Do you want to start a soap making business with a low budget? If so, read this article to know the steps you need to follow in starting a profitable business in soap manufacturing with nearly nothing investment.
To most people especially women, handmade soap making is a creative hobby. One can turn this hobby into a successful business venture by investing in small money. In addition to this, this business can also be started at home. The demand for handmade soaps is increasing because more people are scared of using commercial soaps that contain toxic chemicals.
The demand is expected to grow in the coming years. According to a report by Natural Foods Merchandiser (NFM), sales of the natural body care product industry grew by 11% globally. Customers are buying handmade natural soap in record numbers. Hence, if you looking forward to starting a business with little money from home, soap making is worthy to be considered.
Here below, we list down the basic steps you must follow if you are serious about making money making soaps for existing soap artisans or even for a newbie.
Soap Making Business Plan Guide for Beginners
Here are the 12 Steps to start a profitable soap making business:
1. Do Some Market Research
The first thing one must consider while starting a small business is the demand for the selected product in the local community and the buying behavior of the local people. Conducting market research to collect relevant information regarding the demand and supply status locally is a must.
Soap is a fast-moving consumer product. It is one of the most dynamic products in the FMCG industry. Hence, you need to be always in touch with the taste and demands of buyers.
Industry pundits predict the volume of soap consumption is expected to cross US$ 24 Billion by 2022. The soap industry in the USA alone generates more than $25 billion in revenues annually.
There are more than 630 companies big and small that operate in the United States at present.
2. Learn the Process of Making Soaps
There are many ways of making soaps. However, broadly most soap makers follow three kinds of processes. They are the cold process, hot process, and melt and pour process.
All the processes though have their own positives and negatives. You can choose one of these processes or a combination of the two or more according to your formula. Below we provide you the basic processes involved in the hot and cold water process.
Various Types of Making Soaps
There are basically two common ways of making homemade soaps. One is the so-called cold process and another one is the hot process. The cold process is more common and simple than the mixing of lye or some other alkali and fats or oil. It takes a few hours to saponify but takes four weeks to cure completely. The hot process is a variation of the first one that involves cooking the soap. It is an instant process and easier in the handling of added scents and color.
- Cold Process For Making Soaps
Cold process soap making is made by combining fats (base oils, aka fixed oils or carrier oils) and Lye Solution (Lye + a liquid of choice). The Base Oils you choose will determine the qualities of your soap.
You will need to calculate the lye solution. First, you’re going to select the unit of weight measurement (in our case, ounces), then choose the type of lye you’re using.
For CP soap, you will always be using Sodium Hydroxide (NaOH). Next, enter your liquid of choice. We’ll be using water for our test recipe, but it’s possible to use other liquids such as goat’s milk, coffee, tea, etc.
Add scents, colors, and exfoliants. Once you create the magical batch of soap with the perfect color and scent, you really able to replicate it.
- Hot Process For Making Soaps
Firstly, measure out botanical or colorant and essential oils. Measure out your water and place it in the juice jug. Measure out the lye and pour it slowly into the water stirring as you pour. Keep stirring until the lye crystals are completely dissolved. Starting with the solid oils, measure each and place it into your crockpot that is set on low. As you continue to measure, the solid oils will melt.
Once the solid oils have melted, add the liquid oils. Slowly pour a thin stream of the lye solution into the pot of oils while using the whisk/stick blender to stir the mixture. Maintain a steady, strong stirring motion. Make sure to stir thoroughly all areas of the pot. The mixture will turn creamy and opaque and then will begin to thicken. Put the lid on the crockpot and leave it to cook on low for a while.
The soap will heat up and start to bubble around the edges of the crockpot. The mix will begin to take on a clear Vaseline like look. Once the whole mix has this look, you can test it to see if it is done. Now is the time to add color, botanical bits, and scent to your hot process soap mixture.
