Starting a handmade soap business requires a commercial production space, food-grade equipment, regulatory compliance, and enough working capital to fund 4 to 6 weeks of inventory before the first bar can be sold. These upfront costs are real, and most founders need financing to cover them.
Lenders and investors expect more than a product description. They want verified market demand, a production plan that supports the revenue forecast, realistic margin assumptions, and financials that show how the business reaches break-even and stays there.
This business plan presents Marigold Lane Soap Co., a cold-process handmade soap manufacturer based in Stowe, Vermont. The plan shows how the business produces and sells across four channels, manages a cure-cycle driven operation, controls costs, and builds a stable customer base while repaying an $85,000 SBA 7(a) microloan.
Executive Summary
Marigold Lane Soap Co. is a cold-process handmade soap manufacturer based in Stowe, Vermont. The business sells small-batch bar soap across four channels: direct-to-consumer online, farmers’ market, wholesale retail, and custom private-label for Vermont inns and B&Bs.
The United States organic soap market was valued at $1.05 billion in 2024. Vermont’s reputation for quality, sustainability, and locally made products creates a concentrated version of that demand in a single geography.
Each bar is formulated using Sarah Keller’s chemistry background, not a copied recipe.
The Founder
Sarah Keller spent nine years teaching chemistry at Stowe Middle/High School before launching Marigold Lane full-time. She holds an HSCG Certified Soapmaker credential and has been selling at the Stowe Farmers’ Market since 2023.
Target Customer
The core customer is an eco-conscious woman, 28 to 55, shopping locally in Vermont or visiting as a tourist. Handmade soap fits three buying occasions: affordable self-care, a Vermont souvenir, or a gift. A $9 bar clears the price threshold when the product feels local, well-made, and giftable.
Funding Request
The business is pursuing an $85,000 SBA 7(a) loan through a Vermont community bank. Owner equity of $25,000 brings total startup capital to $110,000. Terms are 10 years at 8.5% fixed APR, at $1,053.88 a month.
Financial Highlights
Month 9 is where Year 1 crosses into break-even territory. The 27% margin of safety comes from conservative pricing and a channel mix that leans on immediate-payment revenue rather than wholesale accounts that pay on terms.
By Year 3, the business carries no new debt, no additional capital expenditure, and a loan balance of $66,547 against $191,449 in ending cash.
| Year 1 ($) | Year 2 ($) | Year 3 ($) | |
| Bar-equivalent units sold | 25,000 | 29,500 | 34,810 |
| Total Revenue | $185,000 | $218,300 | $257,594 |
| Gross Profit | $124,135 | $146,076 | $172,692 |
| Net Income (Pre-Tax) | $22,426 | $44,036 | $62,324 |
| Ending Cash | $90,809 | $132,357 | $191,449 |
Business Overview
Marigold Lane Soap Co. is registered as a single-member Vermont LLC in Stowe, Vermont. The LLC keeps Sarah’s personal assets separate from business liabilities and satisfies the legal entity requirement for SBA loan eligibility.
Location
Marigold Lane operates from Suite 6, 782 Mountain Road, Stowe, VT 05672, on the Mountain Road commercial corridor between downtown Stowe and the ski area base lodge.
The location was chosen for its proximity to wholesale accounts, B&B properties, and the Stowe Farmers’ Market at 3420 Mountain Road, Stowe, VT 0567.
Owner
Sarah Keller holds 100% ownership and runs every part of the operation herself. Sarah brings nine years of experience teaching chemistry at Stowe Middle/High School. She earned her HSCG Certified Soapmaker credential in 2024 and has successfully completed three seasons at the local farmers’ market.
Business Model
Revenue runs through four channels: direct-to-consumer online, farmers’ market, wholesale retail accounts, and custom B&B private-label orders.
Pricing is fixed by channel. DTC online bars go at $9.00, farmers’ market bars at $8.00, wholesale at $4.50 per bar on Net 30 terms, and B&B private-label at $5.00 per bar with an 80-bar minimum. The blended average selling price across all channels is $7.40 per bar-equivalent unit.
DTC and farmers’ markets collect at the point of sale. Wholesale and B&B run Net 30. Those two immediate-payment channels cover 81% of Year 1 revenue.
