How to start a toilet paper business from the ground up

Launching a toilet paper business is a rewarding venture that combines manufacturing insight and marketing skills with business acumen. The industry is a multi-billion dollar market, driven by steady demand for toilet paper from households, commercial businesses, and the hospitality sector.

This guide will take you through the practical steps of validating your business concept, securing funding, acquiring equipment, and building supplier relationships to help you launch a successful toilet paper business in the U.S.

Step 1: Plan your business and validate your concept

Research the market and competitors

First, get a clear picture of the U.S. toilet paper market. You can obtain detailed industry analysis from market research firms like IBISWorld. Look for their report on "Sanitary Paper Product Manufacturing" to understand market size, growth trends, and key players.

Next, analyze your direct competitors. Use online platforms like Ahrefs to see which brands dominate search results. Also, visit local supermarkets and wholesale clubs to examine the product quality, packaging, and price points of brands like Charmin, Scott, and private-label options.

Many new businesses make the mistake of only targeting the mass market. You might find an opening by focusing on a niche, such as 100% recycled paper for eco-conscious consumers or luxury-grade paper for high-end hotels. This can help you stand out in a crowded field.

Calculate your startup costs

With your research done, it's time to budget. Startup costs can vary, but a small-scale operation typically requires an initial investment between $80,000 and $250,000. A thoughtful financial plan is a better approach than securing just enough to get started, as unexpected costs can arise.

Your largest expense will be machinery. A basic toilet paper rewinding machine costs between $50,000 and $150,000. You will also need a log saw cutter ($10,000 - $30,000) and a packaging machine ($5,000 - $20,000). Avoid the error of buying equipment that is too large for your initial production goals.

In addition, budget for raw materials. An initial stock of jumbo paper rolls can cost $10,000 to $25,000. Sourcing low-quality rolls to save money upfront often backfires, leading to production issues and an inferior final product that customers will not buy again.

Here are 4 immediate steps to take:

• Request an industry report on sanitary paper manufacturing from a research firm.
• Create a spreadsheet to compare the pricing and packaging of three key competitors.
• Draft a preliminary budget that itemizes machinery, raw material, and facility costs.
• Identify three potential suppliers for jumbo paper rolls and ask for quotes.

Step 2: Set up your legal structure and get licensed

You might want to consider forming a Limited Liability Company (LLC). It protects your personal assets from business debts and allows profits to pass through to your personal taxes, which simplifies filing. An LLC can cost between $50 and $500 to file, depending on your state.

A common mistake is mixing personal and business finances. Always open a separate business bank account once your LLC is approved. This maintains your liability protection and makes accounting much easier.

Once your business entity is established, get a free Employer Identification Number (EIN) from the IRS website. You will need this for taxes and to hire employees. At the state level, you must register for a seller’s permit to collect sales tax, which is usually free but mandatory.

Locally, you will need a general business operating license from your city or county, which can cost $50 to $200. Also, contact your local planning department for a zoning permit to ensure your facility complies with manufacturing regulations from bodies like OSHA and the EPA.

Here are 4 immediate steps to take:

• Choose a business structure and file the formation documents with your state.
• Apply for a free Employer Identification Number (EIN) directly from the IRS.
• Check your state’s tax agency website for information on obtaining a seller's permit.
• Contact your local city clerk to ask about business license and zoning permit applications.

Step 3: Secure your insurance and manage risk

Protecting your business starts with the right insurance. You will want to get General Liability Insurance, which covers customer injuries or property damage. A $1 million policy is standard, with annual premiums typically ranging from $500 to $1,200 for a small operation.

Next, secure Commercial Property Insurance. This covers your building, machinery, and inventory from events like fire or theft. Depending on the value of your assets, expect to pay between $1,000 and $3,000 per year. This is a necessary cost to protect your significant equipment investment.

If you hire even one employee, Workers' Compensation insurance is legally required in most states. It covers medical costs and lost wages from job-related injuries. Premiums are calculated as a percentage of your payroll, usually 1-2% for low-risk manufacturing roles.

An area some new owners overlook is Product Liability Insurance. This protects you if your toilet paper causes a problem, such as skin irritation from a dye. It is often bundled with a general liability policy, so be sure to ask if it is included.

With these policies in mind, focus on finding an agent who understands manufacturing. You might want to consider providers like The Hartford, Hiscox, or Chubb. They are familiar with the specific risks of a paper production facility, such as machinery accidents or fires caused by paper dust.

