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written by | October 11, 2021

Guide to Starting a Soap Making Business

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Table of Content


In India, the beauty and personal care industry is expanding rapidly and requires less capital than other businesses. As people become more concerned about their skin and health, soap companies in India make huge profits. According to the FY2020 report, the Indian soap market is worth ₹290 crores and is expected to grow to ₹440 crores by 2026. Also, due to the Corona outbreak, people are more concerned about their health, which benefits the soap-making industry.

However, entering the soap business is difficult because large companies have already captured the market. Still, one can capture the market and make a large profit with the right strategy and effort. Creating a successful business is not an easy task, as there are several steps that one should take to become an entrepreneur. Hence, let's talk about all the important steps one by one for creating a soap manufacturing business in detail. 

Did you know? 

In India, there are 14 well-established and popular Indian soap-making brands, and Medimix, Cinthol, and Mysore Sandal are known even to children.

Plan Your Business

Soap companies, like any other business, must plan ahead of time. A well-thought-out plan is essential for achieving success as an entrepreneur. You must locate some critical information, such as the costs of starting a soap-making business? What is your intended market?

What is the profit margin in the Indian soap industry? What is the maximum amount you can charge a customer? How can you make your business more profitable and successful?

After determining the answers to these questions, assess your understanding of soap production, as a good product is a primary reason for establishing a brand. You will also require a workforce to assist with the production of soaps. A team of researchers to determine whether the composition is safe and a factory where all of this can be produced. So make your plans accordingly.

Also Read: 200+ Small Scale Business Ideas with Low Investment

Do the Necessary Research

Research can be considered a backbone for any business. For a soap-making business, one needs to do complete research regarding the production process, production unit, market functions, demand, and supply chain in business. And if you want to do a handmade soap business in India, you need to excel in the art. 

However, primary research is required in the production of soap. The better the product, the more chances of the product. Also, you must know how to attract customers to your business.

Decide the Product

Though your primary product is soap, it has several varieties, including organic soap, aromatic soap, soaps for the complexion, soft skin, liquid soaps, and many others if you want to do a homemade soap business. Based on your expertise and according to people's choices, decide what type of soaps you produce.

Though the business will expand, which automatically increases the range of products, focus on particular products in the initial stage. 

Work on Legal Entities

For opening any enterprise, including the soap business, there are some legal formalities that one needs to follow. First, you need to find the business structure you will follow as the most common business structure types are sole proprietorship, partnership, limited liability company (L.L.C.), and corporation. 

Later on, you need to get legal permission in advance to avoid any issues with government officials. Along with it, you need to apply for the tax and patent your enterprise name. 

Buy Equipment and Get a Workforce

The soap business required several types of equipment to produce a good quality and natural soap. Buy good quality machines as it will be cost-effective in the long term. 

In case of human resources needed to run a soap manufacturing business in India, it is essential to hire labour for loading and unloading, the technician who will operate the machine, and other workers for water and electricity control, etc. 

Get a Logo and Website

It is impossible to grow a soap business without placing it online in the digital era. So, to gain customers online, it is mandatory to get a website that is designed thoroughly and as per your niche. And a logo is very important for any company as it helps create a brand. However, after getting the logo, make it patented so no other enterprise could use it. 

Pricing and Packaging of the Product

Before setting a price for your soap, look into what your competitors are charging. Set your price up or down based on the value you provide.

Your product's packaging did deserve as much attention as the product's marketing. Buyers should find the product visually appealing; you can combine the soap with the other related goods and sell those as a full gift hamper.

Develop Brand

Branding is one of the most important things for a successful business. As the soap manufacturing business is already competitive, you need to be differentiated from the crowd to make it profitable. After creating the amazing product, consider whoever you want to purchase your soaps from and what type of market segment your product lines will fill. For example, your soap is completely natural, which will work well with healthy living consumers, or your soap's aroma is a distinctive feature. Your main focus should be on aroma lovers.

Doing advertisements by thinking about a niche, creating a company's logo or website, wrapping the soap in special papers or ribbons, creating a distinctive and catchy company name, blazoning the soap with letters and different forms are some of the steps to make a brand. 

Do Great Advertising Campaigns

Advertising plays a major role, be it television or newspaper advertising, social media marketing campaigns, or anything else. However, it would help if you created advertising campaigns by focusing on the niche of products. You can put pages on Facebook, Instagram, work on strong SEO, create a company's blog, contact influencers as they play a major role in marketing. 

It would help if you had an offline store that can be shown on Google to improve offline visitors. It is simple to use and provides a personalised feel because the medium is one-to-one messaging, which is now one of the most effective methods of capturing more market share.  

Also Read: Effective Steps To Start A Grocery Store In India With Lowest Investment

List Products on E-Commerce Websites

Though selling soaps on your website is a good idea, however, new websites don't make much money for e-commerce sites. So, to sell more products and profit more, list all of the soap varieties on all possible e-commerce platforms and rank on the search page of these Websites. Listing products on known websites not only increases your profit but also it will help you while creating a brand. Products ranking on e-commerce websites make profit fastly as compared to other products. And it will directly improve your sales. 

Conclusion

The soap market in India is valued at more than ₹200 crores. India has a demand for various soaps, including medicinal, natural, aromatic, and skincare. And if you are someone who wants to start a soap manufacturing business in India, then you need some steps to take care of. As product quality is the most important aspect of the soap manufacturing business, the more appealing the soap is the more profits. Along with it, other things like price, marketing, packaging, licences, branding, market research, website designing are some of the major steps you need to take.

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: Why is adding fats in soaps essential?

Ans:

Before you start a soap business, you should be aware that fats are used in all types of soap. To give the soap solidity and long-lasting properties, fats or oils such as lard, coconut oil, palm oil, and so on must be added. When you make soap without adding fats, it dissolves easily. Furthermore, when soap is exposed to water for an extended period, it becomes soft and mushy.

Q: Soap comes under which category of the trademark?

Ans:

For getting a trademark essential in a new business, one needs to specify the category of the product. And in the case of the soap industry, it is classified under class 3 as it mainly includes cleaning preparations and toilet preparations, bleaching preparations, laundry products, cleaning, polishing, scouring and abrasive preparations, soaps, perfumery, essential oils, etc.

Q: How to get a handmade soap licence in India?

Ans:

To get a licence for homemade soaps in India, it is essential to perform some procedures and fill ₹3,500 and as a government and inspection fee of ₹2500 respectively. However, before getting a licence, you need to establish a production house to take care of sanitation, health, cleaning, etc.

Q: What are some of the equipment needed in soap production?

Ans:

To undergo a soap-making business plan, it is essential to know some basic equipment needed for soap production like scale, thermometer, essential oils to prepare a batter, utensils, blenders, kitchen rolls, etc

Q: How profitable is the soap industry in India?

Ans:

The soap manufacturing business is one of the highest profitable markets, especially after the corona outbreak. According to FY2020, it has attained a valuation of ₹290 crores which will become ₹440 crores by 2026. Beauty soaps have acquired more than 50% of the total market.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.