Mission
To produce small-batch, chemistry-grounded handmade bar soap that competes with national natural-soap brands on quality, while paying a living wage in a small-town Vermont economy.
Business Goals
These targets connect directly to debt service, owner draw, and production capacity over three years.
- 25,000 bar-equivalent units across four channels in Year 1, $185,000 in revenue.
- Six wholesale accounts on the Mountain Road corridor by the end of Year 1, averaging $3,750 per account annually.
- Five B&B private-label accounts by the end of Year 1, averaging 500 bars per account per year.
- 80% of online orders are shipped within 48 hours from day one.
- $257,594 in Year 3 revenue with shampoo bars and body butters added to the line.
- Mountain Road storefront in Year 3 if Year 2 revenue hits $218,300 as projected.
Startup Costs
Marigold Lane requires $110,000 in total startup capital. The SBA 7(a) loan covers $85,000, and Sarah Keller’s equity contribution covers the remaining $25,000.
| Expense | Amount |
| Soap-making equipment (mixers, 30-lb and 35-lb wood molds, curing racks, scales, immersion blender, electric cutter) | $14,000 |
| Vehicle (used cargo van for deliveries and farmers’ market) | $8,000 |
| Furniture & fixtures (workbenches, packaging stations, shelving) | $4,200 |
| Office computer & equipment | $2,000 |
| Leasehold improvements (utility sinks, ventilation, electrical) | $5,000 |
| Initial inventory (raw materials: oils, lye, fragrances, packaging) | $6,800 |
| Prepaid product liability + general liability insurance (12-month policy) | $2,400 |
| Marketing launch (website, branding, photography, launch ad spend) | $5,000 |
| Licenses, permits, LLC filing, sales tax registration | $1,500 |
| Professional services (legal entity setup, accounting setup) | $1,500 |
| Working capital reserve | $59,600 |
| Total Startup Costs | $110,000 |
Market Analysis
Industry Overview
The global organic soap market stood at $2.54 billion in 2025, is tracking toward $2.69 billion in 2026, and is projected to reach $4.97 billion by 2034 at a CAGR of 7.96%.
The United States organic soap market was valued at $1.05 billion in 2024 and is projected to reach $1.85 billion by 2030, growing at a CAGR of 6.34%, driven by heightened consumer awareness around health, wellness, and environmental sustainability.
Cold-process soap holds 45% of the handmade soap segment, and North America leads all regions with a 40.2% share.
The demand signal is concrete. A 2024 survey of 1,000 Americans found 74% call organic ingredients important in personal care products and 65% want a readable ingredient list.
Only 9% fully trust voluntary “natural/organic” label claims. That gap is where a chemistry-trained maker with documented formulas has a real edge.
Local & Regional Market
Vermont averaged 11,016 active short-term rental listings between January 2024 and July 2025. Short-term rentals represent approximately 65% of Vermont’s total visitor capacity and generate over $1 billion in annual economic activity.
Not every short-term rental is a realistic private-label account. The best targets are inns, B&Bs, boutique hotels, and property managers with multiple premium units. Marigold Lane’s Year 1 target of 5 accounts is a narrow slice of that pool, chosen for proximity to Stowe and order volume fit.
Vermont has 285,548 occupied households at a median income of $82,730. Marigold Lane’s Year 1 target of 25,000 units represents 8.8% penetration of that household base, not counting tourist purchases at the farmers’ market or online. The Mountain Road corridor has 14 named lodging properties, each a direct target for the B&B private-label program.
Vermont summer visitors report a median household income of $121,050, with 58% earning above $100,000, and they will pay $8 to $9 per bar without friction.
Target Customer Profile
The primary customer is a woman between 28 and 55, earning $55,000 or more, living in or visiting Vermont. She shops at farmers’ markets one to two times per month in season, buys direct via Shopify or Etsy, and gift sets make up 30% or more of her Q4 purchases.
The secondary customer is a gift shop, general store, or wellness boutique owner on or near the Mountain Road corridor in Stowe. The tertiary customer is an inn or B&B owner in Stowe or Lamoille County seeking co-branded amenity soap for guest rooms.
Competitor Analysis
Vermont’s soap market has two tiers. The first is small-batch, consumer-facing makers selling at farmers’ markets and local shops. The second is industrial-scale manufacturers serving national wholesale accounts.
