During the past year or so, the skincare industry has witnessed a giant increase in popularity and sales. Between flashy TikTok trends and the rise of skincare influencers, taking care of your skin has never been more timely. If you own a skincare business, now more than ever may be the perfect time to expand, especially with the holidays nearing. Not sure if you’re ready? If your business has been profitable, has a loyal customer base, and has more orders than you can handle, it’s probably time to scale. Before you start expanding your business, here are a few things you should know.
This is a time to identify new opportunities for your skincare business
While you might have steady traffic and sales from your current skincare line, expanding your business is the perfect way to identify new opportunities for growth. Depending on your expansion goals, it may be time to offer new products or services based on the demand from your customers.
For instance, if you initially launched your skincare business with a small product line of cleansers and moisturizers, you might consider offering serums, toners, or masks as part of your expansion. If you choose to widen your product line, make sure these new items complement your existing ones and don’t stray too far from your business’s core mission and values.
Along with offering more products, you can also think of new ways to decrease costs during your expansion. If you’re manufacturing more items, is there a way to boost your profit margin? Are there ways to decrease your customer acquisition costs? While scaling, there are many opportunities to better optimize your business’ logistics.
If you’re not sure where to start, research your competitors to look at what they’re offering and determine how you can differentiate your skincare brand. Look at what they’re doing and more importantly, what they aren’t doing to see if there are ways to strategically capitalize on that gap. This will help you determine successful strategies you can emulate and can help you better define your own business goals.
Whatever you decide to do, remember to be adaptable and be ready to pivot based on the current trends and changes in the industry. For instance, skincare has been trending on TikTok with younger generations and this platform can be used to widen your reach and audience. One viral video can make a larger impact than you might think.
It’s just as important to nurture your current customers
While targeting new customers and expanding your reach is important, you should also take time to focus on your current customer base when growing your skincare business. These are the people who made your business successful enough to expand in the first place, so make sure to capitalize on their trust and loyalty. In fact, the probability of selling to an existing customer is between 60 – 70%, while the probability of selling to a new customer is only between 5 – 20%, according to SEMRush. If that’s not enough to convince you to take care of your current customers, I don’t know what is!
To reward your existing customers for their support, consider creating a loyalty program to boost sales and give them more incentive to come back. While acquiring new customers is typically expensive, you can also use your existing customers to help with this process by utilizing a referral program. This is a great form of word-of-mouth marketing and can give your business a sense of trust and authority to new audiences that are more likely to convert. Once you know who your current and repeat customers are, look at their demographics and focus your sales and marketing efforts on them.
Along with creating programs to reward your customers, you should also focus on delivering strong customer service and a positive customer experience as well. As a smaller business, this is where you can stand out compared to larger skincare brands. Try to engage your customers and personalize their experience to strengthen their relationship with you.
If there are any difficult situations or issues, you should do your best to amicably resolve them for unsatisfied customers. This could be offering a discount or complimentary product for any problems or product defects, or just being empathetic about their concerns. According to HubSpot Research, 93% of customers are likely to make repeat purchases with companies that offer excellent customer service; clearly, this aspect of your business can make a huge difference in your overall success and growth.
You’ll need to secure funding for your skincare business
Depending on what your expansion goals are, growing your skincare business can be expensive. For instance, if you’re opening a second location, hiring more team members, or purchasing new equipment there will be a lot of up-front costs you’ll need funding for. One of the most popular financing options for businesses is an SBA loan, which is a loan guaranteed and approved by the Small Business Administration (SBA) and offered through partnering lenders. These loans can be used for most business purposes, like growth and expansion, and have options for smaller and larger borrowing needs. Just keep in mind, the process can be lengthy and there are minimum credit score requirements.
Alternatively, you can also leverage your home’s equity as another financing option if you’re a homeowner. And to be clear, I’m not recommending that everyone DO this–it’s simply an option for some people. Although unconventional, this loan option gives you the money in one lump sum payment and allows you to use the money for any purpose, meaning you can immediately start tackling your expansion goals. It also has a lower interest rate than a personal loan or credit card, making it a wise funding choice if you’re unable to qualify for other business loans.
Hiring a strong team is key
Although it’s easy to want to do everything yourself when you start a skincare business, this becomes unrealistic once you start to scale. Expanding your business means you need a bigger team, and hiring the right people can make all the difference when determining how successful your growth will be. Especially if you’re receiving more business than you can handle, you definitely need to hire more employees.
Hiring people dedicated to your company’s success will ensure continued growth and innovation, and will allow you to focus less on the day-to-day tasks and more on logistics and strategies. With more assistance, you can delegate tasks to ease up your schedule and relieve some stress. When choosing new staff, hire people with different strengths and skills to assist in achieving your expansion goals. Your business will be much more efficient, and your weaker areas will be covered so you can focus on what you do best.
Expanding your skincare business can seem intimidating, but as long as you take advantage of new opportunities for growth and reward your existing customers, you’ll be set up for success.