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How to Start a Candle Business
If you have a passion for candles, their design, scent and feel, then starting a candle-making business could be in the cards for you. Candles can add a bit of romance or give a room a more natural glow — and they make for great gifts at an affordable price. Homemade candles, in particular, feel like they’ve been crafted from the warmth of the heart.
But of course, starting your candle business will take preparation and work. With this step-by-step guide, we provide all the information you need to develop and launch your business while avoiding common missteps.
Time to build
Step 1: Decide if the Business Is Right for You
Pros and Cons
Every business has its pros and cons, and it’s a good idea to weigh these factors to decide if starting a candle business is a good fit.
- Flexible – Set your own schedule and work when you want.
- Rewarding work – Chasing your passion, expressing your creativity in candles.
- Simple business model – Make and sell candles — not complicated.
- Minimal startup costs – Few materials needed; sell online.
- Good money & scalability – With low costs, profits can be strong; grow as you wish.
- Heavy competition – Due to the low barriers to entry, there are many custom candle makers out there that you will have to compete against.
- May need a supplier – In order to effectively grow your business, you may need to pair with a supplier, which will decrease your autonomy.
- Repetitive work with no safety net – You’ll receive no salary for your candle-making; earnings will rely on you churning out candles.
- Difficult to build customer trust and loyalty – With no face-to-face interactions, your candle website may have a hard time building a loyal customer base.
As of 2021, business intelligence advisory Verified Market Research values the global candle industry at around $7.15 billion and expects annual growth of 8.2% through 2028.https://www.verifiedmarketresearch.com/product/candle-market/
Increased demand for home decor products has helped expand and broaden the candle-making market in recent years. Today’s custom-made marketplace offers innovative scents, multiple colors, organic ingredients, and a wide variety of shapes and sizes. One inventive maker even sells a candle shaped like a hand, with wicks on the end of each finger! (The price? A cool $65.) … Continue reading These days, pumpkin candles do well in the fall, peppermint in winter, and citrus in the summer. The candle industry has grown alongside the spa and yoga studio market.
How much does it cost to start a candle business?
The startup costs for a candle business depend almost entirely on your starting inventory, which is the largest cost. In general, to get you started in a modest capacity, startup costs will range from about $1,000 to nearly $1,700.
|Startup Costs||Ballpark Range||Low||High||Average|
|Equipment (pouring pot, infrared thermometer, scale, heating pot, clothespins)||$90-$110||$90||$110||$100|
|Initial inventory and supplies (wax, wicks, jars, molds, dyes, fragrance oils, thermometer, scale, etc.)||$360-$440||$360||$440||$400|
|Labels & Shipping costs||$80-$100||$80||$100||$90|
|Licenses and Permits||$110-$130||$110||$130||$120|
|Signage (for brick-and-mortar businesses) and/or digital marketing costs||$100-$200||$100||$200||$150|
Source: Step By Step Research.
How much can you earn from a candle business?
Candles can be made for a relatively low cost and sold at a high margin, from 30% all the way to 75% in net margin. The total potential earnings for a candle business depend on your level of production. For example, if you’re selling candles at $10 each and they cost you $5 to make, then you make $5 for each sale and your gross profit margin is 50%. Under that arrangement, you’d need to sell about 500 candles per month, or roughly 17 per day, to make $30,000 in a year.
Candleers, a candle-making advisory, estimates that the average candle maker earns $50,000 per year, with the bottom 10% making less than $25,000 and the top 10% checking in at more than $100,000. Simply put, annual earnings will depend on how many candles you are selling and at what price point you are selling them.
Ultimately, your candle business’ earnings will be heavily dependent on the cost of inventory and the cost of making the candles. Your per candle price should be determined by your costs and how much you hope to earn from each sale. Candle-making has relatively low fixed costs, so this ratio will be among the most important aspects of your business.
To find the right price, research the prices of your closest competition.
What barriers to entry are there?
- Knowledge of candle-making – Basic barrier for any candle maker. While not the most difficult process in the world, learning candle-making requires time and focus.
- Access to top suppliers – The most successful candle makers typically secure relationships with top suppliers such as Amazon, Etsy, Shopify, and others.
- Designs must be up-to-date – Candle makers need to keep up with the latest customer desires for new scents, shapes and styles.
- More than full-time job – A candle maker’s earnings depend on the amount of time and energy they are willing to devote to the work.
Step 2: Hone Your Idea
Why? Identify an opportunity
The first thing an aspiring candle business owner should do is assess their skills and knowledge about candles in relation to the larger market. You can find good opportunities with some simple research into the most popular candles and their makers. Try to answer questions like: What are the most popular candle websites and what are their bestselling products? Which price points are most appealing? At which cost could you produce the same candles, and what materials would you need to do so?
Your business brand will be determined as a result of your research and the market opportunity you choose to target with your candle creations. You might go in for wildly shaped or exotically scented niche-market candles, or go for a mass market product. The choice is entirely up to you!
