Getting Started with a Powder Coating Business

These crucial factors should be taken into account when you begin your powder coating business:

1. Services — Determine the range of services you will offer, such as powder coating for automotive parts, industrial equipment, household items, or custom projects.
2. Environmental permits — Secure necessary environmental permits related to air quality and waste disposal, as powder coating involves the use of chemicals and emissions.
3. Occupational Safety and Health Administration (OSHA) Compliance: Ensure compliance with OSHA regulations to maintain a safe working environment.
4. Location — Choose a location with adequate space for your equipment, storage, and workflow. Ensure it has proper ventilation and complies with local zoning laws. 
5. Equipment — Invest in essential equipment such as a powder coating gun, spray booth, curing oven, and ventilation systems.
6. Supplies — Stock up on powder coating materials, including various colors and types of powder, masking tape, hooks, and protective gear.
7. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
8. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
9. Personal Protective Equipment (PPE) — Ensure all staff wear appropriate PPE, such as respirators, gloves, and protective clothing.

You May Also Wonder:

Is a powder coating business profitable?

Yes, a powder coating business can be very profitable. The key is to get the right powder coating training so that you can provide customers with quality work.

Is powder coating easy to learn?

Learning powder coating can require a learning curve, but with proper training and practice, it can become manageable. It involves understanding surface preparation, powder application techniques, curing processes, and equipment operation.

How can I differentiate my powder coating business from competitors in the market?

To differentiate your powder coating business from competitors, consider the following approaches:

• Offer a wide range of color options and finishes to cater to diverse customer preferences.
• Focus on providing high-quality finishes with attention to detail and consistency.
• Implement efficient turnaround times to meet customer deadlines.
• Specialize in specific industries or applications, such as automotive, architectural, or industrial powder coating.

Can I start powder coating on the side?

Starting a powder coating business on the side is possible, but managing workload and scheduling effectively is crucial, especially when juggling it with another job. 

What types of materials or products can be powder coated?

Powder coating can be applied to various materials, including metals like steel, aluminum, and iron. It is also used for coating products made of glass, ceramic, and certain plastics.

How can I handle curing and finishing processes for powder-coated items?

Curing and finishing processes are essential for powder-coated items. After powder application, curing is typically done by heating the coated items in an oven to the specified temperature and duration, allowing the powder to melt and form a durable coating. 

Step 1: Decide if the Business Is Right for You

Pros and cons

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

Powder coating industry trends

Industry size and growth

• Industry size and past growth – The global powder coating industry was worth $11.9 billion in 2020 after steady growth the previous five years.((https://www.grandviewresearch.com/industry-analysis/powder-coatings-market-analysis)) 
• Growth forecast – The global powder coating industry is projected to expand 7.2% annually through 2028.

Trends and challenges

Trends in the powder coating industry include:

• New technologies in powder coating are expanding opportunities to powder coat materials other than metal, such as wood and plastics.
• The latest trend is anti-microbial powder coating, which protects those who touch powder-coated surfaces from bacteria and viruses. 

Challenges in the powder coating industry include:

• Supply chain issues and rising chemical prices are presenting service delivery challenges for powder coating companies and cutting into profits.
• Safety concerns over the exposure to hazardous chemicals is an ongoing concern for powder coating businesses, as is the potential evolution of EPA regulations. 

Demand hotspots

• Most popular states – The most popular states for powder coaters are North Dakota, Ohio, and Pennsylvania.((https://www.zippia.com/powder-coater-jobs/best-states/#texas)) 
• Least popular states – The least popular states for powder coaters are Florida, Texas, and Arkansas. 

What kind of people work in powder coating?

• Gender – 13.2% of powder coaters are female, while 83.1% are male.((https://www.zippia.com/powder-coater-jobs/demographics/))
• Average level of education – The average powder coater is high school educated.
• Average age – The average powder coater in the US is 42.3 years old.

How much does it cost to start a powder coating business?

Startup costs for a powder coating business range from $50,000 to $60,000. The bulk of the costs are for the powder coating equipment. 

You can get powder coating training through the Powder Coating Institute. Workshops cost $400 to $600 and certification can be gained in less than a week. 

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

• Powder coating booth
• Powder coating oven
• Sandblaster
• Powder coating sprayer and equipment
• Air compressor

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
Garage rental deposit	$3,000 - $6,000	$4,500
Powder coating equipment	$45,000 - $50,000	$47,500
Total	$49,550 - $60,100	$54,825

How much can you earn from a powder coating business?

Powder coating car parts costs around $700. Your profit margin after materials costs, rent, and labor should be about 30%. 

In your first year or two, you might do five powder coatings a week, bringing in $182,000 in annual revenue. This would mean nearly $55,000 in profit, assuming that 30% margin. As you increase your marketing efforts and start to get referrals, you could do 15 powder coats a week. With annual revenue of $546,000, you’d make a handsome profit of $164,000.

What barriers to entry are there?

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

• The costs of the equipment
• Learning powder coating skills

Step 2: Hone Your Idea

Now that you know what’s involved in starting a powder coating 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 powder coating businesses in your area to examine their products and services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a thermoplastic powder coating company or an antimicrobial powder coating business. 

