How to Leverage the Latest Beauty& Wellness Trend Data
Indie brands are facing significant headwinds. With competition, inflation, and supply chain pressures, what resources do you rely on to reroute and determine the best course of action for your brand?
Insight to action
As the first wave of beauty trends hit the market this year, new data is coming in hot. Between generous amounts of past and forward-looking trend data, figuring out your next steps is a bit intimidating.
As a founder, you’ve likely relied on your own instincts to decide when and how to move your company forward. As a visionary, this “gut feeling” is not only expected, but often the driving force behind your success.
But as a CEO, there’s another way to manage these big decisions. Your gut will keep you consistent, but your earned knowledge and experience have keyed you into the best way to move forward. Reacting to latest trend data requires a deep understanding of your business strategies and the assumptions behind driving sales growth.
Moving from insight to action requires analysis of how your business model leverages cash and profit — and where that balance may be at risk by competition and changing demand. With the fast-paced, trendy, consumer-driven indie beauty market, nailing down the fundamentals for good financial planning are more important than ever.
Your financial planning guide
Keeping up with trends and moving towards pre-action rather than reaction starts with an understanding of your finances. While financial planning can feel complex, here are a few steps to help you quickly review your business:
1|First, pay attention to conditions surrounding demand for your product. Product demand is a key element in managing future sales and safeguarding working capital. It's the starting point for many decisions surrounding production and inventory plans. When you predict where demand fits in with your sales and financial forecasts, you begin to see a larger picture of business health.
2|Dive into your revenue streams and understand the balance between pricing and volume. Beauty consumers are spending at unprecedented rates and appear to have adjusted to full pricing. However, the marketplace is still volatile, and prices can greatly impact sales if you’re not paying attention. Monitor the balance between pricing and volume — when you see a negative shift, it’s time to make a change.
3|Revisit the unit economics driving your profits. Supply chain disruptions, as well as increased marketing costs, can put pressure on profits. Know the revenue and costs of each of your product lines to shift your resources to the most profitable lines in case of drops in profit.
4|Finally, think about your contingency plans. When something comes your way, whether good or bad, you need to be financially prepared. Assess credit lines and other financing to leverage new opportunities and bumps in the road. Continue to gauge your company’s overall financial health, documenting both your long-term and short-term market assumptions and their impact on working capital.
Good decisions are based on good assumptions
When you recognize shifts and prepare for them ahead of time, you set yourself up for business success. Implementing fundamental financial planning tools, such as forward-looking forecasts and key operating metrics, lets you quickly identify and respond to your impacted business model. And, in the face of such a fast-paced market, planning is priority.
The good news? Despite underlying struggles, industry specialists continue to report strong trends in the beauty and wellness sector. Being proactive and diving into your business performance will allow you to protect and prioritize in case of negative shifts, while also preparing you to take advantage of the positive ones. Make sure you have the right tools in place to accurately pinpoint where your business is and where it’s going. You may be surprised at the opportunities you find in the process!
Do you need assistance with your budgeting or planning? Get in touch! We offer programs that fit your business needs and stage of growth. For more information, reach out to us at info@thielstyle.com.