Making handmade soap is more than just a hobby—it can be a profitable business. But before you can make a splash in the industry, you need to know how to nurture sales.

A key step in this process is creating a business plan. Use Growthink’s Ultimate Business Plan Template to complete yours in just hours!

Decide on a Niche

One of the first things you should do when starting a soap business is to decide on a niche. This will help you define your target audience and differentiate your brand from competitors. It will also allow you to create products that meet the needs and preferences of your customers.

To determine your soap business niche, start by researching the market and identifying trends. You can do this by attending soap-making trade and conference shows, reading industry news and publications, or visiting websites of local retailers that carry handcrafted soaps. Once you know what kind of soap your target audience is purchasing, you can then narrow down your niche by focusing on a specific product or style of soap.

The niche you choose can be based on any number of factors, such as price range, shape, color, type of soap, or ingredient list. For example, you could create a line of luxury soaps for high-end boutiques, make wedding-themed soaps, or offer specialty bars made with artisanal ingredients. Whatever your choice, it is important that you be passionate about it. If you are not, it will be difficult to come up with creative material on a regular basis.

In addition, having a niche can be beneficial when it comes to securing brand deals and affiliate programs. Many companies will only work with businesses that align with their audience and niche. Therefore, it is essential to identify your niche before approaching any potential partners.

Decide on a Brand

A brand is a set of qualities that creates an emotional connection with your customers. It’s everything from the colors you choose for your logo to the packaging and fragrances you use in your soap. A strong brand will attract repeat buyers, which is essential for a successful business!

As you start planning out your business, make sure you have a clear picture of where you want to take it. This will help you decide what ingredients to buy, how much time to devote to making the soap, and how to structure your company. Having an end goal in mind will keep you from spinning your wheels and making decisions that won’t help your business grow.

If you plan on selling your soap online, it’s important to have a clear understanding of the tax obligations that come with owning a business. Registering for an EIN will allow you to handle sales tax responsibilities efficiently, and keeping detailed records of all transactions will make filing your quarterly taxes much easier.

In addition to the legal requirements of owning a business, you’ll also need to consider shipping costs and the cost of any other supplies needed for your soap-making process. It’s also a good idea to get insurance for your business, which will protect you if anything unexpected happens.

Lastly, it’s always a good idea to research the competition before launching your soap business. This will help you understand what’s working for other soapmakers and how to stand out from the crowd. For example, if your competition is all selling bubblegum-scented soap, you might want to try something different! This will be even more crucial if you’re planning on selling your soap at a physical market or online.

Create a Marketing Plan

Once you’ve developed your brand and product, the next step is to create a marketing plan. If you’re not sure how to go about doing this, there are plenty of resources available online that will guide you through the Wholesale private label process. This will be very important for your soap business, as it will help you understand where you should focus your efforts and how much money you should expect to make.

The first section of your business plan will describe the market and competition, and should include a description of what you do and why. This should be followed by a description of your products and services. This section should also include a list of any potential customers, and how you plan to reach them. This can include things like direct sales, e-commerce sites, craft shows, and events.

If you’re selling your products online, it’s important to take high-quality photographs of each bar, and include them with a detailed description. This will help your soaps stand out from the crowd, especially when they’re competing against a lot of other handmade products. It will also be helpful to use keywords in the description that are most likely to be searched for.

Finally, you should document your prices and how they compare to the prices of your competitors. This will help you to develop strategies that will maximize your sales and profits. This can include offering discounts, seasonal sales, a rewards program, or anything else that will attract and retain customers.

Create a Website

A website is an essential component of any online e-commerce business. It can be used to showcase your products, share behind-the-scenes content, run promotions and collaborations, and more. It can also be a powerful sales tool, as it allows customers to easily browse and purchase your handmade soaps from the comfort of their homes.

When creating a website, you’ll need to consider how your business is structured and where you plan on selling your soap. This will help determine what type of site you need, and whether you’ll be using a marketplace or a self-hosted website platform like Shopify. Regardless of the platform you choose, you’ll need to take good product photos and create compelling product descriptions that will drive customers to your site.

You’ll also need to decide how to handle business finances. If you are planning on making and selling a large amount of soap, it may be worth investing in small business accounting software to manage your inventory, sales, bills and payments more effectively. You’ll also need to register your business and set up a bank account to handle your tax obligations.

If you’re planning on launching your soap business as an LLC, a partnership, or sole proprietorship, make sure to understand and comply with all local and state regulations. This will prevent you from being subject to fines and penalties, and it’ll help ensure your business operates smoothly.

You’ll also want to choose a name for your company and create a logo to give your brand identity an aesthetic. Be sure the name you choose is unique, and that it will allow you to expand your brand in the future. If you’d like to explore your branding options in more detail, our HQ Brand Clarity course inside Tizzit offers step-by-step guidance for crafting a powerful brand identity that will resonate with your ideal customers.

Start Selling

Once you have honed your soap-making skills and chosen your market, it’s time to start selling. You can choose to set up your own website, sell on marketplace sites like Etsy and Amazon, or work with local boutiques. Whichever route you take, you will need to decide how much inventory you want on hand to start with and which products will best fit your market. It’s also important to understand your tax obligations and set up a business bank account. This will help you keep track of your expenses, manage your financial responsibilities, and simplify tax filings.

It’s also a good idea to test out your product at a craft show or live event before you begin selling online. This will give you the chance to interact with your customers, answer their questions, and get genuine feedback about your soap. It will also give you a feel for how your product performs in the real world, and how well it holds up over time.

Finally, it’s important to make sure that you can take clear, detailed photographs of your products. This will be especially important if you plan to sell your soap online, as most of your buyers will have only a visual representation of the product. This is also an excellent opportunity to practice your photography skills!

If you’re not a pro photographer, consider taking a course to learn the basics of using a DSLR camera and editing software. It’s also a good idea to invest in some basic studio equipment, such as a light box and backdrop, to improve your lighting and photo quality. Lastly, don’t forget to set up an inventory tracking system and learn how to use small business accounting software. This will help you stay on top of your sales, expenses, and orders.