Do you want to start a hand sanitizer company? If YES, here is a guide on how to start a hand sanitizer manufacturing business with no money or experience plus a hand sanitizer manufacturing business plan.
If there is any product that is in high demand in pharmacies and supermarkets since the advent of the coronavirus, then it must be alcohol-based liquid hand sanitizer.
The fact that alcohol-based hand sanitizer is one of the antidotes to coronavirus or any virus, bacteria and germs at that, means that the product is bound to sell well.
As a matter of fact, economic downturn hardly affects the usage of hand sanitizers because the commodity plays a major role in the health sector. If indeed you are interested in starting a hand sanitizer manufacturing company, then you will surely find this article very helpful.
19 Steps to Starting a Hand Sanitizer Manufacturing Business
1. Understand the Industry
Businesses in the Hand Sanitizer manufacturing industry are involved in the manufacturing of hand sanitizers in a variety of forms, including gel, foam, wipes and liquid. Hand sanitizers and hand antiseptics offer alternatives to hand washing with soap and water.
Research conducted by IBISWorld shows that in the united states of America, over the five years to 2019, the Hand Sanitizer Manufacturing industry has experienced healthy growth, with total industry revenue expected to rise. This growth can largely be attributed to heightened consumer health consciousness over the past five years leading to a rise in total health expenditure.
Additionally, a renewed focus on product marketing from operators has contributed to revenue growth during the five-year period. However, this heightened interest in hand sanitizers has paved the way for increased competition among industry players.
Operators that leveraged distribution relationships often outperformed their peers during the five-year period, since these players were able to distribute their products across the country with low up-front costs. Over the five years to 2024, the industry is projected to continue its upward trend, as consumers continue to focus on healthy lifestyles and become more aware of the outbreak and spreading of infectious diseases.
The Hand Sanitizer manufacturing industry is a thriving sector of the economy of the United States of America and they generate over million annually from more than 23 registered and licensed hand sanitizer manufacturing companies in the United States of America.
The industry is responsible for the employment of over 906 people. Experts project the industry to grow at a 3.9 percent annual rate. Gojo Industries Inc and Vi-Jon Laboratories are the leaders in the Hand Sanitizer Manufacturing industry, they have the lion market share in the United States of America and in most countries of the world.
Interestingly, the industry revenue has experienced healthy growth, rising an annualized 3.9 percent to $74.4 million over the five years to 2022, including an increase of 16.6 percent alone due to heightened demand as a result of the recent COVID-19 (coronavirus) outbreak.
Due to the high costs of manufacturing, marketing and distribution of hand sanitizers, large corporations dominate the Hand Sanitizer Manufacturing industry. Despite the fact that big corporations dominate the industry, but starting a small – scale hand sanitizer production business has minimal barriers to entry, with low startup capital. Most players in the are small to medium sized establishments that cater to the local community.
Some of the factors and incentives that encourage aspiring entrepreneurs to venture into business is the fact that the market is pretty huge and not seasonal. That makes it easier for entrepreneurs to come into the industry at any time they desire; the entry barriers are quite affordable and any serious – minded entrepreneur can comfortably raise the startup capital without collecting loans from the bank.
Over and above, the Hand Sanitizer Manufacturing industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business as long as you are able to obtain the required licenses. You can choose to start on a small scale producing limited quantities or you can choose to start on a large scale producing hand sanitizer products in a variety of forms.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who make use of hand sanitizer cut across various medical practitioners and everybody on planet earth especially in this era of the corona virus pandemic hence the demographic composition of the hand sanitizer manufacturing business is all encompassing.
3. Decide Which Niche to Concentrate On
There is no niche area of specialization in when it comes to the manufacturing of hand sanitizer, but on the other hand, a hand sanitizer manufacturing company may decide to major on any one of these;
- Manufacturing and packaging alcohol and non – alcohol based bottled hand sanitizers for wholesale distribution
The Level of Competition in the Industry
The competition that exist in the hand sanitizer manufacturing business goes beyond competitions amongst hand sanitizer manufacturers in your city or country; it is both nationally and internationally. Major hand sanitizer brands in China, Germany, France, Italy, united kingdom and in any part of the world can be found in pharmaceutical stores all across the United States of America.
So, it will be right to say the competition in the hand sanitizer manufacturing business is tough. The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure you have what it takes to churn out quality hand sanitizer and similar products and you know how to reach out to your target market.
