Ok, so I know we are now at the end of 2023 and heading for 2024 but the costs will vary very little between now and then. I was asked this very question just last week and now seems to be as good a time as any to answer it.
Starting your own soap or skincare business can be exciting but it's essential to be aware of the potential costs involved. Many aspiring entrepreneurs jump into the world of soap and skincare products without fully understanding the expenses. In this blog post, I will take a closer look at the various financial aspects to help you make informed decisions. The figures are all based on my own experiences within The Dog and Ibut are a ball park guide, there is always room to spend more (or less) depending upon your long term goal.
1. Chemist Assessments:
- Every product you intend to sell, be it soap, body butter, lip balm, or bath bombs, requires a chemist assessment.
- Costs can vary, ranging from £75 for a single variant to approximately £250 for 12 variants or a flexi assessment. Most assessments have one base recipe and then your variants are the colours and scents . For a range of 4 or 5 products with a number of variants in each product you would be looking at around £600/£700. You can of course start off with just soap, or just bath bombs for example which would bring your costs down considerably.
- Shop around for cosmetic chemists and choose the option that aligns with your product range. I tend to use MAF Cosmetics most of the time because Michael has a great deal of flexibility built in to his assessments and he is also a really lovely guy ( and a supporter of us in the Soap Suite with a cheeky discount code)
- Product and public liability insurance is a must for your business.
- Opt for a Crafters company like that provided by Ian Wallacefor more cost-effective options.
- You can choose different coverage levels, such as £1 million, £2 million, or £5 million for public liability and the level you choose will depend upon your needs.
- At the last time I looked a reasonable price would be around £130 per year. This will vary however.
3. Raw Materials:
- To build an initial stock, you'll need raw materials like coconut oil, olive oil, sodium hydroxide, fragrances, essential oils, colors, and packaging materials.
- Plan to invest around £300-£400 in your initial stock of raw materials. You won't need to make vast quantities of products and, if I am honest, it is likely that initial sales will be slower than you hope, unless you have a big launch party planned, but soap especially needs to be made ahead
Carefully budget for raw materials to ensure you have sufficient stock to meet customer demand.
- You can choose between DIY or professional packaging.
- DIY packaging can be cost-effective and only a few pence per label. You will need to spend a considerable time however designing your labels and deciding how you will print them. There are budget options such as Avery with which you can get good results.
- Professional packing will be costly initially to get designed and printed. As a guide I paid around £550 to have 12 labels designed for my new human products and all the labels on my existing dog products updated with new colours, text and logo. This included a small print run of each.
5. Website and Domain Name:
- If you're planning to sell online, a website is crucial. Options like Shopify offer user-friendly e-commerce platforms with built in checkout, SEO , blog etc. That costs £25 pm. It is tempting to sell on Etsy however it is really expensive from a costs perspective and very limiting. You still have to drive traffic to your shop, they can close you down at any time and recently I have heard of incidences where they have with held payouts of funds for lengthy periods. I really do not recommend them for low cost products such as soap.
- Don't forget to secure a domain name for your business.This is relatively cheap using a site like Go Daddy. £10 or less for you first year unless you have a name that is likely to be in high demand.
Not selling online but locally at events? Don't forget to research your set up costs. Marquee? Signage? Props etc.
6. Product Photography:
- While you can start with DIY photography, investing in professional product photography later down the line can make a significant difference. Initially however you can get some great product photographs with your mobile phone. Portrait mode is your friend here.
- If you are selling only online then professional imagery is a game changer in my view. Professional services may cost between £250 and £1,000, depending on your requirements. That said I would not want anyone to invest large quantities of money in images in the early days, test your products and niche out first.
- Consider your marketing strategy carefully. Many businesses begin with free marketing options like organic social media reach and word-of-mouth. Attending local events can be useful for this too.
- Paid advertising, such as online ads, can become expensive, especially without a clear target audience and a lack of knowledge.
Start with free marketing options and only venture into paid advertising when you have a solid strategy in place.
8. Training and Development:
- Courses and training can help you understand the legal and business aspects of running a cosmetic company.
- In-person courses may cost around £500 or more. Much will depend on your own circumstances and if you are time poor then you may well prefer to invest in a course which will save you hours in time researching. I f you have more time then conducting your own research will be less of an issue.
- Online courses are also available and for the legal aspects in particular would be my preference as there is a lot to take on board and an online course will allow you to refer back to it as and when you complete each stage. If you feel this is something you would benefit from then do take a look at my Soap Business Boot Camps.
Conclusion: Starting a soap or skincare business in the UK in 2023 does come with costs. By understanding and budgeting for these costs, you can making informed decisions. It may be that starting a business is not for you and if that is the case then I have hopefully saved you time and money along the way.