Soap & Cosmetic Making Business Plan by Leigh Lopez

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โ ฉ

Soap & Cosmetic Making Business Plan

By Leigh Lรณpez Soap & Cosmetic Making Business Plan by Leigh Lรณpez

“All successful people men and women are big dreamers. They

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imagine what their future could be, ideal in every respect, and then they work every day toward their distant vision, that goal or purpose.”

― Brian Tracy, Personal Success

OWNER INFORMATION Your Name …………………………………………………………………………….

Address Line …………………………………………………………………………. …………………………………………………………………………………………. ……………………………………………………………………………………….…

ZIP Code ……………………

Telephone ……………………………………………………………………………..

Fax ………………………………………..Cell ………………………………………

E‐Mail ………………………………………………………………………………….

Business Details Business Name …………………………………………………………………….…

Trading Name …………………………………………………………………………

Structure ………………………………………………………………………………

Slogan………………………………………………………………………………….

Business Email ……………………………………………………………………….

Website ………………………………………………………………………………..

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Contents 1.Professional and Advisory Support

4

2.Executive Summary

6

3.General Company Description

8

4.Products and Services

12

5.Market analysis

14

6. Financial Plan

32

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1.Professional and Advisory Support (List key people who are working on your business or helping you succeed; Mentors, Consultants, advisors and other outside help) NAME

ROLE

JOB TITLE

Planned team structure: (Draw an organisation chart, showing where the roles fit together.)

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Retention, engagement and recruitment policies and practices: (To maintain and improve your business’ capabilities, detail the best practice solutions you‘ll use to retain key staff and compete for skilled workers in the job market. This is often an area overlooked in business plans, but you should lay out your retention and recruitment solutions to readers. This will give them confidence that your business won’t be hamstrung by a high turnover of staff or any other human resources issues. As well, list the policies and practices you will use to recruit, retain and engage staff.)

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2.Executive Summary (Here is where you traditionally ‘sell’ your business to the reader by getting straight to the point and promoting the critical information you need to get across. Rather than start with the executive summary, it’s often easiest to complete the rest of your business plan in detail first.)

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3.General Company Description Describe your business and industry: (Type of business. What changes do you foresee in the industry, short term and long term? How will your company be poised to take advantage of them? Include your point of difference and the value you offer your customers.)

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Mission Statement: (30 words or fewer) ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ………………………………………………………………………………………………

Company Goals and Objectives: (Goals are destinations—where you want your business to be. Objectives are progress markers along the way to goal achievement)

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Business Philosophy: (What is important to you in business?) ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ………………………………………………………………………………………………

Elevator Pitch: (An elevator speech is a clear, brief message or “commercial” that will (hopefully) lead into a deeper dialogue about the functionality, and specialty, of what you and your company can offer.)

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Describe your most important company strengths and core competencies. (Core competencies are the business equivalent of an individual's strengths and talents when applying for a job. They can be defined as the skills and intentions which enable a corporation to leverage its resources. Resources may either be tangible or intangible. )

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To whom will you market your products? (State it briefly here—you will do a more thorough explanation in the Marketing Plan section)

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4.Products and Services Describe in detail your products or services . …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… ……………………………………………………………………………………………………………

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What factors will give you competitive advantages or disadvantages? …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… ……………………………………………………………………………………………………………

What are the pricing, fee, or leasing structures of your products or services? …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… ……………………………………………………………………………………………………………

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5.Market analysis Market research: (Explain what market research you’ve done to build this plan and the methods you used. Outline how ongoing market research is built into your daily business operations. Talking about how you got your market knowledge and customer insight helps the reader have confidence in what you’re about to tell them.)

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Market Structure: (Describe where your business fits into the marketplace or supply chain structure and any efficiencies you plan to implement to usurp the status quo. For example, you could start selling directly to customers online if the accepted structure in your industry is to sell to wholesalers and retailers. This would provide you with cost and time efficiencies that represent competitive advantages.)

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Target market size and outlook: (Describe where your business fits into the marketplace or supply chain structure and any efficiencies you plan to implement to usurp the status quo. For example, you could start selling directly to customers online if the accepted structure in your industry is to sell to wholesalers and retailers. This would provide you with cost and time efficiencies that represent competitive advantages.)

