Soap Making Business Plan Template
If you want to start a Soap Making business or expand your current Soap Making business, you need a business plan.
The following Soap Making business plan template gives you the key elements to include in a winning Soap Making business plan.
Sample Soap Making Business Plan Template
Below is a soap making business plan example with each of the key sections to help you write a soap making business plan for your own company.
I. Executive Summary
Business Overview
[Company Name] is a soap production company in [insert location here] that makes high-quality, all-natural, organic soaps. The Company distributes its products nationwide to major retailers and select department stores. The Company’s products are also available directly to consumers via their website.
Products Served
The Company manufactures and sells the following products to its customers:
- Bar Soap
- Baby Soap (Bar and liquid)
- Liquid Body Wash
- Liquid Hand Soap
Customer Focus
[Company Name] will primarily offer its products to retail locations and e-commerce buyers. The demographics of the customers are as given below:
- Individual Buyers: 35%
- Retail Locations: 65%
Management Team
[Company Name] is led by [Founder’s name], who has been in the soap manufacturing business for [x] years. While [Founder] has never run a soap-making company himself, he has extensive experience and in-depth knowledge of managing a certified soap manufacturing company, including the operations side, such as running day-to-day operations as well as handling the business management side (e.g., staffing, marketing, etc.).
Success Factors
[Company Name] is qualified to succeed due to the following reasons:
- There is currently a high demand for handmade, all-natural soaps in the U.S. In addition, the company surveyed the population and received highly positive feedback pointing towards an explicit demand for the products, supporting the business after launch.
- The Company will use high-quality and exceptional packaging materials which are environmentally friendly.
- The soap making business has proven to be a successful industry in the United States.
Financial Highlights
[Company Name] needs an estimate of $200,000 to launch the soap making business. Specifically, these funds will be used as follows:
- Manufacturing equipment and plant setup: $100,000
- Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Top line projections over the next five years are as follows:
| Financial Summary | FY 1 | FY 2 | FY 3 | FY 4 | FY 5 |
|---|---|---|---|---|---|
| Revenue | $560,401 | $782,152 | $1,069,331 | $1,379,434 | $1,699,644 |
| Total Expenses | $328,233 | $391,429 | $552,149 | $696,577 | $776,687 |
| EBITDA | $232,168 | $390,722 | $517,182 | $682,858 | $922,956 |
| Depreciation | $7,000 | $7,000 | $7,000 | $7,000 | $7,000 |
| EBIT | $225,168 | $383,722 | $510,182 | $675,858 | $915,956 |
| Interest | $6,016 | $5,264 | $4,512 | $3,760 | $3,008 |
| Pre Tax Income | $219,152 | $378,458 | $505,670 | $672,098 | $912,948 |
| Income Tax Expense | $76,703 | $132,460 | $176,985 | $235,234 | $319,532 |
| Net Income | $142,449 | $245,998 | $328,686 | $436,864 | $593,416 |
| Net Profit Margin | 25% | 31% | 31% | 32% | 35% |
II. Company Overview
Who is [Company Name]?
[Company Name] is a licensed soap manufacturing company owned by [Founder’s Name]. The business will be based in [insert location here]. The Company will provide high-quality, all-natural soaps using organic ingredients and innovative techniques.
The Company will distribute its products nationwide to major retailers and select department stores. The Company’s products will also be available directly to consumers via their website.
[Company Name]’s History
[Founder’s Name] is an entrepreneur with a passion for soaps who is passionate about providing soaps that are free of chemicals, preservatives and other harmful ingredients.
[Company Name] will become a known soap manufacturer in [Location], offering a completely organic and natural experience.
Upon surveying the local customer base and finding the potential retail location, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].
[Founder’s Name] has selected an initial location and is currently undergoing due diligence on the property and the local market to assess the most desirable location for the manufacturing facility. The facility also has the health department’s approval.
Since incorporation, the company has achieved the following milestones:
- Found 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 soap manufacturing industry
[Company Name]’s Products/Services
The Company provides the following products:
- Bar Soap
- Baby Soap (Bar and liquid)
- Liquid Body Wash
- Liquid Hand Soap
III. Industry Analysis
[Company Name] competes against small, individually owned soap making companies and major regional or national chains. The global soap market size was $34.09 billion last year and is projected to reach $55.29 billion in the next five years, exhibiting a CAGR of 5.0%. The soap-making industry is highly lucrative, but competitive at the same time. The soap-making industry is quite fragmented and, in the past, big brands commanded a huge market share. However, this has changed a lot with the entry of small soap-making businesses. Given the fact soap is practically used everywhere, the demand keeps increasing.
Going forward, the organic soap manufacturing industry will continue to grow, as the US population will likely become increasingly more beauty-conscious and health-conscious. The trend in the soap production industry is such that, any product that has been proven to be reliable and healthy tends to sell more and determine the direction of the market for such industry.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will serve retail businesses and individuals throughout the U.S.
There are 1.5 million retail and wholesale businesses in the U.S.
The precise demographics of individuals living in the U.S. are as follows:
| United States | |
|---|---|
| Total Population | 312,796,426 |
| Population Male | 49.00% |
| Population Female | 51.00% |
| Median Age | 37.5 |
| Target Population by Age | |
| Age 18 to 24 | 9.99% |
| Age 25 to 34 | 13.08% |
| Age 35 to 44 | 12.94% |
| Age 45 to 54 | 14.64% |
| Age 55 to 64 | 12.43% |
| Median Household Income | $57,639 |
| Households w/disposable income | |
| Income $50,000 to $74,999 | 18.03% |
| Income $75,000 to $99,999 | 12.97% |
| Income $100,000 to $124,999 | 8.65% |
| Income $125,000 to $149,999 | 5.40% |
| Income $150,000 to $199,999 | 5.12% |
| Income $200,000 and Over | 5.34% |
Customer Segmentation
The Company will primarily target the following customer segments:
- Individual Buyers: The Company will sell its products directly to consumers through their website.
