Do you want to start a laundry detergent production business? If YES, here is a complete guide to starting a laundry detergent production business with NO money and no experience.
The fact that laundry detergents are used in all homes and laundromats makes the product an essential household commodity and the business a competitive business, and any entrepreneur who intends to go into this business should plan rightly and research thoroughly so that the risks in the business can be greatly minimized.
The first thing to consider when starting this business is the capacity of the production plant you intend to operate and the necessary machines and supplies needed. You will have to know the types of permits you must have in place, and how to go about securing them.
The next thing to consider is how to get the production machines and where to lease a facility. The options available are outright purchase or lease. You will also have to decide how many staff you intend to start with, bearing in mind that the higher the number of overhead you intend starting out with, the higher your startup capital.
Besides, your production machines have to be well maintained so that you can enjoy high turnover. You could decide to contract the maintenance out, or hire your own maintenance staff, which could prove more expensive for your start-up business initially.
So, if you are considering going into laundry detergent production business, then you should ensure that you learn how to produce laundry detergents and other related products even if you are not going to be the one directly producing the products.
It is good that you have a full grasp of the line of business you intend going into as it will enable you provide practical leadership for the business. Below is an article that will give you the needed guide to launching your laundry detergent production business.
Steps to Starting a Laundry Detergent Production Business
1. Understand the Industry
Businesses in the Soap, Washing Powder and Synthetic Detergent manufacturing industry are involved in the manufacturing of products such as laundry soap, transparent soap, translucent soap, toilet soap, medicated soap, industrial soap, soap flakes, soap powder and synthetic products. Synthetic products include household and industrial detergents used for clothes washing, dish washing, body and hair washing.
Research conducted by IBISWorld shows that in the united states of America, during the past five years, the Soap, Washing Powder and Synthetic Detergent Manufacturing industry contended with steep competition from foreign-based soap manufacturers.
The report also shows that foreign-based manufacturers have inundated the market with low-cost soap products, pressuring demand for domestically manufactured products. IBISWorld also projected that in the coming years, as per capita disposable income rises, many consumers will slowly shift to relatively high-cost brand-name soaps and cleaning products.
The Soap, Washing Powder and Synthetic Detergent manufacturing industry is a thriving sector of the economy of the United States of America and they generate well over billion annually from more than 4,251 registered and licensed soap, washing powder and synthetic detergent manufacturing companies scattered all around the United States of America.
The industry is responsible for the employment of over 41,870 people. Experts project the industry to grow at a – 4.0 percent annual rate.
Procter & Gamble and S.C. Johnson & Son Inc. are the leaders in the Soap, Washing Powder and Synthetic Detergent Manufacturing industry; they have the lion market share in the United States of America and in most countries of the world.
Due to the high costs of manufacturing, marketing and distribution of soap, washing powder and synthetic detergent, large corporations dominate the industry and despite the fact that there are big corporations who are into the production of Soap, Washing Powder and Synthetic Detergent, the fact remains that the industry has minimal barriers to entry, with low startup capital.
Most players in the Soap, Washing Powder and Synthetic Detergent Manufacturing industry are small to medium sized establishments that cater to the local community.
Some of the factors that encourage aspiring entrepreneurs to venture into starting a laundry detergent production company is the fact that the market is pretty huge and not seasonal. That makes it easier for loads of entrepreneurs who are interested in the business 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.
The Soap, Washing Powder and Synthetic Detergent 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 chemical handling license.
You can choose to start on a small scale producing limited quantities of laundry detergents or you can choose to start on a large scale producing laundry detergents, soap, washing powder and synthetic detergent with several outlets in key cities all around the United States of America.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
Those who make use of laundry detergents and related washing products cut across laundry, cleaning and washing related businesses and households hence the composition for a laundry detergent production company is all encompassing, especially when they are also into the production of other related products such as soap, washing powder and synthetic detergent.
