How to start a beauty business in the UK
The beauty industry in the UK is constantly expanding, with the UK health & beauty market set to reach £27bn in revenue by 2022. But with a growing selection of online beauty brands for consumers to choose from, finding your niche is key. Here are some things to consider when starting a beauty business in the UK.
Be aware of the rules and regulations
Health and safety is an underappreciated issue when opening a beauty business in the UK. You’ll need to be aware of the hazardous components used to manufacture many beauty products, as they can cause skin and respiratory problems for some people. Any risks should be advertised, and it’s essential to test the safety of new products prior to public use. The Control of Substances Hazardous to Health (COSHH) Essentials or a COSHH safety course will help you to comply with these laws.
Online beauty businesses need to comply with some specific rules and regulations. Standard regulations (which all retailers are subject to) include the Consumer Protection Act, The Sale of Goods Act 1979, and the Supply of Goods and Services Act 1982. Traders will also need to be familiar with the Electronic Commerce (EC Directive) Regulations 2002. Nearly every website is covered by these regulations, so you’ll have no excuse to not be aware of them.
The regulations ensure that sellers provide consumers with clear information of the product, delivery and payment methods, a cooling-off period for consumers to cancel a sale, and written confirmation of their order; they also oblige you to deliver a product within the 30 day sale period, unless otherwise stated. Every online business needs to state their company registration number, place of registration and registered office address on their website, to comply with the Companies Act 2006.
Attend trade shows
Trade shows are a great way to network in the early days of your business, and spread the word about your beauty brand. The UK is home to some of the very best trade shows, the biggest of which we’ve listed below:
Beauty UK
As the largest beauty trade show outside of London, Beauty UK is held in Birmingham and is a great networking event for your brand. There are four shows under one roof including Hair UK and Barber UK, with thousands of beauty enthusiasts visiting every year. This event provides professional networking opportunities, hosts over 750 brands, and is set in a ideal location for brands up north.
Olympia Beauty
Olympia Beauty is now in its 14th year, and brings the biggest beauty brands to London. The show features over 500 exhibiting beauty brands, and welcomes more than 18,000 visitors every year. The event hosts a selection of brands from makeup, skincare, haircare and many more besides. Whether it’s a luxury or affordable brand, this popular London event is useful for both professional networking and promoting your business.
Professional Beauty
The leading beauty industry event in London, Professional Beauty hosts 800 beauty brands under one roof, and offers access to the biggest beauty enthusiasts. This event aims to produce market-leading exhibitions, magazines, awards and conferences for the salon and spa market, and to expand the market for professional treatments. Professional Beauty differs as they focus more on helping individuals in the beauty profession to become better business owners.
Find a niche and commit to it
The beauty industry is constantly evolving, and is predicted to rise to $51.8 billion in 2020. The UK’s beauty industry reflects this, and is forecasted to increase by another 21.1% in 5 years. Skincare is predicted to be the fastest growing area within the beauty industry, rising 27.9% by 2022, due to innovations in both the lower and higher end markets. While this may be an obvious choice for your new business, you should consider where your passion and specialities lie, and what you think people are looking for in the current market.
While the beauty audience is broad, most upcoming beauty businesses choose to focus on what millennials are looking for. Times are changing within the beauty industry, and millennials shop in a different way. A recent poll has concluded that 58% of shoppers would rather do a quick mobile search on a product, instead of asking an in-shop employee’s opinion. Many shoppers also go in with a product in mind from online research, instead of taking the time to browse.
Another point to consider is individualisation. Consumers today are more interested in personalised products, and not following what everyone else is buying. They’re steering away from only buying top brands, and instead, look to collect both popular brands and more niche brands on the market. As the founder of Tan-Luxe puts it: “Consumers don’t want big faceless global brands any more. They want to join you on your journey, even when it’s slow.”
Organic and cruelty free products have become increasingly popular, with a survey by Nielsen concluding that 53% of responders felt all-natural products were part of their buying habits. This is reflected in the 24% growth of organic product sales over the past few years, and points to a broader market trend.
