A shampoo bar business plan sets out the bars you'll make and who buys them, what a bar costs and sells for, the cosmetics rules that apply, and the first year month by month. Shampoo bars sell on the things a bottle can't offer, no plastic, no water shipped, a bar that lasts, and that lets a small maker charge a good price for a few ounces of product. The plan's work is in the formula and the records: a shampoo bar is a cosmetic, so every batch needs its ingredients' lots written down, its safety backed up, and a way for a customer with a reaction to reach you. In the example below, a personal care maker in Colorado sells 540 shampoo bars, 150 conditioner bars and 50 travel tins a month by month 11, makes a profit from month 1, and ends the year about $39,200 ahead on $63,600 of sales, after paying $20 an hour for the making. Below is a description example, each part of the plan, the formula and the records, the projection, the startup budget, and a free template.
The short version
- Describe the business in a paragraph: the bars, where you sell, the workspace, the goals.
- Cost a bar with your time in it: ingredients, the box or label, and the pressing and wrapping.
- Price direct, wholesale and gift products separately; wholesale leaves less than half a direct bar.
- Add a conditioner bar and a travel tin: same customers, same equipment, a bigger order.
- A shampoo bar is a cosmetic: keep batch records, safety records and a contact on every label.
- Budget for packaging minimums; boxes and tins come in big runs.
- TaroStack keeps formulas, ingredient lots and every batch together. More below.
Part 1: the business description
Juniper & Ash, a made-up personal care maker in Boulder, Colorado, I use in these examples, writes:
Juniper & Ash makes shampoo bars, conditioner bars and travel tins by hand in small batches, sold at markets, online, and wholesale to zero-waste shops and salons. Every bar carries a batch code and a way to reach us. In our first year we plan to sell to 20 shops and reach 740 bars a month.
Part 2: what a bar costs
| Per unit | Shampoo bar, direct | Shampoo bar, wholesale | Conditioner bar | Travel tin |
|---|---|---|---|---|
| Ingredients | $1.40 | $1.40 | $1.90 | $1.40 |
| Box, label or tin | $0.55 | $0.55 | $0.55 | $2.20 |
| Card fee, 3% | $0.42 | $0.45 | $0.66 | |
| Case share | $0.10 | |||
| Your time, at $20 an hour | $1.25 | $1.25 | $1.25 | $1.50 |
| Variable cost | $3.62 | $3.30 | $4.15 | $5.76 |
A batch of 40 bars, weighed, melted, mixed, pressed and wrapped, takes about two and a half hours, which is $1.25 a bar. The tin costs more than the bar inside it; that's why the travel tin is priced as a gift. How a formula's percentages turn into a cost per bar is in how to calculate cost per ounce.
Part 3: customers and prices
| Product | Price | Variable cost | Contribution | Margin | A month at full speed |
|---|---|---|---|---|---|
| Shampoo bar, 3 oz, direct | $14.00 | $3.62 | $10.38 | 74.1% | 300 |
| Shampoo bar, 3 oz, wholesale | $7.50 | $3.30 | $4.20 | 56.0% | 240 |
| Conditioner bar, 2.5 oz, direct | $15.00 | $4.15 | $10.85 | 72.3% | 150 |
| Travel tin with a shampoo bar | $22.00 | $5.76 | $16.24 | 73.8% | 50 |
A wholesale bar leaves $4.20, less than half a direct one, but zero-waste shops and salons reorder steadily and reach customers you'd never meet at a market. A conditioner bar sold alongside a shampoo bar is the cheapest sale you'll make. How to set a wholesale price a shop will accept is in how to price handmade items for wholesale.
Part 4: the cosmetics rules
A shampoo bar cleans hair, so in the US it's a cosmetic; a bar that claims to treat dandruff or hair loss becomes a drug, with much stricter rules, so keep the claims to cleaning and conditioning. Under MoCRA, a small business is excused from facility registration and product listing but not from reporting serious adverse events, keeping adverse event records, and keeping records that back up each product's safety, and every label needs a US address, phone number or website for reactions. What counts as small, and what each of those means, is in MoCRA for small businesses; what goes on the label is in cosmetic labeling requirements. This is general information, not legal advice.
