What are "Good Manufacturing Practices"?



Simply stated, “Good Manufacturing Practices” are the practices and procedures used in manufacturing that ensure a good finished product.  The idea behind having, and consistently using, established practices and procedures is that you consistently end up with the same high-quality product every time, every batch, every bar or bottle.

There are industry standards that detail what good manufacturing practices entail.  They are called GMP “guidelines.” In the US, there are GMP regulations for drugs, food supplements and food, but not cosmetics.  Instead, the FDA has a GMP Inspection Checklist  which covers what they expect in order to ensure that a cosmetic product is not adulterated or misbranded.  The only official Cosmetic GMP Guidelines are those issued by the International Standards Organization as ISO 22716.

Developed over a long time with lots of experience in what could go wrong, GMP Guidelines go much further than just what you do when you are making your product.  They cover everything before, during, after and surrounding the actual making of the product and set some standards on how each potential problem can be avoided. This includes how the space or facility is set up and maintained, organizational structure for overseeing and approving product manufacture, personnel training, safety and hygiene, supplier approval, ingredient specifications and approval, tracking ingredients and materials, documenting production of batches of products, quality control, records management and handling returns or problem products.

When thinking about getting in your own Good Manufacturing Practices, keep in mind that the guidelines are just that – guidelines.  While there are some things that are generally the same for everyone, the details and specifics will be unique to you and your situation.  You probably won’t have to deal with overhead pipes dripping into your mixing pot, but you still need to make sure your space is free of contamination.

If you make a good product, you already have many good practices in place.  You work in a clean space, you measure carefully and correctly, you follow your recipe, you use good ingredients from suppliers you trust. These things that you already do while to make sure your product is at the quality level you want are the core of your good manufacturing practices.

If you want to start establishing your own official Good Manufacturing Practices, these are the four points that most handCrafter’s should start on first:

1.  Good Manufacturing Practices should be written down.
Whatever you already do to ensure your product is high-quality should be in a written procedure. It’s not enough to have it in your head – it needs to be written down in a way that can be clearly understood and could be done by another person who is reasonably familiar with the processes you use.

Having your procedures in written form is not just a drill for complying with the guidelines, it’s a really good idea for several reasons.  First, you don’t have to “remember” what to do every time you go to make a product, reducing the chances of errors, especially on products you don’t make often. Second, when you get to the point of having helpers or employees, you have the procedures ready to give them which will reduce training time and ensure your product quality doesn’t drop if someone else makes it for you.

2.  Assign and track lot numbers for all ingredients and materials used in the product and packaging.
Whenever you receive an ingredient or packaging material to be used in your product, assign it a lot number. It can be anything that will uniquely identify the EXACT order you received. Keep in mind that if you receive 4 oz. of Lavender essential oil on Monday and another 4 oz of Lavender essential oil on Friday, they are two different lots and should have different lot numbers assigned to them.

3. Keep a written record of each batch you make.
Called a “Batch Record,” this is a written document of exactly what you did when you made the batch.  You can start with a copy of your recipe and initial each item as it is measured and added, note temperatures or other key things you check to make sure the batch is right. Note on the Batch Record the lot number of each ingredient or packaging material used in the batch.

4.  Assign each batch a unique batch number.
Every batch of product you make should be assigned a unique batch number, so it can be easily identified.  Ideally, the batch number should go on the label (per GMP guidelines) – but it is not required according to the cosmetic labeling regulations. Using the date and a letter works well (i.e. 2013-04-01-A, 2013-04-01-B, etc.).

Once you implement just these four steps, you can get your good manufacturing practices bumped up to the next level, moving you much closer to full compliance with GMP guidelines.  Not only that, you will have taken some major steps toward making sure your product is of the highest quality – every batch, every bar or bottle, every time.

Marie Gale (www.mariegale.com) is the author of Soap and Cosmetic Labeling; How to Follow the Rules and Regs Explained in Plain English and Good Manufacturing Practices for Soap and Cosmetic HandCrafter’s.  She has been actively involved in the handcrafted soap and cosmetic industry for over 10 years and is Past President (2004-2009) of the Handcrafted Soapmakers Guild (www.soapguild.org). 