For making soaps, you need to procure some equipment. Scale, thermometer, Immersion blender, containers, spoons and spatulas, gloves and goggles, soap molds, etc. are the basic types of equipment you need to buy. Your recurring purchases include oils, fragrances, glycerine base, butter, micas, lye, etc.
Raw Materials & Supplies Needed to Make Soaps with Cold Process
You have listed down below some of the basic items you will need while making soaps:
- Rubber Gloves
- Plastic Goggles
- Surgical Mask
- Stick Blender (aka Immersion Blender – you can get one of these for $20-$30)
- Candy or Oil Thermometer
- Tupperware Measuring Pitcher (with a lip for pouring, and a lid)
- Heat-Proof Stirring Spoons
- Measuring Cups & Measuring Spoons
- 1 Large Microwaveable Bowl
- 1 Small Bowl
- Electric Scale that measures ounces and grams
- Soap Mold(s)
- Soap Making Scale
- A stainless steel 8 – 12 quart/liter pot.
- Others depending on the type, process, and scale of production.
3. Name Your Soap Making Business
The brand name of soap plays a vital role in connecting with customers. While choosing your business name, consider what message you want to communicate to the consumers. Also, take into account what products you will be selling and your target customers before finalizing the business name for your soap brand. Check this guide to know more about naming a business.
4. Decide the Type of Soap to Make
There are plenty of soap types that you can make. It is advised by most successful soap makers is to start with one specific type of soap in the starting phase. Your decision regarding the type of soap should consider certain aspects regarding the demand, type of distribution network like direct, wholesale or retail, institutional selling like hotels, resorts, hospitals, etc. You also need to decide whether your soap will be plant-based or animal-based.
You can also select niches as per industry requirements like baby soaps, pet soaps, olive oil soaps, shaving soaps, mystical soaps, etc.
5. Calculate the Cost of Starting Your Soap Business
The cost of starting a soap company broadly can be categorized into two parts. One is the initial fixed cost like equipment, interior, office furniture, etc. The other is the recurring working capital cost which mainly comprises rent of the space and raw materials for making soaps. You must be prepared to invest at least $2000 to start a soap making business on a small scale.
6. Create a Business Plan
A business plan, though ignored by most beginners, is extremely critical to start and run a business venture. That holds true for soap making too. Check this guide on how to write a business plan or you can take help from business plan software tools to create your business plan for your soap making company.
7. Select the Name of your Soap Company
Take some time off and brainstorm with different names that can perfectly fit your theme of soap products. One thing not to forget is to check whether there is a similar domain is available or not. Check this guide and know more about the different steps to follow in naming your soap business.
8. Register Your Business
Every state and country offers different types of business formation structures. If you are a beginner with a low budget, start as a proprietorship entity. However. if you are starting on a larger scale and looking for certain benefits, talk to professionals and then decide which one will be the best suited for you.
For example, if you are from the United States, forming an LLC will provide you with extra benefits at some extra cost.
9. Licenses and Permits
Talk to your local concerned authority and understand the licenses and permits need to obtain to start and run soap making business. Trademark is another thing you might be interested to have if you want to protect your brand.
Associations like The Handcrafted Soap and Cosmetic Guild offer members an insurance program for soap makers in the United States, Canada.
10. Setup Soap Making Workplace
You need to ensure space however small it is mainly for three categories of work. One is the administrative work, the second is the space for making soaps, and the third is the storage space. If you are making soaps from home, your kitchen will do the purpose.
11. Software and Apps
Having some basic software will not only help you in the smooth running of the day to day work but also will help in understanding your company’s health status with few clicks. The most important software you must have is Accounting and POS software. There are also integrated soap making software available online.
12. Promote Your Soap Products
If you are starting with a low budget, you have to careful in promoting your soap making business so that not much money is spent. Check this article to know about low-cost ways of promoting a small business. Talk to a professional and create a unique logo for your company.
Create a website of your own by following this guide. You can also check the free website builders to create your website. If you are looking forward to tapping online customers, create an online store, or list your product in marketplaces like Amazon, Etsy, etc.