Marigold Lane competes directly with the first tier. The second tier does not serve the same customers, the same channels, or the same order sizes.
Key Competitors
Lyvabel Body Works — Fairfax, VT
Founded in 2018, Lyvabel Body Works specializes in cold-process soap and custom orders, operating from a small farm in northern Vermont. The business sells primarily online and at farmers’ markets with a loyal following built through social media and word of mouth.
Strengths
- Established cold-process soap maker with 5+ years of production experience
- Strong social media presence and custom order capability
- Local ingredient sourcing adds authenticity
Weaknesses
- No formal wholesale program or minimum order structure
- No B&B private-label offering
- Home-based operation limits production scale and commercial credibility
Elmore Mountain Farm — Elmore, VT
Elmore Mountain Farm produces goat milk soap stocked at Stowe Mercantile on Main Street. The brand has local recognition and an established retail presence in Stowe’s busiest tourist shopping location.
Strengths
- Stocked at Stowe Mercantile, a high tourist foot traffic location
- Goat milk soap is a distinct product with loyal buyers
- Local farm story resonates with Vermont tourists
Weaknesses
- No online sales channel
- No wholesale program or B&B private-label capability
- Limited to a single retail location, no geographic expansion visible
Indirect Competitors
Vermont’s soap industry includes two large-scale manufacturers that operate in the same product category but serve an entirely different customer base. Neither competes for the same accounts Marigold Lane targets.
Vermont Soap — Middlebury, VT
Vermont Soap, founded in Middlebury in 1992, manufactures certified-organic bar and liquid soaps, distributed locally and internationally. It serves hundreds of shops, hotels, salons, and retailers across the US as a wholesale and private-label manufacturer.
Strengths
- 30+ years of production experience and USDA organic certification
- National distribution network and established wholesale relationships
- Private-label capability at scale
Weaknesses
- Minimum order thresholds built for national accounts, not local hospitality
- No direct consumer sales at farmers’ markets or local retail
- A Stowe inn ordering 80 co-branded bars does not meet their minimums
Twincraft Skincare — Winoski, VT
Twincraft Skincare employs about 200 people and produces soap for about 200 wholesale customers across North America. It is a B2B contract manufacturer for national brands with no consumer-facing products.
Strengths
- Large-scale production capacity and established national client base
- Deep manufacturing expertise across multiple soap formats
Weaknesses
- No consumer-facing brand or retail presence
- Not accessible to small local accounts
- A tourist shopping on Mountain Road will never encounter the Twincraft name
Competitive Positioning
Marigold Lane is the only soap maker in Stowe running a formal wholesale program and a B&B private-label channel simultaneously at launch. That is the position. No direct local competitor offers both.
At the farmers’ market, Lyvabel Body Works and Elmore Mountain Farm are real competitors. Off it, there is no direct rival across wholesale and B&B channels in Stowe.
Sarah’s chemistry background is the trust signal that makes wholesale accounts convert. In Sarah’s two seasons at the Stowe Farmers’ Market, most makers she encountered could not explain their own ingredient ratios when buyers asked. Sarah can, and wholesale buyers notice.
Soap Product Lines & Pricing
Marigold Lane sells cold-process handmade bar soap across four product lines. Each line serves a different channel and price point. All bars are 4.5 ounces, hand-cut, and individually wrapped in compostable kraft paper.
Marketing & Sales Strategy
Marigold Lane’s one-time marketing launch budget of $5,000 covers website build, branding, photography, and launch ad spend. These are the foundation assets every channel runs on.
The sections below cover the sales process each customer moves through and how Marigold Lane keeps them coming back.
Brand & Marketing Setup
All four channels run on assets built during the launch phase.
| Channel | What It Does | When |
| Website | Shopify store serves as the primary DTC sales and order fulfillment channel. All online traffic converts here. | Live at launch |
| Social Media | Instagram and TikTok organic content covering production, ingredients, and finished product. Builds DTC audience and email list. | Live at launch |
| Outreach | In-person visits to retail accounts and B&B properties with a line sheet and product sample. Converts business accounts into recurring wholesale and private-label orders. | First 90 days, then ongoing |
| Launch Ad Spend | Paid advertising to drive initial traffic to the Shopify store in the first 30 days before organic channels build momentum. | Launch period only |
Sales Process
Each channel follows a defined process from first contact to fulfilled order.