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Financial Planning and Analysis



Creating a business plan is one of the first steps needed to get a new business financed and off the ground.  It’s only the beginning of a continuous process of managing your money and resources.

The basics of financial planning include an annual budget and a method for measuring actual performance against the plan.  It’s also helpful to plan as far into the future as possible, especially if expansion is a long-term goal.

Developing your plan

This doesn’t have to be burdensome or complicated, and many small businesses do it on an Excel spreadsheet.  A spending plan provides a time-phased baseline or budget for projected expenses throughout the year.  This will allow you to track your actual expenses as they come in every month.

Expenses typically fall into two categories: fixed and variable.  Fixed or overhead expenses don’t change much and include office rent, insurance, depreciation, utilities, maintenance, and equipment rental.  Variable or operating expenses fluctuate depending on the growth rate of your business.  Included in this category are materials, supplies, salaries, commissions, advertising, travel, shipping, and taxes.

In addition, you’ll need a revenue forecast based on your estimated product sales.  It’s the total price of goods and services that you expect to sell.  Spread the sales by month, allowing for changes in demand due to holidays and other events that affect your particular business.

Existing businesses have the advantage of historical data to use for forecasting future expenses and sales.  New businesses must rely on experience and judgment to come up with the best estimates possible.

Measuring actual performance

Planning is important, but it’s equally important to track performance against the plan.  This allows you to make changes in real time to correct problems before they escalate, or avoid them altogether.

Prepare a spreadsheet that compares your monthly expense plan to your actual expenses.  The difference between the two is commonly called a variance.  Do the same comparison between your sales forecast and actual sales.  Determine why and how the variances occurred.  Analysis of your financial data will help answer questions like these:

Do I need to improve the way I develop my plan?
Should I hire someone to help me, either as an employee or contract labor?
Do I need more work space, and can I afford it?
Is additional equipment needed to achieve sales goals?
Am I managing inventory efficiently?
Should more or less money be spent on marketing and advertising?
Are there ways to cut expenses without hurting sales?
Am I doing the right things to make a reasonable profit?
What’s my break even point?
What’s my return on investment?
Are my prices optimized for the highest possible sales and profits?
What is my cash flow and how can I improve it?
Are new investments needed to sustain and grow the business?
How should next year’s goals be modified based on this year’s results?
Should I consider changes to my business model?
Do I need more financing to make my business succeed, and can I afford it?

The keys to successful implementation of this strategy are discipline and attention to detail.  While this does take some time, the rewards are high.  Most problems end up costing money, so catching them early will give you time to come up with work-arounds to minimize the impact.

Analyzing your financial performance is a critical aspect of running your business.  It minimizes risk because you’ll have warning signals when things aren’t going as planned.  You’ll be able to adapt to changing economic conditions that affect consumer demand.  You’ll be alerted when your financial goals aren’t being met, and the sales level needed to meet your targets.

Tools

There are tools available for every business to make this process as painless as possible, and some of them are free and simple to use.  Their mention does not constitute an endorsement by the author or publisher of this article.  Don’t limit yourself to what you see here.  Do your own research to find the tools that are most compatible with your specific business and how you like to operate.

The Rolling Business Budget and Forecast is available from Microsoft Office (http://office.microsoft.com/en-us/templates/rolling-business-budget-and-forecast-TC001158956.aspx).  Microsoft offers many other templates to help you organize and run your business effectively.  More sophisticated financial software is available from Microsoft Dynamics (http://www.microsoft.com/en-us/dynamics/erp-small-midsize-business.aspx).  Centage offers several tools for financial forecasting, budgeting, planning, and financial reporting (http://centage.com/Products/Products-Overview.asp).

One useful tool is the ability to make charts or graphs depicting your financial data.  You can create charts in Excel that will automatically pull data from spreadsheets.  Graphs are invaluable for analyzing current trends and extrapolating future performance.

Many small businesses can operate effectively with free templates available online.  If you decide to buy your own software, most offer a free trial.  Give it a test run to see if the features are a good fit for your business.

Bottom Line

All the plans in the world won’t do you any good if you don’t actively measure your performance against them.  Sometimes you’ll find that your plan was inadequate or was based on bad assumptions.  Use that experience to improve the plan the next time it’s updated.

