How to Start A Cosmetic Manufacturing Business
Cosmetic is any product that is meant to be rubbed, sprinkled, sprayed, introduced, applied or rub to the human body for the purpose of beautifying, cleansing, altering the appearance or promoting attractiveness.
Cosmetic manufacturing business is one of the largest industry in Nigeria that makes a lot of turnover and sales. The manner in which people purchased cosmetic in Nigeria keep increasing every now and then, meanwhile, sensitization about the need for personal hygiene and beauty is increasing as well.
The end products of cosmetic manufacturing business are Cream, lotions, toothpaste, shampoo, pomade, shaving cream, hair oils, emulsions cleansing milk, Nails polishes and Nail lacquers, powder, lipstick and lip gloss, depilatories, Hair dyes, Alcohol fragrance solutions, Deodorant or cents, Toilet Soaps etc.
Various Cosmetics are been used in every house, no house can stay in a day, without using one or two cosmetics products. Even if you refuse to use cream, you will surely use soap to bath. So, there is no way, cosmetic business will not strive because it’s an everyday useful products.
Finally, you can enter the business of Cosmetic as an importer of finished cosmetic products or as a cosmetic manufacturer.
Business Registration and Licensing
In starting your cosmetic manufacturing business, you will need to register your company name with corporate affairs commission. And, apart from registration with corporate affairs commission, you will also register with some other others bodies regulating cosmetic industry in the country, one of the bodies is Factory Act Registration. Meanwhile, you also need to License your product with Cosmetic Manufacturing License Authority, licensing your cosmetic manufacturing business, will give it the prestige it needs to be able to acquire or win the heart of various potential customers in the market. Most customers tends to look or research if a particular cosmetic products or company has been licenses or not.
Also, some documents required for applying for Cosmetic Manufacturing License are:-
- Application at Prescribed Form
- Fees Slip/ Challan
- Blue print and layout of premises
- Ownership proof or rent agreement in case of rented premises
- Nature of Business i.e. Proprietorship, partnership or private limited etc along with
- affidavit accordingly
- Detail of Technical or competent Staff
- Qualification certificate of Pharmacist or competent person along with Registration
- certificate copy under state pharmacy council of concern state
- Appointment or Joining letter of pharmacist or competent person, in case if any of
- partner or proprietor is not registered pharmacist under respective state pharmacy
- Affidavit of registered pharmacist
- List of cosmetics intend to be manufactured with formula
- List of machinery and laboratory equipments
- Site Master File etc.
However, this license is been issued by State Drug control office, which is always situated at the capital of any state in Nigeria. Although, before your cosmetic manufacturing business will be licensed, this body will inspect your business location and every other things they need to inspect and they will ensure you complied with all their requirements before issuing the license to operation as cosmetic manufacturing company in Nigeria.
Registering your Cosmetic Manufacturing Business with NAFDAC
Apart from registering with CAC and licensing your business, you will also register your cosmetic manufacturing business with NAFDAC and in registering with this body, you have to follow some certain rules and regulations.
However, you need to choose if you are registering your business as a manufacturer or as an importer. This two way of entering the business falls within the description of food or drug. NAFDAC is empowered by the law to ensure that no processed food or drug shall be manufactured in, advertised, sold, exported from or imported to or distributed in Nigeria without having NAFDAC approval. Therefore, you need to register your cosmetic business under National Agency for Food And Drug Administration and Control (NAFDAC). Your cosmetic products falls basically under Drugs. So, there are two stage in the process of registration and they are:-
- Application for approval to bring in samples – not applicable if locally manufactured
2 . Application for full registration of product – applies whether locally manufactured or
However, the key requirements for registering your business (which falls under Drugs) with NAFDAC are as follows:-
- Application is on single product basis
- Written application stating name of manufacturer and name (and brand, if applicable) of product.
- Completed NAFDAC application form (Form D-REG/001)
- Certificate of Incorporation with the Corporate Affairs Commission, if a compan
- Five (5) copies of the product dossie
- Three (3) packs of the products samples
- Notarised original copy of the duly executed Power of Attorney from the product manufacturer (imported product)
- Certificate of Manufacture issued by the competent health or regulatory authority in country of origin and authenticated by the Nigerian Mission in that country (if foreign import). Where there is no Nigerian mission, The British High Commission or an ECOWAS country Mission will authenticate.
- If contract-manufactured, Contract Manufacturing Agreement, properly executed and notarized by a Notary Public in the country of manufacture.
- Current World Health Organisation Good Manufacturing Practice Certificate for the manufacturer, authenticated by the Nigerian Mission.
- Certificate of Pharmaceutical Products (COPP) duly issued and authenticated
- Current Superintendent Pharmacists license to practice issued by the Pharmaceutical Council of Nigeria
- Premises Registration License from Pharmacists Council of Nigeria (PCN)
- Certificate of Registration of brand name with trademark registry in the Ministry of Commerce here in Nigeria.
- Letter of invitation from manufacturer to inspect factory abroad, stating full name and location of plant.
- The applicable fee payable only if documents are confirmed to be satisfactory.
