Running head; Homemade soap business plan 1

Homemade Soap Business plan

Name

Professor

Institution

Course

Date
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EXECUTIVE SUMMARY

The business

I am committed to producing high-quality homemade soaps for the local market. My

mission is to create awareness regarding skin care and beauty Products with the highest standards

that are needed in every home, learning institution and so on and to contribute in making the

world clean and Beautiful With a vision to reach out to everyone with my products and to

become the number one producer and suppliers of excellent homemade soaps. The homemade

soaps are specially formulated with ingredients that have a higher cleansing property which

leaves your skin clean and free from rashes, bacteria, and pimples. Designed with the end user in

mind, the soaps come in attractive and convenient packaging to suit every customer’s need. The

liquid soap comes in various fragrances that leave a sweet smelling fragrance after using the

product.

Target market

The market will consist mainly of basically anyone who requires soap for this includes;

individuals, homes, institutions, businesses, and industries. My potential customers comprise of

people who have an eye for quality and pocket-friendly products and also have cleanliness in

mind. Considering my target market, I am looking at meeting the needs of over ten thousand

people. Although it’s a new product, I expect high patronage and acceptance right from its

inception because the product is distinctive, and is priced attractively; below prevailing market

prices. I expect to win my customers gradually from the existing providers of similar products

over time with attractive prices, packaging, and customized services. This presents me with a

wide range of clients to cater for.

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Business potential

The recent increase in the awareness of individuals to use soap made from organic

products in an effort to prevent inorganic product side effects as well as improve the overall

health presents a ready market for my products. The need for my products is apparent in the fact

that more and more individuals today are conscious about practicing proper and healthy personal

hygiene and maintaining an overall sense of wellness by maintaining clean homes and

businesses. The current soap producers do not offer as much quality and my product is properly

priced to beat the competition. This opportunity is worth pursuing because I will offer or patrons

with products that will not only meet their needs but also satisfy them.

Funding

Since this will be a start business, it will be financed using savings & additional funds

will be borrowed from family friends. Additionally, the summary of the business plan will be

used to secure a 5-year $100000 loan from the Bank. The same amount from the loan will be

used to purchase the tools and equipment. As per the business plan, the loan will be repaid at an

interest rate of 10% per month. Money obtained from savings as well as money borrowed from

friends family will be used to cover working capital costs

Proposed customers

The potential customers of my products are health conscious individuals who are ready to

practice hygiene of all forms and not only enjoy our products but also be ready to pay for it as

well. My patrons are also people who do not only want the product I offer but also want value for

their money and whose buying decisions are based on quality. My products are distinctive and

unique from those offered on the market. Each product is made from scratch by undertaking the

production without compromising the quality of the product.

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Competitive analysis

Indirectly, producers of other soaps have the potential of affecting the business.

Basically, my attractive prices, packaging, and customized services are my main advantage.

Additionally, the accessibility of my products through marketing links and the fact that the

products are homemade produced will be placed ahead of my competitors. Quality services will

be offered to create a niche and therefore making it highly difficult for any stiff competition. To

sustain my competitive advantage, I shall continue to focus on the four generic building block of

competitive advantage (efficiency, quality, innovation, and clients’ responsiveness) to improve

distinctive competencies that contribute to super performance.

Market evaluation

The market evaluation technique will basically entail personal interaction to receive

patron’s opinions, complaints, and recommendation on price, packaging and how the service

delivery can be tailored to meet their needs. Periodic administration of questionnaires to sample

clients’ opinion to aid in ascertaining their changing preference and needs and respond to them

accordingly.

Situational audit

I conducted a survey on my target market to find out the strengths, weakness the

opportunities and threats in the business. These are some of the results of the research:

STRENGTHS

• The strategic location of production (homemade)

• Access to sales points

• Direct interaction with customers/clients

• Competitive advantage in terms of price, quality, and value.

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• Closeness to my market.

