Candles bring beauty and delightful scents into homes; they’re perfect for improving an area and make excellent gifts. If you enjoy candles and are crafty, you may have attempted to make them before.
But have you considered turning this pastime into a business? Candle makers have the opportunity to put their ideas into action, allowing them to use their imagination to create something fresh and fascinating that people will want in their homes.
Best of all, you may start a small candle-making business from the comfort of your own home, saving money on rent and allowing you to gradually expand your operation. Do you think candle-making could be a good business idea for you? Continue reading to learn more about this business idea.
Overview of the Company
Candle manufacturers usually specialize in a single type of candle. Some people make jar candles, while others make candles inspired by certain scents or locations. Candle businesses may specialize in handcrafted candles made of beeswax, soy wax, paraffin, or gel. Larger businesses, on the other hand, frequently produce large batches of candles, relying on automation to keep up with the high output.
These businesses are run in a number of ways. Smaller enterprises can be run out of a home kitchen, with the proprietors selling their items at craft shows and flea markets. Some entrepreneurs open physical businesses, while others sell their products through boutiques and gift shops, while still others sell their products online through their own website or Etsy. There are several business models to choose from in this sector, allowing entrepreneurs to run their businesses in the way that best meets their lifestyle and business goals.
Summary of the Industry
From 2014 to 2019, the candle manufacturing industry, according to IBIS World, witnessed a 1.5 percent yearly drop. The industry is expected to generate $2 billion in revenue in 2019. Between 2014 and 2019, the number of firms increased to 462, while employment in the industry decreased to 5,116. Newell Brands, Inc. now has the industry’s greatest market share.
While the industry dropped over that five-year period, it is likely to recover in the coming years from growing candle demand. Continued increases in per capita disposable income may lead to an increase in the number of persons purchasing candles. Imported candles with lower prices will continue to be a threat to American makers, forcing them to get creative and come up with new ways to develop unique or higher-quality candles to boost sales.
Trends in the Industry
New and shifting trends are always influencing the candle industry. According to Candle wic, trends impact scents, tints, container styles, and even wax formulations. Perfumes and colors, for example, are frequently associated with each other. Candle makers must keep up with current trends and be able to adapt quickly to their consumers’ requirements. Using trends as a source of inspiration and then figuring out how to do things differently can lead to increased revenue.
Several trends are highlighted by The Wooden Wick Company that all candle makers should be aware of and embrace. A rising focus on sustainability is influencing all businesses, including candle production. Candle manufacturers may embrace this trend by reusing wicks, re-purposing jars, and sourcing responsibly farmed wicks and materials.
Consumers are highlighting the importance of experiences as well. Candles may be used to create unique experiences in people’s homes if they are carefully chosen based on their colors, light output, and fragrances. Hardwood wicks that crackle as they burn can enhance the experience even further.
Candle fashions come and go, and many of them start on Pinterest before making their way into stores. Candle makers can use social media to stay on top of current trends and incorporate them into their operations.
Market You’re After
Depending on how they build their company, candle makers will develop different target markets. A company that sells high-end candles might target gift-givers and homeowners seeking for the perfect candle to complement their décor. Tourists and residents in that specific location will be targeted by manufacturers that create candles that mirror the fragrances and scenes of that unique location.
In order to run a candle-making business, you’ll need the following skills, experience, and education.
A business degree is not required to start a candle-making firm. Certain abilities and experiences, on the other hand, will make it easier and increase the company’s chances of success.
Making candles is a unique experience.
It will be beneficial if you have some prior candle-making expertise. If a business owner lacks firsthand experience, an apprenticeship with an experienced candle manufacturer can aid in the development of skills and expertise.
Designing items that stand out from the present candle offerings is one of the industry’s challenges. Having the ability to be creative is a significant asset.
The devil is in the details.
The attention to detail of a business owner is critical in providing quality control and ensuring that candles reflect the company well.
Strong interpersonal skills will aid a candle maker whether he or she is creating ties with clients or retailers.
How Much Does It Cost to Start a Candle-Making Business?
One of the advantages of working in the candle making sector is that it allows you to start small and build your business over time. Small-scale businesses that are started from home have low initial costs. A modest business run from your home will cost around $1,000, while a larger-scale firm will cost $10,000 or more.
The following are typical startup costs for a candle-making business:
Pouring pots and jars are examples of equipment.
Wax, wicks, jars, molds, colors, aroma oils, thermometer, scale, and other initial inventory and supplies, Labels, Signage on the Web (for brick-and-mortar businesses)
How to Start a Candle-Making Company
Writing a Business Plan is the first step.
The next stage in beginning a business should be to draft a business plan after you’ve come up with an idea.
A business plan is not only required by a bank, but several studies have proven that having one increases your chances of launching a successful firm.