DTC Online
- Customer discovers Marigold Lane via organic social, Etsy, or a farmers’ market visit
- Places order on Shopify, email captured at checkout
- Order packed and shipped within 48 hours, tracking sent automatically
- Day 7 post-purchase email requests review and introduces loyalty program
Farmers’ Market
- Sarah offers a scent sample before purchase, no obligation
- Customer pays by cash, card, or Venmo via Square
- Email collected at the point of sale for the Maker’s Notes list
Wholesale
- Sarah visits the target account with a one-page line sheet and a soap sample
- Retailer places a sample order, approves the quality, then opens at $400 minimum
- Reorder reminder sent every 8 weeks via QuickBooks
B&B Private Label
- Sarah contacts Target Inn 90 days before peak season
- Owner selects scent, confirms bar count and label design, pays 50% deposit
- Order delivered before peak season, renewal outreach sent 60 days before next season
Launch Promotions
New wholesale accounts placing an opening order receive a free counter-display unit. B&B accounts signing in Year 1 get complimentary custom scent development, waiving the standard $250 fee. Any account that refers to a new signed account receives a 10% credit on their next invoice.
Operations Plan
Cold-process soap takes 4 to 6 weeks to cure before it can be sold. Every production decision at Marigold Lane flows from that single constraint. Batch scheduling, inventory levels, staffing hours, and cash flow timing are all built around the cure cycle.
Production Process
The cold-process workflow runs in seven steps.
- Recipe verification against batch log
- Ingredient prep: oils heated to 100°F, lye solution cooled to 100°F
- Mixing oils and lye solution to trace
- Pour into wood molds: 30-lb molds in Year 1 and Year 2 (80 sellable bars per batch), 35-lb molds in Year 3 (93 sellable bars per batch)
- 24-hour saponification, then unmold and cut
- Cure on wire racks for 4 to 6 weeks
- Quality inspection, label, and package
Facility
Marigold Lane operates from a 1,200-square-foot leased production space at Suite 6, 782 Mountain Road, Stowe, VT 05672. The facility includes utility sinks, ventilation upgrades, a shared loading dock, and a dedicated 200-square-foot curing room with humidity control. The lease runs for 3 years at $1,200 per month, with 2-year renewal options.
Equipment
Equipment totals $14,000 and includes mixers, 30-lb and 35-lb wood molds, curing racks, scales, an immersion blender, and an electric cutter. All equipment is available from day one of operations.
Order Scheduling & Booking Logic
Every channel runs on fixed minimums, lead times, and payment terms from day one.
- DTC online: orders placed by 11:59 PM Monday ship Tuesday, orders placed by 11:59 PM Wednesday ship Thursday
- Wholesale: opening order $400 minimum (88 bars), reorder $200 minimum (44 bars), 2-week lead time, Net 30 invoicing via QuickBooks
- B&B private label: 80-bar minimum run, 4-week lead time, 50% deposit at order confirmation, balance Net 30 on delivery
- Farmers’ market: no pre-booking, walk-in sales only, accepts cash, Square, and Venmo
Fulfillment & Delivery
Every channel has a fixed delivery method and a confirmed timeline from day one.
- DTC online orders are packed and shipped on Tuesday and Thursday via USPS Priority Mail. Tracking is sent automatically via Shopify
- Farmers’ market inventory loads into the cargo van Friday afternoon, set up at 3420 Mountain Road, Stowe, VT 05672, by 8:30 AM Sunday
- Wholesale orders are delivered via cargo van to Mountain Road accounts within 2 weeks, outside the Stowe corridor, shipped via USPS Priority Mail
- B&B orders are delivered via cargo van directly to the property before peak season. Sarah handles all deliveries personally
Team & Staffing
Marigold Lane runs on two people. Sarah Keller handles everything from batch design to wholesale outreach. The part-time production assistant keeps the production floor moving so Sarah can focus on sales and fulfillment.
Sarah Keller | Owner-Operator | 40+ Hours/Week
Batch production, formula development, quality control, wholesale outreach, and financial oversight all sit with Sarah. Member distributions run $42,000 in Year 1, $48,000 in Year 2, and $54,000 in Year 3. As a single-member LLC, Sarah reports business income on her personal tax return and pays self-employment tax directly.
