Lip Gloss Business Plan, With a 12-Month Projection

A lip gloss business plan sets out the glosses you'll make and who buys them, what a tube costs and sells for, the rules for what goes on lips, and the first year month by month. A tube of gloss is under a dollar of base, color and flavor, and the tube and wand cost about as much again; the price pays for the marketing, because a gloss brand lives on people seeing the color. The rule that catches new makers is color: every color additive in a cosmetic must be approved for its use, and a mica or glitter approved for the skin isn't automatically approved for lips. In the example below, a maker in Nashville sells tubes direct and to boutiques, gift sets and lip oils, makes a profit from month 2, and ends the year about $23,300 ahead on $44,900 of sales, after paying $20 an hour for the filling. Below is a description example, each part of the plan, the colors and the rules, the projection, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the shades, where you sell, the workspace, the goals.
• Cost a tube with your time in it: base, color, flavor, tube and wand, label, filling, fees.
• Price direct, boutique and gift sets separately; a lip oil roller widens the range cheaply.
• Use only colors approved for lips; "cosmetic grade" on a mica or glitter isn't the same thing.
• MoCRA's small-business exemption doesn't cover safety records or reporting reactions.
• Marketing is the biggest fixed cost; samples and photos sell shades.
• TaroStack keeps shades, pigment lots and every batch together. More below.

Part 1: the business description

Honeysuckle Lip Co., a made-up lip gloss maker in Nashville, Tennessee, I use in these examples, writes:

Honeysuckle Lip Co. makes lip gloss in twelve shades and lip oils in small batches, sold online, at markets, and wholesale to boutiques and salons. Every tube carries a batch code and a way to reach us. In our first year we plan to supply 20 boutiques.

Part 2: what a tube costs

A 10 ml tube takes 10 ml of gloss base at 6 cents a milliliter, plus micas and a flavor oil. The base is warmed, colored, and filled by syringe, about 90 seconds a tube in a batch. The tube and wand cost almost as much as the gloss, so they're in the cost from the start; how to cost packaging properly is in packaging cost per unit.

Part 3: customers and prices

A boutique tube leaves $4.95, less than half a direct one, but a boutique restocks without marketing and puts the shades where customers can try them. The gift set is the holiday line. How the margins compare with other cosmetics is in cosmetic business profit margin, and how to record each batch with its lots is in cosmetic batch record template.

Part 4: the colors and the rules

All color additives used in cosmetics must be approved by FDA, and approval is for a use: a color approved for "externally applied" cosmetics may not be used on the lips unless its regulation says so (FDA). Some micas and glitters sold for crafts or soap aren't approved for lip use at all; holographic glitters, plastic film bonded to aluminum, are an example FDA gives of a combination that may not be approved. So the plan buys micas and pigments from suppliers who state which uses each is approved for, keeps that sheet for every color, and keeps each pigment's lot number on the batch. Under MoCRA, a small business is excused from facility registration and product listing but not from reporting serious reactions or keeping safety records, and labels need a US address, phone number or website for reactions; what counts as small is in MoCRA for small businesses. This is general information, not legal advice.

Part 5: the first year, month by month

Fixed costs are $925 a month: a studio share ($150), market fees ($150), marketing, ads and samples ($500), insurance ($50), the website and online shop ($40), and software and card fees ($35). Sales start at 15% of full speed and reach it by month 11:

The year's sales are $44,855 and the profit $23,289, on top of $20 an hour for the filling. If the marketing doesn't bring direct customers, boutiques carry the plan at a lower margin a tube, so the wholesale price is the one to defend.

Part 6: the startup budget

Get the template

Download the lip gloss business plan workbook. Four sheets: your products with price, variable cost and monthly volume at full speed; the year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Twelve shades from twenty micas and pigments, each with its supplier's approval sheet and lot number, tubes and wands by the thousand, and 20 boutiques reordering their best sellers. When a customer writes about a reaction, a notebook can't say which lot of red mica was in that tube, or who else got tubes from the batch.

How TaroStack does it

TaroStack keeps the shades, the pigment lots and the batches together.

Shades as recipes. Each shade is a recipe with versions, every mica and pigment by weight, and units convert: gloss base bought by the kilo, weighed by the gram. A new mica in a shade is a new version, and every batch records which one it was made to.

Batches with their lots. Recording a batch takes the base, pigments, tubes and labels off stock from the lots used, at what you paid, and notes the lots automatically. One report goes from a tube's batch code to its pigment lots and every customer who got tubes from it.

And the boutiques' orders. Boutique reorders are sales orders that show whether the shades are on the shelf while you're still typing, the reorder list works in days of cover so wands arrive in time, and margins are reported by product and by customer.

Recipes, batches, lots, recalls and margins by product and customer are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is a lip gloss business profitable?

It can be. In the example, a maker selling tubes direct and to boutiques, gift sets and lip oils ends the first year about $23,300 ahead on $44,900 of sales, with $20 an hour paid for the filling.

How much does it cost to start a lip gloss business?

In the example, $4,580 with first ingredients and tubes, filling tools, a scale, label design, a safety review, photos, a market display, a website and $1,500 of working cash.

How much does it cost to make a tube of lip gloss?

In the example, 75 cents of base, mica and flavor, and $2.79 in all sold direct, with the tube and wand, label, filling time and fees.

Can I use any mica in lip gloss?

No. Color additives must be approved by FDA for their use, and a color approved for externally applied cosmetics can't go on the lips unless its regulation allows it. Buy from suppliers who state each color's approved uses.