Moreover, you also need to register your business for tax purpose, so as to have your Goods and services Tax Identification Number.
Processes Involve In Running and Starting a Cosmetic Manufacturing Business
When creating a cosmetics manufacturing business, how you decide to create your inventory is a very vital. You need to cognizance look at how you want to run your inventory on a daily, monthly or yearly basis.
If you want to run a small start-up cosmetic business (in-house manufacturing), note that the cost per item can be high since raw materials are bought in smaller quantities. Despite minor drawbacks like cost, you still gain complete control over your product with small scale production. This process gives Cosmetic manufacturers a great amount of flexibility and freedom without having to rely on a partner.
After the selection of manufacturing strategy, you will now focus on your product. However, as a cosmetic producer you will need to be well versed in packaging your products. You need to be creative and be able to brainstorm and get your thinking into motion.
However, you need to know that, you can as well hire a professional to train on how to produce the cosmetic products or how to run the cosmetic manufacturing business effectively. Hiring a professional to train you will definitely expose you to various standards you need to inculcate into your cosmetic manufacturing business.
After this, you need to understand the various types of cosmetic products you want to be manufacturing in your factory. Having it mind that, cosmetic manufacturing business is a huge business that involves producing of so many products as listed above.
After determining the cosmetic products, you want to be producing; then you will think of how to store those products. This is where the issue of warehouse comes in. Then, you will use these two questions to solve the issue of storage:-
- Where am I planning to store my finished products?
- How will I get the finished products to my various customers? If you can answer those questions very well, then the issue of storage will be duly solved in advance.
Meanwhile, you can also run your cosmetic manufacturing business in a small scale level by producing your cosmetic products from your house or normal small scale factory. In doing this, you will just have to produce your cosmetic products and then start marketing the products yourself via social media handles or meeting people and telling them what you are doing.
Moreover, if you are entering the cosmetic industry as an importer, you may need to take the samples of the cosmetic products you want to be importing to the country to NAFDAC for approval. Once it is approved, then, you can now starting all the process of registering with CAC, doing business plan and so on. However, Registration with NAFDAC has been buttressed above.
Marketing and Sales Strategy: – When commencing your cosmetic manufacturing business, you must determine your target market. This will help you to decide on the range of products you are going to be manufacturing. However, in choosing your market, there are some factors to be considered and they are:-
- Color choices
- Age group
- Skin undertones etc
All these will help you in determining how to carry out marketing and how and where to meet your prospective clients.
More so, in selling your cosmetic products; you will in bulk sales to cosmetic products wholesalers and as well sell to retailers. Any of the either ways, you will surely make your huge turnover.
Online Presence and Branding of your product
Having strong online presence will foster the growth of a new business; building a suitable website for your business will make your business reach large amount of potential customers. Apart from building website, you will also have on account on various social media platforms like Instagram, facebook, Twitter and son on. All these platforms will make you have a strong online presence at which customers can reach you at any given time.
You also need to also know that, cosmetic business needs a lot of branding. Apart from the originality of the products, branding will also help your business in growing and breaking even very fast within first year of entering the cosmetic industry.
In branding your cosmetic product, you will need to have a good logo design and different type of design that will represent your identity whenever your customers come across any one among your products. Since, cosmetic manufacturers produce more than one products. A particular logo must appear on all their products to show that, the product is definitely their brand.
In branding your cosmetic products, you can as well ask yourself this following questions:-
- What is the values of my brand?
- Who is the target audience I intended reaching?
- What product(s) am I planning to sell?
Apart from branding, the above questions will help you in defining your goals as well as target market.
Business Plan Preparation
In starting any business you need to have adequate plan, so as to successfully start the business. However, the best way to ensure that a detailed business plan is prepared to employ the service of a professional consultant. Business plan always serve as a guideline for owner of business in running his or her business.
The business plan contents will comprises of:-
- Executive Summary: – Here, all what is contain in your business plan will be summarized in such a way that, any investor that read it will be able to capture all what is in business in a glance. The reason for setting up your Cosmetic manufacturing business will be buttressed here. It is the duty of the professional consultant that you will hire to ensure that your executive summary appears more attractive and explanatory.
- Description of the Company:- Here your Cosmetic manufacturing business will be What the various cosmetic products will be used for, will be explained here. Also, the industry that your business belongs to will be exposed here and when investors view this, they will have a good idea what the cosmetic products are made up of.
- Market Share:- Cosmetic Manufacturing business has a very large market share in Cosmetic is a household products as well as commercial products. Moreover, the professional consultant you will hire will play a lot of noteworthy role here. They will used their professional experience in projecting your business market share.
- Organizational Setup:- Your Cosmetic manufacturing business will be well organized, due to the fact that, you will need to employ staff to work with you. And this employee will be set up in such a way that will make running of your business easy and standardized.
- Products and Services:- Here, your products composition will be explained briefly and the process of manufacturing it will also be explained, so that your potential customers can know a little about the products.
- Sales and Marketing Strategies: – The manner in which you are to sell your products and how you are to market to the general public will be expose here. There are different strategies of marketing a products. Suitable strategies for marketing your cosmetic products will be analyzed and recommended here.
