Soap Making Business Plan
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Executive Summary
Business Overview
Rose City Soap Company is a soap production company in Portland, Oregon that makes high-quality, all-natural, organic soaps. The company distributes its products across the metro area to major retailers and select department stores. The company’s products are also available directly to consumers via its website. We offer numerous fragrances to choose from, including rose, jasmine, and lavender. Our customers can depend on us to provide them with the perfect soap product that fits their preferences and needs.
Rose City Soap Company is run by Sandy Belrose. Sandy has worked for cosmetics stores for 10 years and has an in-depth knowledge of the industry and clientele. Throughout her career, she worked as a Store Manager, which has given her experience in the operations and management sides of running a business. Her experience, skills, and connections will be invaluable to the business.
Product Offering
Rose City Soap Company offers a variety of different soap products for consumers to choose from. The products come in four categories:
- Bar soap
- Baby soap (bar and liquid)
- Liquid hand soap
- Foaming hand soap
Furthermore, the company will provide numerous scents for customers to enjoy. Some of our initial fragrances will include the following:
- Rose
- Jasmine
- Basil
- Lavender
- Tangerine
- Peppermint
- Patchouli
- Lemongrass
- Tea Tree
Customer Focus
Rose City Soap Company will primarily offer its products wholesale to local retailers, such as health and wellness shops, grocery stores, department stores, and cosmetics stores. However, the company will also have a website for individuals to purchase directly from the company rather than through a third party. We expect most of our retail and individual customers to be located in the Portland, Oregon metro area.
Management Team
Rose City Soap Company is run by Sandy Belrose, who has been a soap maker for 5 years. Over the years, she has experimented with various fragrances and ingredients to ensure all her products are high-quality and organic. She has already sold some of her products through online marketplaces but is making the transition to setting up her own website and selling her products in stores.
Though Sandy has never run a company of her own, she has been a manager of a cosmetics store for 10 years. This has given her an in-depth knowledge of the operations and management sides of running a business as well as of the clientele that typically purchases organic soaps.
Success Factors
Rose City Soap Company will be able to achieve success by offering the following competitive advantages:
- High-quality ingredients: Rose City Soap Company uses all-natural, organic ingredients and continuously strives to improve its product offerings. The company’s products do not contain any harmful chemicals. Instead, the company uses advanced organic and natural ingredients that don’t harm the skin.
- Management: The company’s management team has years of business and marketing experience that allows them to market and serve customers in an improved and more sophisticated manner than the competitors.
- Relationships: Having lived in the community for 20 years, Sandy Belrose knows all local leaders, newspapers, and other influencers in the area. It will be relatively easy for the company to build branding and awareness of the store and establish several product lines.
- Sustainability: Rose City Soap Company will be a zero-waste company with biodegradable packaging. It will maintain its eco-friendly status while scaling up to meet demand.
Download the Soap Making business plan template (including a customizable financial model) to your computer here <–
Financial Highlights
Rose City Soap Company is seeking $350,000 in funding to launch its soap-making business. The capital will be used for funding capital expenditures, staffing, marketing expenses, and working capital.
The breakdown of the funding may be seen below:
- Store design/renovation: $100,000
- Equipment, ingredients, and supplies: $50,000
- Three months of overhead expenses (payroll, rent, utilities): $100,000
- Marketing and advertising: $50,000
- Working capital: $50,000
The following graph below outlines the pro forma financial projections for Rose City Soap Company.
Company Overview
Who is Rose City Soap Company?
Rose City Soap Company is a soap production company in Portland, Oregon that makes high-quality, all-natural, organic soaps. The company distributes its products across the metro area to major retailers and select department stores. The company’s products are also available directly to consumers via its website. We offer numerous fragrances to choose from, including rose, jasmine, and lavender. Our customers can depend on us to provide them with the perfect soap product that fits their preferences and needs.
Rose City Soap Company is run by Sandy Belrose. Sandy has worked for cosmetics stores for 10 years and has an in-depth knowledge of the industry and clientele. Throughout her career, she worked as a Store Manager, which has given her experience in the operations and management sides of running a business. Her experience, skills, and connections will be invaluable to the business.
Rose City Soap Company History
Sandy Belrose is an entrepreneur who is passionate about providing soaps that are free of chemicals, preservatives, and other harmful ingredients. Rose City Soap Company will become a known soap manufacturer in Portland, offering a completely organic and natural experience.
Upon surveying the local customer base and finding the potential retail location, Sandy Belrose incorporated Rose City Soap Company as an S-Corporation on 11/11/202X.