- Retail Locations: The second group comprises the retail locations who will sell their products in their brick-and-mortar stores.
V. Competitive Analysis
Direct & Indirect Competitors
All Naturals
All Naturals is one of the popular soap-making businesses and has been in business for xx years. All Naturals offers a wide array of services that one would expect from a customized soap-making business. Besides offering customized soaps, All Naturals also offers other skincare products such as lotions 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 [xx]. Natural Bar’s current location is in [location], where it is able to 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, free of chemicals. It also makes custom bars based on a client’s specific needs and preferences.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- High-Quality Ingredients: [Company Name] uses all-natural, organic ingredients and continuously strives to improve its products offerings. The Company’s products do not contain any harmful chemicals. Instead, the company uses advanced organic and natural ingredients that cause no harm to 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 sophisticated manner than the competitors.
- Relationships: Having lived in the community for xx years, [Founder’s Name] knows all local leaders, newspapers, and other influencers, including the local leaders who fought the [Competitor] opening two years ago. It will be relatively easy for the company to build branding and awareness of the store and establish several product lines.
- Sustainability: [Company Name] will be a zero-waste company with its plastic-negative packaging. It will maintain its eco-friendly status while scaling up to meet demand.
VI. Marketing Plan
The [Company Name] Brand
[Company name] seeks to position itself as a respectable, upper-middle-market competitor in the soap manufacturing industry.
The [Company Name] brand will focus on the company’s unique value proposition:
- Offering a wide collection of soaps designed for men, women, and children.
- Customer-focused mission
- Moderate price point
- Environmentally friendly, all natural offering
Promotions Strategy
[Company Name] expects its target market to be businesses and individuals throughout the U.S. The Company’s promotions strategy to reach the audience includes:
Pre-Opening Events
Before opening, [Company Name] will organize pre-opening events designed for prospective customers, local merchants, and press contacts. These events will create buzz and awareness for [Company Name] in the area.
Advertisement
Advertisements in print publications like newspapers, magazines, etc., are an excellent way for businesses to connect with their audience. The 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.
Public Relations
[Company Name] will hire an experienced PR agency/professional(s) to formulate a compelling PR campaign to boost its brand visibility among the target audience. It will look to garner stories about the company and its offerings in various media outlets like newspapers, podcasts, television stations, radio shows, etc.
Local Publications
[Company name] will announce its opening several weeks in advance through publicity pieces in multiple local newspapers and publications. It will run regular advertisements to maintain exposure to relevant markets. Community newspapers, college publications, fashion programs, and similar channels will be a major promotion effort.
Social Media Marketing
Social media is one of the most cost-effective and practical marketing methods for improving brand visibility. The Company will use social media to develop engaging content in terms of different tattoo designs and customer reviews that will increase audience awareness and loyalty. Engaging with prospective clients and business partners on social media platforms like Facebook, Instagram, Twitter, and LinkedIn will also help understand changing customer needs.
Word of Mouth Marketing
[Company name] will encourage word-of-mouth marketing from loyal and satisfied clients. The Company will use recommendations and word-of-mouth marketing to grow the customer base through the network of its existing customers. The Company will be incentivizing its existing customer base to encourage their friends to come and try their service for the first time.
Special Offers
The Company will introduce special offers to attract new consumers and encourage repeat purchases, which will be quite advantageous in the long run.
Pricing Strategy
[Company Name]’s pricing will be moderate, so customers feel they receive great value when availing of the products they are paying for. The customer can expect to receive high-quality soaps for a more affordable price than what they pay to ultra-premium brands.
VII. Operations Plan
Functional Roles
[Company name] will have an excellent management system to ensure top quality processing and manufacturing. The founder will hire an experienced team to help him supervise the operations.
To execute on [Company Name]’s business model, the company needs to perform several functions, including the following:
Service Functions
- Customer service
- Soap Making personnel
- Maintenance personnel
Administrative Functions
- General & administrative functions including legal, marketing, bookkeeping, etc.
- Inventory management
- Hiring and training staff
Milestones
[Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Kickoff of promotional campaign |
| [Date 5] | Launch [Company Name] |
| [Date 6] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name] is led by [Founder’s Name], who has vast experience and understands how to grow a business from scratch and make it a national phenomenon. The owner of the company is a Graduate of Industrial Chemistry (B.Sc.) and holds a Master’s Degree in Business Management (MBA) from a renowned university. He has xx years of experience working in a soap manufacturing company.
[Founder] also has personal relationships with wholesalers and retailers throughout the region.
Hiring Plan
[Founder] will hire the following staff:
- General Manager
- Accountant
- Production workers
- Sales and Marketing Manager
- Customer Service representative
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’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 spend will be high, as it establishes itself in the market.
Capital Requirements and Use of Funds
[Company Name] needs an estimate of $200,000 to launch the soap making business. Specifically, these funds will be used as follows:
- Manufacturing equipment and plant setup: $100,000
- Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of ecommerce customers per day | |
|---|---|
| Year 1 | 20 |
| Year 2 | 40 |
| Year 3 | 60 |
| Year 4 | 80 |
| Year 5 | 100 |
| Average number of wholesale accounts | 25 |
| Average order price | $32 |
| Annual increase in order price | 6.00% |
| Annual Lease (per location) | $25,000 |
| Yearly Lease Increase % | 2.50% |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRE-TAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
