How to Start a Beauty Business

Before you even get close to turning your ideas into a viable beauty business, you need to nail down a niche within this large and varied sector. 

That can only mean one thing: it’s market research time. 

Before taking the first steps on your business journey, you need to make sure you fully understand the beauty landscape – and you need to know precisely where your beauty business will fit within it. 

The following list is not exhaustive, but as a starting point, research these various business models and try to narrow down what you hope to achieve with your beauty business:

• Online beauty sales: One option for your beauty business is to harness the power of the internet to sell beauty products and cosmetics online. If you have the chops for a serious design and manufacturing project (and the capital to fund it), then you could create and sell your own line of cosmetics. Alternatively, you could start a dropshipping business centred on beauty products. While you would still need to source a supplier or manufacturer, set up an online storefront and handle order fulfilment, the dropshipping option comes with considerably fewer overheads than launching your own product line. 
• Retail store: Another big and bold option is to launch your own brick-and-mortar beauty store. What you stock will be up to you, and if you go down this route you’ll need to think long and hard about where your beauty business will be based and how you’ll pay for it. This option comes with plenty of overheads and practical considerations, but that doesn’t mean it’s impossible. In the years since the pandemic, beauty aficionados have fallen back in love with physical stores, and there have been plenty of success stories in this space – not least Sephora’s much-touted return to the UK.
• Hairdressing services: If you have the skills and the qualifications, you could launch a beauty business offering hairdressing services. And you’d be in good company: around 60% of hairdressers and barbers in the UK are self-employed, according to a 2023 report from trade body the National Hair & Beauty Federation (NHBF). You’ll need somewhere to operate, as well as insurance and the right equipment, but this is a route which could see you make a few bob by cutting a few bobs.
• Nail services: Nail technicians are currently in demand, and the UK market for nail techs is only expected to grow. One option for your beauty business is to nail down this niche for yourself, offering treatments and services either at home or elsewhere. 
• On-the-go beauty services: You might decide to offer mobile beauty services, taking your skills and services on the road. This could be an option for hairdressers, make-up artists, nail technicians and many other sub-sectors of the beauty industry. What this looks like exactly will depend on you, but you might end up offering beauty services in your clients’ homes, saving the need to invest in premises and pay potentially large overheads. 

When you think you have settled on a niche for your beauty business, you’ll need to make sure you’re clued up about your customers and competitors. And because the UK beauty industry is thriving, there are plenty of both.

As of 2023, there were over 61,000 hair and beauty businesses operating in the UK, according to the NHBF. The chances are that at least one of them will be offering similar services or products to you, so you need to think about how your beauty business will stand out in this crowded field. 

Start by researching your potential competitors. Look at what they offer, where they operate, and how they advertise. If any have physical premises, they might be worth a visit. Your goal here is to work out what your rivals do well and, crucially, what you can do better. 

As part of your market research, you also need to think about your future customers. In this case, your two most important questions are:

1. Will there be demand for my cosmetic products or beauty services?
2. Who is my target market, and how will I market my beauty business to them?

Arm yourself with knowledge and try to put together a profile of who your customers might be. Think about what they want from a beauty business, where they shop, and how you can reach them. 

Do your beauty customers congregate online – on forums or on social media? If so, here’s your chance to learn more about how they think and what they value.

Once you’ve settled on the foundations of your beauty business, you should consider the costs associated with getting your venture off the ground. 

Starting a new business can be expensive, although the precise costs will depend a lot on the business model you intend to follow. If you hope to open physical premises, for example, you’ll probably need a lot more seed capital than if you were simply planning to sell products online. 

Still, consider the following (non-exhaustive) list of potential costs and try to get a sense of how much money you will need to launch your beauty business. This information should eventually feed into your budget and your business plan – vital documents which may be essential to secure the funding your beauty business needs.

