I've been asked many times for advice on how to start a soap business. (Yes, that's why I'm here!) So I decided to put together the most common advice I've given over the years into one huge resource. Here are 10 things everyone needs to know before starting a soap company.
Here's what you need to know before starting your own soap business:
1. If you run a soap business, you cannot always make soap.
Most soap makers are crazy about making soaps and are making handmade soaps one after another, so they are starting a soap business. Great, you have to make a product to sell it (unless you outsource production). But when you are in the soap business, you have to spend as little time as possible to make your product. This is even more important if you are hosting a women's (or men's) show. If you don't have time to sell your product, you end up with a very expensive business hobby.
After starting the soap business, less than 20% of your time as a sole proprietor of the business should be spent on soap manufacturing / manufacturing. (Yes, this includes the time spent ordering consumables, completing GMP paperwork, and packing the product.)
This runs your business and frees up the rest of your time to sell the handmade soaps you make. Therefore, production efficiency is of utmost importance. I work repeatedly with soap makers who spend a lot of time manufacturing products and creating new products. And they wonder why their business isn't going the way they want.
Conclusion: You need to spend more time selling soap than making it profitable.
I'm a big productivity fan, so here are a few more productivity posts.
• How to increase productivity in the old-fashioned way
• Top 5 Productivity Apps I Must Have
Note: When starting a soap making business with a partner, it is very important to define the role in advance. Usually one person takes on the role of production manager and the other is the operations manager. This does not mean that production managers can turn a blind eye to the business side of company management.
2. When you start a soap business, you can't do what you like.
One of the most common mistakes soap makers make when starting a soap business is to create a product line based on the products they love most. Breaking News: You are not your target market. If your target market is like you, they too will make their own products and start a soap business.
If your target audience is ready to die with patchouli-scented soap and doesn't die because you don't like the smell (blasphemy!), Where are your customers going? Yes, yes, they will give their cash olla to the soap companies that make the products they want.
Who do you sell to if you start a soap business that makes detergent powder, beard oil, glitter eyes shadow, baby soap (because these are the products you love to make)? Do you really know a boy who miraculously grows a beard of his own size and wash and dye himself? right. Start your soap business with a small product line (usually up to 10 products). Have consistent goals and focus on one market.
3. Branding is the backbone of the soap business.
If you think branding is about choosing a few colors, pretty graphics you like and mixing them together, there's news. The brand is more than that. And without a strong brand, it would be difficult to start a soap company.
Your brand should guide all the actions and decisions you make in your business. Is this new product development suitable for your business? Is it okay for your company to host this craft fair? Is it right for your business to join this shining new social network? These questions get simple when you have a strong brand and target market.
4. If you compete only on price, you will never have a stable and profitable business.
The biggest mistake I see with the soap companies I have worked with is pricing products at what they can afford or according to fictitious markets. The problem is that many soap companies that run their own websites on Etsy/Artfire and elsewhere set their prices on what someone else does. This means that "market prices" continue to plummet to the point that soap companies that try to compete on price never turn a profit.
A few years ago, I opened a soap business at a local independent craft market and realized that I was sitting in every manufacturer's nightmare. The shelves were arranged so that all the same type of goods were next to each other. He was surrounded by four other soap makers. All the soap makers around me checked each other's prices and then, with the exception of me, installed special programs to compete on price. I stuck to my prices and sold 3 ounces of soap for over $7. At the end of the day, all the other soap makers I talked to were disappointed and left, saying they barely broke at the show. I didn't cut the price (to avoid lowering the perceived value and quality of my product), so I left with healthy interest and a cheerful mood.
If you want to run a successful soap company, it is absolutely essential that you make good profits; otherwise, you cannot afford to stay in business. So why not think about profit from the moment you start the soap business?
5. There are all markets.
The biggest argument I have about setting a reasonable price that makes a net profit is that the market doesn't support it. And this is a big lie. The markets don't just offer you a fair price unless you're chasing the right market or a specific market.
If you throw soap away and pray that someone penniless pays $10 for your soap, you're betting on an opportunity. You need to identify the specific market that is right for your product. For most companies, a market niche is defined and products are created to serve that niche. But most soap makers start by paying attention to the wind and wanting someone, somewhere, to buy their products. Because they are AMAZING BALLS.
Companies that charge $12, $28, $120, even $1,400 for a bar of soap (yes, they exist) don't open stores in street markets like everyone else does. They find the right customers for their products and start serving these wonderful people. This is the only way to develop a sustainable business that will always bring you profit.
There is a market for everything, you just need to find the right market and niche for your product. If you haven't launched your product line yet, find a market first and then create a product for that niche.
6. In addition to creating fabulous products, there are many other ducks in a row.
Surprise, surprise, starting a soap company is not as easy as many people think.