What? Determine your products or services
Make a list of all of the candles you might like to make. Some of the popular candle types, each appealing to different segments of buyers, include but are not limited to:
- Scented and aromatherapy candles
- Twisted and other sculpted candles
- Decorative and other artistic candles
- Vegan candles
- Soy candles
- Odor-eliminating candles
- Bug repellant candles
- Long-lasting candles
Each candle could require different ingredients and a different process of creation. You should consider which type of candles you’d like to define your brand. This will determine your material needs, production schedule, and marketing.
How much should you charge for your candles?
Most homemade candles you’ll find online are priced in the $15 to $30 range. Specialty candles that provide a special scent or artistic design will of course be more expensive than straightforward candles of traditional shape and size.
You should price your candles based on your costs and your profit expectations informed by market norms. It’s best to do a good deal of market research before settling on your price points.
Who? Identify your target market
Different candle types will be popular for different market segments, and at different times of the year. As noted above, citrus and fruit-scented candles will be popular in the warmer months, while mint-scented candles will do better in winter.
Women tend to be bigger candle buyers than men, and homeowners buy more than renters. Spas and yoga centers, restaurants, retailers and other small businesses that rely on candles to create a certain ambiance will also be in your target market.
Depending on the type of candle you produce, some will meet the desires of a specific customer – such as eco-friendly, vegan candles or highly decorative candles. And keep in mind, the more original and exotic your niche, the more you may be able to charge!
Where? Choose your business premises
In the early stage of business development, you may want to operate your business from home as it will help you keep expenses in check.
However, as your business grows and operations intensify, you may need to hire workers for various job roles. Then you may need to rent out a physical storefront, where you and your fellow candle makers can work to produce and sell your candles. You can find commercial space to rent in your area on Loopnet, Instant Offices and Square Foot.
When choosing a production space, you may want to follow these four rules of thumb:
- Central location accessible via public transport
- High foot traffic
- Flexible lease that can be extended as your business grows
- Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Business Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
- Short, unique, and catchy names tend to stand out
- Names that are easy to say and spell tend to do better
- The name should be relevant to your product or service offerings
- Ask around — family, friends, colleagues, social media — for suggestions
- Including keywords in the name, such as “candle” or “wax”, boosts SEO
- Choose a name that allows for expansion: “Jim’s Bakery” rather than “Jim’s Cookies”
- Avoid location-based names that might hinder future expansion
- Use online tools like the Step by Step business name generator
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names at a web cataloging site such as NameChk. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. And if you’ve exhausted all your creative juices but still don’t have a business name, don’t stress! Instead, check out our business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Step 4: Create a Business Plan
Every business needs a plan, a rough outline that helps guide a startup through the launch process while maintaining focus on key goals. A business plan is also crucial for helping potential partners and investors understand your company and vision:
- Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
- Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
- Product and Services: Describe your shop’s services in detail.
- Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
- Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
- Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
- Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
- Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
- Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — a prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s done, you have your own business!
Choose where to register your company
Your business location is a key decision because it can affect your taxes, legal requirements, and revenue. Most people will register a business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states offer real advantages when it comes to candles.
If you’re willing to move, you could really maximize your business!
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your barbershop will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the four main options:
- Sole proprietorship – The most common structure for small businesses makes no legal distinction between company and owner: you get to keep all the profits, but you’re personally liable for all debts.
- Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses.
- Corporation – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly.
- Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
We recommend that most new business owners form an LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can quickly and cheaply form an LLC using ZenBusiness’s online LLC formation service (it can take as little as 5 minutes). They will check that your business name is available before filing, submit your Articles of Organization and be on hand to answer any questions you have about the company formation process.
Step 6: Register for Taxes
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate on a calendar year (January–December), or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online. It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
- Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
- SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
- Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
- Venture capital: Offer potential investors an ownership stake in exchange for funds, keeping in mind that you would be sacrificing some control over your business.
- Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund an entrepreneur’s vision.
- Personal: Self-fund your business via your savings, the sale of property or other assets, and support from family and friends.
Step 8: Apply for Licenses/Permits
Starting a candle business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses and permits associated with starting your business include doing business as, health license and permit from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level licenses, a business license, and local county or city-based health licenses and permits. Additional permits may be required by your state, such as a general business permit or license. The license requirements and how to obtain them vary from state to state, so check your state government’s website or contact the appropriate person to inquire about licenses and permits needed to run a catering business. You could also use the SBA’s guide to identify your state’s requirements.
Your city, town, or county may also have additional requirements, such as signage and zoning permits. You may want to speak to representatives of your local governments about licensing requirements.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties. If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
For peace of mind and to save time, we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state, and provide them to you to make sure you’re fully compliant.
Step 9: Open a Business Bank Account
Before you begin shaping your wax into candles you will need to have somewhere to keep the money you make, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your catering business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer business account options, just inquire at your preferred bank to learn about rates and features.
But it is a good idea to look at a few options, as banks vary in terms of offerings, and you want to find the plan that works best for you. Once you choose your bank, you just need to bring your EIN (or Social Security Number if you decide on a sole proprietorship) and your articles of incorporation or other legal documentation that proves your business is registered.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked but is vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business, and your life.