• Equipment: Depending on the nature of your beauty business, you may need to invest in equipment. Prices are likely to vary widely for different kinds of businesses. A hairdresser, for example, is likely to need very different things to a make-up artist or a nail tech. This means you’ll need to do your own research based on what kind of venture you have in mind. Price up how much it would cost to buy or rent all the kit you’ll need to make your beauty business work.
• Manufacturing costs: If you plan to create and launch your own beauty products, you’ll need to consider all the costs involved with doing so. You will also need to meet certain regulatory, manufacturing, and labelling requirements, depending on your products, so don’t forget to budget for these as well. 
• Overheads: If you plan to open premises, it is likely to cost a pretty penny in overheads. Think about how much you’ll pay to rent or buy your business premises, and then be sure to budget for all the costs associated with furnishing, stocking, and staffing a brick-and-mortar shop. Business energy costs also need to be considered. 
• Website costs: Your beauty business will probably benefit from a website where you can advertise your services and products. A website may also be necessary when it comes to taking bookings. There are various costs associated with setting up a website, although it may be possible to secure hosting and support for a self-designed e-commerce website for around £260 per year. If you hire the help of a professional designer, expect to pay potentially thousands of pounds more. 
• Marketing costs: Spreading the word about your beauty business probably won’t come free, but you don’t have to break the bank to take advantage of social media marketing. The average price of a Facebook advert in the UK is as little as 78p per click. Meanwhile, the cost of influencer marketing – which involves paying popular online personalities to promote or talk about your business – can start at £125 per post for an influencer with fewer than 10,000 followers. Just remember that social media marketing is difficult and comes with no guarantees, which is why many large companies have dedicated marketing professionals to handle this side of the business.
• Insurance: Running a beauty business means dealing with members of the public, and that means it’s a good idea to think about protecting yourself with insurance. If you’re planning to work as a beauty therapist, public liability cover – which protects you in the event that you injure a member of the public or damage their property  – could cost as little as £5 or less. You may also wish to cover your tools or premises, if you have any, and if your beauty business employs anyone who isn’t a family member, you will need employer’s liability insurance. Product liability insurance, meanwhile, is a good idea if you want to protect yourself in the event of harm or injuries caused by your products. These costs can add up, so shop around for quotes tailored to the specifics of your beauty business. You may also be able to find packages of public and product liability insurance to provide full cover for your beauty business.

If you’re looking for a more detailed guide to writing a formal business budget, remember that you can always turn to our five-step guide to creating a small business budget. 

Before you take the important (and exciting) step of registering your beauty business, you need to think about what company structure will work best for you and your venture. 

Running a business as a sole trader is generally the easiest, and cheapest option – since all you’ll need to do before you get started is register for Self Assessment with HM Revenue & Customs (HMRC). This is free and quick, compared with some of your other options. 

However, if you want to run your beauty business as a limited company or as a general or limited liability partnership, these are also viable options – especially if you won’t be running your business by yourself. Each option comes with its own pros and cons and registration process, which we explain in our guide to choosing a structure for your new business. 

Now is also a good time to think about licences, insurance, and the laws around running a beauty business. 

There are quite a few regulations for owners of beauty businesses to be aware of, although depending on what type of beauty business you are setting up, only some will be relevant to you. The best way to check whether any specific laws or licences apply in your case is to use the licence finder tool on the Gov.uk website.

Be sure to also research any additional legal and insurance requirements specific to your type of beauty business. A tattoo studio or laser hair removal clinic will be subject to a handful of specific laws, which wouldn’t apply to a dropshipper who sells cosmetics online, for example. 

» MORE: Should I register as a sole trader or limited company?

Beauty doesn’t come cheap and, by now, you should have priced up the likely costs of venturing into this sector. And if you know how much start-up capital you’re likely to need, then it’s time to secure funding for your beauty business. 

You may be able to secure funding in the form of a small business grant or a start-up loan to get your beauty business off the ground. However, you also have plenty of other options – including using your savings and seeking venture capital investment.

Check out our guide to funding your new business for more information and inspiration. 

If you’re successful in your search for investment, you’re going to need somewhere to put all that money. This is where business bank accounts come in. 

For sole traders, there is no legal requirement to use a business bank account when trading. That being said, you’d probably find it easier to keep your finances separate – and you may end up thanking yourself when you sit down to do your first tax return. 

For limited companies and partnerships, however, it is a legal requirement to use a business bank account and to keep personal and business finances separate. In these cases, opening a business account for your beauty business is an absolute must. 

We’ve already established that the beauty market is a crowded field, with thousands of firms competing for customers. So the next question is: how can you make your beauty business stand out from the competition?

One option is to take your marketing online. 

Setting up a dedicated website for your beauty business will allow potential customers to find and contact you. You’ll also be able to showcase your products and services in one convenient place. 

You may also choose to advertise your beauty business online – perhaps through paid ads on search engines or social media or by utilising influencer marketing. 

And if you set up social media profiles for your business, you may be able to connect with customers by posting about the products and services you offer. 

All the while, consider your brand story: the narrative around who your business is for and what it stands for. This can help to create a coherent brand identity, which customers will ultimately associate with your beauty business.