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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on April 18, 2022
Updated on March 13, 2024
Investment range
$49,550 - $60,100
Revenue potential
$182,000 - $546,000 p.a.
Time to build
3-6 months
Profit potential
$55,000 - $164,000 p.a.
Industry trend
Growing
Commitment
Full-time
Powder coating is the application of a powder to surfaces, usually metal, to create a finish that’s more durable than conventional painting. Often used in car and motorcycle restoration, as well as on bicycles and metal appliances, it’s a large and growing industry, projected to expand more than 7% annually through 2028. If you have experience in powder coating or want to learn, you could start your own powder coating business and help people ensure long-lasting appeal for their vehicles and other metal valuables while making good money.
But to get there you’ll need more than a dusting of business knowledge. Lucky for you, this step-by-step guide outlines the entrepreneurial process you should follow to start your successful powder coating business.
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Starting a powder coating business has pros and cons to consider before deciding if it’s right for you.
Trends in the powder coating industry include:
Challenges in the powder coating industry include:
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:
| 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 |
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.
There are a few barriers to entry for a powder coating business. Your biggest challenges will be:
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.
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.
You might consider targeting a niche by specializing in a certain aspect of your industry, such as powder coating for industrial metal parts or exhaust ducts.
This could jumpstart your word-of-mouth marketing and attract clients right away.
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.
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.
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.
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:
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:
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.
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:
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.
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!
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.
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:
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.
Choose Your State
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’re completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a powder coating business.
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.
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.
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.
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:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
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.
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.
Starting a Powder Coating Business can be a lucrative venture, and effective marketing is crucial for success. Here are concise and practical strategies to boost your business:
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:
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.
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:
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.
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!
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.
Prices for powder coating will depend on the extent of the job. The average price for powder coating car parts is about $700. After rent, materials, and labor 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.
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.
To differentiate your powder coating business from competitors, consider the following approaches:
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.
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.
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.
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