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

What? Determine your services

Your services will depend on your training and equipment. You might want to specialize in a certain type of powder coatings, such as antimicrobial powder coating of wood or powder coating car parts. 

How much should you charge for powder coating?

Prices for powder coating will depend on the extent of the job. The average price for car parts is about $700. After rent, materials, and labor costs you should aim for a profit margin of about 30%.

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

Your target market could be either individuals or businesses, depending on what you specialize in. If you want to keep your options open, you should spread out your marketing to include sites like Instagram, Facebook, and LinkedIn. 

Where? Choose your business premises

You’ll probably need to rent a garage space for your powder coating shop. 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

Step 3: Brainstorm a Powder Coating Business Name

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 “powder coating”, boosts SEO
• Name should allow for expansion, for ex: “NextGen Powder Coating” over “Automotive Powder Coating”
• A location-based name can help establish a strong connection with your local community and help with the SEO but 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 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 Powder Coating Business Plan

Here are the key components of a business plan:

• Executive Summary: A concise overview highlighting the core elements of the powder coating business plan, including its objectives, unique selling points, and potential for success.
• Business Overview: An introduction to the powder coating business, outlining its mission, vision, and the specific niche it aims to serve within the coating industry.
• Product and Services: Clear description of the powder coating services offered, emphasizing the range of coatings available, application methods, and any additional services provided.
• Market Analysis: Examination of the target market for powder coating services, identifying customer needs, trends, and market size to inform business strategies.
• Competitive Analysis: Evaluation of competitors in the powder coating industry, emphasizing strengths, weaknesses, and unique selling propositions to position the business effectively.
• Sales and Marketing: Detailed strategies for promoting and selling powder coating services, encompassing advertising, pricing, and distribution channels to reach the target market.
• Management Team: Introduction to the key individuals overseeing the powder coating business, highlighting their skills, experience, and roles in ensuring the company’s success.
• Operations Plan: A comprehensive plan outlining the day-to-day operations of the powder coating business, covering equipment, facilities, suppliers, and workflow processes.
• Financial Plan: Detailed financial projections, including startup costs, revenue forecasts, and profit margins, providing a comprehensive overview of the business’s financial health and sustainability.
• Appendix: Supplementary materials such as additional market research, legal documents, or any other supporting information that enhances the overall 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 powder coating 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 powder coating 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 option, other than friends and family, for funding a powder coating business.

Step 8: Apply for Licenses and Permits

Starting a powder coating business requires obtaining a number of licenses and permits from local, state, and federal governments. For starters, you’ll need to become well versed in EPA regulations regarding the chemicals you’ll use. 

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 powder coating 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 Tudodesk, shoptech, or Batchmaster, to manage your bookings, workflows, invoicing, 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 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.

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

Here are some powerful marketing strategies for your future business:

• Offer Sample Kits to Local Businesses: Provide small powder coating sample kits to nearby businesses, showcasing the durability and finish options, enticing them to explore your services for larger projects.
• Collaborate with Auto Shops and Custom Builders: Partner with local auto repair shops and custom vehicle builders to become their go-to powder coating service, tapping into a niche market with consistent demand.
• Social Media Flash Sales: Leverage social media platforms to announce flash sales or limited-time promotions, encouraging quick engagement and creating a sense of urgency among potential customers.
• Host Workshops and Demos: Organize workshops or demonstrations on the benefits and versatility of powder coating, educating potential clients and establishing your business as an authority in the field.
• Customer Referral Program: Implement a referral program offering discounts or incentives to existing customers who refer new clients, leveraging word-of-mouth marketing and creating a loyal customer base.
• Local Event Sponsorship: Sponsor local events, fairs, or community gatherings to increase brand visibility, connect with potential customers, and demonstrate your commitment to the community.
• Loyalty Programs for Repeat Customers: Introduce a loyalty program rewarding repeat customers with exclusive discounts or special offers, fostering customer retention and encouraging them to choose your services consistently.
• Create a Striking Portfolio: Develop a visually appealing portfolio showcasing your best work, and distribute it to local businesses, contractors, and architects to highlight the quality and variety of your powder coating services.
• Online Tutorials and Tips: Share informative content through online platforms, such as tutorials and tips on proper care and maintenance of powder-coated items, positioning your business as an expert and attracting a broader audience.
• Collaborate with Interior Designers: Forge partnerships with local interior designers to incorporate powder-coated elements into home and commercial projects, expanding your reach into the design and decor market.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set 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 powder coating 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 powder coating business could be: 

• Durable powder coating for your car rims
• Antimicrobial powder coating for your precious wood furniture
• Why paint your car parts? Powder coating lasts 

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 powder coating business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in powder coating 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 powder coating. You’ll probably generate new customers or find companies with which you could establish a partnership.

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 powder coating business include:

• Shop Workers – assist with powder coating, customer service
• General Manager – ordering, scheduling, accounting
• Marketing Lead – SEO strategies, social media

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 Powder Coating Business – Start Making Money!

Powder coating as an alternative to liquid paint is growing in demand. The market is booming, poised to see strong growth for years. You can easily learn powder coating and start your own business. It takes a fairly large investment, but you can get an excellent return in short order. 

You’re off to a great start, having gathered the necessary business know-how, now it’s time to launch your successful powder coating business!