Nigeria is ostensibly and indeed the largest market in Africa. The population of the country is still on the increase. There are still pockets of unsatisfied demands in many areas of our lives and no producer is willing to invest in certain areas of the economy and that is why importers are having a field day in Nigeria. Makeup business is our focus.
Understanding Makeup Business
Makeup which is in the cosmetic or beauty industry is thriving as the women folk who are mainly users of makeup still believe they are not beautiful until they apply make up.
To start a makeup business in Nigeria, it is not as difficult as some writers would make us to believe. As a matter of fact, as an individual you can start makeup business anywhere you find yourself in the country. Nothing should hinder you from starting a makeup business so far you have the passion for it.
The good thing about this business is that you do not necessarily require a huge amount of capital before you go into the makeup business. With as low as ₦10,000, you can start this business in Nigeria. Just a small amount of money is needed – that is if you are struggling to raise capital before embarking on the project. In this write up, I will take you step by step on how to go into this business and contribute to the economic development of Nigeria.
Steps to starting a makeup business
1. Target Market
No business can be all things to all people or can attack and effectively satisfy a broad market. We must define the market boundaries within which we want to operate and tailor our marketing programmes for each target market.
You should segment your market into identifiable groups of the female folk. For example, young, middle class and the aged.
Market segmentation is the process of identifying and dividing a total heterogeneous market for a product into several sub-groups of buyers with distinct buying desires or requirements and any sub-group may be selected as a market target to be reached with distinct marketing mix – product, price, promotion and distribution. In our case here – makeup. Makeup products can be divided into mainly six product lines:
- Lip gloss
- Lip stick
- Eye shadow
2. Conduct a survey
This may be a formal and/or informal interaction with potential buyers to have an idea if the target market is going to be profitable and how to plan to attack the markets you are going to target. Equally important is to find out whether your product will pass the requirements of the regulatory agency, NAFDAC.
3. The product
You must not only choose any and/or all the products where your experience lie but more importantly, the product that are likely to have adequate demand. Therefore the product selected to be produced must go through the process of new product development sequence, i.e.
- Availability of adequate demand
- Can the company make adequate profit?
- Is the market large enough – for sustainable growth
- Any legal restrictions, can the makeup pass NAFDAC test?
- Is adequate management time available?
- Any environmental/social standards to be met, e.g. SON
- Resource implication – cash, equipment and expertise availability
4. Location decision
Any location is good so far it has access roads, power supply, proximity to the market and adequate security.
5. Business plan
A business plan for a small business enterprise can be seen as both an entrepreneur’s business ‘resume’ and its growth strategy. Since investors and venture capitalists usually want to consider investing on the basis of business plan, a small business enterprise should document its business objectives and directions. Business plans perform the following managerial functions for a small business enterprise:-
- It assists the entrepreneur crystallizes and direct his business ideas
- It can help the entrepreneur set goals and objectives, strategies and control measures.
- It can act as a means of attracting any form of funding for the business
- It can convince capitalists and other investors that the entrepreneur has isolated some beneficial growth business opportunities in all aspects possible
6. Business strategy
The ultimate measure of the success of any business venture is whether or not it generates profit. Business analysis required at this stage is to estimate the new product viability in three areas:
- Margins, profits, return on investment and cash flow
7. Marketing strategy development
Aspects covered by this would include;
- Preliminary marketing objectives – what you want to achieve
- Decisions on the possible market targets – the market to target
- Product positioning strategies and branding
- Preliminary marketing mix decisions
- Preliminary budget estimates
8. Product development
If business analysis points to a favourable decision, the next major step is product development. Once a physical product – for example, a prototype – has been developed, further testing, both technical and consumer, should be carried out.
It is at this stage also that the new product idea is translated into a technically and commercially feasible product. The new product is manufactured in small quantities to allow for test marketing.
9. Market testing and Promotion
The product should be tested among friends to find out their reaction and beyond that, to sample of people who use makeup. The following promotional tools should be used to generate publicity.
- Events Marketing: Event marketing consists of marketing activities undertaken by organisations to achieve a measurable level of product exposure during a special event organised by the organisation or others. Example is large organisation annual conference.
- Social media: The use of Facebook and Instagram to generate traffic cannot be over emphasized. You should advertise in Facebook and Instagram, and invite your friends to like your page.. You should also form groups
- You should try to join groups such as beauty groups, hairdressing groups, try to obtain the co-operation of the group executives. (It is assumed the entrepreneur is a woman)
- Demonstration – you can organize product demonstration in conjunction with others or during a trade fair.
10. Create a brand name and a memorable logo.
The purpose is to stand your brand out from competitors and to give the brand an identifiable name
If the test market is successful and the result positive, then launch the makeup business commercially.
**This is just a guide, to obtain the amount of investment and the product line to choose in a makeup business, a comprehensive research has to be conducted.