Article 16 : Here's An Easy Business Plan For Your Soap Business

Before you start a business, you need to plan it out really well. By committing your ideas in writing, you are helping yourself look at all the possibilities and prepare for any eventuality.

Creating a business plan is easy when you know what you need to do. There's a lot to discuss and not all can be included in this email.

If you are looking for a more comprehensive resource on soap making and setting up a soap business, a good place to look would be "The Super Soap Making Book" by Sandy Simmons.

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When writing your business plan, these are the major sections that you need to have:

- Forecast

Forecasting is when you project the amount of products you need to sell or you believe you can sell. This is not a number that you just pull out of thin air. What is usually done in this case is you base your forecast on the volume sold by your nearest competitors.

Forecasting is important, because the numbers will be able to help you plan how much raw ingredients you need, if you need to get people to help you manufacture the soap and how many people you'll need, seasonality and fluctuations inherent in the industry and so on.

Forecasting will also help you decide whether going into business will be something worth your while or not. Or on the flip side, it can help you decide how many you need to sell in order to reach

your earnings goal.

- Target Market

As discussed in our previous email, determining your target market is essential because this will help you plan the type of product you need to create and the type of marketing campaign that will get you noticed.

- Marketing Plan

This is where you decide on your key communication messages - messages that will set you apart from your competitors and appeal to your target market. Part of defining your communication messages is also identifying your communication channels. Are you putting up a store, joining trade fairs, building your own Website, tapping retailers and re-sellers?

- Operations Plan

This is where you identify your SOPs for creating your product, defining exactly what kind of products you will be creating, how many people you need to help you with it and so on. Every detail that goes into creating your product should be addressed – from where to source your raw materials to packaging your soap to storing it until it's been sold. Getting relevant permits and licenses are also included in this section.

- Financial Projection

This is where you plug in the amounts associated with the investment you need to make. You have your initial investment which will include your start up costs, buying equipment that you'll need, building your website or your stand alone store, your initial inventory of raw materials, etc. You will also need to identify your monthly cash needs in order to run the business to cover for your monthly expenses like staff salaries, purchases of raw materials, electricity, communication costs, transportation costs, and other monthly dues.

Under financial projection, you will also determine your breakeven value and return on investment (ROI). These are computations that will help you determine how much you need to be selling in order to be profitable and how long you expect to run the business before you fully recover your initial investment.

- Exit Strategy

This is where you think about the risks associated with setting up your business and what action you would take in case you decide to stop operating. It is important to think about this because when things don't turn out as planned, you don't want to be stuck in a rut with no other recourse.

In our next lesson, we'll look more into how you can create a product that will stand out from the rest.

Cheers,

P.S.
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NOTE: Picture (s) and content are original and should not be used without permission of the author - Christophe Leroy - aka cleroy61, Copyright 2013, All rights reserved.

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