Production Assistant | Part-Time | $18.50/Hour
Unmolding, cutting, packing, curing rack management, and Thursday fulfillment runs all under Sarah’s supervision. The position starts at 20 hours a week in Year 1, moves to 24 in Year 2, and 28 in Year 3 as production volume climbs. Labor cost for this role ties directly to the direct labor line in the income statement.
Daily Operational Workflow
The week runs on a fixed structure: production on Monday through Wednesday, fulfillment on Thursday, admin on Friday, and the farmers’ market on Sundays from May through October.
Production days average 2.3 batches, with peak days hitting 3. The weekly total is 7 batches in Year 1, 8 in Year 2, and 9 in Year 3.
The morning starts at 9:00 AM with a batch schedule review and ingredient weigh-out. Oils are on heat, and the lye solution is cooling to 100°F by 9:45 AM. The first batch hits the mold at 10:20 AM once the mix reaches trace, scent, and color are added.
The PT assistant comes in at 11:00 AM to clean equipment and start the second batch. Sarah stays on the first batch through saponification. Lunch is at 12:30 PM. The third batch pours at 1:00 PM.
Sarah handles the third pour while the PT assistant works through unmolding and cutting from the prior production day at the same time. Quality checks on cut bars and curing rack transfers happen by 2:30 PM. Equipment gets cleaned, supplies go back on the shelf, and batch numbers are logged before 3:15 PM.
The facility closes at 4:00 PM. Monday and Wednesday follow the same production block, adjusted weekly for inventory needs and wholesale order timing.
Thursday is fully dedicated to fulfillment. DTC orders go out via USPS Priority Mail. Wholesale invoicing runs through QuickBooks.
Friday is Sarah’s administrative day: financials, wholesale outreach, email marketing, and B&B account follow-up. No batches run on Fridays, in any year.
The Stowe Farmers’ Market at 3420 Mountain Road, Stowe, VT 05672, runs Sundays from 10:00 AM to 2:00 PM, May through October.
Suppliers & Sourcing
Primary soap-making supplies come from Bramble Berry. Backup suppliers are Soaper’s Choice and Mike’s Soap & Stuff. Lye (food-grade sodium hydroxide) is sourced from a Vermont-licensed industrial supplier. Packaging comes from a regional kraft-paper printer in Burlington.
Every primary supplier has a confirmed backup. Materials are reordered every three weeks to maintain the raw-materials buffer required by the 60-day inventory assumption in the financial plan.
Quality Control
Every batch goes through four checkpoints. A pH test runs 24 hours after pour, targeting a reading between 8.5 and 10. Weight verification and visual inspection happen at unmold. A second visual and scent inspection runs at the 4-week cure mark.
Risks & Mitigation
Marigold Lane’s risk profile is typical for a small-batch manufacturer entering its first year. The sections below cover the seven most relevant risks and how each one is managed.
Founder Dependence
Risk: Sarah runs production, sales, and fulfillment. If she cannot work for an extended period, output slows, and order commitments are at risk.
Mitigation: The part-time assistant covers unmolding, cutting, and packing independently. A 60-day finished goods buffer provides runway. A trained backup operator is the first staffing priority in Year 2.
Production Capacity Limits
Risk: Year 1 capacity is 28,000 bars against a forecast of 25,000, a 12% buffer. Demand above that level requires schedule changes before new equipment can be added.
Mitigation: The schedule absorbs one extra batch per week by extending Wednesday hours with no new capital needed. Orders beyond that go on a waitlist with a confirmed lead time.
Cure-Cycle Delays
Risk: Cold-process soap cures for 4 to 6 weeks before sale. A missed or delayed batch pushes the fulfillment calendar back and cannot be recovered quickly.
Mitigation: A 60-day buffer of raw materials and finished goods absorbs up to two weeks of disruption without missing a ship date.
Fragrance & Material Cost Increases
Risk: Materials run at 22% of revenue. A price increase across oils, lye, or fragrances compresses the margin directly.
Mitigation: Marigold Lane will enter fixed-price supply agreements with Bramble Berry and Soaper’s Choice, locking costs for a defined contract period and removing exposure to spot price changes.
Wholesale Payment Delays
Risk: Wholesale and B&B accounts run Net 30. Late payments in the same month create a short-term cash gap.
