The majority of people who start a soap business started their business with a hobby. They liked to make homemade soap for family and friends.
If you’re ready to make soap as a business, you’ve got to do your best.
Here’s some business advice – you’ll need to focus on the business end when you start selling. Soap makers wish they could spend all their time making soap, but would have to spend most of their time on ways to sell soap.
Why You Should Consider Starting a Soap BusinessMaking soap is fun. You can be creative with molds, ingredients, scents and colors. You can start your soap business from home. It is not expensive to start making handmade soap. There are numerous soap formulas that you can customize.
How Much Does It Cost To Start Your Soap Business?
Many soap makers start small from home, with a minimal product line at a cost of about $1,000. You will probably need some basic equipment for a minor procedure, such as a microwave, blender and mixing kettle. You can save money with equipment you already have.
Soap can be made in two ways: cold process or hot process. The basics are the same for both: you mix an alkali with fats or oils. As it sounds, the hot process cooks the soap, making it easier to add scents and colors. Most soap companies use that process.
You need better equipment to make bigger batches. Expect to spend from $14,000 to $28,000 to start a soap business. That number varies depending on whether you can start from home or need to rent/buy space.
Starting a Soap Business in 20 Easy Steps
1. Investigate the competition
There are many other soap makers in the business already. Before starting your own soap business, you need to know who they are, what they make and where they sell.
Also keep in mind the competition you will get from the manufacturers who make commercial soaps for the major retail chains. Recognize that people can buy soap very cheaply. How does yours get so special that they spend more to get it?
2. Pick a Niche
Choosing your niche and knowing your target market are closely linked. It’s important to realize that just because you absolutely love a particular soap you make, doesn’t mean there’s a market out there for you.
Today, small businesses specializing in making homemade soaps focus on using natural ingredients, which is exactly what consumers want. To your natural soaps you can add tweaks in the manufacturing process that make your handmade soap unique – such as embossing, adding specific herbs, mixing essential oils or coconut oil.
3. Know your target market
Will you be selling to local store owners or will you do a large part of your business in online stores?
Most businesses, not just soap making, carefully consider the demographics of their buyers. To become a successful soap maker, you have to do a combination of both: selling locally and through an online store on the Internet.
4. Name and Brand Your Business
Make sure that the name you adopt isn’t already in use, or very similar to another company that makes homemade soap.
Also, be careful not to limit yourself as your business grows, because of the name you have chosen. For example, “Linda’s Lavender Luxury Bars” does not allow Linda to expand into other fragrances.
Your logo that you design is extremely important. It will most likely be stamped or printed on your shipping materials and packaging. It should be easily recognizable as a consistent brand with a distinct style and color.
5. Make a soap making business plan
Every profitable business has a plan with all the necessary features:
Mission Statement – Why the company was started.
Executive Summary – Who’s who in management.
Entity Type – Company Structure
Sales Channel Development
Group membership – such as the Handmade Soap and Cosmetics Guild.
Management plan for expansion offset by cash flow
Business plan for expansion by reaching new customers.
6. Look to Small Business Grants
There are several sources for potential grants:
United States Chamber of Commerce
Small Business Administration
Amazon – Amazon recently launched a program called Black Business Accelerator for their merchants. There are other programs for those who market handmade crafts.
7. Form a legal entity and register your company
The most common for soap making is the Limited Liability Company or LLC. That’s because an LLC will protect your personal assets.
Other choices are a partnership or a company.
8. Open a Business Bank Account
You need a business bank account and credit card separate from your personal bank account and credit card.
9. Look in licenses and permits
You need the basic stuff like an employer identification number (EIN) to file sales tax. You also need an Exploitation Permit. Before you start making soap in your home, make sure you comply with local zoning laws.
Since you are selling something that people will use on their bodies, you should pay attention to the cosmetics regulations in your country, which describe what you must do to meet the standards of the Consumer Product Safety Commission.
At the federal level, you must comply with FDA regulations. All ingredients must be listed on the label.
10. Buy the necessary equipment
Before spending money on small equipment, consider being bolder. You’re in this, right? Save your blender for smoothies and buy commercial equipment:
Large metal bowls
Large metal mixing kettles
Personal equipment such as safety glasses (you will be working with an alkali and hot materials), spoons, measuring cups, thermometers, gloves and scales.
11. Find Ingredient Suppliers
Many soap makers say this is one of the most critical and difficult steps. But let’s face it – if you don’t have the supplies, you can’t make the soap.You will need oils, such as fragrance oils/essential oils, and (depending on your recipes) olive oil, coconut oil, and/or shea butter. Soap base – you can choose to buy this ready-made. already for soap use or find other items that can be used as molds for soap. Fragrances and colors (pigments) Packaging material for shipping and/or display
12. Plan Your Accounting System
You need an easy way to track income and expenses. Some suggestions are Quick books, Intuit or Zoho products.
13. Design your packaging
On your website and social media accounts you need really good descriptions and better and better photos. Unless you are a good photographer, you may want to hire this service.
Social media marketing may be your best resource for developing a loyal customer base, which is directly related to how much profit you make. You don’t want to skimp on attractive packaging and photos of your finished product line.
14. Take out insurance
One of these types of policies may be required for your soap business:Business insurance – whether you are at home or producing from another location. General Liability Insurance Product Liability Insurance Error and Negligence Insurance
15. Plan where to sell your soap
Many begin by selling at farmers markets or craft fairs. From there wise use of a business card leads those customers to your social media platforms.
You can also try online marketplaces such as Etsy shop and Amazon Handmade. Read the fine print to understand the terms of those agreements. But generally speaking, selling through Etsy or Amazon opens the door for you to contact thousands of buyers.
You can contact physical locations such as retail stores, spas, hotels, inns, and more.
16. Create a website
Your website should be highly professional with a beautiful design, informative product descriptions and beautiful photography.
Helpful tips for creating an interactive website:Hire a professional to match your website to search engines – this is called search engine optimization. Include a space for announcements, such as your plan to sell at an upcoming farmers market or craft fair. Add a space for customer testimonials. website.
17. Get your taxes in order
As mentioned before, you need an EIN to pay sales tax.
You must also file business taxes. Most small business owners do this quarterly.
Tax requirements vary by state and can be confusing. It may be best to hire a professional.
18. Hire staff
You also need your EIN if you hire staff. You may not need to hire staff right away. You may want to consider hiring a graphic designer so that your products are presented very professionally. There is no need to hire people with soap making experience – you can train them.
19. Make Your Soap
This is the part where you can have fun. You can use existing soap recipes or customize them with scents or colors you prefer.
Remember that handmade soap has a perceived value of being better than other soaps. Make sure your soap lives up to this ideal.
20. Market and expand your business
Here are four great ideas for marketing and expansion:Create a monthly “soap subscription” on your website that people can buy for themselves or as a gift. Use Etsy Soap. Partner with a school club or charity and provide your soap (at a discount) as part of a fundraiser. Diversify – Make a specialty soap for pets such as dogs and cats. It is already being done, with great success.
Now that you know how to start a soap business, start today!
Are you ready to start your own business? Will it be a successful business in selling handmade soap?
Remember, you don’t need a lot of space or money to get started.
Image: DepositphotosMore in: How to Get Started
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