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Business plan: soap making

by wiggal
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If you are already a master at making soap at home or are just learning, think about how you can make a source of income out of it. Humanity has been making soap for many millennia, and about 10 years ago it turned from work into real art. The variety of recipes, flavors, shapes, ingredients allows you to create masterpieces.

Soap making is an interesting, creative business that can be done practically from scratch. Consumers are attracted by the content of natural ingredients, hypoallergenicity,  exclusivity, and unusual appearance. Some products, due to special ingredients, can gently cleanse and heal the skin, protect it from the effects of negative factors. It is also a wonderful gift.

With a competent sales organization, making handmade soap will bring a decent income.

How to start a soap business?

In the west, as a business, handmade soap is popular. In Russia, however, the direction is only developing, so you can take a place “under the sun” without tough competition. Large-scale production began 3-4 years ago, in many regions the niche is still free.

One of the arguments in favor of a business is the ability to produce soap at home or in a small workshop. All you need is a gas or electric stove for cooking. The process does not require special knowledge, long preparation.

In order for the business to develop faster, it is better to organize the release according to the plan drawn up in advance.

Equipment

To make soap at home you need:

  • Scales for liquids. Do not buy mechanical ones – they have too high an error.
  • Cooking container.
  • Forms.
  • Thermometer.
  • Soap grater.
  • Pipettes.
  • Mixing paddles.
  • Measuring spoon.
  • Fridge.

Glass, plastic and stainless steel pots are suitable as containers. Do not use pans made of wood and aluminum, as the alkaline solution reacts with them.

As the customer base grows, the business expands and the use of manual labor decreases, it makes sense to modernize the technical process.

The soap production line consists of:

  • mixer;
  • mills;
  • forming machines;
  • stamping machine;
  • refrigeration equipment;
  • cutting machine.

Chinese manufacturers offer many suitable equipment for the job at modest prices.

Exotic soap production: technology

There are 2 technologies:

  • Cold. The soap mass is thoroughly mixed with essential oils, broths, honey, and other components. Then it is poured into molds, solidifies within 2-4 days. The frozen solid piece is cut into pieces, left to “ripen” for a certain time (from a month to a year – depending on the variety).
  • Hot. The best technique for increasing profitability. The soap mass is slowly heated, constantly stirred, due to which the saponification reaction is accelerated. After a few hours, additional components are added to the mixture, it is poured into molds. The hardened mass is cut, acquires its final consistency within 2 weeks.Both soap production technologies are similar. Only the composition and proportions of the ingredients for the base change.

Staff

At the stage of promotion, all the work can be done independently. This will avoid losses if the products are not in demand. Then you will need production and storage facilities, special equipment, personnel.

When expanding, you will need from 5 workers:

  • Cook. Leads the process and is responsible for the result.
  • Assistant. Performs minor operations.
  • Packer. Is engaged in packaging of finished products.
  • Designer. Designs appearance, logo. It is not necessary to keep it in the state, you can use third-party services. Or develop the design yourself.
  • Sales Manager. Conducts advertising campaigns, gains the trust of the audience.

Raw materials

In addition to auxiliary products (cellophane, gift paper, ribbons, ropes), you need to purchase raw materials for making handmade soap. By the way, creative packaging is an important detail in product promotion. It should be transparent.

The raw materials used are:

  • Soap base. Transparent or white, consists of fatty acids, glycerin. Usually sold by weight. There is also a liquid base for the manufacture of liquid soaps, gels, shampoos.
  • Oils. Protect the skin from dehydration, irritation. Olive, coconut oil, jojoba are widespread.
  • Ethers. Serve as flavoring agents. Endow soap with beneficial properties. Popular citrus, lavender, mint tree, eqalipt, patchouli, ylang-ylang, tea tree. Each oil is a natural antiseptic and protects against facial rashes. The greatest difficulty is the dosage and fixation of the aroma of essential oils.
  • Dyes. Lets you create bright or multi-colored soaps. There are many dyes on the market, so the creative process is limited only by your imagination. The best option is dyes of natural origin. They are harmless. Natural products are in great demand.
  • Fillers. These are ingredients for gentle gommage, additives for scrubbing (ground apricot pits, ground coffee beans, raspberry seeds, fruit and berry fiber, synthetic abrasives). They also put dried herbs, gelatin.
  • Fragrances. Essential oils can create a magical scent, but that’s not enough. Flavors will make the smell more intense, help create a product with the aroma of cake, fruit, candy.

Marketing

It is more profitable to sell products on the Internet. You need to create groups in social networks, your website, place ads on women’s forums and thematic platforms. Sales through Instagram bring a good effect. The image plays an important role. Take bright photos – this is the first thing that potential clients will pay attention to. Do not skimp on the description of the product, describe the composition, the benefits of each component and the benefits of the product (natural ingredients, anti-allergenicity, unusual design).

Try to popularize the production of exotic soap through word of mouth. Present a piece to your friends and acquaintances and ask them to tell as many people as possible about their product.

Registration of a soap making business

Soap making in the Russian Federation is mostly illegal. People produce handmade soap in their own kitchens, sell through social networks and instant messengers. You can register as a craftsman. You need to pay the fee regularly – then you can not be afraid of fines.

soap making business

If you are going to rent premises and hire personnel, open an LLC or IE. Choose a simplified taxation system, for example, the simplified tax system with a 15% tax on the difference between profits and costs.

When registering a soap making business, you will need the following documents:

SP OOO
Application for registration of an individual entrepreneur in the form of R21001

 

Application form P11001
Photocopy of passport The decision of the sole founder or the minutes of the general meeting of founders on the opening of an LLC
Receipt for payment of the state fee (as of 2019, the amount is 800 rubles). Articles of Association in 2 copies

Suitable OKVED codes: 24.51.3 and 24.51.4.

Calculation of profit and payback

Let’s calculate the profitability of a home-based business:

  • Libra – 10,000 rubles.
  • Dishes, molds, shovels – 15,000 rubles.
  • Raw materials – 30,000 rubles.
  • Packaging materials – 5,000 rubles.
  • Advertising expenses – 15,000 rubles.
  • Total according to the sales plan: 75,000 rubles will be required to start.

You will make about 100 handmade soap bars from the purchased raw materials. The price of each is 300 rubles.

The total profit will be 30 thousand rubles. It takes 3-4 months to recoup the initial costs.

Is this a risky business?

The mini soap business has pros and cons:

Dignity disadvantages
Low start-up costs. As we mentioned, you can start at home as well. It is difficult to establish distribution channels. Product demand is low.
Interesting, creative business. Ideal for those who use soap as a hobby. Force majeure situations during production sometimes lead to spoilage of raw materials.

Conclusion

Before following the example of the heroes of the movie “Fight Club”, make a detailed business plan for soap making with calculations. It is hardly possible to create a mini business without preparation, like in a movie. Scrupulously research the handmade soap market and competitors. If you can create the best product and stand out, then get down to business. If you are making a mediocre product that is similar to what you already have, improve your approach.

Don’t be limited to your region. An online store is a great way to sell all over the country by mailing it. However, it will take time and money to promote the store. You can sell in Russia through social networks.

It is important to make an exceptional soap that will attract the attention of the target audience both in appearance and characteristics. Then success will be on your side!

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