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How to Start a Phone Case Business
Some 6.4 billion of the world’s 8 billion people, or 80 percent of humanity, use mobile phones, according to German research firm Statista.https://www.statista.com/statistics/330695/number-of-smartphone-users-worldwide/ That number is growing steadily, along with the average cost of a phone. As a result, the smartphone accessories market, which is led by protective cases, is ripe with opportunity. If you have a creative touch and a gung-ho attitude, a custom phone case business could be your entrepreneurial avenue to success.
Of course, starting a successful phone case business will have its challenges and require hard work. Fortunately, you’ve come to the right place, as this step-by-step guide will provide all the information you need to develop and launch your new business.
$4,650 - $30,100
Time to build
0 – 3 Months
$30,000 - $150,000 p.a.
$25,500 - $75,000 p.a.
Step 1: Decide if the Business Is Right for You
Pros and Cons
All businesses, including a phone case business, have pros and cons that you need to consider thoroughly to decide if the business is right for you.
- Creativity – case design offers endless possibility
- Demand – everybody has a phone that needs protecting
- Simplicity — uncomplicated business model
- Profit potential – high margins mean good income
- Competition – saturated market, not easy to stand out
- Production – finding a good inexpensive manufacturer could be tough
- Choosing market – which phones will you make cases for?
Because smartphones are today such a significant investment, costing up to $1,000 or more, consumers feel the need to protect them, thus driving sharp growth in the phone case market.
Industry analyst Verified Market Research valued the global mobile phone protective cases market at over $21 billion in 2020 and forecast an impressive 66% growth by 2028.https://www.verifiedmarketresearch.com/product/mobile-phone-protective-cases-market/ The expansion is led by increased smartphone use, which is expected to grow a further 30% by 2026, according to research firm Market Data Forecast.https://www.marketdataforecast.com/market-reports/smartphone-market
As of late 2021, the most popular smartphone models are the Samsung Galaxy and the iPhones 12 and 13, thus driving sales for cases that fit those models. The hot trends in terms of cases include cases with a slot for credit cards and ID and colorful abstract designs that pop.
How much does it cost to start a phone case business?
Startup costs for a phone case business range from around $4,500 to $30,000 with an average of around $17,000. At the low end, you can start with a phone making kit to make your own cases and sell via an online marketplace like Amazon or Etsy to avoid the cost of creating your own website. The high end option would include hiring a manufacturer to make your first batch of cases.
|Start-up Costs||Ballpark Range||Average|
|Setting up a business name and corportation||$150 - $200||$175|
|Licenses and permits||$200 - $300||$250|
|Insurance||$100 - $300||$200|
|Business cards and brochures||$200 - $300||$250|
|Website setup||$0 - $3,000||$1,500|
|Phone Case Making Kit or First Manufacturing Run||$3500 - $25,000||$14,250|
|Phone Case Design Software||$500 - $1,000||$750|
|Total||$4,650 - $30,100||$17,375|
How much can you earn from a phone case business?
Making a phone case can cost as little as $2, while that case can then be sold at a retail price of $15, resulting in an approximately 85% profit margin.
If you’re a solopreneur, you could work from home and sell 2,000 units in a year, bringing in $30,000 in annual revenue and $25,500 in profit. As your brand gains recognition, sales could climb to 10,000 units a year. At this stage, you might rent an office and hire staff, reducing your margin to 50%. With expected annual revenue of $150,000, you’d make about $75,000.
Once you know your actual costs and prices, you can use the Step By Step profit margin calculator to project your actual profits.
What barriers to entry are there?
There are a few barriers to entry for a phone case business. Your biggest challenges will be:
- Competition – It’s a very saturated market
- Manufacturing – Finding a reliable and inexpensive producer can be tough
Step 2: Hone Your Idea
Now that you know what’s involved in starting a phone case business, it’s a good idea to hone your idea in preparation to enter a competitive market.
Why? Identify an opportunity
Examine the latest phone case designs and themes, and particularly those seeing strong sales, to come up with a concept for your own designs. Try to find a unique approach or design to differentiate your products and stand out in a crowded market.
