SOAP MANUFACTURING BUSINESS PLAN

Executive Summary
SAFEassure, LLC has designed a new product that provides managers with a
quick, easy, and affordable method to effectively monitor employee hand washing.
Proper hand washing is the most effective preventative measure available to combat
communicable diseases.
Improper hand washing contributes to more than 130,000 deaths in the U.S. each year
through the transfer of communicable diseases in restaurants, day cares and hospitals
(more than AIDS and breast cancer combined). Studies have shown that proper hand
washing procedures in these environments could cut down the spread of disease by up
to 75%. The greatest contributing factor to this problem stems from the inability of
supervisors to monitor and control employee hand washing. Existing products offer
no effective or affordable solutions for enforcing and ensuring hand washing
compliance. Treatment of preventable diseases costs Americans over $95 Billion in
direct costs each year.
SAFEassure, LLC is the first producer that answers this problem and provides
indisputable proof every time a person washes his or her hands. After washing occurs,
the unique dye in our soap remains on the hands and fades to the skin’s natural color
in under six minutes. This would allow supervisors to conclusively verify at a glance
whether hand washing has taken place. No other product on the market offers such a
high level of assurance of sanitation compliance. The product is safe and meets all
current FDA regulatory requirements for soap.
The Market
Although restaurants and hospitals have tremendous market need for a product such
as ours, day cares represent the best opportunity for our initial target market. Day
cares are an ideal market because they have a vested interest in reducing disease
transfer amongst children, and have adamant support from their clients [parents] to
create as clean an environment as possible. As stated by Family Practice News, “Most
day care centers are sophisticated little germ factories, exchanging bacteria and
viruses with the shake of a hand or the sharing of a toy. And many of those nasty bugs
travel home where they can infect the rest of the family.”

The Company
SAFEassure, LLC boasts a strong founding team and experienced board of advisors.
Our primary advisor, Jack Soap, brings twenty years of industry experience and
networked relationships to accelerate market penetration of the product line.
SAFEassure, LLC will outsource the production of its soaps to an existing soap
manufacturer. The executive team will first target the Portland Metro area and
eventually the greater Northwest using direct sales and existing distributor channels to
penetrate the market. Initial capital will be used to test, patent, approve, produce, and
market SAFEassure, as well as provide working capital for the first year.
SAFEassure, LLC will follow three concise strategies to achieve our desired growth:
Exploit first-mover advantage in a highly fragmented market with a unique and
differentiated product.
Develop a strong branding campaign to build awareness, positive perception and sales
of our products within our target markets.
Continue to develop new products to satisfy an ever growing set of markets.
Mission
Our mission is to create value for customers and shareholders by continually
improving health and reducing preventable illnesses through the use of our soap.
Keys to Success
A first-mover branding campaign to build awareness of SAFEassure’s products as the
standard for ensuring hand washing compliance.
Patent protection to defend our time-sensitive dye and product concept from
competitors.
Complementary relationships with organizations interested in increasing hand
washing compliance.
Objectives
Develop a complete prototype which meets regulatory standards by February of Year
1.
Become the specialty soap of choice for day cares across the Northwest by December
Year 2.
Achieve sales of $5 million by the end of Year 6.
Company Summary
SAFEassure, LLC was founded in Portland, Oregon, and created as a Limited
Liability Corporation. SAFEassure, LLC develops and markets soaps utilizing time-
sensitive dyes promoting sanitary and safe environments to businesses and parents
interested in maximizing cleanliness. The company will initially be based out of a
residential apartment in Portland.

Company Ownership
The executive team will retain at least 70% of the equity in the company. Every
$2,500 dollars of investment in the company will secure up to 1% equity in the
company. Assuming 30% of the company is owned by investors, Devon Nevius will
retain 40% ownership, with Kevin Meinert retaining 30%.
Start-up Summary
Total funding required to get the business started is estimated at $250,000, of which
the executive management team – Devon Nevius and Kevin Meinert – will invest
$100,000 and $75,000, respectively. An additional $75,000 investment necessary to
develop a product and effectively bring SAFEassure’s products to an initially limited
geographic region is sought from other investor(s).
The key elements in the start-up plan for the company are:
Development of a working prototype.
Funding of working capital requirements and promotional materials for the principal
operating activities of the company.
Gaining patent approval.
Establish a strong brand image early to position ourselves in the market.
The founders have already developed a rough prototype of the product. Our start-up
period includes 5 months of work by an independently-contracted chemist at a local
lab who will perfect this design into a finished prototype, with the correct balance of
soap and dyes in four colors. The final two months of this start-up period include
safety tests per government regulations to assure high quality.
Company Locations and Facilities
The management team of SAFEassure, LLC will initially use a residential apartment
in Portland to run operations. In Year 2, we will move to a rented office. Distribution
will remain outsourced.
Products
SAFEassure’s product line provides a unique control level to managers, supervisors
and parents alike. We have two basic product lines: CHILDassure, intended for day
care facilities, and an antimicrobial-based product for hospitals (HEALTHassure) and
restaurants (FOODassure) – the antibacterial products are not yet in development. The
various product lines, competitors and future product possibilities for SAFEassure,
LLC will be outlined in the following section.