Since incorporation, the company has achieved the following milestones:
- Found a location and signed a Letter of Intent to lease it
- Developed the company’s name, logo, and website
- Determined equipment and inventory requirements
- Began recruiting key employees with experience in the cosmetics or soap manufacturing industries
Rose City Soap Company Services
Rose City Soap Company offers a variety of different soap products for consumers to choose from. The products come in four categories:
- Bar soap
- Baby soap (bar and liquid)
- Liquid hand soap
- Foaming hand soap
Furthermore, the company will provide numerous scents for customers to enjoy. Some of our initial fragrances will include the following:
- Rose
- Jasmine
- Basil
- Lavender
- Tangerine
- Peppermint
- Patchouli
- Lemongrass
- Tea Tree
Industry Analysis
The demand for organic and locally made cosmetics has increased substantially over the past decade. Consumers are eager to support local brands and want products that are free from chemicals. These factors have helped local soap industries thrive in recent years, and that trend doesn’t seem to be ending anytime soon.
For example, according to Grand View Research, the organic bar soap market is expected to increase at a compound annual growth rate of 8.2% from now until 2030. It is expected that the industry will be valued at USD 3.64 billion by the end of the decade.
A similar situation is occurring in the organic liquid soap industry. According to Allied Market Research, the industry will see a compound annual growth rate of 9.3% until 2027 and is expected to be valued at around USD 38 million by the end of the decade. These data show that as long as consumers continue to demand organic soaps and locally-made products, the soap industry will thrive.
Download the Soap Making business plan template (including a customizable financial model) to your computer here <–
Customer Analysis
Demographic Profile of Target Market
Rose City Soap Company will serve residents and businesses located in the Portland, Oregon metro area. There are hundreds of businesses and other establishments that would be interested in selling locally-made soap products.
The precise demographics for Portland, Oregon are:
Customer Segmentation
The company will primarily target the following customer segments:
- Individual buyers
- Grocery stores
- Cosmetics stores
- Department stores
Competitive Analysis
Direct and Indirect Competitors
Rose City Soap Company will face competition from other companies with similar business profiles. A description of each competitor company is below.
All Naturals
All Naturals is one of the most popular soap-making businesses in the Portland metro area. They have been in business for 20 years, selling a wide variety of soap products, including customized soaps. In addition to selling soaps, All Naturals also offers other skincare products such as lotions, body wash, and face wash.
Soap Experts
Soap Experts provides its customers with thousands of soap options in a variety of shapes, sizes, and fragrances. Customers can browse through their vast database via their website. Soap Experts also provides samples of their products for potential customers to try different scents and product types before purchasing.
Natural Bars
Natural Bars was established in 2010. Natural Bars’ current location is in Lake Oswego, where it can cater to a high-end clientele looking to be treated by experts and professionals in a more serene setting than that of the normal bustling soap shop. Its products are all 100% organic and free of chemicals. It also makes custom bars based on clients’ specific needs and preferences.
Download the Soap Making business plan template (including a customizable financial model) to your computer here <–
Competitive Advantage
Rose City Soap Company enjoys several advantages over its competitors. These advantages include:
- High-quality ingredients: Rose City Soap Company uses all-natural, organic ingredients and continuously strives to improve its product offerings. The company’s products do not contain any harmful chemicals. Instead, the company uses advanced organic and natural ingredients that don’t harm the skin.
- Management: The company’s management team has years of business and marketing experience that allows them to market and serve customers in an improved and more sophisticated manner than the competitors.
- Relationships: Having lived in the community for 20 years, Sandy Belrose knows all local leaders, newspapers, and other influencers. It will be relatively easy for the company to build branding and awareness of the store and establish several product lines.
- Sustainability: Rose City Soap Company will be a zero-waste company with biodegradable packaging. It will maintain its eco-friendly status while scaling up to meet demand.
Marketing Plan
Brand & Value Proposition
Rose City Soap Company seeks to position itself as a respectable, upper-middle-market competitor in the local soap-making industry.
The Rose City Soap Company brand will focus on the company’s unique value proposition:
- Offering a wide collection of soaps in liquid or bar form
- Offering a wide variety of fragrances
- Customer-focused mission
- Moderate price point
- Environmentally friendly, all-natural offering
Promotions Strategy
The promotions strategy for Rose City Soap Company is as follows:
Advertisement
Advertisements in local newspapers and magazines are an excellent way to connect with local consumers and retailers. Rose City Soap Company will advertise its products in popular magazines and news dailies. Obtaining relevant placements in industry magazines and journals will also help in increasing brand visibility.
Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. Rose City Soap Company will use social media to develop engaging content in terms of soap-making and the company’s product offerings. Engaging with prospective consumers and businesses on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.