Here are 4 immediate steps to take:

• Request quotes for a $1 million general liability policy that includes product liability coverage.
• List all your major equipment and its value for a commercial property insurance quote.
• Contact a provider like The Hartford or Hiscox to speak with a manufacturing specialist.
• If you plan to hire, calculate your estimated annual payroll to get a workers' compensation quote.

Step 4: Find your location and buy equipment

Select and prepare your facility

You will want to find a warehouse space between 2,000 and 5,000 square feet. Look for properties in areas zoned for light industrial use. This ensures you comply with local regulations for manufacturing and avoid issues with noise or operating hours.

When you inspect a potential location, confirm it has 3-phase electrical power for your heavy machinery. Many new owners make the costly error of signing a lease on a space that only has standard power. Also, check for adequate ventilation to manage paper dust and a loading dock for deliveries.

Purchase your production line

Now it is time to acquire the equipment you budgeted for. Your core machines are a toilet paper rewinding machine ($50,000 - $150,000), a log saw cutter ($10,000 - $30,000), and a packaging machine ($5,000 - $20,000). You can find suppliers on platforms like Alibaba or through industry trade shows.

With equipment sorted, you can finalize your raw material supplier. Most jumbo roll suppliers have a minimum order quantity (MOQ). This is often one full truckload, which is about 20-22 tons of paper. Plan your initial purchase and storage space to accommodate this volume.

Here are 4 immediate steps to take:

• Search commercial real estate listings for warehouses zoned for light industrial use.
• Create a facility checklist with your power, ventilation, and loading dock needs.
• Request final quotes from two or three equipment manufacturers.
• Confirm the minimum order quantity with your chosen jumbo paper roll supplier.

Step 5: Set up your payment systems

Establish your payment terms

For wholesale clients like offices or hotels, Net 30 payment terms are standard. This gives them 30 days to pay an invoice. You can accept payment for these larger accounts through ACH bank transfers or business checks to keep transaction costs low.

Many new owners get caught by high fees when they start to accept credit cards. Average commission rates from other payment providers can range from 2.5% to 3.5%, and often include monthly charges. You will want to find a solution that is transparent about its pricing.

Choose a payment solution

For businesses that need to accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit and digital wallets directly through your smartphone. Your customer just taps and the sale is done.

At just 1.99% per transaction with no hidden costs or extra hardware needed, it is particularly useful for taking payments from small business clients on delivery or when selling at local markets. The process is simple.

• Get Started: Download the JIM app for iOS.
• Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
• Access Funds: Your money is available right on your JIM card as soon as the sale is done, with no waiting for bank transfers.

Here are 3 immediate steps to take:

• Decide on your payment terms, such as Net 30, for wholesale customers.
• Compare transaction fees from different payment solutions for credit card sales.
• Download the JIM app to see how it works for in-person payments.

Step 6: Secure funding and manage your finances

Find your startup capital

The SBA 7(a) loan program is a strong option for manufacturing startups. You can often secure funds from $50,000 to $350,000 to cover equipment and initial operating costs. These loans are backed by the government, which makes them more attractive to lenders.

To qualify, lenders will want to see a detailed business plan and a personal credit score above 680. Interest rates usually float around the Prime rate plus 2% to 5%. You might also consider equipment financing, where the loan is secured by the machinery itself.

Plan your working capital

With funding in mind, you need to map out your first six months of cash flow. A small operation typically requires $75,000 to $150,000 in working capital. This covers payroll, rent, utilities, and at least two large orders of jumbo paper rolls.

A frequent misstep is to budget only for the first paper roll purchase. You will likely need to place a second order before revenue from the first batch arrives. Plan for this to avoid a cash flow gap that could halt production.

Here are 4 immediate steps to take:

• Contact an SBA-preferred lender to discuss a 7(a) loan application.
• Request a quote for equipment financing based on your machinery list.
• Calculate your six-month working capital needs in a detailed spreadsheet.
• Prepare your business plan and personal financial statements for loan applications.

Step 7: Hire your team and set up operations

Define your core roles

Your initial team will likely consist of two key roles. First, you need a Production Operator to run the rewinding, cutting, and packaging machines. An experienced operator is a great asset. Expect to pay a salary between $35,000 and $45,000 for this position.

You will also need a Warehouse Associate to manage your jumbo roll inventory and handle shipping. This position typically pays $32,000 to $40,000. A candidate with a forklift certification is a must, as they will move heavy pallets and raw materials.

Establish your operational systems

Once you have your people, focus on safety. Some new owners underestimate the risks of paper dust and heavy machinery. Have your production staff complete an OSHA 10-hour safety course. This training helps prevent accidents and ensures compliance with regulations.

For managing your team, you can use a scheduling app like Homebase or When I Work. These platforms help you create schedules, track hours, and communicate with staff, which simplifies payroll. They are much more reliable than a simple spreadsheet.

