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If you don’t plan and track your skincare business budget properly, you're setting yourself up for failure.
When we developed our strategy pack for artisanal skincare brands, we saw a lot of business owners struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial sales.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your skincare brand's finances around and set you on the path to success!
Get the budget tracker tailored for skincare brands
Most skincare brand founders don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for skincare brands
Here is an example of a (very) detailed budget for an artisanal skincare brand, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for production and office space | $3,000 | $36,000 |
| Electricity | Power consumption for production equipment | $500 | $6,000 |
| Water | Water usage for production and cleaning | $150 | $1,800 |
| Internet & Phone | Internet service and business phone | $100 | $1,200 |
| Waste Removal | Garbage and recycling services | $100 | $1,200 |
| Insurance | Property and liability insurance | $400 | $4,800 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Production Manager | 1 | $4,000 | $4,000 | $48,000 |
| Skincare Formulator | 1 | $3,500 | $3,500 | $42,000 |
| Production Staff | 3 | $2,500 | $7,500 | $90,000 |
| Marketing Specialist | 1 | $3,000 | $3,000 | $36,000 |
| Customer Service | 2 | $2,000 | $4,000 | $48,000 |
| Office Manager | 1 | $3,000 | $3,000 | $36,000 |
3. Raw Materials & Supplies
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Essential Oils | High-quality essential oils for formulations | $2,000 | $24,000 |
| Carrier Oils | Base oils like jojoba, almond, etc. | $1,500 | $18,000 |
| Botanical Extracts | Natural extracts for skincare benefits | $1,000 | $12,000 |
| Packaging | Bottles, jars, labels, etc. | $2,500 | $30,000 |
| Lab Supplies | Beakers, pipettes, safety equipment | $300 | $3,600 |
| Cleaning Supplies | Sanitizers, detergents, etc. | $200 | $2,400 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $500 | $6,000 |
| Social Media Management | Managing social media accounts | $600 | $7,200 |
| Influencer Collaborations | Partnerships with beauty influencers | $1,000 | $12,000 |
| Website Maintenance | Hosting, domain, updates | $150 | $1,800 |
| Email Marketing | Email campaigns and newsletters | $200 | $2,400 |
| Promotional Events | Special events and promotions | $300 | $3,600 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of production equipment | $300 | $3,600 |
| Uniforms | Staff uniforms and safety gear | $100 | $1,200 |
| Licenses & Permits | Health permits, business licenses, etc. | $150 | $1,800 |
| POS System | Point of Sale software and hardware | $100 | $1,200 |
| Contingency Fund | Emergency repairs and unexpected costs | $400 | $4,800 |
| Office Supplies | Stationery, pens, printer ink, etc. | $100 | $1,200 |
| Staff Training | Training programs and materials | $200 | $2,400 |
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What are the biggest expenses for an artisanal skincare brand?
Be mindful of these significant expenses. Here are five major costs every artisanal skincare brand owner needs to consider, along with some tips on how to manage them effectively.
- Raw material costsHigh-quality ingredients are essential for your products, but they can be costly. Prices can vary based on seasonality, supply chain issues, and the quality of the materials. To keep these costs under control, focus on bulk purchasing, negotiate better prices with suppliers, and minimize waste. It's easy to overspend by buying too much or opting for rare ingredients that don’t significantly enhance your products.
- Labor costsYour team is crucial to your brand's success, but paying for their wages, benefits, and training can be expensive. This cost is always high because you need skilled employees to ensure product quality and customer satisfaction. You can optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, be careful not to underpay or overwork your team, as this can lead to high turnover and poor product quality.
- Rent and utilities of your production spacePrime locations for your production facility or retail space come with high rent, but they can attract more customers and provide a better working environment. Utilities like electricity, water, and heating are essential but can add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient appliances and lighting. Overspending often happens when you choose a location that's too large or too luxurious for your needs.
- MarketingGetting the word out about your skincare brand is crucial, but advertising can be expensive, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we recommend in our guide. Overspending can occur if you invest in flashy campaigns without a clear return on investment.
