Starting a cosmetics business in Kenya

Starting a cosmetics business in Kenya


Cosmetics businesses are becoming very popular among Kenyan women as well as men who like to look good all day long without having to worry about breaking the bank.

If you are looking for a venture that doesn’t require much capital and has the potential of becoming very lucrative within a short amount of time, then this might be it.

This blog post will help people who want to venture into this type of industry by providing them with some basic information on it as well as tips on how to get started.

Develop a cosmetics business plan

The first step in starting your own cosmetic company is to develop a business plan. This will help you define the goals and objectives of your company, as well as establish what resources are necessary to be successful.

Below are the key items that should appear in your cosmetics business plan:

Your goals and objectives

Define what you want to accomplish with your cosmetics venture. For example, is your goal to generate extra income on the side or do you want to start a small scale beauty brand?

Your goals and objectives will help you determine what type of business structure (e.g., sole proprietorship) suits your needs.

Determine what products to sell in a cosmetics store. There are a wide range of beauty products that you can sell some of them include;

  • Makeup products such as eye shadow, mascara,foundation, lipstick
  • Hair care products such as Shampoo, Hair oils, Hair relaxer, Hair treatment
  • Skincare Products e.g. soaps, creams, and perfumes
  • Personal care items like body lotions, bath oils
  • Hair products like wigs, weaves and braids
  • Hair accessories such as headbands and wraps
  • Nail care kits such as buffer, nail file, nail polish
  • Kids accessories such as beads and hair clips
  • Fragrances such as perfumes and colognes

When starting this venture you ought to have enough knowledge of beauty products so as to be able to advise the customers accordingly and also be able to deduce customer challenges and offer solutions.

You also need to keep up with beauty trends. Check what is happening in the market, what are others doing, what is ‘hot’?

Your target market

To develop a business plan, you’ll need to identify your target market and the different types of products that they would be interested in purchasing from you.

For example, if your company is going to sell makeup for women who are looking for natural beauty products then it makes sense that this segment would prefer organic products, as well.

Are you targeting middle and high-end customers or low end customers? We recommend you target middle and high-end customers as they have a high spending power which translates to higher margins and high turnover though they are more demanding in terms of variety, quality of products, and customer service.

Research and analyze the competition

It’s important to know what your competitors such as Bestlady are doing and how they’re fairing in the market.

This will help you identify where they’re coming up short in their marketing plan, and how you can improve on it.

Analyzing the competition’s products as well as their strategies can give you a better idea of how they handle issues such as customer service, pricing policies, return policy, and how you can improve your own company.

Determine type of cosmetics store

Do you want to sell exclusively online or do you want a brick-and-mortar store as well?

This will help determine the necessary expenses for starting your business such as inventory and website development costs.

Several beauty shops such as Bestlady have physical locations where they sell their products. But majority of them have an e-commerce site that sells the same items for a cheaper price than what you would buy at the store or online through other retailers like Jumia.

Jumia provides delivery services around the country to make it even easier for their customers to get their products so you can opt to sell your beauty products through them.

Identify a suitable location

If you have decided to have a brick-and-mortar store,you need to identify an ideal location to set it up;Look for locations that ;

  • Are densely populated. Areas, where there is a large concentration of salons, are ideal as customers are more likely to buy.
  • Have high traffic .Areas known for cosmetics such as Dubois Road have high foot traffic of the right kind of customer.
  • Have less competition.Areas, where there are not many beauty shops, are ideal as you will not compete on price.

Determine funding needs

This is important as you will be able to develop a budget that can be used to run your company throughout the year.

The higher your funding needs, the more you will have to fill in requests for loans or other financing options.

You also need to be aware of what type of structure is best for your company and how much capital you would require as initial start up.

Below is a table of how much investment you need to start a cosmetics shop in Kenya.

Cosmetic Store Requirement

Cost (Ksh)

Licenses

Single user permit

10,000

Signboard License

5,000

Fire Inspection Certificate

3,000

Conservancy fee(Waste management)

2,000

Sub-Total

20,000

Equipment

Furniture

30,000

Fire extinguisher

5,000

Sub-Total

35,000

Stock

Beauty Products Inventory

50,000

Premise

Rent (1 months’ rent and Deposit)

40,000

Renovations

25,000

Sub-Total

70,000

Employee wages

30,000

Total

200,000

The above figures are just guidelines. Specifics could vary.

  • For instance, the amount of rent you pay will depend on your location and the specific building you are operating from.
  • Licenses will depend on the county and the size of your premises.
  • The renovation will be based on the present status of the premises.
  • The amount you pay your employees will depend on what you have negotiated with them.
  • The amount of stock could differ depending on your budget.In highly competitive markets ensure you have a variety of items as this could be a way of differentiating and attracting customers.

Identify cost of goods

You should also identify your cost of goods before completing the rest of the business plan.You’ll need to do some research in order to get accurate information on how much each product will cost.

This is important because the price you set for your products should be low enough to ensure that you can make a profit, but high enough so that customers are still willing to buy them at this price point.

