Entrepreneur magazine - May 2004

http://www.entrepreneur.com.ph/cover/natural_soaps_and_lotions.html

Cover Story
8 Great Business Ideas
Natural Soaps and Lotions
By Arlene Anne L. Wong

Two employees started making natural soaps and lotions as a hobby. Customers liked their products, so they quit their jobs and set up their own business. Marge Gabat and Ana Gutierrez took advantage of consumers' increasing demand for natural products and started producing bath and body lotions, balms and massage oils. Now they have regular customers including spas and salons. They're looking forward to making more products and gaining more business.

Gabat, a philosophy graduate, started making lip balm as a hobby in February 2003. She spent P2,500 to make 50 jars of lip balm, and in three days her fellow workers at a call center in Libis, Quezon City, had bought all of it. "It was a hit," she says. "They then asked me if I could make soaps and lotions." She turned to books, magazines, and the Internet for research. She used the yellow pages to find suppliers.

Operating from her kitchen, she was soon making and selling creams, lotions, and foot and hand spa kits made from olive and essential oils, honey, milk, herbs and spices. In November 2003 she left her job to concentrate on her business. She then put up Mapga Trading with the brand name Home Spa. Her officemates helped her promote her products. Libis is home to many spas and salons, so it wasn't long before these too started buying her soaps and lotions by the liter and gallon. She put a mark-up of 60 to 70 percent on her hand and foot baths (P480 a liter and up) and cuticle softeners (P3,840 a liter). To sell more, she started giving 20 percent discounts to spas and salons retailing her products. Lynnie Aruiza, owner of Gloss Designer Nails, orders foot and hand spa products worth P2,000 to P5,000 from Home Spa each month. She earns P5,000 selling them in her salon.

Gabat comes up with new variants every quarter and accepts orders for wedding giveaways and presents. "I just want to be a great small bath and body shop," she says. "I'd like to have my own place."

Biologist Gutierrez started making all-natural lip balm in 2001 to give away to friends. "I made the balm in my own kitchen when I was stressed out," she says. Her hobby turned into a business when a friend met a shop owner in Boracay. "She wanted high-end local products. She found out about my lip balms and bought some for her shop," Gutierrez says. She then borrowed P4,000 from her mom and added the money she earned to it to make more products. Later in the year, she invested P10,000 in a small shop near her home in Antipolo to carry her lip balms and massage oils. Then, in 2002, she put up Something Place Body Food Inc.-Something Place referring to her shop, Body Food to her products.

"I chose all-natural ingredients because anything that you can eat is safe for the body," says Gutierrez. "You don't apply anything on your body that is not safe enough to inject, that's why my products are called Body Food." Initially, she had problems with suppliers who sold ingredients and materials in large quantities, so she started working with smaller companies. "Ordering from smaller companies costs more, but I can buy small and my money doesn't get tied down in inventory," she says. She had to be creative with her packaging.

She found it challenging to continue producing all-natural products that are not easily made. Later, Gutierrez tapped a dermatologist to test her products for safety and quality. Next, she raised P100,000 in rent money and an extra P20,000 to open a shop in Libis in February 2003, but she had to close it last January because of poor foot traffic. "Maybe I should have waited a little bit to find a place I was really happy with," she says. I didn't what the traffic would be because the shop was still being built." Body Food grosses P60,000 to P80,000 a month and nets up to half of its total sales. Its aromatherapy shampoo, lotion, and bath gel sell for P150 a bottle. Lip balms go for P300 a jar, but the skin relief butter is the most expensive at P2,500 for the largest size. Its best sellers are the cocoa butter massage blocks and soaps, which sell for P250 to P300. Gutierrez is now focusing on supplying exclusive products to spas. She has also begun offering spa treatment training seminars. "Those who want to put up spas can go to my group and we can train them," she says.

THE BEAUTY BUSINESS

Thinking of joining the bath and beauty industry? Marge Gabat and Ana Gutierrez share some tips:

- Be different. The bath and body industry is highly competitive, so you must offer something new. "Come up with an idea that will sell and set you apart from all the other bath and body products," says Ana Gutierrez of Body Food. "It takes a lot of creativity to stand out."

- Know what you're offering. "It takes courage to stick to your original concept," says Gutierrez. "It's tempting to mix up your products, and if you do you'll confuse your customers."

- Be resourceful and flexible. Your small budget shouldn't keep you from being creative especially with your packaging. "You should know how to adjust when you're starting out," says Gutierrez. "When I didn't have money for packaging, I looked for somebody who could come up with packaging for me."

- Don't be afraid to approach prospective clients. Marge Gabat of Home Spa suggests calling up the spas and and salons to offer your products. "Ask for the owners' names and write them a proposal," she says. Then you can meet them to present your products.

- Have a budget for product samples. You can start small by giving out samples to friends, relatives and co-workers. "If your products are any good, they'l like them," says Gabat.

- Keep your trade secrets secret. Gabat learned this lesson the hard way. An officemate engaged her in small talk once and casually asked about her production process and materials. She told her, and not long after her officemate put up her own bath and body business.

- Tell your clients about your products' shelf life. "Masks and one kind of body scrub last for three to four weeks only and must be refrigerated," says Gabat "Make sure your customers know this."

- Deliver on time. You can't afford to disappoint your clients. "They're your regular customers, so be reliable and always be on time," says Gabat.

This article appears in the May 2004 issue of Entrepreneur Philippines. Get more helpful articles like this from every issue of Entrepreneur Philippines!


Home Spa Bath and Body Essentials, Manila
Telefax: (632) 434.1126
Mobile: (0928) 347.9343
Email:
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Yahoo E-group: http://health.groups.yahoo.com/group/home_spa