3. Decide Which Niche to Concentrate On
It is pretty hard to find a laundry detergent production company producing only laundry detergent products used at homes because with that, it will be difficult for them to maximize profits in the industry. Even though there is no clear-cut niche area in this line of business, but it is common to find a standard laundry detergent production company engage in the manufacturing of all or some of the under listed;
- Dishwashing detergent
- Car washing detergent
- Washing powder
- Synthetic detergent
- Scouring compound
The Level of Competition in the Industry
If you are looking towards starting a laundry detergent production company, then you should brace- up for competitions in the industry. The truth is that you are expected to compete with both small and large corporations in the industry. This is why most laundry detergent production companies are leveraging on creativity in terms of good smell, branding, packaging and marketing to continue to stay afloat in the industry.
The fact that there are stiffer competitions in the Soap, Washing Powder and Synthetic Detergent Manufacturing industry is not hampering the performance of new entrants as most of them know how to strategize to reach out or attract more customers even if it is just people in their immediate community.
4. Know Your Major Competitors in the Industry
It is the norm that in every industry, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands are those that 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 soap, washing powder and synthetic detergent production companies in the United States of America and in the globe;
- Procter & Gamble
- C. Johnson & Son Inc.
- Detergent Marketing Systems
- Sun Products Corporation
- EMS Detergent Services
- Cosco Soap & Detergent Co
- Vanguard Soap LLC
- SFIC Corporation
- Custom Soap Colorado
- Commonwealth Soap & Toiletries
- Eaton Corporation – Filtration
- Deeno Group USA
- St Bernard Soap Co
- Trividia Manufacturing Solutions (formerly P.J. Noyes)
- XPLO Detergents – Ultra-Pak Inc
Starting a laundry detergent production company can’t be said to be a difficult business venture but at the same time, it is a business that requires thorough economic and cost analysis – feasibility studies and market survey if you are looking towards making profits in the industry.
Part of what you need to focus on in this line of business is how to build a standard production plant, a robust distribution network, branding and of course how to maintain your machinery and equipment and to take care of your overhead before your business breaks even. Other costs that should be considered during planning and budgeting are supply of chemicals, packaging materials and maintenance costs et al.
In other to play safe with your investment, it is important that you hire the services of business consultants to help you carry out thorough economic and cost analysis before committing your resourcing to the business especially if you intend launching a large – scale and standard laundry detergent production company.
5. Decide Whether to Buy a Franchise or Start from Scratch
If you are looking towards starting a detergent production company, then you should make plans to start from the very scratch. This is because from available research, you can hardly get the franchise of detergent production company to buy; it appears not to be available. Besides, the fact that you can start the business in any capacity means that it is a business that is open to entrepreneurs with different financial capacity.
Please note that most of the big detergent production 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 and of course you can build your own laundry detergent production company to become a successful brand with your distribution network spread throughout the length and breadth of the United States of America.
6. Know the Possible Threats and Challenges You Will Face
If you decide to go into the laundry detergent production business today, one of the major challenges you are likely going to face is the presence of well – established brands in the Detergent Manufacturing industry both in the United States of America and from other parts of the world.
Some other challenges and threats that you are likely going to face are unfavorable government policies. It is a fact that unfavorable government policies can hamper the growth of your laundry detergent production company. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
It is important to clearly establish that if you have plans to launch any form of business including laundry detergent production business, the legal entity you choose will go a long way to determine how big the business can grow.
Generally, you can either choose a general partnership, Limited Liability Company, or even a sole proprietorship for a laundry detergent production business. Ordinarily, sole proprietorship should have been the ideal business structure for a small scale laundry detergent production business especially if you are just starting out with a moderate startup capital in a small neighborhood and just into production limited laundry detergents and other related washing products.
But if your intention is to grow the business and have distribution networks spread across the United States of America and other countries of the world via franchising, and then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
8. Choose a Catchy Business Name
In the business world, 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. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
So, if you are considering starting your own laundry detergent production business, here are some catchy names that you can choose from;
- Sun Lite® Laundry Detergent Production Company, LLC
- Washerwoman® Laundry Detergent Production Company, LLC
- Spice Kline® Laundry Detergent Production Company, Inc.
- Snow White® Laundry Detergent Production Company, Inc.
- Nelson Vintage® Soap and Detergent Production Company, Inc.
- Green Label™ Soap and Detergent Production Company, Inc.
- Fresh Smell© Laundry Detergent Production Company, Inc.
- Clean Deal™ Soap and Detergent Production Company, LLC
- Kastrup Group© Washing Powder & Synthetic Detergent Production Company, Inc.