Measuring performance will help install financial discipline, effectively allocate resources, improve inventory control, reduce expenses, avoid problems, and identify ways to increase sales.  This is critical for small businesses because they don’t have the financial firepower to withstand big problems that go unsolved for very long.  Routine analysis of your financial data gives you the heads-up you need to stay on course and helps you focus on doing the right things to be successful.



Geoffrey Michael (www.geoffreymichael.pro) is a freelance writer specializing in business, marketing, personal finance, law, science, aviation, sports, entertainment, travel, and political analysis.  He graduated from the United States Air Force Academy and is also licensed to practice law in California and New Hampshire.  Geoffrey wrote this feature article exclusively for DebbieMay.com, an organization dedicated to helping small businesses succeed.

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Thinking Without A Box



When entrepreneurs talk about chasing the dream, we are not talking about a fantasy, like winning the lottery. We are talking about the things that really matter to us and what we are willing to do to make our dream a reality.  But it’s one thing to have an idea that you’re really passionate about, and another to have a concept that’s also practical, strategic and profitable. 

I once spoke with Marcia Wieder, who is known as America’s Dream Coach and has been the catalyst for turning dreams into reality for thousands of people over the past 20 years. “The ideal professional dream is to be paid well for doing what you love,” Marcia told me.  “I think that sometimes people forget that we need to marry the two ideals, passion and strategy, to achieve success.” 

But for entrepreneurs who aren’t bringing home the paycheck of their dreams it’s often difficult to come up with the new idea and strategy that will change your plight. Therefore, most people either give up on their dreams or compromise them down to what they think is realistically possible and neither creates a desirable outcome. The alternative is to gain clarity on what we really want and explore other ways to make the dream a reality. That often means shifting gears a bit, or as I like to say, thinking without a box! 

If what you are doing isn’t working, then it’s definitely time to shift those gears! Too many entrepreneurs live a life of struggle, especially solopreneurs and micro-business owners. Here are a few indications that it’s time to get out of the box and realize that you have a whole world of choices before you. Keep in mind that these vary depending on the size and type of your business. 

  • You can’t pay yourself well for what you do—worse yet, you continue to pour money into your business with little or no return
  • You no longer enjoy what you do
  • There is not a market-need, or it has shifted significantly
  • There is a constant imbalance between work and your personal life
So how do you figure it out? That question is usually best answered by engaging with mentors, coaches, peers, or your board of advisors. (Yes, even solopreneurs get to have a board of advisors!) You see, it’s really difficult to remove yourself from your beliefs, preconceived notions, and way of thinking in general. Brainstorming with someone who isn’t involved in, or doesn’t even know, your business helps you to see it from another perspective. It’s a pretty remarkable experience if you open your mind to the possibilities. 

The trick? Just like any brainstorming session, there are no bad ideas. Get everything down on paper or a mind map and narrow it down later. Enjoy the process and remove the boundaries! 

I often suggest to coaching clients that they get away for a weekend, or a whole week if necessary, to explore their new ideas. Doesn’t that sound decadent? It will be just you and your ideas; alone with a pad of giant-sized sticky note paper, markers and your imagination. And it works! All you really need is one new idea. Sure, that one idea may feel overwhelming, but continue to work away from your normal environment and with your champions to create the strategy to take it to the next level.  

American’s Dream Coaches advice? “Extraordinary things happen when we take action on what matters to us the most. Do what you love, value your gifts, charge what you are worth, have powerful enrollment conversations – and repeat often!” 

Marla Tabaka is an entrepreneurial coach who inspires entrepreneurs around the world to attain what she calls, The Million-Dollar Mindset. As a result, many of her clients have achieved – even surpassed – the million dollar mark in annual revenues and are living the life of their dreams. In addition to running a thriving practice, Marla is a columnist for Inc. Magazine on-line, and hosts two international on-line radio shows, The Million Dollar Mindset and Million Dollar Mindset Tapping. Marla wrote this feature article exclusively for Debbie May.com (http://www.debbiemay.com/), an organization dedicated to helping small businesses succeed. If you would like to consult with Marla to learn how she can help you grow your business and better your life, contact her at Marla@MarlaTabaka.com.