Before you sell a bottle of soap, you need to know how stable the product will be over time. Ideally, you should know how soap is stored in the most ridiculous places (like in someone's car during the height of summer in Arizona), how long perfume lasts, and how long the integrity of the product is not compromised. Believe it or not, most soaps go bad over time. The last thing you need to do is to make sure that the soap spoils quickly in the buyer's hands after receiving the money.
In the United States, if you live in Florida or California, you must follow a specific set of beauty rules. If you make cosmetic claims such as soap being moisturized, you need to comply with FDA regulations. And even if you don't sell cosmetics, you still need to comply with other regulations regulated by the Consumer Product Safety Commission and the Federal Trade Commission.
In Canada, you need to fill out a cosmetics notification form. You must also comply with the Canadian Food and Drugs Act guidelines and other cosmetics (including soap) on the Health Canada website.
And this is not a complete list of applicable rules! Be aware of the permits, controls, or permits that may be required by your state or local government. Marie Gale is a great resource for finding applicable (US) regulations that may be needed, but don't forget about sales tax and DBA registration.
7. Photography is a big challenge for most soap makers to start their own business.
Most soap companies want to sell their products online to reach as many audiences as possible. In short, customers will trust their ability to take good product photos. And not everyone is a master of photography.
If you make any of these big product photo mistakes, you'll have a hard time attracting an enthusiastic audience. It is important that the image accurately reflects the product or brand. This means that the product photos should be crisp and bright. When you visit Etsy, Artfire, and other craft sites, you'll find that the products on the front page and collection are associated with great product photos.
If you don't know how to use the camera, you need to invest in professional product photography or learn how to take your own product photography. We also recommend checking out the best photo upload sites.
8. Starting a soap business is an investment.
Your soap business will be as strong as you. To build a successful soap manufacturing company, you need to learn, grow and continue to expand your capabilities.
Experienced soap makers have become experienced soap makers because they knew they needed to keep learning. Despite spending more than 10 years making my own handmade soap, to this day I continue to learn new things about soap making. When you get stuck in learning, you get stuck in growth. This applies not only to soap making, but also to business.
The old saying that you have to spend money to make money is more true than ever. Focus on your strengths when you are starting. And invest money where it matters. Invest in education to strengthen your weaknesses and outsource tasks you can't or don't want to do.
I always give entrepreneurs accountability and support through business coaches (not only because I'm alone, but I also have!), Or through inspiration groups, business organizations, or local support groups. I advise you to ask. This will help you keep investing in yourself and your business, mentally, physically or financially.
Note: Be careful when creating a support system. Many of the students who helped me start a soap company face the problem that there are too many cooks in the kitchen and everyone is drinking the same cool aid. And it makes it difficult to focus on your business, plan your own successful version, and stand out from the crowd. When starting a soap business, set a budget and limits for paid * and * free features. Do not take all courses in the sun that you find useful. And don't join all the Facebook groups you find.
9. We need to build a soap business for tomorrow.
If you're getting ready to start a soap company, keep ending always at the top of your list. Want to turn your soap business into an empire? Want to stay in your kitchen forever? Would you like to outsource the management to a retailer, facility or employee? Think about where you want to grow your business and build your soap business to suit your needs.
If you want to sell to retailers across the country, it would be unwise to start a soap business with time-consuming products (such as soaps and bespoke products that are time-consuming and complex in design). So you should start focusing on production efficiency and growth hacking as soon as possible. If you want to get smaller (if you have to, that's okay), you can afford the design, the price, and even sell your product.
Keep in mind that smart planning also means planning your tour from the start. Whether you are planning to sell your business, pass it on to your family, close a store, or sell off inventory and equipment, each of these retirement paths must be prepared from the start. Building a business for your child seems to be very different from building a business you plan to put up for sale.
And even if you start with plan A, you can end up with plan D - this plan is not final. It is important to make regular adjustments to your plans regarding where you are and where you want to go. We are human, we change our minds, and that's okay.
10. When you start a soap business, fear is your biggest enemy.
This really should be number one, I tell you.
99% of the soap salesmen I work with, whether they're scared of public speaking, fear of failure or more, some kind of terror turns them into a business, dare I say I let them. Horror
Before you start a soap business, be clear about your fears and start overcoming any fears you have right now. And as you go about your business, you will face new fears, and it is important to keep taking steps to get rid of them.
When you decide to start a soap business, you are solely responsible for its success. And you cannot let fear guide your path. Even if you think you are not afraid right now, I promise that you will find the fear that is holding you back. This is the life of an entrepreneur, and it's completely normal! Be honest with yourself and keep rolling the ball in the right direction.
More tips from other soap makers...
We reached out to other soap makers around the world to find out what they wanted to do differently when starting their soap business. Read her advice: What would you change if you could start your soap business all over again?
If you are already in business, what did you think or want to know before deciding to start a soap company? Write in the comments and help each other.
