How Much is Needed to Start a Soap-Making production?

Start your soap business with as little as $500.

Whether it’s a relaxing bubble bath, a soothing foot scrub or an invigorating facial, for many women nothing beats creating an at-home spa experience. If you appreciate this passion, consider starting a business creating soaps, perfumes, lotions and other spa products. There are hundreds of free, helpful tutorials online showing you how to start your business with as little as $500.

Education

Helpful tutorials abound online. Wholesale Supplies Plus has an entire library of information to help you get your business off the ground and guidance on the various ingredients, packaging materials, regulatory information about cosmetics and labeling, recipes, projects and design ideas. Soap Crafters and Teach Soap offer forums for soap enthusiasts to share ideas and instructions.

Insurance

If you sell a product or service, you must have business insurance to protect your business assets in case you cause damage or injury to your clients. It also protects your supplies and equipment from theft or damage (renter’s insurance doesn’t typically cover business assets). As a home-based business with a relatively low-risk product and low-cost supplies and equipment, you should be able to secure a basic insurance policy for about $600 to $1,000 per year.

Supplies

Supplies needed for your soap-making business include colorants, melt-and-pour soap, premade bases, containers, coloring, packaging supplies, fragrances, and essential oils. Expect to spend about $150 to $500 in supplies, depending on how much you purchase in bulk. Soap Crafters offers a basic start-up kit, enough to create eight bars of soap, for $20. Wholesale Supplies Plus offers soap-making kits starting at $29 and perfume kits starting at $17. Kits are a good way to get launched with little investment. You'll also need a quality digital camera to take pictures of your work.

Licenses

Home-based business owners typically operate as a sole proprietor or limited liability company (LLC). An LLC, which protects your personal assets, may be preferable to sole proprietorship. Check with an experienced tax professional or an attorney to determine which entity is best for you. As a sole proprietor in Texas, you must file a “Doing Business As” permit and pay the fee of about $15, depending on your county. As an LLC, you must register with the secretary of state, which will cost you about $300. You’ll also need to apply for a federal tax identificaiton and a sales tax permit, both of which are free.

 Advertising

Advertising costs vary. Craft fairs, farmer’s markets, flea markets or dog shows (if you sell products for dogs) are venues that fluctuate in cost. Other marketing venues include local hotels, bed and breakfasts, gift shops and specialty stores, all of which may agree to carry your line. Just be sure you have enough products available to make it worthwhile.
 

 

Website

A website is a must for any business now and you can either purchase your own website for about $20 per month or open a store on sites such as Etsy or Dawanda, which are marketplaces for homemade goods sellers. Fees are charged when you make a sale. Starting your own website takes significantly more knowledge in web design and Internet marketing, however, with your own site you have more creative freedom. If you elect to start your own site, review online tutorials on search engine optimization to learn how to design your site. If you opt to join Etsy or a similar site, start a free blog where you can discuss your soap-making abilities and other handy tips to garner interest in your products. Make certain to create a link to your store.