Soap making can be a fun and creative hobby, but did you know it can also be a profitable business? If you’re passionate about soap making and have been considering turning your hobby into a business, this guide is for you!
Is a Soapmaking Business Right for You?
Before diving into the world of entrepreneurship, it’s important to determine if a soap making business is the right fit for you. Running a successful soap making business requires time, dedication, and hard work. Here are some questions to consider:
- Do you have a passion for soap making?
- Are you willing to put in long hours and hard work to build your brand and customer base?
- Do you have the necessary skills and creativity to formulate unique soap recipes?
- Are you willing to learn about the legalities and regulations of selling handmade products?
If your answer is yes to all these questions, then a soap making business may be the perfect fit for you! Let’s dive into the essential steps to start your successful soap making business.
Start with a Business Plan
Every successful business should start with a solid business plan. This will help you identify your target market, plan your marketing strategies, and set financial goals.
Your plan doesn’t have to be hundreds of pages to begin with, just start with the basics:
- Executive Summary – a brief overview of your business and goals (are you wanting soapmaking world domination, or a successful second income?)
- Market Analysis – research on your target market, competition, and industry trends (we will discuss this below)
- Target Market - what demographic are you looking to serve and how will you appeal to them?
- Product Line – description of the products you will offer and why they will stand out from your competition
- Marketing Strategies – how you plan to promote and sell your products
- Financial Plan – projected budget, expenses, and revenue
Keep in mind that having a well-thought-out business plan can also help you secure funding or loans from investors or friends and family, if needed.
Research the legal requirements.
Starting any business comes with legal requirements, and a soap making business is no exception. Before starting your business, it’s important to research and understand the legalities involved. Some common legal requirements for a soap making business include obtaining necessary permits and licenses, following safety regulations, registering your business, and complying with labeling and packaging laws.
Ensure you are operating your soapmaking business under the correct legal entity for your state and country. In the US, typical business structures used by soapmakers are a sole propietorship, a partnership or a limited liability company (otherwise known as an LLC).
Is soap a cosmetic?
It’s also important to note that different countries and states may have different regulations, so be sure to research and follow all requirements to ensure a smooth and legal operation of your soap-making business.
The Food, Drug Administration (FDA) develops regulations based on the different laws set by the Food, Drug and Cosmetics Act (FD&A Act). This act helps to protect public health by ensuring that drugs and devices are safe for human and animal use.
If your product meets the conditions of FDA’s definition of soap, it is regulated by the Consumer Product Safety Commission (CPSC) and not FDA. While if your product is a cosmetic, it is regulated by the FDA. This is why it’s really important to know which of your products falls under the category of “soap” and which is a “cosmetic”.
Traditional soap is made through the combination of fats and alkali. These fats can come from multiple sources including, animal and minerals. These fats are then degraded to fatty acid and mixed with alkali to form soap.
According to FDA, soap has to meet three conditions:
- The product must be composed mainly of “alkali salts of fatty acids”.
- The product’s cleaning action has to be resulted from these alkali salts. This means that if your product has synthetic detergents, it is not considered a soap.
- The product needs to be labelled and marketed only for use as soap. If it has other purposes, it is a cosmetic.
Generally speaking, traditional soaps that fit with the definition above are regulated in entirety by CPSC.
There are no specific regulations enforced by the CPSC for the labelling of soap. Hazardous substance labelling may need to be applied for situations where a strong degreasing agent is included that could potentially cause eye irritations - this however is not a common scenario for most soap makers.
Cosmetics are defined, by the FDA, as a product intended for “cleansing the human body, making a person more attractive, or changing a person’s appearance”. Some examples of cosmetics include:
- nail polish
- hair dyes.
If you have identified that your product is a cosmetic, it will be regulated by the FDA under the FD&A Act. According to FDA’s official website, “under this law, cosmetics must not be adulterated or misbranded”.
This means that cosmetics will need to be safe to use under a labelled or customary condition of use. Cosmetics that contain colour additives will also need to be approved. Their website further states that labels should not be deceptive, and manufacturers have a legal responsibility for the safety of their products.
Identify Your Target Market
Knowing your target market is essential for any business, and this is especially true for a soap-making business. Before launching your products, research the demographics of your potential customers such as age, gender, income level, and lifestyle.
It is often helpful to create personas of your ideal customers to better understand their needs and preferences as this will help you create targeted marketing strategies and tailor your products to meet their needs.
Stand Out From the Competition
With the rise in popularity of handmade and all-natural products, the soap making industry has become quite competitive.