Product Description
SAFEassure, LLC will produce a line of institutional liquid soaps with a time-
sensitive dye blended into the mixture.
The dye reacts with the hands during the lathering process, staining the hands a
distinct color, then fading in under six minutes.
The product will sell for approximately $90/case. (4 gallons/case)
The packaging will be compatible with existing soap dispensers mounted in washing
stations and be available in a variety of sizes.
Initially, SAFEassure, LLC will produce products with child care acquirers in mind,
utilizing the brightest colors possible. This product line, called CHILDassure, will
consist of four colors: red, blue, pink and green.
Competitive Comparison
SAFEassure’s products offer a high value alternative to other hand washing
compliance products.
They provide an unprecedented level of control, allowing these managers to monitor
and follow hand washing frequency and habits of both child-care workers and
children. Ultimately this can lower costs for all users, either in a workplace or private
environment by reducing the risk of disease outbreaks and/or health code violations.
As the first fading dye hand soap in the market, SAFEassure, LLC will build brand
identity, establishing the company as the standard for improving hand washing
compliance.
As SAFEassure’s products become more familiar in a workplace environment, the
product will begin to produce a pressure on employees, whereby they feel compelled
to wash their hands out of a consciousness about the perception of all employees, not
just managers. This “peer pressure” effect will further fuel the use of our products and
the recognition of the benefits they deliver.
Sales Literature
In order to sell our product while creating familiarity and a positive brand image, it
will be necessary to develop brochures and literature to emphasize the safety and
beneficial attributes of fading dye soap, many of which may not be readily apparent to
an interested party. These will be delivered both in person during a sales presentation
and by direct mail.
Sourcing
The key to our success is the time-sensitive dye. Once the proper ratio of dye to base
soap is isolated, the fragmented nature of the soap industry provides many options for
outsourcing production. Similar to any commodity, economies of scale require the
soap to be produced, packaged and distributed in large batches. Initially, the soap base
will be purchased in quantities of at least 38,000 gallons for approximately $50,000.
Once the relationship with the manufacturer is established, our subsequent purchases
will be approximately for $20,000. These inventory amounts should be sufficient to
for SAFEassure, LLC to meet the customer demand. Utilizing his production and
distribution knowledge, Rick Brown will use existing established relationships in the
industry to help us mix, package and distribute the product line.
Technology
The technology of our fading dyes will be pivotal in the success of our company. The
interactions between fading dyes and antibacterial or anti-microbial bases suitable for
use in restaurants or hospitals are more complicated than the interactions with the
glycerin or lotion soaps utilized in the CHILDassure line. As soon as cash flow
permits, projected to be in 2008, SAFEassure, LLC will employ a professional
chemist with experience developing dye products to further the research into
technological innovations that may produce antibacterial and anti-microbial versions
of the soap to address additional markets.
Future Products
Additional soap products, manufactured to comply with regulatory minimums for
strength and effectiveness in their respective target markets will be developed to
address restaurants and hospitals. These soaps will be trade marked under the names
FOODassure and HEALTHassure, respectively.
Perhaps the most promising future market opportunity for fading dye soap is the retail
market. This product line will include soaps using the same or similar dye colors as
the day care to encourage children to wash their hands more often at home. This will
be a top priority when the company develops the financial resources enough to mount
a national advertising campaign and distribution system. A complete line of fading
dye products could potentially be developed, including floor, counter and body
cleaning products that use fading dyes to indicate places on a surface that may not
have been cleaned.
Market Analysis Summary
There is tremendous potential for a product that provides supervisors and parents with
the control to monitor and encourage hand washing. Considering the large scope of
our potential markets, we feel it is imperative to focus our limited resources on a
particular geographic region where we can establish demand for our product. After
successful market penetration, we will begin implementation into the restaurant and
hospital markets.
Market Segmentation
SAFEassure’s first product line addresses the day care market. CHILDassure will first
be introduced in the Portland, OR area, before sequential expansion to additional day
care markets. There are currently 516 day care facilities in the Portland Metro area.
After successful implementation in Portland, we will begin expansion into the greater
Northwest. There are 3,414 day care facilities in the greater Northwest.
Successful penetration into the day care market will be followed by implementation
into the restaurant and hospital markets. There are currently 19,362 restaurants in the
Northwest, followed by health care services, which includes 23,108 organizations in
the Northwest.
Industry Analysis
The Industrial and Institutional soap industry, of which we are a part, is quite
fragmented, but contains several well known main competitors: Gojo, Kimberley
Clark, Dial, Provon, and SoftSoap, as well as generic brands that provide to
distributors like Massco and Sysco. The industry is stable and growing; between 1998
and 2003 it grew by an average of 4% annually. Within the I&I sector there is fierce
competition for market share among the existing popular soap offerings, leading to
lean profits on soap sales.
Distribution Patterns
Distribution in the soap industry is provided by regional providers. These distribution
companies usually serve a large portion of the market based on the respective size of
the market, delivering to the organizations monthly or bi-monthly depending on
demand and usage patterns. Food services typically receive deliveries of cleaning
products once a month. Hospitals typically have a distribution system that operates on
monthly deliveries of large quantities. Restaurants typically have a weekly delivery
schedule.
