Candlemakers are both craftsmen who pay close attention to the sensory aesthetics of their product line and pragmatic business people who know how to entice consumers with clever marketing methods.
Table of Contents
Follow these ten steps to start a candle making business:
Make a plan for your candle-making business.
Create a legal entity for your candle-making business.
For tax purposes, you must register your candle-making business.
Create a Business Bank Account and a Credit Card
Create an accounting system for your candle-making business.
Get the Permits and Licenses You Need for Your Candle Making Business
Purchase Candle Making Business Insurance.
Create a brand for your candle making business.
Make a website for your candle making business.
Configure your Business Phone System
Starting a company entails more than just registering it with the state. We’ve put up this basic guide to getting started in the candle manufacturing industry. These stages will guarantee that your new company is well-planned, correctly registered, and legally compliant.
STEP 1: Make a business plan.
A well-thought-out strategy is vital for entrepreneur success. It will assist you in mapping out the intricacies of your organisation and uncovering some unknowns. Consider the following crucial topics:
What are the initial and continuing expenses?
Who is your intended audience?
How much money may you charge your customers?
Fortunately, we have done a lot of the legwork for you.
What are the expenses of starting a candle manufacturing business?
You may be allowed to start your company at home, depending on local zoning restrictions, utilising your own kitchen heat source and utensils. Many websites, including Candle Science and CandleChem, sell a basic set of items. To begin, your candle components should not cost more than a few hundred dollars. This includes the following:
Paraffin, gel, soy, beeswax, or another kind of wax
Wicks
Jars, tins, or other containers (although bear in mind that if you’re just selling pillar candles, you won’t need containers)
Fragrance essential oils
Agents of colour
Packaging materials
Shipping expenses for raw materials and finished goods
Other startup expenditures will include site development, which may range from free to a few hundred dollars depending on your talents, and at least a decent camera. If you want to present your items at numerous fairs and festivals, a booth might cost $100 per day, plus petrol and associated travel expenses.
You should also consult with an insurance representative beforehand. Because there is some risk of fire, you should ensure that your company is fire-insured and that you have a fire extinguisher on your premises. You should also consult with a lawyer to see what licences or permissions are required in your area.
What are the continuing costs of running a candle manufacturing business?
The majority of the company focuses on the many types of wax, your containers, and colour and aroma additives. Once you’ve shown your business model works, you may acquire these things in bulk at cheaper per-unit pricing. Wax, for example, may be purchased in 25-pound amounts for as low as a dollar per pound. Wicks are available in 100-foot spools. Bulk quantities of containers, such as glass jars, mason jars, and tins, are also available.
Who is the intended audience?
Anyone that wants candles is your end user. Some people have pragmatic demands, such as lighting in the case of a power outage, while others want a more visceral experience. Churches that use candles to decorate prayer offerings or shops that wish to provide a dramatic impression to their displays are also excellent consumers.
You might also target resellers who can purchase your product in quantity. These will include shop owners in your immediate vicinity as well as those farther afield. Such buyers may be found at arts and crafts trade exhibitions.
Consider renting booths at arts and crafts events, flea markets, festivals and fairs, and other similar venues if you like meeting your consumers face to face in a setting where they can truly feel the beauty of your items. An instructive article on selling at arts and crafts events can be found in Entrepreneur Magazine.
How does a candle manufacturing company earn money?
Candlemaking firms sell to customers directly or indirectly via resellers such as boutiques, gift shops, and other arts and crafts retail venues. Because candlemaking is such a broad sector, you may differentiate yourself by selling various types of candles (pillar, floating, votive, tea, etc.) or by the quality of your product. Experiment with smells, colours, and moulds to create something distinctive and deserving of premium price
Furthermore, for optimal profit margins on your sales, you should always be on the hunt for raw material suppliers at the lowest feasible cost. Consider related items or candle kinds to broaden your target demographic.
How much money may you charge your customers?
Your items might sell for as little as a few dollars or as much as $20 or more per unit. Pricing will be determined by the quality and breadth of your product range, your target market, marketing strategy, and competition. If you want to be the lowest seller, make sure you purchase your raw materials at highly competitive costs and that you always know what your rivals are asking. To save the most money per unit, you should purchase wax, wicks, colouring agents, perfumes, and other components in bulk.
If you want to market a more luxury product line, pricing is less important as long as your items stand out visually. If you locate a retail reseller that can move a lot of your products, you may consider offering big reductions on price.
How much profit can a candle manufacturing company make?
Profit margins of 50% or above are extremely likely. The cost of supplies is not very exorbitant, but be sure you have the time to devote to making your company lucrative.
How can you increase the profitability of your company?
Once you’ve mastered the fundamentals of candle production, try expanding your product line. You may, for example, boost your cost and profit possibilities by learning how to mould or carve candles into any form. Or start selling elegant oil lamps made from liquid candles. Consider related sensory items such as scented soaps and incense. In certain circumstances, you may learn how to create these additions to your expanding product line yourself, or you can figure out where to get them for resale.
Consider giving candle making workshops if you have the requisite space in your studio. You might contact your local community centre or community college about adding your class to their curriculum.
Finally, is your company profitable enough to consider franchising the model? Begin by reading this helpful article on the steps to franchising a firm.
STEP 2: Establish a legal entity
Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most frequent business structure forms.