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Customer mindsets and behaviours: (Summarise or list the factors influencing your target customers’ purchasing habits and the way they will engage with your business. Explain how the business will meet the market’s requirements.) ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… …………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………

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Competitor analysis: (Use this section to identify your competitors’ strengths and weaknesses, and formulate a strategy to combat the former and target the latter. Your choices should be based on sound competitor research.)

Name of Competitor 1: ………………………………………………………………………………………………………………………………..

STRENGTHS

WEAKNESSES

Summarise your strategy for competing with that business ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………

Soap & Cosmetic Making Business Plan by Leigh López

Page 18 Name of Competitor 2: ………………………………………………………………………………………………………………………………..

STRENGTHS

WEAKNESSES

Summarise your strategy for competing with that business ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………

Soap & Cosmetic Making Business Plan by Leigh López

Page 19 Name of Competitor 3: ………………………………………………………………………………………………………………………………..

STRENGTHS

WEAKNESSES

Summarise your strategy for competing with that business ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………… ………………………………………………………………………………………………………………………………

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SWOT - Internal and External forces: Now that you’ve analysed your market and your competition, think more widely about your SWOT – your strengths, weaknesses, opportunities and threats. Some will be internal to your company. Others will be forces outside your direct control. They’re all important to identify and plan for.

Internal forces - Strengths (Explain what positively impacts on your business from the inside. What do you do well, or what do you have that you can make the most of? For example, a good reputation, smooth operations, or a strong team. Outline what you’ll do to make the most of those strengths.)

OPPORTUNITIES

WHAT WE”LL DO

Internal forces - Weaknesses (Explain what negatively impacts your business from the inside. It could be what you don’t do well or what you don’t have that you need.

For example, a poor reputation or none at all, bumpy operations, the wrong team.

Outline what you’ll do to overcome or turn around those weaknesses.)

WEAKNESSES

WHAT WE”LL DO

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External forces - Opportunities (Explain what might positively impact your business from the outside. What’s out there or on offer that you could make the most of? For example, good talent to hire, a large untapped market, new software tools, a key new partnership. Outline what you’ll do to take those opportunities) OPPORTUNITIES

WHAT WE”LL DO

External forces - Threats (Explain what might negatively impact your business from the outside. What’s out there that might be a risk to your business? For example, no talent to hire, law changes, rising production costs, poor public infrastructure.

Outline what you’ll do to mitigate those risks.)

THREATS

WHAT WE”LL DO

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Market strategy: Detail your strategy for taking your product or service to the target market. The core segments of a marketing strategy are often referred to as The Four Ps. The Four Ps are: 1.

Product – designing features into your product or service that meet the needs of the target market.

2.

Price – using a pricing strategy that reflects the values of your product and brand, and appeals to the target market.

3.

Place – choosing the right distribution channels to make sure the product is sold at the right place and time to meet your target market, and choosing the correct delivery method to meet their needs.

4.

Promotion – choosing promotional and advertising tactics to appeal to your target audience to maximise sales.

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Launch strategy and budget: (Explain your launch marketing strategy and then note your budget. Few businesses make their name purely on word-of-mouth; they need to promote their business to effectively set up their space in the marketplace. The budget for this should be part of the start-up costs mentioned in the Finance section and reflect the total cost of the launch marketing tactics outlined in your marketing strategy.)

Outline your strategy:

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AREA OF SPEND

COST

TOTAL $

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Ongoing marketing strategy and budget: (Once you’ve launched your business and gained recognition for your start-up’s brand, you’ll most likely need to continue marketing to keep the brand ‘top of mind’ with your target market.)

Outline your strategy:

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AREA OF SPEND

COST

TOTAL $

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Assets held and planned: Businesses hold various assets, from equipment to know-how. It’s good to acknowledge your assets in your business plan and explain how you’ll replace those assets as they reach the end of their life.

Business Premises: (Detail your premises situation. If you own the premises, list it as an asset. If you lease premises (or are you going to) to save money on your capital costs, explain that here. ) Explain your premises needs:

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ASSET

REPLACEMENT/MAINTENANCE STRATEGY

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Computers and IT: (Explain your IT (information technology) requirements and how you plan to manage them. Use this to spark thoughts about solutions for any specialist human resources or security issues, which you might want to note in other parts of your plan) Explain your IT needs:

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ASSET

REPLACEMENT/MAINTENANCE STRATEGY

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Equipment (Explain your equipment requirements and how you plan to manage them, including solutions for any machinery, vehicles and equipment costs. For example, is it more in your business’ interests to buy or lease certain equipment?)

