Design Fun
OPPORTUNITIES
The beauty industry has learned from the lockdowns and other challenges of the past two years.
First, we’ve learned about the consumer’s willingness and, in fact, embrace of online purchases. This is not just typical e-commerce offerings; instead, beauty consultants and advisers have encouraged the transition toward web-based shopping and social selling (buying from someone that is representing the brand).
When our client came to us, we jumped on the opportunity to take advantage of this in unique and authentic ways.
CHALLENGES
One of the major challenges that keeps beauty product makers and sellers up at night is the performance of their supply chain. It was challenging enough to get items before the pandemic and is even more so now.
Even with increased lead times people are incorporating into their orders, there is less assurance of something showing up on time or, in fact, at all. Having multiple potential sources of supply is helpful but presents its own quality assurance and consistency concerns. It also requires securing rights to formulations and production methods in advance.
LOOKING FORWARD
For an early-stage beauty or consumer-goods company seeking growth capital in 2022, the best advice is to identify the likely “finish line” and try to anticipate the most impactful steps or inflection points between here and there.
You will organize and operate your company differently, for instance, if you are building to hold instead of building to sell. It is critical to build an authentic, passionate, and loyal customer base. It is acceptable if it is small or a niche community; capital providers see a lot of value and opportunity in that. Building barriers to competition, including using celebrity product lines or brand ambassadors, is a big plus.
Assemble a strong management team because that is a large part of what a capital provider is evaluating.
Finally, it is important to set things up right from the beginning. The money spent now will reap multiples later and shows a level of seriousness and professionalism that can set you apart.
