How to Start A Candle Making Business: The Complete Guide

People love their homes to smell nice and to feel cozy. The best way to achieve this is by having candles in your home. They are not only affordable, but they also make great gifts and can brighten any room. When you are considering turning your hobby into a business and have mastered the way around making candles, there are a couple of steps that you need to follow.

Ensure you perfect your craft and be confident in the candles that you make. Create a detailed business plan, find small business funding, and register your taxes. Open a business bank account and credit card. Get the permits needed for your business, define your brand, and lastly, set up your business!

When it is time to start your candle-making business, you need to make sure that you follow every step and get things done correctly. In this article, I will discuss everything that you need to know when it comes to starting a candle-making business. By the end of this article, you will know the ins and outs of starting your own business.

Perfect Your Craft and Gain Confidence in Making Your Candles

Table of Contents

Before you start your own candle-making business, you would have to make sure that your candles are of great quality. You know when a candle is good when it helps you destress, add decorative flair, or set the mood in any room. However, when a candle is bad, it can be a huge disaster.

A candle can smell too sweet, too floral, too smoky, or the scent can be weak. It ends up smelling like nothing at all. When it comes to making candles, it is easy to step too far in one direction and make a candle that no one likes to burn.

Brushing up on the basics of candle-making and developing a few signature scents is an important factor that you need to consider before you begin your business journey. You will need to master how to get a good burn time, make a scent that permeates a room, and create scents that people will love.

Aside from that, you also want to define what will make your candle line stand out from others. You might want your candles to be inspired by a different exotic location or have unique glassware for the design, or you may also have clever names for the scent that you have.

When you have a good scent and an affordable price point, you can stand out from the rest and get far in the candle game. However, you also need to make sure there is a way for your brand to be noticed in a very saturated market.

The key is to be unique with your candles and add your own personal twist to your brand.

Decide on What Niche You Like to Concentrate On

When you have perfected making candles, from gel candles to aromatherapy to container candles, it is time to choose your niche. During the molding process, there is no limit on how you want to shape your candles. You can decorate your candles to add visual impact, from flowers to paint.

The type of candle you can choose to make or manufacture should be your own specific niche. These niches are manufacturing container-filled candles, pillar candles, votive candles, taper candles, tea light candles, floating candles, and gel candles.

Make sure to focus on one first, and then when you feel like you are successful on your first venture, you can move on to manufacture another type of niche.

Create a Detailed Business Plan for Your Candle-Making Business

The business plan is one of the crucial parts of starting your own candle-making business. A clear plan is needed for you to be a successful entrepreneur. It will help you map out any specifics that your business may have and discover any unknowns that you need to be aware of.

Know the Costs that are Involved in Opening a Candle-Making Business

You may want to start your business at home, depending on your local zoning laws. You can use your own kitchen heat source and utensils. You can purchase starter kits online, and you can read about them in this article that I have written.

The candle ingredients you will be using shouldn’t cost more than a couple of hundred dollars to start. These ingredients will include your wax (paraffin, gel, soy, beeswax, and other wax), wicks, containers (these are not needed when you are solely marketing pillar candles), fragrance oils, coloring agents, packaging supplies, and shipping costs of natural products in and finished products out.

Aside from that, it would be best if you also thought about other startup costs such as web development. Now, it can cost zero to a couple of hundred dollars to maintain your website. This would depend on your skills in the area and at least a reasonably good camera.

When you plan to exhibit your products at various shows and festivals, a booth can cost around $100 a day, and you will also have to consider gasoline and related travel costs that come with it.

It is also best to talk to an insurance agent first since candle-making has some potential aspects for fire accidents. It is important that you make sure your operation is insured for fire and also you have fire extinguishers handy in your premises.

It would be best if you also had initial discussions with your lawyers to see what your local requirements are when it comes to licenses or permits in starting a candle-making business.

Know the Ongoing Expenses When it Comes to Candle-Making Business

The candle-making business revolves mostly around different forms of wax, containers, color, and fragrance additives. When you have started and proven your business model will work, buying these products at lower per-unit costs in bulk is best.

For example, wax can be found for as little as a dollar per pound when you buy it in 25-pound quantities. Wicks can also be bought by the 100 feet spool, and containers which include glass jars, mason jars, and tins can also be bought in bulk quantities.