Explain your equipment needs:

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ASSET

REPLACEMENT/MAINTENANCE STRATEGY

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Stock (Many businesses rely on stock for their business model, and many of those hold stock within the business. If that’s the case for you, it’s good to show how you’ll replace your stock and how you’ll protect it before sale.)

Explain your stock needs:

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ASSET

REPLACEMENT/MAINTENANCE STRATEGY

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Intellectual Property (Intellectual property typically includes things like a logo, brand, trade secret, design or invention.)

IP is important for small businesses because it can help: Create market advantages and business opportunities, grow profits, including licensing or selling to others, attract investment, protect businesses, maintain your good reputation, keep competitors away, be a selling point for potential business buyers.

Explain your intellectual property situation, as background before listing specific IP assets.:

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ASSET

REPLACEMENT/MAINTENANCE/ PROTECTION STRATEGY

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Branding:

(your brand should encompass most areas of your business, from

stationery to how you deliver your product or service to customers, it can be difficult to define a budget for building and maintaining it. But it's a good idea to set a budget, otherwise it's easy to spend money unnecessarily. A list has been started below, continue to add to it.)

Explain your branding needs:

…………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… …………………………………………………………………………………………………………… ……………………………………………………………………………………………………………

TASK

AVERAGE COST

MAINTENANCE COST

Building your brand, Brand Strategy & Management Name development Logo and identity design Website SEO (website search-engine optimization) Brand marketing materials: brochures, flyers, stationery etc Advertising Social media Signage

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6. Financial Plan It’s important to know you can make ends meet or make money if that’s what you want to do. This section outlines at a high level your forecasted costs, revenue, profit and loss, break-even date, cash flow and balance sheet.

Cost forecast - money out (Summarise the start-up and ongoing costs of your business. Account for as much detail as possible. The more accuracy and honesty you provide at this stage the better, because if you sugar-coat the costs you face now, you’ll just be setting yourself up for problems later on. You need to pause and spend time digging down into the figures to give yourself a realistic costs basis on which to build your break-even analysis.)

Outline your strategy:

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Page 33 AREA OF SPEND

FIRST YEAR $

SECOND YEAR $

THIRD YEAR $

TOTAL

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Revenue forecast - money in (Revenue can come in different forms, including sales, commissions, royalties, rent and bank interest. List the different types of revenue you’ll be getting and provide a forecast for each year. Include your sources of investment funding. It’s up to you how much detail you go into. But if you’ll be showing this business plan to potential investors, they’ll want to see how much you’re backing your business with your own investment and who else has invested in the business.)

Outline your strategy:

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FIRST YEAR $

SECOND YEAR $

THIRD YEAR $

Investment/Funding TOTAL

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Break-even forecast: (Carry out a break-even analysis outline the strategy used, and the resulting date in the spaces provided. A break-even analysis estimates when your business could break even and start to pay its ongoing costs. To find a break-even date, you need to a) estimate the sales volume you need to reach to break even and b) estimate how long it will take you to reach that milestone given your capacity limitations.)

Production stats.:

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Break-even point formula :

Break-even date: ……………………………………………………………………………………………………………

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Profit and loss forecast: (Forecasting profit and loss can be quite difficult for existing businesses, let alone start-ups with no track record to go on. If you’re still in the start-up phase, you need to base your figures on your market research by estimating the value of the market and the share of it you could take from your competitors as your business develops. Try finding industry data or using publically available statistics to support your forecasts. To show your objectivity, you can also provide pessimistic, realistic and optimistic forecasts rather than just one forecast.

Outline your strategy:

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PROFIT AND LOSS FORECAST

FIRST YEAR $

SECOND YEAR $

THIRD YEAR $

Estimated revenue Estimated costs Estimated profit/loss

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Cashflow forecast: (A cash flow forecast is a tool for recording how much money you are likely to have coming in and out of your business at any point.)

To get done: Attach your cashflow forecasts for the next three to five years to your completed business plan.

Game Plan: Few businesses enjoy consistent levels of cashflow throughout the year, so unless your industry or business model can justify that prediction, you’ll need to drill down into your market research to identify the peaks and troughs in income that you can expect.

