A soap business plan sets out what you'll make, whether it counts as soap or as a cosmetic, who will buy it and at what price, how you'll make and cure it, and the first year month by month. Two things set soap apart in a plan. The rules depend on your claims: a bar sold only as soap is regulated differently from one that promises to moisturize. And cold process soap cures for weeks before it can be sold, so the cash for a month's bars goes out well before the sales come in. In the example below, a soap maker reaches 250 market bars and 150 wholesale bars a month by month 11, makes a monthly profit from month 3, and ends the year about $6,900 ahead on top of paying for the making. Below is a description example, each part of the plan, the projection, and a free template.
The short version
- Describe the business in a paragraph: the soap, the customers, the workspace, the goals.
- Decide what you'll claim; "soap" alone and "moisturizing soap" fall under different rules.
- Cost a bar, with your hours, which are the biggest line.
- Plan the cure: four to six weeks of stock in the racks at any time.
- Price for markets and wholesale; wholesale margins on soap are thin.
- Project 12 months with sales ramping up.
- TaroStack costs every batch, dates every lot, and shows what's curing. More below.
Part 1: the business description
Hoʻola Botanicals, a made-up skincare maker I use in these examples, adds cold process soap. Its description reads:
Hoʻola Botanicals makes cold process soap with coconut and olive oils and island botanicals, cut, cured for six weeks and wrapped by hand on Oʻahu. We sell 5 oz bars at two Saturday markets and online, and wholesale to gift shops. Our bars are labeled and sold as soap. In the first year we plan to sell 400 bars a month by month 11.
Part 2: soap or cosmetic
FDA treats a product as soap only when most of it is an alkali salt of fatty acids, its cleaning comes from those compounds, and it's labeled, sold and represented only as soap (21 CFR 701.20). Products that meet that definition are regulated by the Consumer Product Safety Commission, not FDA; a cleanser that also claims to moisturize or deodorize is a cosmetic, and one that claims to treat a condition can be a drug (FDA). The plan should say which you are, because it decides the label and the records. This is general information, not legal advice.
Part 3: what a bar costs
The costs come from soap business profit margin. For the plan, the overhead share moves to the monthly costs:
| Per 5 oz bar | Cost |
|---|---|
| Oils and lye ($25.54 a batch of 19) | $1.34 |
| Box and label | $0.40 |
| Labor, 2 hours a batch at $20 | $2.11 |
| Variable cost | $3.85 |
A market bar also pays a 3% card fee, so its variable cost is $4.15.
Part 4: customers and prices
| Channel | Price | Variable cost | Contribution | Bars a month at full speed |
|---|---|---|---|---|
| Markets and online | $10.00 | $4.15 | $5.85 | 250 |
| Wholesale to shops | $6.00 | $3.85 | $2.15 | 150 |
Wholesale soap leaves $2.15 a bar, so the plan leans on markets and online. A shop selling at about $10 sits beside your own price.
Part 5: the first year, month by month
Sales start at 15% of full speed and reach 100% by month 11, against $440 of fixed costs a month: insurance, market booths, marketing and samples, the website, software and card fees.
| Month | Market bars | Wholesale bars | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|
| 1 | 38 | 23 | $518 | −$168 | −$168 |
| 2 | 50 | 30 | $680 | −$83 | −$251 |
| 3 | 63 | 38 | $858 | $10 | −$241 |
| 4 | 75 | 45 | $1,020 | $96 | −$146 |
| 5 | 100 | 60 | $1,360 | $274 | $129 |
| 6 | 125 | 75 | $1,700 | $453 | $581 |
| 7 | 150 | 90 | $2,040 | $631 | $1,212 |
| 8 | 175 | 105 | $2,380 | $810 | $2,022 |
| 9 | 200 | 120 | $2,720 | $988 | $3,010 |
| 10 | 225 | 135 | $3,060 | $1,167 | $4,176 |
| 11 | 250 | 150 | $3,400 | $1,345 | $5,521 |
| 12 | 250 | 150 | $3,400 | $1,345 | $6,866 |
The projection counts a bar's cost when it sells. Soap's cost goes out six weeks earlier, when it's made: at full speed, about 560 bars are curing at any time, about $2,160 of oils, boxes and hours sitting in the racks. In the first months that's a few hundred dollars, inside the $1,500 of working cash; by full speed, the year's profits are carrying it. How to plan stock that takes weeks to be ready is in how to prepare a production plan.
Part 6: the startup budget
| Item | Example |
|---|---|
| Molds and a cutter | $250 |
| Scale and stick blender | $150 |
| Goggles, gloves, apron | $60 |
| First oils and lye | $400 |
| Boxes and labels | $300 |
| Label design | $300 |
| Business license | $150 |
| Curing racks | $150 |
| Market tent and table | $300 |
| Website | $300 |
| Working cash | $1,500 |
| Total to start | $3,860 |
Get the template
Download the soap business plan template. Type your bars with their price, variable cost and monthly volume at full speed, your fixed costs and startup budget, and how fast sales will come; it works out each month's sales, profit and cash, the first month with a profit and the lowest cash point. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
Six weeks of curing means three or four batches in the racks, each ready on a different day, in six scents. Which bars are ready for Saturday, which batch used the new olive oil, and how many lavender bars are actually on the shelf versus in the racks: a notebook loses track, and the market table comes up short of the scent that sells.
How TaroStack does it
TaroStack costs every batch, dates every lot, and keeps the curing racks apart from what's ready to sell.
Every batch, costed and dated. Each soap is a recipe, with units converted: buy oils by the jug, use them by the gram. Recording a batch takes oils, lye and fragrance off stock from the lots used, at what you paid, divides by the bars that came out good, and puts them into a lot with its own code and dates. How a soap batch number can work is in how to create batch numbers for soap.
Curing kept apart. A batch that's curing can sit on hold, apart from stock that's available to sell, and be released when it's ready, so the market's pick list only offers bars that are cured. Stock is picked first-expired-first-out.
And the plan, checked. Margins are reported by product and by customer, and stock that isn't moving shows how long since it last went out, so the scent that doesn't sell is visible before you make more. Each shop is a customer with its orders.
| The job | Notebook | In TaroStack |
|---|---|---|
| What a bar costs | Worked out once | Every batch, at what you paid |
| Which bars are cured | Check the racks | Curing lots on hold until released |
| Which batch used the new oil | Unknown | The oil's lot, on the batch |
| Which scents sell | A feeling | Margins by product |
Lots, holds, recipes, batches and margins 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.