What? Determine your products or services
You’ll not only need to choose a list of designs that you want to make, but also determine your materials and which phones you’ll make cases for. You could choose the most common models, or choose less common models to create a niche market.
How much should you charge for phone cases?
The average price for a phone case in a marketplace like Amazon is between $10 – $20, but prices are often much higher. You should start at the low end at first until you start to gain traction with your business.
Who? Identify your target market
Your target market will depend on your designs. If your designs are fun and trendy, you may wish to target a younger audience found on sites like Instagram and TikTok.
Where? Choose your business premises
In the early stages, you may want to operate your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles. You may need to rent out an office for your operations. Find commercial space to rent in your area on Loopnet, Craigslist, Crexi, and Commercial Cafe.
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
- The name should be relevant to your product or service offerings
- Ask around — family, friends, colleagues, social media — for suggestions
- Including keywords, such as “phone case” or “phone protector”, boosts SEO
- Choose a name that allows for expansion: “Jim’s Bakery” over “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. 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: 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 phone case products 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.
- Appendix: Include any additional financial or business-related documents.
If you’ve never created a business plan yourself before, it can be an intimidating task. Consider hiring an experienced business plan writer on Fiverr to create a professional business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the 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 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 are planning to expand, you might consider looking elsewhere, as some states offer real advantages when it comes to a phone case business.
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 phone case business 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.
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.
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 phone case 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 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.
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 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 phone case 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 any 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.
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, Webflow, 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.
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. Design software such as HAVIpropel, PhotoCenter3D, and PRINTFUL, for instance, can help turn you into a brilliant designer of phone cases.
Some of your business will come from casual online visitors, but still you should invest in 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, make sure you link to your social media accounts and vice versa. 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 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.
- 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.
You’ll need a handful of items to successfully launch your phone case business. Here’s a list to help you get started:
- Phone making starter kit
- Case design software
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 phone case business would include:
- Designers – design new unique cases
- Customer Service – handle customer calls
- General Manager – scheduling, hiring and firing, inventory
- Marketing Lead – SEO optimization, social media strategies
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 or Facebook. You can also use free classified sites like Jobs and AngelList. 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!
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 phone case 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.
Some signature USPs for your phone case business could be:
- Phone cases for the biggest or smallest phones only
- The wildest and most unique case designs
- Custom-made designs according to your vision!
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 the first 10 customers of the day get 50% off.
- Optimize calls to action – Experiment with text, color, size, and position of calls to action such as “Buy Now”. This can sharply increase purchases.
- Signage – Put up eye-catching signage on your website
- Flyering – Distribute flyers in your neighborhood and at industry events
- In-Person Sales – Offer your products/services at local markets, trade shows
Consider a Niche
You should consider creating a niche for yourself by specializing in a certain aspect of your industry. This could jumpstart your word-of-mouth marketing within your niche market.
Build Affiliate Relationships
Affiliate marketing is advertising in which you compensate third parties (i.e. your affiliates) in order to generate traffic to your website. You can develop long-term relationships with these affiliates and generate traffic for each other on an ongoing basis.
Wrapping it up
Much like global phone usage, the phone case industry is growing by leaps and bounds. Think about it: every time you upgrade to a new phone you need a new case! The market is expected to expand by two-thirds by 2028. People like creative and unique designs for their cases, so feel free to use your creative juices as you launch your new business!
You’re now ready to start making phone cases, and good money!
Phone Case Business FAQs
Yes, you can. You can purchase design software and a phone case making kit with 100 blank cases for about $4,000. It’s not a difficult process – you just need creative designs.
Costs to start a phone case business run from about $4,500 – $30,000. To be on the low end you can make your phone cases at home and sell them on an online marketplace like Amazon so that you don’t have the expenses of a manufacturer or building your own website.
There are no industry-specific permits required to manufacture cases, but your state or town may require certain licenses and permits. Check with your state and local government offices for requirements.
Profit margins on phone cases are high. When you start by yourself from home, your margin can be up to 80%. Even after you grow your company, your profit margin can still be around 50%. The sky’s the limit when it comes to sales since the market for phone cases is expected to be $35 billion by 2028.