How to Start a Cricut Business

You’ve probably heard of Cricut, the top US brand of automated cutting machines popular with home crafters, which has seen explosive growth of late. After a sharp increase in 2019, Cricut’s revenue nearly doubled in 2020, the year the pandemic began. User numbers have since continued to increase, as the billion-dollar US crafts market has expanded rapidly. You could start your own Cricut business at home, sell great products to people all over the world and grab a slice of that market. 

Cricut machines are typically used on materials like paper, felt, leather, and vinyl, and can create anything from shirts to blankets and even mugs. You can design iron-on or glue-on decorations and sell your products on your own website or on a platform like Etsy. It doesn’t take much money to get started, and you can sell at a good markup. 

To start a Cricut business, however, you need more than creativity. You need some business know-how to be successful, and this step-by-step guide will provide all the insight you need and walk you through the process of launching your Cricut entrepreneurial career.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a Cricut business has pros and cons to consider before deciding if it’s right for you.

Cricut industry trends

The US arts and crafts market achieved sales of nearly $1.2 billion in 2021, up nearly 11% from the previous year.((https://www.statista.com/topics/3908/crafts-and-creative-activities-in-the-united-states/#dossierKeyfigures)) This goes along with the lightning-fast growth of Cricut, presenting a sizable opportunity for the bold and creative entrepreneur.

Industry size and growth

• Industry size and past growth – Cricut says it took in $1.3 billion in revenue in 2021, after growing a stunning 168% over the past two years.((https://investor.cricut.com/news-releases/news-release-details/cricut-inc-reports-fourth-quarter-and-full-year-2021-financial)) 
• Growth forecast – The global arts and crafts market is predicted to grow nearly 4% annually through 2027.((https://www.marketwatch.com/press-release/arts-and-crafts-market-growth-analysis-2022-by-top-manufacturers-company-overview-cagr-status-revenue-and-forecast-till-2027-2022-04-20)) 
• Number of users – Total Cricut users grew to over 6 million while paid subscribers increased to over 2 million in 2021.

Trends and challenges

Trends in Cricut include:

• New and trending applications of the Cricut machine include unique wallpapers, monogrammed items, and appealing placemats.
• The latest Cricut machine, the Cricut 3, is designed to cut faster and work with Cricut Smart Materials, to allow for even more creativity and speed. Smart Materials are designed specifically for the Cricut machine, such as Smart Vinyl and Smart Iron-On. 

Challenges in the Cricut industry include:

• The rising popularity of the Cricut machine is creating more competition for Cricut businesses.
• Supply chain problems caused by the Covid-19 pandemic

What kind of people work in the Cricut industry?

• Gender – 65% of crafters are female, while 35% are male.((https://www.zippia.com/crafter-jobs/demographics/#gender-statistics))
• Average level of education – 36% of crafters have a high school diploma, while 34% hold a bachelor’s degree.((https://www.zippia.com/crafter-jobs/education/))
• Average age – The average age of a crafter is 48 years old.((https://www.zippia.com/crafter-jobs/demographics/#age-statistics))

How much does it cost to start a Cricut business?

Startup costs for a Cricut business range from $2,300 to almost $6,000. The main costs are for a website, the machine and Smart Materials, and additional materials.

You’ll need a handful of items to successfully launch your Cricut business, including: 

• Cricut machine
• Smart Materials
• Smart iron
• Products to design (shirts, mugs, etc.)

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 - $200	$175
Business licenses and permits	$100 - $300	$200
Insurance	$100-$300	$200
Business cards and brochures	$200 - $300	$250
Website setup	$1,000 - $3,000	$2,000
Cricut machine and starter materials	$300 - $600	$450
Additional materials and products to design	$500 - $1,000	$750
Total	$2,350 - $5,700	$4,025

How much can you earn from a Cricut business?

The prices you charge will depend on what you make and sell. These calculations will assume that you can make an item for $5 and sell it for $15, resulting in a 66% profit margin. 

In your first year or two, you could work from home and sell 3,000 items in a year, bringing in $45,000 in annual revenue. This would mean nearly $30,000 in profit, assuming that 66% margin. As your business gains traction and you start to get repeat customers, sales could climb to 10,000 items a year. With annual revenue of $150,000, you’d make a nice profit of nearly $100,000.

What barriers to entry are there?

There are a few barriers to entry for a Cricut business. Your biggest challenges will be:

• Competition from other online sellers
• Making products that are unique enough to sell

Step 2: Hone Your Idea

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

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research Cricut businesses online to examine their products, price points, and what sells best. You’re looking for a market gap to fill. For instance, maybe the market is missing a custom placemat business.

You could be a bold Cricut maker and explore the Cricut design space with the full use of Cricut craft and all the Cricut tools that come with the Cricut cutting machine. 

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

You can choose from any number of products to make and sell with Cricut. You can specialize in one, such as T-shirts, or make a variety of items. You also might want to choose a design theme to put on a variety of items.

How much should you charge for Cricut items?

Your prices will depend on what types of items you decide to make. To determine your prices, look at similar items and their prices, as well as your cost to make your items. You should aim for a profit margin of at least 65%. 

