Start a hand sanitizer by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your hand sanitizer. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a hand sanitizer?
Most businesses need to start by creating an LLC and banking business accounts, as well as operating insurance. Legal requirements should be handled first, whenever possible. Initial costs will also focus on a building for packaging and manufacturing your product, obtaining bottles or containers for the hand sanitizer, and shipping your product to retail partners. You will also more than likely need a small staff, so salaries and worker insurance will also add to the initial costs.
What are the ongoing expenses for a hand sanitizer?
Most ongoing expenses pertain to the manufacturing of the product and salaries for your workers. Whether you’re buying or leasing a building, you’ll also have these payments. Maintenance of your factory machines will also be a factorable expense.
Who is the target market?
Any consumer looking to protect themselves and their family is a potential customer, with the 30-65 age groups representing some of your strongest customers.
How does a hand sanitizer make money?
Selling products, both in bulk for stores and individually to customers, generates revenue for the business.
How much can you charge customers?
A small to medium bottle of hand sanitizer is typically between 3-7 dollars, although some more established brands can charge even more. Specialty fragrances or bottle designs might also garner more money.
How much profit can a hand sanitizer make?
Profits will vary, but a successful hand sanitizer business can gross six figures annually.
How can you make your business more profitable?
Some hand sanitizer businesses are upping their manufacturing abilities to meet larger, more commercially suitable needs.
Other products in the personal hygiene market, such as soaps, can also become part of your branding.
Hand lotions may be a good option to offset the effects of hand sanitizer on skin.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your hand sanitizer is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Read our Best Banks for Small Business guide to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Recommended: BlueVine is an online bank with free business checking and no hidden fees. Great for businesses who do not often deal with cash.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a Hand Sanitzer business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a hand sanitizer
Marketing and promoting this type of business will require creating a trusted name brand. Your product needs to be synonymous with quality and safety.
- Advertise with medical publications and trade papers.
- Create a recognizable logo and a social media presence.
- Start a website with testimonials and offers for free samples. You need your product in people’s hands — literally.
- Buy billboard space and spend money on print advertising for your initial startup campaign.
How to keep customers coming back
For this type of business, personal preference and name brand recognition are quite important. Ask customers what they do and don’t like about your products, particularly the smell of the product. A pleasing fragrance may win over some more particular customers. And, when you find a winning formula, don’t change too much. Customers like the comfort of easy product recognition and expectations.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Hand Sanitizer In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
A hand sanitizer business is fairly specific in its scope. Experience in manufacturing, marketing, and advertising will be needed. Knowledge in chemistry and biology may be helpful, also. A person looking to open this type of business should also understand business and finances to help their business be profitable.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a hand sanitizer?
For most hand sanitizer businesses, daily operations focus on manufacturing, bottling, and distributing products. Additionally, marketing and advertising and making contacts with potential buyers and customers is a regular occurrence.
What are some skills and experiences that will help you build a successful hand sanitizer?
As a product, hand sanitizer is nothing new, and there are lots of manufacturers of this product. This means that you have to develop a unique advertising and marketing angle. Understanding marketing, advertising, and business, in general, will be critical for success. Experience in shipping logistics will also help.
What is the growth potential for a hand sanitizer?
Currently, the market for hand sanitizers is excellent. Everyone is looking to keep safe and clean when coming in contact with the world, and sales are exceptional. We can expect to see some cooling of this trend, as the virus is abated. Starting a business now would more than likely prove profitable, but be aware of growing cautiously, as competition and public needs may fluctuate in the coming months.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a hand sanitizer?
Since this is currently such a saturated market, you’ll need something to help your particular product stand out. Consider partnering with a larger company to produce hand sanitizer with their company logo or branding. A partnership can help maintain your business in the early months when survival is most difficult.
Consider a special promotion with related products or give out free samples to the general public. You may even think about donating some of your wares to organizations in need. Positive word of mouth can be a persuasive advertisement.
How and when to build a team
From the onset, you’ll need some people on your team. From manufacturing staff to delivery drivers, in-store marketers, and display builders to office staff, you’ll need at least a modest crew to help monitor all the moving pieces and keep the business running.