Good Clean Fun

If you have heard me present lately, you will know that I have started to make soap. I have gone full nerd on it using graduated cylanders and all. It has been fun to build a new knowledge set, bust out my old chemistry and lab skills, and try out a whole bunch of fragrances. (My latest favorites are lemongrass essential oil and something called Santa’s Pipe fragrance oil.) But what has been really interesting is figuring out what would happen if I decided to sell it. What goes into selling a consumer good? I’ll let you in on the process over my next few posts.

Because I am a lawyer, my first thoughts were of limiting my liability. That means I would likely want to form an entity. Collin has done a great job talking about S. Corps lately, and we’ve previously discussed organizing as an entity. I am pretty sure that I’m not ready to jump to a C. Corp yet so I would need to think about S. Corp versus LLC. That decision will depend on what’s my expected revenues, use of employees, and tax implications. A call to my accountant is likely in order.

But there is more to it than picking the correct entity. After all, by organizing, I didn’t get rid of the liability, I just shifted it to the company rather than me personall. Next up would be insurance. I have to think about what kinds of claims would people make agains my new Soap Co. I mostly think about personal injury. If I made it wrong, the user could be injured. If I label it incorrectly, the user could be injured (allergies) or upset (vegans likely won’t like lard in their soap, and people focused on rainforest sustainability will want to know about the use of palm oil.) So next call will be to my business insurance agent.

Then, I’ll have to think about my relationships. I need to figure out my vendors and customers. Will those customers be direct to users or to retail shops? And once I figure out those, what is my relationship with them? What happens if something goes wrong? How do either they fix it or I fix it? Are contracts needed? And what about marketing? How do I get a logo? Who can help me get it on Instragram? How much does that cost and what if they say stuff wrong?

Whoa, doggie! That got heavy fast. And I haven’t even made soap yet! Aaaaaaaaah! Perhaps this step of limiting my liability needs to be delayed a bit. I have lots more challenges ahead before I worry about a wholesale distribution contract. So let’s set this part aside and talk about a more direct challenge next time, shall we? For now, I know that I need to talk to my lawyer, my accountant, and my insurance agent before I buy display stands and start selling anything. I’ll put those on my to-do list and go sniff some the new bottles of fragrances that the UPS guy just delivered.

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