Make Sure You Know Your Target Market for Your Candle-Making Business

Your target market is people who want candles and some individuals who have pragmatic needs. These are people who need illumination in the event of power blackouts. Another target market would be the people who are looking for a more sensory experience.

Great customers would include churches that use candles for decoration of prayer offerings or retailers who need to add a dramatic effect in their showrooms.

You also might appeal to resellers who can buy your products in bulk, such as store owners in your local area or beyond. You also might meet customers at arts and crafts trade shows.

When you like meeting customers face to face in a venue where they can experience the aesthetics of your products, it is best to get renting booths in arts and crafts shows, flea markets, fairs, or festivals.

Making Money in Candle-Making Business

In the candle-making business, you will sell candles either directly to the consumers or indirectly through resellers. These are places like boutiques, gift shops, and other arts and crafts stores or venues. Candle-making is considered a very general field, so it is best that you create differentiation through the type of candles you sell.

It is best to experiment with scents, colors, and molds so that you can create something that is unique and worthy of premium pricing. Also, be on the lookout for raw material suppliers at the lowest cost possible at all times. This way, you can get maximum profit margins on your candle sales.

Consider associated products or types of candles so that you can expand your target audience. The more people you reach out to, the more sales you will be making.

Pricing Your Candles and the Profit that You’ll Make

Your candle products might sell for as little as a few dollars apiece or as much as $20 or more. The pricing would depend on the quality and breadth of the product line, your audience, marketing strategy, as well as the competition.

When your strategy is to be the lowest selling, you need to ensure you are getting raw materials at competitive prices and know exactly what your competitors are charging at all times. You also want to buy wax, wicks, coloring agents, scents as well as other materials in bulk to get the savings you need.

Now, if your goal is to sell your candles at a more premium product line, price is less of a concern as long as your candles stand out aesthetically. You will want to consider deep discounts on pricing when you find a retail reseller who can move plenty of your merchandise around.

The profit margin of your candle-making business is around 50 percent or higher. The cost of materials is not particularly high, so you need to make sure you can fully invest the time needed to make your business profitable.

Making Your Candle-Making Business Profitable

Once you have gotten used to the basics of candle-making, consider branching out into different types of products that you can offer. For example, you can increase the cost and profit by learning how to mold or carve your candles into different shapes.

Another thing that you can do is start marketing fancy oil lamps while using liquid candles. Look into associated sensory products such as scented soaps and incense. You can also learn how to make these additions in order for you to grow your candle line or find out where to buy them for resale.

When you have the necessary space, consider offering candle-making classes to those who are interested in learning how to make candles. You can approach your local community center or community college to see if they will be interested in adding your class.

If your candle-making business is successful enough, you can think about franchising your model. You might be looking at this in the further future.

Know the Level of Competition in the Candle Industry

Now, the level of competition in the candle-making industry is pretty high, and there is no mistake about it. The candle industry uses about one billion tons of wax to manufacture candles each year, and this is just in the US. The industry grows about ten percent every year, and candle sales in the US are over $2.3 billion.

The biggest sector is companies that offer natural or alternative waxes. People nowadays are becoming more conscious of health concerns and are becoming greener. The four most crucial factors that affect candle sales are colors, costs, and shapes.

Unlike before, candles are not used only as tools for illumination, and they are also used for relaxing, such as burning scented candles. This means that there are more people dependent on candles than a decade before.

Naming Your Candle-Making Business: Most Crucial Factor

Choosing the right name is essential and challenging at the same time. You would need to give it a lot of thought and consideration. It has to sound unique and something that will describe your product or brand well. There are name generators online that can help you choose the perfect name for your business.

If you are operating your candle-making business in a sole proprietorship, you might want to operate under a name other than your own name. During the registering of your business name, it is best that you research your business name by checking your state’s business records.

You should also check the federal and state trademark records, social media platforms, and web domain availability. Make sure you secure your domain name before anyone else does.

Choosing Your Candle-Making Business Entity

The benefit of creating a business plan is it will encourage you to choose a legal structure for your business. Choosing the right business entity is crucial and a decision that shouldn’t be taken lightly. There are a few common forms of business entities that are sole proprietorship, general partnership, corporation, and limited liability company.