With all this in mind, when it comes to your beauty brand, you need to think of the individual, and what will make your brand stand out – your niche. You could go down the route of men’s grooming, for instance; this is a booming market, predicted to reach $60.7 billion by 2020. Or venture into vegan makeup – another niche on a meteoric rise in popularity.
Create your branding
Branding in the beauty industry is key. Your brand isn’t just there to look cool or get people’s attention; it should communicate your brand values effortlessly, and tell somebody about your products without even having to advertise them. Your business’ name, then, is of the utmost importance. When it comes to deciding branding, your first step should be deciding on a name, and ensuring that this isn’t taken by anyone. You can check this by searching for and purchasing a domain, and by checking when registering the business with Companies House.
If you’re considering expanding abroad, branding also comes into play here. You’ll need to research if your company name is already taken in your chosen destination, and on local URLs (e.g. the .fr domain in France). Also, be aware of the local language, and check if your brand name or message is somewhat offensive or amusing.
As a beauty brand, you’ll need to consider the local taste for the overseas expansion. For instance, beauty products including skincare and haircare may be subject to different demands in new areas. This can work to your advantage – hair dye for instance is very popular in Asian countries, as there is less natural variation in hair colour. Another idea to consider is local business, and how yours will fit in. Local businesses in a different country will have more of an advantage of the local business environment, however as a foreign business, you could brand present yourself as a luxury brand and raise prices, with an exotic appeal.
Register your trademarks and name
Once branding is covered, you need to consider registering the trademark of your brand. A common misconception is that once you’ve registered at Companies House, your trademark is registered. This isn’t true, however – you must also register your name and logo with the Intellectual Property Office (IPO).
For your trademark name, avoid anything too literal or descriptive, as these can often be rejected. The name also cannot include a famous name, or part of a name of an existing brand. The best way to choose a name is usually to invent a new word, or use a portmanteau of existing words. Conveniently, the IPO has its own search engine to let you search any trademarks of the same name. In the event you find the same trademark as yours, there are two ways to get around this: you can either prepare a letter of consent to the existing trade mark, or apply to revoke the trade mark if it’s more than five years old, and is no longer in use.
Consider import & export taxes
Another things to consider is import and export tax, and how it will affect your beauty business. Currently, UK companies can can sell their goods freely to customers anywhere else in the EU without those customers having to pay additional taxes to import the goods. They can also import from anywhere else in the EU without tariffs, while other countries including Switzerland, Norway, South Africa and South Korea also have a free trade agreement with the EU. However, once Brexit is put in place, the UK will need to strike new free trade deals with these countries and the European Union.
If you’re worried about having to pay additional taxes post Brexit, there are a few business moves to consider. You could source local products to sell, including skincare, bath products and haircare, exclusively made from the UK, instead of importing from the EU. The trade shows mentioned above, would be an ideal path for networking, and making contacts with potential business partners.
The other option would be to expand the business in the EU, which comes with many benefits and drawbacks. Unless your brand is explicitly tied to the UK for whichever reason, you could move the business to prime beauty spots including Paris or Milan. This means when Brexit comes along, it will not affect your taxes. The French beauty industry is consistently booming and had €202 per capita in 2015 that it’s a prime location for your beauty business. France also offers exemplary banking facilities and financial incentives.
However, if you are exclusively based in the UK and you’re looking to avoid the effects of post Brexit, you could consider sourcing products from other areas of the world, such as Asia or America.
Expanding overseas
To expand overseas, there are many EU countries which offer low tax rates and financial incentives. Countries including Ireland, Bulgaria and Cyprus are a few locations which have the lowest tax rates in Europe.
However, for a beauty business the best European location for expansion is France. As Paris is the centre for everything fashion and beauty, you can join the luxury beauty boutiques, and online French makeup brands. It’s worth noting however that even though recruitment is straightforward in France, their labour laws are rather complex compared to other EU countries.
Having the term ‘Paris’ on your beauty business certainly gives it that exclusive appeal – and by setting up a business in France, it’s an easy way to achieve that Paris brand. Although it’s not necessary to use the term, many clothing and accessory brands want to project the French image as part of their marketing strategy – because having Paris legally in your name, makes it that slightly bit more luxurious.
For more help and advice on opening your beauty business in the UK, please contact us.