Here are some of the different types of insurance to consider:
- General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
- Business Property: Provides coverage for your equipment and supplies.
- Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
- Worker’s compensation: Provides compensation to employees injured on the job.
- Property: Covers your physical space, whether it is a cart, storefront, or office.
- Commercial auto: Protection for your company-owned vehicle.
- Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
- Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.
Step 11: Prepare to Launch
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using services like WordPress or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web developer to create a custom website for your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, a number of websites and digital tools can help you with many business tasks. We have broken them down into different categories below.
Some of your business will come from walk-by customers and web surfers, but you should still spend time on marketing! Especially as a new business, getting the word out and increasing customer awareness is crucial.
Social media is a particularly good way of promoting your business because you can create engaging posts that advertise your products:
- Facebook: Great platform for paid advertising, allows you to target specific demographics, like men over age 50 in the Cleveland area.
- Instagram: Same benefits as Facebook but with different target audiences.
- Website: Search engine optimization (SEO) will help your website appear closer to the top in relevant search results, a crucial element for increasing sales.
- Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero.
- If you are unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
You will need several different items to launch your candle business, including special equipment you’ll need to purchase. Websites like Candle Science, Candles and Supplies, and CandleWic offer a comprehensive selection of candle-making equipment. Here is a list to get you started:
- Aluminum melting pitcher
- Aluminum pouring pot
- Glass thermometer
- Wick bars and holders
- Molds, wax, wicks
- Fragrance materials
- Measuring cup(s)
Step 12: Build Your Team
You may not need any employees if you are starting out small from a home-based office. But as your business grows, you will likely need workers to fill various job roles. The potential employees for a candle business include:
- Candle maker
- Packer and shipper
- Marketing strategist
- IT specialist for your website
Your business may at some point need to hire all of these positions, or just one or two of them, depending upon its size and needs. You might also hire multiple workers for a single role, or a single worker for multiple roles, again depending on your needs.
Free-of-charge methods to recruit employees include publishing a job post on platforms such as LinkedIn or Facebook, or using free classified sites like Jobs and AngelList. You might also use a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Finally, you could also hire a recruitment agency to help you find talent.
Step 13: Start Making Money!
Focus on USPs
Unique selling propositions, or USPs, are the unique characteristics of a product or service that sets it apart from the competition. Customers are inundated with buying options and need to be able to quickly grasp what’s novel about your catering business and how it fulfills their wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Some signature USPs for your candle business might include:
- Regional or seasonal scents
- Twisted and unusual designs
- Aromatherapy candles
- Eco-friendly and vegan candles
- Visually satisfying online store with a customizable selection
- Lifestyle and decor recommendations with every candle order
- Branded Pinterest posts detailing candle ideas
- Reusable candles
Your marketing will likely start on social media platforms, where you should seek to develop a strong following. Post regularly about your candles, highlighting special events, price discounts, and USPs. You could also make a video announcing your opening and detailing your services and advantages.
Your website will also be a critical part of your marketing. Once it’s up and running, make sure you link to your social media accounts and vice versa.
Here are some additional marketing suggestions:
- Website and SEO – Create a website and optimize it for search engines.
- Social media marketing – Create a strong social media presence especially on Facebook, Twitter and Instagram, and post there regularly.
- Competitions and giveaways – Create interest and build an email list or social media following by offering prizes or giveaways for people who complete a certain action.
- Optimize calls to action (CTAs) – Experiment with the text, color, size and position of calls to action such as “Buy Now”. This can make a big difference to the percentage of web visitors who buy your product.
- Signage – Put up eye-catching signage at your store and website
- Flyering – Distribute flyers in your neighbourhood and at industry events
- In-Person Sales (IPS) – Offer your products at local markets, tradeshows
Build Affiliate Relationships
Affiliate marketing is advertising in which you compensate third parties, who are your affiliates, in order to generate traffic to your website. You develop long-term relationships with these affiliates, and generate traffic for each other on an ongoing basis.
Candle Business FAQs
Generally, a candle should be used within 12-15 months of buying it. For best results, while not in use they should be stored in a cool, dry place. Once in use, a typical homemade candle should burn strong for about as many hours as inches of length. For example, a 4-inch candle will burn for about 4 hours. Different materials and wicks will result in different candle burn durations.
Since candles can be fragile, it is best to package them in durable boxes and fill the interior with tissue paper or bubble wrap to cushion them during transit. For certain candles and climates, you may want to include frozen gel packets within the box to prevent any melting. See this guide from Paper Mart for some more tips and tricks on candle shipping.
Yes, scented and unscented candles – using the appropriate materials – are safe for use. Both synthesized and natural scents have been widely tested and deemed safe. Wicks and wax sold by candle makers and suppliers are also safe, as they must be approved by the relevant regulatory agencies. For more info on candle safety, consult this comprehensive FAQ from the National Candle Association.
No, insurance is not required to sell candles in the US. However, many candle makers buy liability insurance to help shield against any potential legal action. Ultimately, candles deal with fire, so there always liability concerns for sellers. The Armatage Candle Company provides a useful guide on candle maker insurance.