Mitigation: The $59,600 working capital reserve covers six weeks of operating expenses without incoming revenue. QuickBooks sends automated reminders on day 25 and day 35.
Farmers’ Market Seasonality
Risk: The Stowe Farmers’ Market runs May through October. The five-month off-season removes a high-margin sales channel from the revenue mix.
Mitigation: DTC online and wholesale orders run year-round. Q4 gift set revenue is planned to fill the gap. The email list supports direct sales through the off-season.
Product Liability
Risk: Handmade personal care products carry product liability exposure. A customer claim could affect both cash flow and reputation.
Mitigation: A $1M product liability rider is in place from launch. All formulas avoid Prop 65 substances, allergen disclosures appear on every label, and a 100% money-back policy within 90 days resolves issues before they escalate.
Regulatory & Compliance
Marigold Lane operates across two federal regulatory tracks and one state framework. Products marketed as handmade bar soap without cosmetic or therapeutic claims fall under the true-soap exemption. The moment a product makes a cosmetic claim, FDA jurisdiction applies. Every marketing decision is reviewed against that line before publication.
Regulatory Coverage Map
| Requirement | Status |
| CPSC labeling compliance | Compliant. Product identity, net weight, manufacturer address, and ingredient list on every bar |
| Vermont LLC annual report | Filed annually, $35 fee |
| Vermont sales and use tax | Registration filed before launch |
| Workers’ compensation | Active. Covers part-time production assistant |
| Local zoning | Verified for commercial production at Suite 6, 782 Mountain Road |
| Product liability insurance | $1M coverage, $2,400 annual premium |
Labeling Requirements
Every bar leaving the facility carries the following under CPSC rules.
- Ingredient list in descending order by weight per CPSC rules
- Allergen disclosure included for all fragrance components
- Marigold Lane formulates to avoid Prop 65 substances
Insurance & Liability
Marigold Lane carries a small business owner’s policy with three layers of coverage.
- A product liability rider is specifically required for personal-care products, separate from general liability
- Annual premium of $2,400 covers general liability, product liability, and commercial property
- Carrier: Hiscox or Veracity Insurance Solutions
Financial Plan
Marigold Lane’s three-year financial plan is built on three assumptions: 25,000 Year 1 units at a $7.40 blended average selling price, 22% direct materials cost, and 18% annual revenue growth through Year 3.
Funding
| Source | Amount |
| SBA 7(a) loan (10-year term, 8.5% fixed APR) | $85,000 |
| Owner equity contribution (Sarah Keller) | $25,000 |
| Total Startup Capital | $110,000 |
Financial Assumptions
| Item | Assumption |
| Blended average price per bar-equivalent unit | $7.40 (weighted across DTC $9 / FM $8 / Wholesale $4.50 / B&B $5) |
| Channel mix (Year 1, by units) | DTC 40.0% (10,000u/$90,000) / FM 30.0% (7,500u/$60,000) / Wholesale 20.0% (5,000u/$22,500) / B&B 10.0% (2,500u/$12,500). Same proportions in Y2 and Y3. |
| Bar-equivalent units sold | Y1: 25,000; Y2: 29,500; Y3: 34,810 |
| Year-over-year revenue growth | 18% per year (Y2 = Y1 × 1.18; Y3 = Y2 × 1.18) — applied to units; price held constant |
| Direct materials cost | 22% of revenue (oils, lye, fragrances, colorants, labels, packaging — blended across channels) |
