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How to Start a Candle Business

Written by:

Edited by:

Reviewed by: Daniel Javor

Published on October 29, 2021

Updated on September 20, 2022

How to Start a Candle Business

Disclaimer: Step by Step Business’ content is for informational and educational purposes only. It’s not intended to be a substitute for professional legal or tax advice. All of our articles are thoroughly reviewed and fact-checked by our editorial team. Read our editorial guidelines for more details.

Some of our articles include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

Fast Facts

Investment range

$1,040 - $1,680

Revenue potential

$60,000 - $180,000 p.a.

Time to build

0 - 3 months

Profit potential

$30,000 - $72,000 p.a.

Industry trend

Growing

Commitment

Flexible

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.

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.

Pros

  • 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.

Cons

  • 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.

Candle industry trends

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.((https://www.uncommongoods.com/product/light-my-fingers-candle))

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.

Industry size and growth

candle industry size and growth

Trends and challenges

Trends in the candle industry include:

  • Increasing consumer preference for personalized candles
  • Great interest in wooden wicks
  • Rapid growth of ecommerce

Challenges in the candle industry include:

  • Labor shortage
  • Environmental concerns
candle industry Trends and Challenges

What kind of people work in a candle business?

candle industry demographics

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.

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
  • Scale
  • Measuring cup(s)
  • Clothespins
Start-up CostsBallpark RangeAverage
Equipment$90 - $110$100
Initial inventory and supplies$360 - $440$400
Labels and shipping costs$80 - $100$90
Licenses and permits$110 - $130$120
Insurance $200 - $400$300
Website$100 - $300$200
Signage$100 - $200$150
Total$1,040 - $1,680$1,360

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%. 

In your first year or two, you could work from home and sell 500 candles a month, bringing in $60,000 in annual revenue. This would mean $30,000 in profit, assuming that 50% margin. As your brand gains recognition, sales could climb to 1,500 candles a month. At this stage, you’d rent a storefront and hire staff, reducing your profit margin to around 40%. With annual revenue of $180,000, you’d make a tidy profit of $72,000.

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.

candle business earnings forecast

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 a full-time job – A candle maker’s earnings depend on the amount of time and energy they are willing to devote to the work.

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Step 2: Hone Your Idea

Now that you know what’s involved in starting a candle business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

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.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

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 stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out a storefront. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

  • Central location accessible via public transport
  • Ventilated and spacious, with good natural light
  • Flexible lease that can be extended as your business grows
  • Ready-to-use space with no major renovations or repairs needed
candle business idea rating

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. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

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 using our Domain Name Search tool. 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. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

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, assess 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.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist at Fiverr to create a top-notch business plan for you.

what to include in a business plan

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 important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to candle making. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your candle business will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • 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.
  • C Corp – 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. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using ZenBusiness’s online LLC formation service. They will check that your business name is available before filing, submit your Articles of Organization, and answer any questions you might have. 

types of business structures

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.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding a candle business. You might also try crowdfunding if you have an innovative concept. 

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 (DBA), health licenses and permits 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 and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but 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 ensure you’re fully compliant.

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.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, 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 candle  business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some 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 the above insurance types.
types of business insurance

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of 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, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as Craftybase to track material and product stock, log expenses, and update pricing. You can also use NetSuite Commerce to manage your online and in-store transactions.

Accounting

  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero
  • If you’re 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.

Marketing

Some of your business will come from the casual passerby or online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness. 

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for 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 under age 50 in the Cleveland area. 
  • Instagram: Same benefits as Facebook but with different target audiences.
  • Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Buy Now”. This can sharply increase purchases.
  • Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.

Kickstart Marketing

Take advantage of your website, social media presence, and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:

  • Competitions and giveaways – Generate interest by offering prizes for customers who complete a certain action, such as half off on the fifth purchase.
  • Signage – Put up eye-catching signage at your store and website. 
  • Flyering – Distribute flyers in your neighborhood and at industry events.
  • In-Person Sales – Offer your candles at local markets and trade shows. 
  • Post a video – Post a video about your candles. Use humor and maybe it will go viral!
  • Limited edition – Offer a one-time version of a special scented candle.
  • Seek out referrals – Offer incentives to generate customer referrals to new clients. 
  • Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
  • Testimonials – Share customer testimonials about how they love your candles.
  • Create infographics – Post infographics and include them in your content.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

You can create your own website using services like WordPress, Wix, 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 designer or developer to create a custom website for your business.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your candle business meets their needs or 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. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your candle business could be:

  • 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
unique selling proposition

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a candle business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been making candles for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in candles. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

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
  • Label Maker
  • Packer and Shipper
  • Marketing Strategist
  • IT Specialist for your website 
  • Accountant

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Start Making Money!

Scented candles are widely thought to melt stress, induce or improve sleep, provide therapeutic care, and more. That’s why candle making is a nearly $2 billion market in the US and remains one of the top business ideas globally. Now that you have all the information you need to start a candle business, it’s time to take the first step in your entrepreneurial journey. 

If you do proper research to better understand what your target market needs and craft a brilliant marketing strategy, you can light your way to success and start making a great profit!

Candle Business FAQs

How long do homemade candles last?

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.

How do you ship candles?

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.

Are scented and other specialty candles safe?

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.

Do you need insurance to sell candles?

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.