WEAKNESS

• Low degree of reputation

THREATS

• Competition as a result of market growth may reduce sales.

• Costly new regulatory system.

OPPORTUNITIES

• Increasing desire to practice good hygiene and live healthily.

• Market’s ability to grow rapidly because of the strong increase in market demand.

Underlying service assumptions/ philosophies

Every aspect of the service rendered is based on the fundamental believes;-

a. Everybody is entitled to quality products.

b. Motivation and experience make a difference in business.

c. All customers have equal rights.

Marketing plan

I plan to pursue personal selling techniques and in the near future advertising and publicity to

market my business and its product. Another form of promotion which will be useful in the early

stages of the business is sales promotion. A number of sales promotion activities would be

undertaken to market the homemade soaps. A one-to-one interaction between the customer and

the seller will be used to reach potential customers.

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Advertising

I intend to promote my products through posters, social media, and flyers. As the

business grows, billboard adverts will also be used. Advertising done in this manner can go a

long way in helping create a competitive position and improve the worth of my homemade

products.

Pricing strategies

Appropriate pricing strategies need to be adopted in order to break even and eventually make

profits; I will adopt a number of pricing techniques over time to ensure that the profit-making

motive is met. My business will adopt penetration pricing in the initial stages of production. This

pricing technique will charge a somewhat low initial entry price, than the normal market price, to

woo new buyers. I expect customers will opt to buy my products because of their relatively

lower price. This pricing technique will capture a large market. Differential pricing will be

another pricing method that will be adopted.

Distribution strategy

I will strive to have a well-coordinated distribution system that will ensure that the gap between

the business and its clients are bridged. Steps will be taken to ensure that the business outlets are

strategically located to ensure that the products reach the target market.

Equipment needed

Silicone Spoons & Spatulas

Containers for Mixing the Soap Batter

Scale

Containers for Measuring and Mixing Lye

Water container
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Immersion Blender

Thermometer

Soap Molds

Gloves & Goggles. Etc.

What development of the business has been achieved

The business has achieved the following;

• Secured a production space

• Established strong distribution lines

• Attracted and maintained a customer base

• Employed 4 key staff to assist in production and marketing

• Started production and distribution

Business viability evaluation

Based on the demand for organic soap and market analysis I project to make five hundred

dollars’ worth of sales in the first year and an estimated 20% increase in sales in the next seven

years.

Estimated Profit Statement For First

Year USD USD
Sales 500,000 500,000
Production cost;
Packs (bottles etc.) 4,526.00
Ingredients 2,672.00
Labels 260.00
Boxes 376.00
Total Cost of Sales (7,834.00)
Gross Margin 492166
Expenses:
Transportation 220.00
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Sales and Marketing Expenses 500.00

computer 200.00
Wages 500.00
Silicone Spoons & Spatulas 30.00
Payment to Standard Boards 300.00
Electricity 160.00
Containers for Mixing the Soap Batter 70.00
scale 70.00
Containers for Measuring Mixing Lye 100.00
Water container 33.00
Immersion Blender 30.00
Thermometer 15.00
Soap Molds 30.00
Extra tools 40.00
Gloves & Goggles 60.00
Total Operating Expenses (2368.00)

Net Profit/Sales 489798

References
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Brabec, B. (1992). Homemade Money: The Definitive Guide to Success in a Homebased

Business. Betterway Books.

Carpenter, S. (2017). Soap Making Business Startup: How to Start, Run and Grow a Million

Dollar Success from Home! CreateSpace Independent Publishing Platform

Mullins, J. W., Mullins, J. W., Mullins, J., & Komisar, R. (2009). Getting to plan B: Breaking

through to a better business model. Harvard Business Press.

Robinson, A. (2017). Natural and Organic Liquid Soap Making Business Start Up. CreateSpace

Independent Publishing Platform

Truic. (2019). How To Start a Soap Making Business. Retrieved 06 March 2019 from,

https://howtostartanllc.com/business-ideas/soap-making