| Direct labor cost (production assistant) | Hours × rate (NOT a % of revenue plug — direct labor is a real headcount cost). PT assistant @ $18.50/hr × 50 production weeks. Hours scale with production schedule (Ch 7.4 + 7.7): Y1 20 hrs/week → $18,500 (10.00% of revenue); Y2 24 hrs/week → $22,200 (10.17%); Y3 28 hrs/week → $25,900 (10.05%). The DL-as-percent-of-revenue figure drifts naturally because hours grow in step-changes while revenue grows continuously. |
| Payroll tax rate (employer side) | 9% applied to direct labor only. NOT applied to owner draw — single-member LLC is a disregarded entity; Sarah pays self-employment tax personally on her 1040. |
| Owner draw (member distribution, NOT W-2 salary) | Y1: $42,000; Y2: $48,000; Y3: $54,000 |
| AR collection (DSO) | Net 30 on wholesale + B&B revenue (combined 18.92% of revenue); 0 days on DTC + farmers’ market (immediate payment) |
| AP payment (DPO) | Net 30 on total COGS |
| Inventory days on hand | 60 days × annualized total COGS — covers the 28–42 day cure cycle plus 18–32 days of raw-materials buffer (reorder cadence ~21 days). At the conservative end of the 60–75 day band lenders typically expect for cure-dependent products. |
| Loan: lender | SBA 7(a) loan via Vermont community bank |
| Loan: principal amount | $85,000 |
| Loan: term | 10 years (120 months) |
| Loan: annual interest rate | 8.5% fixed |
| Loan: monthly payment | $1,053.88 |
| Loan: annual payment | $12,646.54 (rounded $12,647) |
| Year 1 interest / principal split | Interest $7,009; Principal $5,638 |
| Year 2 interest / principal split | Interest $6,510; Principal $6,136 |
| Year 3 interest / principal split | Interest $5,968; Principal $6,679 |
| Loan ending balance Year 3 | $66,547 |
Depreciation Schedule
| Asset | Cost | Life | Annual | Acc. Y1 | Net Y1 | Acc. Y2 | Net Y2 | Acc. Y3 | Net Y3 |
| Soap-making equipment | $14,000 | 7y | $2,000 | $2,000 | $12,000 | $4,000 | $10,000 | $6,000 | $8,000 |
| Vehicle (cargo van) | $8,000 | 5y | $1,600 | $1,600 | $6,400 | $3,200 | $4,800 | $4,800 | $3,200 |
| Furniture & fixtures | $4,200 | 7y | $600 | $600 | $3,600 | $1,200 | $3,000 | $1,800 | $2,400 |
| Office computer | $2,000 | 5y | $400 | $400 | $1,600 | $800 | $1,200 | $1,200 | $800 |
| Leasehold improvements | $5,000 | 10y | $500 | $500 | $4,500 | $1,000 | $4,000 | $1,500 | $3,500 |
| TOTAL | $33,200 | — | $5,100 | $5,100 | $28,100 | $10,200 | $23,000 | $15,300 | $17,900 |
Income Statement (Profit & loss)
| Year 1 ($) | Year 2 ($) | Year 3 ($) | |
| Bar-equivalent units sold | 25,000 | 29,500 | 34,810 |
| Total Revenue | $185,000 | $218,300 | $257,594 |
| COGS | |||
| Direct materials (22% of revenue) | $40,700 | $48,026 | $56,671 |
| Direct labor (PT hours × $18.50 × 50 wks: Y1 20h, Y2 24h, Y3 28h) | $18,500 | $22,200 | $25,900 |
| Payroll taxes on direct labor (9% of DL) | $1,665 | $1,998 | $2,331 |
| Total COGS | $60,865 | $72,224 | $84,902 |
| Gross Profit | $124,135 | $146,076 | $172,692 |
| Gross Margin | 67.1% | 66.9% | 67.0% |
| Operating Expenses | |||
| Owner draw (member distribution — single-member LLC) | $42,000 | $48,000 | $54,000 |
| Commercial rent | $14,400 | $14,400 | $14,400 |
| Insurance (general + product liability) | $2,400 | $2,520 | $2,650 |
| Accounting & legal services | $2,400 | $2,520 | $2,650 |
| Phone & utilities | $1,800 | $1,890 | $1,985 |
| Ongoing marketing (Y2 +22% / Y3 +18%) | $9,000 | $11,000 | $13,000 |
| Vehicle / fuel / delivery | $3,600 | $3,800 | $4,000 |
| Production supplies & consumables | $2,400 | $2,500 | $2,625 |
| Repairs & maintenance | $1,200 | $1,300 | $1,365 |
| Technology subscriptions | $2,400 | $2,500 | $2,625 |
| Marketing launch (one-time) | $5,000 | — | — |
| Licenses & permits (one-time) | $1,500 | — | — |