Step 2: Choose a Legal Entity
A business entity, also known as a business structure or legal entity, is the legal form through which a company operates. The four main types of business entities are sole proprietorship, partnership, corporation, and limited liability company. Each entity has its own set of advantages and disadvantages, including liability risk, costs, and administrative requirements.
Step 3: Give the Company a Name
It can be difficult to come up with the ideal name for a company. The name must not only resonate with your customers, but it must also be available for use.
Step 4: Decide on a location.
While a small business can be conducted out of a home’s kitchen, as the business expands, it may be necessary to expand into a larger location or even a small storefront. The cost of renting these spaces varies depending on the space’s size, whether it’s a retail or manufacturing location, and even where it’s located. A prime retail site will cost more to rent, but it will bring in more foot traffic and raise public awareness.
Step 5: Fill out an application for business licenses and permits.
While no specific licensing is required for a candle-making firm, you will most likely need typical business licenses and permissions to get started, such as a business license, sales tax permit, and an Employer Identification Number.
Step 6: Obtain Funding
It’s one thing to come up with a good business idea and have the abilities to manage it, but it’s another to get the money to start a candle making business.
While the cost of starting a candle making business is cheap, obtaining a financing can be challenging because the majority of the funds will be spent on inventory and marketing.
To qualify for a loan, the borrower(s) must have strong credit and be able to contribute 15 to 25% of their income to the entire start-up expenditures.
Step 7: Open a Bank Account for Your Business
It’s easier to track your business’s income and expenses if you keep your personal and business funds separate in separate corporate bank and credit card accounts.
Step 8: Create a marketing strategy.
A well-thought-out marketing strategy can help a business succeed. Many candle manufacturers have websites and are active on social networking sites such as Facebook, Instagram, and Pinterest. Paid online advertising and paid social media advertising are also viable options. Business owners that perform some or all of their marketing themselves save money by not having to hire a professional marketer, allowing them to stretch their budgets. The cost of marketing will vary depending on the type of marketing that is done.
9th Step: Obtain Insurance
To be properly protected, candle-making firms require multiple forms of insurance:
General liability insurance covers the business in the event that a customer is hurt on the premises, such as from a trip or fall. Costs such as legal fees and expenses may be covered by this insurance.
Commercial property insurance safeguards a company’s assets and supplies in the case of a disaster, such as a fire (which is important as you are working with flammable materials).
If you run your business out of your house, check your insurance policy to determine if it covers incidents caused by the business.
If a person is injured on the job, worker’s compensation insurance can assist pay expenses like medical bills and lost earnings.
The cost of an insurance coverage is influenced by a number of factors, including the value of the company’s equipment and the number of personnel on staff. Request quotes from several companies and compare them to get a better understanding of how much insurance will cost. Consider coverage limits and exclusions, prices, and deductibles when comparing policies.
Hire Employees (Step 10)
A business owner can manage all of the candle production at first, but as the company expands, it may be necessary to hire support. According to Neuvoo, candle makers earned an average annual wage of $24.863, or $12.75 per hour. Candle manufacturers with less experience earn $22,425 per year, while those with more experience can earn up to $33,826 per year.
Salaries are only one of the costs associated with recruiting personnel. Workman’s compensation insurance, paid time off, and health insurance contributions must all be factored into a company’s budget.
Set up an Accounting System (Step 11)
Setting up an accounting system for your candle business is essential for its long-term success.
Tax compliance not only keeps the company out of problems with the government, but it also allows the company to track and monitor patterns and cash flow in order to maximize earnings.
The profitability of a candle-making firm are determined by the size of the company, the number of employees, any speciality areas the company focuses on, and even how the company distributes candles, such as wholesale or directly to clients.
Because the average price of a candle can range from a few dollars to $20, having numerous suppliers allows you to keep track of costs and take advantage of discounts to maximize profits.
Also, keep in mind that a company that makes one-of-a-kind products that no one else has or meets an unmet market demand can benefit from charging higher costs.
Before launching a candle-making business, there are a few things to think about.
While creativity and an artistic mind are desirable qualities in a candle entrepreneur, it’s also critical to activate your brain’s analytic side while analyzing your company’s finances.
For some new business owners, this is a challenging transition, but having precise, accurate financial data is vital to your company’s success. Start paying attention to your finances right away, and make sure you understand how your company operates financially. This involves pricing your suppliers and items to ensure a sufficient profit margin.
If you require assistance, contact an accountant or bookkeeper; these professionals can assist you in correctly establishing your firm, saving you time (and likely money) at tax time.
When launching a candle-making business, don’t expect quick success. Plan to experiment with a variety of designs and scents, as well as different marketing and selling strategies, until you find one that works. Above all, focus on creating a brand and goods that are clearly identifiable and set you apart from other candle makers.