But over and above, there are several hand sanitizer manufacturing companies scattered all around the United States. So, if you choose to start your own, you will definitely meet stiff competitions. Besides, there are larger hand sanitizer manufacturing companies / brand such as Gojo Industries Inc and Vi-Jon Laboratories that determine the trend in the industry and you should be ready to compete with them for customers.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands who perform better or are better regarded by the customers and general public than others. Some of these brands have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.
These are some of the leading hand sanitizer manufacturing companies/brands in the United States of America and in the globe;
- Gojo Industries Inc
- Vi-Jon Laboratories
- Edgewell Personal Care
- Nice Pak
- EO Products
- KAS Direct, LLC
- Clark’s Botanicals Hand Sanitizer
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Hand sanitizer manufacturing business is not a Green business, as a matter of fact, you will come across several brand names in your local pharmaceutical stores when you go shopping. So, if you are mapping out your economic analysis, you should carry out thorough market survey and costing of the required raw materials, branding and other equipment needed to successfully run the business.
If you are considering starting a hand sanitizer manufacturing company, then your concern should not be limited to the cost of setting up the business and churning out a wide variety of quality hand sanitizers but also on branding and on how to build a robust distribution network. The truth is that if you are able to build a robust distribution network, you are sure going to maximize profits in the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
Unfortunately, you can hardly find the franchise of a hand sanitizer company to purchase meaning that if you want to own a hand sanitizer manufacturing business, you must be ready to start from the scratch.
The truth is that it will pay you to start your hand sanitizer company from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business.
Please note that most of the successful hand sanitizer manufacturing companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own a hand sanitizer manufacturing business today, one of the major challenges you are likely going to face is the presence of well – established hand sanitizer brands cum companies whose products can be found all across the United States and the global market. The only way to avoid this challenge is to create your own market.
Please note that once the corona virus pandemic is over, sales might drop sharply, since revenue started out at an artificially inflated level due to the ongoing corona virus. Operators will likely spend more on marketing efforts due increased market saturation and that is part of the threat hand sanitizer manufacturers are likely going to face. Another threat is the arrival of a new hand sanitizer production company in same location where theirs is located.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
From a general perspective, you can either choose general partnership, limited liability company, or a sole proprietorship for your hand sanitizer manufacturing company. Sole proprietorship should have been the ideal business structure for a small – scale hand sanitizer manufacturing business especially if you are just starting out with a moderate capital.
But if your intention is to grow the business and have your hand sanitizer distributed across the United States of America and other countries of the world, then choosing sole proprietor is not an option for you. Limited Liability Company or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your hand sanitizer manufacturing business; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.
If you take your time to study the various legal entities, you will agree that limited liability company is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or ‘S’ corporation especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your hand sanitizer manufacturing business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. If you are considering starting your own hand sanitizer manufacturing company, here are some catchy names that you can choose from;
- Clint Moore® Hand sanitizer, Inc.
- Medic Plus™ Hand sanitizer, Inc.
- Ella Henry™ Hand Sanitizer Production Company, LLC
- OJZ® Hand sanitizer Manufacturing Company
- Sally Graham® Hand sanitizer, Inc.
- Green Life® Hand sanitizer, Inc.
- Sharon TIM® Hand sanitizer Production Company
- Deb Rosen® Hand sanitizer, LLC
- Lincoln Xavi© Hand sanitizer, Inc.
- Beci Leo™ Hand sanitizer, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your hand sanitizer manufacturing business.
Here are some of the basic insurance cover that you should consider purchasing if you want to start your own hand sanitizer manufacturing business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If any business requires intellectual property protection (copyright ©), then it should be a hand sanitizer manufacturing business. The truth is that your formula needs to be protected or else anybody can successfully fake or create similar products and make money off your brand name.
Please note that in the United States, if you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
Although you do not need any special professional certification before you can successfully start your own hand sanitizer manufacturing business, but you will do yourself a whole lot of favor if you study chemical engineering or related course before starting this this type of business. It will afford you the opportunity to truly maximize the business.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own hand sanitizer manufacturing company in the United States of America;
- Certificate of Incorporation
- Business License
- Chemical Handler’s Certificate
- Business Plan
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Apostille (for those who intend operating beyond the United States of America)
- Company Bylaws
- Memorandum of Understanding (MoU)
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
When it comes to starting a hand sanitizer manufacturing business, securing a standard production facility is part of what will consume a large chunk of your startup capital, but if you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard large scale hand sanitizer manufacturing company.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your hand sanitizer manufacturing business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your hand sanitizer manufacturing business, the rule of thumb is that you should be guided by the demand for such product and easy access to labor and raw materials. Of course, if you are able to secure a central location for your hand sanitizer manufacturing business, it will enable you cut the cost of transporting your raw materials and finished products to and from your production facility and warehouse.