| Professional setup services (one-time) | $1,500 | — | — |
| Total Operating Expenses | $89,600 | $90,430 | $99,300 |
| EBITDA | $34,535 | $55,646 | $73,392 |
| Depreciation | $5,100 | $5,100 | $5,100 |
| EBIT | $29,435 | $50,546 | $68,292 |
| Interest expense (from loan amortization) | $7,009 | $6,510 | $5,968 |
| Net Income (Pre-Tax) | $22,426 | $44,036 | $62,324 |
Cash Flow Statement
| Year 1 ($) | Year 2 ($) | Year 3 ($) | |
| Beginning Cash | $67,600 | $90,809 | $132,357 |
| Operating Activities | |||
| Net income (pre-tax) | $22,426 | $44,036 | $62,324 |
| Depreciation (non-cash add-back) | $5,100 | $5,100 | $5,100 |
| Change in accounts receivable (increase = outflow) | ($2,877) | ($518) | ($611) |
| Change in inventory (increase = outflow) | ($3,205) | ($1,867) | ($2,084) |
| Change in accounts payable (increase = inflow) | $5,003 | $933 | $1,042 |
| Change in prepaid expenses (decrease = inflow) | $2,400 | $0 | $0 |
| Net Cash from Operations | $28,847 | $47,684 | $65,771 |
| Investing Activities | |||
| Capital expenditures | $0 | $0 | $0 |
| Net Cash from Investing | $0 | $0 | $0 |
| Financing Activities | |||
| Loan principal repayment | ($5,638) | ($6,136) | ($6,679) |
| Net Cash from Financing | ($5,638) | ($6,136) | ($6,679) |
| Net Change in Cash | $23,209 | $41,548 | $59,092 |
| Ending Cash | $90,809 | $132,357 | $191,449 |
Opening Balance Sheet (At Launch)
| Line Item | Amount ($) |
| ASSETS | |
| Cash (working capital reserve $59,600 + $8,000 float for one-time expenses) | $67,600 |
| Inventory (raw materials) | $6,800 |
| Prepaid insurance | $2,400 |
| Gross PP&E (equipment + vehicle + furniture + computer + leasehold) | $33,200 |
| Total Assets | $110,000 |
| LIABILITIES & EQUITY | |
| SBA 7(a) loan (long-term) | $85,000 |
| Member’s capital (paid-in by Sarah Keller) | $25,000 |
| Total Liabilities + Equity | $110,000 |
Balance Sheet (Years 1–3)
| Year 1 ($) | Year 2 ($) | Year 3 ($) | |
| ASSETS | |||
| Cash | $90,809 | $132,357 | $191,449 |
| Accounts receivable (Net 30 on wholesale + B&B = 18.92% of revenue) | $2,877 | $3,395 | $4,006 |
| Inventory (60 days × annualized COGS) | $10,005 | $11,872 | $13,956 |
| Prepaid expenses | $0 | $0 | $0 |
| Net PP&E | $28,100 | $23,000 | $17,900 |
| Total Assets | $131,791 | $170,624 | $227,311 |
| LIABILITIES | |||
| Accounts payable (Net 30 on total COGS) | $5,003 | $5,936 | $6,978 |
| SBA 7(a) loan balance | $79,362 | $73,226 | $66,547 |
| Total Liabilities | $84,365 | $79,162 | $73,525 |
| EQUITY | |||
| Paid-in capital | $25,000 | $25,000 | $25,000 |
| Retained earnings (cumulative net income; owner draws already in OpEx) | $22,426 | $66,462 | $128,786 |
| Total Owner’s Capital | $47,426 | $91,462 | $153,786 |
Break-Even Analysis
| Item | Value |
| Blended revenue per bar-equivalent unit | $7.40 |
| Variable cost per unit — direct materials (22% of revenue) | $1.628 |
| Variable cost per unit — direct labor (Y2 DL $22,200 ÷ 29,500 units) | $0.7525 |
| Variable cost per unit — payroll tax on direct labor (9% of DL/unit) | $0.0677 |
| Total variable cost per unit | $2.4483 |
| Contribution margin per unit | $4.9517 |
| Contribution margin (%) | 66.9% |
| Annual fixed operating costs (Year 2 ongoing OpEx, ex one-time and ex depreciation) | $90,430 |
| Break-even units per year | 18,262 units |
| Break-even units per month | 1,522 units |
| Break-even revenue (annual) | $135,139 |
| Margin of safety (standard sales formula: (Sales − BE Sales) / Sales) | 27.0% |
| Year 1 forecast vs. break-even | 25,000 units / $185,000 — exceeds BE by 6,738 units / $49,861 |
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