products.
- Create a draft price list for your top three services or packages.
- Decide on a starting markup percentage for your product line.
Step 10: Control quality and scale your business
For products, look for manufacturers who follow Good Manufacturing Practices (GMP). This ensures your line meets safety and quality standards. You should also batch test each new shipment for color consistency and texture before it goes on sale.
Measure your performance
To measure product quality, track your return rate and aim to keep it under 5%. For services, a good goal is to achieve a 20-30% client rebooking rate within your first year. You can also monitor online reviews and strive for an average rating of 4.5 stars or higher.
Plan for growth
When you are consistently booked 4-6 weeks in advance, it is time to consider hiring another artist. Once online sales surpass 100 orders per month, you might explore a third-party logistics (3PL) service like ShipBob to manage fulfillment. Reinvest 15-20% of profits into growth.
Some owners expand too quickly without the cash flow to support it. Before you sign a new lease or hire full-time staff, make sure you have at least three months of operating expenses saved. As you grow, inventory software like Katana can help you manage stock more efficiently than a spreadsheet.
Here are 4 immediate steps to take:
- Research GMP certification requirements for cosmetic manufacturers.
- Set up a spreadsheet to track your product return rate and client rebooking rate.
- Calculate 15% of your projected monthly profit to set a reinvestment budget.
- Review the pricing for an inventory management system like Katana.
You have the steps to launch your makeup business. Your unique artistry is what will set you apart, so let that shine through in every product and service. The path is clear, and you are ready to begin.
And when you make your first sale, getting paid should be simple. JIM lets you accept payments right on your smartphone, with no extra hardware, for a flat 1.99% fee. Download JIM and you are all set.