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

Who? Identify your target market

Your target market, again, will depend on what items you decide to make. If you design trendy purses, your target market will likely be younger and stylish women. You can find them on sites like TikTok, Facebook, and Instagram.

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 it may get big enough that you’ll need to rent a production facility. 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

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 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “Cricut Tees”, boosts SEO
• Name should allow for expansion, for ex: “Cricut Craft Central” over “Cricut Engraving”
• Avoid location-based names that might hinder future expansion

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 set 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. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: A concise summary outlining the core elements of the business plan, providing a snapshot of the business goals and strategies.
• Business Overview: A brief description of the business, its mission, vision, and the problem it solves in the market.
• Product and Services: Clear and detailed information about the offerings, highlighting their unique features and value proposition.
• Market Analysis: Examination of the target market, including size, demographics, trends, and potential opportunities for the business.
• Competitive Analysis: Assessment of key competitors, their strengths and weaknesses, and strategies to gain a competitive advantage.
• Sales and Marketing: A plan outlining how the business will promote and sell its products or services, including pricing, distribution, and promotional strategies.
• Management Team: Introduction to the key individuals leading the business, their qualifications, and roles in the company.
• Operations Plan: Details on how the business will operate on a day-to-day basis, covering production, logistics, and key suppliers.
• Financial Plan: Comprehensive financial projections, including revenue forecasts, expense budgets, and cash flow statements.
• Appendix: Additional supporting documents, such as resumes of key team members, market research data, or any other relevant information that enhances the business plan.

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

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll 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’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to Cricut businesses. 

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 Cricut 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 an 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.

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 in 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.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re 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 Cricut business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Licenses/Permits

Starting a Cricut 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.

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 Cricut 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.

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 Vend, TAKU, or LS Retail, to manage your purchasing, inventory, sales, and payments.

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. 

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.

You can create your own website using website builders. 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.

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. 

Marketing

For your Cricut business, the marketing strategy should focus on showcasing the unique, personalized, and high-quality crafts you can create. Emphasize the customization options you offer, the range of products (like custom stickers, t-shirts, home decor), and the creativity and precision of your designs. Here are some powerful marketing strategies for your future business:

Kickstart Marketing

• Professional Branding: Your branding should reflect the creativity, precision, and personal touch of your crafts. This includes your logo, packaging, and overall online presence.
• Direct Outreach: Connect with local businesses, event planners, schools, and community organizations that might need customized products. Networking at local craft fairs and community events can also be beneficial.

Digital Presence and Online Marketing

• Professional Website and SEO: Develop an attractive website showcasing your product range, customer reviews, and a portfolio of your work. Implement SEO best practices to optimize your site for search terms related to Cricut crafts, personalized gifts, and custom decorations.
• Social Media Engagement: Utilize platforms like Instagram, Pinterest, and Facebook to showcase your products, share behind-the-scenes glimpses of your crafting process, and engage with your audience.

Content Marketing and Engagement

• Crafting Blog: Share posts about DIY projects, crafting tips, and ideas for using Cricut machines creatively.
• Customer Spotlights and Reviews: Highlight customer testimonials, especially those showcasing how your products were used in special events or as unique gifts.
• Tutorial Videos: Create video content showing how you make certain crafts, offering inspiration and demonstrating your expertise.

Experiential and In-Person Engagements

• Workshops and Classes: Offer workshops or classes teaching basic Cricut skills or specific project tutorials, which can attract potential customers to your business.
• Participation in Craft Fairs and Markets: Regularly participate in craft fairs, markets, and local events to sell your products and increase brand visibility.

Collaborations and Community

• Collaborations with Local Artists and Businesses: Partner with local artists or businesses for unique collaborations or to offer a wider range of products.
• Community Engagement: Participate in community events or charity functions, offering your products or services for auctions or as donations.

Customer Relationship and Loyalty Programs

• Custom Order Incentives: Encourage custom orders by offering consultations or special pricing for personalized designs.
• Loyalty Rewards for Repeat Customers: Implement a rewards program that offers discounts or special previews of new products to repeat customers.

Promotions and Advertising

• Targeted Online Advertising: Use platforms like Facebook and Instagram, along with Etsy if you use it, to reach individuals interested in personalized gifts, crafts, and home decor.
• Email Marketing: Build an email list to inform subscribers about new products, special offers, and crafting ideas.

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 Cricut 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 Cricut business could be: 

• Custom vinyl placemats to brighten your table
• Monogrammed leather luggage tags – Never lose your bag again!
• Stay cool with the hottest Cricut T-shirts

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 Cricut business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in Cricut 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 Cricut items. 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

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a Cricut business include:

• Designers – assist with making items
• Packagers – package and ship items
• Marketing Lead – SEO strategies, social media, and other marketing activities

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: Run a Cricut Business – Start Making Money!

Cricut is seeing explosive growth, along with the broader US arts and crafts market. It’s expanding to new markets and introducing new features, inspiring more people to get the machine. You too can get in on the action now by starting a Cricut business and using your creativity to design products with wide appeal. The sky is the limit! You just need a creative eye, your machine, and some quality materials and you’ll be on your way. 

Now that you understand the business, go ahead and take the plunge. Start cutting your way to Cricut success!