Making a Living Making Soap - Growing Your Business

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Making a Living Making Soap - Growing Your Business

• Invest in your business right upfront. Undercapitalization is the primary cause of most small business failures. Don't buy into the myth of "bootstrapping". Purchase professional molds, tools and supplies from the beginning and save yourself the aggravation of having to change course mid-stream in a couple of years.
  
  
• Don't incorporate sooner than you need to but do it as soon as possible. Incorporating your business won't protect your personal assets as well as many people believe but it will offer you more protection than operating as a sole proprietorship.
  
  
• Invest in product liability insurance. Though I've never heard of a soap maker being sued it may be worth your peace of mind to know you're covered.
  
  
• Outsource as much as you can. For example, save yourself hours of work and have your labels designed by a graphic artist and then have them professionally printed. They'll look better and save you many hours of aggravation.
  
  
• Keep good records. You know you need to keep good business records for tax purposes but if you're making toiletries you also need good records the FDA.
  
  
• Become familiar with the FDA's regulations regarding handmade toiletries. If soap is all you're making you may not even fall under FDA jurisdiction but adding other toiletries will put you directly in FDA territory.
  
  
• Recognize all your costs. It's easy to overlook hidden costs like waste and equipment wear-and-tear. Work that into your pricing formula from the very beginning.
  
  
• And while we're on the subject of pricing - forget the "double your cost" method of pricing. I've never used such a simple pricing method and I don't know any successful soap maker who does. It's vital that you cover your costs but it's also important to know that customers will judge the quality of your products by their prices.
  
  
• Don't under-price your products. This is probably the biggest mistake crafters make. People who buy handmade soap are paying for your expertise—under-pricing your product tells them that your products are nothing special.
  
  
• Don't try to compete with discount chains. There's no way you can compete with a 25 cent bar of dollar-store soap and the people who buy those types of products aren't going to purchase from you anyway.
  
  
• Don't try to compete with high-end brands. With their lavish packaging and huge advertising budgets there's no way you can compete with established luxury brands.
  
  
• Plan for the future. If you're really serious about making a living at soap making you're going to have to plan on hiring employees. There just aren't enough hours in the day for one person to make soap, fulfill orders and contact with new clients.
  
  
• Don't waste time in online chat rooms thinking you'll learn from people who've "been there". The people who are truly making a living making soap aren't wasting time on the internet.
  
  
• Don't spend money joining "professional" groups. If you're interested in joining a trade association, guild or other group make sure you get feedback from current and former members.
  
  
• If you're lucky enough to have someone critique your products listen to what he or she has to say. Criticism can be a bitter pill but an honest critique of your products can be a valuable learning experience.