A skincare business plan sets out what you'll make, which rules apply to it, who will buy it at what price, how you'll make and record each batch, and the first year month by month. Two things set skincare apart in a plan: whether your products contain water, because water-based products need preservative and stability testing before you sell them, and the record-keeping the federal cosmetics law (MoCRA) asks even of small businesses. In the example below, a maker of whipped body butter, which has no water in it, reaches 150 retail and 300 wholesale jars a month by month 11, makes a monthly profit from month 3, and ends the year about $14,600 ahead on top of paying for the making. Below is a description example, each part of the plan, the projection, and a free template.
The short version
- Describe the business in a paragraph: the products, the customers, the workspace, the goals.
- Decide whether your first products contain water; it decides your testing budget.
- Cost each jar all in, and price for retail and wholesale.
- Put the rules in the plan: labels, safety records, reaction reports.
- Plan batch records and lot codes from the first batch.
- Project 12 months with sales ramping up.
- TaroStack costs every batch, keeps its lots and records, and traces any jar. More below.
Part 1: the business description
Hoʻola Botanicals, a made-up skincare maker I use in these examples, is starting out. Its description reads:
Hoʻola Botanicals makes whipped body butters with shea, mango butter and island-grown botanicals, by hand in small batches in a dedicated workspace on Oʻahu. We sell 4 oz jars at two Saturday markets and online, and wholesale to gift shops, spas and boutiques. Our first products contain no water, so they need no preservative. Every jar carries a lot code. In the first year we plan to be in 25 shops and spas and to sell 450 jars a month by month 11.
Part 2: what a jar costs
The costs come from cosmetic business startup cost. For the plan, the overhead share moves to the monthly costs, so the variable cost per jar is the rest:
| Per 4 oz jar | Cost |
|---|---|
| Shea and mango butters, coconut oil | $1.95 |
| Lavender oil | $0.60 |
| Jar, lid and label | $1.10 |
| Labor | $1.00 |
| Variable cost | $4.65 |
A retail jar also pays a 3% card fee, so its variable cost is $5.19. Margins across a range of products are compared in cosmetic business profit margin.
Part 3: customers and prices
| Channel | Price | Variable cost | Contribution | Jars a month at full speed |
|---|---|---|---|---|
| Retail, markets and online | $18.00 | $5.19 | $12.81 | 150 |
| Wholesale to shops and spas | $10.50 | $4.65 | $5.85 | 300 |
Three hundred wholesale jars a month is about 25 shops and spas taking a dozen each. A shop selling at about $18 sits beside your own retail price.
Part 4: the rules, and testing
| What | In the plan |
|---|---|
| Cosmetic or drug | Claims stay on how it feels and smells; "heals eczema" makes it a drug |
| Labels | Identity, net weight, ingredients in order, your business name and place, a contact for reactions |
| MoCRA | Small businesses skip registration and listing, but keep safety records and report serious reactions |
| Testing | None for a water-free butter; preservative and stability testing, about $1,200, before a lotion |
| Records | A batch record and lot code for every batch |
What still applies to a small business under MoCRA is in MoCRA for small businesses, and what goes on the label in cosmetic labeling requirements. This is general information, not legal advice.
Part 5: the first year, month by month
Sales start at 15% of full speed and reach 100% by month 11, against $870 of fixed costs a month: workspace rent, insurance, market booths, marketing and samples, the website, software and card fees.
| Month | Retail jars | Wholesale jars | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|
| 1 | 23 | 45 | $887 | −$312 | −$312 |
| 2 | 30 | 60 | $1,170 | −$135 | −$447 |
| 3 | 38 | 75 | $1,472 | $56 | −$391 |
| 4 | 45 | 90 | $1,755 | $233 | −$158 |
| 5 | 60 | 120 | $2,340 | $601 | $442 |
| 6 | 75 | 150 | $2,925 | $968 | $1,411 |
| 7 | 90 | 180 | $3,510 | $1,336 | $2,746 |
| 8 | 105 | 210 | $4,095 | $1,704 | $4,450 |
| 9 | 120 | 240 | $4,680 | $2,071 | $6,521 |
| 10 | 135 | 270 | $5,265 | $2,439 | $8,960 |
| 11 | 150 | 300 | $5,850 | $2,807 | $11,767 |
| 12 | 150 | 300 | $5,850 | $2,807 | $14,573 |
The cash is lowest in month 2, about $450 down, well inside $2,000 of working cash. The plan's assumption most worth testing is the 25 shops. And adding a lotion in year two means a preservative, testing before the first sale, and a shorter shelf life to manage.
Part 6: the startup budget
| Item | Example |
|---|---|
| Formulation and small test batches | $400 |
| Safety review by a cosmetic chemist | $500 |
| Ingredients for the first run | $900 |
| Jars, lids and labels, first 1,000 | $1,100 |
| Label design, with ingredient names | $500 |
| Scale, mixer, thermometers, pots, filling tools | $700 |
| Business license and any state registration | $200 |
| Website and product photos | $600 |
| Market tent, table and display | $300 |
| Barcodes from GS1, if selling to stores | $250 |
| Working cash | $2,000 |
| Total to start | $7,450 |
Insurance is paid monthly in this plan, so it's in the fixed costs rather than here.
Get the template
Download the skincare business plan template. Type your products with their price, variable cost and monthly volume at full speed, your fixed costs and startup budget, and how fast shops will come on; it works out each month's sales, profit and cash, the first month with a profit and the lowest cash point. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The plan's $4.65 jar and its batch records start tidy. Then there are six scents, shea from two suppliers, lavender oil by the lot, and twenty shops. The cost per jar is from the first batch, the notebook says "shea" but not which lot, and when a spa calls about a client's reaction, finding the batch and who else has it takes an evening while MoCRA's clock runs.
How TaroStack does it
TaroStack keeps a skincare line's batches, lots, costs and records together.
Every batch, costed and recorded. Each product is a recipe with versions, so a reformulation is recorded as a new version. Record a batch and TaroStack takes each ingredient from the lot used, notes it on the batch, puts the jars into a lot with its own code and date, and costs it from what you paid, divided by what came out good. Batch record forms carry your own fields, like temperatures and sign-off, with limits that flag a reading outside them.
Any jar, traced. One report walks any lot to the shops and customers who got it and back to the ingredient lots inside, with what's still on your shelves, so a reaction report leads to its batch in minutes. Lot labels print with the lot code for every jar.
And the plan, checked. Each shop is a customer with its orders. Margins are reported by product and by customer on what each jar actually cost, so the plan's $5.85 a wholesale jar becomes a number you can see every month.
| The plan's line | In the spreadsheet | In TaroStack |
|---|---|---|
| Cost per jar | $4.65, from the first batch | Every batch, at what you paid |
| Which shea went in | "Shea" | The supplier's lot, on the batch |
| Who has this batch | Search the orders | One report, lot to customer |
| Wholesale contribution | $5.85, assumed | Margins by customer |
Lots, lot labels, recalls, recipes with versions, batches and batch records 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.