Word-of-Mouth Marketing
Rose City Soap Company will encourage word-of-mouth marketing from loyal and satisfied clients. The company will use recommendations and word-of-mouth marketing to grow its customer base through the network of its existing customers. The company will be incentivizing its existing customer base to encourage friends to come and try its service for the first time.
Special Offers
Rose City Soap Company will introduce special offers to attract new consumers and encourage repeat purchases, which will be quite advantageous in the long run.
Pricing
Rose City Soap Company’s pricing will be moderate, so customers feel they receive great value when availing of the products they are paying for. Customers can expect to receive high-quality soaps for a more affordable price than what they pay for ultra-premium brands.
Operations Plan
The following will be the operations plan for Rose City Soap Company.
Operation Functions:
- Sandy Belrose will operate as the President of the Rose City Soap Company. In addition to running the operations of the company, she will manufacture all the soap until demand requires her to hire additional help. She will also help out with marketing efforts and connect with local retailers who may be interested in selling the company’s products.
- Sandy will hire an Administrative Assistant to help with the administrative and operations sides of the business. They will also help with some of the marketing efforts, such as posting to social media.
- Once the business has several wholesale customers, Sandy will hire additional staff to help make and package the soap as well as provide customer service.
Download the Soap Making business plan template (including a customizable financial model) to your computer here <–
Milestones:
Rose City Soap Company expects to achieve the following milestones in the following six months:
- 4/202X Finalize lease agreement
- 5/202X Design and build out Rose City Soap Company
- 6/202X Hire and train initial staff
- 7/202X Kickoff of promotional campaign
- 8/202X Launch Rose City Soap Company
- 9/202X Reach break-even
Management Team
Rose City Soap Company is run by Sandy Belrose, who has been a soap maker for 5 years. Over the years, she has experimented with various fragrances and ingredients to ensure all her products are high-quality and organic. She has already sold some of her products through online marketplaces but is making the transition to setting up her own website and selling her products in stores.
Though Sandy has never run a company of her own, she has been a manager of a cosmetics store for 10 years. This has given her an in-depth knowledge of the operations and management sides of running a business as well as of the clientele that typically purchases organic soaps.
Financial Plan
Key Revenue & Costs
Rose City Soap Company’s revenues will come from its e-commerce sales as well as its wholesale accounts. The major costs for the company will be product costs and salaries. In the initial years, the company’s marketing spending will be high as it establishes itself in the market.
Funding Requirements and Use of Funds
Rose City Soap Company is seeking $350,000 in funding to launch its soap making business. The capital will be used for funding capital expenditures, staffing, marketing expenses, and working capital.
The breakdown of the funding may be seen below:
- Store design/renovation: $100,000
- Equipment, ingredients, and supplies: $50,000
- Three months of overhead expenses (payroll, rent, utilities): $100,000
- Marketing and advertising: $50,000
- Working capital: $50,000
Download the Soap Making business plan template (including a customizable financial model) to your computer here <–
Key Assumptions
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and to pay off the startup business loan.
- Number of daily e-commerce customers:
- Year 1: 20
- Year 2: 40
- Year 3: 60
- Year 4: 80
- Year 5: 100
- Average number of wholesale accounts:
- Year 1: 10
- Year 2: 15
- Year 3: 20
- Year 4: 25
- Year 5: 30
- Average order price: $25
- Annual Lease: $25,000
Financial Projections
Income Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
| Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
| Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
| Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
| Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
| EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
| Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
| PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
| NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
| Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
| Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
| Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
| Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
| TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
| Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
| Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
| Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Investment | ($180,950) | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
| Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
| Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
Soap Making Business Plan FAQs
What Is a Soap Making Business Plan?
A soap making business plan is a plan to start and/or grow your soap making business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your Soap Making business plan using our Soap Making Business Plan Template here.
What are the Main Types of Soap Making Businesses?
There are a number of different kinds of soap making businesses, some examples include: Glycerin Soap, Liquid Soap, Novelty Soap, and Herbal Soap business.
How Do You Get Funding for Your Soap Making Business Plan?
Soap Making businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start a Soap Making Business?
Starting a soap making business can be an exciting endeavor. Having a clear roadmap of how to start a soap business will help you stay focused on your goals and get started faster.
1. Develop A Soap Making Business Plan - The first step in starting a business is to create a detailed soap making business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your soap making business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your soap making business is in compliance with local laws.
3. Register Your Soap Making Business - Once you have chosen a legal structure, the next step is to register your soap making business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
4. Identify Financing Options - It’s likely that you’ll need some capital to start your soap making business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
7. Acquire Necessary Soap Making Equipment & Supplies - In order to start your soap making business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your soap making business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.
Learn more about how to start a soap making business:Â
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