- Funding: – Funding is also a vital part in running a business. This section will buttressed how you are going to fund your business. Funding your business can be through loan or through external investor funds. However, whatever will be suitable for your business will be explained here.
- Financial Projection:- This is a very import section of a business plan. In this section, how you are going to make some acquisitions and how much you will be expecting as profit for the next three years will be breakdown here. This section is one of the major reasons why you need to employ the service of professional consultant in preparing your business plan for you. For your well-prepared business plan, visit www.bullscapitalltd.com
- Appendix:– Every other information that you need but is not in the main business plan content will appear on this page.
Equipment and Machinery Required in Cosmetic Manufacturing business
In analyzing this equipment and machine, we have to categorize them based on the products we want to produce. Therefore, for the production of Lipsticks and Lip-gloss and other related cosmetic products, the equipment you will purchases are:-
- Vertical mixer
- Jacketted kettle – steam, gas or electrically heated
- Mixing vessel (stainless steel)
- Triple roller mill/Ball mill
- Moulds with refrigeration facility
- Weighing and measuring devices
For the manufacturing of creams, lotions, pastes, cleansing milks, shampoos, pomade etc, the equipment and machinery needed are:-
- Mixing and storage tanks of suitable materials.
- Heating kettle – steam, gas or electrically heated.
- Suitable agitator.
- Colloidal mill or homogeniser (wherever necessary).
- Triple roller mill (wherever necessary).
- Filling and sealing equipment.
- Weighing and measuring devices.
For manufacturing of Toilet Soaps and other related cosmetic products, the equipments you need are:-
- Kettles/pans for saponification.
- Boiler or any other suitable heating arrangement.
- Suitable stirring arrangement.
- Storage tanks or trays.
- Amalgamator/chipping machine.
- Triple roller mill.
- Pressing, stamping and embossing machine.
- Weighing and measuring devices.
For production of Powders, equipment and machinery needed are:-
- Powder mixer of suitable type provided with a dust collector.
- Perfume and colour blender.
- Sifter with sieves of suitable mesh size.
- Ball mill or suitable grinder
- Trays and scoops (stainless steel).
- Filling and sealing equipment provided with dust extractor.
- For compacts: – (i) a separate mixer, (ii) compact pressing machine.
- Weighing and measuring devices
- Storage tanks.
Therefore, different cosmetic products have their own distinct equipment and machinery needed for their production.
Funding and investing the Business
In funding your cosmetic manufacturing business, it all depends on how commercial you want to go in the business. Meanwhile, there are three type of investment in setting up cosmetic manufacturing business which are:- Inventory Investment, Fixed Capital investment and Working Capital investment. All these three investment have the right time and conditions in which they are been used.
Furthermore, in funding your business; you can either use your own personal funds (this is in the case of Small scale start-up cosmetic manufacturing business). And, if you want to run a big start-up cosmetic manufacturing business, you may not be able to raise enough funds to start the business, therefore there will be need for Bank loan or external investor’s funds.
However, in getting bank loan or investors funds, you will need a bankable business plan; business plan is very essential when acquiring loan from bank. Therefore, you need to pay attention to your business plan preparation.
Location of the Business
This type of business is located in a clean place and well sanitized place. The hygienic conditions of such place should maintained around the premises and outside premises. Meanwhile, the business factory cannot be located in a residential area or has any interconnection with residence.
More so, the location of the factory must be spacious enough to accommodate all the machinery to be used, so as to makes its installation easier for smooth manufacturing process of the products.
In a nutshell, the step by step procedure of starting a cosmetic manufacturing business includes:-
- Preparation of a Business Plan
- Choosing a Cosmetic Manufacturing business Name
- Visiting Drug Control office for discussing about all particulars
- Finalizing a premises for manufacturing, which in most cases used to be industrial area.
- Company registration or incorporation of firm
- Furnishing and setting up premises as per requirement.
- Purchasing of machinery and lab equipments
- Take NOC if required from other departments
- Preparing of file with covering letter having complete detail of firm or company
- Submitting the file to licensing authority
- If accepted and approved, a license will be issued for manufacturing of cosmetic
- Preparations for which license is applied etc.
Finally, starting a cosmetic manufacturing business is not an easy task, but in starting the business our firm (www.bullscapitalltd.com) make it easier. Starting a cosmetic manufacturing business needs the right plan and proper equipment and this we can help you put it into places or prepare your well-articulated business plan for you.
About the Writer
Olusipe Abiodun Yinka is an Audit Associate in Bulls Capital Limited. He has a National Diploma in Accounting from Abraham Adesanya Polytechnic, Ijebu-Igbo, Ogun State; as well as a Degree in Accounting from Alex Ekwueme Federal University, Ebonyi State. He is a creative copywriter and a Trendsetter. Apart from writing, Olusipe is also an entertainer.
Do you want to start Cosmetic Business today?, please call 08023200801, 08075765799, email: firstname.lastname@example.org. We will make starting you business easy. Alternatively, you may complete our request for proposal form hereunder.