How to Know When You Are Ready to Start a Soap Company of Your Own
As a business coach in the handmade soap making industry, I get asked often about how long a soapmaker should wait before they start a soap company. It even comes up in our Facebook group often, and it usually doesn't go so smoothly.
Experienced soapmakers with longstanding soap businesses may seem negative or appear as if they're afraid of competition, but usually, experienced soapmakers that warn a soapmaker about starting a business too soon are only wanting what is best for you and the industry as a whole.
They may be protective of our industry, wanting only the best for the customers who shop the handmade soap arena, and upholding the best possible perception of our industry as possible. They also usually despise seeing others make the same mistakes they've made, and will do what they can to prevent that from happening. If an experienced soapmaker offers advice about waiting to start a soap company, it usually comes from a place of love, I promise!
It's no secret that I've owned two successful soap companies (one of which I sold), but soapmakers are usually surprised to find out that I didn't even think to start a soap company until I had six or so years of soapmaking experience under my belt. While this greatly benefited my businesses, it's not typical or required, at all. In fact, not much is typical or required, but there are definitely some recommendations to save some trouble in getting started.
Are you ready to start a soap company of your own?
If you want to know if you are ready to start a soap company, here are the common questions I dish out in return to that big old question:
Do you know how the soap you are making right now compares to your competition?
Ten years ago, I thought I made the best soap I could possibly make. Fast forward a few more years, and I had tweaked that recipe a bit more to make it even better. In the past three years or so, I haven't been able to make that recipe any better. (I've been making soap for almost twenty years now, you learn a lot in that time.)
The level of recipe tweaking and formulating know-how can only come with lots of research and experience, not to mention, comparing your products to the others available on the market.
Being able to objectively compare your formulations with your competitors will help you differentiate your products on the market. Before you throw in the towel and start your own soap company, compare your perfect recipe with soap made not just by other handmade soap companies but large scale handmade soap companies and commercially produced soap bars.
Takeaway: Figure out what sets your formulations apart, so you can communicate that to your customers.
Have you made enough soap to handle issues in soapmaking and know how to fix them?
When you start a soap company, you need to be able to reel in your costs and keep any losses to a minimum. If you aren't experienced enough with soapmaking to know how to troubleshoot and fix common issues, it will cost you valuable time (that could be better spent selling and marketing) and financial resources that eat at your profits. Here are a couple of common issues you should have under your belt with a big fat checkmark of 'I got this!':
- Anticipating and handling acceleration, seizing, and ricing
- Calculating and using a water discount, superfat/lye discount, and recipe changes
- Identifying when something is not "right" - such as oil is missing, your lye solution is strong/weak, your mold/soap pot is not the right level of "full" for the recipe you are making, etc.
- Understanding allergens found in your ingredients
- Understanding the difference between the two processes of saponification and curing
- Identifying when soap is unsafe for usage (lye pockets, uneven saponification, etc.)
- Having a go-to method for rebatching
Takeaway: There is no magical timeframe that suddenly makes you a knowledgeable soapmaker.
Every soapmaker is unique in reaching the point where they can fully troubleshoot and handle issues in the soapmaking process, and it all depends on your learning curve. Advice that says you should make X number of batches of soap or have X number of years of soapmaking behind you isn't a one size fits all metric for determining your expertise!
Do you know how your soap will perform, smell, or look in a year from the date of manufacture?
When you start a soap company, you need to fully understand how your product performs. If you have not completed full research and development on the products you wish to sell, you will not know if your customers are getting the level of quality they expect from your brand and it could backfire on your brand's reputation.
You should know exactly how long a bar of soap lasts (you will be asked a million times by customers, I promise!). You should also know how your recipe and the soap itself will perform in different situations (hard or soft water, lathered in the hands or with a loofah, etc.) as well as if it's stored in a variety of places (left in a car in 120° F weather or -20° F weather, tucked in a closet or drawer, placed on a shelf near a shower, etc.) You want to know exactly how long a fragrance will last or if a colorant will fade or morph over time.
Takeaway: It's a good rule of thumb to test a soap formula for at least a year before selling it.
Doing so will allow you to correctly recommend usage methods, proper storage conditions, and advise on the stability/shelf life of the product.
Are you experienced enough in soapmaking that you can turn your attention to business?
The biggest issue I see with a soapmaker who starts a soap company with little experience is that they have to split their attention and focus on mastering both soapmaking and business. Entrepreneurship is tough, and there are a lot of hats to wear as a CEO. If you are going at it solo, you need to be able to focus 99% of your efforts and energy on the business side rather than the soapmaking/manufacturing side.
Takeaway: Don't try to split your learning between soapmaking & business, the biz will keep you busy!
Some soap companies have managed to handle having little soapmaking experience when they start a soap company by having more than one owner, such as a partnership between spouses or friends. In this case, one founder can focus on soapmaking and the other can focus on business. This really helps the learning curve in both arenas and would be extremely difficult for a soapmaker to handle solo.
There is a slew of lessons that soapmakers learn when they start a soap company, and I've dished on ten of my favorite things to know in the past.
Before you dive in, it's important that you understand the amount of dedication necessary for a small business to succeed, and evaluate what success will truly mean to you.
Not all soapmakers start a soap company to build a multi-million dollar business, and that's totally okay.
What isn't okay is diving in and not having a clear understanding of where you want to take it and having limitations on what you will or won't do for your soap company.
Define where you want to take your company (a brick and mortar? retail only? wholesale? private label? in your kitchen forever?), what you expect from it financially (pay for your supplies? supplement your income? support your household?), and how much time and attention you are willing to devote to building a soap company you love.
Skipping this step will quickly lead to your wheels spinning out and make any decision in business a difficult one!
Still not sure if you are ready to start a soap company? Reach out to a soapmaker in business that you respect and ask them to get real with you or leave a comment below so we can talk it out!
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