Outline your strategy:

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Balance sheet forecast: (Summarise your balance sheet forecast for the next three to five years, before attaching a detailed forecast for the next year to your plan.

Balance sheets account for all the assets a business owns for the calculation of its net worth, which is the value of the business’ assets minus its debts (or liabilities). They also show how the assets are financed if they’re not owned outright by a business or individual. Potential investors will compare your cashflow forecasts with your balance sheet forecasts to see when the business’ income is likely to balance out all the debts incurred buying assets in the start-up phase. This is different to a break-even analysis, which estimates when the business will generate enough income to cover its ongoing costs rather than its total debts.)

Outline your strategy:

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BALANCE

FIRST YEAR $

SECOND YEAR $

THIRD YEAR $

Total

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Business continuity planning: (We all like to hope for the best, but sometimes things don’t go our way. It’s important to have a plan for when your business is interrupted by a natural disaster, a machinery malfunction, a safety incident or health issue. Business continuity planning might involve insurance, policies, and computer back-ups and systems. Think about what’s right for your business and list your processes and tools here.)

Outline your strategy:

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RISK

SYSTEMS,POLICIES OR TOOLS TO MITIGATE RISK OR DEAL WITH …

EXAMPLE: RISK- Computer theft MITIGATE RISK - Insurance so we can buy straight away, cloud back-ups and systems to ensure data is not lost.

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Succession planning:

Whether you plan to sell your company (or otherwise

transfer ownership due to ill health, or you wish to move on to new opportunities, retire or pass away. ) now or in 20 years, having a plan in place helps you in many ways: Among other things, it can inform lenders who seek assurance of business continuity, provide incentives to key members of management, and structure a future transaction so that the business can fund your retirement without sapping its cash flow. Because of the complexities involved, a business owner will need a team of qualified professionals to assist in finalizing the plan as the process can be complicated. For the purpose of this business plan simply state your ‘Exit Plan Goals’ and list the ‘Best Case Scenario.’

Overtime you can work on a full complete succession plan.

A good succession plan covers: I. when you plan to exit the business II. who the business is being sold to or who will take it over III. whether you choose to sell all of the business or sell down gradually IV. any tax and legal implications.

V. your future role – if you’re not ready to let go completely, define your role and make sure you’re rewarded appropriately.

Your exit plan goals

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The Best Case Scenario

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Are you planning to start a soap business? Soap is considered to be a staple commodity that has been on the market for thousands of years. For this reason, the soap production industry is increasingly witnessing a growing trend and the sector is thriving. Millions of dollars are generated annually from small, medium and large scale soap production enterprises. According to statistics, global bath soap market revenue totalled $25 Billion in 2019. Numerous factors such as population growth, increased hygiene awareness, value addition and increasing demand for emerging markets have positively contributed to the growth of the soap making industry.

There is no doubt, this is an excellent business idea to venture into. So if you are tinkering with starting a soap making or handmade cosmetic making business, here is a complete sample business plan template you can use for FREE. One good thing about this kind of business is that you can start it on a small scale level from your home and then grow when your market grows.

I know that the very thought of writing a business plan can seem daunting. However, your business plan is a necessary and very important strategic document as it focuses your energy, time and resources on a clear end game; not only that of launching a successful beauty business but also of ensuring it has the potential to thrive long term.

It is a tool to refer to every time you are faced with important decisions. Your plan guides your decision-making and makes the everyday of running your beauty business simpler and smoother.

It will take time to write your business plan as it summarises the hard work that must be done before you start your business. Working out your ‘why’ and what your brand stands for, what you’ll be selling, where you’ll be selling, who your competitors are and what your market gap is, and how you’ll fund your business is very critical. It also entails drafting a full financial plan, based on things like estimated sales forecasts.

Running a beauty business, even one that you start at home, requires you to be very organised. You will need a strong business plan that leads you through all of the main components of your business.

Leigh Lopez, has over 10 years working industry experience paired with an MBA in Marketing and BSc (Hons) Cosmetic Science. She continues to promote education, research and collaboration to advance the science of the handmade beauty industry.

Get in touch leighlopez@icloud.com

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Planning is bringing the future into the present so that you can do something about it now.

― Alan Lakein

Soap & Cosmetic Making Business Plan by Leigh LĂłpez