A lean team of two or three employees is often enough to start. A common mistake is to hire too many people before you have consistent orders. Start small and add more staff as your sales volume grows and justifies the expense.

Here are 4 immediate steps to take:

• Draft job descriptions for a Production Operator and a Warehouse Associate.
• Research local providers for OSHA 10-hour safety and forklift certification courses.
• Create a sample weekly schedule to estimate your initial staffing needs.
• Sign up for a free trial of a scheduling app like Homebase to see how it works.

Step 8: Market your products and find customers

Focus on wholesale accounts first

Your quickest path to consistent revenue is through wholesale. Create a target list of local businesses like janitorial supply companies, office managers, and independent hotels. Prepare a simple one-page sell sheet that details your product specifications, pricing tiers, and minimum order quantities.

With your list ready, begin direct outreach. A cold email campaign or a phone call can be very effective. A good outreach campaign often converts 1-2% of leads into an initial meeting, so persistence is key. This B2B approach provides steady cash flow.

Build your brand with direct sales

You can also sell directly to consumers to build brand recognition. Set up a simple e-commerce website on a platform like Shopify. This allows you to control your brand message and capture higher profit margins than you would through wholesale channels.

Many new owners think they must compete on price. A better strategy is to focus on a niche, like 100% recycled paper or a convenient subscription service. This helps you stand out and attract a loyal customer base willing to pay for quality or convenience.

Here are 4 immediate steps to take:

• Create a list of 20 local businesses to target for wholesale accounts.
• Draft a one-page sell sheet with your product specs and pricing.
• Outline a social media plan focused on your unique selling point.
• Research the costs of setting up a basic Shopify store for direct sales.

Step 9: Set your pricing and profit margins

Calculate your base price

First, determine your cost of goods sold (COGS) for a single roll. Add up your expenses for paper, packaging, direct labor, and a fraction of your factory overhead. For a standard roll, your COGS will likely land between $0.25 and $0.35.

With your cost figured out, you can apply a markup. A wholesale markup of 40-60% is a solid starting point. If your cost is $0.30 per roll, this puts your wholesale price between $0.42 and $0.48, which secures a reasonable profit on bulk orders.

Adjust for market and sales channels

Before you set that price in stone, look at what competitors charge. Analyze the per-roll price for major brands and store brands. Some new owners make the mistake of trying to undercut everyone, but a price war will destroy your margins. Justify your price with quality instead.

You should also set different prices for different channels. Your direct-to-consumer price on your website can support a higher markup, perhaps 100-150% over your COGS. This is because you are selling smaller quantities and handling the marketing and fulfillment yourself.

Here are 4 immediate steps to take:

• Calculate your cost of goods sold (COGS) for one roll of toilet paper.
• Analyze the per-roll price of two major brands and one private-label competitor.
• Decide on a wholesale markup percentage, aiming for at least 40%.
• Establish a separate, higher price for your direct-to-consumer online sales.

Step 10: Control quality and scale your operations

Establish your quality standards

You will want to define clear quality metrics. Check every batch for consistent ply count, sheet size, and roll diameter. You can also perform a simple tensile strength test to ensure durability. A good benchmark is to aim for a strength that prevents tearing during normal use.

Some owners skip these checks to save time, but one bad batch can damage your reputation. For an eco-friendly brand, you might consider Forest Stewardship Council (FSC) certification. This shows customers your paper comes from responsibly managed forests.

Plan your growth

With quality under control, you can look at scaling. A good signal to hire another operator is when your current team consistently works over 45 hours per week for a month. This prevents burnout and maintains production quality.

When you consistently sell 90% of your monthly capacity for a full quarter, it is time to think about expansion. Avoid the temptation to buy a second machine after just one good month. Wait for sustained demand before you make that investment.

To manage this growth, you can use an inventory management system like Katana or Fishbowl. These platforms help you track raw materials, manage production orders, and prevent stockouts as your business gets more complex.

Here are 4 immediate steps to take:

• Define three quality control checks to perform on every batch.
• Research the costs and requirements for FSC certification.
• Set a production capacity percentage (e.g., 90%) that will trigger your expansion plan.
• Schedule a demo for an inventory management system like Katana.

You now have a clear path to launch your toilet paper business. Remember that consistent quality is what builds trust and secures repeat customers. With a solid plan and attention to detail, you are ready to start your venture with confidence.

And when you make those first sales, getting paid should be simple. JIM lets you accept payments right on your smartphone for a flat 1.99% fee, no extra hardware needed. Download JIM and you are all set.