To stand out from the competition, consider offering unique scents or ingredients, experimenting with different packaging designs, or creating a niche product line for a specific target market.
Take some time to research other similar soap making businesses and see how they built their success, as well as any potential obstacles they faced.
Build Your Brand
Your brand is what sets you apart from other soap makers and helps you establish a unique identity. This includes your visual branding such as logo, packaging, and website design. A strong brand will help you attract customers and encourage repeat business. Take some time to research your competitors and find ways to differentiate yourself and stand out from the crowd.
This also includes choosing appropriate names for your soap bars - names that not only align with your brand but also resonate with your target audience. Consider using a soap name generator to help you brainstorm ideas and come up with creative, attention-grabbing names.
Choose Your Ingredients Wisely
One of the key components to making successful soaps is selecting the right ingredients. You’ll want to choose high-quality oils, fragrances, and colors to ensure your soaps look and feel luxurious.
Ensure that your ingredients align with your branding and mission, for example, if you’re going for an all-natural aesthetic make sure you select organic ingredients.
Understand that there is a balance to be found with quality ingredients and the price points that you’ll need to set to turn a profit. You may need to experiment with different suppliers and ingredients to find the right balance for your business and consider buying in bulk where possible to secure better unit prices.
Read more: 4 Pricing Mistakes Handmade Sellers Make →
Invest in Quality Equipment
Invest in quality equipment such as a scale, thermometer, measuring cups, and immersion blender. Having the right equipment will ensure that you can produce consistent, high-quality soaps time and time again.
It’s important to note that you don’t need to spend a fortune on equipment when starting out, but make sure you’re buying items that will last you for years and that are durable.
Develop your Recipes and Techniques
As a soap maker, your products are the heart of your business. This is why it’s important to develop unique, high-quality recipes and techniques that will set you apart from competitors. Experiment with different ingredients, scents, and designs to find what works best for you and your target market.
Create batch records for each of your soap products to maintain good records for GMP, and develop a series of standard operating proceedures that will allow you to create good products reliably and consistently.
Find Your Sales Channels
Decide how you’re going to sell your soaps. Will you attend local markets or sell strictly online? Are you going to approach retailers to stock your products (i.e. consignment) or set up your own store?
Choosing your sales channels early on will help you develop a marketing strategy and guide the direction of your soap-making business.
Spend time creating engaging listing descriptions and high quality photos for each of your products to increase your chances of sales.
Read more: SEO strategies for Etsy sellers →
Adopt the right software for success
Managing a business can be challenging, and that’s why it’s important to have the right software in place to help you streamline processes. Consider investing in accounting, inventory management, and customer relationship management software early on in your soapmaking journey to keep track of expenses, sales, and customer data.
Craftybase is the software of choice for soap makers → because it is specifically designed to meet the unique needs of craft businesses.
It offers a comprehensive solution for managing inventory, tracking expenses, and monitoring sales. This software is especially vital for soap makers as it helps to track the cost of ingredients down to the gram, ensuring accurate costing and pricing.
Craftybase also provides detailed reports on profit margins, sales trends, and stock levels, keeping you informed and in control of your business. Ready to take your soap making business to the next level? Try Craftybase today for FREE and experience firsthand how it can streamline your operations and contribute to your business growth!
Start Small and Grow
Starting a soap making business can be overwhelming, but it’s important to start small and grow steadily. Begin by selling your products at local markets or online platforms before expanding to retail stores.
This will help you test your product line, gather feedback from customers, and adjust accordingly before scaling up.
What equipment do you need for a soap making business?
To run a successful soap making business, you will need a few essential pieces of equipment. These include a scale, thermometer, measuring cups and spoons, immersion blender, mixing bowls, molds, and safety gear such as gloves and goggles.
You may also want to invest in additional equipment depending on the size and scale of your business, such as a large melting pot for larger batches, a cutting tool for slicing soaps, and labeling equipment.
It’s important to research and invest in quality equipment from reputable suppliers to ensure consistency and safety in your soap making process. Additionally, consider the cost and space requirements of each piece of equipment before purchasing to make sure it aligns with your business goals and budget.
Remember, as mentioned above, starting small allows you to gradually invest in equipment as your business grows. Don’t feel pressured to have all the latest and most expensive equipment right away - focus on the essentials and upgrade as needed.
Starting a soap making business is a great way to turn your passion into profit. Remember to create a business plan, build your brand, carefully choose your ingredients, invest in quality equipment, and find your sales channels. With these tips, you’ll be on your way to starting a successful soap making business. Be patient, persistent, and always remember to have fun on your journey!