![How to plan and track the budget of your handmade soap brand [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-4_47027da2-bc9a-47a0-93b6-6dba127b09ca.png?v=1715856437&width=1100)
If you don’t plan and track your handmade soap business budget properly, you're setting yourself up for failure.
When we developed our strategy pack for handmade soap entrepreneurs, we saw a lot of soap makers struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial sales.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your soap business's finances around and set you on the path to success!
Get the budget tracker tailored for handmade soap brands
Most handmade soap brand founders don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for handmade soap brands
Here is an example of a (very) detailed budget for a handmade soap brand, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for production space | $2,000 | $24,000 |
| Electricity | Power consumption for production equipment | $300 | $3,600 |
| Water | Water usage for soap making | $100 | $1,200 |
| Internet & Phone | Internet service and business phone | $100 | $1,200 |
| Waste Removal | Garbage and recycling services | $50 | $600 |
| Insurance | Property and liability insurance | $200 | $2,400 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Soap Maker | 2 | $2,500 | $5,000 | $60,000 |
| Packaging Staff | 2 | $2,000 | $4,000 | $48,000 |
| Sales & Marketing | 1 | $3,000 | $3,000 | $36,000 |
| Manager | 1 | $3,500 | $3,500 | $42,000 |
3. Raw Materials & Supplies
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Oils & Butters | Essential oils, shea butter, etc. | $1,500 | $18,000 |
| Fragrances | Natural and synthetic fragrances | $500 | $6,000 |
| Colorants | Natural and synthetic colorants | $300 | $3,600 |
| Packaging Materials | Boxes, labels, wrapping paper | $400 | $4,800 |
| Cleaning Supplies | Detergents, sanitizers, etc. | $100 | $1,200 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $300 | $3,600 |
| Social Media Management | Managing social media accounts | $500 | $6,000 |
| Print Advertising | Flyers, posters, magazine ads | $200 | $2,400 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $150 | $1,800 |
| Promotional Events | Special events and promotions | $200 | $2,400 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of production equipment | $200 | $2,400 |
| Uniforms | Staff uniforms and aprons | $100 | $1,200 |
| Licenses & Permits | Health permits, business licenses, etc. | $100 | $1,200 |
| POS System | Point of Sale software and hardware | $150 | $1,800 |
| Contingency Fund | Emergency repairs and unexpected costs | $300 | $3,600 |
| Office Supplies | Stationery, pens, printer ink, etc. | $50 | $600 |
| Staff Training | Training programs and materials | $100 | $1,200 |
Some handmade soap brands make 5x more profit than you!
We have studied the strategies of the best handmade soap brands in the world. Replicate them now!
What are the biggest expenses for a handmade soap brand?
Be mindful of these potential pitfalls. Here are five major costs every handmade soap business owner needs to consider, along with some tips on how to manage them effectively.
- Raw material costsThese can take up a significant portion of your budget. You're dealing with natural ingredients, and prices can vary based on seasonality, supply chain issues, and quality. To keep these costs in check, focus on bulk purchasing, negotiate better prices with suppliers, and minimize waste. It's easy to overspend by buying too much or opting for premium ingredients that don’t add enough value.
- Labor costsYour team is essential, but paying for their wages, benefits, and training can be costly. This expense is always high because you need skilled artisans to produce high-quality soap and maintain smooth operations. You can optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, be careful not to underpay or overwork your team, as this can lead to high turnover and reduced product quality.
- Rent and utilities for your workshopPrime locations come with high rent, but they can attract more customers. Utilities like electricity, water, and heating are essential but can add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient appliances and lighting. Overspending often happens when you choose a location that's too large or too upscale for your needs.
- MarketingYou need to spread the word about your handmade soap, but advertising can be expensive, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we provide in our guide. Overspending can occur if you invest in flashy campaigns without a clear return on investment.
- Equipment and maintenance costsThis includes everything from soap molds to packaging machinery. These are expensive because quality equipment and regular maintenance are crucial for smooth production and customer satisfaction. Optimize by investing in durable, energy-efficient equipment and maintaining it regularly to avoid costly breakdowns. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your handmade soap brand?