- LK and Sons© Laundry Detergent Production Company, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
It is a known fact that 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 laundry detergent production company.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own laundry detergent production company in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Building Insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own laundry detergent production company, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
11. Get the Necessary Professional Certification
Apart from the results you produce as it relates to producing effective and fragrant laundry detergents, professional certification is one of the main reasons why some detergent production companies stand out. If you want to make an impact in the industry, you should work towards acquiring all the needed certifications in your area of specialization.
You are strongly encouraged to pursue professional certifications; it will go a long way to show your commitment towards the business. Certification validates your competency and shows that you are highly skilled, committed to your career and up-to-date in this competitive market.
These are some of the certifications you can work towards achieving if you want to run your own laundry detergent production company;
- Chemical Handler’s Certificate
- Certified Soap, Washing Powder and Synthetic Detergent Manufacturers
- Degree or Diploma in Chemical Engineering and related courses
Please note that you can successfully run a laundry detergent production company in the United States and in most countries of the world without necessarily acquiring professional certifications as long as you have the required experience and business exposure.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching any 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 laundry detergent production business in the United States of America;
- Business and liability insurance
- Tax Payer’s ID
- Fire certificate
- Chemical Handlers Certificate
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
It is often said that money is the blood of any business, so raising startup capital is perhaps one of the major concerns of entrepreneurs; it can be challenging raising capital to launch a business idea. Your idea must be workable and promising for you to secure finance from financial institutions or from angel investors.
The first thing to put in place before sourcing for startup capital for your laundry detergent production business is to draft a detailed business plan. With a good business plan, you can easily convince investors to invest in your business.
The truth is that no bank can give you a loan if you don’t have a good and workable business plan. Besides, investors will not take you seriously if you don’t have a business plan on ground before launching out to source for startup capital. Here are some of the options you can explore when sourcing for startup capital for your laundry detergent production company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- 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 laundry detergent production company, there are key questions you should answer and key factors that must be considered. You are expected to choose a location that is easily accessible especially as it relates to your distribution network and supply of raw materials. Affordability, availability of labor and safety are also some of the factors that you should consider.
Laundry detergents and other washing products are used by households, laundries, laundromats, car wash, and cleaning companies, so it is important to choose a location that will give your economy of scales; a location that will give you leverage to favorably compete in the industry as a new entrant and also to make reasonable profits.
It cannot be overemphasized that the location you chose to launch your laundry detergent production company 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 and businesses with the required purchasing power.
Before choosing a location for your laundry detergent production company, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
15. Hire Employees for your Technical and Manpower Needs
If you are considering starting a detergent production company, then you should make plans to build a standard detergent production plant. A standard detergent production plant includes chemical mixer, vessels, crystalizing machines, burner and conveyor belt system, protective gears et al. So, you are expected to put all this equipment and machine in place and also purchase standard distribution trucks.
Even though you can get fairly used of the above listed equipment and machines, but it is advisable to go for new and latest machines and equipment that can serve you for a long time especially if you have the required money to make the purchase. Even if you don’t have the required amount, you can enter an agreement with the suppliers of such machines and equipment and spread the payment over a period of time.
As regards acquiring a facility, if you have the required finance, it is to your advantage to acquire a property or lease a facility to be used for your soap, washing powder and synthetic detergent production plant; it usually gives you the freedom to design the facility the way you want to it to be and install safety gadgets as you so desire. But if you are low on cash, then you don’t have any option other than to rent a facility.
When it comes to creating a workforce structure for a standard detergent production company, then you should look towards getting qualified and competent people to fill the following roles; Chief Executive Officer (Owner), Plant Manager, Chemical Engineer, Quality Control Officer, Human Resources and Admin Manage, Merchandize Manager, Sales and Marketing Manager, Accountants/Cashiers, Production Workers/Machine Operators, Distribution Truck drivers and Cleaners.
You will need a minimum of 5 – 20 staff members to successfully run a small scale but standard laundry detergent production company.
The Service Delivery Process of the Business
Despite the fact that there are 3 methods of producing dry laundry detergent, in recent time, only 2 of these methods are commonly used. They are the blender process and the agglomeration process.