If you are struggling to decide on what types of business structure to choose, consult with a business attorney or tax experts. The extra expense will save you a lot of stress down the line, as the type of business structure you will choose will affect your taxes, risk level, and other important factors.

Once you have chosen your business entity, it’s time to register your candle-making business with the necessary federal and state agencies.

It’s Time to Register for Your Taxes

Now, you would need to register for different state and federal taxes before you can open your candle-making business. For you to register for taxes, you will need to apply for an EIN, which is easy and free. You can get your EIN for free through the IRS website, via mail, or fax.

Small Business Taxes: What You Should Know

Depending on the structure that you have chosen, you will have different options for how your business will be taxed. A great example is how some LLCs could benefit from is being taxed as an S corporation or S corp. There are specific state taxes that you should apply to your business as well.

It is best that you are aware of these types of taxes for you to run your business successfully.

Open a Business Bank Account and Credit Card

It is important that you use dedicated business banking and credit accounts for your personal asset protection. If your personal and business accounts are mixed, it may be hard to keep track of what you are making in your business. There is also a big risk in the event your business is being sued.

Also, learning to build your business credit can help you get the credit cards you will need in financing your business’s name, get better interest rates, have higher lines of credit, and so much more.

When opening a business bank account and a business credit card can separate your personal assets from your company’s assets which are necessary for your personal asset protection. Also, it will make accounting and tax filing way easier.

Consider Opening a Net-30 Account for Your Candle Business

The best way to go when it comes to establishing your business is the net-30 vendor. The term ‘net-30’ is popular among vendors, which refers to a business credit arrangement. This is where the company pays the vendor within 30 days of receiving goods or services.

The net-30 credit terms are usually used for businesses that need to obtain inventory quickly but don’t have cash. Aside from establishing business relationships with vendors, net-30 credit accounts get reported to major business credit bureaus.

This process is how businesses build their credit so they can qualify for credit cards and other lines of credit that they need for their business.-

Get Any Permits and Licenses Needed for Your Candle-Making Business

If you fail to acquire necessary permits and licenses can result in huge fines or even cause your business to shut down. Knowing the proper permits and licenses to have for your candle business is crucial, and here is what you need to know.

The State and Local Business Licensing Requirements

There are particular state business permits or licenses that you may need to go into business as an entrepreneur. Most businesses are required to collect sales tax on the products or services they offer. If you want to know more about particular local licensing or regulatory requirements, it is best to check with your town, city, or county clerk’s office.

You can also get assistance from one of the local associations, and you can find a list of them online.

Make Sure Your Candle-Making Business is Insured

Just like the license and permits, you would need insurance to start your candle-making business to operate safely and lawfully. Business insurance can protect your company’s financial wellbeing in case there is an event of a covered loss.

There are different types of insurance policies that are created for specific types of businesses with different risks. If you are not sure of what insurance to get or what risks your candle business may face, start with General Liability Insurance. It is the most common coverage that small businesses need.

If you are planning to add employees to your business, getting Worker’s Compensation Insurance is important. There is a huge chance that your state will require you to carry Worker’s Compensation Coverage. Now, each insurance that you will get will come at a cost, so best to take note of it for your budgeting.

Finding and Managing Your Candle Supplies

First, you should be able to pop over to your local craft supply store to get the wax and scents for your candles. However, when your candle business begins to grow, you will need to save money by buying supplies in bulk from a wholesale supplier.

You will want to start sourcing affordable supplies right away so you can test for quality and find the perfect supplier for your business. Some of the supplies that you will need are wax, wicks, containers for candles, fragrances, color agents, shipping, and packing supplies.

Before you place any large orders, it is best to plan out how much inventory you will need and how you will manage it. Not only will it make finding a supplier easier, but you will have a more reliable inventory system. At this point, you want to consider using an inventory management app to organize the comings and going of your supplies.

Find Small Business Funding that Will Help Your Business

As the saying goes, it takes money to make money, and starting your own candle business is not an exception. To pay for your supplies, marketing, insurance, production, legal council, and other expenses, you will need some type of business funding.

