This article is brought to you by the AVEENO® Skin Health Start Up Accelerator. Filled with helpful resources, this entrepreneurial hub is part of AVEENO’s commitment to creating a more diverse and inclusive industry to impact the health and beauty of all skin.
As you are developing your brand identity and your products, this is the best time to explore sources of capital—money you need to get started and stay afloat. As you get ready to launch your skincare or haircare brand, acquiring capital can sometimes be pushed off your to-do list, but fundraising really needs to be pumped to the top.
To make your dreams come true, you need capital. From your own savings and love money to grants and outside investments, let’s break down what that means for you and your business.
Personal savings. This is an obvious starting point for every entrepreneur because to breathe life into your beauty business, you need to put a crack in your piggy bank. But before withdrawing any amount, consider how much you are willing to invest and hold yourself to that amount. Create a realistic cost plan that includes perfecting your skincare or haircare line, product testing, a small batch and branding. Plus, set aside a little buffer budget, this way you won’t slow down if part of the startup goes sideways.
Love money. By the time you enter this next phase, you should have a mini-batch of products for people to experience—and for them to see just how much you believe in your brand. Love money comes from family and friends who love your products as much as you do. Before you approach your inner circle, be clear on how much money you want to raise and have your business plan polished and presentation ready. These investors will want to make sure you have established a target audience, you can run a small first production, show market value, work through your patents and trademarks, etc. and start your website.
Grants and donations. Many companies have created special grants and donations devoted to women-run, black-owned businesses. For example, Neutrogena has partnered with Johnson & Johnson Innovation to launch the Black Innovators in Skin Health QuickFire Challenge, which invites you to pitch your ideas to improve skin health for the chance to receive up to $50,000 in grant funding—click here to learn more. Investment firm, Eniac Ventures is committing to facilitate better investment and mentorship opportunities by opening up its direct lines, you can book one-on-one time by contacting nihal@eniac.vc. Collab Capital are actively supporting black innovators with the funding they often lack when looking to scale their ventures and the social resources many find difficult to tap into.
Outside investments. Now that you have generated some capital and the market has reacted well to your fabulous brand, it’s time to take it up a notch. A simple way to do that is by acquiring a loan or line of credit at your bank. Another way is through crowdfunding, this can be a fast way to gain capital and introduce your products to new markets. Lastly, you can seek out angel investors who generally donate between $50,000 and $1million. Just be sure whoever you bring on as an investor is someone you want to be in a long-term relationship with because they will be with you, impacting your business (good or bad), for years to come.
For more expert advice and business tools for entrepreneurs, visit the AVEENO® SKIN HEALTH STARTUP ACCELERATOR. Click here to learn more.