Here are practical tips to help you, as a handmade soap business owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Raw Materials | Source ingredients in bulk from local suppliers to reduce costs and ensure freshness. |
| Labor Costs | Implement a time-tracking software to optimize employee hours and minimize overtime. |
| Utilities | Use energy-efficient lighting and equipment in your production area to lower utility bills. |
| Marketing | Run social media giveaways for your handmade soaps and collaborate with local influencers for organic exposure. |
| Packaging | Opt for eco-friendly, cost-effective packaging and offer discounts for customers who bring their own containers. |
| Equipment Maintenance | Maintain a log for regular checks and servicing of soap-making equipment to extend their lifespan. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider a smaller, more affordable workspace. |
| Insurance | Review your insurance policies annually to ensure they meet your current needs and compare rates for the best deal. |
| Cleaning Supplies | Train staff on the efficient use of cleaning supplies to minimize waste and reduce costs. |
| POS System | Choose a POS system that offers essential features with low transaction fees and integrates with your inventory management. |
| Staff Training | Conduct regular in-house training sessions and utilize free online resources to keep your team updated on best practices. |
| Waste Management | Implement a waste tracking system to minimize material waste and explore recycling options for soap scraps. |
| Technology | Invest in multi-functional soap-making equipment and utilize business management software for inventory and sales tracking. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital order systems. |
| Inventory Management | Use inventory management software to track stock levels and reduce spoilage of raw materials. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan delivery routes to maximize efficiency and reduce fuel costs. |
| Uniforms | Choose durable, easy-to-clean uniforms and offer staff a stipend for maintenance instead of using an external service. |
Copy the tactics of the best handmade soap brands in the world!
There are handmade soap brands that make way more money than you do. We have studied their tactics. Get them now!
Expenses that are just useless for a handmade soap brand
Yes, some expenses for your handmade soap business are just unnecessary. They don't contribute to increasing revenue or improving customer satisfaction.
| Soap Business Expense | Reason It's Useless |
|---|---|
| Luxurious Packaging | Overly elaborate packaging doesn't necessarily attract more customers and can be a drain on the budget. |
| Exotic Ingredients | Unless you are targeting a niche market, most customers are satisfied with high-quality, locally-sourced ingredients. |
| Excessive Product Variants | A large variety of products increases inventory costs and can lead to more waste. |
| High-End Production Equipment | Top-of-the-line equipment is not always necessary and can be cost-prohibitive. |
| Traditional Advertising | Paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your soap business. |
| Multiple Label Designs | Having various label designs increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving product quality. |
| Premium Subscription Services | Expensive subscriptions for industry magazines or software often go unnoticed by customers. |
| Exclusive Scents | Using rare scents can inflate costs and complicate supply chains. |
| Costly Display Units | High-end display units are not always appreciated by customers and can be a significant expense. |
| Custom Printed Wrapping | Personalized wrapping is a minor detail that most customers overlook, and it can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water for Production | Most customers are content with soaps made from filtered tap water, making expensive bottled water unnecessary. |
| Extra Delivery Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Rebranding | Constantly updating branding and packaging can be costly and disrupt operations. |
| Expensive Store Decorations | Elaborate store decorations are often ignored by customers and add to the cost. |
| High-End Store Fixtures | Luxury store fixtures are prone to damage and expensive to replace, often going unnoticed by customers. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Label Designs | Frequently redesigning labels is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Production Tools | Specialized production tools are often unnecessary and add to costs without a proportional benefit. |
Stop working with a tight budget for your handmade soap brand!
Managing a budget for a handmade soap business when funds are tight can feel overwhelming. It's like being trapped in a cycle where any unexpected expense can throw you off balance.
This constant pressure makes it nearly impossible to invest in growth projects, leaving you always scrambling to cover costs. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, pinching pennies and barely making ends meet. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on growing your revenue. More income means more breathing room and more resources to invest back into your business.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of handmade soap businesses just like yours. Get them now!
Make your handmade soap brand more profitable
We have studied the strategies of the best handmade soap brands in the world. All their tactics are explained in our pack!