Competition and Buying Patterns
Commercial customers select soap based on the necessary minimum safety
regulations for the intended user; restaurant and hospital regulations require anti-
bacterial/microbial. Customers will typically select a product based on price,
distributor availability, and convenience. Distributors will deliver a complete order of
cleaning and maintenance products to customers. Major competitors sell to a variety
of customers, including distributors like Sysco, who receive generic soap from bulk
producers, then repackage and deliver it along with other products it sells, utilizing
the same distribution systems.

Main Competitors
Traditional soap producers
Soap is a common and familiar the commodity of necessity to every company.
Traditional soaps employ pleasant scents and dyes to encourage hand washing
compliance. However there is no way to verify if hand washing has occurred and
traditional soaps do little beyond the pleasant scents to encourage hand washing.
The largest current soap producer, Dial Corp, consistently achieves strong sales, and
has enjoyed strong market share in the commercial markets. Producing a wide variety
of soap products, Dial has maintained 18% in market share over the last decade. The
other largest commercial soap providers include Kimberly Clark, Gojo, SoftSoap,
Provon and NXT.
Alternative hand washing compliance systems
HyGenius, a product produced by Compliance Control Inc., is a complete hand
washing compliance system that is installed (and leased) in businesses like
restaurants, hotels, hospitals and receive. The system includes a small control box that
controls water temperature, pressure and run time. By systematically controlling these
factors, employees can be both trained and monitored in their hand washing frequency
and technique. Periodic reports stored on the computer and linked to the Internet can
be produced to indicate the number of times per month employees have been washing
their hands, and the estimated savings that the system has created through efficient
water use.
This system has limited value to business managers because they are expensive to
install and lease, and do not necessarily increase employee compliance. They provide
managers the ability to track usage, but do not help control day-to-day hand washing
compliance individually or immediately.
Disposable Gloves
Hypo-allergenic gloves are the solution provided by some organizations to combat the
threat of hand washing non-compliance. To limit the risk of hand contamination,
many restaurants and all hospitals require the use of gloves. Although gloves
eliminate the risk of direct hand contamination they are not without downfalls:
Gloves can carry bacteria in-between fingers, and on the glove surface, causing
similar cross contamination to that of bare hands.
Disposable gloves can cost a location upwards of $5,000 each year.
Gloves can provide a false sense of security, causing employees to substitute gloves in
place of proper hand washing.
Gloves rip and tear.
Industry Participants
The soap industry is highly fragmented. There are more than forty different
Institutional soap products that compete in the market.
Target Market Segment Strategy
Our initial day care market will consist of medium to large day care organizations,
consisting of twenty or more children. Organizations such as Kindercare and La Petite
Academy represent very attractive opportunities for our products.
Organizations of this type are attractive because they are well managed, successful,
health conscious and nationwide. Within these organizations we will target decision
level managers with the power to implement use of our product in those locations.
Market Needs
According to our reasechers about soap and detergent business dertemine that most
soap markers are produced soap and detergents with poor quality and soild at higher
price compare to production cost as well there is many use in demand and present
market does not afford the demander
. Additional future target markets also have significant need for fading dye products:
1. Hospitals: “In health care, nurses and doctors wash only 30% of the required time
between patient contacts and procedures. Each year, an alarming 2,400,000+
nosocomial infections occur in the U.S. alone. They are estimated to directly cause
30,000 deaths and contribute to another 70,000 deaths each year. Nosocomial
infections cost over $2,300 per incident and $4.5 billion annually in extended care and
treatment.”
2. Restaurants: “Food borne illness kills over 10,000 people each year. Over 70% of
all outbreaks originate in food service operations and, as many as 40% are the result
of poor food service and cross-contamination. Each year over 80 million estimated
cases of food poisoning occur in the United States alone. The U.S. spends between
$7.6 and $23 billion annually on health care and lost productivity resulting from food
borne illness. The average incident costs the food service company over $75,000 and
results in significant future sales losses.”
Market Trends
There has been a recent effort by the Food and Drug Association, the Center for
Disease Control, the National Restaurant Organization, and others to promote
education to increase hand washing compliance in target markets. The focus of these
programs is to educate and encourage preventative control measures for children and
workers to help reduce diseases and lawsuits. This has led to greater awareness in our
target markets about maximizing cleanliness and minimizing preventable illness.
There is an additional trend in both our target markets and industry towards organic
based soaps. Organic products have become increasingly associated with safety and
health in a variety of different markets. Our completely organic soap is
complementary to this growing market trend.
Market Growth
The demand for child day care services will continue to grow. As the labor force
participation of women between the ages of 16 and 44 remains high, parents of
preschool and school-age children are expected to seek more day care arrangements.
As parents continue to work during weekends, evenings, and late nights, the demand
will grow significantly for child day care programs that can provide care during
nontraditional hours. School-age children, who generally require child day care only
before and after school, increasingly are being cared for in child care centers. (U.S.
Department of Labor,