How to Start a Beauty Company
Beauty brands are so hot right now!
It’s time to launch a well-designed line of products.
Here are our favorite tips to start your beauty company…
1. Pick an Available Name
You’ll start by picking a company name that is available and isn’t trademarked.
A trademark is the exclusive right to use a company name.
The company that owns the trademark for a name is the only one who can use it. If you use a trademarked name, you could be sued or forced to rebrand.
It doesn’t matter if the LLC name or DBA name is available.
You’ll want to run a trademark search to make sure your name is available. Otherwise, you might be registering a company name that you can’t legally use.
Read More: The Smart Way to Name Your Company
2. Register Your Company
LLCs + Corporations
It’s typically a good idea to register a beauty business as a legal company.
There’s a higher risk of liability in a beauty brand because you’re creating products that are applied to skin. You don’t want to be liable for allergic reactions and injuries.
If you don’t register your business as a legal company, then you and your business are the same person. You’re personally liable for everything that happens in the business. Your personal assets are considered company property. You may have to use your house, car, or bank account to pay for business debts, contracts, and lawsuits.
If you do register as an LLC or Corporation, then you and your business are separate people. You aren’t personally liable for business debts or lawsuits. Your personal assets are considered separate from the business. You won't need to use personal assets to pay business debts.
Read More: How to Register Your Business
You may need to file a DBA or a Doing Business As with your city/county.
You typically need a DBA if you’re not registering your company as an LLC or Corporation AND your business name is different than your personal name.
You also need a DBA if you are registering your company as an LLC or Corporation AND you’re using a different brand name than the registered name.
You'll typically file a DBA with your county or state.
Once you filed an LLC or DBA, you’ll want to obtain an EIN from the IRS.
It’s how you file your taxes as a business.
You can do it online and it’s pretty simple.
Many cities and counties will require you to file a business license.
This is the paperwork you need to do business in that city/county.
Some cities require it for everyone. Some only require it for certain industries.
Head to your city or county website to see if you need a business license.
Typically, you can file a business license online or head into their office.
Read your state tax website to see how to register with your State Tax Board.
Many states do not tax shipping or wholesale. In some states, it even matters how purchases are itemized in your online checkout.
Find out your state and local sales tax laws to determine if your products need to be taxed.
Business Bank Account
It's so much easier to keep all business income + expenses in one place.
When it’s time to file business taxes, you’ll want to have it separate so you can calculate how much you spent on your business.
Trust me, that gets messy when you keep it all together.
So make things easy on yourself and set up a separate account.
It’s also necessary to keep your limited liability as an LLC or Corporation.
If you want your business to be separate, you have to keep your money separate.
3. Protect Your Brand
A trademark is the exclusive right to use your company name, logo, or tagline.
That means you're the only one who can use it.
Once your company starts doing well, you’ll see other companies popping up with similar branding. They’ll confuse customers and steal sales. Without a trademark, there’s no way to stop them.
Plus, only one company can own a brand. Typically, it’s who trademarks it first.
If another company trademarks your brand first, they’ll own your name nationally. You'll have to rebrand or file an expensive lawsuit.
That’s why a trademark is so important.
Review Your Brand
Some words can't be trademarked. They’re free for anyone to use.
Without a trademark, there’s no way to stop them.
That’s why I don't recommend a name that can't be trademarked.
Run a Trademark Search
A lot of names are already trademarked.
If you haven’t already, you’ll want to run a trademark search to see if your name is available.
It's not as simple as inputting your exact company name and hitting search. You'll need to search for similar sounding words, similar spelled words, alternate pronunciation of words, and foreign translations.
You can search google, social media sites, and the USPTO like this:
Search your exact company name
Search keywords from your name
Search any spelling variations of your name
Search any similar names that come to mind
Write down all the similar companies. You’ll want to know what they sell, where they sell, and when they first used the name.
Once you find the search results, you'll need to determine if any of these brands are too similar to your name.
If they’re too similar, then you can be sued or forced to rebrand. Plus, any trademark applications you file will be denied and you won’t be issued a refund. So it’s really important to make sure that you run the search correctly.
That’s why it’s best to have an attorney run your trademark search. It needs to be done correctly to make sure that your brand is available before you start using it.
If you didn't find any similar brands, you probably didn't run the search correctly.
Read More: How to Tell if Your Brand Name is Available
File your Trademark Application
You'll file your application with the United States Patent + Trademark Office.
After you file the application, the trademark office will review it.
And 84% of applications are denied. You can be denied for a hundred reasons, like using commas instead of semicolons.
When an application is denied, you’ll work with attorneys at the trademark office.
We rarely see DIY trademark applications approved. That’s why it’s best to work with a trademark attorney. Your application is much more likely to be approved.
4. Create your Products
It’s important that you follow federal regulations about beauty production, labeling, and testing.
The law states that your products need to be manufactured in a space that complies with federal regulations called GMP: Good Manufacturing Practices.
The law also specifies what your labels need to say: like what ingredients you need to include, in what order, and any allergens; and what kind of quality control testing you need.
Read More: How to Label Your Products
5. Create a Website
You need a website that attracts customers + converts them to buyers.
Terms + Conditions tell users how you handle orders, returns, and shipping.
A heads up that FAQ pages aren’t binding on customers. You need a checkout feature that requires customers to agree to your Terms before buying.
Read More: All About Website Policies