Part 5: the first year, month by month
Fixed costs are $455 a month: market fees ($200), marketing and samples ($120), insurance ($60), the website ($40), and software and card fees ($35). Sales start at 15% of full speed and reach it by month 11:
| Month | Shampoo, direct | Shampoo, wholesale | Conditioner | Travel tins | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|---|---|
| 1 | 45 | 36 | 23 | 8 | $1,421 | $543 | $543 |
| 2 | 60 | 48 | 30 | 10 | $1,870 | $857 | $1,400 |
| 3 | 75 | 60 | 38 | 13 | $2,356 | $1,199 | $2,599 |
| 4 | 90 | 72 | 45 | 15 | $2,805 | $1,513 | $4,112 |
| 5 | 120 | 96 | 60 | 20 | $3,740 | $2,170 | $6,282 |
| 6 | 150 | 120 | 75 | 25 | $4,675 | $2,826 | $9,108 |
| 7 | 180 | 144 | 90 | 30 | $5,610 | $3,482 | $12,590 |
| 8 | 210 | 168 | 105 | 35 | $6,545 | $4,138 | $16,728 |
| 9 | 240 | 192 | 120 | 40 | $7,480 | $4,794 | $21,522 |
| 10 | 270 | 216 | 135 | 45 | $8,415 | $5,450 | $26,972 |
| 11 | 300 | 240 | 150 | 50 | $9,350 | $6,106 | $33,079 |
| 12 | 300 | 240 | 150 | 50 | $9,350 | $6,106 | $39,185 |
The year's sales are $63,617 and the profit $39,185, on top of $20 an hour for the making. Margins this high are why the category attracts makers; the work is getting to 740 bars a month of buyers.
Part 6: the formula and the records
A shampoo bar made with mild surfactants rather than soap can be formulated close to the pH hair and scalp prefer, and with no water in the formula it's far less prone to mold than a liquid shampoo, though a bar left wet in the shower still meets water, so whether to add a preservative is worth asking your formulator. The records are the same as any cosmetic's:
| Record | What it holds | Why |
|---|---|---|
| Formula, with a version | Every ingredient by weight, and its percentage | Every batch should match the tested formula |
| Batch record | Date, batch code, each ingredient's supplier lot, weights, who made it | A reaction report leads back to the batch |
| Safety records | Ingredient safety data, use levels, any testing | MoCRA asks for safety substantiation |
| Adverse event log | Every reaction a customer reports, and what was done | Kept three years under MoCRA |
A template for the batch record is in cosmetic batch record template.
Part 7: the startup budget
| Item | Example |
|---|---|
| Mixer, molds and a bar press | $600 |
| Scale and thermometer | $120 |
| First ingredients | $500 |
| Boxes, labels and tins, first order | $700 |
| Label design | $350 |
| Product liability insurance, first year | $600 |
| Market tent and display | $450 |
| Website | $200 |
| Working cash | $1,500 |
| Total to start | $5,020 |
Get the template
Download the shampoo bar business plan workbook. Four sheets: your products with price, variable cost and monthly volume at full speed; the year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
Four products, a dozen ingredients from five suppliers, boxes and tins bought by the thousand, and a batch every other day are more than a notebook keeps straight. A customer emails about an itchy scalp and the batch code on the bar leads to a page that doesn't say which lot of surfactant went in; the tins run out in November; the cost per bar is still last spring's.
How TaroStack does it
TaroStack keeps the formula, the lots and the batches together.
Formulas with versions. Each bar is a recipe with versions, every ingredient by weight, and units convert: surfactant by the kilo, weighed by the gram. A change to the formula is a new version, and every batch records which one it was made to.
Batches with their lots. Recording a batch takes ingredients and packaging off stock from the lots used, at what you paid, notes which lots went in automatically, and divides by the bars that came out good. Batch record forms carry your own fields, like weights and initials, with sign-off.
And the trace when a customer writes. Every batch goes into a lot with its code, lot labels print with it, and one report goes from a bar's code to its batch, its ingredient lots and every customer who got bars from it. Margins are reported by product and by customer.
| The job | Notebook | In TaroStack |
|---|---|---|
| Which surfactant lot is in this bar? | Maybe in the notebook | The batch's lots |
| Who else got bars from that batch? | Read the orders | One report, lot to customer |
| Tins running low | Found in November | The reorder list, in days |
| What does a bar cost now? | Last spring's number | Every batch, at what you paid |
Recipes, batches, lots, recalls and margins by product and customer are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.