You start considering getting a business line of credit, which I’ve mentioned above. It is a more flexible form of credit that is a standard business loan. It will provide you with a set amount of money that you can choose to get money from only when you need it.

Another that you need to take note of is equipment financing. When your business needs expensive equipment, like a candle-making machine, then this would be your best option. For this type of financing, a certain lender will loan you money specifically for the purchase of the equipment. Then, this equipment will be used as collateral for the loan.

You also need to look into startup funding where, you as a brand new business owner, should consider startup financing options. These loans include SBA microloans or business grants. Another popular option is crowdfunding, where you can have easy startup funding.

Once you have obtained your funding or begin to obtain expenses or earn income, you should take steps to make sure your business and personal finances are separate from each other. Finding an accounting software program to manage your business’s financials will be a great help.

Define Your Candle-Making Business Brand

The brand is what your company stands for and how the public perceives your business. When you have a strong brand, it will help your business stand out from the rest. One way to define your brand is to create a logo design that you are confident with and something that will stand out.

Promoting and Marketing Your Candle-Making Business

The most important part of having a successful business is to figure out the audience you wish to attract. Whether your customer is a pragmatic shopper only into cost savings or is more interested in the sensory experience, you will be able to boast competitive pricing.

Make sure to consider establishing a presence on an online marketplace such as eBay, Amazon, or Etsy. You will have a lot of competition on these sites, so it is best to keep your prices as low as possible.

Also, there are plenty of additional arts and crafts sales platforms that may not be as well known as Etsy. Here, you will have less competition and more chances of selling your product to more customers.

Keep Your Customers Coming Back for More

Now, your goal is not only to draw your customers but also to have them come back. Since candles are disposable items, there is a need to be replaced frequently, so it is crucial that your existing customers return for more of your product.

You must satisfy their needs so they enjoy the quality of products they get from you, and they know how to contact you whenever their supplies run low. It is also important that every order contains easy contact information that contains your website, email, address, or your phone number.

You also might want to include a business card or label with the said information as part of your packaging. If you are meeting your customers in people such as during craft shows or flea markets, ensure buyers and lookers alike get your business card.

You may want to get their name as well and permission to add them to your subscribers to send email newsletters before any prime candle-buying times such as holidays.

Time to Create Your Business Website: Get it Out There

The website is the most important part of your business since it will help you expand your business to different customers. Now, this is also the step where business owners fear the most because of the lack of experience in website building. Nowadays, web technology advancements make the lives of small business owners easier and simpler.

There are different reasons why you shouldn’t delay creating your business websites. The number one reason is all legitimate businesses have their websites. It is their one-stop-shop for the items that you sell. The size or industry of your business does not matter when it comes to getting your business online.

Aside from your website, you can create a business page on Facebook or LinkedIn, but it shouldn’t be a replacement for your business website. Here, you can link your business website and have people visit it instead.

There is no need to be a genius when it comes to creating your website or even hiring a web developer. You can use tools online to design or create a website that you can be proud of for your business. The process of creating your own website can only take two to three hours to complete.

The Skills that You Will Need to Run A Successful Candle-Making Business

For a candle-making business, it usually starts as a hobby. As a candle maker, you would have to love the aesthetics of making candles and related items. You should know how to brand your business to ensure success. Knowing the basics of e-commerce and establishing an online presence is another skill that you should have.

Displaying presentation skills are also important both online, in the quality of your photos and written product description, and in the physical display when you sell from booths or shows.

Another critical factor when it comes to selling your products is personal sales ability, whether it is for your customer directly or to resellers. It would be best if you believed in your product and should be able to make others catch your enthusiasm.

Potential Growth and Profit You Will Get for Your Candle Business

A successful full-time candle maker might earn from $25,000 to $50,000 a year. Now, you could exceed this amount by selling to major resellers and when you consider franchising your business once you have grown enough. Others may also want to emulate your business model while they franchise your brand.

Final Thoughts

Being your own boss and owning your own company is always exciting, especially when it means you get to do the thing that you love and express your creativity. You will get to invest in something that is yours and have fun while you do it. As long as you have a good business plan and think well about your candle-making business, you should be successful at it. Good luck on your business journey!

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