Identify where to buy cosmetics in wholesale

To be profitable in this venture, you ought to buy your products in wholesale.

In Nairobi, the major distributors and wholesalers are found on the upper side of River Road, near the junction with Latema Road. Another major concentration of wholesalers is along Dubois Road,Nairobi.

Below is a table of a list of wholesalers of cosmetics in Nairobi and their location

Cosmetics Wholesaler

Location

Gawa

Nyakio House River Road

Euro

Market Mansion Building Tubman Road

East end Chemist

Tom Mboya Street

Diana House of Beauty

Uganda House Kenyatta Avenue

Cosmix

Perinda Center 2nd Dubois Road

BestMan

Nyakio House River Road

Bestly

River Road

Best African

Nyakio House River Road

Beauty Options

Eagle House Kimathi Street

Sarah Beauty

Nyakio House River Road

Super Cosmetics

Reliance Plaza Woodvale Road

Identify your pricing

If you are able to source intelligently then you will enjoy higher margins or have room to offer a variety of prices and if need be compete on prices.

Ensure your pricing is competitive so that your customers don’t feel like they have been ripped off if your prices are exorbitant or have a fear that your products are not genuine because of how low your prices are.

To be able to compete competitively ,have fair prices that are within the market range.

Consider buying beauty products in bulk as wholesalers offer big discounts which you can pass to your customers.

Have an operational manual

It’s also important for the business plan to include an operations manual so that everyone involved with running the day to day operations will know how to do their job.

We recommend starting with an operations manual and developing it into separate documents as needed . For example, if there were different personnel or different tasks, you would need separate operations manuals for each group.

The operational manual should also incorporate the following items:

  • The level of customer service

This gives guidelines out on how to treat customers,customer responsiveness and attentiveness.

Confidentiality and professionalism will ensure you have a successful company where customers will keep coming back leading to more revenue in the long term.

You can also have product samples that customers can smell, touch without much limitation. Ensure you sell original products as fake products can impact a clients health negatively.This may lead to a bad company reputation as word travels fast by mouth.

  • Opening & Closing Hours

Opening and closing hours will depend on the location of your premise due to security concerns. But ensure you consistently open early and close reasonably late to allow as many consumers as possible to buy at your store.

Identify your Marketing channels

Last but not least the way you are going to market your beauty company should be contained inside your business plan.

You need to be able to come up with the right marketing strategies so you can get an edge over your competitors and earn more money .

Market proactively in such as a way customers are drawn in your store rather than just waiting for them to walk in.

Below are marketing channels that you can deploy to advertise your company;

  • Using sign boards

Signage is really important when it comes to advertising,It is mainly used for marketing in high traffic areas.

  • Direct mailing

This is one of the most effective way to advertise because it reaches directly into people’s mailboxes where they see them every day.It does not cost much to do and you can get really good deals on bulk orders.

  • In-store advertising

In store marketing is necessary for a lot of businesses especially those with physical locations.It creates awareness about your company which will help generate more customers.

Useful tools like Twitter, Facebook, Instagram are also very useful for in store advertisements because they help create a connection with potential consumers.

  • Branding

Branding will help you stand out from the competition and help your customers remember who you are.

A good logo or design can capture attention, but do not forget to create an identity that tells people more about you so they know what makes your company different.

A good example of a beauty shop that has been branded effectively is Bestlady.You can recognize their shops from their brand colors pink and purple.

  • A website

Having a well designed yet informative and user friendly site will go a long way in attracting new customers as they can see what you offer, the products you sell and also contact information if need be.

  • Social media marketing

Instagram and Facebook have been used by many businesses for marketing purposes.They are a lot cheaper than other marketing methods and easier to do.They are also great for branding as you can post pictures of what your company offers or products that are available.

You will need to create an effective campaign so people would be able to find the page where they could purchase their desired beauty product from.

A good marketing campaign should be able to inform the customer about your company as well as give them a reason for buying from you and not elsewhere.

Is a cosmetic business in Kenya profitable?

Cosmetic business in Kenya is profitable for those who are willing to invest time and resources. It is one of the most competitive industries in today’s world as well as the most lucrative.

It is not an easy venture to get into but those who have succeeded in it are doing well for themselves and their families.

The only way to be successful in it, is by ensuring you are not just looking for quick returns but instead concentrate on growing the customer base over time.

The goal should be achieving a larger audience and earning more money over time rather than getting rich overnight.

You need to stay updated with all the trends that go on in this industry so you could sell products that would be needed by your customer.

You also need to be innovative and creative as well so you can come up with new, exciting products that would have your customers asking for more from you.

Through proper research of the industry and also by making a good marketing plan, any individual could succeed in this venture.It doesn’t matter where you are because the Internet is a great tool that could be used to market your products.

Conclusion

The cosmetics industry provides a lot of business opportunities for people in Kenya. It is a profitable venture if you work hard at it.

It’s up to you how you want to take the full advantage of these industry and make your life better through it.

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