The blender process is ideal for smaller laundry detergent production companies and the process starts with mixing the ingredients in large vats before being packaged. The machines used are very large: a common blender holds 4,000 pounds (1,816 kilograms) of mixed material, but the blenders can accommodate loads ranging from 500 to 10,000 pounds (227 to 4,540 kilograms).
By industry standards, these are small batches for which the blender process is ideal. Despite the fact that some settling may arise, the detergent produced is of high quality and can compete with detergents made by other processes. The second commonly used method of production is called the agglomeration process.
Unlike the blender process, it is continuous, which makes it the choice of very large laundry detergent production companies. The agglomeration process can produce between 15,000 and 50,000 pounds (6,800 and 22,700 kilograms) of detergent per hour.
In the third laundry detergent production method, dry ingredients are blended in water before being dried with hot air. Even though the detergent produced is of high quality, the running cost, that is the fuel costs and engineering problems associated with venting, reheating, and reusing the air is high hence the need to replace this method with agglomeration.
The last step in the production of laundry detergents is packaging. Laundry detergents are packaged in cartons, bottles, pouches, bags or cans. The choice of packaging materials and containers involves considerations of product compatibility and stability, cost, package safety, solid waste impact, shelf appeal and ease of use.
Please note that laundry detergent production companies enforce quality control measures and they do this by constantly monitoring the quality of their detergents, and they employ the same testing methods to assess the effectiveness of new products.
One easy quality control method used involves light being shined onto a piece of fabric that has been soiled and then washed in the test detergent. It is important to state that a laundry detergent production company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated laundry detergent production company process is not cast on stone.
16. Write a Marketing Plan Packed with ideas & Strategies
Running a business requires that you should be proactive when it comes to marketing your goods or services. You must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the industry.
People and organizations will purchase and make use of your laundry detergents and other related products if they know that they are going to get the best as it relates to easy removal of dirt and stains, protecting their cloths, giving their clothes good smell and of course value for their money.
As a matter of fact, your marketing strategy will center on quality, efficiency and pricing, and above all excellent customer service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services or products. In other words, a larger percentage of your marketing effort will be directed to internet users.
These are some of the marketing ideas and strategies that you can adopt for your laundry detergent production company;
- Introduce your laundry detergent production company by sending introductory letters alongside your brochure to households, laundries, laundromats, car wash, cleaning companies, merchants and other key stakeholders throughout the city where your laundry detergent production company is located and distributed
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs will know what laundry detergent brand to purchase within your location
- Create a basic website for your business so as to give your business an online presence
- Directly market your products
- Engage in roadshows in targeted communities from time to time to promote and sell your laundry detergents and other related products
- Join local laundry detergent production company associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community 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. Work Out a Reasonable Pricing for your Services & Products
Please note that a key factor that will help you sell your laundry detergent and other related products at rock bottom prices is to purchase your raw materials and supplies directly from wholesalers in pretty large quantities. The truth is the higher the quantity of items that you purchase directly from wholesalers, the cheaper you tend to get them.
Other additional strategies that will help you retail your laundry detergents at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.
18. Develop Iron-clad Competitive Strategies to Help You Win
The availability of different variants of laundry detergents and other related products under your production, your business process and of course your pricing model are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust distribution network and clientele base. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your laundry detergents and other products can favorably compete with the some of the best in the laundry detergent production company line of business.
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.
If your intention of starting a laundry detergent production company is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of distribution networks and exporting your products, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your laundry detergent production company;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your laundry detergent production company
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your laundry detergent production company
- Distribute your fliers and handbills in target areas
- Contact households, laundries, laundromats, car wash, cleaning companies, merchants and other key stakeholders throughout the city where your laundry detergent production company is located informing them about your laundry detergent production company and the products you sell
- List your laundry detergent production company in local directories
- Advertise your laundry detergent production company in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where laundry detergent production company is located
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo
20. Create a Suppliers/Distribution Network
In order to successfully run a laundry detergent production company, you must establish good business relationship with wholesalers of the required raw materials within the city where your laundry detergent production company is located. You would need steady supply of these raw materials at affordable prices in order to remain in business.
So also, you are expected to create business networks with distributors of detergents and other related products. They are your major clients and you could sell to them at a discount price.