- Packaging and equipment costsThis includes everything from product packaging to manufacturing equipment. These are expensive because quality packaging and reliable equipment are crucial for product integrity and customer satisfaction. Optimize by investing in durable, eco-friendly packaging and maintaining your equipment regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets or overly elaborate packaging that doesn’t add enough value.
How to spend less with your artisanal skincare brand?
Here are practical tips to help you, as an artisanal skincare brand owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Raw Materials | Partner with local suppliers for high-quality, organic ingredients at competitive prices. |
| Labor Costs | Implement a scheduling software to optimize staff hours and reduce overtime. |
| Utilities | Install energy-efficient lighting and equipment in your production facility. |
| Marketing | Run social media contests for your skincare brand and collaborate with beauty influencers for free exposure. |
| Packaging | Use cost-effective, eco-friendly packaging and offer discounts for customers who return containers for recycling. |
| Equipment Maintenance | Set up a maintenance log for regular equipment checks and servicing. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a less expensive location. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Product Development | Conduct in-house testing and use customer feedback to refine products, reducing the need for costly external testing. |
| POS System | Choose a POS system that offers essential features with low transaction fees and integrates with other systems. |
| Staff Training | Conduct regular in-house training sessions and use free online resources. |
| Waste Management | Implement a waste tracking system to minimize waste and recycle excess materials. |
| Technology | Invest in multi-functional production equipment and utilize management software for inventory and orders. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital order systems. |
| Inventory Management | Use inventory management software to track stock levels and reduce spoilage. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan delivery routes to maximize efficiency and reduce fuel costs. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital order systems. |
| Inventory Management | Use inventory management software to track stock levels and reduce spoilage. |
| Pest Control | Schedule monthly pest control services and maintain cleanliness standards to prevent infestations. |
| Product Testing | Utilize in-house testing and customer feedback to refine products, reducing the need for costly external testing. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
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Expenses that are just useless for an artisanal skincare brand
Yes, some expenses for your artisanal skincare brand are just unnecessary. They don't contribute to increasing revenue or enhancing customer satisfaction.
| Skincare Brand Expense | Reason It's Useless |
|---|---|
| Luxurious Packaging | Overly extravagant packaging doesn't necessarily attract more customers and can be a drain on the budget. |
| Premium Ingredients | Unless you are targeting a high-end market, most customers are satisfied with high-quality, mid-range ingredients. |
| Excessive Product Lines | A large product range increases inventory costs and leads to more waste. |
| High-End Manufacturing Equipment | Top-of-the-line manufacturing equipment is not always necessary and can be cost-prohibitive. |
| Paper Advertising | Traditional paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your skincare brand. |
| Multiple Packaging Designs | Having various packaging designs increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving product quality or customer service. |
| Premium Subscription Services | Expensive subscriptions for industry magazines or databases often go unnoticed by customers. |
| Exclusive Ingredients | Using rare ingredients can inflate costs and complicate supply chains. |
| Costly Office Furniture | High-end office furniture is not always appreciated by employees and can be a significant expense. |
| Custom Printed Labels | Personalized labels are a minor detail that most customers overlook, and they can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water Brands | Most customers are content with filtered tap water, making expensive bottled water unnecessary. |
| Extra Delivery Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Office Renovations | Constantly updating office decor and layout can be costly and disrupt operations. |
| Expensive Office Decor | Elaborate office decor is often ignored by employees and adds to the cost. |
| High-End Office Supplies | Luxury office supplies are prone to damage and expensive to replace, often going unnoticed by employees. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Branding Designs | Frequently redesigning branding materials is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense.Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Event Equipment | Specialized event equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your artisanal skincare brand!
Managing a budget for an artisanal skincare brand when funds are tight can feel overwhelming. It's like being trapped in a cycle where any unexpected expense can set you back significantly.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always scrambling to cover costs. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, pinching pennies and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more resources to invest in your brand.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of artisanal skincare brands just like yours. Get them now!
Make your artisanal skincare brand more profitable
We have studied the strategies of the best skincare brands in the world. All their tactics are explained in our pack!