It cannot be overemphasized that the location you chose to open your hand sanitizer manufacturing business is key to the success of the business; hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people who make use of hand sanitizer daily.
15. Hire Employees for your Technical and Manpower Needs
If you are considering setting up a hand sanitizer manufacturing company, it means that you should be prepared to purchase equipment and machines such as blending, mixing and compounding machine, mixing preparation pot, working platform, control panels and essential pipes, valves and filters), and packaging, labeling and sealing machines.
If you don’t have enough cash, you can start with fairly used equipment / machines but if you are financially buoyant, then you should go for brand new ones since they usually have a long lifespan.
As regards leasing or outright purchase of a production facility or warehouse facility, the choice is dependent on your financial standings, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent / lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property.
When it comes to hiring employees for a standard hand sanitizer manufacturing company, you should make plans to hire a competent Chief Executive Officer (Owner), Admin and Human Resources Manager, Sales and Marketing Manager, Chemical Engineer / Quality Control Officer, Machine Operators, Accountant, Distribution/Delivery Van Drivers and Client Services Executive. On the average, you will need a minimum of 7 key staff members to run a small – scale hand sanitizer production business.
The Services Delivery Process of the Business
Generally, the hand sanitizer production line has hand sanitizer mixer, mixing preparation pot, working platform, control panels and essential pipes, valves and filters. Formulations vary widely. A number of active ingredients are used, for example benzalkonium chloride, however, the most effective sanitizing products are based on alcohol, usually isopropyl or ethyl alcohol.
Ideally, the alcohol content is between 60 and 95 percent. The alcohol is usually blended with an aqueous dispersion of carbomers such as Carbopol to provide the gelling effect, although some products are lower viscosity for use in foam dispensers.
One of the key steps in the manufacturing process is preparation of the gel. Obtaining an agglomerate-free dispersion is essential to ensure a clear, bright gel after neutralization. Some formulations include surfactants and moisturizers such as glycerine to protect the skin and prevent drying out the skin.
These may make up a small proportion of the overall formulation so the mixing system must be capable of dispersing them uniformly throughout the product. The remaining ingredients include moisturizers and fragrance and occasionally coloring may also be added.
16. Write a Marketing Plan Packed with ideas & Strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a hand sanitizer manufacturing business, then you must employ strategies that will help you attract customers or else you will likely struggle with the business.
These are some of the marketing ideas and strategies that you can adopt for your hand sanitizer manufacturing business;
- Introduce your products by sending introductory letters alongside your brochure to hospitals, labs, clinics, pharmaceutical stores and key stake holders throughout the United States
- Advertise on the internet on medical related blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Creating a basic website for your business so as to give your business an online presence
- Directly market your products
- Provide discount days for your distributors
- Advertise our business in community health – based newspapers, local TV and radio stations
- List your business on yellow pages’ ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
17. Develop Iron-clad Competitive Strategies to Help You Win
The quality and uniqueness of your hand sanitizer, your business process and of course your pricing model are part of what you need to stay competitive in the industry. If wholesale distributors are making profits from selling your products, they will be more than willing to help you push your products to every nooks and crannies of the cities they distribute products.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust distribution cum business network. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your hand sanitizers can favorably compete with the some of the best in the industry.
18. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps to attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your services delivery or products, they can hardly source for alternative service provider or products.
Statistics has it that one of the major reasons why clients’ source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service. If you can continue to improve on the quality of your hand sanitizer and your customer service delivery, then you won’t struggle to maintain loyal customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
If your intention of starting a hand sanitizer manufacturing company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your hand sanitizer manufacturing company;
- Place adverts on both print (newspapers and medical related magazines) and electronic media platforms
- Sponsor relevant community – based events / programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your business
- Install your Bill Boards on strategic locations all around your city or state
- Distribute your fliers and handbills in target areas
- List your hand sanitizer manufacturing company in local directories / yellow pages
- Advertise your hand sanitizer manufacturing company in your official website and employ strategies that will help you pull traffic to the site.
- Ensure that all your staff members wear your branded shirts and all your vehicles and distribution trucks / vans are well branded with your company logo et al.