If your candle manufacturing company is sued, forming a formal business organisation, such as an LLC or corporation, prevents you from being held personally accountable.
STEP 3: File your taxes
Before you can begin for business, you must register for a number of state and federal taxes.
To register for taxes, you will need to get an EIN. It’s really simple and completely free!
Taxes on Small Businesses
Depending on the business form you choose, you may have multiple choices for how your company is taxed. Some LLCs, for example, may benefit from being taxed as a S company (S corp).
These guides will teach you more about small company taxes:
Taxes on LLCs
LLC vs. sole proprietorship
Corporation vs. LLC
S Corp vs. LLC
How to Form a S Corporation
S Corporation vs. C Corporation
There may be state taxes that apply to your company. In our state sales tax guides, you may learn more about state sales taxes and franchise taxes.
STEP 4: Establish a company bank account and credit card
Personal asset protection requires the use of distinct business banking and credit accounts.
When you combine your personal and business accounts, your personal assets (your house, vehicle, and other possessions) are at danger if your company is sued. This is known as penetrating your company veil in business law.
Furthermore, understanding how to develop corporate credit may help you get credit cards and other financing in your company’s name (rather than your own), lower interest rates, larger lines of credit, and other benefits.
Establish a business bank account.
Opening a business bank account is not only required when asking for business financing, but it also:
Separates your personal assets from the assets of your firm, which is required for personal asset protection.
It simplifies bookkeeping and tax reporting.
Create a net 30 account.
Net 30 accounts are used to develop and grow company credit while also increasing cash flow. Businesses use a net 30 account to purchase items and refund the whole debt within a 30-day period.
Many net 30 credit suppliers submit information to the main business credit agencies (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how firms establish business credit in order to get approved for credit cards and other lines of credit.
Apply for a business credit card.
Obtaining a business credit card benefits you in the following ways:
Put all of your company’s costs in one location to separate personal and business spending.
Build your company’s credit history, which will be important for raising funds in the future.
STEP 5: Establish business accounting
Recording your numerous costs and sources of revenue is crucial to assessing your company’s financial status. Keeping precise and thorough accounting also makes yearly tax filing much easier.
STEP 6: Obtain all required permissions and licences
Failure to get appropriate permissions and licences may result in significant penalties or possibly the closure of your firm.
Requirements for State and Local Business Licensing
Certain state business licences or licences may be required to start an Ebay company. Visit the SBA’s reference to state licences and permits to learn more about licencing requirements in your state.
Furthermore, local licencing or regulatory restrictions may apply. For further information, please visit:
Check with the clerk’s office in your town, city, or county.
Contact one of the local organisations mentioned in the US Small Business Associations database of local business resources for help.
STEP 7: Obtain commercial insurance.
Insurance, like licences and permits, is required for your company to operate safely and legally. In the case of a covered loss, business insurance protects your company’s financial well-being.
There are several sorts of insurance plans designed for various types of companies with varying risks. If you are unaware about the hazards that your company may encounter, start with General Liability Insurance. This is the most popular coverage required by small companies, so it’s a good place to start for yours.
STEP 8: Establish your brand
Your company’s brand is what it stands for, as well as how the public perceives it. A strong brand will help your company stand out from the crowd.
How to Market and Promote a Candle Making Business
The most critical stage is to identify the audience you want to reach. Is your average consumer a cost-cutting shopper, or is she more interested in the sensory experience? If the former are your clients, be able to brag competitive price. If the latter, you should have a great display of your product range and employ enticing colours and smells.
Consider creating a presence on online marketplaces such as eBay, Amazon, and Etsy. These sites have a lot of competition, so keep your costs as cheap as possible.
There are other more arts and crafts sales sites that are not as well recognised as Etsy (and therefore potentially less populated with competitors). ArtFire, Big Cartel, and Craft Is Art are just a few examples. Here are 14 probable choices.
How to Keep Customers Returning
Your objective is not simply to attract clients, but also to retain them. Because candles are disposable commodities that must be replenished on a regular basis, your current client connections might be profitable over time. So make sure you meet their demands, that they like the quality of your items, and that they know how to contact you when supplies run short.
That is why it is critical that every purchase includes simple contact information, such as your website, email address, or phone number (or all three). As part of the packing, you may add a business card or label with this information. When meeting consumers in person, such as at craft events or flea markets, make sure both purchasers and passers-by acquire your business card. And attempt to get their names and permission to enrol them as subscribers to email newsletters you send out, possibly before peak candle-buying seasons like the end of the year or Mother’s Day.
STEP 9: Create your company’s website.
After you’ve defined your brand and designed your logo, the next step is to build a website for your company.
While developing a website is an important step, some may be concerned that it is out of their grasp due to a lack of website-building skills. While this was a fair concern in 2015, online technology has made significant advances in recent years, making the lives of small company owners considerably easier.
The following are the primary reasons why you should not put off developing your website:
Every genuine company has a website, period. When it comes to bringing your company online, it doesn’t matter what size or sector it is.
Social media accounts, such as Facebook pages or LinkedIn company profiles, are not a substitute for your own business website.
STEP 10: Install your company phone system.
Getting a phone for your company is one of the finest methods to keep your personal and professional lives distinct and private. That isn’t the only advantage; it also helps you automate your company, provides it legitimacy, and makes it simpler for prospective clients to identify and contact you.