![How to plan and track the budget of your handmade soap e-commerce store [template]](http://onlineyougrow.com/cdn/shop/articles/cov-budget-8_f5db61b6-a7c1-4fb6-8f98-fe565b10e46a.png?v=1715856544&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 business owners 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 shops
Most handmade soap shop owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for handmade soap shops
Here is an example of a (very) detailed budget for a handmade soap e-commerce store, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for production and storage space | $1,500 | $18,000 |
| Electricity | Power consumption for production equipment | $200 | $2,400 |
| 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 |
| Customer Service | 1 | $2,500 | $2,500 | $30,000 |
| Marketing Specialist | 1 | $3,000 | $3,000 | $36,000 |
| Manager | 1 | $3,500 | $3,500 | $42,000 |
3. Raw Material Costs
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Oils & Butters | Olive oil, coconut oil, shea butter, etc. | $1,500 | $18,000 |
| Essential Oils | Lavender, peppermint, eucalyptus, etc. | $500 | $6,000 |
| Colorants | Natural colorants and micas | $200 | $2,400 |
| Packaging Materials | Boxes, labels, wrapping paper | $300 | $3,600 |
| Preservatives | Natural preservatives | $100 | $1,200 |
| Miscellaneous Ingredients | Herbs, clays, exfoliants, etc. | $200 | $2,400 |
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 | $100 | $1,200 |
| Office Supplies | Stationery, pens, printer ink, etc. | $50 | $600 |
| Licenses & Permits | Business licenses, health permits, etc. | $50 | $600 |
| POS System | Point of Sale software and hardware | $100 | $1,200 |
| Contingency Fund | Emergency repairs and unexpected costs | $200 | $2,400 |
| Staff Training | Training programs and materials | $100 | $1,200 |
Some handmade soap shops make 5x more profit than you!
We have studied the strategies of the best handmade soap shops in the world. Replicate them now!
What are the biggest expenses for a handmade soap e-commerce store?
Be mindful of these potential pitfalls. Here are five major costs every handmade soap e-commerce store 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 employees to produce high-quality soaps and manage operations smoothly. 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 decreased product quality.
- Website and hosting feesYour online store is your primary sales channel, and maintaining it can be expensive. Hosting fees, domain registration, and website maintenance add up quickly. To optimize these costs, choose a reliable but cost-effective hosting service and invest in a user-friendly, efficient website design. Overspending often happens when you opt for overly complex or high-end web solutions that don’t significantly enhance user experience.
- MarketingYou need to promote your handmade soaps, but advertising can be pricey, whether it's online ads, social media campaigns, or influencer partnerships. Optimize this expense by focusing on cost-effective methods like the ones we offer in our guide. Overspending can occur if you invest in flashy campaigns without a clear return on investment.
- Packaging and shipping costsThis includes everything from packaging materials to shipping fees. These are expensive because quality packaging and reliable shipping are crucial for customer satisfaction. Optimize by investing in durable, eco-friendly packaging and negotiating better rates with shipping carriers. You can overspend by choosing overly elaborate packaging or premium shipping options that don’t add enough value.
How to spend less with your handmade soap e-commerce store?
Here are practical tips to help you, as a handmade soap e-commerce store 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 | Utilize time-tracking software to manage production hours efficiently and avoid overtime. |
| Utilities | Invest in energy-efficient equipment and LED lighting to lower utility bills. |
| Marketing | Run social media giveaways and collaborate with influencers to increase brand visibility at minimal cost. |
| Packaging | Opt for eco-friendly, cost-effective packaging and offer discounts for customers who choose minimal packaging options. |
| Website Maintenance | Regularly update your website and use affordable hosting services to keep costs down. |
| Shipping | Negotiate rates with shipping carriers and offer free shipping for bulk orders to encourage larger purchases. |
| Insurance | Review your insurance policies annually to ensure they meet your current needs and compare rates for the best deal. |
| Inventory Management | Use inventory management software to track stock levels and avoid overproduction. |
| Equipment Maintenance | Set up a maintenance schedule for regular checks and servicing of production equipment. |
| Office Supplies | Buy office supplies in bulk and go paperless where possible to reduce costs. |
| Staff Training | Conduct regular 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 recycle whenever possible. |
| Technology | Invest in multi-functional equipment and use e-commerce management software to streamline operations. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan delivery routes efficiently to reduce fuel costs and consider using eco-friendly transportation options. |
| Customer Service | Use customer service software to manage inquiries efficiently and maintain high customer satisfaction. |
| Product Development | Conduct market research to develop products that meet customer needs and avoid unnecessary expenses. |
| Subscription Services | Review and cancel any unnecessary subscription services to cut down on recurring costs. |
| Advertising | Utilize cost-effective online advertising platforms and track ROI to ensure effective spending. |
| Networking | Attend local craft fairs and markets to network with other small business owners and potential customers. |
Copy the tactics of the best handmade soap shops in the world!
There are handmade soap shops 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 e-commerce store
Yes, some expenses for your handmade soap e-commerce store are just unnecessary. They don't contribute to increasing revenue or improving customer experience.
| E-commerce Expense | Reason It's Useless |
|---|---|
| Luxurious Packaging | Overly extravagant packaging doesn't necessarily attract more customers and can be a drain on the budget. |
| Premium Website Themes | Unless you are targeting a high-end market, most customers are satisfied with clean, functional designs. |
| Excessive Product Variants | A large variety of products increases inventory costs and can lead to more unsold stock. |
| High-End Photography Equipment | Top-of-the-line photography gear is not always necessary and can be cost-prohibitive. |
| Print Advertising | Traditional print ads often have a lower return on investment. Don’t include them in the marketing strategy of your e-commerce store. |
| Multiple Branding Styles | Having various branding styles increases costs without adding significant value to the customer experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving service quality. |
| Premium Subscription Services | Expensive subscriptions for analytics or design tools often go unnoticed by customers. |
| Exclusive Ingredients | Using rare ingredients can inflate costs and complicate supply chains. |
| Costly Office Furniture | High-end office furniture is not always appreciated by customers and can be a significant expense. |
| Custom Printed Packaging | Personalized packaging 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 Shipping Options | Most customers are content with standard shipping, making expensive shipping options 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 Website Redesigns | Constantly updating the website design can be costly and disrupt operations. |
| Expensive Promotional Items | Elaborate promotional items are often ignored by customers and add to the cost. |
| High-End Office Supplies | Luxury office supplies 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 Website Features | Frequently adding new website features 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 Office Equipment | Specialized office equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your handmade soap e-commerce store!
Managing a budget for a handmade soap e-commerce store 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 money 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 e-commerce stores just like yours. Get them now!
Make your handmade soap e-commerce store more profitable
We have studied the strategies of the best handmade soap shops in the world. All their tactics are explained in our pack!
